Three messages before we get started. If you’re a tech entrepreneur, don’t you have unique legal needs that the average lawyer can’t help you with? That’s why you need Scott Edward Walker of Walker Corporate Law. If you read his articles on VentureBeat, you know that he can help you with issues like raising money, issuing stock options, or even deciding whether to form a corporation. Scott Edward Walker is the entrepreneur’s lawyer. See him at WalkerCorporateLaw.com.
Do you remember when I interviewed Sarah Sutton Fell about how thousands of people pay for her job site? Look at the biggest point that she made. She said that she has a phone number on every page of her site because, and here’s a stat, 95 percentof the people who call end up buying. Most people though don’t call her. But seeing a real number increases their confidence in her and they buy. So try this: Go to Grasshopper.com and get a phone number that will make your company sound professional. Add it to your site and see what happens. Grasshopper.com.
Remember Patrick Buckley who I interviewed? He came up with an idea for an iPad case. He built a store to sell it and within a few months he generated about a million dollars in sales. Well, the platform he used is Shopify. If you have an idea to sell anything, set up your store on Shopify.com, because Shopify stores are designed to increase sales. Plus, Shopify makes it easy to set up a beautiful store and manage it. Shopify.com.
Here’s the program.
Andrew Warner: Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. What I mean by that is, this is a place where I interview entrepreneurs about how they built their businesses for an audience of ambitious entrepreneurs who want to learn about how to build their own businesses.
Here’s the big question for today’s interview. How do you build a business around a unique, new product? Jennifer Michelson is the founder of Gunnar Optiks, which makes glasses for people who spend much of their days staring at computer screens. I often say in these interviews that finding your first few hundred users and finding your first few thousand users is tougher than going from one million customers to two million. I invited Jennifer to Mixergy to teach us how she got her first hundred thousand customers in under two years. I also want to ask her about how she raised money to fund her business, and to learn about the business in general. Jennifer, welcome to Mixergy.
Jennifer Micheleson: Thank you very much for having me.
Andrew: Let’s start off with the basic question. What are Gunnars?
Jennifer: Gunnar Optiks Eyewear is eyewear for digital use. Anybody that stares at a computer screen for long periods of time strains your eyes in a number of ways, by staring in the near distance and staring at artificial lights. Your blink rate goes down, your eyes dry out and so we compensate for all of that. We do the work for you, put your eyes in a rested state so you’re not straining your eyes.
Andrew: OK. I said in the beginning of this interview that this is a product that’s new, that’s different. But how are these glasses different from regular glasses?
Jennifer: They’re different in a lot of ways. They really focus on tuning the spectrum for indoor use. The color spectrum that comes from the computer is very different than what our eyes are meant to be looking at. They’re meant to be looking in sunlight. If you think about outdoor eyewear for sports and how they shift that color spectrum to make things a little bit easier, that’s similar to what we do, but for indoor use. Sadly, we’re spending a lot more time indoors than we are outdoors, so we want to make sure people are taking care of their eyesight. We think of it as a preventative measure to maintain your vision.
Andrew: You’re wearing a pair right now, right?
Jennifer: I am wearing a pair.
Andrew: They look great.
Jennifer: I don’t know if you can see on the video chat, but the lenses have a yellowish tint to them. That’s our amber lens and it’s tuned to the color spectrum, like I mentioned, for the computer, for digital use. They’re also, if you can see, they’re kind of wrapped. They stay tight to your face to keep in moisture, because when you’re looking at text or playing video games your blink rate goes down and your eyes dry out. We also have anti-glare on it that helps to cut the glare. All in all, we prefocus the light. We do the work for you and it makes a big difference.
Andrew: I was curious about the doubters, about the initial reaction that they have when you show them a new product. Can you tell me about how maybe some of the investors or some potential customers reacted?
Jennifer: I think with any new product, especially in the completely new product category, you’re going to have a lot of skeptics. This is not rocket science. It’s common sense. You’re staring at basically a light bulb two feet away from you. We have the ophthalmic community behind us. These are covered by insurance. We have a lot of doctors and medical advisors and an advisory board that we worked very hard for years on the RD and DA to make sure that we’re using the right solution for the masses. We also do prescription. I think to have that community behind us, to have partnership with Zeiss, Carl Zeiss Vision, all of those things tell you that this is something for anybody that has eye strain. An estimated 80 million people, just in the U.S., suffer from some form of eye strain, and the symptoms vary. That tells you that it is a product that can work for a lot of people.
