Andrew: Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses. And frankly, when you hear today’s guest, one of the first things you’re going to think about is, “Hey, Andrew, what happened to Mixergy? You’re interviewing someone who creates cups? You’re the guy who interviewed the founders of Airbnb, the founders of Wikipedia, the founder of Y Combinator. These are software empires and now a guy who sells cups?”
Well, I’ve got to tell you something. I’m noticing that there’s this revolution in entrepreneurship, in online entrepreneurship happening. Just like there was back when Airbnb started as a handful of coders, actually three guys in their home coding it up and nobody realized that it was a revolution because it seemed too small, I think the same thing is happening in physical goods. The same thing is happening with entrepreneurs like the one you’re going to find out about today.
What I’m noticing is that entrepreneurs who have an idea for a physical product very often they’ll go to Kickstarter, but more often than that, they’ll go to Amazon to start listing the product, they’ll go to Alibaba or AliExpress, and they’ll find somebody to actually manufacture it and they’ll start selling on Amazon and they’ll actually start to get some real sales.
And then what they’ll do is transition to their own website, which I’ve noticed is more a Shopify site, and they’ll hope and work to get more of the Amazon customers and more customers in general to come to their own store, or they’ll find a retailer and they’ll work with a retailer and they’ll try to really break free of the Amazon-only connection to expand to retail outlets. That’s what I’m noticing. They’ll start with one or two products or one type of product and they’ll expand and expand and expand.
So that’s what I want to understand with today’s guest. Today’s guest is an entrepreneur who had an idea for what he called a side hustle, and it ended up being this really big business that’s continuing to grow. His name is Erik Howe. He is the cofounder of SIC. SIC makes cups that have a double-walled stainless steel vacuum technology that keeps your drinks ice cold for 24 hours, and I wouldn’t have believed that except there are these guys who are obsessed with keeping their freaking drinks ice cold. They will actually see how long their piece of ice will stay cold in a cup and they’ve checked out SIC cups, and they’ve agreed that the ice will actually stay cold longer.
By the way, while I’m at it in this introduction, I should tell you SIC stands for Seriously Ice Cold. I should also tell you that this interview is sponsored by two great companies. The first is called Toptal, top as in top of your head, tal as in talent. They help you find developers. Erik had an experience that was kind of different with them, and we’re going to talk about that later. And also by Acuity Scheduling. They’re the company that I use to actually talk to my customers and understand what they’re looking for. It helps me grow sales and it will help you too. I’ll tell you more about them later. They’re called Acuity Scheduling. First, Erik, welcome.
Erik: Hey. Thanks, Andrew. Thanks for having me.
Andrew: Hey. Let’s talk revenue. I’ve got the numbers here in front of me. What do you feel comfortable saying publicly about where your revenues are first 12 months of business?
Erik: The first 12 months, we were definitely in the millions, not on the lower side, but not on the higher side between zero and ten, so somewhere getting close to the middle.
Andrew: Somewhere close to the middle. You’ve told me the numbers, so I know that you’re not just being cutesy about it. You’re really solid here. In the first 12 months of business, that’s where you were, right?
Erik: That’s right. We sold our first cup December of 2015. So we’re about a year and a half into it now.
Andrew: Wait, December 2015, got it. Okay. What’s the profit? Are you guys profitable?
Erik: Yeah. We’re definitely profitable. We profited just over $1 million in the first year.
Andrew: Impressive.
Erik: Yeah. It was a fun run.
Andrew: And you’re a guy who before this you had these little — little in comparison to this —sales jobs. Like what were you selling before this? What were the two jobs you had?
Erik: I was always in outside sales. My initial job was selling uniforms kind of door to door in the Loop of Chicago. I was calling on restaurants and auto body shops and selling a uniform service where they’d pick up uniforms and clean them. Then I started selling medical devices. So I did medical devices for close to probably 10 years, in the operating room kind of helping surgeons put these implants in and making sure the devices are functioning the way they’re supposed to.
Andrew: So what was the problem with doing that? It seems like you had a good life. You’re making good money. You were raising a family or starting a family. What’s the problem?
Erik: It definitely wasn’t a problem. I’ve kind of always had this yearning and my big drive was like how can I make money in my sleep? That was the big thing. I’ve heard all these successful attorneys and physicians I used to work with that I would joke they made a ton of money but they didn’t make a single dollar when they went to bed. So I started doing some private label on Amazon. That was kind of what tipped me off.
Andrew: What’s the first thing you private labeled on Amazon?
Erik: The first thing was like a handheld coffee grinder.
Andrew: Okay.
Erik: I’ll never forget. I was talking to one of my surgeons at the time, and I told him about the whole process and that I got them from China. I was all excited. Then I sold two of them the night before. I was in the operating room with him and I said, “I made $13 last night. You made $0 while you were slipping.” Granted, at 9:30 that morning he’d already made more than I’ll make that day, but it definitely was something that kind of tipped me off.
Andrew: Did you buy it — where’d you get the cups and how many did you buy before you started selling?
Erik: The coffee grinders were first.
Andrew: Excuse me, the coffee grinders.
Erik: That’s literally just sourcing it through Alibaba, getting samples, creating logos, creating images and then slapping your logo on a product, make a couple little small changes to it, send them over, they come to your house in 50 or 60 boxes. You put some Amazon labels on and send them into Amazon. Then there’s some process to follow through from Amazon pay per click and stuff, but then you pretty much cross your fingers and see if they sell. You start learning from there, at least back then. Now it’s become a little more strategic as I launch products.
Andrew: How many of the coffee grinders did you buy?
Erik: I think the first order was like 500.
Andrew: So you buy them from China, they put your logo on it as you create it. I’m guessing what you’re saying is they also send you samples throughout the process. You finally see the sample that represents what your finished product is going to be. Boom, you buy 500, you list it on Amazon.
Erik: Yeah. You get some photography. You create a listing. You’re rolling. They’re up and going, and your mom is usually the first person that buys one.
Andrew: What’s the difference between you selling it and anyone else who’s on Alibaba and selling the exact same grinder?
Erik: There really isn’t. That’s the crazy thing. I’m extremely candid with customers that will ask me questions on Amazon. Amazon is an interesting business because you have direct customer point of contact but yet you don’t. You don’t have that customer’s email, you don’t have that customer’s data. It’s all through the Amazon system. But I mean, people ask that. They’ll pull out a grinder that is $45 and one that’s $12 and they’re saying, “What’s the difference?”
Clearly, I can’t speak for what the others do, but I know in my heart of hearts that they’re probably made roughly in the same factory with roughly the same components. It just depends on maybe there are some people that have a bad listing visually but charge a higher price and somehow get sales because maybe the sucker thinks higher price equals better product. It’s an interesting strategy.
Andrew: I see. You know what? I’ve noticed this with electronics. I remember buying this battery case for my iPhone 7+ and it was $100. But I thought, “This is good, really big battery,” which is what I needed to spend the whole day working. Then I started watching it on Amazon for like $40, $60, all these different prices, the exact same thing, just a different logo on it. So, essentially in many cases, it’s the same one. It’s who’s marketing it better and maybe who ends up randomly buying it because of some random thing in their head like bad design and high price probably means it’s really good.
Erik: I think the numbers are just unfathomable the amount of people that are shopping for every product you can imagine on Amazon. So it’s definitely interesting.
