Andrew: Hey there, freedom fighters! My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. I’m racing through this intro because it’s very important this to listen to in this interview. No matter what, I want you to hear the first thing he sold in this interview. Even if you don’t like me, even if you don’t nothing but skip to that portion, you owe it to yourself to hear the first thing today’s guest sold, okay? Now I’m going to read the intro as I wrote it before. I want you to know that, and now let’s go to the intro. And the intro is this.
I’ve got a story for you about a founder who made a promise to his wife that he wouldn’t spend too much money launching his site. Despite the limited funds that he used to launch his business, he still was able to build a multimillion dollar company. And I invited him here to talk about he did it. That entrepreneur is Jonathan Beekman. He is the founder of ManCrates which offers gift boxes for men. Their gifts include a personalized whiskey crate which actually comes with a crowbar which you’re going to need in order to open up the whiskey crate and premium jerky that comes in an ammo can.
All right. One more thing before we start. Thank you to Big Commerce. Big Commerce is the platform that Jonathan uses to run his store, and I emailed Big Commerce and said, “Hey look, I interviewed your founder. Would you mind telling me about some of the bigger store on your platform and they said, “You’ve got to talk to Jonathan.” So a big up to Big Commerce for introducing me. Jonathan, welcome.
Jonathan: Hey, thanks for having me.
Andrew: The promise you made to your wife was what?
Jonathan: So I told her, based on our kind of background. I had worked in nonprofit, went back to school to get my M.B.A., came out of business school, wanted to start a company. My first company was also a gift company. We ended up pivoting a couple of times, raised money, hired a great technical team, ended up licensing the technology, getting acquired plus the home run we had hoped for. But coming out of that experience the savings . . .
Andrew: Was the home run you hoped for, does that mean it failed?
Jonathan: So that’s a good question. The failure was relative. I think I learned a lot from the process, but, yeah, I would say not a hit for us but . . .
Andrew: Did you personally lose money or just your investors?
Jonathan: So every business I started so far invested my personal cash. And so, yes, I lost some money.
Andrew: That’s why your wife said . . .
Jonathan: It’s interesting. So I have a very eclectic kind of work background. I spent three years in nonprofit before coming back from business school. So, you know, the thing about nonprofit you don’t make a ton of money. If you know anything about business schools, you are spending a lot of money. So coming out of this last startup, my wife was, I think, a little bit nervous about me diving back in and doing another startup, especially using our own capital to do that.
And so basically the promise I made to her, I said, “Look, I totally get it. I think this thing can be huge. Let’s me try to derisk the business as much as possible, only spending a thousand bucks in the initial stage.
Andrew: A thousand bucks? That’s it?
Andrew: And she went for it.
Jonathan: She went for it, yeah, of course. My wife is awesome. She was like, “Okay, let’s see you do it for a thousand bucks.” And I immediately regretted only asking for a thousand bucks. I should say it’s hard to do anything for a thousand bucks, but that was my limitation early on.
Andrew: Can I tell you something?
Jonathan: Yeah, you should be so lucky to have a wife who says exactly what your wife said. It turns out that it was one of the best decisions that you made, right? Not only does it make for a better interview for me, which everyone should be thinking about me when they’re starting a company. But second, it made you, it forced you to come up with creative solutions, am I right?
Jonathan: Yeah, totally. I totally agree 100%.
Andrew: All right. We’re going to find out what the first ones were.
Andrew: So you took a thousand bucks. Your idea actually was . . .
Jonathan: So the idea was I came from a gift business called GroupIt where we were trying to do basically kickstart for group gifts. And we were doing this as a service that we’d offer to retailers. So I had been in the gift space for a couple of year. There is a ton of money spent in gifts, and when you talk to customers very few people were actually happy.
And so this has been grating on me since my last business school. I thought, look, the first cut at it didn’t work out. I think I can actually do something that’s interesting in the space and really innovative that no one has really gone after which is guys are notoriously hard to buy for. So I said, “Look, I like cool stuff. My buddies like cool stuff.”
Let’s try to take this concept of ManCrates. We’ll choose, hand select awesome stuff, you know, gadgets, gear, tech. We’ll pack it into these wooden crates, and we’ll ship everything with a crowbar so at worst they’ll have to rip this crate open with his bare hands, right?” It’ll be just like this very visceral fun opening experience. And so that was the initial kernel of the idea.
Andrew: And, Jon, before you even knew what would be in the box, you had a vision that it should be a crate with a crowbar.
Jonathan: Yeah, it was one of those moments where everything kind of comes together as if by magic. It was just this light bulb that went off, and I actually came up with this idea while we were working on this other business. And everyone was like, that’s a great idea. But as an entrepreneur you have to stay like ruthlessly focused on what you’re working on. And so when the opportunity came for me to jump out and start working on this full-time. I jumped at the opportunity to do that.
Andrew: I love what you did first. But before we share that, I want to understand what you took from Groupit. What’s one lesson that you said for the rest of my life, I’m going to walk away with this one piece of knowledge that will have made the whole experience worth it?
Jonathan: Totally. That’s a very easy one. So being in the Valley, reading a lot of, like, lean startup stuff, there was one concept that struck me over and over again as I was reading this stuff. And it’s the idea of how do you sell something before you build it.
Jonathan: Right? And so that’s kind of been our mantra here at ManCrates. Like, how do we sell something before we build it? And I think that’s another way of saying, how do you get to product market fit? How do you validate that people actually want to pay you money or spend attention or time on your site before you actually go out and build, you know, a bunch of tech.
And so, at GroupIt, we had actually got things in the works, right? We had this concept. We thought it would work. We hired a super-talented tech team. We built a lot of really, cool stuff. The short version is it worked for half the market. We were basically trying to bring retailers and their customers together. The pitch totally worked for retailers. We thought that was going to be the hard part. We didn’t realize that it was going to take a lot of additional iterations to really nail the customer part. And by that time, we’d spent a lot of money on tech already.
Andrew: How much?
Jonathan: So you’re faced with a couple of decisions. I think at that time, we’d spent maybe half a million to three-quarters of a million dollars.
Andrew: That was how much money that you raised?
Jonathan: I’m not sure if I can totally disclose that number. . .
Jonathan: . . . but it was more than that.
Andrew: Okay. All right. Okay. And so you were saying then?
Jonathan: It wasn’t like there was an impending cliff that we were going go over, but the short version is we spent more money than we should have trying to validate this idea. Right? And so, basically just reflecting on that experience, just realized, like, look, I’m going to be cash constrained because I’m paying for this out of my own savings.