Andrew: Tell me more about the challenges because we’re going to spend a lot of this interview talking about how you overcame the challenges. I’m especially curious at this point in the interview about the skeptics, and the way that they challenged this and the way that they said it may not work as a business. What were they questioning? Were they questioning your ability to find your market? Were they questioning your ability to come up with the right product? Were they questioning your ability to communicate the need? Were they questioning the size of the market?
Jennifer: I think the biggest issue that we had to overcome was the economy. It was really, are people going to buy this? Are they going to have the money to buy this product? It was new and not necessarily proven at the time we started out. I think that was our biggest hurdle. Once we had the ophthalmic community behind us, and, like I said, Carl Zeiss on board, it was a much easier task to educate people on what we do and how we do it.
Andrew: Carl Zeiss Vision. What is that? You brought his name up before, and I’ve seen him in articles about your company.
Jennifer: Zeiss is 150 year old optical company. They are in the top . . .
Andrew: Is that Outlook, by the way, going off in the background?
Jennifer: Yeah, I’m sorry. I should turn that off. It’ll keep buzzing.
Andrew: By the way, let’s get sidetracked for a little bit. How do you do that? How do you sit and work with Outlook constantly letting you know that email is coming in? I find it so distracting when even Skype messages pop up, and they don’t happen nearly as often as email.
Jennifer: I think you learn to tune it out. Honestly, you just learn to tune those things out. You know it’s there, it’s kind of in the back of your mind. But as you can see behind me all the computer monitors, I think we are learning how to take in so much information so quickly, and how to process so many different things at the same time. You tune those things out. It’s the same with your eyes. You’re doing a lot of work and you do it without thinking about it at all. You just compensate for those things.
Andrew: What am I not noticing, because I look at my computer all day and I don’t walk home feeling pain the way that I might if I were walking all day in the street. My feet might hurt, my shoulders might feel a little tense and my legs would hurt.
Jennifer: I think it really depends on the person. Some people have a little bit of irritation or dry eyes. Some people have migraines. It really depends on the person and how your visual system interacts with the computer. But I think what you would notice more is just fatigue. You are using those ocular muscles, they’re pinched to focus in the near distance. That’s something that you do without thinking about it, so people put it off on not getting enough sleep or having a stressful job. It’s taxing on your system but it isn’t something that you can say, “Oh I had a tough workout at the gym. My abs are killing me.” It’s not like that.
Andrew: How do you convince customers that they need you when they’re not walking home at the end of the day with a specific pain that they can’t wait to have solved, when they’re not aware of the issue?
Jennifer: I think once you bring awareness in, you see that this could be an issue. Even if it’s not an issue, preventive measures would be beneficial because you are doing a strain. Even if you don’t have symptoms from it, you’re still processing information and staring at the light. Once you explain it to people and when you explain what we do, pretty much everybody says, “Oh yeah, I do know what you’re talking about.” It really is subconscious. It’s not something you think about. Your brain just compensates for it.
Andrew: Once they hear what the pain points are, they start to be aware of them. There are some people listening to our interview now who might be thinking as they’re walking home today, “Hey, you know what? My eyes do hurt.”
Jennifer: “I have a little bit of blurred vision. My eyes are dry. I’m pinching the bridge of my nose. I’m tired at the end of the day. I do have to look away from the computer and take breaks.” You do start to notice those things once you’re aware there’s a problem. Now, you have a whole other spectrum of people that have an eye twitch that they can’t get rid of. They have migraines from staring. That’s the far end of the spectrum, people that really need to do something about making it work ergonomically for them.
Andrew: You were telling us about Carl Zeiss before I got distracted by email.
Jennifer: They are a150 year old optical company, and they are in the top two for optical lenses. They do the lenses for instrumentation. If you take a close look at a Sony camera, you might notice that it has a Carl Zeiss lens on it. They are very well known internationally. If you don’t wear glasses you might not know who they are, but I think they are in the top two lens providers globally.
Andrew: From what I read, they’re going to help you develop the lenses and they’re also going to help you market them.
Jennifer: They are actually going to do all of our prescription lenses, and they’ve got, like I said, 150 years of expertise. We have a few. Anything that we can do to improve on our products is what we’re after.
Andrew: Where did the idea come from for this business?