Andrew: Okay. So one of the things that I’ve noticed here is in San Francisco, a lot of people will walk around with their own cups. They will go into Starbucks with their own hot cup to have it filled up. It’s become a thing, right? Just like years ago it was the thing to have like a special knitted holster for your water bottle and to walk around town with your water bottle because you’re going to be healthy. Now it’s become a thing to walk around town with your stainless steel cup. You noticed that. You said what to your wife?
Erik: Well, I was actually with my business partner. We’ve got a vacation together. We both have small children. So he brought some of these stainless steel cups. We live in Florida, so we’re outside playing with the kids and golfing. I was like, “Wow, these things work.”
So I went home and went to the local sporting goods store and said, “Can I have two of those cups.” It was like a 16-year old kid and he kind of laughed and said, “Seriously, the day we get these things in, we sell them out.” I’m like, “What?” That’s when I pretty much said to my wife, “We’re going to sell cups.” I don’t know how or why, but if people are running to a store to buy a $40 cup, they want something with it. So then we started to quickly just say, “What could we do that makes it different? We can’t just come out with the same cup.”
Andrew: Okay. What were you going to do to make it different?
Erik: So we looked at it, and all the cups at the time were just this industrial stainless steel looking cup. Quite honestly, it would be a cup that if somebody gave me I would use, but my wife would never buy it. So we said, “Well, what if we made some pink ones? Pink is probably cool. How about some cute blue ones? Those things will work.” We quickly thought in my house, granted, I did try to go buy those, but it would be a purchase where I feel like my wife would go buy those cups. So we said, “Let’s make colors that we feel would appeal to people that are roughly around our wives’ age, that demographic.”
Andrew: I see. I know why I have one. I got one from one of my past interviewees. Andy Fossett of GMB Fitness sent me one. I didn’t realize how helpful it would be. The reason I love it is I know if I go out of my house this morning and I want a cup of coffee on the way into work, I’m going to have to pay $6 for just a cup of coffee, no joke, right? And I have to walk four blocks, three blocks before I can find the place that I like. So I might as well just pour it at home the way that I like it, save my $5, $6, whatever they’re going to charge, and I walk around with my cup. What is the obsession with the cold version of that? Why are so many people buying these freaking things now?
Erik: Because not everybody lives in San Francisco, right?
Andrew: I imagine for them it’s cheaper, isn’t it? Or maybe you’re saying they can’t walk a few blocks and find a cup of coffee, so they want to make it at home and take it with them? What’s the obsession? Why is this such a hot thing all of a sudden?
Erik: I think it’s just performance. I think that as you had said, people are active, people are out and about a lot more. I think as kooky as it sounds, hydration has kind of been beaten in our head the last handful of years of drink more water, drink more fluids, less this, less this. So drinks that you consume and make at home that you take with you — I liken everything to where I’m at in life, middle 30s with two kids. If I take my kids to the park, there are eight moms there that have some type of stainless steel drinkware. Obviously, I hope that they’re ours.
But it’s a society now that people always take stuff to go, they have it there. So, obviously, we play on the reusable piece of it as opposed to disposable plastic drinkware and stuff like that. I think it was just kind of a natural evolution of where we’re going with everybody moving around becoming more transformational and needing more hydration close by.
Andrew: Okay. What you were seeing was, “I’m not inventing this thing. I see that people are shifting towards this kind of product. When the stores get it, they run out pretty fast. I know how to get it. I’m just going to put a little twist on it that will actually allow me to stand out so that I’m not the 5th guy or the 100th guy selling the exact same thing on Amazon.”
Now, I understand the first version, finding a coffee grinder on Alibaba and just putting your logo on it. This new evolution of your business is a little harder. Now you want to find somebody who manufactures these kinds of cups that you like and can paint it the way that you want it painted. How did you do that?
Erik: Right. So it’s still, at least at our fingertips, from Alibaba and from different sources, it’s still fairly easy. The question is the hardest part is to really vet those resources. For every one manufacturer you find on one of those sites from how many thousands of miles away on your computer, there’s five or six people that pose as manufacturers that are literally just agents and they just go and talk to manufacturers. Or there are even people that have whole sales offices that literally just subcontract out to manufacturers.
So we just went over there pretty quick. We placed our first order. By the time we were ready to place our second order, we went over. That was the biggest difference is there were some other leaders in the space at that time that have quality products. There wasn’t a chink in their armor that we could go after from a quality standpoint. There was a lack of design and some things like that. But the only way for us to compete to try to come out to sell a $30 or $40 cup was to make a quality product. So cut down our competitor’s product in half, measure the components, go make sure that we have third-party quality control, we hire people to —
Andrew: The first time you got your first set of cups, you weren’t cutting down your competitor’s products, right? You were just going into Alibaba and buying what?
Erik: No, we did. We cut down the products and measured how thick the stainless steel is.
Andrew: You literally went to Amazon, you bought a competitor’s stainless steel cup, you cut it in half?
Erik: Yeah, with a grinder.
Andrew: And then you measured the thickness of it?
Erik: Yeah, because there are two pieces of stainless steel there.
Andrew: Okay.
Erik: There isn’t a ton of magic between the cup, right? You have stainless steel, you have another stainless steel and a vacuum in the middle. So, obviously, the only real components are the thickness of the stainless steel and the seal of that vacuum there. If that vacuum seal goes away, that cup is just as useless as the Styrofoam coffee cup you get from the factory.
So, obviously, everybody at first was saying, “Oh yeah, our stainless steel is this thick,” but we need to make sure that it was. It sounds a little crazier than it is, but it wasn’t that difficult to slice it open, have a measurement that says this is x-amount of millimeters, this is x-amount millimeters, this is our standard,” we created a little SOP that says, “This is what products we need.”
Andrew: I see. And then the paint job, that’s a little harder, right?
Erik: Yeah.
Andrew: That’s harder to measure. How did you specify the color paint you wanted, the way you wanted to paint it on?
Erik: That was definitely a lot harder. That involved a lot of samples back and forth. Just like anything, if you ever painted a room in a house and you go get that color again and it’s off, your wife usually is the one that sees it, so that is definitely hard, but their standard colors, RALs and Pantones that are colors that once we establish exactly what we want, the hard thing is that a lot of people, from a cup standpoint, a lot of people will stop a little short on the product. So we had to at least build independent plugs to try to get the cups exactly the way we wanted to, but that was the hardest part.
Andrew: What do you mean by build independent plugs?
Erik: So, if you can imagine how you paint a cup, it literally comes down a line and they hand-spray it with a powder coat. Well, what most people do is they literally tape the top of the cup. So if you look at a cup, the paint won’t go all the way up to the top. It’s kind of the cheap way, right? You just do that and then you just spray paint everything. We didn’t like that look. We thought visually it didn’t look as well. So we wanted the paint or powder coat to come all the way up.
So, in order to do that, you have to create a rubber plug that goes inside the cup so that when you hit it with paint, you don’t have to hit tape. It will cover the entire surface area of the cup. We literally custom made them, went back and forth.
Andrew: And the factory you found in China did this for you?
Erik: Yeah.
Andrew: Give me one tip for finding the first factory that someone was listening to us should use. If they want to find a factory that can actually do good work, what would you suggest?
