Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of mixergy.com, home of the ambitious upstart. And yes, this is an audio only interview, but I still did the fist bump, as always. It’s a habit and it’s an important part of getting me and you ready for these interviews.
In this interview, we’re going to find out what someone would do, what an entrepreneur like you, you the listener, might do if you had an idea for a new exercise product. How would you manufacture it? How would you get stores to sell it? How would you even explain it to consumers in a way that would get them to understand and buy it?
What do you do when you have a new physical product that you have to explain, get sold and get people enthusiastic about? That’s what we’re going to find out here in this interview. And we’re going to hear it from a woman who’s done it.
Her name is Julie Austin. She is the founder of Hydrasport which makes Swiggies. Swiggies are water bottles that you wear on your wrist while exercising. I invited her to tell the story of how she did it. And this interview, like so many of my others, is sponsored by Scott Edward Walker of walkercorporatelaw.com. We’ll tell you more about him and why he’s the startup lawyer later on. But first, Julie, welcome.
Julie: Thank you very much, Andrew.
Andrew: You were running on a country road on the day that you realized that you needed to come up with this product. What happened to you on that run?
Julie: This was in Texas in August which is really hot and humid. And I had no idea that I didn’t drink enough water before I went out to run. I carry my keys and music and I didn’t have anywhere to keep water. So I didn’t think it was going to be a big deal. And I’m out, literally, on a country road, and nobody around.
Julie: And I passed out from dehydration. And luckily, someone was driving down the street and rescued me. But I thought after that, you know it really isn’t a good idea to run without water. And everything on the market at the time, I think there was maybe a fanny pack kind of thing . . .
Julie: . . . that you had to rinse out with baking soda. And it just was too much trouble. So I thought, where can you have water on the body that is easily accessible and it just seemed to make sense to have it on your wrist.
Andrew: Yeah, I get that. I can understand the idea for doing it. But how do you even get started manufacturing something like that? Can you tell me about the first prototype? I heard your dad helped you with it.
Julie: The first prototype was made out of clay.
Julie: And I literally just went into an art store and found some clay, and molded it into what I though the product would look like. I had a band that I added to it. And I put a little cap in the clay.
Julie: And it looked really silly, but it did work. I mean the product didn’t work, but you could see what it looked like. And I took that to a mold maker who made a mold for me based on what I’d shown him. And what I tell inventors all the time is, just make something.
It could be out of Popsicle sticks or toothpicks. It doesn’t matter. Just so people will have an idea of what the thing looks like. Because if it’s in your head and you try to explain it, no one’s going to get it. It’s hard enough even when you have a prototype, but at least you have somewhere to start.
Andrew: I’m wondering if, since this is audio only, and we can’t hold it up for the audience, I wonder what the image that each person who’s listening to us has in their head. My guess is that it’s all over the place and that it’s not, probably, maybe no one has the exact image of what you’ve created. And you’re right. It’s not until you start to see something that you get what the product is.
A description doesn’t do it justice. So then you had this clay mold. Basically, it’s just clay that you put on your wrist. How do you go from there to creating something that’s more realistic, that actually can contain water and work?
Julie: Well, I was very lucky in that I took this to a mold maker in the U.S., and I was able to sit down face to face and go over everything that I was looking for and they made a mold.
Andrew: I’m sorry, Julie. A mold maker would take this idea and create the mold into which you would pour, or someone would pour plastic and then it would harden up into the physical product. Is that what we mean by mold maker?
Julie: Exactly. Yup.
Andrew: Okay. So what does something like that cost, to have a mold created?
Julie: Well, to have one of them, because I had a mold for each wrist, and one of them in the U.S. was $3,500.
Andrew: $3,500 to have this made, how do you find a mold maker, is it something that I can go and Google?
Julie: You know what, you probably can.
Julie: I happened to find this person through a friend who sold products, so that’s the only way I knew how to start, was just in the beginning was ask a lot of questions, and that’s really what an entrepreneur should be doing, is okay, I have a mold now, I mean, I have a prototype, what’s the next step? I guess I need to get a mold made, how I would I find a mold maker, you know . . .
Julie: . . . Google is your friend, you just google mold manufacturers, and, you know, that will take you to your next step.
Andrew: Okay. You go to the mold manufacturer, is it as easy as describing what your product is and showing the clay model, or is it something else?
Julie: Well, in my case I guess I was lucky, and that they got it right away, and the mold that they made actually worked. You know, it depends on the complexity of the product, you may need to, you know, go through several tries to get it right, I just happened to get lucky the first time.
Andrew: Can you give me a sense of where you were at that time, was $3,500 a lot of money for you, or was it just an easy check to write?
Julie: Well, at the time I had no money.
Julie: I mean, no money, so I literally had to start working two and three part-time jobs, and I saved up a little bit here and there, and that’s, I just did it piecemeal, this is why it took so long for me to do is because it was all my own money, I never got an investor, never got a bank loan, nothing, it was just me doing it in stages.
Andrew: How long did it take you to get this done, to have the mold made?
Julie: Oh, to have the mold made was some, probably two or three months, I guess.
Andrew: All right, so it wasn’t a year of saving up, it was that, it was just a couple of months to do it, so why is that? One of the things that April Dykeman, who did the pre-interview with you, told me was that you did start out entrepreneurial, you had a start-up book club where you and your book club members would read Rich Dad, I guess that’s “Rich Dad, Poor Dad”, the “Cashflow Quadrant”, what’s that, “Rich Dad’s Guide to Financial Freedom?”
You were entrepreneurial earlier on, I think you even had a lemonade stand, sold Girl Scout Cookies, how did you end up at a place where $3,500 is a lot of money?
Julie: That’s a very good question.
Andrew: You know what, actually as I say it out loud I’m realizing, that’s not as gentle as I wanted it to sound, that sounded very judgmental, but . . .
Julie: No, no . . .
Andrew: . . . (?) that?
Julie: . . . it’s actually, we need to hear the hard questions . . .
Andrew: Thank you.
Julie: . . . and in the past few years of the economic downturn . . .
