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Alright, let’s get started. Hey there freedom fighters. My name is Andrew Warner, and I am the founder of Mixergy, home of the ambitious upstart, and I’ve got an ambitious upstart here with me today. In this interview I want to find out how an entrepreneur who never built and manufactured physical products before, how he ended up building, manufacturing and soon releasing to his customers, a product, and he did it all within a year.
Michael Del Ponte is the founder of Soma, a startup that creates and sells beautifully designed water crafts and sells its filters on subscription. I invited him here for him to talk about how he did it, and Mike, it’s good to have you here.
Mike: It’s an honor to be here. Your interviews are amazing. They’ve inspired me as an entrepreneur and as we were saying offline, we had actually connected through one of your guests two years ago and just reconnected through your (?) not too long after that.
Andrew: Yeah, I’m really appreciative that Tim asked to, Tim reconnected us for this interview. It seems to me, though, Mike, that you wanted to have this interview. You asked him for an introduction. You asked Ken from Manpacks. Why?
Mike: You have really people that I think understand what we’ve gone through. We are really lucky to do a Kickstarter competition back in December. We put Soma up on Kickstarter. Within nine days we had done over $100,000 in product, and a lot of the people who supported us in that, Soma, in that Kickstarter campaign are people who are, like your guests, or your guests and your audience, entrepreneurs, people who understand technology and gadgets, early adopters.
Actually it was Tim, when I was sitting down with him for dinner, he said, “You should talk to Andrew when you guys launch,” and today’s a really special day. If it looks like we’re sitting in the foreman’s office of a manufacturing facility, we actually are. I’m here in Union City, California. We are manufacturing Soma and we’re shipping out to our customers for the very first time this week.
Andrew: Alright. I want to make Tim Ferriss proud for introducing us, and I want the audience to get as much value of this as possible. So here’s the approach I’m taking here. Mike, I’m thinking, the person who’s really going to be watching this and using this, is someone, who in the back of his mind or her mind is thinking “One day I’d like to not create a software company or an info product business, but I want to create a company that manufactures products, that sends them to people, that they have in their homes,” and if they do that, they’re going to end up with a lot of problems, right? What are some of the problems that they’re going to end up with?
Mike: Well, and just so everyone knows, we’re based in Silicon Valley. As you said, we’ve never developed a physical product, and most people that I know are doing software, so we are exactly like your audience who would be curious to shift over. There are a lot of problems. The general process is you have the concept, you get drawings or sketches of the design, then you go into engineering and prototyping, and then you go into manufacturing and you ship.
Throughout every single one of those processes, there are timelines and budgets that in most cases you have a very good probability of being over time and over budget. And so the biggest problem is making sure things keep moving along smoothly, that your product ends up being perfectly, and that you’re able to do it at a cost that works for your business model.
Andrew: Let’s break this down. Concept. That’s where it all starts. What was your concept like when, in the beginning?
Mike: Sure. So the idea for Soma came from a dinner party that I hosted in San Francisco, about a year and a half ago. Everything in the house was perfect, and as my friends started coming in, one of them said “May I have a glass of water?” so I was like “Sure. Of course. No problem.” So I walked into my kitchen, and I open up my fridge, and I reach in, and I grab my Brita water pitcher and I take one look at it and I’m like “There’s no way I can put it on the dinner table. It’s made of cheap plastic. There these black flakes swimming in the water. I can’t remember when I changed my filter.”
So I went and I grabbed a glass wine decanter and I put it onto my counter and I start pouring the water from the Brita into the decanter, and as I did, the lid flew off, water spilled all over my floor, I got so mad I wanted to throw the Brita against the wall, and at that moment one of my friends walks in and he says “What the heck is going on in here?” He could tell I was furious and I told him the story. We both start cracking up. And I said “Why don’t they just design something that’s beautiful, sustainable and actually works?” and he said “Why don’t we do it?” And that was the first general concept.
Andrew: I’ve done that actually. Before our guests come over, I have this water bottle that I got from Crate and Barrel, I pour water from the Brita into that and then I put that out on the table for people. I’ve stopped hiding the Brita though, but it’s not the way I present water when I put it out on the table.
Alright, so you had a concept. Do you then sit down and sketch it out and say “Here’s what I think it should look like?” or does someone else do that for you?
Mike: Sure. So I don’t have a design background. My business partner doesn’t either. We had a vision. We wanted it to be the Apple of water filters. So we had a general direction, but we were fortunate to connect with two incredible industrial designers that are based here in San Francisco, Joe Titan and Marcus Debol, background at IVO and InCase, they’re incredibly prolific in terms of the number of products they’ve designed, and their aesthetic is very simple, modern, minimalist-
Andrew: Mike, I’m sorry to interrupt, but I really want to get into the details of this. How do you find a designer like that? Is this something you Google or-
Andrew: Or is there another way to do it? I don’t want to leave the audience with this understanding that, bam, you found the perfect person and they are going to be left out in the cold. How does someone find them?
Mike: Absolutely. Well, and it wasn’t fast. To be honest, everything in Soma happened just through conversations, and so when we got the idea, we just started telling everyone we knew about the concept, and we asked a good friend, who is a designer for introductions to other designers in San Francisco. One of the guys who he introduced us to recommended three other designers, who we interviewed, and we went through, a long time down through the process, and we just built a relationship with that first guy, Joe Titan, who co-founded InCase and he was really just helping us find other people, but he really got inspired by the fact that it was about health and sustainability, and he pitched the idea that he designed it.