I’m going to be time constrained as well. How do I answer the most important question as quickly as possible, which is does anyone want to pay me money for this, right? Or is this just a crazy idea because I have a lot of them.
Is this just a crazy idea that I think is really cool and no one else thinks is cool? So basically applying that, like, sell it before you build it. That was the mantra that kept running through my head in the early days of ManCrates.
Jonathan: I’d like to think that the DNA of our company still retains a big piece of that.
Andrew: Yeah. This thing that we’re getting to slowly, and it’s important that we’re building to it properly is the thing that people have told me about your company, almost as much as the crowbar, which we’ll get to also, you took the thousand bucks and you used it how?
Jonathan: So what can you do with a thousand bucks? So basically built a website myself. Right? And I’m not a developer by background, so I put my Photoshop skills to the test. Our early website was, like, 70% Photoshop, 30% real products. So I spent a little bit of money getting a logo so we looked professional enough that people weren’t coming to the site and go, this is sketchy and bounce. Spent a little bit of money on early prototypes. And actually, I don’t know if you can see this. This is literally the first and only ManCrate that was in existence for, like, the first six months of the company. Like six months.
Andrew: Not the first version. The first box and only box.
Jonathan: It was literally the only one that we had.
Andrew: That’s pretty cool. I love that you got that over your shoulder. I love that. Yes.
Jonathan: So basically built, like, six different collections of products that I think people would really like. Half of them included alcohol and quickly learned that you can’t sell alcohol, right? Like this is like me being naive and just diving into this thing headfirst.
But then I used the rest of the money, which was probably about three to four hundred bucks. And I just spent it on Google apps. I said, look, with the pitch on the site, and the products as I’ve laid them out and the pricing that I have, and all the kind of marketing at my disposal, can I actually get anyone, just a single person, to buy one thing from me.
Because if the answer is like crickets, and I do everything I can and I optimize my ads and no one is buying, probably not a business I want to spend any of my time doing. So that’s what I did. Starting running ads. Right? And I kind of drip fed it early on. Started getting a couple of sales a day.
And what was interesting is I only have one crate. So I can’t send everyone a ManCrate that they’ve ordered. I would call the folks back and I would apologize. I’d say, you know, we’re a young company and, unfortunately, I don’t have inventory to sell you. So I’ve already refunded your money and I’m going to give you a 50% off discount next time you buy from us.
But while I have you on the line, what was it about what we were doing and the offerings on our site that really kind of caught your attention? And early on, I was expecting people to basically give me a one to two line answer and then hang up on me. And it turned out that people were really willing to share a lot of information with me.
And I was surprised how many 30 and 45 minutes conversations I had with these folks. And I knew we were on to something. I had canceled on one of our early customers. She came back a couple of weeks later and bought from me again. And I had to have another awkward conversation with her and say, I really still don’t have product to sell you, but I appreciate the vote of confidence. And that’s when I really started really realizing listening to customers tell me in their own words the problems I was solving for them, it really-
Andrew: What was the problem? What did you hear that you didn’t know otherwise?
Jonathan: You can ask almost anyone this. You say, “Tell me about the last gift you gave.” And people go, “Uh-hmm.” You know, or you ask them, “What are you going to get for your dad this Father’s Day?” And they’re like, “Uh, you know what, I don’t know.” They shrug. This is the experience with almost all gifting. Buying for guys specifically is really, really tough. Because when we get asked what we want, if you’re like me I go, “I don’t know, I mean I have everything I want, if I want something and I need it I’ll go buy it. I don’t know.”
Jonathan: The problem is, for the gift giver, they want to give you something, right? Because if you think about gifting, it’s really emotional, it’s one of the ways we connect with people around us; expressing emotion through this exchange process. And when you don’t give them any leads, they’re left going, “Ah, I don’t know what to do.” They end up giving you gift cards or something else: ties, trinkets, something they know is going to disappoint you. And you feel as a gift giver, that’s not a great experience. And so when I was talking to these customers over and over again, they were like, “I’ve spent hours looking for something online. This is the first thing that I know he would love, I just really need to have this.” And so just hearing that expression of the pain point they were feeling, over and over again because this happens six to ten times a year. And the way that our products were solving that pain for them was really kind of empowering.
Andrew: What about this? When I look at the boxes as they were before, and compare to what they are now, now everything feels so unique. Like the jerky was, I called it premium jerky because I don’t know what it is. I don’t think I could walk into a store and get it. When I look at the original boxes, it was butterfingers, skittles, coke in there. IPA, beer nuts, stuff I could get at the local supermarket.
Jonathan: Who sent you those early photos? I thought we had deleted those from the internet.
Andrew: We’ve got good researchers here at Mixergy.
Jonathan: [laughs] No, you’re totally right, I mean what can you do? My time early on, I was thinking, “I just want to see if people will buy.” And the initial hypothesis was that the crate opening experience was really unique, we were doing some of the curation for that, but really I was limited because I only had a thousand bucks and I had already spent most of it. So I literally went to the store to buy some of those early selections, and the curation element was something that we introduced later as we built some momentum behind it. So now if you look at our products, every day we’re improving our products, every day they’re more curated, every day there’s a stronger discovery aspect to what we sell.
Andrew: I’ve got a note here to come back and ask you how you improved your product, how you can figure it out. But then if I look back at that early experiment, what you were doing was seeing, is the crate that someone opens up so meaningful an experience that that alone would get them to buy. And if it is, then we can enhance that experience and carry it throughout the product right down to what’s in the box. That’s the test.
Jonathan: Absolutely. And that was the early test. And I would say that was a necessary but not sufficient condition for us building a really big company. To be clear, we’re not just a crate company, we’re not just a “we put stuff in a box” company. Our goal is to become the go-to place online for men’s gifts. You have to think outside of the crate, in this case, if you’re going to do that right in a big way.
Andrew: No doubt, but the first version seems to emphasize that, including the logo that had a crate on it, right.
Jonathan: Totally, yeah. It was pretty rough around the edges.
Andrew: Okay. So I think I’m seeing where this is going. Here’s the other problem that I have with this. I remember reading Tim Ferriss’s book Four Hour Work Week about how he bought Google AdWords to test the book title that he was going to go with. And I remember hearing Eric Ries talk about that in the early days. And then when we buy ads on Google, to test our ideas, it ends up being so expensive and competitive that it’s hard to really buy enough ads to see if anyone’s going to buy. You were doing this in 2011, not that long ago.
Andrew: How were you able to buy enough ads to get customers?