Julie: . . . I’ve asked myself a lot of hard questions, and I think, you know, I started out as a kid being very entrepreneurial, and doing just crazy things like putting on shows in my neighborhood, and then, you know, charging admission, you know, I started out that way, honestly, and then something, I lost it along the way, and, you know, decided I wanted to be an actor and move to New York, and got a job, and I kind of fell into the job thing, and lost the entrepreneurial spirit . . .
Andrew: I see.
Julie: . . . for quite a while . . .
Andrew: I see, and then when you had a job . . .
Julie: . . . until I lose my job.
Andrew: Did you lose your job?
Julie: I did lose my job, and that’s when I started creating my own jobs.
Andrew: I see, and so the jobs that you had before you launched this, what are some of them, the ones that you created?
Julie: Oh, the ones I created?
Andrew: Yeah, before Hydrasport, what were some of the jobs that you had to create for yourself after you lost your full-time job?
Julie: The very first one was a job reading scripts, and I created the job within a company, so that job never existed. I just went to a friend and I said, “Look, I need a job, what do you have for me, is there anything open,” and he said, “No, we’re not hiring.”
And I happened to be sitting in his office and looked around the room, and I saw scripts piled to the ceiling, and I said, “Huh, what are those scripts, I mean, are you reading those, does someone read them?” And he said, “Well, we, you know, basically read them whenever we can,” and I said, “Look, why don’t you pay me to read them?”
Andrew: I see.
Julie: And I read them.
Andrew: I see.
Julie: And I had no idea what I was doing. I said, “Train me, I’ll work cheap,” and I created that job within that company, and then I started doing it for other companies.
Andrew: Way to hustle, Julie, I see, all right. So then it’s not such a big leap to go from that to starting your own business, you’re already creating your own jobs, you’re already working up the, what seems to me like guts to ask someone else to pay you to do something, right? So it’s not a huge leap to take to create your own product and start selling that, is it?
Julie: Well, just to create a busi-, the thing to running a business, though, is what I didn’t realize, is that I would actually be successful, and when you’re successful . . .
Andrew: What do you mean, you thought that this was just not going to work out?
Julie: I had no idea what it entailed, but along the way I had to hire employees.
Julie: And so once you start hiring employees, and I started getting distributors, suddenly I’m very responsible, you know, and there were single moms who were selling my products, and I felt very responsible. It wasn’t like I could just say, oh whee, I want to take the day off, all of a sudden, you know, I’m a leader, you know, and I didn’t think I was, but it was sort of an accidental thing that happened, and . . .
Andrew: I get that, I feel that pressure sometimes myself. Frankly, Mixergy went from just me asking questions, whatever that popped into my head, to suddenly I’ll have an audience that has a specific need, they don’t want me to ask just whatever random question comes to my head, and then you saw there’s a team of people who helped us book you, and want to make sure that they’re paid, that they’re taken care of, ooh, all right, let’s get . . .
Julie: You know what . . .
Julie: . . . I just want to say, in reading your bio . . .
Julie: . . . something really stuck out, which was, you said, you know, you were starting with a thousand dollars, and then it turned into ten thousand, and then hundreds of thousands, and at some point you’re in too deep, and . . .
Andrew: You mean the previous company, yes.
Julie: And that’s really what happened with Swiggies in the beginning is that I just kept putting more money, and more money, and more money, and suddenly I was in too deep, and then I was hiring people, and then I just couldn’t go back.
Andrew: Right, you can never then go back to what one entrepreneur told me was the candy store days, the days where you’re just kind of running a little shop, and you buy things, and keep small inventory, and then get to sell it to people who you meet. At some point it becomes a huge, giant operation that’s way bigger than you.
Andrew: So let’s see how it got there for you. You started out with a mold with clay that you created yourself, as I understand it, it was five bucks worth of clay, you take it out, you spend another $3,500 to have a mold made, then you have to pay a little bit more to have mold made for the other wrist, which I didn’t think it’s important, but of course now that I see the product, you want to make sure that the spout, the part that people get to drink out of is convenient, whether it’s worn on the left or the right.
So you need one for the left, one for the right. There is another issue that I wouldn’t have thought of as an outsider, packaging, how do you get packaging made?
Julie: Well, I also went to a friend who had a product line, and I said, ‘Look, you know, I’ve created this product, I have no idea what to do next, but I do know if I want to get it into retail, I have to have packaging, is there any way you could help me out, help, you know, point me in the right direction?’
And he said, ‘Well, you know, I happen to have some leftover packaging’, I think it was probably about 2,000 blister packs, and he said, “You can have them for free if you want,” and that’s really where it started. I had to make a little header card for it, and they looked beautiful, but, you know, I really wasn’t thinking of the big picture . . .
Julie: . . . of, you know, in the future how do I get the same packaging, right?
Andrew: Right, to keep it consistent.
Julie: Exactly. So what happened was I was so naive, I put these in my car, and I drove them door to door. I managed to get into quite a few stores just on my own, and I thought, but that time I was a little cocky, and I thought, “Hey, I’ve got a good product, I know what I’m doing,” and I drove to the corporate headquarters of a sporting goods chain . . .
Julie: . . . and I just kind of walked in the lobby, and I said I’d like to meet, you know, the big cheese, I didn’t want to talk to the buyer, I wanted to talk to the CEO, and they said, well, maybe, we’ll see, and I just hung out in the lobby until I got a meeting with them, and I had nothing prepared.
Andrew: And this is a chain of multiple stores, and you just walked over and expected the president to be there, and because you expected the president to be there, they showed up?
Julie: I happened to be there and I guess that just never happens. And I don’t know. I was really naive and just felt like, “You know what? I’ve got a great product and this needs to be in your stores,” and he said yes.
Julie: And I got into a fairly decent chain on the West Coast. They’ve since gone bankrupt. It had nothing to do with me, though. But I got into the chain and I had to fill the order and I thought, “Wow, this is great. I’m home free and this is all going to be easy from now on.” But that’s not how it happened.
Andrew: Well, but you had beginner’s luck there. By the way, you have a lot of friends. You have a friend who can introduce you to a mold maker. You have a friend who has blister packs ready to go. How does your friend end up with blister packs? What did he do?
Julie: Well, this was a friend of a friend, and everybody has friends of friends who can help them.
