Andrew: Hi, everyone, my name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses. And you guys, if you’ve heard me do interviews, you know I ask them personal questions. I asked this one guy when he lost his virginity. Don’t worry Jacob, I’m not about to ask you that. I asked another person, actually multiple people how . . . sorry, you said it’s okay?
Jacob: No, it hasn’t happened yet, so I’m still waiting.
Andrew: I see. I asked, just a little while ago, I asked an entrepreneur about how his daughter was 2 years old and like with his girlfriend and the mom and like the whole situation, how it’s two different people and whether he’s sleeping with other people. A lot of personal questions. People open up about them, no issues.
Here’s the one place where people squirm or put up deep resistance, they don’t want me to know. Ask them where they had their products manufactured. No joke. Go look at my interview with Jennifer from Linjer. I asked her, “Where did you have your stuff manufactured?” She wouldn’t tell me. I said, “China.” She barely acknowledged that. It’s hard. It’s hard. If you want to get something manufactured, it’s hard to find the right place to get it manufactured, it’s hard to actually bring it to market.
But I’ve interviewed entrepreneurs who have done it, and they still won’t tell me how they did it.
Today’s guest has a business that aims to help make that problem, the difficulty of actually having your product, your physical product created. He wants to make that whole process easier. His name is Jacob Rothman. He is the founder of Platform88. They offer an all-in-one manufacturing services solution in China.
But as he’s going to tell you, it’s more than just manufacturing your product. We’re going to find out what it is. And we’re also going to find out how he ended up starting this business and what it’s like to start a business in . . . or start a product based business and have it manufactured in China.
This whole thing is sponsored thanks to two great companies. The first will host your website right. If you want to actually manufacture something and have your own site for it, HostGator will do a fine job of hosting your site.
The second is a company I’ve used to hire a developer, a designer and even a finance person. It’s called Toptal. I’ll tell you about both those later.
First, Jacob, welcome.
Jacob: Hey, Andrew. Thanks for having me on. Really appreciate it.
Andrew: You know, before we started I said, “I’m going to introduce you as a guy who can help people manufacture stuff like the people who were doing Kickstarter campaigns.” And you said, “Actually it’s more than that.” Before we get into your story, what do you mean? What’s more than manufacturing?
Jacob: Well, manufacturing has gone through a few iterations since the time I’ve been here. I’ve been in China for over 15 years. And for me this sort of next wave of manufacturing is opening up resources that we have and developed to new entrepreneurs, whether it’s retail markets abroad, whether it’s distributor relationships, whether it’s how to access the Chinese market here. So manufacturing is difficult. It’s good to have competent partners on the ground, but partners that can sort of open things up and go beyond just the ability to make a widget is what we aim to do.
Andrew: You mean, also distributors who’ll help me sell my widget in, I know some people hate the word widget, but I’m going to stick with it because it’s good, who’ll help me sell it in China?
Jacob: Yeah, possibly we have a department within Platform88 that helps people sell their products within China. It’s obviously a very large market, and if you hit it right, there are millions of consumers here that can buy your product.
Andrew: Can you give me a case study? Is there one specific . . . I’m looking at your website and I see a handful of different products, like this coffeemaker that I can take with me camping. I could see a stand-up desk that’s basically just four pieces of wood put together in a creatively designed way. Give me one of them where an entrepreneur of business came to you and said, “Hey, listen Jacob, I got this idea, people want to buy it.” And you took them to have the product made, but maybe you even also help them sell it.
Jacob: Sure. Well, we’re looking at two things, we’re looking within China and then we’re looking outside of China. Within China, we did last year a product called Stojo, which is a really clever collapsible coffee cup for people who don’t want to throw away their Starbucks or Costa Coffee or Pete’s Coffee Cup, because it’s a waste. We introduced it to the market here in China and people went nuts for it. I think people don’t always understand consumer needs within China, and in that particular case, people were pretty hip to not creating waste. And we sold over 200,000 of them through our network here, which is pretty good.
Andrew: I see the collapsible cup. I sometimes do that. Instead of buying a cup of coffee outside of the house I’ll take my like big cup, the metal one that I was given from a past guest. And I do hate having to shove it in my backpack because it takes up a lot of room and it spills. I get the value of this thing. I get why someone in the U.S. might buy it. How are you helping sell it in China? What specifically did you guys do?
Jacob: Sure. Well, there’s a number of online sellers here. And if you really peel it back there’s hundreds of them. There’s a few dominant ones like Qiangdong or Taobao. And a lot of times what we do is we localize the Kickstarter or Indiegogo campaign, we put it into obviously into Mandarin, we changed some things about it, we relaunched the product here in China. We’re doing it right now for another product called the Press a Cup, which allows you to infuse fruits and other things into your water.
So, you know, sometimes it works great and you hit it, like anything else. And sometimes it doesn’t. But in those cases, they’re doing well.
Andrew: I see. And you don’t just help them make that cup, you also help them sell it in China?
Jacob: Right. So, and then beyond China too, I mean, developing manufacturing partners in China is difficult. You want to look for, if you’re going to sell into retail around the United States or around the world, you want to look for partners that have already established retail connections because the certifications for factories are pretty intense for people like Home Depot or Walmart or Lowe’s. And in many cases, we’ve already developed those relationships with buyers so we can channel their products to the right places.
Andrew: So why do you think so many entrepreneurs who I interview will not tell me where they had their stuff manufactured? Why is this such a point of contention that it’s an awkward experience every time I ask it?
Jacob: I don’t know. I mean, probably in the software world if you’re using an outside resource to design your software, nobody wants to reveal that either. It’s a competency that you develop within your company. And, you know, I don’t think you want your competitors finding the same resources, especially if they’re good, right?
Andrew: Because then they’ll go to the same factory and have a similar product made and then the selling part. It’s that hard to find a manufacturer? I can’t just go online or find a broker and get something made?