Now it took us, I don’t know how many weeks, I’d say four to five weeks, of interviewing people, having second and third presentation meetings with them, getting proposals and budgets, before we actually came down to our top three finalists, and then, to be honest, it came down to the quality of their work and then their relationship. We felt really comfortable with Joe and Marcus, and that’s how we selected them.
Andrew: Joe was a guy who, he’s the co-founder of InCase? They make beautiful cases. I think I’ve got one here in the office. He knows what he’s doing. Why take your idea to a person who could eventually steal your idea and say “Hey, you know what, kid? This is a good idea. I’ll go do it. You become a,” I don’t know, “You work with me as a partner,” but essentially gives you 5% or just puts you out in the cold. Why take it to someone who could steal your idea?
Mike: Well, this is a classic question on whether to be secretive or transparent. I’ve always found that it’s better to just go out and tell people your idea. It’s very rare that someone is going to have the gumption and resources to just take your idea and run with it. I’m sure it does happen, but I’d rather go share it with the smartest best people in the world that I know and inspired them to be on our team, than as opposed to being in a bubble and missing out on potentially working with someone like that.
Andrew: What about the opposite? What do you have to offer him? You’re a guy who had a couple of previous projects. Frankly, I went to look some of them up, Sparkseed.org, is where I went to get some background info on you. The site’s down. So why would he say “I’m going to invest my time, my creative energy, my trust in this guy, Mike?”
Mike: Yeah. So that’s a great question, because when you’re developing your product, if you don’t have a lot of resources you’re selling the vision, and as the entrepreneur, the number one thing that you’re doing is selling the vision. Every partner that you bring in, you’re going to have to get some kind of deal. You’re going to have to ask them to expedite the process. Whatever it is, they’ve got to get bought in, and you’re not going to have typically the cash to give them. So, and our-
Andrew: So what do you do to make him feel so bought into this that he has to partner with you and trust you with his reputation?
Mike: Well, so I think there are three things. Number one, the team. So, going out and if you get a guy like Joe Titan to design your product, where we were lucky, we raised some investment money, we also had advisers with companies like Warby Parker and Birchbox, you want to surround yourself with an incredible team and others will be attracted to that. The second, I think it’s really important that I project has meaning, so our product, not only is it good for the environment and good for your health, but every time you buy a Soma filter you’re also giving clean drinking water through Charity Water.
So that’s really compelling for people. And then third, you have to have a business model that people can wrap their head around and realize “It’s going to scale, and there’s a potential for them to make a lot of money.”
Andrew: What’s the business model that introduced that early on that got him interested?
Mike: So, we know that most people never change their water filters on time, so what we did is we said “Look, here’s a company,” and she used Brita as an example,” that’s the market leader in millions of homes, almost everyone has one, but no one really loves it.” So there’s that opportunity. “Plus no one changes their filters on time. What if we just delivered them to their home every two months and you get them on a recurring payment subscription plan?” Not only do you have an opportunity to disrupt a large market, but you can get reoccurring revenue that’s dependable and predictable. It’s pretty simple, but also pretty compelling.
Andrew: Alright. I get that. I don’t want to brush over this Sparkseed.org and make it seem like a failed business in the past that we’re embarrassed by and that’s why we’re moving past it. What is it and how did it help you with Soma? And then I want to move back in to product development, but I want to understand that. What is Sparkseed and how did it help you today?
Mike: So Sparkseed essentially was a nonprofit incubator. Before there was Y Combinator or (?), what we were doing is we were finding college students who had incredible business ideas, but business ideas that had a positive impact on the world. So these could be electric car charging stations, they could be food programs in Africa. We would find these entrepreneurs, give them resources like capital, connections, media connections, mentoring, and we’d help them launch and grow their businesses. So essentially, the type of business that we’re doing at Soma, we had incubated 15 of these around the world, and we had seen times when they stumbled and times when they shined, which is very helpful in thinking about starting the Soma business.
Andrew: What about in connections? Did that help you at all?
Mike: Absolutely. So after I left Sparkseed, which merged with another nonprofit organization, I ran marketing at BranchOut, which is how, Andrew, you and I first connected through Rick Moreni, who’s an amazing entrepreneur.
Mike: So when I went there to lead marketing, I was an early employee. I had three goals. I said “Number one, I want to learn how to be a great entrepreneur from Rick. Number two, I want to increase my reputation for getting results. And number three, I want to build my network of investors who will fund my next company,” and I was really fortunate all three worked out, and many of the investors in Soma are people that I met through Sparkseed or through BranchOut.
Andrew: Give me an example, because you are a really well connected person. As I said, Tim from Manpacks emailed me. Tim Ferriss emailed me about you. Rick emailed me a long time ago and introduced us. Give me an example of someone who’s Tim Ferriss. How do you get Tim Ferriss invested in your vision?
Mike: Well, so Tim has been probably, he’s definitely been one of the most helpful investors in Soma. He goes about for his portfolio companies and he’s very selective. And so we definitely had to give him a compelling vision of how big this opportunity was. So how big is the market and how much of it do we have? The second is he was also really interested in doing a physical product, and I think in Silicon Valley people really want to do physical products. So that was compelling. And then third, knowing about all the other investors and advisers, it was a cool group to be hanging out with, and he could build his network through that as well.
