Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses.
A while back, I decided I was going to get the big iPhone, the plus. I think it was the seven plus. Because I wanted the big screen because I like to work on my phone. The problem was, it was infuriating. I couldn’t reach things on the upper right, it became really difficult even to use my phone. I liked the big screen and couldn’t get rid of it, but I just couldn’t deal with it at the same time. So I started doing . . . Because I love this type of research, David. I started doing research online to see what could I get to make it work better. I got cases, endless cases that were little grippier. That didn’t help. I tried all kinds of stuff.
And then I found this. I think you’re going to hate the way that I do this and I’ll explain why later to the audience, but look at this, guys, if you’re listening to me, you can see it, if you’re not, I’ll describe it. It’s a little circle on the back of my phone. I pop it up once, twice, and there it is. I can now put my two fingers around it. One on each side of this little device. And I can hold my phone like a human being. And use it to type, to work endlessly, to take photos. I freaking love this thing.
And I’m not someone who usually . . . I never have cases on my phones. I hate to have anything on my phone, but this I just really enjoy.
And I also like that I can put it down when I want to watch a video while I’m eating lunch or something or do a FaceTime with someone, because we do a lot of FaceTime in my company.
I was at Baby Bath Water Institute. And this guy comes off the slopes at this event. And he says, “Oh, you’re using this PopSocket.” I said, “Yeah.” He said, “I know the founder of it.” I go, “Interesting.” And then he told me how much revenue the company was making or what he thought the company was doing. “Are you kidding me? Really? This little thing?” I said, “Can you help me get the founder on Mixergy?” And he did. And now I’ve got the founder on here. I want to find out how he did this, how he made this work. Why there aren’t tons of competition for this? People are ripping them off. And then how does every freaking celebrity seem to have this on Instagram.
And we’re going to do this interview thanks to two great companies. I told you I don’t edit anything, David. The first will host your website right. It’s called HostGator. The second will help you get your next phenomenal developer. It’s called Toptal.
David, I saw your eyes change when I said the revenue. The revenue is not that big?
David: I’m laughing because only 10% of rumors we hear on the street are ever anywhere close to the truth. So I don’t know what you were told. We often hear stories about and then . . .
Andrew: What do you feel comfortable saying? What is the revenue today?
David: I’m not comfortable giving the revenue. I could give you units. So I’m happy to tell you, last year we sold 35 million grips. And this year we’ll sell close to 60 million.
Andrew: That’s what they’re called, grips. Sixty million? You sold 35 of them last year. I paid for mine $10, for two, is that the standard price?
David: No, you got a good deal on yours. They retail for $10 for one standard PopSocket’s grip. And then there is premium materials and there’s licensed PopSockets that sell for around $15 retail. And then some special collection, like Swarovski, that was $50.
Andrew: Good Lord, so it’s fair to say, over $50 million a year in annual revenue, can we say that?
David: That is fair.
Andrew: Wow wee. For a guy who was a professor. I’m looking at your LinkedIn profile, looking for some hint of how you came up with this. Did you got any entrepreneurial or creative experiences before that would have led to this?
David: I was a greedy, ambitious, curious kid. So I had a bunch of inventions as a kid. I was always hustling, starting businesses, trying to make money. So I definitely had the spirit. As a young kid, I had mix-tape businesses that would make mix-tapes from my peers in grade school in third and fourth grade and I’d bring them to school and sell them to the kids. I had, you know, a lawn mowing business. A bicycle repair business even up. I had no idea how to repair bicycles.
And then a I started delivering pastries at a restaurant nearby when I was 12. And so I’d get up in the dark and ride my bike to the restaurant, deliver these pastries, made decent tips because 12 year-olds aren’t typically working at restaurants. So people thought that was cute and they always give me fat tips until the Labor Department found out and interviewed me at my house. And the restaurant got a lot of trouble. They then rehired me at age 14 and they got in trouble the second time for having me.
Andrew: You must have been really good at your job for them to be willing to risk that twice. And still you became an associate professor of philosophy. Why does someone who has all these jobs, who has all this hustle, go and become a professor, let alone, one of philosophy? And I’m not putting it down, I’m really just asking, why?
David: Sure. In college I had planned to go to business school and become a business man and be an entrepreneur. But I took some classes in science. And I got interested in the nature of reality. And then I studied physics for a while after undergrad. And realized that most of the physicists, surprisingly, aren’t so interested in the fundamental questions that explain our physics. And then I realized that was going on over in the philosophy department. So I walk out of a physics lab one day and the middle lab walk right over the philosophy department enrolled and eventually got my PhD and started teaching philosophy.
Andrew: And did you understand the meaning of life because of this, do you have any insights that you could share with me that would give me a sense of whether I’m on the right track or not? No.
David: The difficult questions, well, the meaning of life question, that one maybe isn’t so difficult. It depends what we mean by is meaningful . . . I don’t . . .
Andrew: Like, you end up with a core philosophical understanding of the world that allows you to live a better life now than you did before you got into philosophy.
David: Certainly. So, I mean, what philosophy does, it’s just . . . Another name for philosophy is clear thinking. So it just trains people to think more clearly about questions, whether the questions are really deep questions about the meaning of life or consciousness or whether there is a god, whether they’re really difficult questions like that are much more mundane questions, like business questions, “Who should we hire? What sort of business should we go into? How fast should we grow?” It doesn’t matter what the question is.
Andrew: So what’s your process for answering that?
David: Philosophy helps you to answer them. What’s that?