Jonathan: I think the ad buying works for certain types of businesses. I think the lesson I would take away from what we did is the goal is to test whatever you think is going to be the highest converting, most profitable customer acquisition channel for you. That might be Facebook ads, that might be word of mouth, which means you might want to just spend time getting product in people’s hands. For us, I realized that if we couldn’t acquire people at scale using Google ads, it was not a super interesting business to me. Do I think we could have eventually made it work? Probably, because if you look at our total acquisitions to date most of it comes from word of mouth, viral, direct traffic.
We’re spending less and less every day on paid acquisition. But in the early days, I just wanted something that I could turn the dial on and dump money into it, and it would give me a certain number of clicks per day. And I would be able to what my conversion rate was early on, what my cost of customer acquisition was, and I could start to build out a model that eventually I could take back and impart what my wife say like, ‘Look, I think this is actually worth me selling my motorcycle, us investing basically every penny we have because I pretty much de-risked this thing.’ And that was the conversation I had after a couple of months of doing this.
Andrew: The other thing I see throughout the site is a phone number. That went to you why?
Jonathan: Well so in the early days these, the thing you’re trying to do more than anything is you’re trying to talk to customers and hear if you have product market fit. It’s really hard to do that if you’re not actually on the phone talking to customers, right? I mean, you can use, analytics will tell you part of it. It tells you the quantitative part of it but I think the subjective part of it is also really interesting. Building the data base of anecdotes that I heard from customers, it started to paint a much more well-rounded picture of what I actually saw compliment the Google analytics data that I was seeing.
For me, we still do this. The phone number is still on our site because I think that’s one of the best ways that we can develop new products. It’s one of the best ways that we can figure out if we have problems with our existing products. It’s a channel of communication into our business which I think is richer than any other form. I try to get people to call us every chance we have. We have amazing customer service guys and every time we have a call from a customer, I think it’s an opportunity for us to learn about how to…
Andrew: So what did you ask back in the early days that helped you learn what someone who found you on line was looking for? And as you told April in the pre-interview, help you learn the problem that you were going to solve with the business?
Jonathan: I would ask them to tell me about how they found us. You can learn a lot from that. They’re like, ‘Oh, well,’ they’ll tell you where else they were looking so you can kind of figure out if there’s other channels where you should be advertising. Maybe there’s something that you never thought of like, ‘Oh, that’s really interesting.’ You can learn about the key words both through analytics but then also through the way they tell you what they were searching for in the first place, helps you kind of step into their mind and kind of understand what the kind of universe of other solutions is for them.
Jonathan: So for us, that’s what people were telling us. “I was looking for gift cards. I was looking for,” and God forbid, you were looking for gift baskets for men. That was one of the early terms that we just crushed because no guy wants to get a gift basket. When customers would come to us they’d be like, ‘Oh, I thought I was looking for this one thing but then I saw you guys and I realized.’ That’s where we developed this fun, irreverent brand with our customers. If you search gift baskets for men, click on one of our webs, we actually make fun of a lot of the search terms that people that click onto to get to us.
If you type get well baskets for men, you’d wind up on a page with this guy that’s got a patch on his eye and a broken arm and it basically says, ‘Don’t send him a fruit basket. He’s already hurt.’ It’s like a playful kind of brand that we’ve developed with our customers because part of what we’re trying to do is, we’re trying to be basically their wing man and say, “We kind of know what occasion you’re looking for. Let us help you deliver something really amazing that you might not have thought of before.” Talking with customers early on, that will allow us to step back and forth to get that qualitative data that supported everything else we were seeing on analytics.
Andrew: I see. You know what? I see it right now. Now I understand how you can compete with people of so much freakin’ money like Harry and David. They’ve been around forever. They have deeper pockets than you and now I understand. Look at the ad. If I type in gift baskets for men it says, “ManCrates for real men. No bows. No wicker baskets. Just great gift crates for men.” Done. And then I click over and I see it. So I get that.
One question is, how did you find us? Is there something else that you use that you recommend we ask people when we talk to them?
Jonathan: That question will tell you a lot. What we found is, early on no one knew about us. As we started doing different things, started getting some PR hits and coverage, we started seeing that mixed change. The best kind of feedback you can get to that question is, ‘Oh, I saw a buddy of mine post his man crate on Facebook,’ or ‘One of the ladies that I work with was talking about this awesome thing she gave her husband and so I knew I had to check you guys out.’
That’s, I think, a real measure of how viral your product is and we’re viral in, I think, the truest sense of the word and that people tell each other and it becomes something that spreads organically. I think you can do that if you [??] really awesome experiences to people. Asking that question, it’s helped us see how that’s evolved over time and it’ll also [??] focus on certain channels where we might not be doing as well.
Andrew: I was looking at the get well gifts for men. I see what you’re talking about.
Jonathan: You see what I’m talking about?
Andrew: It is so much more fun. Yes. I get it. All right. So then you finally have this thing that works. It’s time now to put it into action. What’s the first step you took once you realized this is a real business, there’s a real need. I can make an impact here.
Jonathan: It’s actually surprising. You might be surprised. It seems like what we do is pretty easy, but there’s actually a lot of moving parts and I learned that it was way harder than I expected it would be. My first step is that I went and talked to people who were in the box business. I talked to subscription companies, I talked to people who were doing gift baskets, and I tried to get a sense for what the flow looks like, how hard is this. And then once we realized this was a go, I actually started doing it myself.
One of the challenges was trying to find the people that sourced the crates; that was non-trivial. In the early days, I was paying this guy who was amazing, this guy named Brian, who was basically building these in his backyard. Every time I went to pick up my allotment of like six crates, it was like we were doing a drug deal. I would back up to his car, he’d open the trunk, I’d open the trunk, and we’d ferry stuff back and forth. It was very low-budget.
Working through some of the things that would seem like very simple things to solve, I thought, “Oh, I can just post something on craigslist and get this.” It took me a while to get the physical product right, and then going and buying products; in the early days I think I was making about a dollar an hour if I was actually going to pay myself minimum wage. Because it took me forever to ship even one crate, and I was obsessed about how long it would take someone to open.
So basically I spent my days in the weeds, actually trying to fulfill the orders that I got, and that was incredibly helpful for two reasons. One, it gave me an idea of what the day-to-day would be like and some of the skill sets I would need from a warehousing and supply chain perspective. The second thing is that I think you can get anyone to buy anything online, once. The hard thing is getting them to buy from you over and over again. And without any real product out there in the world, the feedback I was getting was just about the concept. I had no feedback on what the actual experience was like. So getting crates in people’s hands actually allowed me to get real information about the experience, about how it played in a social setting. I called almost all of our customers early on and just said, “How did it go?” And it was awesome getting their responses.
Andrew: What did you hear that allowed you to make it more viral, make the product more of what Seth Gordon would call a purple cow?