Julie: Happened to be, if I can say this, in the sex toy business.
Andrew: Okay, yes, yes.
Julie: And he looks at business like he’s selling cars or he’s selling peanuts. It’s all the same.
Julie: And this was someone who started with absolutely nothing. This guy started in a tiny studio apartment with no money. He’s now a multi multi millionaire.
Andrew: Would he do an interview with me? I might need that follow-up interview. What do you say?
Julie: Hey, I’m sure he would. He’s a great . . .
Andrew: Are you still in touch with him?
Andrew: Can we follow up with you afterwards to have him on here?
Julie: Sure. He has a very well-known company.
Andrew: Okay. Can you say his name?
Julie: Doc Johnson . . .
Andrew: Doc Johnson.
Julie: . . . is the name of the company.
Andrew: Why do I know Doc . . . do I know Doc Johnson? Doc Johnson, that sounds like a porn name. Let me see. Oh, yeah, it is, okay. I see. I see now what you mean. All right, but he has that business and he has other non- porn businesses?
Julie: I think he does, yes.
Andrew: Okay, all right, this sounds like an interesting person. All right, we’ll follow up afterwards. So he helps you out, you get your products in his blister packs, you take them into the store. Is it worth asking you what you said to the president of this store?
Julie: You know what? I really said the same thing I said to all of the stores I went into. “I’ve got a great new product. It’s not on the market. I have a patent on it. No one else has this. Would you like to take a look at it?” I mean, that’s just basically it. And then it kind of went from there.
Andrew: Well, all right, way to go with guts again. So now . . .
Julie: You know when you have something brand new and unique?
Julie: People will . . . they’ll pay attention to you.
Andrew: I don’t know. I feel like sometimes when you have something new and unique, people don’t get it. And so you have to explain it or you have to relate it back to something they do get.
Julie: Well, I think with this product you have to see the product in action.
Julie: So I was wearing them when I went in.
Andrew: Oh, okay. All right, and so there was no hesitation, like, “Well, maybe people don’t want to have it on their wrist. What if it weighs too much? What if they drink from one side and not the other so then they end up with one wrist lighter than the other and they . . .” None of that. Julie: Not this first time, no.
Andrew: Okay, all right, so now you get in the first store and . . .
Julie: Beginner’s luck, maybe.
Andrew: Or hustler’s luck. Way to go. So now you get into the first store. You’re thinking you’re onto something. How do you . . . what happens when you go to the second store?
Julie: I actually ended up getting a rep after that and the rep got them into stores in Hawaii. Here’s what I didn’t realize about selling to retail, because I just thought the same thing that a lot of inventors do. I have a great product. I’m going to get in Walmart and I’m going to get in all these stores. And you’ve got to crawl before you can run. And when you get them into retail, then what?
What happened was, one day I said, “Let me go check out this store and see what’s happening. Let me go see them in the store.” And they were on the bottom shelf in the back. No one knew what they were. If I was walking through the store, I would never see them. And I realized that to sell a product, you need — this is why, you know, people having end caps, the, you know, end of the aisle . . .
Julie: . . . is so valuable, but it’s also not cheap, they don’t just give them to you. They don’t give you prime real estate with the. . .
Andrew: You have to pay for that.
Julie: Either you have to pay for it, or you have to have a commercial on the air, yeah, and that’s why you’ll see the big companies that have the end caps, although I do have some of the small businesses, like Stupidiotic. Stupidiotic is a store, they have one in Big Bear, California, and they just opened in the MGM Grand. They’ve given me, I think it’s six orders, reorders just since Christmas, and . . .
Andrew: Stupidiotic, I’m on their website, I love the name and I had to see what it’s about, interesting.
Julie: They sell . . .
Andrew: It’s just all kinds of funny, fun things to have.
Julie: Unique products, and the great thing about them being at the MGM Grand is that they get a lot of tourists, so people come, and they also, one thing he does, he has a mannequin with these on them, on the mannequin, so that’s how he sells, he’s my top salesperson.
Andrew: So that’s actually interesting. You told me that you walked into that first store, and because you can show the president what it looks like to have these water bottles around your wrist, he got it.
Now most people are not going to see it on their wrist or on anyone else’s wrist, they are going to see it on a shelf, maybe ideally on a top shelf so they can spot it, but more likely on a lower shelf, how do you combat that? You had an interesting way of doing it.
Julie: Well, I mean, for one thing I would go into the stores, and I would tell the sales people, “Look, I’ll give you a set of these for free if you’ll wear them,” that way people will see them on your wrist, and I guarantee you a hundred percent of the time people will ask what they are, especially if you’re drinking out of them, people will see you doing that, and they’ll go, what is that.
And then the sales people can point to the bottom shelf, here we go, here they are, they’re called Swiggies, and they’re wrist water bottles.
Andrew: Got it.
Julie: Oh I get it.
Andrew: And so were they willing to do that, were they willing to put it on their wrist?
Julie: Some of them were, yeah.
Andrew: Okay, so that’s clever, so for the price of just a set of them, a set of the water bottles, suddenly you had promotion that I’d argue is even better than an end cap promotion.
Julie: Yes, it is.
Andrew: By the way, this Stupidiotic website, I got to put it away, you told me about it, I went to take a look, it’s just keep sucking me in, like the shredder scissors that will shred paper for you, the laser scissors, the jumble remote, all right, that’s not so, that doesn’t get me in there.
But let’s see what else, there’s the 24 hour clock, the date, I got to put this away, this is just, it’s just kind of fun and goofy at the same time, and sucks me in.
Julie: That’s why he does so well.
Andrew: But you know the idea is, yeah, I can see that actually, and I can see how it would be even more fun to see in person than to see on the website because you can actually play with some of these things that he’s selling. What about this, you said that you had, was it a distributor who got you into those stores in Hawaii, how do you get someone who sells your stuff on your behalf?
Julie: Well, I guess, you know, I never really went after them, a lot of these people found me, and the reason I would tell any product entrepreneur, the most valuable advice I would tell you is to generate buzz first. Get people, before you ever decide to go in and tackle retail, because that should be really kind of the last thing you do, is to generate buzz, sell them online, get people coming to you.