Jennifer: My husband was initially in Wall Street, in banking, and he had migraines from staring at the computer. He was on that far end of the spectrum of computer vision syndrome. At the time he was diagnosed, the only solution he was offered was 20/20/20. Look away every 20 minutes, for 20 seconds, 20 feet away. Or, he could wear reading glasses, and he was only about 30 years old. The little reading glasses that you can pick up at the store only take care of a problem or two. They don’t take care of the full spectrum of issues that your eyes are forced to work at. We had a friend that was in optical and he is a Stanford engineer. We talked to him a little bit about it and said, “Hey, this is an issue. Is there anything that we can do?” Good friends of ours started tossing the idea around and then several years later my son Gunnar (the company is named after him) was born. At a very early age, I want to say before 3, he was playing on the computer because he wanted to do what his parents were doing. We went to print out some pictures from one of the cartoons that he had seen so he could color, and I said, “OK Gunnar, let me Google the show.” He looked at me and said, “Go to PBS.org.” I realized right then that these kids are going to be on some form of digital device for everything; for all of their education, for their entertainment, for their information, and they are born into this digital age.
I grew up in Cupertino so I think I was introduced to it earlier than many people. But I read an article yesterday about kids in high schools and colleges being issued iPads. When these younger generations are using them all the time, what effect does that have on their vision? It was right then that I said that this is something we need to do. This is something we really need to look into and research and see if there isn’t something that we can come up with that will make a difference.
Andrew: What was your background? I know you’re not a serial entrepreneur. What were you doing before?
Jennifer: My background was in marketing and advertising, and at the time I was a stay-at-home mom. I had Gunnar and I left my job when I got pregnant and that was that. I was a stay-at-home mom, and I had every intention of staying a stay-at-home mom while I had little children. This is not something I planned to do. It just happened. We went down the path and as we had little successes here and there, decided to stay the course.
Andrew: You had this idea. You saw how your husband’s eyes were at 30. You saw that your son was headed in the same direction probably faster, and the rest of us were going to follow the same path. What’s the first thing that you did to launch the business?
Jennifer: It was a few years worth of research, I think, that we did initially, really looking into seeing if there was an issue that was more widespread than just the small community of people that we were speaking with. We realized that it was a widespread problem and rapidly increasing. They came out with a study recently on myopia, which is nearsightedness. It has increased 17 percent over the last 30 years, much of it due to people staring at computers for long periods of time. As humans, we’re not meant to be doing the things that we’re doing.
Andrew: You did the research. It’s time now to create the product. How did you create the first pair?
Jennifer: Wow. Well, we actually went through a lot of iterations of what we were doing. It turns out that the medically correct solution for CVS doesn’t really work for the mainstream. It has focusing power that is pretty significant and for a lot people that doesn’t work. It’s too much and can have adverse effects. So we went through quite a few iterations of what we were doing and long periods of testing them and doing focus groups and samples. That took quite a bit of time.
Andrew: You were doing full on focus groups, or just checking in with your friends?
Jennifer: No, we were doing full focus groups and studies. We did a study with the University of the Pacific. Microsoft we did a study with them on productivity and the effects of dry eyes. So yes, we did quite a bit of . . .
Andrew: What are the effects of dry eyes on productivity?
Jennifer: It’s the effects of not just dry eye, but eye strain and blurred vision. All of those things have significant impact on productivity. I could send you the data. But basically for companies, there is loss of revenue from people making mistakes because their vision is compromised, people taking breaks and people being out of work. Those are the types of things that companies are paying for when an easier solution would be to have computer eyewear.
Andrew: How much did all that research cost you before you launched?
Jennifer: Quite a bit. [laughs] Quite a bit of money, we spent.
Andrew: At that point, it was just you and your husband footing the bill? There was no company and no outside investors?
Jennifer: Yeah. At the time my husband and I personally paid for everything.
Andrew: Did you want to be in the eyewear business?
Jennifer: I really didn’t. [laughs] Like I said, I was a stay-at-home mom. It wasn’t my intention to get into any business. At the time I wanted to stay at home with my kids.
Andrew: But you were going down a path that would set you up as an entrepreneur who was running a business. Was your vision to do this part-time while you were raising kids?
Jennifer: My vision was to do whatever I could to make a difference for this generation. It’s something I’m passionate about. I think, as a mom — I don’t know if you have kids, but I have three children now — as a parent, you want to do whatever you can to protect them and that includes their wellbeing from head-to-toe. You’re putting on their seatbelt, you’re putting on the sun screen and you’re making sure they eat right. They breathe and they’re exposed to all sorts of things, but you want to do what you can to protect them and this is part of it. It was important enough that we did continue down the path.
Andrew: If it was just for your kids, you could have created glasses that were made just for them, and you didn’t need the focus group. At what point did you think there’s a bigger business here? There’s a bigger, graspable market and not only is it there, but I’m not going to just blog about it and hope somebody else creates it, or write a letter to Carl Zeiss. I’m going to build a business here to seize this opportunity. Do you remember what triggered that decision?