Andrew: And you just reached out to him cold, or you had an introduction?
Mike: I had built a relationship with him through Rick Moreni, because Tim was an adviser to BranchOut.
Andrew: Oh, I see. Okay. You know what? These connections that help entrepreneurs build their businesses, is something that I don’t spend enough time exploring in my interviews. I recently interviewed one of the founders of Honest Tea.
Mike: Oh yeah.
Andrew: And I, he, great business, great guy. He’s a professor who teamed up with one of his students to create Honest Tea. I didn’t know how exactly within the interview to show all the different people who he reached out to who are in the food industry, who are in the drink industry, who are in the, I think even, the do-gooder industry. He found ways to merge their worlds into his. And I see that in you, and I’m glad that we got to talk a little bit about it. Let’s move on now with the product itself then. I see the concept. You said the next step is drawing. Who does the drawings and how much input do you have in their work?
Mike: Yeah. So this is really important lesson for entrepreneurs. You’re going to hire a lot of experts who have a lot more experience than you, but as the entrepreneur, you’re driving the vision. You’re the one who’s waking up at 3 in the morning thinking about your product. And so while you’ll hire an expert to do these drawings, you also need to drive the process and have a lot of input.
So Joe Tan and his partner, Marcus Diebel are into certain industrial designers. They did all the sketches and concepting, but I was also in many of the meetings, doing the reviews, and helping them, if nothing else, be a sounding board for the ideas. They presented over twenty concepts, and we kept going, we want more, we want more, let’s be more radical, let’s deviate more from what’s in the market.
Andrew: Do you have the picture with you? I don’t think we showed it in the interview yet, did we?
Mike: Yeah, actually. It’s right here. So this is the Soma water…
Andrew: Let’s get it right in the center of the camera, because I want to make sure… Sorry, not up close, a little further, but right there, yeah. Tell me what’s there, and then I’ll ask how you evolved the concept into that. What are we looking at there?
Mike: So there’s a lot here that’s unique. First of all, this is glass, not plastic. Second of all, you’ll notice there’s no handle whatsoever. We have the perfect grip size: 2.6 inches in diameter. We did a lot of studies on that. There’s also no external spout, so you’ll look, 360?, the silhouette is perfect, and the way it works is you just pour water right here into this trap door. You turn on your faucet and the water goes through. It filters down here.
Andrew: And that trap door pushes down because of the force of the water that comes down from this sack on top of it?
Mike: That’s exactly right. The water filters through here and fills the craft. It holds six glasses of water, and then when you go to pour, you just tilt it, and it goes through this mouth right here, and it goes out this pour spout.
Mike: All of these things, for the most part, no one’s ever done before. No one’s done an inner channel. No one’s done a craft with no handle. The trap door, all of these things are fairly innovative and unique, and that’s where these incredible designers come in.
Andrew: Hang on one sec. What did the original idea look like, then? I see what the finished product looks like, what people are going to have in their hands. What was the original sketch?
Mike: You know, the first sketch was just a really sleek-looking version of a Brita pitcher. If you look at all the water pitchers on the market, they’re essentially like a bucket with a handle on them, and so we made it look sleek and nice. Great textures and contours, but it wasn’t radical enough. We wanted something completely different in the market, and so we kept saying more and more and more and more, and finally, Joe and Markus had this breakthrough where they just came up with this and we were just blown away.
Andrew: I saw on Tim Ferriss’s blog where you wrote in detail how you got people to talk about your product. You’re a details systems kind of thinker. My guess is somewhere in your computer, you have sketches or images of the designs along the way. Would you share it with the Mixergy audience?
Mike: Absolutely. I’ll give you early sketches and some early renderings and see what I can dig up for you. I mean, we have so many. I’ll try and find something no one else has and get it out to the audience.
Andrew: I’d love it. What do I do to get that? Do I follow up with you via E-mail?
Mike: Just shoot me an E-mail and I’ll make sure you have it this week.
Andrew: OK, and for the audience, if for some reason we don’t have it as part of the post, catch us, let me know in the comments. The job titles of the person who draws, is it industrial designer? That’s what we’re looking for?
Mike: That’s right. So essentially the team that you’ll create over this period from idea to physical product is you’ll need industrial designers who can come and they’ll create the form and function, so from a high- level, what does it look like and how will it function. Once you have that, you’ll take renderings, so 3-D drawings of your products that take those sketches and bring them to life just like the finished product should look like. Now you have the shell, but you need the mechanics, so then you’ll bring in the engineers, who will do engineering drawings and prototype the product, and you’ll go through months of testing, and once you feel like the prototype is good enough, then you start going into manufacturing.
Andrew: How do we find the engineers who are going to do that?
Mike: You know, for us, everything is kind of through referrals. Luckily, our industrial designers have deep experience working in manufacturing. They’re not just guys who just do sketches. They’ve actually manufactured products, and so they had a great network. We hired a consultant who was a pretty high-level operations guy here in the Bay area, and he had a network of people, and to be honest, [?] just a lot of coffees and teas and lunches and breakfasts and picking up the phones and just asking everyone that they know who the number one best person is, because for us…
Andrew: Who is the number one… Sorry, go ahead.
Mike: Yeah. No, I was just going to say, our policy throughout the process was we only want to work with the absolute best, and when you’re doing a project like this, you know, it can cost a lot of money if you make a mistake, so we just kept asking people, why are they the best, why are they the best, and you look for people who have deep experience and a track record for delivering products.