Erik: Definitely go to Alibaba. You’ve got to select a gold supplier and somebody that’s at least been doing it for 10 years. Years ago, that was kind of fluff. Before Alibaba went public, I think anybody can make up and say they’ve been around for 10 years, say they’ve been around for 12 years. The website has become a lot more accurate. So that’s the biggest thing. And then you’ve got to make sure that you have somebody you interact with a lot, that their English is good because, man, a lot gets lost in translation.
Andrew: And are you chatting with them using their service, using the contact option?
Erik: Yeah, either that or we talk through WeChat a lot, both audio calls as well as chat calls. I’m a big email fan because everything can be tracked back. I can easily say, “This is what we discussed at this time,” as opposed to chats and calls.
Andrew: I see. So you’re getting to know them and seeing do they speak the language well and also can they start sending you samples, and you’re looking for someone who’s been on at least 10 years. I’m scrolling looking for someone who can make a cup like yours. So far the longest that I’ve seen is someone who’s eight years in the business, eight years on Alibaba, excuse me.
Erik: Yeah.
Andrew: So it’s tough to find that.
Erik: The interesting thing, our first supplier that made our first cup is not the suppliers we use now. The dichotomy of it that I find is the people on Alibaba or the people that need business, if you were to go make glassware, the best glassware maker in China is not on Alibaba because they’re not looking for Andrew to try to buy a thousand pieces of glass.
Andrew: Right.
Erik: So you kind of start a little bit with bottom feeders.
Andrew: And then how do you work your way up? What’s the next level? How do you find that next level supplier?
Erik: I think you have to physically go there. There are two different fairs called the Canton Fair that goes on twice a year. You go there. It’s obviously a little bit overbearing. It’s huge. Or you go there and you arrange your own — a) you find somebody, like we found a couple different people that work with us there that are sourcing agents that have said, “Okay, here’s who you’ve got to go talk to, here’s who you’ve got to go talk to.
Andrew: How’d you find the right sourcing agent?
Erik: Through about 72 hours of different emails back and forth and up at 2:00 in the morning on the phone with them. It’s definitely —
Andrew: You’re just trying to figure who can you work with, who do you trust to be your rep there.
Erik: Yeah.
Andrew: Okay. I see what you mean. I’m looking at your competitors, and the lip of the cup isn’t painted.
Erik: Right.
Andrew: It’s often covered with the lid, so you can’t really tell.
Erik: Right. We obviously can’t speak to why they chose that. We believe that everybody tried to drive us to do that because it’s easier from a manufacturing standpoint. Visually, I just don’t like the look as much.
Andrew: I wouldn’t have even noticed, but I get it. You want to stand out. This is what’s going to separate you from all those other guys who look exactly the same.
Erik: That’s right, until they figure out how to make our plugs and they steal it because everybody likes it.
Andrew: That’s what happens?
Erik: Yeah. That’s exactly what happens.
Andrew: That happened to you already?
Erik: No, not quite, but we’ve had rumblings. It’s hard to manage something from thousands of miles away. So we’ve heard, “Hey, your cup is in this facility and they’re looking at it and changing this. It’s very hard to stay on top of it.” At the end of the day, those people in China don’t work for you. They work with you.
Andrew: Yeah.
Erik: There as driven as we are to get a sale.
Andrew: All right. And your goal was even though there’s a lot of back and forth, you’re saying, “Look, if we could get to the holidays, December,” which is what you mentioned, 2015, “Then at least we’ll get some holiday sales in and that will start our company right. That’s the biggest shopping period of the year, you’ve got to get in on it.” Did you do a few tests? As I understand it from your conversation with our producer, you did do a few Amazon tests before that big launch, right?
Erik: We did. Yeah. We definitely — you could order some small samples just to kind of see would people buy it? The hard thing it on Amazon, naturally you need reviews in order for people to view your product unless you have a very hot item that maybe coincidentally happens to be sold in December and a lot of other products are sold out. Then your product kind of moves up the ranks a little bit.
We definitely tested it, just a few colors and small volumes, a couple hundred here, a couple hundred there and said, “Wow, they sold out in hours. Okay, people want this product.” So then it was pretty easy. Then it was launch in December to consumers, and then in January is when we started having retailers reach out to us and say, “Hey, do you carry cups in retail stores?”
Andrew: How many cups did you buy before that December launch of yours, December 2015?
Erik: Only maybe 500, 600 cups.
Andrew: I see. So you pretty much sold out. That was it.
Erik: Yeah. Well, then our first order was like 2,500 cups, and we sold those in a day and half on the December launch.
Andrew: I see. 2,500 for December 2015 or afterwards?
Erik: December.
Andrew: Got it. Okay. So first you did 500, then you went for 2,500, then you sold those out and so by the end of the year, you sold about 3,000.
Erik: Yeah.
Andrew: What did you do about the ratings? I don’t think I picked up on that.
Erik: So the ratings, it was interesting. Amazon has actually changed now. Originally, there were a ton of these review groups of people that want discounted product in order to write an honest review. They could leave you one star, they could leave you two stars. Amazon has since put the kibosh on that. They no longer will allow these review groups. I would assume now you kind of have to hope you have a lot of friends and a lot of family that will take your product and then leave a review on Amazon.
If not, you’ve either got to discount it and then hope you’ve got a good mechanism to garner those reviews from an email follow-up sequence and stuff like that. We launched through a couple different review groups was kind of what gave us that initial buzz. But again, to be 100% honest, it was very good timing that there was a lot of other products that were not available that were sold out, being that it was December 12th, 13th.
Andrew: Okay.
Erik: So we naturally moved up even though our reviews were much lower.
Andrew: I see. But you can still have family do it and that seems like a common thing to do. The other thing I’m noticing is people who have even small mailing lists of fans will start selling that way. It’s not enough to really make a living because they just have a huge audience base, not tens of thousands like we do at Mixergy, but they’re not looking for that.
They just need a handful of really passionate fans, some of whom will go and buy the product and give it a high rating and a really thoughtful review, and then after that they’ll get some organic reviews. I’m also finding that people will send me product as a gift knowing that I will buy it anyway and then they’ll ask me, “If you buy it, can you please review it?”
Erik: Yeah.
Andrew: Which is frankly a big ask for me because I hate doing reviews on Amazon.
Erik: I know. I never left one before I had a business on Amazon. Now I leave one to kind of throw some love if the product was good.
Andrew: Me too. It’s such a pain to do. There’s nothing in it for me. All right. Let me talk about the way that we handle our customers here at Mixergy. I think it’s something that everyone should learn from. One of the things that we did recently was we launched this bot program to teach people how to create bots, Erik.
The way that we launched it was first I introduced it to a few people in my audience. I said, “If you’re interested in this, you can’t sign up. There’s no website. You have to schedule a call with me so I understand why you’re interested so we can figure out if it’s a good fit for you.” So, what I did was I had them express interest, fill out an application, put down, I think, like a $20 deposit and then get on a call with me first. I wanted to talk to potential customers. To talk to potential customers and schedule all those calls is a nightmare.
Who’s in the room with you? It seems like someone — is it one of your kids?
Erik: No, my wife opened the door to make sure the kids didn’t mess anything up.
Andrew: I don’t know how you work from home. I’ve got to tell you, it would drive me nuts. Even when it was just me and my wife, as soon as she moved in with me — and I really urged her to move in with me because I wanted her to live with me — I said, “I can’t work in the house anymore. I have to go out.” The distractions don’t bother you at all. You seem like an easygoing guy.