Jonathan: We probably don’t have enough time for me to tell you all of the things I heard, but there were some things that were really surprising to me. I just assumed everyone would love to spend ten minutes trying to hack away at a box to get it open, and feedback from early customers helped us do two things. One, it helped us kind of adjust the opening experience, so it was optimized. We wanted people to struggle, but not be completely perplexed. The second thing was that it allowed us to start shaping the voice and the brand. So if you go to mancrates.com/help, which in the early days a lot of people were saying, “I don’t know how to get this thing open.” And I would say, “Just go to mancrates.com/help.” If you go there, in 64-point font it just says, “Try harder.” [laughs] That’s the only thing we have online.
In talking to customers and hearing how their experience was, it helped us develop this playful banter, and what I learned is that a lot of our early customers really enjoyed watching and participating in that opening experience. It shaped how we manufacture the products, it shaped how we actually present the products in there. Another thing we found is that when people would open their crates without any priming, it took them a while to figure out why all these things went together.
So now what we do is we have a crate card that goes in every one of our products, that basically tells them what they’re getting with a really cool graphic and a little bit of Man Crates humor on the back of the card. So you open your Grillmaster crate, and it’s going to have a card that says, “The ManCrates Grillmaster.” You flip it over and on the back it’s got some funny language, and then you’re primed for the experience. All of those things, all of the physical opening experience, came out of talking with customers early on.
Andrew: You know what, I see that. I see mancrates.com/help does have this beautiful graphic with a man holding up a crowbar and it says, “Try harder” in big font. And if I’m not understanding it, I can click and see it in different languages.
Andrew: So how would someone get to that? Is that on the card, or is that if they called you up?
Jonathan: Both. Normally when someone was on the phone, we directed them to the page and then listened as they went to that page. That provided some entertainment, I think for both parties. On all of our cards it has that at the bottom. We’ve had less than ten total occasions where people just legitimately have not been able to get their crate open. That’s where our team goes into troubleshooting mode, and as far as I know no one has failed to get it open after talking with us.
Andrew: One of the issues I’ve always had with buying from Etsy is that whoever gets the gift is going to get this really pushy connection with the person who made the gift. Which makes sense, because they don’t want me to love Etsy, they want me and my recipient to get to know the person at Etsy so that they don’t get lost. But it’s hard without over-promoting to the recipient. So how do you do it in a way that allows people to feel connected to you, but not that it’s too firm and too aggressive?
Jonathan: From a product curation perspective, we think that great products stand on their own. If we’re doing our jobs, we should be able to put this product in your hands, and if you have a phenomenal experience with it, that’s going to stick in your mind. So I don’t think we have to hit them over the head with more ManCrates stuff. We don’t put any promotional stuff in the crate, there’s no offers if you buy them three more packs of beef jerky from us you get this or that. We don’t do any of that. Because really, what we’re trying to do is we’re trying to step in on behalf of our customer and help them build a relationship with the person that they’re sending a gift to.
So everything we do- the humor, the cards we put in there, the custom videos we allow our customers to create, all of that is done to basically strengthen that bond between those two people. So we try to get out of the way and let our products speak for themselves.
Andrew: You started to say that you interviewed or talked to other people that were in the box business. What did you learn by talking to them?
Jonathan: A lot about basic margins, shipping costs. I learned a lot from subscription businesses, how they think about their business, and how they think about scaling through the different inevitable phases that you go through in this business. So that was really helpful; I think it helped us put in place some mental guidelines about the kind of relationships, the kind of products we need to have, the kind of margins we need to command. It just gave us a set of advisers that were willing to step in and advise us when we inevitably hit some hurdles in the business.
Andrew: Why didn’t you make it into a membership thing?
Jonathan: I’m not sure if anyone has actually successfully done a gift business that is a subscription. We tried that at my last company, and I think there’s some challenges there. There’s quite a few people that do like that you can buy a subscription for someone, and we’re certainly doing that. I’m not sure there’s a ton of people that, on behalf of the customer, will log in to buy one gift every month and then they send it to different people. Fundamentally, gifting is lumpy, right? So you might not have any occasions for the next three months, and then come December, you’ve got 12 gifts you’ve got to send. So basically what we’re trying to do is build a long-term relationship with our customers where they come back, which they’re doing. They come back and buy from us because they’ve had such great experiences.
Andrew: How do you get them to remember you?
Jonathan: You’ve never received a ManCrate, have you?
Jonathan: Okay. I’m going to send you one, and then you can ask me that question. I think it’s really hard to forget us.
Andrew: I see, you’re saying once. But if I get it, how do you as a recipient- I guess I would call you up, but I would call you up and thank you anyway.
Jonathan: But the thank you is going to be totally different. Think about getting a gift card, think about the kind of thank you that you might give someone that way. If you’re there in person, they’re going to see the disappointment or the way you feel about the gift on your face. It’s totally different. Imagine you’re in your office, there’s a bunch of your coworkers around, this thing lands on your desk with a thud. You go to help, all your coworkers are participating in the experience with you. You rip this thing open, and everyone’s like, “Yeah, you finally got it done!”
It’s just a kind of social experience that you don’t get with a lot of products. So even if it’s remote, our job is to make the gift recipient love the product so much that they’ll brag about it to their friends, they’ll post it on social media. That’s the best feeling you can get as a customer. Your buddy posts this thing that you sent him on Facebook, saying that it was the most amazing experience he’s ever had. That seals the deal for us with our customers.
Andrew: I’m wondering how you get to do that throughout the product. I’m always amazed when people will find an area of their site that no one else touches or no one else pays attention to, and not only do they get in there and touch it, but just by touching it they communicate the brand message through it. How do you do that?
Jonathan: One of the things we found early on is that when you go and buy a gift from Amazon, or 1-800-flowers or whatever, everyone does the gift buying process the same. Most people treat is as a tack-on to e-commerce. I think it’s a really different purchasing process. Most people, when you buy a gift, you land on a page that’s got a blank note box that says, “Write a note.” And if you’re like me, I get hit with writer’s block every time I see one of those things. It’s really hard in the moment to write a really funny, witty note, especially when you’ve come through this site that has that sprinkled throughout all the copy.
This is just one small example, and I could talk about this for a couple hours, but the one small example is we said: Look, let’s make it easy for people. Let’s create a feature where when they hit that page, and they hit that blank box, we’re going to give them an option to just click a button that basically says, “Help me write this skit, help me write this note.” You just click that button and it just populates really hilarious notes that we write knowing about the gift you’re giving and the relationship that you have with that person.