Jacob: Well, there are many hundreds of manufacturers, but the top ones in each category there are not as many as you might imagine. It’s, you know, from there you might think that China’s vast and there are so many different people that’ll help you, but so many people in the upper tiers of manufacturing for your specific product there really are not as many as you think.
Andrew: So then it’s easier to find. This shouldn’t be something they’re hiding then?
Jacob: I don’t know. I guess you’d have to ask them.
Andrew: You know what I’m noticing? I thought, I have to be honest with you, when I heard that you were in China, I said, “Oh, no, another Chinese entrepreneur.” Every time I used to interview Chinese entrepreneurs or talked to them about a possible interview, the connection was horrible. It’s not just the distance. They would tell me that there was like something going on where China would degrade the ability for them to use Skype. It was just one of the things. Now it’s not happening anymore. Things have changed a lot.
Jacob: Yeah. I mean, one of the reasons for this company, Platform88, is to sort of take advantage of a lot of changes. I’ve been here for 15 years. And the difference between when I started and now is really vast, and not just in terms of what you can do here but how you live here. Because I’ve also been living here for 15 years.
Andrew: Why did you go to China in the first place?
Jacob: To manufacture products. My family had a company in California and we were doing a sort of innovative gadgets and for . . .
Andrew: You know what? One sec.
Hey sweetie. She’s been calling me over and over. If you see me going over, my wife, let me call. Let’s call her back, let’s see what’s going on with her. Is it kind of weird that I’m calling her?
Jacob: No. If you need me to help talk to her, I can . . .
Andrew: Charlie Rose would never do this.
Jacob: Well, you know.
Andrew: Olivia. Hey, you’re in an interview. Jacob Rothman is not saying it because he’s nice, but I’ll say it on behalf of both of us, Charlie Rose would never take a call from his wife in the middle of an interview. But I was a little worried because you kept calling. Is everything okay? Got it. Okay, but you’re fine. Okay. All right, I’ll tell them. All right, bye. I love you.
Jacob: [inaudible 00:09:06] but I really, you know, have a deep feeling for you.
Andrew: Here’s what happened. I hate getting phone calls because it’s usually random people calling. There’s never any good things that happen from an unscheduled phone call. So I send all my calls to voicemail. She’s been calling because she doesn’t know like what’s the new protocol for reaching Andrew now. Is it she should audio FaceTime me if she wants to do it, because I can’t get junk mail that way. She’s like trying five different ways and that’s why she kept calling. It’s not urgent, it’s just confusing to call me. I’m a difficult man to be married to, Jacob.
Jacob: I’ll keep that in mind when I, you know, want to marry you in the future.
Andrew: Constantly experimenting. Oh, so sorry, you were saying what brought you to China in the first place.
Jacob: Oh, yeah, my family had a manufacturing business in California, where I’m from. And I went over there to help source and develop products. And then I just kind of fell in love with the place, the speed of it, the ability to make pretty much anything we wanted. And it was intoxicating. And when I first got here, I was really sort of aware that I was watching history unfold. I mean, it was 15 years ago. China was beyond the waking up point, but many things that we have now are how we think of China now, weren’t there when I first got here.
Andrew: What was it like when you first got there?
Jacob: I think people were a bit shy in terms of talking with foreigners. They weren’t on the world stage like they are now as a superpower. And there was just a lack of everything. When I had to . . . there was one computer in the lobbies of hotels and people line up and wait. Now everyone has WeChat on their phones and can pay for everything. I mean, it’s vast actually. It felt like, and I was aware of that when I got here, it felt like I was watching history sort of unfold.
Andrew: Did you actually use this word with our producer, you said that you were a bit of a dick when you got there?
Jacob: Maybe. Right. I said that [inaudible 00:11:05].
Andrew: Tell me what you, because I feel really weird saying it considering like the intro that I gave. But tell me about what you mean by that. How were you when you first got there?
Jacob: Oh, I would say, and it’s advice that I would give to people coming to China or in any buying relationship, when I first got here I was pretty harsh. I felt that I knew how to do things better than the people that I was working with. And so I was pretty harsh with people around me. I don’t remember using that word, but I don’t deny it. I may have used that word.
And I think over the years, especially as my factory partners and people that I was working with at the time, grew quite large and in many instances larger than my own business, I realized that working more productively and cooperatively with people was a better way to go.
Andrew: What was the family business that you went there for?
Jacob: We manufactured brooms and mops in Stockton, California. It was called National Broom Company.
Andrew: Wow. And so then, did you move the manufacturing to China?
Jacob: No, the business at that time was changing. We ended up selling the American Brush and Broom industry, had mostly moved to Mexico by the time that I got involved in it. And so the business changed and started doing electronic gadgets and gifts for some of the people I mentioned, Brookstone and Sharper Image at the time, other folks.
Andrew: And so then, what were you manufacturing in China in the beginning? Was it these things that we’re talking about that went to Brookstone?
Jacob: Yeah, they were. You didn’t have power banks at the time, but flashlights that did other things or, you know, camping chairs and all sorts of men’s “gifts” that you might find at Sharper Image or Brookstone or some of those places.
Andrew: I get it. And then it seems like you started to, at that point, get into, was it just the manufacturing for other people’s products? Am I right?
Jacob: Yeah. When I came over here, I opened an office and then I realized that there was an entire universe of people out there that might need this type of help. And I opened an office that was doing, they call it trading, a trading company, so I opened a trading company. And from there we changed to a factory, ended up merging with one of my largest factories, in the last 10 years I’ve owned my own factory here.
Andrew: So a trading company is someone who finds factories and helps . . . what does a trading company do?
Jacob: A trading company would be like a liaison for people. And typically they were, when I first got here, run by Hong Kong people and Taiwanese people, and they were your sort of ambassadors into China because it was too wild and too rough to not have a more educated or sophisticated person “handling” your business. And it was part of the assumptions and just some of the things that changed dramatic from being here.