Andrew: If I were to drop you in the middle of nowhere and say you have no connections, middle of nowhere meaning anywhere outside of San Francisco, Oakland even. And say you have no more connections. You have no access to go and have coffee with all these great people but you have to build a great product. And I say this because this is where many people who are listening to us are. How would you start to establish these connections that would lead to the right industrial designer?
Mike: So, the first thing I would do is I would look for the connector in the group. So, in our case Joe Chan was the one who got us dialed into the entire design community. And he made so many introductions. Now if I went to someone who maybe was a very junior designer, but didn’t have deep experience, well that person couldn’t connect me with his or her network. And so you can have 50 coffees that lead nowhere or you can find that 1 connector. In the entrepreneurial world there are very few people that know more entrepreneurs than you do. You’re the connector in that community. If you’re going to the design, you’ve got to find out who that is and first go to the connector. And then they can help with all the introductions that you need.
Andrew: I’m going to address the noise in the background because I get issues. I get complaints about it, and I’ll tell you people in the audience, I hear you and I keep working to make the audio quality better but in this case, we have to have some noise in the background because of where he is in the evolution of his business and because physically where he is. Next week when I do an interview with a librarian about how she got her start, I promise you quiet.
Mike: And it’s all my fault because, literally, we are at my factory producing our Soma products. So any sounds that you hear in the background, this is what you’ll be experiencing when you’re building your own physical product. You’re in these factories and it’s a whole different experience.
Andrew: The level of complaints that I got, I really listened to them and it’s gotten me to now have a whole computer just for interviews. Internet speeds up and down of over 45. Forty-five megabits up, 45 megabits down. Nothing else on this computer except what it takes to do interviews, so there are no conflicts. So guys, I’m paying attention. Keep sending me your complaints, but in some cases like this one we can’t obviously clear everything out, the connector. How would you find that connector? Are there magazines? Are there blogs? Is there a mixer [??] for industrial design or for product development?
Mike: Yeah, so there are. Behance is a great website, which is probably the leading community for design professionals. PSFK is one of my favorite blogs for creative professionals. And to be honest, I just love using twitter for these things, because you can just Google top ten industrial designers’ and as you start following these people, you can see who they follow, and they’re mutual connections. You get recommendations through twitter. So I use twitter a lot just to find, or go down the rabbit hole, and find out who are the experts in different categories.
Andrew: You mentioned a consultant. What’s the consultant’s background?
Mike: The consultant that we hired was the VP of operations of Method, which was one of my favorite companies. You probably know them from their beautifully designed soap bottles. And he was someone who was not through much effort of mine. I was having lunch with someone and they said you really need to speak to this guy. And they made it so. A lot of times it comes from serendipity as well.
Andrew: So we’re talking about an employee at Method, who you said I need you as a consultant and you paid him either in shares, or in a percent of the business, or in cash?
Mike: Yeah, so, he had recently left Method and was looking for his next gig. He was running his own company but was open to doing some consulting on the side. And to be honest, again, the entrepreneur needs to share the vision. And so everyone’s busy, and as a startup you almost never have enough money to pay people market rate. So a lot of times it was getting an introduction and going and sitting down face to face, and sharing the long term vision of the company, so much that they felt compelled to join in.
Andrew: Did you have money at this point or were you still bootstrapping it? None?
Mike: So in the beginning I quit my job. I wasn’t taking a salary. We had no money in the bank. And to be honest, I’ll never forget this, the Soma HQ was the desk next to my bed. So, it was literally in my apartment, and I could touch my bed when I was sitting at my desk. And I worked there for a few months. As the ball got rolling, and we got he sketches and we built out our network, then we started raising a small seed round.
Andrew: When we’re at the engineering stage, at this point, did you already have a seed round to pay the engineers?
Mike: Yes we had raised a little bit of money at that point. The entire process we’ve been really fortunate. I think people have seen that if they gave us a break up front, then there’s an opportunity for them to make a lot of money by them doing future projects. So, for us we had to go to them and say look, we can’t pay you our full rate now, but if you guys do a great job over the next couple months, there’s going to be more business for you to have, and that’s worked out really well for us.
Andrew: Who’d you get the early round from?
Mike: So that was led by Steve Anderson of Baseline Ventures, and the participating angels were guys like Michael Birch [??] Jabar, Rick Moreni, Tim Ferriss, all these incredible guys, John Rapogle from Seventh Generation, [??]. So we were super blessed to have these investors, who coincidentally, almost always invest in software, but there’s this boom right now that people want to do physical product, and they loved it.
Andrew: And that’s the $1.2 million raised?
Mike: That’s right.
Andrew: Did you have to create spreadsheets showing them how long a customer was going to stay subscribed, or giving them any estimates that way of where the business was going?
Mike: Absolutely. So we built out elaborate financial models. We did all sorts of forecasting and calculations. The good thing about doing that is when you’re planning your business, it’ll help you internally, and investors sometimes want to see that, but to be honest, I would say that having that vision and really pitching them on how this is going to change the world is more important than having your numbers down to the last iota.
Andrew: You and I have a little bit of a rapport here so I can ask you this. I’m looking at a photo that my researcher put together for me in preparation for this interview. It’s you from a few years ago. You look older in the photo. You hair is parted to the left, just, you’re wearing a collared shirt, just like a junior venture capitalist, and now I’m looking at you, your hair’s buzzed really close on the side, pushed all the way back, you’ve got a nice look, great t-shirt, there’s a style look to you, a stylish look to you. What happened? Did you as a person become more design conscious, more design expressive because of this process? What happened?