Jennifer: I think what triggered it was seeing how widespread the problem is. It’s actually, CVS is about four times more prevalent than carpal tunnel. That’s a pretty big market for what we do, and I think at the end of the day I’m doing something that’s good for people. It’s an incremental change, but it makes a difference long term. It makes me feel good about what I’m doing. I’m trying to make little differences.
Andrew: You decided you were going to launch a business. At the beginning did you think you would continue to self fund it, or did you know right away that you would need to raise the money?
Jennifer: At some point, when we went for inventory, decided this is the part where we need to bring in outside investors. It’s very (________) in the sense that you need a lot of money to buy inventory, for shipping, sales and distribution. So that is when we decided we’re not going to self fund this any more. We’re going to go to friends and family and get investors.
Andrew: Why did you decide to be in manufacturing at all instead of coming up with the technology and licensing it out to someone else to create?
Jennifer: You know, that’s a good question. I’m not sure why we made that decision. My co-founder, Joe Croft, is an engineer. He actually has another company where he manufactures diaper bags. It’s called JuJuBe, give him a little plug. It’s a great company and he’s done this multiple times, manufacturing goods, so he knows what he’s doing. He’s very well versed in going overseas and working with the factories. It’s the path we decided to take.
Andrew: How did you know where to have it manufactured?
Jennifer: That is all Joe. That’s Joe Croft. That’s my co-founder, and he does all of the production.
Andrew: How did you convince Joe to join up with you?
Jennifer: There wasn’t a lot of convincing. Joe and his wife are good friends of ours. It didn’t take a lot of convincing to get into the business together. I think he saw the same things that we did. He saw the same issues and saw that it was a sizeable market. It would take a lot of work, there was a lot of education involved, educating the public, but I think he saw the same things that we did and decided to go for it.
Andrew: Do you know what specifically it was about this business that made him want to join up; that captured his passion enough that he would commit two years of his life and a lot of hard work to it?
Jennifer: He and his wife have four children. I think from that standpoint we’re all very passionate about our kids, our communities and making that difference; visually or however we can.
Andrew: Do the glasses come in kid’s sizes yet?
Jennifer: They don’t. There’s a lot of research that needs to be done for the under 12, so 12 and up is basically the focus. We’re really focused on a little bit older than that even, probably 16 to 34, but really, anybody that’s on a computer for long periods of time. I don’t know that that younger crowd is on the computer as much as, say, you or I are on the computer at this point.
Andrew: Can you tell me about the first few sales? I think I bungled that introduction. What I meant to say was: It’s hard to get the first few sales; the first hundred, tough, the first thousand, tougher. The first hundred thousand, many people never see and they close up shop. The people who I interview here would say, “Last year we did a million, next year we’re going to do 2 million sales.” I think that’s an easier leap. Even though it seems like a bigger leap, it’s easier. Let’s talk about the first sale that you made, and then move up and up, end of story.
Jennifer: Well, when we launched the product it was October, 2008, and we did a soft launch here in San Diego with just a few places that we had Gunnars, and M Online had them available. We would see a few trickle in here and there, and it was really exciting for us. Our first path was going to the doctors. The doctors had them in their offices. That was a little bit easier for us to explain what we do, how we do it, how it will work for them and so they were initially the first people to sell them. It kind of ramped up from there.
Andrew: Jennifer, did you go door-to-door to doctor’s offices and show them the glasses?
Jennifer: Yes.
Andrew: You did?
Jennifer: Door-to-door.
Andrew: You walked in there and you said if you have any patients who have eye problems, who have eye strains, migraines, consider giving them these glasses.
Jennifer: That’s pretty much what we did.
Andrew: What kind of feedback did you get from the first doctors who saw this? I think that’s invaluable.
Jennifer: I think we had a few doctors who were on board and they really understood what we were doing and what we were trying to do, and they were behind us 100 percent. That wasn’t true everywhere. A lot of doctors said, “Well, this is something that I can make myself.” We said, “Absolutely. It’s something that you can take the components of what we do and try to put that together yourself. It’s a lot more expensive. It’s a lot less comfortable for you. What we’re selling you is a complete package.” I think once they understood from a business standpoint that we were offering them a tool that they can use, then it made the difference to them. The fact that we’re covered by insurance, the fact that we have medical advisors on board and I think, the people that we have in place were what convinced them that it was a good option for them.