Andrew: In light of your experience answering the philosophical questions, the deeper questions, what’s your process for answering those other more common business questions that you just brought up?
David: It’s a very rational process, as anybody can tell you who works here at PopSockets. So there’s no ego involved. I don’t really care who is giving reasons for or against taking a certain action or taking the business in a certain direction. It doesn’t matter to me what their expertise is. All I care about is how good the reasons are.
So people here at our company are trained to give reasons for their views, to dispute with what was commonly held, to disagree with each other and then at the end of the day the best reason wins.
Andrew: Can you give me an example of something that won out because of . . . Or a directional decision that won out because of this decision making process that wouldn’t if it was run differently?
David: Sure. Early on in the business, when it was just me really. And I don’t think I had any employee, maybe I had a couple of early employees. But experts in the business field were all telling me I should start simple, start with just a black PopSocket, maybe a white PopSocket grip. And then year two, if that’s successful add five or six solid colors. If that’s successful, the third year add graphics. And if that’s successful, the fourth year allow people to customize their grips.
I thought that was a bad idea. So I consider the pros and the cons of that and decided that the expense related to offering a bunch of great graphics and the ability to customize, was outweighed by the potential benefit of resonating with an audience, well, especially millennials, who really care about fashion. They really care about personalization, right from the start.
So that’s what I did. From day one I allowed customization. I had a bunch of graphics. And fortunately, I did that because that’s what ended up being the real it to begin with.
Andrew: Yeah, I see that people are so proud of the logo they have on their PopSocket, of the color, etc. Okay. So I heard that the idea came to you because of an earbud tangling issue. Is that right? Or is that just one of those tales that people tell about the founding [inaudible 00:09:12]?
David: That is not an urban myth. That’s an urban truth. Yeah, I still have a vivid memory of pulling that headset cord out of my pocket. And it was tangled. And I thought, “I can’t deal with this anymore.” So I hopped in the car and drove down to a local Giant fabric in Boulder to look for a solution.
Andrew: With the idea that you’re going to solve it for yourself or solve it for yourself as an MVP, minimum viable product for others?
David: No, I had no intentions of commercializing it. I was just tired of the problem that I had. So I stuck a couple of giant plastic buttons on the back of my iPhone 3 with some spacer buttons and wrapped my headset around them. Probably within a week, within a few days I was made fun of enough though, by friends and family. That I was motivated to start tinkering with mechanisms. I probably went through 20, 30 different mechanisms before I settled quickly on the accordion mechanism that you’ll see on kitchen stores and camping stores. You know, large balls that collapse by an accordion mechanism. Settled on that.
And then spent the next year and half, two years trying to scale that down to a really small size. It turned out to be difficult for the PopSocket.
Andrew: How did you keep trying these different prototypes? All I have here in the research that I was able to do was, you taught yourself 3D-CAD systems for designing parts and assembling them and you created models for prototyping in China. You made 60 prototypes over the course of 15 months. That’s at least what I have in my research. But, how are you getting these things made? Did you find a factory in China and say, “I created this in CAD software. I’m sending it to you.” Created it and ship it back, or was it some other fast process?
David: No, that’s exactly right. It was a lot more than 60 prototypes, it was by 60 rounds of prototypes. Each round could have been 10 or 20 different models. But, you know, taught myself, it’s pretty simple actually, it’s called SolidWorks. It’s a program where you draw something and then you can extrude it. You can turn it into a three-dimensional object after you outline whatever you want to build.
And I would just send that model to a prototype, his name was [inaudible 00:11:35] in China. I found him on the Internet. And after two weeks I would go out to the mailbox and get my prototype in the mailbox. And it was typically a huge failure.
Andrew: And the reason you knew it was a failure was, what? Was it that you tried and it felt like a failure? Or, I heard you also took it to your students and they got to interact and they told you that.
David: The students didn’t get to see any of the early prototypes. So, no. For instance, my very first prototype, I still have it, it was a flat piece of plastic. And when you press on it, it was supposed to expand like an accordion, like a bowl. When you actually pressed on this, nothing happened. It was like pushing on a silver dollar. It was just rock hard. I mean, it didn’t expand the slightest. It needed to expand about an inch and a half, and it was zero. So I knew, it was pretty clear that it wasn’t anywhere close to working.
And then once I started getting the accordions to collapse and expand a little bit, it was really difficult to get them to fully collapse and stay collapsed, and fully expand and stay collapsed. So to be stable in their expanded and collapsed states. It’s really hard at that miniature scale.
Andrew: Yeah, this is kind of silly, but at night I put my PopSocket like this. I open it up and then I put it on my nightstand like that expanded. And the reason I do that is so that when I wake up in the middle of the night or in the morning and want to grab my phone, I could just take my fingers underneath and grab it and go. And I could see that it has to support my full iPhone to be able to do that.
All right. And you were saying the previous versions could not do it. It’s a lot of time for someone to keep experimenting on his own and not see any results. Why didn’t you give up at that point?
David: I guess I’m a stubborn guy.
Andrew: Was it just to see it work or did you say, “This has to make money. If I get this right, the world would be at path of my door to buy it.”
David: I was not all that confident. So I had plenty of evidence that it was going to be a big failure. That didn’t stop me. I was still going to make it. You know, my friends and family, they all thought it was this . . . And they would use the expression, “the stupidest idea ever.” I did though at one point run into a group of middle schoolers on the campus of University of Colorado. They were just on that campus walking across and I showed them a prototype with some giant buttons on giant accordions that expanded away from my phone. But they were ridiculously big. And the middle schoolers, with their jaw drop, their eyes open. They gave me that look like, “I have to have it.” And that really kept me going in the face of skepticism. Because I thought, “No, no. I remember the look on their faces. That’s a look that’s telling to me, ‘they’re going to buy it at the store.'” And it turned out to be true.