So on average our customers will click that button ten times before checking out. And it does two things, one it helps them write really awesome notes. But two, every single time they click that button we’re basically delivering a punch line to them that is another brand impression. And so it’s basically becoming, it’s making the check-out process entertaining. So I think I may have. . .
Andrew: Sorry, no we’re fine. You came up with a great example of it. I’m hitting this suggest a note button now as we’re talking, and it’s very hard to stay focused on this interview because I keep clicking on the things you talk about. Says, ”I never got to properly thank you for that stock tip, let me know when you can make it for the yacht party.” Click suggest a notes. Let me do it again, ”You could have left me to the wolves and no one would have blamed you. Thanks for getting my back.”
That’s clever and it shows an awareness of a part of the process that most people don’t notice. How did you notice it enough, to know that others were going to have that problem and not be as witty as you to know that you should feature that before you take peoples credit card numbers?
Jonathan: So I mean, the bottom line was when we were looking at orders early on, we saw that 50% of people were leaving that field blank. Which is inconceivable if you think about like that’s the only place in most check-outs were you can personalize the gift. Like if someone’s buying you a set of sunglass from Amazon, I could send you the exact same sunglasses. The only thing that differentiates those two experiences it the note that we include, if you’re buying from Amazon.
With us there’s a bunch of different ways to personalize it. But when we looked at the data we were saying, 50% of people are skipping this field, why is that, it makes no sense to us. So we started of course calling people and they’re like oh you know . . . and you start to talk to customers and they say, ”I always hate writing those notes, I thought I was going to email you guys later once I thought of something.” So we just said, why we don’t just give them things to think about and make it easy. And two things happened one, the percentage completion went to like nearly 100%. And two, the kind of creativity that saw in peoples notes exploded. Even if they didn’t take our note like verbatim, we are basically giving people creative license to write creative stuff.
And I think that’s you know, when I’ve watched people open their crates the note card being punchy that like goes a long way. It seems like a small thing but I think guy’s specifically . . . again I’m generalizing a little bit. But it think guys communicate largely on the back of humors, right. So giving about the way most guys like at a bachelor party or whatever. It’s largely a humor based, right. We’re not like having long conversations over wine, usually. But we’re telling stories we’re like giving each other a hard time and this note is kind of the embodiment of that. And so we’re basically making it easy for people to kind of have that experience even if their [??].
Andrew: Right underneath that box is something called diabolical duct tape which I could have. Where do you come up with things like that? And how do you know that they hit and don’t insult people?
Jonathan: Well, we don’t know before we push them, and that’s why we push them quickly and see if anyone cares. So we did that is an option that actually came from our customers. People kept asking us like, ”Oh, can you draw stuff on the package because he’s like really into this or that. Or can you wrap the whole thing in duct tape?” And we heard it over and over again. Again this is another benefit of having your phone number like in big numbers on your website is people will tell you what they want.
And so we kept hearing this over and over again, we said, let’s just test this. Let’s see, you know independent like how hard it’s going to be for us to wrap packages in duct tape. Let’s just test it. So we put it on the site and low and behold a lot of people started actually adding that to their order. And so it’s become this thing, it’s become a thing for us.
Andrew: All right, I get testing it, I get that it comes from customers. What I’m curious about next is how you keep track of it all. You know, sometimes I’ll hear great ideas from guest in my interviews or from the audience. So add it to Evernote. You don’t forget, and it will get disappeared in the thousands of other notes in Evernote. You have so many customer service people beside you. How do you keep track of it all?
Jonathan: Well, so it’s hard. And this phone is like the most annoying, you hear . . . give me one second.
Andrew: Yeah, go for it. Let me say this, okay.
Jonathan: You can also record that again or we can just keep going.
Andrew: No, no we keep everything in there. So if they said anything bad or saying good.
Jonathan: Apologies for the most annoying phone in the world. So your question was basically with . . .
Andrew: How do you keep track of all these ideas and suggestions?
Jonathan: Right, how do we keep track of it? So one of the things we do every week is we have a Monday morning check in with all of our functionalities. We’ll go through marketing, we’re go through operations, and you know we’ll go through what we call voice of the customer. This is opportunities for our customer service guys to basically tell us what they’ve been hearing every week.
And so we track these kind of pieces of feedback pretty religiously. In Zendesk you can do this in any kind of like customer service software. So what we do is we have a dashboard that shows us what people are thinking about. Right. And a lot of times, it’s seasonal. So people will be asking about the same thing over and over again. The voice of the customer is our opportunity every week with the entire team. I’m talking warehouse. I’m talking office. I’m talking everyone to hear what our customers are thinking about.
And from there, it’s pretty easy for us to remember what are the things that are top of the mind on behalf of our customers. the second thing we do is every Friday we send out the one or two most epic emails we’ve gotten from customers.
A lot of times they’re hilarious and not for public consumption. But we’ll send these out. So we’re about just staying connected to our customers. The third thing I’ll say, and then I’ll be done, is the third thing is we have a ManCrates brain trust on Facebook.
Jonathan: It’s like an invite only group. It’s usually for guys and women that have sent us long emails about what they would like to see in future products. And so by kind of tapping this group of people who are already invested, it’s an opportunity for us to run ideas by them and basically get, you know, a much larger scale, kind of, customer feedback group to get us this kind of feedback over and over again. And again, it’s the stuff we hear all the time that we end up prioritizing.
Andrew: The customer service people. I know you go through a tough process hiring them. What are you looking for and how do you weed out the people who aren’t appropriate?
Jonathan: It’s interesting because from what I’ve experienced, there’s a lot of folks that think customer service is all about trying to get your calls prower [sounds like] up as high as possible. Trying to get the customer off the phone as quickly as possible. Right.
It’s trying to solve problems in one touch. And while I agree with that last point. Right. Trying to, like, solve people’s problems when they first call you. I kind of disagree with the standard way that businesses think about customer service. For us, it’s pretty easy as a first pass to see people that have come in from big call centers where they’re kind of measured ruthlessly on these kind of metrics, and have a really hard time thinking outside the box on how we do customer service.
How we do customer service is we really empower our customer service folks to make the customer happy. Full stop. They’re like what guidelines are there? It’s like make the customer happy. Be conversational. Build relationship. And I think a metric of that is, if you’re on the phones and people start calling back asking for you specifically, that’s a good sign. And so our customer service . . .
Andrew: I think I still need a little more depth in this answer, because I want to deconstruct your process. But we also have to put some flesh on that example that you just gave, or the point that you just made. How about we talk about what happened with the hot sauce?
Jonathan: Oh, sure. Sure. The hot sauce story . . .