That’s how I have so many distributors, they just find me, I don’t contact international distributors. They always find me. I just got a new one today from Ireland, a new one last week in Singapore, South Africa, I mean, they just find me online, and you just keep generating, you know, a lot of like wholesale directories is a good way to go if you have a product.
Andrew: What’s a wholesale directory?
Julie: Wholesale.com, those kind of websites where people who sell, who are distributors or retailers, go to find new products.
Andrew: I see, okay. So you list yourself on this website, and then other distributors and people who buy wholesale will find you there, is that right?
Andrew Gotcha. You’re also saying that in retrospect it might’ve been better to build buzz before going into stores. How do you today build buzz? What’s an effective method for you?
Julie: The best thing I do is PR.
Andrew: What kind of PR?
Julie: Well, I was just on The Today Show a few months ago, and the Queen Latifah Show. I’ve been on HGTV, Lifetime. . .
Andrew: I see ABC, CBS, FoxNews. How do you get on there? The Wall Street Journal. I’m looking at your website, where there’s a list of the places that you’ve been. How do you get so much press?
Julie: I’m a publicist.
Andrew: Ha, I see. And that’s one of the two jobs that you had before you started this business, before Hydrasport?
Julie: That’s one of two jobs I created, yup. And created pretty much by accident because a friend of mine. First of all, I tried to hire a publicist for myself. . .
Julie: . . .And they never got anything for me. I was paying them money, and nothing ever happened. And so I just said, “Maybe I can do this myself.” And I started becoming my own publicist. Then I started working for other companies, and just, you know, needing to get the product out there, and having that passion for it myself. I’ll pick up the phone and call anybody. I’ll call the Pope if I can find his phone number.
Andrew: So that’s a key to it – that you’re willing to pick up the phone and call someone there. What else? I want us to learn how to get publicity for our own companies from a woman who does it.
Julie: Well, you have to have a unique angle. . .
Julie: . . .That the press wants, for one thing. And what I did in the very beginning was, this is typically a hot weather, summer type of product.
Julie: You know, people were going to use them when you go outside. Also, you can freeze them to keep you from overheating. And so, I looked, and I realized that it was a “beat the heat” story.
Julie: So, the press always has “beat the heat” stories in the summer, as soon as the weather gets warm. So I literally put them in my car, and I drove cross country, and I called the news stations, you know. Like, if I was in LA, I would call the news station in Arizona. And I would say, “I’m coming into town. Can you put me on the morning news?” And that’s how I did it, all the way across the country.
Andrew: Ah-ha. So you’d actually go into the local markets, and you knew that they were at the point where they were doing the “beat the heat” stories, and you pitched yourself as a solution to the “beat the heat” issue.
Julie: Exactly. And I got on every single station except one, and that was because I think there was a hurricane coming in.
Julie: So you can get bumped off for a bigger news story.
Andrew: I see. What are these stories called that I see in the media over and over again? Like there’s the New Year’s story about resolutions, there’s the holiday story about things to buy before Christmas. What are these stories called that we need to keep an eye out for, and see if we could connect ourselves to them?
Julie: You know what, I’m not sure.
Andrew: These recurring, seasonal stories. Over and over, they always do it. And then at some point, after the “beat the heat”, you need the, what’s it called?
Julie: “Back to school.”
Andrew: “Back to school,” right. All right.
Julie: And then we’re into the holidays.
Andrew: I see. Now most people, you know, Julie, would say, “I have an innovative product. They should interview me about how innovative it is.” Or, “I’m an innovative entrepreneur. They should interview me about how I started this thing.” You said, “No. I’m not going to ask them to do my story. I’m going to find whatever story they are going to do anyway, and connect into that, and give them the material for that. Am I understanding one of the keys to success with your PR?
Julie: Exactly. Yes.
Andrew: What else? What else am I missing? I want to make sure to get as much out of your experience in PR as possible, so that I can learn from it.
Julie: The thing is you have to keep coming up with a new angle for your product or your business.
Andrew: So what was another angle you came up with, after “beat the heat?”
Julie: The next one I came up with was women inventors.
Andrew: Ah, Okay.
Julie: So I would go to the stations and say, you know, “Look. I have a handful of women inventors that have new products. Would you put us on as a group of women inventors?” Because still to this day fewer than 15% of all patent holders are women.
Julie: Which is shocking.
Andrew: So again, it’s not, “I’m a woman inventor you should interview me.” It’s, “There’s a bigger story and I’m a part of it.”
Andrew: Got it. You even helped create the bigger story. I wouldn’t say manufacture it, but you helped package it by saying, here are all these other women who are doing it?
Andrew: Ah, okay. All right. Here’s something that I heard was a challenge for you. Cash flow. Why was cash flow an issue for you, Julie?
Julie: Well, cash flow, I think, is always an issue for start-up companies. Unless you get that big infusion of angel investment money.
Julie: Or venture capital. If you’re bootstrapping, which I’ve done with every business I’ve ever done, then you need every dime possible to promote your company. I mean you just to have it just in case anything happens. You know.
I guess one big mistake that I made in the beginning was that I bought 50,000 sets of Swiggies, and kept them in a warehouse before I had any idea how I was going to sell them. And so that really took my cash flow and that’s money that I could have been spending in other ways. And that’s something I shouldn’t have done, but I didn’t know any better.
Andrew: I feel like, yeah, I get how that’s an issue. But, I also feel like, because you’re in physical products, you have more of a cash crunch than I would, for example, have because I’m in digital. It doesn’t really cost me any more to create more inventory of interviews.
Julie: Oh, absolutely.
Andrew: Fair to say?
Andrew: Yup. Mm-hmm.
Julie: In fact, I have manufacturing in three countries right now, and I need another set of molds because I have a big order coming up, and the factory is already at capacity. So that’s money that I would need for those molds. So just things like that that you don’t anticipate.
Andrew: Speaking of factories, that’s an issue that I’ve heard come up over and over again with entrepreneurs who I’ve interviewed who are in physical products. Finding the right factory. Making sure that they’re competent. Dealing with errors. How did you do that?