Andrew: Okay. So then you finally had your version that you’re happy with and you went to Kickstarter. Your goal on Kickstarter was tiny. It was, what? Like $18,000?
David: I think it was $12,000 or something, I think. [inaudible 00:14:51]
Andrew: All right, $18,000 is what you ended up with.
David: Yeah, I think the goal . . . I don’t remember. The goal was anywhere $12,000 or $15,000. I wasn’t trying to raise money for the business. That money was gone within a few weeks. I was burning cash on molds, factories, the website, you know, that really was insignificant.
Andrew: How much money would you say lost before you started to turn a profit?
David: About $1 million. About $800,000 to $1 million. So that was about half my money, all my savings, my house burned down and I used a lot of the contents for the insurance. I used that money, all of my personal savings I used. And then I raise about $500,000 from just people I met around Boulder who seemed interested in investing.
Andrew: At what point did you raise that money?
David: I raised that money after I had the Kickstarter campaign. So I think that was 2013. And then I launched the business in 2014. So 2013, 2014 is when I raised about $500,000.
Andrew: So after the Kickstarter campaign. And after, how much money of your own did you lose before you went into . . . Wow, I had no idea it would cost that much. How much of your own did you put in before you raised money?
David: I was burning money so I had already spent probably a good $300,000 or $400,000, all my savings. I was spending my cheap paycheck each month. And the fire money from the insurance.
Where did that go? I hired . . . Oh, I know where. One chunk of it, you know, a little over $100,000 went to a company called Speck Design in the Bay Area. They helped me design the body of the case for the Kickstarter campaign. The Kickstarter campaign was around the case.
Andrew: Because the Kickstarter campaign was around the case.
David: Exactly. And I had obviously I had no expertise designing cases and I didn’t trust myself to design that part. So I hired that company and they designed a really cool case with cavities for the PopSocket to collapse and expand.
Andrew: Wow. So, I still remember the first time I saw your video on Kickstarter. It’s incredibly memorable. It was you, as a professor in a school, the whole blackboard thing behind you and you’re dancing like you got no care in the world, “Buy this, don’t buy this, understand what it does or don’t fully understand. I trust that at the end of this dance you’ll get it and you’ll either hate me or you’ll love me. But I’m okay with it. I’m okay with myself.” When you’re putting that much of your money on the line, how do you dance like that? How do you had that carefree attitude? How do you not say, “Guys, I spent all my money on this. Here’s why this is so good.” How do you not take that approach? How do you dance carefree?
David: It’s a great question. I don’t know, it’s part of my personally. And I would rather have danced and had a complete failure. I mean, by most standards, the Kickstarter campaign was not a great success. I could have raised a lot more money doing a traditional campaign, but I couldn’t stand the traditional campaigns. They just struck me as so boring, so cookie-cutter. I mean, I could have done a spoof. I considered doing a spoof campaign, making fun of all the campaigns that looked exactly like one after another. Instead, I danced. And you said it, “Either you’ll love it or you’ll hate it.” I actually didn’t say those words but that’s what happened.
So people, the tech bloggers, in particular, hated it. There were headlines, I don’t know if you’ve seen them, headlines like, “A great idea, horrible Kickstarter campaign.” The beginning of the article would say, “Wow, this guy just made a horrible mistake. He danced in this Kickstarter video.”
Andrew: For me the part that didn’t win me over was the case. I just didn’t want the case. You’ve changed away from the case. Was that common feedback that you got?
David: That was from watching my students. I got these cases in the hands of my students, a class of about 30. And I watched them use the case. They weren’t using the headset management, even though they all said they would. None of them really did. Maybe one or two of them used it. They used the stand, but mostly they got addicted to the grip really quickly. Just as you said in the opening of the show. It allowed them to pull their hand out of the back side of the phone and access the whole screen with their thumb.
Unfortunately, the PopSocket grips, they weren’t positioned in the ideal place for that. One was on the top of the case, one is on the bottom. So either your hand is really high up or it’s really low. It need to be closer to the middle. And that’s why I invented . . . I had been working on it for a while, but that gave me the confidence to finish up the standalone product that’s been the hit, that sticks anywhere on your phone case. Most people put it somewhere around the middle.
Andrew: I could see how watching people use that would give you a quick understanding that that’s the direction. Okay. So now you finally had the direction. You had some Kickstarter customers, you send them the case. Then there was this issue with Kickstarter where you ended up refunding 25% of . . . Not only did you not make much money, you had to give back 25%. Why did you give back 25%? Help me understand that.
David: So the Kickstarter campaign was in January of 2012, a Consumer Electronics Show is also every January and I got to the Consumer Electronics Show that year. I was showing the case around. And a company called Case-Mate quickly decided to license my patent. And so during the Kickstarter campaign I struck a deal with Case-Mate. And I let everybody know that, just said, “Hey, if you’re not interested in sticking with this, I’ll give you a refund since it’s not what was originally promised.” You thought that I was going to develop for myself. And then Case-Mate ended up delaying the case again and again and again. So I wanted to offer anyone a refund at any time.
Andrew: I heard you regretted that. There?
David: Yeah. Yeah. Would I have done it again? Probably not. I enjoyed the dancing, that part was fun. The rest didn’t so much.