Andrew: I won’t forget the hot sauce story. What were you going to say?
Jonathan: The hot sauce story is great. It’s the result of what you do, and what you get when you hire the right people for customer service. So our scoring process for customer service is, as a first pass, before we even talk to them on the phone, I’ve got three customer service emails. Right.
And in our job description, it talks about the things that we value as a business. And so you’ve already got a little bit of priming if you’ve read our job description. We send you three of our anonymized, but real, kind of hardest customer issues that we had to deal with.
And you have 30 minutes, and we can schedule so it doesn’t have to be synchronized. You can schedule this so that you have to answer all three emails in 30 minutes. And I’m trying to do a couple of things. One, I’m trying to test, it helps me test, like, how fast you are. If you can’t type, it’s going to be really hard for you to knock those out.
It’s helping me test for voice. It’s also giving me a sense with how you do with ambiguous, kind of, complicated difficult situations. Right. And so if you pass that screen, then we bring you in and I do the, basically, a one-on-one where I also pretend to be the customer on my fake phone.
I call you and you have to basically have a conversation with me as if I’m the customer. If you pass that screen, then we bring you in and we put you on the phones. And it’s kind of the culmination of those three steps that we get a pretty good feel whether or not you’re going to a fit for ManCrates or not.
What that process yields, is it yields people who understand the way ManCrates does customer service and it culminates in examples like the hot sauce. So the short version is we came out with a Hot Sauce Crate and there was a defect in one of the bottles of hot sauce that we were shipping in that crate.
If you kind of jarred the bottle in a certain way, the whole bottom would pop off. It was a glass bottle. The bottom would pop off regardless of how we packed it. So we had this one customer who left us a voicemail and it was obvious that she and her husband in the background were not happy with what we had delivered.
Apparently, he had opened this crate. He had pulled the bottle of hot sauce out and the bottom had just, pfft, all over their white carpet. Like a full bottle of hot sauce. So we called them back immediately and within like 20 minutes, we had a professional cleaner, five-star review on yelp, actually at her front door, cleaning her carpet, and the crazy thing was, this guy was so impressed, the cleaner was so impressed that we’d bend over backwards and try to get him there in a very short period of time that he didn’t even charge us for the carpet cleaning.
Jonathan: No, he didn’t even charge us, so it was totally free to us. Think about that, so we realized that we are going to screw up orders from time to time, everyone is. It’s not whether or not you screw up, it’s how you react to it that helps you build kind of this mystique around your customer service.
Andrew: That top of the funnel there for customer service people was, you send them three emails, not all at once, but you send them an email, they reply, and you send them another?
Jonathan: No, so what I do is I schedule them, so for example I say, “When do you have 30 minutes to sit down in front of your computer and answer customer service?” and you say “6 pm tonight.” I say Okay. So I go in with my three emails, and I just schedule them to all hit your inbox at 6 o’clock. And so 6 o’clock you’re sitting there, [three beep sounds] three emails come in from me, you start cranking them, and by 6:30, I’m expecting to have all three of those answered in my inbox.
Andrew: I see, and that tells you, are they procrastinators, are they overwhelmed, all that other stuff.
Jonathan: But it’s also fair, like, I don’t want to just give someone a task, and they–
Andrew: All is going great, this is a great concept. Anyone who is listening, or many people I should say who are listening, are thinking to themselves, “You know, I wish I had come up with this, it’ such a perfect idea,” and yet when you went to raise money for it, what happened?
Jonathan: So, it took a while for us to convince investors that this was going to be a big thing, right? It’s easy a few thousand dollars’ worth of product, and when we went out to raise, we had only sold about, you know, by the time it closed, we’d only sold about fifty thousand dollars’ worth of product. Now that might seem like a lot, it wasn’t a lot to the investors who were expecting just a massive ramp, and so we had to really sell them on the vision of where this was going. And it took us a fair bit of time to find the right investors that really wanted to be part of this journey with us.
Andrew: Yeah, it was also tough. What did they say to you? I want to make sure, the reason I’m giving you this look is because I want to make sure we don’t leave people with this idea that you just came up with a great concept and because you knew how to iterate using lean startup methodology, everything was easy, and everybody got it right from the start. It was tough to get here. It’s fun now, we’re having a hell of a time just listening to you, it’s fun for you, I can see your loving running this company, but when you talk to investors, what would they say?
Jonathan: So a lot of them would say, “Oh, you know, I don’t know how big this can be, this feels like a little bit of, you know, like there’s too much novelty here, I’m not sure you can build a repeatable business model, here. Most people get one [??], are they going to want more?” And so that was stuff that, you know, we had to talk to a lot of people, right, and we were in the seed stage, so I think it’s a little bit easier for people to kind of make that leap, because they’re putting relatively little money at risk. But, once we found the right people, then we had to actually go out and prove that we could de-risk the business, in those ways, right?
Jonathan: Early on, I was de-risking, like, “Do people want to buy this once”, right? In subsequent raises, it was like, “Do people want to buy this over and over again, can we build a company, can we expand our product lines?”, which we’ve done. And we’ve done a lot of that since then, but early on there wasn’t really any proof.
Andrew: What about the sleepless nights? I like to talk about doubt and insecurity that we entrepreneurs have? I don’t want to leave my audience thinking that if they’re having doubts it means that they’re on the wrong track, if they’re having doubts it means that they’re not the supermen that most entrepreneurs are, superwomen. Talk about those nights, what’s the lowest point for you?
Jonathan: That’s a great question. I think when you’re raising money in particular, that’s where I feel the most angst, right? That’s where it’s very easy to kind of be up at night and be trying to figure out, is this the right thing I should be investing my money in, should I be investing my time in this, right, you start to listen to people asking good questions, right, they’re reasonable people, and you start to kind of internalize them a little bit. And so I think you need to have, as an entrepreneur I think you need to have both boldness and humility when you go into the process, right?
Humility that you don’t know all the answers, but a certain boldness and confidence, saying, “Look, we can figure this out, and we’re going to figure it out.” For me, I think the lowest point was after I had sold my motorcycle, like as a compromise, my wife was like, let’s invest in this thing, we had invested a large part of our savings in this business.
Jonathan: And as you go out, you think, “Look, we’re crushing it, like, we have a great team, the product is great, the customer feedback is amazing – everyone will want to fund this.” And, at least I’ve never been in a fundraising where it works out exactly like that, so, I think there are some people, but I certainly didn’t have them with me, and so there’s nights where you’re a month in, and you’re just trying to fight and claw for every little last inch, and investors are burying you with request after request. It’s very easy to be up at night and just be thinking about when the money runs out, what happens then.