Mike: Yeah. I think you really have to live your brand, and the more that we got into Soma, I fell in love with modern design. If you would have asked me “What is modern design?” when we started this company I had no idea. But hanging out with our designers, reading design publications, if you run a design company, you need to really become a designer, and I feel like I’ve taken that mantle on, and so I definitely have kind of changed how I spend my time, how I dress, because your brand is really an expression of who you are as an entrepreneur, and so I’ve evolved as Soma has evolved.
Andrew: Alright. We have the industrial designers, the concept keeps improving, we have engineers who are now coming in. They’re taking it to the prototype stage. Who builds the prototype?
Mike: So, there are different prototype shops that use different technologies, but probably as all of your listeners have heard, this is the era of 3D printing. So you can literally email a 3D printing engineering drawings and the next morning you have a physical product. So the way it worked for us is we would say “We want to see how this cone fits into this glass,” well, we could do that overnight. It doesn’t cost, it costs a lot of money. It’s not cheap, but we literally 3D printed all of these parts. There’s a great place in the Bay Area called Fathom, located in Oakland, and we would go to those guys or other prototype shops and they would make these parts overnight. We’d do a bunch of tests. We’d make some changes, and do it again.
Andrew: That’s the prototype of the design, the look, the feel, making sure that the fingers feel nice around the center part of the pitcher, what about the part that filters out the water, that has to not just look like the finished product, but work like the finished product. Who does that?
Mike: Yeah, so we were really fortunate. We connected with a guy named David Demon. He’s considered the top water filter expert. He did water filters for Starbucks and Pete’s and Coffee Bean and Keurig, and actually he was just, through serendipity someone met him at a tea conference of all places, connected him with us, and he’s the one who has designed and prototype our filter, which not only takes out all the contaminants, but it also biodegradable.
Andrew: I actually saw him in your Kickstarter video. When you say “serendipity” I always feel like I can’t allow that to fly because I’m an interviewer. It’s like when the founder of Honest Tea said to me that he met Oprah, and it was serendipitous that she happened to be in the same yoga studio as he was in, but him getting his drink into Oprah’s hands and then on Oprah’s list was because he did the planning beforehand. Everywhere he went he carried a small bottle of tea with him, several actually at a time, so no matter where he was he could give someone a taste. There was some pre-planning that went into making, taking advantage of the serendipity. What was that?
Mike: Well, just like he carried his bottle of product, I think you need everyone to carry your story. So with Soma we say “It’s smart, beautiful and sustainable.” That’s a little line that you can get everyone to remember and tell your story. There are four value propositions, beautiful design, sustainable, subscription service, and share-able. And one of the things is you don’t have to be the person out there networking all the time. If people can tell your story, then they can meet someone at a (?) conference and get them so excited that they’ll hop on the phone with you and be open to working with you even when you don’t have any money.
Andrew: That’s a really relevant way of expressing what your vision and product or, or what your vision and product is. How do you get to that? How do you get to a place where you could express it so well that other people can carry your message, especially when in the beginning there isn’t a product there, let alone something to describe. How do you get that that?
Mike: That’s, literally, thousands of hours for us to simply, because all the ideas make sense up here, but they don’t always come out perfectly, and for us it was having conversations, going out and people saying “What is Soma?” and having to explain it to them in a really concise manner, and getting feedback from those people, or even watching for what clicks. You know, there are a lot of times when we had a pitch and we’d say “We’re the Method of this,” “We’re the Tom’s Shoes of that with a Warby Parker model,” well, a lot of times its way too convoluted and so we just kept simplifying, simplifying, simplifying, and I’m actually re-reading that book, Made to Stick, which I think is the best for storytelling, and that book has better answers that what I can provide. That’s-
Andrew: How did it shape your story?
Mike: Well, one of the things they say in Made to Stick, number one, “It should be a story,” so at the beginning of this interview I told you the founding story, and all the things that happened. The second, “It should be concrete.” So if you remember that story I talked about the lid falls off and water splashes all over the floor, you can visualize that. Emotional is really important, and then simple. I think simple is the one that as entrepreneurs we often miss out on.
Andrew: I noticed that story at the top of the interview. It seemed too perfect. I remember though, no, this isn’t a criticism. This is, “I as an interviewer need to know exactly how everything worked,” but that’s not the way you have to tell your story, I don’t think. I remember when I was at Dale Carnegie volunteering to help them teach that How to Win Friends and Influence People class, and one of the big aspects of their training is storytelling, and when they’d ask me to tell a story, I would tell it exactly as it happened.
And they go, “Andrew, you’re boring us to death here. Please pick it up a little bit.” So I would think of ways to do it, and they would basically coach out of me a combination of multiple realizations that may not have happened the moment that I’m telling the story about. It seems like that’s what happened to you. The glass, the top of the pitcher didn’t fall down. It wasn’t, maybe not exactly as it happened, but you have to make it more vivid, and so you add more color.
Mike: Well, yeah. That’s exactly right. So, that story is true, but the thing is there’s a lot more that happened. It wasn’t really this punchy he walks in and says two words, I say two words, and then the clouds. . .