Andrew: No, I mean, on what you regret it . . . Oh, you’re saying you regretted the Kickstarter, that maybe you shouldn’t have done the Kickstarter?
David: Even the Kickstarter, it’s not nice to have so many unhappy followers, right? And it was in the age of Kickstarter when I think people really thought they were buying a product, right? That it was a store to just go buy a fun product. And so people felt, they felt betrayed that they bought a product and it wasn’t being delivered on time.
Andrew: Yeah, and that’s where like what’s now become the traditional approach would have helped you because the traditional approach is, “Here’s how far along we are and here’s we need your money to help produce it and . . . ”
Okay. Let me take a moment to talk about my first sponsor, then I’m going to come back and find out about how you actually did get sales. And I know that you got really good at it, obviously. But first, the sponsor is a company called HostGator. If you guys out there have any idea, you want to build a website you need a hosting company. I’m going to tell you, hosting is pretty much a solved problem. There are tons of companies that do it. You can pick any number of them. So why would you pick HostGator? Because it just works.
They’ve been around for years. You heard me interview people who said that they were trounced by HostGator, acquired by HostGator. You might as well, go with the company that works, doesn’t charge you much and is trusted by many, many Mixergy interviewees and your very fine host here, Andrew. When I started a company to do chatbots I said, “Let’s just go to HostGator.” And they’ve done great for us.
So if you’re getting started, go to hostgator.com/mixergy. hostgator.com/mixergy, where you’re going to get up to 60% off of their already low prices. They’re going to make it sure that you have . . . Actually, I don’t even like the lowest one. I want the baby plan for you guys. That’s the one that they’ll give you 60% off if you use my link. But they’re going to give you unlimited domains, which I think is really powerful so that any idea you have if you want to create a website for you, you just fire it up quickly. And you have one-click install of WordPress and, you know, so many things that I’m not going to go through the whole list. I’ll just give you two.
Number one, 45-day money back guarantee. So if you think, “I’m full of it.” They’ll give you money back. And number two, they’re going to give you $100 AdWords offer so if you create something and you want to promote it, they will help you promote it.
Go to hostgator.com/mixergy. I talk way too fast. hostgator.com/mixergy. Grateful to them for sponsoring.
Okay. The next big batch of customers came from where?
David: Well, really . . . The first batch of consumer is Kickstarter . . . I don’t know how you would call those customers. I guess you’re right, in a sense they’re customers. They supported it. They got a real deal. The money was gone very quickly. And then I launched in 2014, January. So two years later I launched. I was still a full time professor at the University of Colorado. I launched out of my garage, in the mountains of Boulder. I launched a website, hired the first two guys I saw. They were giant landscapers clearing burnt wood off our hill from a fire. And we flipped the switch expecting to get a ton of orders and of course it was just crickets. Nothing happened. No sales. Their names were Warbear and Little Big Hands. These two giants in my garage really to assembly these tiny little PopSockets.
So that wasn’t working. And luckily, I got a chance to attend a promotional industry show called the PPIA Expo in January in Las Vegas. It’s every year. One of my investors was headed there. And he was selling giant Christmas stockings. So he said, “You can have half of my you booth and you can sell PopSockets.” And it was a 10 by 10 booth, a tiny booth. So half of it was PopSockets. The other half giant Christmas stockings. It was a giant hit.
So I had a crowd around me for three days straight. A distributers from the promotion industry. These are people who sell directly to the clients, like Coca-Cola, T-Mobile to put their logo on items and give them away as . . .
Andrew: And why did they want this?
David: And distributors . . .
Andrew: Why would they . . . ? Distributors, are who?
David: The distributors recognized very quickly the value of the PopSocket. I mean, you’re not going to get a lower cost impression for a brand than a PopSocket. So if you’re Coca-Cola and you want your brand out there, the PopSocket is perfect. It’s on the side of someone’s hand. It’s in their hand all day long because people are using their phones all day long in public. So it’s just Coca-Cola getting flashed like a billboard all day along. Plus, it’s such a unique thing, the PopSocket grip, that it’s a conversation starter. So people ask, “What is that?” And now the conversation centers around this Coca-Cola branded grip. And that’s how I really got my start.
So I ended up after that show selling . . . I don’t know, probably 20,000, 25,000 to brands like T-Mobile, Yahoo, Microsoft, Hushpuppies. And they bought thousands of them with their brands on them. And that minimum number, a critical mass out in people’s hands. And those people then became, you know, evangelists who were out there telling everybody what it is and where to get it and sending traffic to our website. So we started to seeing the sales climb, climb, climb.
Andrew: It is such an unusual thing to see. And you have to ask, what is that thing on? I get ask that all the time. You know what? And I do have one of your PopSockets that was given to me by a company. I went to Fireside Conf. And I think there . . . It was WordPress, gave me a PopSocket with their logo on it. And I thought, “You know, I have one for my phone but what would it be like if I had it on my Kindle?” Because I read my Kindle a lot. I popped it on the Kindle, on the bottom right, and it’s on there and now people ask about that.
All right. I didn’t realize that happened so soon for you. Also, I didn’t realize you raise money before . . . Huh?
David: Yeah, I raised money, that was a big break early on in 2014, the first year. And then celebrities started, you know . . .
Andrew: How did you raise money when this didn’t take off? How did you convince an investor to buy into this idea that barely made a mark on Kickstarter?