Andrew: Can you give me a specific sale that you helped make and show me how you walked through it? It sounds a little ridiculous to say, do you remember one of your early sales. But we all remember coming back home from the first sale, saying “Yes!” It might seem small in comparison to future sales, but man, that one is memorable. Someone, maybe, who was a skeptic, who you turned around?
Jennifer: I think there were a lot of people in the early days that would just try to look at us like I’m not sure what this is, or what they do and I’d think if I could get everybody and talk to them one-on-one and put the glasses on them and really have them look at it and see the difference for themselves. When you have that light go off basically, that they understand it and say, “Oh yeah, now I get it. I understand it, and yes I do have eye strain.” Those are the memorable experiences. I think that some of the feedback we get from not the one-on-one, but the people that are online who have had an eye twitch that they couldn’t get rid of, and they write a letter that is extensive because they are so appreciative that something that’s noninvasive could make such an impact for them. Or the migraines, those are the things that make it all worthwhile.
Andrew: The early sales come from door-to-door selling to doctors, who then introduce it to their patients. What’s next?
Jennifer: It’s such a huge market, so really focusing on the channels where we could make an impact like the optical community. The online presence was there from the beginning. That’s been tough. It’s much easier now that you have social media. You can get the word out very quickly. I think going into gaming, some of the gaming retailers. Those were a little bit tougher, but we started off in that direction as well and then eventually into consumer electronics. That’s the direction that we’ve taken and it’s worked quite well.
Andrew: I think for just about any interviewer for any publication that would be enough, because they like to go high level. I am a business nerd. I like to dig deep in and really understand it. If you don’t mind, let’s get a little technical here. Optical community — I’ve written down all the areas where you went and marketed your glasses. Optical community, is that just going to doctors the way you described, or is there more to that?
Jennifer: Doctors and small, independent optical stores. Basically those outlets that are not big, major chains are where we went.
Andrew: Just door-to-door, “Hi, my name is Jennifer and I’m with Gunnar Optiks. I want to introduce you to a new pair of glasses. Your patients are going to love them. They’re not going to have eye strain. They’re brand new. If I could show you a pair I’m sure that you’ll understand, let’s try them on.” That kind of thing?
Jennifer: Exactly.
Andrew: I might have a job in this business. I think I can do that.
Jennifer: [laughs]
Andrew: Number two. You said online. By online, do you mean your own website, or did you also go out to other websites like ThinkGeek, or any of the other techy stores?
Jennifer: Initially it was our own website and then we branched out to a variety of etailers. We are on BestBuy.com, Amazon, Zappos — they’re not easy. It’s not easy to get into the completely new products category. But we got there, and for eyewear, that is something you’d think people would want to try first, doing very well online.
Andrew: How do you get into BestBuy online? Again, I go into the trenches.
Jennifer: It’s not easy. [laughs]
Andrew: How? Tell me about that.
Jennifer: Well, to be honest, I don’t work in the sales department. We have a sales department that does that, and I think it was quite the uphill battle to really convince them what we do. I think some of our partners and investors, and having Zeiss on board really made a difference because it gave validity to what we do.
Andrew: Is it that you have your own sales people and all you have to do is pretty much bring up Carl Zeiss and doors open up?
Jennifer: No. [laughs] It depends on what we’re doing. Really, I think the sales numbers — it really boils down to the dollars with a lot of these sites and they want to see numbers. They want to see hard numbers, they want to see figures, they want to see demographics, they want to see that type of information and it’s a numbers thing for them.
Andrew: What kind of figures? What kind of demographics? They’re looking to make sure that the demographic that buys those products is the same kind that walks into their store. How do you do that when you’re so young?
Jennifer: It’s not easy.
Andrew: Tell me. That’s why I’m asking. Teach me, you went through the process. I’d like to save my audience some time by having them learn how you did it so they don’t have to bump their heads against the wall when they do it.
Jennifer: I think, going back to the Internet and the analytics and the data that you can retrieve and take a look . . .
Andrew: From the data that’s coming to your website based on Google analytics, you can say, “These are the people that are coming to my website. They line up with the customers in your store?”
Jennifer: Yeah. These are the sales and these are the figures, and presenting all of that to them makes it much easier.
Andrew: What’s been the best source of customers from all of the online stores that you’ve been in?
Jennifer: The best source of customers are the gamers.
Andrew: The gamers. Are there online stores catering to gamers that you were able to tap into?