And on top of that, our first two employees agreed to join me for an indefinite period of time with no salary. So not only was I thinking about the cash of the business, I was also thinking, “I’ve got to get these guys paid at some point.” And it’s all resting on your shoulders as the CEO. That’s one of your jobs as CEO, to go out and properly capitalize the business. It can be a very heavy weight to bear, and it feels good when you finally do close funding.
Andrew: Jon, at multiple times in my life I’ve looked at homeless people and thought, “That could be me. I’m in trouble because I’m really out here on a limb on my own.” Do you ever feel that way?
Jonathan: I would say yes. I used to feel that way, but I don’t anymore. I went to Nicaragua a couple years ago on a service project, and my wife also went with me. We went with a church group, and we went out into the middle of the sticks. It took us thirty minutes driving through sugar cane fields to even get out to this place. We reached this tiny little village where we were helping build this building, and I started talking to one of the guys that was there. He told me the story about how the year prior, weather had come in and destroyed his entire crop. And I said, “What did you do?” And he said, “Well, I went to the bank, and I had to mortgage everything I have.” I said, “What happens if that happens again this year?” And he said, “We’ll be literally destitute. They’ll take our house, we’ll be on the street; we’ll have to beg for food.”
In that moment I paused and started thinking about my life back in Palo Alto, in the United States where I’ve got friends around me; I was trying to imagine what series of circumstances would have to happen in concert for me and my wife to literally be in that same place: out on the street, destitute, begging for money. To be honest, I couldn’t think of a set of circumstances where that would happen. It really gave me this sense that we’re really fortunate to live in the community that we have, with the education that we have, and it struck me as this huge blessing that we have to be able to do risky things and not feel like we’re going to be out on the street destitute. I was very much in the same boat as you, but after having that experience it re-framed the entire way I thought about entrepreneurship. Since then, I think bad things can happen, but I like to think that regardless of whether or not I succeed or fail, I’ll be able to get back on the horse eventually and give it another shot.
Andrew: One of the best days of your life was actually getting out of your apartment and not having people assemble crates in the apartment, and moving into where?
Jonathan: [laughs] We moved into a warehouse in Redwood City, California, which is halfway between San Francisco and San Jose. I think it was the happiest day of my wife’s life, because if you can imagine being in a small two-bedroom Palo Alto apartment, doing a physical product company like ManCrates where guys are spilling ink on the floor, we’re destroying our carpet, we’re destroying our furniture. My living room was like my assembly floor. It was a great moment where we felt like we actually a real company, when we finally moved out of my apartment and moved into a proper warehouse space. And that space was really small, but not being at home was an awesome thing. [laughs]
Andrew: I notice you use something called hardpin.com that somehow connects with Pinterest. What is Hardpin?
Jonathan: That is a good question. This might be a question for my marketing guy. For our Pinterest strategy, we use a couple different tools, one of which allows us to tap into influencers who are on Pinterest, and give them cool products that they can choose to talk about or not. And when they do, because of the audience it works really well for us. Hardpin may be a former name of a service that we use today.
Andrew: Oh, so you give influencers on Pinterest your boxes; if they like it, they take photos of it, they pin it, and they link back to you. And that’s how you get traffic from Pinterest.
Jonathan: For some of them, yes. Others, there’s services that allow you to tap into them much like you would an advertising network where they’re looking through interesting things they want to talk about, when they find something that strikes their fancy they’re like, “Oh, this is really cool.” And they’re part of a program where you can actually kind of incentivize them to do that for you. It’s a great way of getting your product out there, and Pinterest is a great product discovery platform. When people are looking for gifts, and they find our stuff, a lot of them buy.
Andrew: I never heard of it before, but I can see the power of it and now I get it because frankly, Pinterest doesn’t seem to do that well for men sites, not as well as for women’s sites.
Jonathan: It doesn’t.
Andrew: It’s actually ManCrates.hardpin.com. That’s where anyone who’s an influencer, I guess, can sign up and potentially get a box. But you’re even going to, you want to check out what it is.
Jonathan: I’m like, “What is this?”
Andrew: They usually don’t say anything about ManCrates on that site. I think that’s…
Jonathan: I will say the last I see completely disconnected from our business. I think one of the most, the biggest areas of leverage for entrepreneurs is to hire other super smart people and empower them to do stuff and run the business in their functional areas. We’ve got an incredible team. I trust them and they do things like this where they draw traffic and I set goals for them.
Andrew: So they go out there and they experiment and they’d use that? Or maybe they use gifts.com as a service?
Jonathan: Exactly. And this is, it’s possible, oh, you know what this is? Sorry. This is why. I was going to mention, this is hello Society. I think this was formerly known as Hello Society. I didn’t know it was called Hardpin. That’s pretty cool. Maybe the rebranded, or maybe I’m just out of the loop. I don’t know everything about our business but I know a lot.
Andrew: And that’s your biggest expense right now. Is advertising bigger than product development or the cost of the product, cost of goods sold?
Jonathan: No. Cost of goods sold is easily our biggest expense. I think what’s interesting for us is, I mentioned that paid acquisition has decreased in size on a percentage basis over time. That’s what we hope to see. You hope to see that SEO and people talking about your brand and people coming back and buying from you over and over again, you hope to see that as an acquisition channel grow. I think paid acquisition, as long as it’s profitable or break even for us, that’s what’ we’re going to do.
I will say that marketing is a big part of our expense but certainly by no means bigger than costs to get sold.
Andrew: Going back to something that you said earlier, you keep having to improve your product. How do you do it? What’s the process for iterating on products when your customers aren’t the ones who are getting it, it’s their friends who are getting it and where you don’t have the quick iterative cycle that software would have.
Jonathan: One of the things we do a lot, and we think it is a one step removed, but we do ask, we do a nude nacrometer score fairly regularly and run our promoter scores off the charts. If you think about gifts, the feedback loop that’s going to allow you to have a net promoter score is if the person likes the gift and says, ‘Thank you,’ in a great, meaningful way.
You sell crappy products…I can’t imagine that many gift card companies have super high net promoter score. Right? It just doesn’t, it’s kind of uninspired. For us, we listen to customers. We do a lot of follow-up calls asking them how it went. A lot of times we’ll get customers that actually received the product and gave the product in person as a way of saying, “Tell us about the experience.”
Another big part of it is just us as entrepreneurs and as people who are so close to the product saying, “I don’t like that product,” or “Let’s kill that product,” or “We should revise this thing.” We also look at sales numbers and all that but a lot of it is just kind of gut feel. When we see new products and we’re struck with this kind of inspired moment, we’ll go in and we’ll completely revamp crates.