David: Good question. I guess . . . I don’t know. It’s luck. I ran into a bunch of people. And some of them thought it was a good idea when I explained the product them. And I wasn’t pitching for investment. I was talking to people about supply chain or just businesses how I could start PopSockets. But I bumped into people who said, “You know? Maybe I’d like to invest in that.” Once I explained the product to them. This thing sounds appealing.
Some early investors took gambles, not like huge amounts of money. But they are all very happy today.
Andrew: I bet they are. What percentage of a business did you give up?
David: I still own . . . I own more than 50% of the voting shares. So I still control the company. But I own a little over 40% of the company today. And that’s not just investors, that’s incentive equity for leadership for executives in the company over the years.
Andrew: So, I don’t know celebrities for anything. If you like you ask me who created a company, I’ll know like WordPress, Matt Mullenweg.
David: Me either.
Andrew: You don’t either.
But I’m seeing there’s a Business Insider article here with all these celebrities. Some of them are women who are barely wearing anything, but you do see the PopSocket in their hands. Serena Williams is the only one whose name I recognize. There’s a Kardashian that goes around using a PopSocket all the time. She takes a selfie in a mirror and I see it. But that’s about all I know.
What I always wondered is, how did you get those celebrities to use PopSockets? And then I heard on a Shopify interview with you, that you used a talent agency. Is that where the celebrities came in?
David: No.
Andrew: No?
David: We currently use talent agencies for . . . So at some point we started using talent agencies. But that was well after the celebrities that you’ve seen started using them. So, early on, Gigi Hadid, Kendall Jenner, Ryan Seacrest . . . I heard Woody Harrelson’ wife was using one. Serena Williams . . .
Andrew: So it’s just that they were using and because . . . Sorry. It wasn’t that you did anything to get them to use it. It’s just that they were using it. And they took selfies in mirrors often. And it would show up. That’s it.
David: Exactly. The mirror selfie with the PopSocket in the hand. So we saw a hotspot early on late 2014, early 2015, there were two hotspots in the country for sales. One was around Los Angeles and Hollywood. It was because of the celebrities. And the other was in Denver because we were receiving some schools. They were selling them for a fundraisers. So there were two little flames kind of in the country.
And how it began in Hollywood? We don’t know. Several people have taken credit for it. I don’t know what the true story is. Several people have told me they got a PopSocket into so and so’s hand who gave it to Gigi Hadid. Or someone knows somebody who knows Reese Witherspoon. That was all organic.
But what happened was, Jenna Marbles, who at one point was the number on YouTuber. She ended up using PopSockets in her videos. And we approached her for our first deal where we gave her royalties on sales of her collections. So she did a collection in our website.
Andrew: Based on her dogs.
David: Yeah, her cute little dogs. That kicked off a string of deals that we did through agencies. So that’s when the agencies came in where we then worked with certain influencers to curate their own collection. And tell their fans about it.
Andrew: So just like they might sell [crosstalk 00:31:20]. Sorry, we are having delay issues today. That’s why it sounds like we’re talking on each other. But, it’s not rudeness. It’s just the internet. But just like they might sell T-shirts to their audience, here there was something more useful to sell. You created the collection for them and then they sold it to their audience. That was how it worked. Okay. All right. So that’s a big milestone.
For some reason, it seems like opening offices in San Francisco, Finland and Singapore was major for you but I don’t know why. I just see this here in my research notes from my team. Was that major or they just . . . ? You can tell me about that.
David: Certainly. Each one was a big event. San Francisco is our research and development center. So that’s crucial to the future of the company. There’s almost 20 people there. They’re working on new materials, new colors, new designs and then new physical products. Some products related to the PopSocket grip, like mounts and cases. And some products are slightly less close to the PopSocket grip. They have a full pipeline.
And then our offices in Singapore and Finland, they are working on growing those markets, Europe, the Middle East, Africa and all around Asia.
Andrew: You’re still the CEO from what I can see on your LinkedIn profile, right?
David: Yes.
Andrew: How do you know how to run a company? Hiring, you had to figure fast. You went really slow for a long time and then really fast, where had to figure out hiring, figure out how to put together different offices, figure out different markets, figure out new research and development techniques, where you figuring this stuff out?
David: That’s probably why I’m CEOs, is that it’s stimulating. So I’m learning a lot. I still learn a lot every day. I had no experience. I’ve learned about international sales, I’ve had a learn finance, engineering, online marketing.
Andrew: How do you learn all this?
David: Jump right in, it’s the best way to learn. You know, and I’ve ask several MBAs, successful MBAs or people who got a business degree as an undergrad. I’ve asked them often, I say, “Can you think of a time in business when you stop and you thought, ‘Huh. I learned that in the class and now I know the answer to it’?” And every one of them says, “No.” Unless it’s a specialty, like finance, accounting or law, engineering, design, those are specialties where, of course, you’re learning very specific skills. But in business, I tend to think, jumping right into is the best thing you can do to learn this.
Andrew: But, are you doing all a trial and error? So if it comes to hiring or research and development, are trial and erroring it? Or you’re not hiring someone who is especially good at it and bringing them in as consultants or anything like that?
David: It is a lot of trial and error, as you say. So I’ve made a lot of mistakes, especially with hiring. We’ve had various partnerships that hadn’t worked out. We’ve hired people that, of course, hadn’t worked out. It’s a combination of trial and error, and reasoning. So, you know, what are the chances that this person is going to be the right person given their backgrounds, given their skills, given the cultural values that we have at PopSockets.