Jennifer: I think the BestBuys and the Amazons, I think those stores cater pretty much to everybody. We do quite a bit of advertising and PR to those areas, to those publications, to that media. We have a partnership with MLG, which is Major League Gaming, and they understand what we do and they appreciate what we do. It makes a difference for them so they spread the word on their own.
Andrew: That’s the next item on my list here. Gaming. I’m wondering how you got into the gaming community. How did you personally get in there? You’re not a gamer yourself.
Jennifer: I’m a gamer, but I have three kids so they take over the Xbox and I don’t have a lot of time on it. I don’t have a lot of free time to play video games at this point in my life anyway.
Andrew: But then how did you do it? How did you get into the gamer community and convince them that you had enough credibility in this space that they should pay attention to you and buy your glasses?
Jennifer: Well, I have to give credit to my head of marketing, Mark McNab. He is a marketing genius and he was the one, very early on, who said that this is a great product. We should reach out to the gaming community and start some work there and see what they think and get their feedback. The credit really belongs to him for that.
Andrew: Tell me more about what he did. Obviously, he did most of the work. It’s his job to be involved in this and he spends more time on it than you do. But it’s your company, you’re overseeing his work and his responsibilities. Plus, you’re an entrepreneur, you’ve got to be proud when somebody does something like this. You want to watch and learn from him the way that I do. Tell me, what did he do? How did he get into that gaming community?
Jennifer: I think, a lot of different ways. He just started talking to people. He’s very personable and he will go out and talk to anyone for anything. So he would just start talking to people and getting into that community and getting an idea for . . .
Andrew: By talking to people, do you mean talking to individual gamers, or are we talking about talking to bloggers, manufacturers?
Jennifer: Talking to developers, talking to professional gamers, and talking to some of these gaming leagues like the Major League Gaming. Going after them and really immersing yourself in the community to understand it. Going to the events that they have and the meetings, like Tracks, that we just recently had, and Etree—just immersing yourself in those areas.
Andrew: When you talk to professional gamers, are you asking them to try it and just hoping that they’ll like it and continue to use it? Or, are you making some kind of deal with them where you pay them to wear the glasses and to endorse them?
Jennifer: We don’t pay them to endorse the glasses. We sometimes have people come to events. That’s a little bit different. We’re asking people to come to things. We don’t pay them to endorse our glasses. We’re pretty confident, and we think if we can get people to try them they’ll like them, and for the most part it has worked out very well. It does work, and they do see the difference. You see, a lot of these gamers, they carry around eye drops because their eyes are constantly dried out. These guys will go for a minute, two minutes without blinking, and so for them, they are really at the heart of what we do. They are the definition of the hard core computer user. Just the intensity, visually, for these guys has got to be more than anybody else. They understand what we do and it does make a difference for them. If their eyes aren’t dried out and they’re not blurry and they’re not exhausted, they’re not going to blink and they’re not going to miss a kill. They understand it.
Andrew: You also said consumer electronics. What do you mean, first of all, by the consumer electronic industry?
Jennifer: In the brick and mortar stores is what I was referring to. We’re in Frye’s, we’re in MicroCenter, and hopefully in some bigger big box stores in the near future.
Andrew: What was that like? I’ve had friends who have tried to sell these big companies, who tried to get in the door and get listened to. They said the recession helps them because if they can prove that they can make money, then that’s all it basically takes. But it’s still, even with that push, even if they could show that they could make money for individual stores, it’s still just a gauntlet that they’ve got to run through. It’s a lot of work. So how did you guys do it?
Jennifer: It’s a lot of work, and I think the worst thing in the world for us would be for our eyewear to go in there and put our POP and have them sit because people didn’t know what they were and the education factor wasn’t there and we hadn’t built the foundation for what we do. A lot of it is timing for us, and going into these stores we really had the ability to do it from a lot of different standpoints. We had the confidence to go in there and meet every challenge and every question that they had and give them the bottom line, the dollars that they could make off of this. That’s important, but it’s just a part of it.
Andrew: How long did it take you to get into Frye’s?
Jennifer: It took awhile, to be honest. It’s not as easy as you think to get a product in there. I sometimes see products in these stores and I think, “How did this get into this store? How are they in here, and for us it’s so much work?” But it’s not easy. It took us a long time to be ready on our side to do it; to scale appropriately and get into those stores at the right time for us was the most important factor. It’s tough. It’s not as easy as you would think.
Andrew: 100,000 glasses sold through the optics community, website, yours and other people, to the gaming industry by courting them, to the consumer electronics business through the consumer electronics stores. That’s where we ended up with the first 100,000.