Andrew: You said if the sender gets a thank you from the recipient then they’re happier. Is that why you have thx.mancrates.com?
Jonathan: That’s right. This was our kind of insight. We said, ‘Well, if it’s hard for people to write gift notes to a company to gift, it may be just as hard for people to write thank you notes to say, “Thank you for this awesome thing today.” What we do is, we have this auto thank you note generator which Arnold is our spokesman for the thank you note generator. Basically, it helps you build this really funny custom note with a couple of clicks. You hit that button and it gets delivered in this interesting, cool way and it’s one of the things we do to help connect both the recipient and the giver at the end of the cycle.
Andrew: I see it. Hey, Steve, thanks for the ManCrate. It was harder for me to open than the six inch steel lid on Saddam Hussain’s bunker. Or I can shuffle and get another one.
Jonathan: You can shuffle and it’ll open…
Andrew: “Harder for me to open than the safe I found in the former drug house,” or “My college sister’s diary after spring break.”
Jonathan: It allows us to express our sense of humor and hopefully, is a service that makes life easier for our customers.
Andrew: I want to ask one more question about revenue and then a questions about your childhood and then we will tell people that they can go check out ManCrates. But first, if you want a follow up to this interview. I know I have a thousand plus interviews on Mixergy courses. Here are two that I recommend. One interview one course. The interview is my very first interview with Eric Ries, where he lays out the foundations of the Lean Startup Methodology back before anyone even knew him. He did such a great job with that, that I would recommend that over anything else on my site if you’re looking for Lean Startup. After this. This is a good case study on how to do it. Eric Ries walks you through it and answers some of the popular questions, like, do you need to charge or can you just send out a survey? John I know you’re going to say no, no surveys, you want real customers right?
Jonathan: Yes, that’s what I want to say.
Andrew: Eric Ries says that too. But what about if you have a product where you can charge? You’ll see, he’ll explain that and so much more in the interview with Eric Ries. You’ve got to see that and listen to it in the follow up. And the second is Ash Maurya did a course with us on the Lean Startup process where he walks you through step by step how to use it. He is fantastic and I urge you to just put a search for the name Ash in the search bar, and you’ll see it. Great course, great interview. Before we get to the revenue, you where an entrepreneur or entrepreneur from the time you were a child. What are some of the things you sold?
Jonathan: So I sold all kinds of crazy stuff. [??] when I was a kid I would enlist my friends in any number of kind of money making schemes. I grew up in Phoenix and so we lived on a cul-de-sac. It was a relatively safe area. So my parents would just kind of let us go free, and I was always trying to scheme about like how can I get more like money to buy candy or whatever. So I’d enlist my friends in these schemes and we sold everything from mud sculptures. We had this newspaper recycling business where we would go gather newspapers and we either resell them. Like you know base on like this, hoping that people would have like would take pity on us and give us money for them which they did. Or we’d make like paper mache stuff out of them and sell them back to the same people. We sold pretzels at baseball games. I sold snow cones. We had these, went through this really embarrassing phase where we were making these like dolls out of mops. But hey, it brought in the cash. So whatever. You know.
Andrew: Dolls out of mops.
Jonathan: Once we got to school, who’d had candy and want to sell it, basically, like, you know, selling it without the teachers knowing. So, yeah very entrepreneurial.
Andrew: Did you ever get shut down? Did your school ever tell you don’t do this, or anything else?
Jonathan: Yeah, many times.
Andrew: What’s the one that they shot you down for that you feel a little bit wronged by?
Jonathan: I know, I know, I get it. I just had my, I have a kid now, I have a nine month old so I’m starting to, my views on candy sales at schools are starting to change. But, I don’t feel particularly wronged by anyone shutting me down. It was fun though.
Andrew: I’m still upset that my elementary school shut me down for selling candy. How dare they, they should be encouraging this creativity.
Jonathan: That’s right. That’s right. It’s way better than many things that kids could be selling at school.
Andrew: Yes. Or doing. All right, final question. You said you didn’t want to tell me this number but I’m going to ask you in the interview anyway.
Andrew: What’s your revenue?
Jonathan: So I still won’t tell you the number. But I will say that’s it’s in the millions growing very quickly.
Andrew: How about last year? How about 2013, what was the revenue?
Jonathan: 2013 we did two-and-a-half.
Andrew: Two-and-a-half million. And have you beaten it already in 2014?
Jonathan: Yeah, yeah.
Andrew: Blew past it.
Jonathan: So see, now you’re asking me questions you’re going to kind of reverse engineer, as will everyone else out there. But yeah, we’re growing very quickly.
Andrew: Can I say this. Last question on that, more than five million?
Andrew: All right. Are you profitable?
Jonathan: Yes, we are.
Andrew: You are. Is that a problem for your investors? I’d imagine that they’d want you to keep the losing money right? Or at least spending as much as possible.
Jonathan: I love that you ask the question “Is it a problem for your investors?” [??]
Jonathan: Where do you live that that’s a question that you can actually ask? So what I would say is, we have optimized growth, given the limited amount of capital that we raised back in 2012. We basically are investing every dollar of profit back into the business. We don’t get it exactly right so we’re at worst break even. At vast we show kind of a modest profit. But we’ve grown very quickly. We grew from three people to we have now about 20 people on staff. All that is funded from cash from operations. And yeah, and that’s kind of been the story, so we’ve been trying to grow as fast as possible given the limitations that we have.
Andrew: This is one of the funniest interviews I’ve ever done. I, I kept getting distracted by the website. If you guys have not been on Man Crates go to it. But frankly don’t just go to Man Crates, click around. I don’t know that the home page communicates enough the wit of the site. You have to really go explore and then discover things like I did with the THX site. Or go to mancrates.com/help, and when you discover those pages that you almost aren’t supposed to see is where you get the spirit of the company. And I’m so glad that I’ve gotten to see this. And frankly to see how much you’re enjoying running this business and talking about it. You know?
Jonathan: As you could probably imagine, this is like one of the most fun businesses you could possibly run in all. I’ll give you and anyone watching this a little Easter egg. If you search for Man Crates exotic jerky you’ll find our Aprils Fool’s joke from a couple years ago. It’s not on the main site but it’s hilarious. If you see anyone trying to peddle endangered panda jerky…
Andrew: That was you guys?
Jonathan: That was you guys. Aprils Fool’s joke of course. But thanks….
Andrew: I see it.
Jonathan: …thanks for having me on the interview, this was really fun.
Andrew: Alright. Thank you so much for being on here guys. Check out ManCrates. Thank you all for being a part of it. John, thank you for doing this interview.
Jonathan: Thank you.