Mike: Partways and it’s a miracle. But there’s a lot of stuff in there that you’re not going to include. I’m not going to say “The water spilled, and then I went to my cabinet and I looked for my towel and I chose the pink one, and then he said ‘Get the blue one.'” No one cares about all of that. So you want to take the authentic, true story, and you want to basically make it compelling, and also make it a story that other people can remember.
So if I told you the full story of that entire night and the conversations we had and then the brainstorms, you wouldn’t’ remember anything except “This guy spilled some water,” but by taking the most powerful moments out of that story, you’re able to really remember the parts that hit the most, and that’s a big challenge for entrepreneurs as well, is just simplify, simplify, simplify.
Andrew: It’s also, when we’re listening to other people’s stories we should remember they are simplifying, simplifying, simplifying their stories so that it’s memorable, so that it makes sense, and if our lives don’t turn out as simple as the stories it’s not that we’re doing something wrong, it’s that we’re comparing ourselves to a perfectly structured story. How long did it, not how long, but do you practice that story?
Mike: Yeah, well, I wouldn’t say I practice it, like, looking in the mirror and rehearsing it, but every time I say it, I have a different reaction. So, for example, with you, you said “Well, that happened to me,” the “I pour it and the lid falls off.” Well, that’s really compelling. If I would have said “I picked it up and I hated the way the handle felt in my hand,” well, that’s not really that big of a pain point.
So what I do is with this or anything else about Soma, any messaging, I just have conversations, and I see what does and doesn’t work, and I try and smooth things out or maybe emphasize different points based on that.
Andrew: I get that. How formal are you about it? Do you sit down afterward and say “Why didn’t he understand it?” Do you write it down or do you just process it in the moment and say “Oh, he didn’t get it. Next time I’ll try something different?”
Mike: It’s a lot of gut feeling. Just reading their body language and reaction and the energy in the room, and intuitively knowing “Well this seems a little bit more compelling than this.”
Andrew: I re-watched your Kickstarter video where you raised $147,444. Your goal was $100,000. In the video you say, “We have all this done. We have the design. We have this, we have that, etc. What we need is just you.” And you said that you would launch this, that if anyone paid, I have to go to the other computer, they would get their pitcher estimated delivery July 2013. We’re now in September 2013. If all it was, I see the design here. It’s not essentially, as far as I can tell it’s the exact same thing as what you’re holding up, if it was already designed and ready, what takes so long?
Mike: So the biggest challenge is what’s called tooling, and these are essentially the machines that you use to manufacture. So, for this product, every part in here needs to go through a tooling process. So, this glass has a steel tool, or another way to think about it, a mold that is in this shape, and those molds are typically made overseas. The glass for us is made in Germany. The plastic part, the tools are made in China.
Everything’s manufactured here, but it takes months to design that mold, to manufacture, which is cutting steel, and then you go and you run parts, and there’s always something wrong. It’s a little rough here, the hinge doesn’t work, and you iterate, iterate, iterate. And so we went through a process that took a really long time of getting all that tooling done and finally getting to a place where you say “Okay, let’s hit the ‘Go’ button and run 10,000 of these.”
Andrew: And so how long did you expect that process to take, the process from having the design to hitting the go button? What was the expectation?
Mike: We expected about eight to 10 weeks and it took about a month after that. So our goal was to ship in July, and for us, we figured “Well, that means the very last day of July is the last day we can do it.” We ran into some issues. One of our molds is a four cavity mold, which simply means it produces four parts at a time, and three of those cavities cracked.
Of course, you can never anticipate this stuff’s going to happen, but essentially a very expensive piece of machinery we broke, we’re right before we’re going to ship product, we had to go through, fix, we could only use one out of four of those cavities, fix that tool, and then start running all of our parts. This is one of those things you never know what’s going happen, but in retrospect we should have said “Okay, if we think it’s going to take eight weeks, it’s going to take 12 weeks.”
Andrew: In those situations, it’s easy to, in retrospect, say “Oh, it happens,” and brush it off, but in those moments, we as entrepreneurs feel like maybe we’ve made a mistake, maybe we’re not up to the task, maybe Tim Ferriss should have not trusted us, whatever it is. I don’t want this interview to sound like a guy who’s (?) sure, who has all the right people around him and everything works out well. I want to get to the real you.
Andrew: So take me to a point where you were vulnerable in this process, where you thought it was done.
Mike: Yeah, well, we never got to a point where we thought it was done, but to be honest, we made a promise at Soma, and integrity’s really important, and we said “You’re going to get your product in July,” and we thought it was going to be August, and now it’s September 3rd, and we’re just shipping out for the first time today.
So, the hardest part was going to our community and saying “Hey, we made a promise to you and we can’t fulfill that,” and what that looks like as an entrepreneur is you’re not sleeping well, your 12 hour days turn into 18 hour days, the budget that you have expands, because instead of shipping things the inexpensive way you’re expediting them and there is extra cost for that, and you have to tread these thin lines between essentially having very comfortable relationships and having hard conversations.
I’ll give you a story. When that tool broke, was, like, the worst news I could have ever got, because at that point we were, like, right on the border of whether we were going to be late. We essentially felt like we, “We’re probably going to be a little late,” and when they said, “Your tool has broken,” it was like, I’ve never really dropped that many F bombs in my life, but it felt like everything went out the window, and then in five seconds it was like “Okay, what’s the solution?”
Andrew: Why? What brought you back there? There have been times in your life when you didn’t get back. What brought you back this time?