The real answer to your question though is, you know, I learned a lot personally. But before our explosive growth last year in 2014, I had a pretty strong leadership team. And that’s really key. These are experts. So we had an expert in operations who built out a team. There was me and one other person a year and a half ago. Now that team has 20 people on it. And they’re 20 strong people on this team [inaudible 00:35:13].
Andrew: In operations alone you mean?
David: That’s just operations, yeah. Same though with finance we had one person, she was just out of college. She was running everything. I mean, she and I knew about the same about finance, which is zero. And now that department is close to 20 people, including human resources. So in marketing sales, product development, each of these departments has leadership that’s grown the departments out.
Andrew: And that’s the . . . If I could take one thing away from how you were able to do that it’s, you hire the right leadership and then they build it out with you.
David: Yes.
Andrew: Okay. How do you hire then? Hiring is super tough right now. What’s your process for hiring and bringing them on?
David: Yeah, you say it’s super tough right now but it’s always been tough for me. The toughest hasn’t been a factor of the market. It’s a tight market. For me it was a challenge of inexperience. So I had no idea what the market could provide me. I didn’t know what my options were. I didn’t know what level of person I could get. And, you know, who to trust, what kind of people were there. And that was, I would say, one of my greatest two or three challenges, was hiring. And I had no idea how to even find these people, whether to run ads or talk to friends of friends.
Andrew: So what did you do that worked?
David: It ended up being friends of friends, or a friend of an investor. So it was, you know, sort of personal, it was relationships to start with that got me my first couple . . . with one exception, got me my first couple of leaders. And then once they were on board, they, of course, brought their networks in.
And then when we reached a certain level we started recruiting on our own. So by then I was confident that I knew what kind of person I was looking for. And we now have an internal recruiter who, you know, actively hunts on LinkedIn in other sources, looking for the person, for a particular role that we’re looking for.
Andrew: All right. Speaking of hiring, let me talk quickly about my second sponsor and then come back. And I should point out the thing that, I think, I love that it upsets you because I think it says something about you, about my phone, and then we’ll continue with your story.
The sponsor is a company called Toptal, frankly since we’re talking about hiring. I think it’s a great time to talk about it. Toptal realized that hiring developers is really tough. And often, people need, not just the best developers, but they need to hire them pretty quickly. And so they said, “We’ve found a new way to do this.” Toptal decided they were going to get a network of the best developers together, by, among other things, putting them at a test that is super tough.
I had a guest on here, incredibly successful company. He heard me say, “The test is super tough to get into Toptal’s developer network.” He said, “I’m a developer. Let me take it.” I said, “Fine.” I introduced him to Toptal. I check back in a couple of weeks later. I said, “How did it go?” They said, “He didn’t even finish.” I checked in with him, he goes, “I had no idea how insanely long this was, even. This is really tough.” I said, “Fine. I understand why you didn’t complete it.”
But you could also understand why in the marketplace people who do pass the Toptal test have something to be proud of. Something that they often will even blog and talk about and brag about. That’s how you get the best developers. That’s how Toptal does it.
And so, if a business like mine or yours, David, or anyone who is listening to me, is looking to hire developers, what we do is we go to Toptal. And I’ll give you a URL that you can go to. You pressed the big button on their site. And once you do that, you tell them a little bit about what you’re looking for.
And then you get on a call with a real human being where you can go deeper into your needs, your quirks, how you work, how you communicate as a company. And then they’ll go find, often, two or three people based on what you’re looking for. And if you like them, you can hire them right away. If you don’t, say goodbye and you’ve nothing to lose.
In fact, never mind nothing to lose at that point. They are so confident that they can hire the right person for you. Get this, I should say, it’s top as in top of your head, tal as in talent. So here get this, Mixergy listeners are going to get 80 hours of Toptal developer credit when they pay for their first 80 hours in addition to a no-risk trial period of up to two weeks.
Here’s the get this part. If at the end of the trial period you are not 100% satisfied, you’ll not be billed. That’s how they make it easy for anyone who’s interested in hiring to say yes to them.
Go to top as in top of your head, tal as in talent. That’s T-O-P-T-A-L.com/mixergy. toptal.com/mixergy. Cool.
The reason . . . Oh, I got to come back to this so I don’t forget, then I beat myself up a night. I love that I sent you a picture. I freaking love this thing. I sent you a picture of it. Just on my computer and you said, “Andrew, I don’t like your disk. I’ve got a better disk for the back.” And you sent it to me. This thing. How did you even notice it?
First of all, can you tell people why I have this thing? What happened? What this disk is that goes underneath the PopSocket?
David: Sure. So very few people go without cases. You’re one of them. I’ve been one of them the last couple months. I think only about 7% of people use their phones, especially the iPhone, without a case. It turns out though that the new iPhones for an inductive charging they have a glass-back to keep fingerprints off of it. Apple has put this coating on, it’s a non-stick coating that makes it nearly impossible for anything to stick to it, including our sticky gel, our repositionable gel.
So we had to develop a special disk that does stick to it. And our gel sticks to the disk. And that’s what you were using. And I could see you were using an older oversized disk that’s bigger than the grip. And we improved upon it. So the disk now is the same size as the PopSocket and you shouldn’t see underneath your PopSocket.
Andrew: So I like this so much and I found it so . . . I was hoping I wouldn’t need anything that there would be something magical about this new iPhone that would just stay. Instead, they actually un-did it. They made it harder. If I want to get control center now, I have to go to the top right. And I use that all the time to pause, play music. You know what I’m talking about.