Most people felt 15 years ago you needed someone from Hong Kong to be your guide into China. So that was the trading company sort of era. And they went away. There are trading companies now, but it’s mostly the factories that have risen up and become very competent on their own.
Andrew: How is your language?
Jacob: I speak fluent Mandarin.
Andrew: And when you got there, how was it? Your language skills is what I meant to say, I kind of half asked that question. How was it?
Jacob: I mean, my English was great and it continues to be okay. My Hebrew is . . .
Andrew: Your Hebrew is also good, you said?
Jacob: My Hebrew is not so good. But my Mandarin’s all right.
Andrew: How did you learn Mandarin?
Jacob: I started with a tutor in San Francisco and had classes and a grammar book and dictionary. And I tried to be here in a way that was a bit different from other folks that I saw around me. A lot of people would stay at the Sheraton or the Westin, and I would stay in local hotels. And a lot of people would have drivers and I took the bus. I just forced myself to sort of engage.
Andrew: Hey, you know what? I lived in Argentina, and I have to say that I forced myself to disengage to kind of live in my bubble because I wanted to work. I was looking for a quiet place to work. But I realized it’s very easy for Americans to find that world because people want to speak English with Americans for practice. There are also Americans everywhere so you can easily find your bubble, it’s hard not to get sucked into your own bubble. So at this point, is your friendship circle mixed, is it locals largely?
Jacob: Well, I married a woman from here, and half her family I would say doesn’t speak English, so my circle is mostly Chinese. If you wanted to live a life here, like you said, like when you were in Argentina and just be around Americans or French or Germans, you can definitely do that. And there’s plenty of restaurants and bars and clubs and you can watch NFL games with other Americans and cheer them on. But it’s just for whatever reason, it’s not the path I took. My wife is Chinese, from China.
And most of her friends are Chinese. It’s a little bit hard in Shanghai because a lot of people here sort of come in and come out on contracts for a couple of years. So if you’re looking for sort of stable friends and family and I have a son who’s 7 and, you know, if you want those types of friends who are raising kids and doing family stuff, the local Chinese population is probably your best bet.
Andrew: So you were building this trading company. Then you bought a factory, you merged with a factory. What were you at that point manufacturing? And I want to build up to the place where you got into Platform88. That’s more of like the Kickstarter company, am I right?
Jacob: Sure, yes, so . . .
Andrew: How did you get your original customers?
Jacob: So we have been manufacturing, still manufacturing, we have two facilities, one in Ningbo which is more northern China and one in Yangon which is southern China. We manufacture grilling and kitchen items. So Weber, Charbroil, in the United States, part of their lines are manufactured by us including [inaudible 00:17:15] Cuisinart and those types of customers.
Andrew: I see, I see. So, now I understand that some of the challenges that you were talking to our producer about which you said, “How do you scale down to a smaller run, like a thousand unit company, when you’re used to building or creating products for these bigger clients?” So why would you even get into the Kickstarter world considering the level of clients that you’re servicing, why start getting involved with someone who makes a product that could go away in a month?
Jacob: Well, I would say a few reasons. And you’re right, 80% or 90% of people who get into new consumer products businesses fail, right? So there’s a few reasons that we’re doing that. The market has changed. Just like we went from the era of trading companies, then we went from trading companies to self-sufficient factories, both Amazon and Instagram, and Indiegogo, and Kickstarter have really changed the way people look at and buy products. And it’s my contention that things will continue along this direction.
So the era of mammoth factory is only chasing Walmart orders or chasing large OEM customers like OXO or Klean Kanteen or those folks. I won’t say it’s behind us, but there’s a new era starting. And I would say also our mission is a little bit similar to yours in that sense. We want to empower entrepreneurs, right? So if we change our manufacturing, to do that it’s good for us and it’s also good for people that we want to help.
Andrew: You’ve been drinking from a Hydro Flask, that’s one of your products.
Jacob: No. I am drinking from the new Hip bottle, which is . . .
Andrew: I thought you guys were Hydro Flask.
Jacob. We’re not Hydro Flask but we . . .
Andrew: I mean, had created Hydro Flask.
Jacob: We’ve made products for Hydro Flask, but we . . .
Andrew: Got it. Okay. So good. I thought it was kind of awkward for me to have said that competitor. With the new product then?
Jacob: This is a company out of California. They’re called Hip and so they want to make interesting and cool Hip looking containers. And so this will be on target. It’s also launching in other stores in Europe and Australia around the world.
Andrew: Yeah, it caught my eye immediately. I kept looking for an opportunity to ask you about it.
Jacob. It wasn’t a product plug, I was literally just thirsty. But now that we’re talking about it. Sorry.
Andrew: What app was that?
Jacob: That is WeChat. Sorry about that.
Andrew: While you check WeChat, let me take a moment to tell everyone about my . . . oh, you know what? This is a good opportunity to ask you. All right, one of my sponsors a company called HostGator. If somebody said, “Look, I want to start selling things online.” And they’ll go open up a HostGator account, create a web site on HostGator, what would you suggest that they do as a way of like starting to sell physical products online on their own site, not on Amazon where eventually they’ll get lost and cut out, I feel. What’s a product or what’s a place to go find products to sell on HostGator or any other platform?
Jacob: I mean, I guess looking at Instagram and people who are doing things on there. Most of our customers have pretty active Instagram accounts, and good content and you can get a sense of what the product is about.
Andrew: I see, so it’s create the Instagram account to promote the product that you’re selling on your site and also sell it in lots of other places.
Jacob: Yeah.
Andrew: Are they largely creating their own products, or are they starting out by selling other people’s products at first?
Jacob: On Instagram?