Erik: Yeah, definitely. You learn it. Like I said, I definitely get the most productive work done from about 9:00 p.m. to 1:00 a.m. when everybody else is asleep.
Andrew: And your wife doesn’t want you to like cuddle up with her before going to sleep. She doesn’t say put it all away.
Erik: No, she definitely gets it. She understands there’s not a whole lot of time for that.
Andrew: I see. She sees, “Hey, look, this guy has finally got something he’s passionate about and it’s rising. We can’t put the kibosh on that.”
Erik: Right.
Andrew: Weekends, do you go to bed with her at the same time?
Erik: No, more just because my wife is a very early go to bed, early riser. She’s up at 5:00 a.m. working out. I’m not quite a 5:00 a.m. workout person. So our natural — we’ll usually hang out, watch a movie or something like that, and then I’ll work a little bit or do something like that. I definitely don’t go to bed at the same time.
Andrew: I see. All right. So here’s what I was doing. I was trying to get my potential customers. I knew it would be a nightmare to try to schedule it. What I did was I went to Acuity Scheduling. I created a brand new calendar for this. I picked the times that I was available to have conversations with people. I also picked a few questions that I wanted to ask them before they got on a call with me.
Anyone who was interested enough to put down a deposit got a link to my calendar. They got to book themselves on my calendar, answer a few questions and then I got a call with them and I understood what they wanted. I understood why they signed up. I frankly figured out who was the right fit for it and also who the wrong fit was.
That’s the power of calling. I’m noticing more and more people, just like more and more people are getting into physical products, more and more people are talking to their customers before they buy. It used to be a big pain, now it’s really easy. It teaches you so much. Frankly, from a point of view of selling, it’s also fantastic. When people get to talk to a human being, they feel much better about a company and much more likely to sign up.
So imagine this — a website that just says, “Here’s the site, go buy,” or one that says, “Schedule a call, schedule a demo or buy.” That schedule a demo link could point to an acuity scheduling calendar that’s on your site so it looks like your site, it’s a native experience. Anyone could pick a time to schedule a call with anyone on your team and then they do a demo, really powerful.
Look, if you’re out there and you want to talk to your customers before they buy, while they’re still customers of yours after they cancel, make it easy for them. That’s what Acuity Scheduling is all about. And if you’re a Mixergy listener, they’re going to give you a ton of free time. All you have to go to AcuityScheduling.com/Mixergy. I frankly think they should give you less time. They’re giving you 45 days’ trial for free and throwing in an exclusive, private, one on one consultation with one of their pros.
I think they should give you like two weeks. You’ll know in two weeks whether it’s a good fit or not. In 45 days, you can probably do a sales run. Our whole sales campaign lasted less than 45 days. It’s really powerful. I’m going to ask them to cut it back. It’s available to you right now at that 45-day level if you go to AcuityScheduling.com/Mixergy. Actually, why am I going to ask them to cut back? Guys, go check out AcuityScheduling.com/Mixergy. If it works for you, even if you don’t sign up, I love it.
All right. There we go. You know what I was actually doing there was trying to create scarcity by saying let’s go tell Acuity. I said, “Screw that. I’m not creating artificial scarcity. If people sign up, they should sign up.”
Erik: Yeah. 45 days is long, but I will say that I need to sign up for it. I keep hearing you talk about it. But I liked like when I talked with Ari, your producer, when somebody sends you an email and says, “Pick this time,” phone tag in today’s world I think is the worst game —
Andrew: Horrible.
Erik: The most time-consuming game in the world. I can’t stand it.
Andrew: And you know what? I had someone on the team say, “Hey, Andrew, how many interviews are you doing next week?” Next week, I’m recording 15 interviews in 5 days. That’s huge. It may be even more. It might be 20. Someone said, “Do you have someone on your team that’s going to follow up with them and make sure no one cancels so you’re not just wasting your time?” I said, “I don’t need it. Acuity is going to do that.” I hardly ever have someone not show up because Acuity will send them reminders.
All right. I see now you got your business. It’s up and running. The next level for you, the next step was easier than it is for other people. You’re saying that resellers started coming to you?
Erik: They did. Honestly, keep pinching ourselves and there’s no doubt it was unique in that respect, but the honeymoon — I kept telling my partner for the last while, we kept saying, “The honeymoon is not going to last forever. Not everybody gets people asking for your product.”
Andrew: Why? Why didn’t they just go into Alibaba and pick the cups they wanted? Why did they need to have the SIC cup?
Erik: Well, from a retailer standpoint, we’re talking about a boutique at a store down the road from your house. In San Francisco, they’re carrying our cup. They’re not going to go on Alibaba and buy 12 cups, 24 cups. They’ve got to get samples. They’ve got to get all this stuff.
Andrew: So then why yours as opposed to any of the other options that are available on Amazon?
Erik: That’s a great question. That’s what we were trying to figure out. That’s why we talked to a lot of our customers at first. First off, when you first said SIC earlier in the interview, you smiled and laughed. People like that. People think it’s funny.
Granted, some people think it’s silly. Our wives thought it was crazy we were going to call them SIC cups. My partner and I, when we were hanging out we’d say, “That’s sick,” you hear it a lot in adventure games and sports and stuff, like, “That was sick.” We got our first samples. My partner was the one, Bobby, he said, “These things are sick, man.” I was like, “Let’s call them sick cups.” Then the acronym came after.
So people liked the idea of the brand. The other thing is we’ve offered a lifetime warranty. Nobody else has really ever stepped up to do that. These products, they’re built pretty rugged. They’re good product. There’s no reason this cup should break in a year, two years, five years. Quite honestly, if it does, then I owe it to you to give you another one if you spent $30 or $40 on a cup. I think the lifetime warranty hooked a lot of people at first. Again, we were very early in the game of these powder coated colors. So when these retailers were calling us, they couldn’t go on Amazon. They didn’t have 25 different people selling powder coated cups. We were one of the first to come out with that idea of it, that people could at least have their own color. It was still an early adopter type of mentality.
Andrew: Even now, I type in stainless steel tumbler and I get a bunch of options. I add the word color to the end of it and I don’t see many.
Erik: Right. Yeah. It’s definitely not as available as it was. It’s more available now, but back then, there was nobody on there. So, quickly our business went from obviously 100% Amazon to kept going down from 20-80, 30-70, 60-40 and now Amazon is less than 5%, about 3% of our business, yeah.
Andrew: Really? Wow, I had no idea.
Erik: Yeah.
Andrew: Am I right also that Shopify is your platform and you’re doing I’d say less than five percent on your own site?
Erik: From a direct to consumer standpoint, yes. So 80% of our business is through Shopify, but it’s through our retailer. So Warner Hardware in rural Pennsylvania jumps on our site, buys a case of cups and we ship it to them tomorrow.
Andrew: Why are they doing that on Shopify? I didn’t realize Shopify was a good platform for working with resellers.
Erik: It may not be the best, but what I’ve always said we need to have a new platform, but the funny thing is the last 17 months of our life I feel like we’ve been running downhill. We haven’t fallen yet, but our feet have never gotten under us to take that big — it will work just the same. Shopify was built for you to go in and buy an individual product. Well, if we just create our SKUs and create our shop as an individual product for you happens to be 24 cases or 24 cups, then it works the same.
Andrew: I see.
Erik: So that’s the way 85% of our business is through Shopify through retailers.