So now they made it even harder for me. And then I put my PopSocket on there and it kept falling off. And my wife goes, “What kind of idiot are you? The thing keeps falling on your head in bed and you keep it on.” I go, “I need it, otherwise I can’t reach the corners.” I’m willing to have it fall on my head a couple of times for that because I use my phone.
And then I said, “You know? Let me research it.” And I discovered that on your frequently asked questions page you identify this. And then you said, “We’ll give you a little disk.” And I love that you didn’t say, “Andrew,” or the website didn’t say, “Send proof in that you actually bought a PopSocket.” You just said, “Tell us where.” I said where. And the site sent me, or your team sent me a disk.
What I loved about you was you’d noticed that in the picture, that it was not right. That says a lot to me about you. The attention to detail, the fact that you needed to, even though I loved it. I sent you a picture of it, you needed to get me a better disk. What does it say about you that you needed to do that? Help me understand you through that.
David: I probably am a bit of a perfectionist. Like I said, it didn’t really matter if I was going to end up making money on this invention. I was going to make it work one way or another. Just a certain frustration. It’s not perfect.
But our company too, I mean, it’s a company-wide value that we are all hold being customer-obsessed. I think a lot of companies have learned from Amazon that you can make people really happy by bending over backwards, following on with returns, the service. Just make people as happy as you can. And it’s worth it to lose a little bit of profit and to put that extra energy to it.
Andrew: And that’s what it is, a little bit of perfection. You had to complete the product from the beginning, even if nobody bought it, had to be right to your standards. And you want to make every customer happy because, even though you can’t directly get a return on investment or analyze your return on investment on making Andrew happy with that one exchange, you say, “The more people we make happy the better it is for business.” That’s what it comes from.
David: Yep, that’s right.
Andrew: You know what? Before I had, this I looked at the ring. I wonder why the ring you think didn’t take over. And why there’s so many knockoffs of the ring. You know, the little thing that’s a ring that goes on the back of the phone, that people put their finger in like a ring and they held on. That one didn’t seem to take off as much. And it has a lot of knockoffs. What do you think of what happened there?
David: True. So it turns out, looking back at the history and the patents that were filed, the ring was invented roughly around the same time that I invented the PopSockets grip. And it is a Korean product, the ring. It’s a metal ring that folds against the back of your phone. You can fold it up, put your fingers through it. It acts as a stand and a grip.
It’s interesting, I once had the CES booth, the Consumer Electronics Show booth. This was probably 2014. I set up a booth. It was in this horrible spot. I got no traffic. So I got up to leave and I started setting up on this empty space and I looked next door. And who was next door to me? The ring in this little booth. You know, there’s thousands of booths there and I happen to start setting up right next to them. And so I thought, “You know what? I’m going to get up and move it again.”
And I moved somewhere else. What explains the fact that the ring hasn’t caught on, it’s missing the magic. So the magic of the PopSocket it is the accordion mechanism. And that accordion mechanism is fun to play with. Do you fidget with your PopSocket?
Andrew: I try not to. I guess I do sometimes in my pocket, I do fidget with it.
David: Most people are playing with them, like expanding, collapsing, expanding, collapsing throughout the day. It’s fun to play with. It’s also very comfortable that the accordion on the fingers. The ring is a purely utilitarian solution. So it’s just a functional solution. It’s a piece of cold metal, goes on your finger. It’s not fun to play with. It’s not all that comfortable. And I say that’s the number one difference between our product and other products.
There’s a second difference though. It’s the personalizable nature of the PopSocket. So all the different graphics, the materials, the customization element. That also sets us apart from the competition.
And your second question, why is it that there’s so many knockoffs?
Andrew: Yes.
David: We also deal with our own problems. So there are a lot of fake PopSockets grips too. We though have a big team and we have very strong intellectual property. They did not. So unfortunately, they do not have a global patent. And they’ve been knocked off around the world. We have patents around the world. And we have a large team, six people enforcing our patent around the world. In China, Europe, Japan, the United States, Canada. We’ve got 45 law firms actually, around the world working on defending our patent and making sure the customs agents around the world are educated so they confiscate fakes at the border. And making sure that anyone who’s ripping us knows that we will take action against them.
Andrew: And the reason you’re able to do that is because you’ve got a global patent. Is there anything else that anyone who is getting a patent should be aware of? Get that global patent you’re saying? What else?
David: Sure. I would recommend . . . It’s tough, because there’s a time window when you originally invent something. So what I invented the PopSockets grip back in 2010, maybe I started filing in 2011. I had to decide, maybe by 2012, how many countries I wanted to apply for this patent. It’s expensive. So it costs money for every country you apply. And at that point, I hadn’t made a single cent. And the window closes. So by the time you determine that your invention is a success or a horrible failure, it’s too late to patent in the countries. You just have, you know, a certain window. I gamble on the big economies, like Europe and China and Japan and India. There are some countries that I certainly regret that I did not file in, like South Korea. And I would recommend to you listeners, if they do file, they should file a design patent and not merely a utility patent.
So the utility patent covers the functioning mechanism. The design covers the look of the invention, the exact look. And it’s a lot easier to enforce on the design patent than on the utility patent because customs agents can just look at a picture and look at a candidate fake and determine whether it looks like. If it looks like it, they’ll reject it.
Andrew: That makes a lot of sense. Wow. How much did it cost you to do that? To get the patents? Like roughly, I just want to get a sense of how deep you went in because of means.
David: Yeah, that is another expense. By the way, where I’m trying to think about all the expenses that added up to hundreds of thousands of dollars. So in the U.S., I probably spent . . . Just on the courier utility patent . . . I filed several patterns, by the way, and trademarks. But on our core utility patent probably ended up spending $15,000 in total, on the attorney’s fees and filing fees. Internationally, $15,000. And then each year there’s fees to keep it keep alive.