Andrew: Yes, the new entrepreneurs, if someone who was listening and saying . . . five years ago it was, I have to create a web site or I have to create an app, today it’s maybe I create software or maybe I can start in this like physical product space. I interviewed the founder of BestSelf Journal. She started out by finding products that already existed in China, branding them a little bit nicer and selling them. That worked out well enough that she learned how to sell online, but the margins were super thin. It gave her enough experience in e-commerce so then she could launch her own product, which was a BestSelf journal and then other products and so on.
If someone were going to go down that path as a way of getting started with physical products and eventually maybe getting their own stuff manufactured, what’s a good place for them to find products, or how do they find the right products to sell if they’re getting started? What would you suggest?
Jacob: Oh, I see. So I would look around on Alibaba and other sites so much that, I mean, Alibaba is really the only one. But if you want to develop and manufacture your own stuff, Alibaba is really at this point one of the only places to go. So you look around, you’d find something and hopefully you would have an industrial designer that could help you tweak it a little bit to make it unique for you.
Andrew: So you can take something that’s already on there, if I saw a bottle that looked nice I could work with an industrial designer through a reseller on Alibaba?
Jacob: Potentially, they’re not really resellers, in most cases, they’re factories.
Andrew: I shouldn’t say the reseller, through the manufacturer there, they can help design it.
Jacob: I would say many factories now have industrial design capabilities. And it’s one of the things you look at when you’re sourcing somebody is, do they have engineers? Do they have industrial designers, graphic designers?
So if you were to take, this one again, this was a stock piece and you wanted to change the strap or change the lid in some sense, you can do that. It’s the CFM, color finished material process. And if you’re just getting started and didn’t want to invest in molds that’s a good place to go.
Andrew: You know what? I feel like all this stuff is still a mystery. And just like Paul Graham used to give talks, and I remember the founders of Reddit said that they took a train to go from school to go hear Paul Graham talk, just to understand what this whole startup thing was. I feel like we’re in the same place right now with manufacturing and physical products that if you were to say, “Hey everyone, anyone who wants to come down here, come down or over to our place in China, we’ve got a place you can come out. I’m going to talk to you a little bit about what the process is like. Then I’ll have someone else spend an hour and talk about what the life is like here in China.”
The whole mystery of it, people would be swarming you just to learn this. Frankly, I’m curious about every bit of this. I’m like looking over your shoulder just to get a sense of what it’s like outside.
Jacob: Hazy.
Andrew: Yeah, I see that actually. I do see that. Why don’t I close out the sponsorship message by saying this. Guys, if you’re listening to me I’ve talked about HostGator as a place where you can go host a WordPress site, because they’re like one click install click button, boom, you get a WordPress site very similar to what Mixergy is, right? And you could publish anything.
What I don’t talk enough about is, that you could start a lot of different sites on HostGator, including e-commerce. If there’s something you want to sell. It’s easy, one click install, you have an e-commerce site. You can start selling directly from your site. Do you want to put a blog up to promote it or to write about it? Another one click install. If you buy the unlimited package, which is what they called a Baby Plan because it’s pretty inexpensive and easy to start out with, you could have unlimited domains. So you can have mysite.com which would be your e-commerce store where you’re selling, but also press.mysite.com where you’re talking about like stuff around your topic. That would be your blog. Maybe you even have another one called podcast.mysite.com.
All those things to be had unlimited domains, unlimited hosting if you go to . . . I don’t know what unlimited hosting is. I’d better not say that. People will catch me if I say the wrong phrase.
Go check them out. All the right phrases are on their website. And the site is hostgator.com/mixergy. It’s so easy to get started with them.
And if you hate your hosting company, you just switch to them. I’m happy with them. I just started Bot Academy, my new site on them. They’ve been holding up really well. And I urge you to go check them out too, hostgator.com/Mixergy. I think I say HostGator too fast. Okay.
So I see that things are going well and I see that you were interested or I see the appeal of getting into this new crowdsourcing world. How did you get started with it? How do you get started with Kickstarter and Indiegogo clients?
Jacob: I think that’s what I was mentioning a little bit earlier, we saw, or the three people that started Platform88, myself and my partners, saw another shift on the market. If you want to start a product, millennials buy products and sell products a little bit differently from my generation, right? So they’re designing products with unique features or integrity and the intent behind the product is a little bit different from, say, when I first started. And I was noticing really interesting campaigns on Indiegogo and Kickstarter. And I was noticing . . . sorry. And I was also noticing that after they get off Kickstarter that they were selling really in a B2C platform and there was an opportunity there.
I was seeing lots of people who would start their products and have interesting ideas and find the wrong manufacturer. And it was really sort of heartbreaking.
Andrew: Because they couldn’t get it done.
Jacob: They couldn’t get it done. And how many Kickstarter, Indiegogo campaigns even today do we see where people just went wrong or were delayed for months and months and months? So it’s kind of heartbreaking to see such good energy and ideas behind products go to waste because they can’t finish the manufacturing.
Andrew: You know what? I had a situation like this . . . there it is. Jorno, J-O-R-N-O, on Kickstarter. It was a keyboard for the iPhone. It was foldable to about the size of an iPhone. I used to have those devices with older phones that just didn’t exist for the iPhone. I said, “Great, I’ll take it with me when I’m traveling if I want to go spend a weekend somewhere and journal, I’ll have this keyboard so I could type, but I won’t have to carry my laptop with me.” I kept looking at it on Kickstarter. Poor guy who ran this, he had not talked since, but he got a lot of press for this keyboard. And then he got a Kickstarter campaign that did over $100,000, which was big at the time, this was 2013.
And then I think he never came out with it. I saw him struggle in the comments, I kept going, like every week I’d go there to see, “Are there any updates? How did this work out?” Heartbreaking, heartbreaking to see that this thing didn’t really work out for him.
I am guessing that it didn’t work out. I don’t want to say anything wrong, but last I saw, it just was not going. So painful.