Andrew: What is it, retailers.SICCup.com?
Erik: No, it’s the same thing, there’s just a login. When you log in, we’ve created a tag that says retailers that you only see a certain product page.
Andrew: I see. How does somebody get the login information? How do they even know that exists?
Erik: So if you’re on our website, you go to retailers. You apply to be a retailer, and then you deal back and forth with some people on our team that field some questions. You’ve got to give your business license. We vet you a little bit and then —
Andrew: To make sure I’m not buying it just for a wedding that I’m throwing this weekend or something like that.
Erik: Right.
Andrew: I see. Okay.
Erik: So now our new focus has to be direct to consumer. But honestly, when you start a consumer good product, you’re either going to go through direct to consumer initially or you’re going to go through retail channels. The hard part about going through retail is you establish your prices and you can’t sell them cheaper than your retailers can sell them to consumers, you know?
Andrew: So I get that somebody reached out to you and they started buying. I’m wondering when you wanted to grow it, was there anything you could do to get more resellers? Was there anything you could do to reach out to retailers? What did you do? I see your eyebrows went up as I asked that question. What did you do?
Erik: The beauty of Facebook is incredible for a business like ours right now. When we can dial into groups and we can actually — I just learned about this recently because my partner handles more of the Facebook advertising. We can literally upload our email list and Facebook will scrub that list to find people that like the same thing.
So the interesting thing about our retailers is we’re not selling to big box retailers currently at this time a year ago. We were selling to a ton of mom-and-pop small stores, like I said a boutique that if you and your wife were walking on the road, she would say, “I’m going to run in there,” and you’re going to say, “I’ll check my phone out here on the bench.”
Andrew: Right.
Erik: So those people are usually business owners that are active that are on Facebook. We can hone in on those people via Facebook, target them and start collecting these incoming leads.
Andrew: I see. But you still needed a handful of them. You needed a few hundred of those potential resellers before you could find others using the similar audience feature on Facebook, right?
Erik: Yeah. But I’m talking like when we started, we could get 100 people a day that were filling out our application to carry our products.
Andrew: How? Because they were looking for this?
Erik: They were looking for the product. The market demanded it at the time. These small —Julie’s Boutique did not have a rep calling on her that carried a large label stainless steel drinkware.
Andrew: I see. So what I’m getting from this is that if you find something that’s how that people are looking for already, then the world does start to come to you. You didn’t need to do — I don’t see a big blog on your site. I don’t see any content marketing, right?
Erik: No. The hardest part is basically shoot first and aim later. Don’t be too scared. Don’t try to make the product perfect. Don’t try to make the website perfect. Don’t worry that Shopify is not the absolute perfect backend for a wholesaler. Make it work and figure it out. It was more take action. We happened to be very lucky the timing was there.
Andrew: I see. It’s kind of like the fidget spinners. If you were there when they started to take off, you were going to do better than if you were trying to push a product to the world and explain why they needed it.
Erik: I’m sure. Those things sell at $4 or $5, but I’m sure the first person that sold them is probably on vacation now, but you and I are working.
Andrew: You know what? I read an article about the woman who invented it. She actually lost the patent on it because she couldn’t keep it up or something like that, and then she lost the whole business and she watched these two other companies basically run away with it and now everywhere you go you see fidget spinners.
Erik: Really?
Andrew: That’s the big lesson here, that if you can find this thing that’s hot just as it’s starting to take off, it’s much easier to grow your business.
Erik: Yeah. I still have this side business of selling products on Amazon.
Andrew: You’re still selling other products on Amazon?
Erik: Yeah, I still do that, the coffee grinders and stuff like that. But I guess the thought is don’t think you’re going to build a whole business out of it. You’ve got to plug and find that hot one. If you do, yeah, it’s crazy that people will come to you if the market needs a product.
Andrew: And what you did that was helpful is you collected email addresses of all the retailers that were interested, which then allowed you to go to Facebook and target not just them but people like them. I see. Then it becomes this virtual cycle, where you start advertising to people who are like them, some of them fill out your form, which then allows you to target them and gives you more insight into who else you might want to target and so on and so forth, right?
Erik: Yeah. Like I said, we definitely cut our teeth on the smaller retailers, the smaller boutique retailers the from a cash flow standpoint will pay up front before you ship products, don’t demand terms so I can provide cash flow to keep buying more product and stuff like that. Now we’ve moved on to the next phase.
Andrew: Still, dealing with the manufacturers is always an issue. In fact, you told our producer, “I quit my medical device sales company, the job that I had there. Got a shipment of 30,000 cups,” and then what happened with them?
Erik: So, as I was talking early in the interview, we said the hardest part was figuring on the powder coating, the fine tuning. We’d had third-party inspectors in our factories, but basically, we got 30,000 cups that just weren’t good. So definitely in the six figures from a loss standpoint, let alone then you’re standing there trying to figure out what are you going to do with these cups.
Andrew: What did you do with the cups?
Erik: We ended up paying more than the cup originally cost to get that powder coat off and get them re-powder coated in a US facility.
Andrew: Oh wow. I see. So you had them color them properly. They still got it wrong even though you hired inspectors, which I didn’t realize was a thing. So if we’re working with manufacturers in China, we should hire inspectors to check out the product before it gets shipped, right?
Erik: You should. But the word to the wise is you can pay an inspector $200 and somebody could walk in and say, “For $300, you can email Andrew and tell them you’re great.”
Andrew: I see. That’s what happened, you think.
Erik: I think. They were not my employees. I don’t know. The reports that I saw, the pictures are not the same as the cups that I received.
Andrew: I see. Okay.
Erik: It’s hard. But that was a — quality is the biggest thing, to try to sell a quality product.
Andrew: That’s when you started creating standard operating procedures that included quality assurance. What did you do to make sure that in the future your cups would look the way you wanted them to?
Erik: Obviously vetted some better third-party inspectors and create a process where we actually have three different inspections from three different companies throughout the process, two of them—
Andrew: I think I just lose your connection. Let’s give it a sec. Two of them did what?
Erik: So we will have one inspector go during the manufacturing process and then two separate ones when the cups are done so that we can kind of analyze those reports and make sure that we’re getting the same pictures and the same stuff. Then creating an SOP that says, “Here’s how long it takes to make a product. Here’s when we go in to inspect it.” Create a very detailed document that says, “This is a failure. This is good.”
The difference is we’re not selling electronics. You don’t hit a button and it’s either green or red. It’s more of a cosmetic and visual approval. You may see a cup and say, “Eric, that’s fine,” and I may have a critical eye that says, “No, it’s not.” So, especially from a language barrier standpoint, laying out enough pictures — unfortunately, we had enough pictures of bad cups that we could show you hundreds of pictures of what was bad.
So creating those documents that says this is good, this is bad, running them by our manufacturers to make sure our expectations aren’t too high because we’re still manufacturing a product, so there is some variance of defect. Yeah, just kind of working through all that that I had no clue how to do but you figure it out.
Andrew: All right. Let me take a moment to talk about Toptal. Actually, before the interview started, I said to you, “Look, I’m going to talk about Toptal and I’m going to talk about Acuity Scheduling, any issues with either of them?” And you gave me this look that made me think, “Uh-oh, did this guy have a bad experience with Toptal?” And then you said, “I had this experience with them and it wasn’t a good one.” What happened with Toptal for you?