Mike: There’s no opportunity for failure on this. You know, we’ve got thousands of customers. We’ve got thousands of customers who supported us when we just had a prototype. That’s number one. And then number two, we believe in the vision and we feel like there needs to be a product out there and you can’t get stopped by this.
I always say as an entrepreneur it’s a roller coaster. If you’re at the top of the rollercoaster, guess what? You’re going to go into some hard times. And when you’re through the hard times, you know you’re going to go back up. And so for me, we get bad news like every week designing and developing a product and you just got to remember push on, push on, push on.
Andrew: Could you have gotten to that point without the $1.2 million seed ground?
Mike: We couldn’t develop this product just on the Kickstarter money because the Kickstarter money was for the tooling. We raised about $150,000. The tools cost about $150,000.
Andrew: Tools meaning the mold, the stuff that it takes to make it in a machine that’s already built.
Mike: That’s right. But then you still have to pay your designers, you have to buy the materials for us, we have a few people on our team. You have to pay salaries and rent and all that type of stuff. So for us, we needed to raise outside capital. With that said, I think Kickstarter is an incredible platform, Indigo as well. And if you can bootstrap it and just raise money for your own production, then that is an incredible way to go.
Andrew: How much would you have needed to get to? Instead of $147,000, how much would you have needed to get to?
Mike: If we took no salaries, no rent and we’re just talking about product development, you got in our case about $150,000 in tooling. There was probably another $50,000 in other supplies meaning the coconut shelve carving that goes in the filter and the packaging and all these. And then the biggest thing is inventory.
So for us we’re producing 15,000 units right now and you got to pay for at least some of those units before they ship out. And so that’s a big part of selling the vision. It’s trying to get the best payment terms but in general if you’re a new company and you’re doing, I don’t know, a $50,000 production run, you’re going to have to put up at least half of that down before they even turn on the machine.
Andrew: What could you have done to get more from Kickstarter? Now that you got this experience, what could you have done to get more than roughly $150,000?
Mike Del Ponte: Well, we really only marketed the Kickstarter campaign for 10 days so fortunately we hit the goal in 9 days and there’s an article on Tim’s blog called ‘Hacking Kickstarter’. It talks about how you use [??] and we did it in a real scrappy manner. We didn’t have a PR firm or advertising by [??] or anything like that. But for us, we wanted to get proof of concept, raise enough money for tooling and then get directly back into the product.
But I would say, you know, if we wanted to raise more money than I think one, we actually invested in a really fancy video, which I loved but you could see into a webcam and you be like ‘you know guys, we put our entire lives into this and we need you and literally it’s going to cost a quarter million dollars. We can’t do it for lot less and we just need you to [??]. I think that would be more compelling than doing a fancy video like we did.
Andrew: Really? So you would have gone cheaper on the video and ask for more money. Quarter million is definitely better than $100,000.
Mike: Yes. In our instance because we had raised money and we are focused just on paying for tooling, then we just needed to hit around $100,000. But if our lives were on the line, then we literally needed $300,000 for the entire product development process. I would have said it’s $300,000 and I need you and instead of doing it for 10 days marketing, I probably would have done for 30 days. And those are 18 hour days. It’s exhausting but definitely it’s doable.
Andrew: What happened with your trip to Germany?
Mike: It’s a good question.
So, you know, when we came up with this idea for a biodegradable filter, we had a concept but we hadn’t proven it out. One of the issues with PLA, which is essentially a plant base material that hogs like plastic, is that PLA, because it’s made to compost and biodegrade, above a certain temperature, let’s call it 100 degrees Fahrenheit, it starts to warp. That doesn’t work if you’re shipping product in the back of a truck of Arizona in the summer.
And so we needed something that would both break down and have a nice high heat tolerance and we searched and we searched and we searched and we couldn’t find it anywhere. And so it literally took getting on a plane, flying to Germany, renting a VW car that’s about the size of this desk, drive it straight to the airport and having one meeting where I pitched my heart out and we found the one plant based plastic that actually works and we’re filing for a patent right now. But if it weren’t for hustling and getting on that plane, and hitting hard, and putting it all on the line, we probably would not have developed this filter and we would have been really out of luck.
Andrew: So a couple of years ago, you emailed me, this is November 2011, and you asked me if I’d get on the phone, I said yes. We got on the phone soon afterwards, and you asked me about how to interview. I gave you my “How to Interview Your Heroes Course” for Mixergy and I talked to you on the phone about what to do for your interviews, when you emailed me the other day, in the reply, in the email to me you had the notes from our previous conversation.
Mike: Yeah, that conversation was amazing, and I was so blown away that you would take the time to have a phone call with me and give me all of your wisdom.
Andrew: Well, let me get back to what you learned from that conversation, because I’m curious about what you got out of it.
Andrew: What I was going to ask you is, the note taking, you don’t just meet people and say “Goodbye.” You don’t just have a conversation with me and hope that it’s useful. You’re deliberate. You took notes on our conversation. You’re deliberate. You asked Rick for an introduction. You’re deliberate when you meet strangers. So, what is your process for finding, for staying in touch with people, for meeting someone and making sure that it becomes a connection, not just a happen, not just a good bumping into someone experience?