Julie: Oh, boy. The very first factory that I worked with, I literally rolled the dice. This was at the Nasdaq party, and I met a factory. This was in Malaysia. That was my first factory, besides the U.S., I mean I had manufacturing here.
Andrew: Let’s start with the first one, if you don’t mind, the first place that manufactured your product. How did you find them?
Julie: The one in the U.S. just happened to be almost literally in my neighborhood. And it was just too expensive. So I happened to meet a factory owner in Malaysia at one of these trade shows.
Andrew: Okay. Okay.
Julie: And I did find out that he had done some other manufacturing for big companies. So he had a track record and I manufactured there. But the costs were still too high and I ended up going to China. And this friend that I met, he said, oh, I work with this factory. They’re wonderful. Well, they were semi-wonderful. They were late on an order and I had to end up air- freighting about 50,000 Swiggies.
Julie: Which ate into my profit.
Andrew: I’ll bet.
Julie: I saved the day, but I ended up not making as much money on that. And this is somebody that I knew, so I really don’t know how to tell you to find a great factory. The one I have now, literally, they cold-called me. And I’ve been working with them ever since. They’re a small, family-driven. They’re out of China. They’ve been incredible. They have great quality. They’re always on time. They communicate well.
That was another thing. I couldn’t communicate with the other factory. They didn’t speak any English and I had to go through a translator. So I don’t know that I’m the best person to tell you about how to find a factory, because the best one I found actually, literally, cold-called me.
Andrew: Is it possible that starting with a U.S. factory might have been a better decision for you because, yes, it was more expensive. But you can be more hands-on. You can make sure that they understand you because you speak the same language and come from the same culture.
And once you got that first batch out, you can think about reducing costs by moving it over to China and dealing with some of the issues that you talked about, does it make more sense to start off more expensive, that start in your own country?
Julie: You know what, you’re probably right, because, you know, I only started with a very small amount, I think my first run was about a thousand, and in China they don’t really want to do a thousand.
Andrew: I see, I get that.
Julie: You know, your minimum quantity is going to be higher.
Andrew: You know what, I never, I don’t think I’ve interviewed an entrepreneur yet who said I started manufacturing in the U.S., they almost always go to China and start working that market, but that seems like an interesting approach to say, I’m going to start with the place I know best, the place that I’ve grown up in, the place where culturally there’s a better fit, and then I’ll expand from there, and I’ll reduce cost.
Julie: Well, I ended up making money anyway, because I sold them retail, so, you know, I . . .
Andrew I see.
Julie: . . . if I were to start over again from scratch, I wouldn’t have done it that way because I would have started online, and . . .
Andrew: Sold directly to consumers online . . .
Andrew: . . . instead of stores. Stores seem like the savior though, because you feel, it feels to me as an entrepreneur, if I sell to a store, then they can move multiple products at once, and I don’t have to sell one at a time, they can help me because they’re experienced in selling.
It becomes more real, where if I’m online trying to hustle to get my own customer, it doesn’t really feel like a real business yet, but once I’m in a store, and I get the point to the store, take my friends in the store, and get to walk in, touch it, and go home, and have champagne and celebrate, that feels more real, but it’s not as effective.
Julie: Well, you know what, I don’t know, because I did it the opposite way I’m not sure what would have happened if I’d started online, but if you’re going to sell online, you have to learn search engine optimization, you have to learn how to sell online, because you’re going to be the sales person as opposed to getting it into a store and they are selling for you.
Andrew: I see you do kind of sell online, but you sell, I see a very prominent link on your website, on Swiggies.com, for the affiliate center, and then I see one for promotional products, and wholesale, and international distributor, so this is the way you sell online, by courting people who buy in bulk.
Julie: Exactly, I mean, I think that’s the easiest way, I mean, you can sell a product any way you want, you can sell them one at a time, you can sell to stores, you can sell wholesale, and then this is the beauty of having a product, is that there are a million ways to sell them.
And what I did not know going into it is that it’s a promotional product, it’s a very unique promotional product, and I discovered this completely by accident, because I did to to one of these trade shows, and the trade show was action retail sports, and I thought, oh, that’s perfect, this is for sports, it’s outdoor, it’s action, retail . . . no, I didn’t do enough homework to find out that this is the skateboard crowd, this is the surfing . . .
Andrew: Oh, I see, okay.
Julie: . . . and this is absolutely not my market, and my trade show booth was next to the skateboard ramp, the music was so loud that nobody could even hear me talking, people came by my booth, and it was just trying to steal the product, and it was horrible, it was a nightmare, and so, you know, the first day wasn’t even over, and I closed up shop, and I said, you know what, this is not going to work, and I started walking around the show, and I end up meeting a guy who was doing the same thing.
So he was selling a hand spray sunscreen, and this was not his market, and we got to be friends, and he said, hey, you know, I’m doing a trade show in Vegas, why don’t you come out there, you can, you know, have part of my booth and see if you can make a go of it, and this was the promotional products industry, where you give away product with a corporate logo on them, and the minute I walked into the door, I was wearing the product, and I was bombarded in the aisle, and I said, you know what, I think this is my market, and I never would have found it otherwise.
Andrew: And so a company like, we’ll use Home Depot just because there’s a sample on your website for Home Depot, they will buy in bulk these wrist- based water bottles and then hand them to their employees, or is it to customers, how are they using it?
Julie: Mostly it’s corporations that sponsor marathons.
Andrew: Oh, I see, right, I’ve done marathons where I get random things, and sometimes they’re not at all connected to running if a company wants to give something away that’s connected to running and is also a conversation piece, boom, they buy this, they put it in the bag, they give it away. Got it, that makes sense. Or even sometimes on the sidelines I’ll see people give it away. Got it, that’s how they do it.
Julie: We just had an order from Nextel ordered for the Argentinian Marathon. Xerox, we’ve had a lot of big corporations. Dublin Marathon ordered 72,000 of them.
Andrew: Whoa. I see.
Julie: That’s where the money is, in huge volume.
Andrew: I see. So where most people would think, let’s just put a buy button on the site and get a really nice store up. You do do that. I see a ‘buy now’ button and I see that I can buy it for adults, for children, etc. but you also are thinking, who has my audience in bulk?