Look at this, here’s Ryan Hoover, I gave information at least two months ago, I’ve heard nothing. I’ve received nothing. This is Ryan Hoover, now who runs Product Hunt. And so that’s what you were seeing. You were seeing these people try to make it. It didn’t work out and it’s not because the idea wasn’t good, it’s not because he didn’t have customers. It’s because they didn’t know how to manufacture it. You said, “This is my opportunity.”
It seems like one of the first things you did was you put together the website platform88.net. And you basically said, “Look at all these big companies that we worked with.” I’m looking at the early version of the site. It’s the Home Depot, J.C. Penney, etc. And at that point you had the credibility. But how did you get people to discover you? How’d you get these Kickstarter people to recognize that there’s some guy on the other side of the world who could make the stuff that they want and you can relate to them?
Jacob: Well, it took us a year or two to sort of get our momentum and messaging right. But we have three factories supporting us. And there’s over 1,500 workers in our factories. So we already had scaled. It was just a matter of crafting our message and trying to reach people. And now we get 5 or 10 people a day . . . well, not that many, probably 4 or 5 people a day contacting us to help make their stuff because we have . . . we put out good articles through MailChimp, we’re on Instagram, on Facebook. And we’re just trying to be as transparent and clear as possible, which is refreshing for people who want to come to China and make products.
Andrew: I see. So you took on all the social tools that everyone else is using to sell their products, to sell the company that makes the products.
Jacob: Sure. And in a little bit different way, if you go to our Instagram account you’ll see not just pictures of manufacturing. You’ll see people who have come over here and cool things about China. And it gives sort of a vibe about us that we’re really interested in helping you and being part of your process.
Andrew: Yeah. It does make for a much more approachable company. Did you make the Nokero Light also? I see that on your Instagram.
Jacob: Yeah, I notice you are connected to Steve on there. We don’t make Nokero, but Steve and I are friends and I like to put stuff about him on our site whenever possible. And he just got a grant from the Vatican and was over there, so I think the post was about that.
Andrew: I see. It was about that. I love that. I still have it in the house. He sent me one. I’m glad that he did because until you touch it you don’t get a sense of how cool it is. It’s a solar powered light that screws into your light socket like any other light. It just looks so beautiful, so tiny, so elegant. I keep taking it out and showing it to people. I don’t think people get as excited as I am about this light.
Jacob: And he’s pretty amazing, he’s been all around the developing world and has a really great sense of purpose in terms of getting his product into the right hands. And it’s not just any solar light. He has a lot of technology to make it the brightest, best solar product out. And we don’t make it, so I’m not plugging it for that reason. I think he’s amazing.
Andrew: I see. So you started doing all this social media, you started talking and writing more. You know what? One thing I’m wondering is, before I go on with your story is, why is it called Platform88?
Jacob: So Platform was, to sort of convey the message that we want to be a place for you to sort of stand on and grow from, right? So that’s an easy. Eight is a lucky number in China, double eight is even more. It’s a homonym for father or for wealth, Bah or Fah. So 88 is just part of it. So a little Chinese cheese for the name.
Andrew: I see. Okay. How do you get the first participant or the first client for Platform88?
Jacob: It wasn’t very hard. If you actually come over here and look at our factories and you’re seeing brand name stuff on our factory lines, once people sort of understand that, and understand that we’re trying to help, it really wasn’t that difficult.
Andrew: But how’d you get them to come in and take a look?
Jacob: I sent pictures of our factories and just talked them through the process and . . .
Andrew: Was it cold emailing? Was it just reaching out to people and sending it to them?
Jacob: Yeah, yeah. We have a lot of resources here, so we contact lots of campaigns. We still do. And so we have three or four people in our office who just reach out and contact people.
Andrew: I see. By the way, your stuff is so stunning. If I look sometimes like I get distracted it’s because I’m looking at the stuff on your freaking website. You look like a manufacturer when I see . . . you’re a wearing a vest or a venture capitalist frankly, you should see these venture capitalist walking around with the same vest you are, all around here. But your stuff just looks so well designed. I guess you’re highlighting the people who have the best design. There’s this one thing Kozo. Kozo Lamp, that thing is gorgeous, I can’t stop clicking and saying, “Why don’t we have one of those in our house?” It’s basically, it looks like a bunch of pipes put together to make a lamp, right?
Jacob: Yeah, it’s. He’s a great guy out of Israel that came up with this idea for upcycling pipes. And so he put them together to make really interesting lamps. I have one by my bed as well and David is awesome. We’re great friends.
Andrew: It’s so well designed. Recycling means you take it apart and you create something new. Upcycling means you take what’s already there and you turn it into something new, right? Am I right?
Jacob: Better . . . discarded plumbing pipes into beautiful lamps, right? And I think that’s, going back to an earlier question, it’s one of the reasons I really like this part of our business is you have people who see things from different angles that I would never have thought before. So when you start opening your sources and saying, “Hey, here’s what we have, what do you have?” There’s this collaboration that takes place that is amazing.
It’s been probably the best five years of my career. Not necessarily financially, just holistically with really cool people in our company.
Andrew: So Jacob, what was the process for getting those customers, specifically, how would you identify them or how would you reach out to them? How would you get them to come into the factory? Do you remember that process in the beginning?
Jacob: Yeah, I mean, at the very beginning it was me.
Andrew: You were emailing people?
Jacob: Yeah, the stuff that I saw that I thought was cool and I’d email people and say, “Hey, I’m from California. I’m not scary. I’m living in China and here’s the resources we have. Come and take a look.” And once we talked with people and share what we’re doing, it really wasn’t hard to have people come over and work with us.
Andrew: How would you find the people?
Jacob: Kickstarter campaigns.
Andrew: Actively going? And so people who were on Kickstarter at that point didn’t already have a manufacturer or didn’t already have everything together and they just needed money to make it happen?