Jennifer: We also have a pretty considerable international footprint as well now, a lot of different countries. I’m including a lot of that as well. We have Canada, and globally it’s ramping up much faster than in the U.S. Our first 100,000, where most of that was U.S. based, we do have international that is now ramping up as well.
Andrew: Is it just at this point that you had the funding and so you were able to go after all these markets all at once, and hire people who could spend all their days courting individual segments of your market? How much of an impact was that?
Jennifer: Like I said, we raised funding from friends and family. We did the MCI plan. We did not go out and raise massive amounts of money so that we could spend, spend, spend all over the place. We tried to keep it smaller and scale appropriately because you can get in over your head in trying to branch out too much at the same time. Strategically going after markets that made sense according to the timing is what we focused on. We did not go out and try to hit every single avenue all at once.
Andrew: And this is all over the last year and a half, roughly?
Jennifer: Pretty much.
Andrew: Pretty much. What is a year and a half? Why go after all these different areas instead of starting with one? Why not start with just the gaming community, and once you’ve established credibility there, start to grow into other areas. Why not go after just optical community and establish yourself and your reputation there before moving on to another area? Why did you decide to go after all, what do we have here, four different areas?
Jennifer: Well, we didn’t go after them all at once. Like I said, we went after the optical first, and had that sector behind us and on board with what we were doing. Then we started to branch out into the gaming and into the consumer electronics, so it really was staged. It wasn’t that we went after all of those at the same time. It wasn’t simultaneous at all.
Andrew: The other thing that I wanted to learn in this interview was about raising money. Friends and family, what was that like to approach friends and family and ask them to invest in you?
Jennifer: Again, not easy. I think the timing was very difficult. We had a lot of people that invested because they are friends and family. We had a lot of people that were more difficult because they were bigger investors, so getting smaller amounts of money as not as easy as it is to get sometimes a larger sum. We didn’t want to go venture capital. We didn’t want to take that route. Really, it’s not an easy thing to do. We had a legal team that helped us, but it really was up to us to go out and raise the capital.
Andrew: Did you feel like it was an imposition to talk to friends and family about your business and ask them for money? Does it add pressure to know that it’s friends’ and family’s money that is now behind you and that you have to do well for them? What was that like?
Jennifer: Absolutely. It’s absolutely difficult to know that you have friends’ and family’s money involved. But when it is something that we believe in, we have the foundation and we have it set and we’re confident in what we do and in our ability to sell, it makes it easier. But it is not an easy thing to do, to raise capital. The VC route or friends and family; none of those routes are terribly easy. It is tough, because you’re working for them at that point.
Andrew: Did you do another round after friends and family?
Jennifer: We did an initial round. We actually had more come in than we had anticipated, which was unheard of at the time. So we only took in the amount that we wanted and then we went back for more because the inventory was considerable that we had to purchase. We went initially, then we went back for a second round for inventory financing. Now that we’re a little bit bigger that’s not such an issue.
Andrew: Peter Thiel, he’s an investor. He’s the guy that’s known for launching PayPal, growing that and selling it to eBay. He’s the guy who’s known for investing in Facebook, and who, “Fortune,” when they wrote an article on him said, “Guy’s got a butler,” and that’s where the article on Peter Thiel started. How did you get him as an investor?
Jennifer: Actually, Clarion Capital was an introduction. They are very good at what they . . . Peter, at any age, is very good at the things that he has chosen to put his money in thus far — Facebook, PayPal, LinkedIn. I think an introduction and a lot of information that they wanted and a lot of due diligence.
Andrew: What was it like to pitch them?
Jennifer: Not basic. [laughs]
Andrew: Can you tell me about how you prepped for it?
Jennifer: You know, we’ve got our investor deck. I think just getting all of your facts and figures and your information together and putting your best foot forward and going to all of these people, to any of them.
Andrew: I need more specifics. To say just putting your best foot forward is kind of obvious, and it sound cliché. I need, like, specifics. I created the first deck based on a book that I got and it ended up being a ridiculous “How to Create Powerpoint for Dummies” book. But it was the first set of slides that I created. Then I took it to a friend who said, “No, here’s what you need, three slides.” Give me those kinds of specifics.
Jennifer: There again, we had a lot of help from our marketing and Joe Croft.
