Andrew: Hey there Freedom Fighters. My name is Andrew Warner, I am the founder of mixergy.com, home of the ambitious upstart. And one of the reasons why I moved here to San Francisco is that I wanted to meet people.
So for example, the other week I was a party for the founder of the company that makes these water purifiers, they’re called Soma, and as we were enjoying the water and the conversation there, I met today’s guest. And I found her, found out about her story, and I said, “I’ve got to get you here to Mixergy,” and instantly took her email address so we can connect, and bring this interview for you.
In today’s interview we’re going to find out how a former Apple product manager built a business that reimagines strollers and car seats, and how she sold that business. Vivian Chiang is the founder of Orbit Baby, which designs the only infant to toddler car seat and stroller system. She launched the company in 2005, sold it six years later, she’s here to tell her story.
And one more thing before we start, I want to thank, as always, this gentleman right here, that is Scott Edward Walker. He is the entrepreneur’s lawyer, who also moved to San Francisco around the same time I did. I’ll tell you more about him later, but first Vivian welcome.
Vivian: Thank you, Andrew.
Andrew: Did you grow up here in San Francisco?
Vivian: No. I actually spent a lot of time just moving back and forth between the Bay area, Taipei, the east coast, I was in New Jersey for a little bit, and I was actually born in the Midwest. So, traveled a lot, went to, I think, counted like eight different elementary schools growing up, so a lot of moving around.
Andrew: I imagine that it’s hard enough for a child to get and make new friends in one school, but to have to move around so much, did it make it harder for you to meet friends, and to feel like you were at home?
Vivian: Yes. I mean I think after a while you get used to it. And part of the reason why I think it’s really good for kids to move around is you become super adaptable, and you know, living in Taipei for a total of eight years during my formative years, from when I was in pre-school, and then again from junior high through the first two years of high school, it really challenges you to kind of, you know, look beyond what you’re used to. And, you know, obviously being immersed in a different language, and a different culture is actually, makes you pretty adaptable as a person, and you know, you use a lot of those skills later on I life when you’re at work, or you’re starting a business.
Andrew: What do you mean? How did you adapt quickly when you were a child?
Vivian: Well, as an example, I was kind of thrown into a public school, a Chinese public school in fifth grade. I had no idea how to speak Chinese. I could say I want to eat, or I want to go to the bathroom, but I couldn’t read or write. And so it was really tough, you know, not knowing how to like even read the homework assignments. And the first day I think my mom packed me a peanut butter and jelly sandwich to school, and everybody else had like their bento boxes with rice, and meat, and different Chinese delicacies (??). And pretty soon I learned, like, this is not going to work. I can’t come to school anymore with a PB&J sandwich.
And so the next day I was like I’m not going to do this anymore. So, you learn that very quickly as, you know, a ten year old, like what works, and what doesn’t work. And it’s not because people bullied me or made fun of me, I was just like oh, you know, this is a new place and I have to learn how to adapt, and take on different challenges even if it means different lunch routines.
Andrew: So I’m looking at your LinkedIn profile here, and I see Apple, I see Cisco, I see is in pronounced Sanera Systems?
Andrew: Silicon Spice, Goldman Sachs, this doesn’t seem like the resume of a woman who would end up building her own company and being an entrepreneur that so many others admire. Were you an entrepreneur growing up?
Vivian: Yes, in many ways I was in a sense that I was really into engineering. So I really liked building things, and it sounds like such a cliche? But when I was a girl I would, I had a ton of Legos, and I just loved building. And it wasn’t, I never really wanted to follow the roles in the Lego books. You know, they have steps, right. If you get like that huge Star Wars spaceship it is like this thick, and you have to go through one to 80. I wasn’t really into that.
I was into building like, I remember one of my first pieces when I was six I built a little camera, and I had a little roll of paper where I drew actual faces of my family members, so I could pretend to take a picture of them, and then draw it onto the camera, and then rip it off and give them their picture.
So from pretty early on I was really into engineering, I was really into math and sciences, and so when I got to Stanford I studied electrical engineering as like natural kind of path, and also pre-med because I thought maybe I wanted something interesting there, but you know I think the fact that I was really interested then in math and sciences from early, really helped cultivate this sense of starting a business maybe in the valley.
Andrew: What about this, here’s something I noticed about you before we recorded. I hope it’s okay for me to bring up. It was a piece of paper taped to something behind you. I didn’t see the piece of paper. I didn’t see what it was taped to. You noticed it. That little detail most of my entrepreneurs who I interview, wouldn’t ever pay attention to. You did. You cared about the backdrop. Were you always someone who noticed details like that?
Vivian: Yeah. Little things just tend to kind of jump out at me. I have a pretty good sense of what is missing in the picture. If for example, if I look at a design. It could be a 2D design, I can kind of tell what looks a little bit off or what looks right. I have a pretty good ability to also remember faces or to match faces with people from the past or people who look like each other. I don’t know if that’s a good thing or a bad thing, but little things. It’s not necessarily a good thing sometimes as you can tell I was too detailed or obsessed. I like things to look neat.