Julie: Yeah, and I really didn’t even know until I met this guy at the trade show and he told me all about the promotional market, and they want something unique. Because they have hats, and pens, and mugs, and t-shirts, and that’s boring. They’ve had that forever. They want something completely unique that you can put a logo on, and that’s where the market came in.
Also another market I had no clue about is the alcohol industry. I started getting orders for things like, there’s something in Canada where the kids, before they go to college, they do this bar hopping week. This one company ordered a huge amount, with their logo on them. So the kids wear them, I mean kids, you know, college students. They go bar to bar filling them up with their favorite drink.
Andrew: I also see the marriage of the two of them in something called Hash House Harriers. Where…
Julie: Oh yeah, that’s another industry.
Andrew: You know what, it’s interesting that’s the one logo that you sell on your site directly to consumers, this is a running group, actually they called themselves a drinking group with a running problem. What they do is, they meet, I think, at a bar. They go out running, chasing this path that they don’t even know ahead of time and then they all end up at a bar together and they drink.
I had a guy here who I met in Argentina who met his girlfriend at the time doing one of these runs. So I could see how it would be a fit that they might want to have some of the drink around their wrist while they go for a run.
Julie: Well the interesting thing about that market, I mean, I was in Vegas catching a plane and this guy stopped me and said “If you have 5 minutes, I’m going to tell you something that’s going to make you a lot of money”, and I went um, OK, whatever.
So he told me about the Hash House Harriers. I never heard of them. He said “Check it out.” He said “We run with an open beer.” So they literally run with a cup of beer that they get. They go keg to keg.
Andrew: I had no idea they did that.
Julie: And he said, “This is perfect because you could put the beer in them and run, and you won’t spill your beer.” I’ve sold a lot of these around the world. It’s huge. It’s an absolutely huge market.
Andrew: I see.
Julie: These are things you don’t realize when you go into business, that the industries and the markets, the people who will use your product. You don’t really know until you start your business exactly who those people are.
Andrew: But Julie, if this happened to you one time and serendipitously you ended up meeting someone who showed you the corporate market, and bam, a brand new part of your business took off, great. But if it happens multiple times, the Hash Harriers, the distributors that find you.
Let’s see what else, the affiliates. It just seems to happen over and over. I feel like it’s not luck, it’s something about Julie. What is it about Julie? What is it about you that allows you to have all these opportunities? I want to learn from that.
Julie: That’s a good question. I wrote a book called The Money Garden; How to Plant the Seeds for a Lifetime of Income and it’s about creating and running multiple businesses. I think it’s an innovator’s mindset that I do have that’s probably helped me out in that regard, not just to invent a product, but to create multiple businesses.
Andrew: I see.
Julie: And there is a lot of serendipity involved.
Andrew: I don’t know. I think also there’s a lot of…
Julie: Now that you tell me that, there is.
Andrew: I’m not sure that I believe that. There’s something about you that makes you more open to conversation, makes you more willing to talk to strangers at an event instead of saying, “I picked the wrong one. I’m going to pack it up and go home,” that makes you approachable on, I think you said it was a flight, by a runner.
My sense is that it’s that openness to conversation and to ideas that puts you in front of ideas that open up new markets for you.
Julie: You know what? It’s a very strong sense of intuition.
Julie: That’s what it is.
Andrew: All right.
Julie: A very overdeveloped sense of intuition.
Andrew: All right, so let’s talk about the flip side of that so that I can bring up my sponsor. The flip side is you talked with a guru, a marketing guru, the worst kind of gurus there are, especially if they’re self- professed. What happened with this marketing guru?
Julie: Well, there was a time when . . . in all inventors, especially, but probably entrepreneurs get to a point where you have just worked and worked, you’re working 16 hours a day and you are just exhausted. And you say, “I cannot do this alone anymore and I want somebody to . . .” You kind of want somebody to rescue you, in a way.
Julie: And inventors are notorious for this, and artists are notorious for wanting someone to rescue them. And that happened to me and one of my employees said, “Well, I know this guy who’s worked with a lot of big companies and celebrities, and maybe he’s a marketing guru. He can help you out.” So I met the guy and my gut instinct said, “Run fast. Do not, do not work with this person.”
But I was kind of at a vulnerable point where I said, “Oh, well, he’s worked with all these celebrities and maybe he knows something I don’t.” And we ended up getting into a 26 page contract, and the day after that it was Jekyll and Hyde. And I realized this was a very big mistake and I ended up having to hire an attorney, cause I didn’t hire an attorney to read the contract. It was going to cost me too much money.
So I ended up having to hire an attorney after the fact. So to this day, I don’t sign contracts. People give them to me. It sounds crazy. People give them to me all the time and I say, “Oh, sure, okay, I’ll look at it,” and then I never sign it.
Andrew: And people don’t tend to follow up, I’ve noticed.
Julie: Well, if they follow up, I say, “Oh, yeah, I’ll get to it,” and then I just never do. And the reason is because of what happened to me in this bad situation. But every distributor I’ve ever had around the world that I’ve had for years that I have great relationships with, none of us have a contract.
Andrew: What happened when you say that he became, that he turned after the contract? What happened?
Julie: I think I have a phone call, something like, “Okay, now I own you and you need to send me all of your inventory,” and then just all kinds of crazy things. And I said, “No, no, this is not going to work.”
Andrew: I see.
Julie: “Well, that’s too bad. You signed a contract and you better do it.”
Andrew: Oh, okay, yeah, that would keep me from signing contracts. I always get nervous when someone wants me to sign a contract, especially if they wrote it themselves. “So what am I supposed to do now? I have to go hire a lawyer to deal with your agreement, which you’ve written for me, which basically sets the terms as you like them, and we have to go back and forth a million times.”
Forget it, especially when it comes to MDA. “No way. You want to tell me something and now I have to go hire a lawyer to look at your document or worse, I just have to accept that I have to trust you with your document?”
Julie: Exactly. And so now I have my own one-page contract, that basically is in plain English and it just says, “You’re going to do this and I’m going to do this. The end.” I mean, it’s in plain English. I did have . . . I mean, it’s not that simple, but I did have an attorney just write up one page so that I would have something to show them.