Around the world I’ve probably spend maybe another $15,000 or $20,000. There are some countries like India that were a steal. I think it was $800 to cover India on this, which has, you know, potentially one of the greatest audiences for PopSockets in the world. So that was a no-brainer. And then other countries where is thousands of dollars to file.
Andrew: Every time I say PopSockets, I watch you, you say PopSocket grips. My sense is that’s a trademark thing. That you don’t want PopSockets to become a . . .
David: Yeah.
Andrew: Talk to me, talk to me about that. What are you . . . ?
David: You’re exactly right. So, if your nose is running, you might ask for a Kleenex. But Kleenex is a brand. It’s not a type of physical item. And Kleenex, the word, it starts being used by English speakers to refer to a physical object rather than the brand who makes it, the brand who makes it could lose their trademark. So they could lose the right that word. And a judge could say, “Hey, we’ve determined that this is no longer a word that refers to your brand. It’s word that refers to this physical item. It’s just part of English.”
And so there’s other items, like Velcro. When people started using Velcro for the hook and look. The hook and look that he said. The company who makes that, they have a big campaign to try to educate people that, “No, no, that’s a hook and loop adhesive by Velcro.” Like, it’s a Velcro hook and loop.
Companies like Apple don’t have to put as much energy into this, but technically, if you look on their websites, they don’t sell MacBook Pros. They sell MacBook Pro computers, a MacBook Pro laptop. So the people don’t get confused. Yeah.
Andrew: Someone asked, “Do you call it iPhones or iPhone?” And the response from Apple was, “You don’t you call it iPhone devices, iPad devices. That’s the plural.” Meaning that they wanted us to be clear, the iPhone is a brand name, not the name of the product. It’s not what it is.
David: Exactly.
Andrew: You know what? Let me close out with this. We’ve seen you struggle, take big risks. You could’ve lost it all. You ended up with something really successful that a lot of people love. You got a company that you seem to really enjoy running. And I get why.
On a personal level, having done all this, what’s different now because of this? What are you able to do today that makes you happy because of all this that you did with PopSockets?
David: Okay. Excuse me. We’ve got the power to do good. So, initially when I started this business, I thought I could maybe make a million dollars. And then after a couple years I thought, “Maybe I could make a few million dollars.” I’d sell the company and start a nonprofit. You know, address some concern of mine, say, animal welfare on my own.
And then, in year three of the business, I started realizing the people around me and the company, they care about making a positive impact. And I started noticing the company is much better positioned to make a big impact than I am on my own. So we’re now in a position where we can do good with this momentum. We’ve partnered already with three movements disorder groups, Parkinson’s, arthritis, Craig Hospital, it’s a hospital for people with brain and spinal injuries in Colorado.
We’ve raised a lot of money for each of them. Several hundred thousand dollars for each. And gotten PopSockets grips into people’s hands who have movement disorders. It makes it much easier for them to use their devices. And then we’re launching a platform called poptivism. It’s launched in stages. So it’s on our website right now under Shop, Design for Causes. There are seven different PopSockets right now that you can buy. And 50% of the proceeds will go to some cause.
Eventually though, early next year anybody in the world will be able to design their own PopSocket, associate a charity and 50% of the sales will go to that charity. And what we want to do is create a platform to support the communities causes, rather than dictating what the PopSockets’ cause is, what we care about. We want to empower people to be activists for the causes they care about and actually raise money for them and make an impact.
Andrew: I see that. I read that. I didn’t fully understand it until you explained it now.
So I think that all makes sense. I meant something like, do you get to buy an airplane and fly off anywhere you what? Is there a boating trip where you get to disconnect from the world.
David: I still drive my Subaru 2011, Subaru station wagon. I’m not so into fancy materialized personally. That doesn’t make me happy. I do like a good massage. And I’ve always said that when I get rich I’m going to get a lot of massages. But I don’t have time unfortunately to get massages yet.
Andrew: Really?
David: No. I’m just too busy.
Andrew: So you don’t have like a masseuse come into the office even?
David: Oh, no. That’d be terrific. We actually do have a massage therapist on Mondays here. And Monday is the one day I work from home. I’ve missed that so far. What do I like? I don’t know. I’m sure I’ll end up traveling to some nice places when I have some more free time.
Andrew: All right. Well, thanks so much for coming on here. I’ve been waiting for this interview for so long. My team got annoyed with how many times I asked, “When is this happening? When is this happening?” Glad it did. Because I just had no idea that this little thing, that I thought I and a few celebrities discovered was so freaking popular and that it did so well.
And I was curious about your story. And now that I see how far you went and how much of an investment you put into this before you saw a return, I’m even more amazed. Thanks so much for being on here.
The website for anyone who wants to check it out is . . . Actually, just go to your local store. But it’s PopSockets.com. What I did was I went to YouTube to see how people used it to see if I would look like a freak if I had it. And then I went to Amazon and just bought it for $10. But go check it out everywhere.
And I want to thank my two sponsors for making this interview happen. The first is the company that will host your website right. It’s called hostgator.com/mixergy.
The second is a company that will help you hire phenomenal developers, toptal.com/mixergy.
And finally, if you’ve got an Alexa device, please say, “Alexa, play Mixergy.” Wait, “Alexa, play Mixergy podcast.” You’ll be glad you did. David, thanks so much for doing this.