Jacob: Most of them still don’t. In the case of your keyboard, and I don’t know that one specifically, but in the case of the keyboard, people would still do design products and kind of throw them out there and not kick the tires on whether or not they can be made. So maybe that one, the folding, didn’t work right or the Bluetooth connection or maybe they didn’t have something they needed to work with Apple. And instead of actually working prior to the campaign, they just kind of threw it out there and hoped for the best, right?
So, and unfortunately that still happens today. We have a new partnership with one of the best providers in the crowdfunding industry, Agency 2.0, in Los Angeles. So now with them sort of on the front marketing the campaigns and us behind, we’re trying to do boot camps prior to them getting on crowdsourced funding sites and saying, “Hey, does that feature really work?” You know, “Do you know the cost?” So we can sort of help the ecosystem improve hopefully.
Andrew: I see. You told our producer that at first you were very much in like a service business, how do you mean?
Jacob: I don’t remember that comment but . . . I really don’t know.
Andrew: I guess what I took away from that was that you would do more than just creating, more than just the manufacturing, you’re already helping here, it looked more like a service company at the beginning and initially you were just about helping to manufacture then we pivoted more into how can you scale, how can you grow, what other platforms can you be on, like Amazon. So it was more than just, “We’ll get your thing made so you can ship it out to people.” But you were doing more consulting, more like the phrase, I think that you used was, “The startup rabbi,” even from the beginning.
Jacob: Yeah. Well, I actually wanted to be a rabbi when I got out of school. So it’s sort of a natural part of my career, I suppose. But manufacturing is one element of it. Actually business consulting or mentoring is a part of it. And beyond that, like I was trying to say before, up until, and still now, China’s very close, the business community here is somewhat close. So you can go to a factory where you have tons of resources that would help you. But you may not ever know that they have it. So we have tried to take our factories and open them up and just share what we have.
We have a retail relationship with Walmart or with Metro in Germany. And instead of really not sharing that with startups we say, “We have this relationship. Is there some way that that relationship will help you?” And so I guess that’s what I’m getting at.
Andrew: I see. How did you know what else to start like officially bundling in? I look at the site, it’s changed so much. I’ve got a version of the site from July 2nd, 2014, in front of me and it’s just manufacturing, really big letters at the top. Today that’s not what I see when I go to the site. How did you know what else to add that was worthwhile?
Jacob: Well, I’ve been a business person or an entrepreneur for 20 years, and there’s really only three or four things that you need for your business, right? You need the manufacturing, you need the distribution, you need financing. And so as people are in their 20s and early 30s starting to develop a product offering that to people and saying, “Well, I know that there’s more than you need than the manufacturing and I know these are the categories, so how can we work together?” So it was really just an iteration of that.
Andrew: All right, let me take a moment to talk about my second sponsor. Have you heard of these guys, other than on Mixergy, Toptal?
Jacob: Oh, no, I’m sorry, I haven’t.
Andrew: You haven’t. Oh, good. Let me tell you about Toptal. I’ve hired them for developers. They’re really well known for having some of the best developers. But I had an issue that I think a lot of other entrepreneurs could relate to. Everything that had to do with the financing of the business, I had to decide for myself. I had to think through and find what don’t I know. And so I went to Toptal and I said, “Look, do you guys have like an outsource CFO, chief financial officer?” And they said, “No one has ever asked for that. But let’s go back and see what we have.”
So they actually went back and they thought about and they said, “You’re not really looking for a CFO. What you want is someone to be like a profitability adviser, someone to look through your business and see where are you screwing things up, where are you missing opportunities.”
And so they found three different people, were fantastic. One was a new graduate from Stanford University. The other was an entrepreneur who had multiple businesses during his career and he was later in life, he was looking to help out other entrepreneurs. And the final person was a guy who was a former McKinsey partner, ran a couple of companies, I think for the Carlyle Group, really smart guy. I liked them all.
I ended up going with Jack, who had a background with McKinsey. Partially because when I talked to him and I did the job interview with him, I shared my screen, I showed him my finances, he was looking so intently, I said, “Do you want mouse access?” Because I was using zoom and he goes, “Yeah, let me do that.” He kept scrolling through and giving me advice, “Here’s what I think you should be doing.”
And as soon as I told Toptal that I wanted to hire him, he immediately fired off a spreadsheet to me show me how running as an LLC was costing me this much in taxes and then if I were to switch to an S-Corp here’s what taxes would be. He said, “You’d be foolish to miss this opportunity.” This is the kind of person you get from Toptal. He didn’t charge me for it. He wasn’t fully hired at the time, but he couldn’t help himself and he just had to go and put together a spreadsheet.
That’s what I love about working with the best of the best. And that’s what Toptal’s about. These people are obsessive.
Let me give you an example, Jacob, of how obsessive they are. Sorry what were you going to say?
Jacob: No, I was just saying, that’s an example of how new our world is that you can actually find these people, that things are more transparent, right?
Andrew: Really, the McKinsey guys would be available only to Fortune 500 companies.
Jacob: Right. So I really like that. It’s part of what we’re talking about as well. So how do you make things more transparent, how do you find those people. I mean, that’s amazing. I want to check out their site.
Andrew: They’re fantastic. I’ve had nothing but positive experiences with them. If anyone out there wants to go check them out, I urge you to go to the special URL where you’re going to get some like risk-free-time with them. Go to toptal.com/mixergy. Top as on top of the mountain, tal is in talent, toptal.com/mixergy. I’ve hired a phenomenal developer from there, a designer from there.
And now I hired Jack who is more of a long term hire from them because I gave him access to our base camp, he’s now like pinging people and saying, “Hey, what are you doing here? Why are you doing that?” Fanfreakingtastic. And he was right by the way. An S-Corp was the right move for me right now. And no one else thought to suggest it. Or put together the data on it.
Here, actually let me tell you this. Here’s how obsessed they are, this ad that I’m doing for them works. I know it works because, and they know it works because they see how many people go to toptal.com/mixergy.