Andrew: I should now, at this point, talk about Scott Edward Walker of Walker Corporate Law. If you need a lawyer, someone who might help you with contract, someone who might help you with all the big issues that you’re going to face as an entrepreneur.
You can go to one of the big firms, the ones that will probably, if you’re a startup, be eyeing either your investor’s money and saying how much can we get, or eyeing your shares, you know, the equity in your business, and saying how do we, you know, “partner with you”, by taking equity instead of cash. That’s one way to go, not a way that I’ve gone, but I’ve seen people go that direction if they’re willing to give up a lot, that’s the way to go.
Another direction is to go someone who charges a lot less, and that person, chances are, wouldn’t understand usually the tech market that we’re in, wouldn’t understand that you at some point are going to want to raise money, if you’re a tech startup, or maybe a cellular company, all those issues that you’re going to face down the line, you need a lawyer who understands them today, because he or she has gone over them for years.
And a lawyer that I recommend, the one that will not take a big share of your business, and at the same time understand the base you’re in, is you know them by now, is Scott Edward Walker of Walker Corporate Law.
If you want to look them up, go to walkercorporatelaw.com, you can say, hey, Andrew is running this as a sponsorship, so of course he’s going to say that Scott is a great guy, well, why don’t you take a look at walkercoporatelaw.com and see who else says that Scott’s a great guy, and see that I’m not alone in recommending him, and saying that you should at least talk to him.
I’ll give you his e-mail address if you want to connect with him directly, it’s, here it goes, firstname.lastname@example.org. Check him out.
All right, so . . .
Julie: So it sounds like I should have Scott before I got into this mess.
Andrew: It may not be too late. Are you thinking, by the way, of ever selling your business, or is this something that you’re going to continue to do?
Julie: I have thought about that, yes, and, you know, I watch Shark Tank, which every entrepreneur, that should be required viewing, and I see, you know, kind of what they want the entrepreneur to do on their own. So I mean, yes, I have thought about that. I would like to build it up a little more on my own before I do that, I think.
Andrew: Where are you now, what size revenues are we talking about?
Julie: Well, since I’ve started, you see that’s the thing, I would never make it on Shark Tank because it took me way, way too long to figure out how to run a business, and how to sell, it just took, my learning curve was just too big. The revenue before 2009, I was doing very well. I took an enormous hit, you know, because it’s an impulse item.
Andrew: What’s very well, at your height how much revenue were you doing?
Julie: I sold about over a half a million with no advertising.
Andrew: Okay, half a million, and then the economy took a hit, and then what happened?
Julie: Yeah, it’s like in 2009, 2010, I mean, people were not buying impulse items.
Julie: Even though it was a $12.95 item, everyone was hunkering down and thinking of, you know, here is rent or mortgage, food, and, you know, it was just the basics and, you know, I couldn’t sell anything, and also I’ll tell you another thing that happened, and it happens to every single product entrepreneur, and I don’t care if you’re a small inventor or if you’re Nike, it happens to every company, and that’s counterfeiting.
Andrew: Oh yes, yes.
Julie: It’s a huge, huge problem, and because I had built the company up, and suddenly I was making money, you know, nobody wants to steal something from you that’s not working . . .
Julie: . . . and I had a big problem with counterfeiters.
Andrew: And you can’t do anything about it, can you?
Julie: You can.
Andrew: But . . .
Julie: I have figured out little ways around it that, you know, you could either hire an attorney, and it’s going to cost you hundreds of thousands of dollars, and, you know, I just couldn’t afford to do that, or you can, there are other ways that you can stop counterfeiters. You know, they’re all about money, that’s the bottom line, it’s money, so if you can cut off their stream of money, then they’ll move on to the next thing.
Andrew: How do you do that, by cutting off the distributors, by talking to the people who . . .
Andrew: . . . who sell it? I see.
Julie: Yep, and so . . .
Andrew: So instead of a lawsuit, you just go to the distributors, go to the people who are introducing their products to the consumers. I would go to Stupidiotic and say, hey, you’re selling counterfeit product . . .
Andrew: . . . and Stupidiotic is a good company that wants to do the right thing and they’d cancel it, cancel their order.
Julie: Yes and what happened was, on their website they said “We do business with Walmart, and IBM”. So I called IBM and got someone from the board of directors who called me at home, and I said, “Do you guys know that you are selling a counterfeit product, or you’re dealing with counterfeiters?” They said, “No, I don’t think so” and they looked it up and they realized no, we’ve actually never done business with them.
So they were lying. They put this on their website and that wasn’t even true. They hadn’t sold to IBM. They hadn’t sold to Walmart.
Andrew: They have more power to go after these guys than you do. That is interesting jiu jitsu.
Julie: I did it twice.
Julie: I did it once where they put a Speedy Gonzales, what is it, Warner Brothers, I believe, maybe?
Andrew: I don’t remember. I don’t know, but I get it.
Julie: I think so.
Julie: That’s their trademark.
Julie: And the counterfeiters put their trademark on my patent protected bottle, so I called Warner Brothers and I said “I want to show you something. Do you guys do business with counterfeiters?” and they said “Nope, we’ve never done business with them. They put this on there without our permission.” So you’re right. They had bigger guns than I do, and they were able to stop them, and that’s one way I go around it.
Andrew: Are you willing to tell us the other way?
Julie: [laughs] I have many ways.
Andrew: How about one more way? I’ve got to believe that you’re not the only person today, and that’ there are many in my audience that have to deal with this.
Julie: Well, let’s see. Like I just said, going after the distributors… Two things, Alibaba and TradeKey are the biggest middleman; I guess you would call them because they’re not a distributor. They’re just a clearinghouse website of sorts, but they are the biggest.
Anyone who has a product should constantly be checking on TradeKey and Alibaba for counterfeiters and if you let them know, here’s my patent, here’s my trademark. They’re violating it. They’ll take it down, but what I can tell you is, TradeKey took it off and never put it back up.
Alibaba will get it right back up the very next week, so you have to constantly be looking at their website every day to make sure there aren’t any counterfeiters on it.
Andrew: I was checking it out right now. Alibaba has two listings. Both go directly to you, to Ms. Julie Austin.
Julie: Oh! So no counterfeiters today?