Erik: So, after listening to your podcast, I had heard about Toptal. I got on there, checked it out. Basically, I was looking for somebody that would almost just say small updates versus me paying a retainer to some of these expensive, I was thinking of somebody that would work five hours a week, ten hours a week.
Andrew: They totally have someone who will work five or ten hours a week, especially if it’s an ongoing relationship. It’s a great way to find a developer. So you said to them, “I need someone to work that many hours a week,” to do what?
Erik: Just like small stuff. If we want to change pictures on our website, stuff that I could probably do but I don’t want to. They were very thorough, they emailed, emailed called until they got ahold of me and then basically explained that it was almost too small for them. Their developers are even a little more talented than that. It wasn’t a project. So it was nice of them to basically turn the business away. I thought I was very — I was willing to pay for somebody to do very immediate work.
Andrew: My sense before we started was that you were also feeling a little bit insulted or hurt by that, that you were too small for them or that your project was too small. Am I right?
Erik: Yeah, definitely that the project was too small. But in hindsight, it was.
Andrew: You ended up going to what, the expert place at Shopify? They have this list of experts you can hire who’s just focused on Shopify, right?
Erik: Yeah.
Andrew: What I’ve found is that Toptal has actually done that with many of my listeners. People will listen to an interview, hear me talk about Toptal and then go to them and say, “Hey, I have this project.” Sometimes it’s because it’s actually not a good fit for Toptal — and I should say top as in top of your head, tal as in talent — and sometimes Toptal will say, “Hey, it’s not good fit because you don’t have the resources to actually work with this developer,” or other times it will be like you. It’s not a project that we want to take on.”
They don’t want to update the photos on someone’s site. They don’t want to do basic stuff like that. These are really highly talented developers that are looking for challenging work. This is the kind of caliber of person that you can find at Google, at Facebook. I know it because Toptal really prides themselves on getting this top developer into their network.
So the benefit of working with Toptal is they’ve curated the list. They know who the best people are and because they’re not in Mountain View, they’re not living in San Francisco where the cost of living is expensive, sometimes they’re living in Eastern Europe. They’re living where they grew up. They’re living where they were born. You can hire them to work on your schedule and you don’t have to pay these expensive San Francisco prices.
So, if you guys are out there and you’re looking for developers, you can go to Toptal.com/Mixergy and do what many Mixergy interviewees and listeners have done — hire the best of the best developers. These are people who will really help shape the way that you build your company, specifically the software that your company is run on.
And if you’re a Mixergy listener, you’re going to get something that they don’t give anyone else. It’s 80 hours of Toptal developer credit when you pay for your first 80 hours and that’s in addition to a no risk trial period of up to two weeks. That’s top as in top of your head, tal as in talent, Toptal.com/Mixergy.
Let me see if they even do Shopify — yeah, they do. They have Shopify developers. I wanted to confirm it by going to their site. But they wouldn’t want to do some serious coding work for you on Shopify.
Erik: Yeah, a complete redesign or something like that. They don’t want to change pictures.
Andrew: I’ve got to tell you, Shopify has really come up in this world. I remember when Toby first bought ads from me and Harley, the two guys over at Shopify, their goal was to just tell the world, “You can build on our platform. You don’t have to use this software you have to figure out yourself and install yourself, and then even though it’s open source, it means you then have all these potential conflicts with plugins, we’ll make it all work.” And they had a real hard job trying to convince the world for a long time. Then boom, it took off.
Erik: Crazy. Yeah. There’s no doubt. It’s the easiest part of my business, which is a very nice thing to say.
Andrew: Yeah. You know who lost out on this is Magento. These guys created basically the WordPress of shopping. It was really taking off. People loved it if they were in ecommerce, but you had to install it yourself, you had to manage it yourself, and then they sold to eBay, where I think the project just basically died. And then even big companies like yours, you’re really at a level where you would have gone to Magento, you wouldn’t have wanted to be on somebody else’s platform. You would have wanted to own the software yourself. You’re just doing it on Shopify. You’re not going to Magento.
Erik: Yeah.
Andrew: What other tools do you use? What other tools that are not obvious to me as an outsider do you use to manage your store on Amazon to keep track of your inventory, to talk to your customers, any of it?
Erik: So we use a tool called SKULabs for our inventory. Basically, Shopify sends an order to SKULabs. SKULabs is where my warehouse staff gets an order, runs out, scans a barcode, ships the product, throws a shipping label, prints it out right away. It sits on the dock and UPS picks it up at 5:00. So, as I was telling you before the started, warehouse operations, when you really break them down are very simple. Obviously, my warehouse is a little different than an Amazon warehouse or something like that. But at the end of the day, it’s boxes in and boxes out.
So the beauty of Shopify is very simple. A SKU comes across. It sends over to SKULabs. We get a ding. When you have a Shopify site, my little two-year old daughter now, like if I have the volume on in my phone, you get the little ding on Shopify and my little two-year old daughter goes, “Pay.” So I know when that happens that in the warehouse, those guys are getting an order printed out and they’re going to pick an order. It’s a very streamlined system, honestly.
Other than that, we don’t use a ton of detail crazy software. Our product is physical consumer goods. We’ve got a CRM system that tracks from returns, because we give a lifetime warranty, so we have customers that have returns. Other than that, everything operates off of Google sheets, Google Docs, stuff that people can access from multiple locations.
Andrew: What do you do with Google Sheets to manage your products or to manage your customers?
Erik: Not as much managing customers and products. That’s more like internal documents. I handle all the finances and stuff like that. So that’s running reports that my partner can access at any time, that I can share with any of our employees. We’ve got a custom cup business where we’re starting to put certain logos on cups. So we have somebody that runs that department. So I can jump on at any time and see the leads that they’re working on.
Andrew: That’s also in Google docs?
Erik: All in Google docs, yeah.
Andrew: So if I were to order custom cups with Mixergy, maybe I needed a thousand of them, that would be in a Google doc.
Erik: It would be in a Google doc once you ordered it. Shopify is actually where we process the order. So we would send you an invoice through Shopify. What’s in Google docs is when I track where that order is from my customer so I know the person that handles that for me has sent your cups out to the person that’s going to print them, when they’re going to be printed, when they’re going to get back and when they’re going to get to your office.
Andrew: I see. Like project management in a Google doc.
Erik: Right.
Andrew: You’re doing it all manually, or is Zapier sending the data into the doc?
Erik: Zapier sends the data into the doc.
Andrew: I was their first customer. I should have been their first investor. Instead I introduced them to their first investor and then they ended up at Y Combinator and things just took off. What a great freaking product. You can’t run your business without Zapier.
Erik: No. It definitely works.
Andrew: What do you use for your CRM?
Erik: We don’t have a CRM.
Andrew: No CRM?
Erik: No.
Andrew: So, if someone buys form you, you don’t have anything to nurture them, to try to get them to come back, to buy again, none of that?
Erik: We’ve got an email sequence system through Shopify that basically is following up if a customer has an order within x-amount. From a retailer standpoint, usually a retailer should be ordering every 45 days. If they don’t buy it, then we have an email sequence that will start emailing them. If they don’t order in 60 days, I have somebody that calls them.
Andrew: I see. So Shopify manages all that for you.
Erik: Yeah.
Andrew: And Shopify will tell your people when to call up a customer?
Erik: Yeah.
Andrew: Interesting. I had no idea. They just ping them. How do they ping them, an email?