I had lunch with the buyer. I say, “So, how are things going?” He’s going, “Well, we’re making money. Let me show you how much money we’re making from these ads, just like how many new customers we’re getting as opposed to how much money they’re spending.” Because they’re spending, I don’t know, hundreds of thousands on ads from Mixergy.
And I said, “Great. So, what else should we talk about?” He says, “I’m trying to figure out how many people don’t actually use the slash mixergy at the end because then we might be like not accounting for orders right.” I said, “Why?” You know that you’re profitable, there are no more ads and I can sell you. If you told me, “It’s more profitable and you want more ads. I couldn’t do anything, why?” “We have to understand. We have to get to the bottom of every last order that comes through.” That’s what these guys are, they’re like obsessive people.
“And so, do you want us to have a drink and talk?” He said, “I’ll have one drink. But let’s talk about how we can figure this out.” And he has these methods, he found some site that will actually will work with radio stations to help them account for all the orders that come through when someone buys an ad on the radio. And he says, “Here’s how it could work for MIxergy. And then if we can make it work for Mixergy maybe we can make it work with other podcasts.” Like obsessive.
Jacob: Are they based out of the Bay Area?
Andrew: You know, it’s kind of weird. They don’t really have a home base. They pride themselves on being all over the world. In fact, when I was first introduced to Brendan, the co-founder of the company, I heard he was like somewhere in South America. He isolated himself. Kind of like I was when I was in Argentina, isolated himself from the world, focused on creating this business. And a friend of mine said, “You want to interview him?” And I said, “Yeah, I don’t know who this guy is. If he’s like unknown and that successful. I got to have him on.” And so he broke his silence, he came on here, he did an interview. And then I got to know him.
Jacob: Nice.
Andrew: I had him over for dinner and the guy was just as obsessive as he is in the interview. He’s like the only person who is not like chilling out enjoying the dinner. He’s like focused on work. Do you relax? When you relax, when you’re not working, what do you do?
Jacob: I box. I’ve been boxing since [inaudible 00:43:02].
Andrew: Do you box?
Jacob: Yeah. Well, not as well as I used to, but I still box.
Andrew: When you have to punch someone in the face, I think I pulled my punch.
Jacob: I just lost a tooth actually.
Andrew: I see that. Wow. Someone punched you so hard they knocked a tooth out?
Jacob: Yeah, I used to box at a gym in Oakland called Kings Boxing Gym. And if you’ve ever been in a professional boxing gym, it’s not as rough as you think it is. People are pretty cool. If they’re much better than you they really don’t tune you out. They just work with you a little bit. But there’s a boxing gym around the corner from our office. And I got over there and new people, amateurs, they’ll just swing for the fences and try to hurt you. And I got in the ring and I just wasn’t thinking. And it had been a while. And this guy just hit me right here and knocked my tooth loose and it had to come out.
Andrew: Wow. So, if you can’t go full on out with people does, it feel a little restrained, like your arms are tied? Because what I love about running is I can go all out whenever I want, to have to like let myself go but also pull my punches seems hard.
Jacob: It’s all right. If you know what you’re doing, you just don’t want to hurt somebody and it’s not pulling your punches so much it’s just I’m maybe not hitting somebody when you know it’s going to hurt them or there were different times. But I’m going to be 45 next year so I might hang up my gloves.
Andrew: Do you think if somebody like came and accosted you in the street that this boxing would help? Would you be able to protect yourself?
Jacob: I think it’s actually a negative, not a positive because I have gotten into a few fights.
Andrew: Oh, really?
Jacob: Yeah. I actually spent a little time in a local jail because I got into a fight on the street here. But probably not the best thing.
Andrew: What kind of fight?
Jacob: Well, a taxi cab driver almost hit my mother-in-law and my wife. And I got a little upset and I kicked the side of the guy’s car door. And he got out and he started yelling and took a swing. And I guess it was the wrong thing to do because I instinctively hit him back and I broke his nose in the middle of the street.
Andrew: Wow. I wonder if I have enough of a punch . . . I don’t think I do to punch someone’s . . . wow.
Jacob: Sure you do. Everyone does. It’s not that hard.
Andrew: You know what? It’s not the fist, I can’t see myself hitting somebody in the face and breaking something like I would . . . there’s a part of me that can’t do it, like you ever see a movie and like the good guy has the gun against the bad guy and the bad guy goes, “Just give me the gun. I know you’re not going to shoot.” And the good guy gives the gun because he can’t shoot. He knows that he’s about to get the gun pointed at him. I feel like that’s the thing. I’m not ready to hit somebody in the face. I’m ready to like ask questions and get to know them. That’s the part that I think I can’t get past.
Jacob: Well, you’re a much better man than me. So I think it’s probably a negative had I not spent years in the ring I probably would have been in the same place you are and not hit him and been taken off to the local jail.
Andrew: What was the local jail like?
Jacob: They were concerned. I think I was treated differently because I’m not Chinese. And after a little while I was released. And I had to pay for the nose.
Andrew: I see. All right. I’m reading “Orange Is the New Black,” the book that spawned the TV show. And I’m wondering, “Can I survive in jail?” I think her jail I could survive. It doesn’t seem that tough so far. But I’m on page 82, so we’ll see.
All right. The other thing that I noticed that you did was you started to work with like newer companies before they’re even launched. Is it called Blackcelerator?
Jacob: Gee, where did you see that?
Andrew: You know what? This could actually be very racist what’s written in my notes here. It’s African-American students, you’re helping them create products.
Jacob: So this is something we actually haven’t launch yet, I must have talked about it with your producer.
Andrew: Oh, good. I thought maybe he made it up and it was like a little . . . okay. What is that?
Jacob: So we have a database of about 6,000 startups. And I was noticing that within the database very few are African-American or people of color. And as the economy shifts, and retail kind of slows down and Amazon speeds up and B2C sort of speeds up, I really got to wonder if a whole group of people were being left out of this equation because they didn’t have access to the tools to do these things.