Andrew: No, none today.
Andrew: Is this a good source of customers for you?
Julie: Alibaba and TradeKey? Yes.
Andrew: Okay. So you just go on there and you start listing. Boy there are all these different places to go list. Is there someplace like a Mixergy where you can go learn from other entrepreneurs who sell physical products? Because I’ve got to tell you, I’m doing my part, but it’s a small part.
Usually what I do is I focus on software entrepreneurs. On the people who make mobile apps, who make websites. Is there something like this? Is there a resource online where you can learn from other people about outlets like Alibaba?
Julie: Wow. You know what, that’s a very good question. I touch on it a little bit on my blog, which is Create for Cash. Well I started a blog called InfringerBlacklist.com and basically it was just me ranting about these people stealing my product. I constantly was getting rid of the counterfeiters and at one point I had them all knocked off the internet.
Also, I would give you another tip. Google will also work with you on that. It takes a long time, but if you tell Google, “Look these people are stealing my product. I have intellectual property. They’re violating it.”, they will take them down. If they keep doing it, I am, pretty sure that Google will ban them.
Andrew: I see. I get that. By the way, you said the site is Create for Cash, but I think you rebranded. I think you’re now on just CreativeInnovationGroup.com. In fact, if I go to the old domain, I’m led to CreativeInnovationGroup.com through, I think a 301 redirect.
Julie: Hmm. Well, I have seven blogs that I keep up. So…
Andrew: Why are you blogging when you have to go fight pirates? Why are you blogging when you have to talk to affiliates and distributors? Why blog?
Julie: Because that’s really how people find me. And a lot of people have found me on other people’s blogs which is another thing. If you have a product, you need to connect with the bloggers. I connected with a lot of mom bloggers, and they…I had a kids version of the product, too. So that’s another little spin-off.
I had the adult version. I sell in the [??]. I sell corporate promotional, retail sale, and I have a kids version. So mom bloggers love the product, and they go out and they blog about it.
Andrew: I see. Did we fund them all? Here’s what we got you. You might have even contacted us or someone in the audience contacted us. But one of the first places that we looked and I could see it here because we documented all our research. Here’s a site called sleeveshirt.blogspot.com, this little tiny blog.
Andrew: Do you know them that they apparently…
Andrew: You do. All right. It looks like they do small touch base interviews with entrepreneurs, and they might have even stopped as of last year. Too bad.
Julie: Huh? Well, I didn’t know that.
Julie: There was one blog that I got on her website. I don’t think it’s a blog, it’s a website. And I’ve been getting orders from them for years from that one little site. It’s called Strange New Products.
Andrew: Let’s see what that is, Strange New Products.
Julie: I think a lot of people have found me internationally from that one site.
Andrew: I would never have guessed. I’m looking at it. It seems like it might be a blog, but it just a collection of strange new products, like it says. Oh boy, some of these are really strange.
Julie: Like Stupidiotic [??].
Andrew: Like Stupidiotic. I better put this away or else I’m going to get sucked in. All right. Let me say this to the audience. If you like this interview and you want more conversations like this where I break down the process of how an entrepreneur build a physical product business, we’re talking about things like Clocky, the alarm clock that rings and then jumps right off your bed and you chase it so you’re forced to wake up.
Or a keyboard that you place on top of your iPad that was launched off of Kickstarter. Let me see what that’s called, keyboard, iPad, Kickstarter. I’m embarrassed that I can’t think of the name right now. Why can’t I… There it is, Touch Finder, of course.
And so many other products, like the DoDo Case. A guy created a software company. He went into Y Combinator. It did… And then he launched a case for the iPad, and it took off and it did gangbuster business. And then I had him on here to talk about how he did it.
If this is you, if you’re an entrepreneur who wants to build a physical product, we have interviews with entrepreneurs. We have courses with entrepreneurs who have done it. We have everything I can do to help you learn properly from other entrepreneurs who have done it. If you want that, go to — here it is — MixergyPremium.com.
When you go there, you’re going to have access to all of my old interviews. You’re going to have access to all of the courses. You’re going to have access to so much you’re going to wonder why I sell it for so little. And the reason is that my hope is that you will learn from that, especially if you’re getting started, but even as you develop and get bigger the bigger, you’ll learn.
And the way you really pay me is by coming on here and doing an interview the way that Julie did. Julie invested an hour of her time doing this interview, breaking down her process, telling you some of the things that, Julie, you didn’t talk about in detail on the other side. And my hope is that you will do the same thing in the future. Is that true, Julie, that you’ve revealed things?
Andrew: Did some of what you revealed make you a little uncomfortable maybe early on in the interview? The [??]?
Julie: I don’t think so.
Andrew: Good. All right. Sometimes entrepreneurs sound really comfortable, and other times they email me afterwards and said, “Andrew, I’m not sure I should have said this. I’m not sure I should have said that.” Then I spend another half hour with them just reassuring them that everything’s okay.
Yes, you did talk a little more openly than you usually do, but openness is what gets people to connect with you. And, Julie, you were honest.
Julie: You’re very good at that.
Andrew: Thank you. Have I gotten some openness here?
Julie: You absolutely have.
Andrew: Thank you. You know it’s hard to tell because we’re doing an audio only interview. I can’t tell if I shocked you a little too much. Have I shocked you not enough? So I’m just trying to read your voice, and I appreciate you doing this interview even though we couldn’t get a webcam on you and coming here and telling your story.
If people want to follow up with you, which of the many sites that we talked about today is the best one for them to follow up?
Julie: The best site is probably CreateForCash.com.
Andrew: I think CreateForCash.com leads over… Let me see. I think it redirects. Yes, it does to CreativeInnovationGroup.com. Is it supposed to do that?
Julie: It’s not supposed to do that. That’s very strange, but they’re both my sites. So either one is fine.
Andrew: All right. And the site is CreativeInnovationGroup.com. It’s a beautiful looking site. I don’t know who this Sean Johnson is, but he did a good job with your site. I can see everything from your books to your speaking to your clients. Thank you so much for doing this interview and sharing so much of your story with us.
Julie: Well, thank you, Andrew.
Andrew: All right. And thank you all for being a part of it. Bye guys!