Erik: Yeah. It would be an email that says, “This customer hasn’t ordered in 60 days.”
Andrew: Unbelievable. All right. So the other thing I noticed was I went to your site, you started out as cups, as a cup company, right? I intentionally didn’t want to introduce you as the founder as SIC Cups because you’ve gone way beyond cups. How did you know what else to create? What’s your process for learning from your customers?
Erik: So there’s a ton of just asking our retailers, like I said earlier, at the base of our business, we’re starting to get a lot more into direct to consumer, but the base of our business is selling through these retailers. The nice thing about that is we can call one retailer and talk to them and they can describe 20 of their customers as opposed to us having to ping 20 individual customers.
So pretty much just customer feedback, asking our retailers what products do they — do they carry other products in stainless steel? What are they? They’re water bottles, they’re this. Why can’t we offer that if the same person is going to be buying these similar products? So then we partnered recently with Tervis, which is kind of a really big deal for us, but it’s going to stay in the drink line, but it at least opens us up into more customer data on what other products people want.
Now, I don’t know where the product development will go, but our goal isn’t really — maybe it will be backpacks, coolers and stuff like that, but our goal — we kind of built it on the idea of wherever you’re at that you’re getting sick, we want you to have our product with you. That could be literally laying in a hammock and having no kids within 30 miles. We hope you’re going to have either a water bottle or a cup or something like that. Or on a hiking trip in Croatia, then maybe we have a product that fits that mold.
Andrew: Yeah. I never heard of Tervis before you, frankly. Then I started Googling them. These guys have their own retail outlets. They make cups themselves, it seems like, right?
Erik: Yeah.
Andrew: The plastic tumblers that might have images of fish or the Golden State Warriors recently won the championship, so you can get a Golden State Warriors cup, I bet, from them. So they call you up and say, “We make plastic cups. We need somebody to do stainless steel right. You guys can do it. You can probably put all the logos we have access to,” because they have partnerships that give them access to these logos. They say you can put it on our cups. So you say, “Yeah.” They start asking you all these questions. You immediately start to think, “Why can’t they do this themselves?” Why can’t they do it themselves? Why do they need you?
Erik: Well, I think they bought me and my partner.
Andrew: You think they what?
Erik: I think they just bought into myself and my partner and our sales teams. But no, to be 100% honest —
Andrew: Why you guys?
Erik: Their biggest reason was they’ve always offered a lifetime warranty on their products. They feel good about it even though their product is made of plastic, if they make it the way they should, that thing should last forever. When they quickly saw stainless steel coming out of nowhere and they decide they need to do it, Tervis has made every product in the USA for 50+ years. So they started to look at making it in the U.S. and basically their purchase price would have been around $70 for a cup. So they said, “We can’t do that.”
Then if you only made products in America, it’s very hard to go source the product from China and say, “Made in the USA except for this one little product line.” They said, “Well, we’ve got to at least test it. Let’s see if our consumers are very adamant about they don’t want a product made in China.” The only way to do that is kind of through a co-partnership. The fact that they have some of their own stores, they have 50 stores, but they’re in about 11,000 retail locations. They can easily test in their 50 stores within weeks, right? You don’t have to call Bed Bath & Beyond and ask about this new product.
So we tested in their stores, and basically the customer really wanted that product. They were excited about that product. Then it was kind of like, “How do we do this partnership?” They know what they’re doing on this. They’ve been in 11,000 stores. They’ve been selling cups for 50 years.
So why don’t I become their private label, in a sense, where I’m going to make their stainless steel. I’m going to handle all the China production, all that piece and provide them a quality product that they can distribute into all their locations, they can put the Warriors logo, they can put all they want. We’re still fairly young in that, but by the end of the summer, it should be in about 11,000 stores and then you’ll see it at ever Bed Bath & Beyond and Bass Pro and all those stores.
Andrew: They could end up being a majority of your business at this point.
Erik: Yeah. There’s no doubt. From my standpoint, my question to them was, “What if you become 70% to 80% of my business?” There’s no doubt that I set out to build a business and to have all your chips in one bag is kind of a little bit nerve-wracking. It would not be a bad problem to have from a revenue standpoint, but if you looked to sell your business, it would definitely be devalued if 80% of it was one customer.
Andrew: Yeah. And frankly, then it gives them a lot of leverage with you, right?
Erik: No doubt.
Andrew: You know that they’re taking up a bunch of your business.
Erik: There’s no doubt. It’s a very fragile partnership at this point because we’re just new and young, but we’re both really excited about it. At the end of the day, if I can make a little bit of money off it and it’s worth it for them to not have to deal with that, the problem of the thousand-employee organization is if they decide to start sourcing from China, you know they’d probably have to have a 20-person team and all these — the process, it’s a heck of a lot easier to say, “Hey, Erik, we need x-amount of cups.”
Andrew: Instead of trying to figure out the whole thing themselves.
Erik: Right. There’s no doubt they may eventually do that, but the scale, it’s afforded us an opportunity to scale at a very quick pace over the next six to eight months.
Andrew: You were starting say earlier maybe we get into backpacks. I feel like you’re still trying to figure out what SIC is going to be. Are you someone that expands into backpacks or are you someone that expands into carafes, for example, right? That’s a tough thing. The only thing that I can see that gives me a sense of who you are is this — I guess your Instagram shows what you’re about.
I looked at one of your competitors. Your competitor is showing some rugged dude by himself. There’s nobody there except for him in the wilderness. He has a stainless steel not a cup, but a stainless steel gallon jug that he’s pouring into a stainless steel cup because he only has that and the bear that could potentially kill him tonight. Your approach is the opposite. We’re the guys that can be with you on your hammock. We’re the guys who your kids are going to enjoy drinking water from, right?
Erik: Yeah.
Andrew: It’s this atmosphere of fun — not fun, fun, coffee, wine, coffee type of thing.
Erik: Right. Our product is probably not going to make you have fun. It depends on what concoction is inside of it, but we’re just hoping to be there with you when you’re having fun, like that’s it. So it’s a very simple concept, but it’s totally true. I think it lends itself to a lot more demographics and marketing opportunities than saying the only time you’re going to drink it is if you climbed up a mountain and killed two elk and you’re trying to get them back down and you need one drink of whatever.
Andrew: Or pretend you do. There’s a big market of Americans who just want to pretend they do, right? That’s why I bought my SUV. I always wanted to go and drive over something, but I was living in L.A. There was nothing to drive over. I couldn’t even drive over the cars in front of me in traffic. I was just stuck there like everyone else. But I do see how you have this feeling. What I’m wondering is how did you get to that? You’re a fairly young company. How did you figure out what your tone was going to be, what your Instagram was going to be, what your product colors were going to be? How did you come up with your personality of the brand?
Erik: It definitely resembles — my partner and I are extremely similar people. We’re best friends outside of work. Now we talk to each other way more than we talk to our wives and other people like that.
So, probably, if you took a marketing class at any university, this is probably the first thing the professor would not want you to hear. But I felt like a lot of these in this industry, it was pinpoint, like you said, it was speaking to one person, this is it. Where honestly, maybe the mundane, maybe the mid-30s guy with two kids is not that cool, but there are a ton of them out there and a ton of them that are doing the things we’re doing and are out using these products the same way we are.