So hopefully next year we’re going to launch an accelerator. And, yes, we’re sort of tongue in cheek calling it Blackcelerator which is for people of color, and African-Americans to come over and go through sort of a bootcamp or an accelerator program for products.
Andrew: Come over, meaning, they’re going to come to China and do this.
Jacob: Yeah, we have lots of space and we’ll run, just like you mentioned earlier, a program that talks about manufacturing and retail and product development and design. And we’re going to target some of the historic black colleges in the United States and try to get that going next year.
Andrew: I think it’s a great idea. Frankly that’s a place where I dropped the ball at Mixergy. I’m asked a lot of time, “Why don’t you have more women? Why don’t you have more people outside the U.S.?” It’s a challenge. It was easy for me in the past to say, “I can’t get more people from China because of the internet connection.” That’s not true anymore. I should be reaching out and getting more Chinese entrepreneurs on here.
But I should be getting people from other parts of the world. I should be getting people who are not represented, even if frankly, let’s suppose that the vast majority of entrepreneurs are white male. I only have like 300 interviews a year. There must be 300 entrepreneurs who are not white male or female, who are still doing well enough that I should be interviewing them. I’ve dropped the ball on being able to get them.
It’s not that I dropped the ball, I haven’t been able to get them on here. And I think that’s a challenge that I’ve wrestled with for years. And I think actually starting the way that you are makes a lot of sense.
Are there other programs like that? For anyone who’s interested in saying, “You know what? I want to manufacture or I want to get into physical products?” Is there something like that that’s geared towards them?
Jacob: Yeah, geared towards African-Americans or women or other groups?
Andrew: I mean, in general, for anyone who’s listening who says, “I’m interested in this.” In the past they would have gone to startup school from Y Combinator or programs like that. I know that you guys are associated a little bit with Startup Grind, Startup Grind is more software oriented.
Is there something like that that brings in entrepreneurs a physical product, companies talks to them about, brings in presenters and lets them get a sense of more than just hearing the conversation, but given them a walk through a factory, lets them understand what happens through this process.
Jacob: We are in some respects, but one of the most innovative ones is a company called Hax, which is owned by SOSV. And a guy named Cyril started it. I’m a mentor for Chinaccelerator which is also owned by SOSV.
And they were some of the pioneers doing that. They created a space in Shenzhen, invited people in. Now it’s difficult to get into their program. But they were sort of the pioneers of doing that. And they’re still around and getting bigger every day.
Andrew: What is it called? It’s SOS-V as in Victor?
Jacob: So the parent company is called SOSV, and underneath SOSV, you have Chinaccelerator here in Shanghai, run by a friend of mine, William Bao Bean. And then you have Hax which is run by Cyril. I have never been able to pronounce his last name, but he’s based out of Silicon Valley. They have MOX, which is a mobile only accelerator in Taiwan. They have a food one I think. So they have four or five different accelerators underneath them and they’re really prolific.
Andrew: I see it. SOSV is the sosv.com, it’s an accelerator. And then they have H-A-X, Hax accelerator underneath them, they have Chinaccelerator, they have Food-X, so I see so they have these different accelerators that are focused on a specific type of company, it looks like, am I right?
Jacob: Yes. So the one for hardware is Hax. And that’s a little bit, especially in the early days, like you were talking about, but we’ve actually thought about doing something, not like Hax but more of like you mentioned sort of an education intro to China type of thing. We’ve thought about doing that as well. And we may at some point. We’re going to focus on the one for Africa-Americans first.
Andrew: I get that. Kind of like even a conference that was in a more interesting place. A lot of times conferences will go to an interesting spot just to talk, instead of taking me to a place to talk, take me to a place where things are done.
All right, once I close out with this, we asked you a question that we often ask entrepreneurs in our pre-interview, about what book you’d recommend to the audience. And usually the books are the same ones so we don’t bring it up. For you it was “The Man Who Loved China” Simon Winchester. I never read it, but I’ve seen the cover forever, I don’t know why. For some reason never grabbed me. What is it about that book that made you want to recommend it?
Jacob: Oh, it’s mostly the stereotype that people have about China. One of the first things people ask me is, “How will my IP be protected?”
And we’re talking about a window in China as the economy got restarted. There was copying, there’s still copying, but I think if you look at it historically and realize how many inventions came out of China that they’ve had an entrepreneurial spirit here for a very, very long time. Then that question really becomes a bit stereotypical, racist even, and only during a certain time, maybe of 10 years that is even accurate or even partially accurate.
So I’d like to recommend that book to people just so they can stand back and say, “Yes, there’s a fidget spinner but there’s also, you know, WeChat and Didi Chuxing that just beat Uber. And before that there was gunpowder and paper and so. I like to recommend that because I like to tell people that China’s really changed in the last five or so years. And if you look at it historically you’re dealing with a very creative country and a culture on its own.
Andrew: I’m sending the book to my Kindle right now. I realized he’s the guy who wrote the book, “The Professor and The Madman.” That’s what it is. I love that book. It was such an easy quick fun read. I want to do this. I want to read this one too. I sent it to my Kindle.
All right. Well, if anyone wants to check you out, is your website .net or .com? I see you seem to have both but sometimes you promote one over the other.
Jacob: It was originally .net and then the .com became available. So either one still works but .com is our main one.
Andrew: Platform88.com. Go check them out. Actually can they come see you in person? How did they get a look at the factory?
Jacob: They can come to any of our factories just by going through our website and e-mailing us and we’ll be happy to take them to any of our three locations.
Andrew: Cool. Let them know Mixergy sent you. And I want to thank my two sponsors. The first is a site that will host the company that will host your website, it’s called hostgator.com/mixergy. And the second will help you hire your developer, I hired someone to help me with my finances, it’s called toptal.com/mixergy.
Thank you Jacob.
Jacob: Thanks Andrew.
Andrew: Thanks. Bye, everyone.