Mike: Yeah. So I try and do what you did two years ago, and now I remember exactly, because you did it again today, which is the very first thing you did when we got on the phone, or got on the Skype, was you asked how you could help me. And you did the exact same thing two years ago when I was really had no traction, no venture capital, nothing like that. You said “How can I help you?” You said “What would be a win for you where you’re,” those were your exact words.
Mike: And you’ve obviously built up this unbelievable network because you’re always focused on adding value, and so I just constantly try and do that for my friends and the people I meet is follow up, express gratitude for everything that I’ve learned, and then just find moments, take a little bit of time to think “Well how can I help Andrew? How can I help whoever it is that I meet?” and ping people every once in a while.
I spend a lot of time on Sunday. I live here in San Francisco and I’ll be walking around town, and I’ll just pull out my phone and I’ll scroll through and I’ll reconnect with people that I haven’t talked to in a long time and just say “Hey, I’m thinking about you. How are you doing?” and it’s easy to get into a rut and just focus on the people in our own circle, but we have to remember that relationships only are cultivated through conversations. And so I try and really reconnect with people and do what you do in terms of just adding as much value as possible.
Andrew: On a tactical level, for me to stay in touch with people and not get overwhelmed by all the work that it takes to document our conversation like it’s some scientific research that I have to sit and work on, I use CoBook because it’s just using the built-in Apple address book. I use EverNote because I can easily toss stuff into it, and I use GMail because it stores all my email. If I do a search with all of those three I know everything that I’ve done with you basically. What do you do on a tactical level to stay in touch with all these great people who you connect with?
Mike: Well, there’s a great app called Write That Name, and Write That Name, essentially what it does, if someone sends you an email and they have an email signature, it’ll take all of their contact information, put it into your GMail address book and then you can actually sync that up to your phone. So my phone has everyone that I’ve ever gotten an email from, their name, their email address, their phone number. And so that’s just great in terms of capturing all of that type of stuff. That would be probably my number one tip in terms of an app or technology.
Andrew: Write that Name, right?
Andrew: So going back to what you said earlier, why did you want to do interviews?
Mike: Well, it was partly because I saw how you had connected with all of these people, and it was great for them because they got to tell their story and connect with all of the people in your audience, and it was great for you because you now know all these incredible people. And so I was thinking about, at that point in my life “Is there something that I could do, but in a different niche?” I actually wanted to focus on people, I forget how I phrased it, it was something like “Getting rich by doing good.” So entrepreneurs, like the-
Andrew: One second.
Mike: From Honest Tea, who are starting companies who are not lucrative, but that are doing good for the world.
Andrew: Oh, I see. I can see that actually as a common thread throughout your life here. Well, let me finish off by saying this. Two things, first I’ll give a message, and then I want to ask you a final question. The message is, if you want to take the course that I gave Mike all that time ago, it’s a part of Mixergy Premium. Just go to mixergypremium.com and you’ll get it. You’ll also see, of course, by the founder of Hidden Radio, where he teaches how he got publicity for Hidden Radio when he was promoting it on Kickstarter.
And you’ll see several interviews with entrepreneurs build physical products and you’ll get to see how they did their production, how they came up with their ideas, how they walked through their whole process. If this is something you want to do, whether it’s connect with people or build a product, those interviews and courses and so many others are mixergypremium.com. One membership gets you access to it all. Mike, are we still connected here?
Mike: We certainly are.
Andrew: All right. It looks like the connection’s just a little bit funky. Let me call you right back.
Andrew: All right. Here’s the final thing I’d like to hear. Guy Kawasaki told me years ago that most people do postmortems on their project after things fall apart or maybe they go well. They say, “What worked well; what could we have done better. What could we do better next time?” What he advises the rest of us to do is to do a pre-mortem. Before we start out ask, “What could go wrong? How could we fix it before it happens?” So the person who’s listening to us might be on a journey that starts right now at the end of this interview where they’re going to create a business maybe even based on physical products like you. What could go wrong for them? What’s one big thing that they should watch out for?
Mike: So I love the idea of the pre-mortem. We do it at Soma all the time. Something will go wrong. Out of all of these, whether you’re using glass or plastic. I’ll give you one example. Our filter has silk in it. And so our filter’s made of plant-based materials, coconut shells, and silk as a screen. Well, we just recently found out that silk is really hard to cut with certain machinery. Go figure! We didn’t test that six or nine months ago when we could have. We tested that in the last month. And so my one piece of advice around that is almost everything’s going to go wrong. What you want to do is test it, and figure out what went wrong really early so that you have more time to solve it.
Andrew: That’s great advice. The website. . . I should have probably given this out before, but I can imagine my audience has already Googled it and went onto the site. It’s drinksoma.com. Soma is in the area here in San Francisco, right?
Mike: That, as well as it means ‘Drink of the gods.’
Andrew: ‘Drink of the gods?’ That’s what Soma means?
Mike: That’s right.
Andrew: All right. Soma, check out drinksoma.com. I did my best to get you guys on video, a screenshot of what this looks like. I’ll have Mike hold it up. I don’t think we did it justice. We were very utilitarian. We wanted you to get a sense of the shape. But if you really want to get a sense of this product that’s been built, go to drinksoma.com and you’ll experience it for yourself. Beautiful product, Mike. Thank you for sharing the story, and congratulations on shipping out this week.
Mike: Thank you so much.
Andrew: Real artists ship, right?
Mike: That’s right. Thanks for your time, Andrew.
Andrew: Thank you. Thank you all for being a part of it. Bye, guys.