Andrew: Be more specific about the kind of help that they got. Here’s why I’m pushing for this. We agreed in the beginning of this interview. I won’t push for finances. If that’s not what you’re comfortable saying, that’s fine. This isn’t like proprietary information, but it is useful information if we can get into the specifics of what was it about your deck that worked? When Fred Wilson, the venture capitalist said, “My deck was too confusing because it added too many details and I had to dumb down my deck in these ways so that I could raise money from my limited partners. I thought that was interesting, because a lot of entrepreneurs say that when they go to venture capitalists like Fred Wilson, they have to dumb down their message and here he is doing the same thing. So the idea is to just keep simplifying and simplifying your slides. Give me as specific as you can.
Jennifer: I think making it very straightforward, very easy when you are talking to these people. They don’t want a novel. They want very clear, concise information. They want to know the bottom line.
Andrew: What’s an example of maybe a slide that wasn’t so straightforward, that you took from big and bulky, and made it simple to understand? I can learn from that.
Jennifer: My co-founder and I are both fairly wordy. For us, it’s difficult to really boil it down to just the very important points without expanding unless people ask for it. You really have to go for the essence of what you do. Explain it quickly and concisely. I don’t know that I have an exact example for you of what we did. But keeping it short and to the point, I don’t want to say the textbook message of what we do, but really that’s kind of the path that you ultimately follow and you’re dressing it up as something else. But you’ve got to follow that methodology in making it quick, simple, concise and easy for them to understand.
Andrew: I get that. I just think that if I could hear how you did that I’d learn so much. I’m not asking because I’m prying, I’m asking because I admire your business. I admire how far you’ve gotten. I admire the investors that you have and I just want to learn as much as possible. If it’s more specific, I feel like we could learn even more. If we attach a story and a clear example, then it’s something that people will remember for the long term. But I’m not good at remembering specifics either. I’ve got people who I interview who can remember the names of the first person who turned them down and every one after that one when they were going after investors. I don’t have that kind of memory either. I wouldn’t remember it.
Jennifer: I don’t have that kind of memory myself. I think making it visually aesthetically pleasing and . . .
Andrew: See I want to know how, I want to know how you, when you need to make it aesthetically pleasing, here’s how we did it, because I don’t have the skills. We went to 99Designs, or we went to ELance, or we hired a friend’s kid and here’s how we did it and paid him $20 bucks but it ended up being beautiful. All you need is a little polish. That kind of stuff.
Jennifer: We do it all internally. All of our marketing materials and everything is done internally. We have a great team. It’s a very small team, but it’s a great team, and we pride ourselves on our brand name and our imaging. That was a big part of our deck. It’s very important to have the marketing surrounding the . . . look at the success of say, Apple, because they keep it very consistent. Their branding is very well known. I think taking from companies that we would like to mirror in some ways, doing that and adding those components for the branding and marketing of it is important. Keeping that consistent along with the message to us is very important.
Andrew: What’s next for the company?
Jennifer: Oh, gosh, what’s next? I think continuing to branch out into different sectors. International presence, expanding that and overall just keep the growth and continued expansion until we get every single pair of eyes in the world wearing Gunnars when they’re on the computer. [laughs] But I think anybody that we can help, anybody that has eye strain, those are the people that we would like to at least be in front of and say, “This is the solution. It’s a great solution and we’d like to be the solution for you.”
Andrew: I know there are people who are listening to us right now who are saying, “I’d love to try this.” If they want to try it, they can go to the local Best Buy and put on a pair?
Jennifer: Well, actually, we’re not in the brick and mortar Best Buy. They can go to Frye’s or they can go to BestBuy.com. We do have a return policy. Try them for 30 days. See if they work for you. See if you like them. Check out the quality of our lenses. Check out the quality of our product. We stand behind what we do, and it is important for you to take care of your vision. It’s the last thing we think about. You put off going to the dentist and going for your checkups. Well, vision is at the very bottom of that list unless you already wear glasses, so we want people to think about it. If we’re not the solution, make sure you’re taking some measures to protect your eyes and protect your vision, and your children’s, that generation. Let’s make sure that we have a bright future and we can all watch the movie on our iPad, but we can go watch the football game too and enjoy it.
Andrew: I hope people from the audience check out Gunnar Optiks. Get yourself a pair of glasses and give me feedback. Let me know what you think of them. I’m looking forward to hearing from you guys. The website is GunnarOptiks.com?
Jennifer: It’s Gunnars.com.
Andrew: Oh, all right. Jennifer, it was great to meet you. Thanks for doing the interview.
Jennifer: Thank you so much for your time. I appreciate it.
Andrew: Congratulations on the launch. I’m looking forward to watching the company grow.
Jennifer: Thank you.
Andrew: Bye.
Jennifer: Bye bye.
Andrew: Bye everyone.
This transcript brought to you by www.SpeechPad.com.
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