We kind of mimic what our personal life is. When we’re on vacation, we use this thing and it works. When you’re in Costa Rica and you’ve got a SIC Cup and you’re jumping off a waterfall, that’s pretty sick. It’s fun. Then you’ve got an iced cold drink. When my wife takes the kids to the park and leaves her cup in the South Florida heat for two hours and comes back and it has ice in it, that works, but we don’t need to show her killing an elk to do that.
Andrew: You know what, though? Your version of that is the craft cocktail. I’ve noticed for people in their 30s, the aspiration isn’t to go out there and be in the wilderness where a bear could potentially get you and to come back home having killed something, it’s more like, “I aspire to make the right cocktail.” Even on your Facebook page at the top is a guy who’s got the. . .
Erik: The shaker.
Andrew: Yeah, the shaker. The speakeasy, that’s what it is. It looks like he’s in a modern speakeasy. That’s one of the big things here in San Francisco, to go to a speakeasy, where you’re pretending you can get busted at any minute for having a cocktail. That’s the thing. They’re not making cocktails enough that they need the shaker. It is a nice touch that says, “Here’s what our brand is about. We’re about this kind of experience.”
Erik: Yeah. We don’t have it figured out yet. Like you said earlier, we don’t know exactly. It still is partially fluid. That’s kind of liberating.
Andrew: But there’s no process where you guys sat down and figured this out. I feel like when I interviewed the founder of Warby Parker, there’s a reason why he sold the monocle. He saw these old mustaches were coming back with his audience, people were starting to wear jeans that looked like they were from the ’20s. He wanted to have something that felt like that experience, so he created the monocle.
He didn’t need to sell any. Frankly, he’d have been better off if not a single person bought a monocle. He just wanted to show, “This is what our brand is about,” and this monocle is not going to make money. It’s going to carry our brand to everyone who looks at it. I feel like you guys know that. Was there any session where you did drugs and tried to figure out what your brand was about or maybe didn’t do drugs but did like a craft cocktail and tried to figure it out?
Erik: Literally, like I said, we talk about getting sick and what was the coolest thing you did in the last year? Did you have a drink there? What do you do when you’re out with your kids? Stuff like that. We’re just trying to put our product where people are having their fun. So we definitely are not in the phase of Warby Parker where we can afford to come out with products that don’t make money yet, but if we did, it would maybe make for a cool story.
But I think at this point, the cocktail shaker is similar in the sense that we used it, we’re literally making a cocktail, in an old shaker, you shake your hands, it gets ice cold, the whole thing sweats. We said, “We’ve got a cup that doesn’t sweat. Why don’t we make a shaker that was double-walled, vacuum insulated?” We have a design patent pending because there actually isn’t a patent on that.
You can literally shake a cocktail for 20 minutes and your hands will never get cold. That’s pretty sick. Let’s make these shakers. So people are digging it. Now we’re trying to feel like there may be a commercial play, like we’ve had a lot of bars buying them recently. Say you have a table. They’ll make the whole 30-ounce thing of shots and set it there and it will stay there for three hours ice cold and then you can pour your drinks as you wanted.
Andrew: Yeah, I get it.
Erik: There are some other commercial applications that definitely were not there when we were or weren’t doing drugs talking about where our business was going.
Andrew: And then your logo is on the shaker that they get at their speakeasy and it feels like something they can take home. The other image I love of you guys, there’s the speakeasy one that I love. Then there’s the one where there’s a woman, she’s pouring wine into her water bottle, which I see all the freaking time, of course.
Erik: Yeah, I know.
Andrew: We’re not the people who are going to carry flasks, though flasks are pretty cool, you might want to do that. But wine in a water bottle, I’ve seen that happen.
Erik: Definitely.
Andrew: Especially on the beach because they don’t allow that, they don’t allow wine.
Erik: I know, on the beach, on the boat, a lot of places you don’t want glass anymore. It’s just a little easier also to take your cap instead of pouring that cork out all the time.
Andrew: Yeah.
Erik: I’m not a wine drinker, per se, but it’s amazing how many people that do.
Andrew: All right. What’s the best part of having achieved this, leaving your job and finding building this up, what’s the best part of this whole thing?
Erik: I think the pinch me moments and the coolest part are like I’m heading out to go — you’re probably not a golfer, but I’m going to the US Open this afternoon, going to Wisconsin to watch some golf with a buddy of mine. I didn’t have to ask anybody if I could do that. I did check to make sure I could have my phone on the course.
Andrew: You can?
Erik: You can. Or honestly, I’ve had this aspiration of, “Can I kind of snowbird at this young age with young kids?” I live in South Florida. Can I get out of here in the summer and go to a lake in Minnesota or something like that for a couple months? Honestly, in the next year or two, I think I may be able to do that.
Andrew: Because you’re not in the warehouse anyway. You’re miles away from it.
Erik: Yeah. I don’t have a geographic boundary. I don’t have meetings I need to go to on a consistent basis. That’s the most liberating part of it. On the other side it’s when do you not work because if work is right there accessible, then it’s hard to not work. Then the ideas of when I had a buddy in Baltimore maybe last weekend and a friend in Alabama text me that they saw my cups at a store. That’s pretty cool, when you’re and about. Your product is somewhere you don’t know they’re at and they happened to stumble on it and they talk to the people working there. The people are like, “These cups are great,” describing our products. That’s pretty exciting.
Andrew: Yeah. It is exciting to actually create a physical product where you know that you’re experiencing it, people come over to your house they get to experience it, people randomly find it and you see it in their hands.
Erik: Yeah. Somewhere tonight people are going to be at a barbecue and hanging out and drinking out of a SIC cup and getting sick. That’s fun. I don’t know where they’re at, but I hope that I’m with them.
Andrew: Do you agree with me that this is a new thing. I don’t know that I would call it a trend, but it’s this quiet movement that’s happening of people like you who are starting out by just grabbing stuff off of China as is with a logo and then they’re starting to make their own and grow the business.
Erik: Yeah. I think it’s easier than ever. They’ve definitely — the physical products I think at first were daunting. Now I think it’s more accessible.
Andrew: It’s more challenging, frankly, in many ways, like inventory, bad production but there’s huge upside to it. I’m excited to see how far you’ve come in such a short period of time. If anyone wants to go check this out, just go to Amazon and type in SIC and one of the cool things you’ll see is he’s got competitors now, people buying up his keyword. So you type in SIC and some guy’s like really crappy version of SCI will come up for you.
Now that you’ve taught me that the top is supposed to be colored, I can see there’s one, for example, Simply Modern Mug here, they didn’t go all the way to the top or the bottom because I can see why it would be tough. Something has got to grab ahold of the cup while it’s being painted in the factory.
Erik: That’s right.
Andrew: Go check them out on Amazon, go check them out on their website. The website is SICCup, SIC is spelled S-I-C, SICCup.com. I’m grateful to you for doing this interview. Congratulations. To everyone else, thank you for listening.
Of course, don’t forget, the two sponsors are the company that will tell you go away if you’re not a good fit, which I actually am very proud of. It’s called Toptal, top as in top of your head, tal as in talent, Toptal.com. The second company is the one that I use anytime I want to talk to my customers or partners or anyone. If you want to really get something scheduled right, you need Acuity Scheduling. It will help you sell more by understanding and talking to your customers. Go to AcuityScheduling.com/Mixergy. Thanks, guys and thanks for subscribing. Bye, everyone.