Andrew: It does though help explain what your first website look like and I have a screen shot of it here on my computer and what your product looks like. I want to understand as we go through this story, how someone with such an attention to detail can ever launch a product because I feel for many people that would keep them from launching because that first version is never perfect.
It’s so tough to even get it good enough to someone’s standards when their standards is just so detailed oriented. Let’s just get a little more of your background before we jump into this business that was such a success story. One thing I’m curious about, what did you learn working at Apple that you then brought into your business? What did you learn at Apple?
Vivian: Speaking of attention to detail, I think anybody who works at Apple in marketing would say that’s the number one skill or talent you have to have is extreme attention to detail. It’s all in the little minutia of pixels sometimes or moving things just a little to the left or a little to the right. It sounds trivial, like, why would that matter, but I think that’ s why they’ve been so successful in creating such beautiful products.
Andrew: Do you have an example of that that you experienced at Apple?
Vivian: Yeah. As an example, I worked on the Dot Mat team, that was before it became iCloud, obviously that was a long time ago. For example, the packaging. I remember being in these packaging reviews where nothing was good enough. We would go through iteration and iteration. You would look at these designs and you were like this is so beautiful, why can’t this get approved?
At the end of the day, a lot of it was asking the right questions like, why, would you want, a silly example, why would you want a music note there? What is the purpose of that? Why would you want a tree there? What is the functional story behind it as well as the benefits that the consumer actually derives? I think Apple has just been effective at conveying that to the end consumer.
Andrew: I see. If there is no end benefit to the end user of having the music note on the packaging then maybe you just get rid of it.
Vivian: Yeah. Yeah.
Andrew: I see. The reason you started this business was?
Vivian: Oh, I’m sorry. You were going…
Andrew: You know what? Actually, I was going to say the reason and then I said wait, you’re not here to read from your research. You’re here to give Vivian an opportunity to tell her story, so halfway through that question I said, “was” question mark. What was the reason?
Vivian: Yeah. The reason was because I really wanted to create something from nothing, to build something from scratch. I’ve been at Apple for just a little bit and I think it’s really, really, cool to work for a company that has such great marketing, great people, great talent, and great products. I think at that time I was just ready to see if I could do it on my own. There is just nothing quite the same as going out and creating something from scratch.
We didn’t have anything. We didn’t have product. We didn’t have a website. We didn’t have a single piece of collateral. We didn’t have a logo. We didn’t even have a name really. That’s what really intrigued me. I had graduated from the Stanford Business School just a year prior so I had told myself I was going back to Business School so that I could actually have the skills to one day start a business. So I thought, now is a good time, you know. And, you know, it’s been a very, very rewarding experience. That’s the most compelling reason. You feel extremely gratified by what you do.
Andrew: So, then, if you’re out there looking for an idea, how do you find the right one? Where do you even begin to look?
Vivian: Yeah. So, that’s a really good question, you know. At the time when I was in Business School, we had looked at this space. So, basically done a study of premium car seats and strollers, whether or not there’s actually market for that. And, this was back in 2003, and one of our competitors had just recently come out. And, that market wasn’t as [??] as it today.
If you’re a new parent expecting, and if you were to go and look for a premium stroller, or car seat bench, there is actually quite a few now. But ten years ago, there wasn’t. And so, we really looked at that space and, we want to see if people were willing to pay a premium for their child’s safety, right? And, through a couple of research studies in Business School, we decided that people were willing to.
Andrew: How? How did you research that?
Vivian: We did a lot of in-depth interviews. We also did some focus groups that, in my opinion, like, in-depth interviews are actually much more accepted, because you just don’t have group bias. And then, we also did, like, consumer, just non face-to-face interviews, as well, and we tested it with [??] Price [??] and features versus benefits, and like I said, at that time, we didn’t really have a certain product, but we had the idea around the product.
But the idea was also from the fact that, we had the time, my husband and I didn’t have any children, but we had eight nephews and nieces, and they were all under the age of six, at that time. And they would come in from all over around the world and visit us, and we would have to install these car seats. And we realized that car seats are really hard to install. And then, if you talk to any pediatrician, you know, they will tell you that four out of five car seats are installed incorrectly, even today.
Andrew: And, what does it mean, that its installed incorrectly? It just doesn’t look right? It doesn’t feel comfortable for the child, or are we talking about a safety danger?
Vivian: It’s a safety danger. So, basically for it to be installed correctly, it shouldn’t move an inch in any direction. And I think, frequently, a lot of car seats are installed so that, you know, let’s say you were to take sharp turn, it could possible move more than an inch. And, so what we also found, was a lot of new parents in the Bay area would go to Stanford, for example, to the Lucile Packard Children’s Hospital, and get it checked by the safety experts who had done so many installations, they could help you install your car seat. Or, they would sign up at a fire station, for example, in Redwood City, where there were wait lists, too.
So, we just thought it was so crazy that you would have to go and visit a so-called expert, and usually, [??] has to be a strong guy, because he can actually put the weight on the car seat to get it installed correctly. And, that a lot of the product manuals will actually say, put your knee on it, to tighten the car seat. And, you know, my knee could be, not as strong as yours, or as my husband.
Vivian: I just thought it was really, really, an archaic way of, you know, bringing this beautiful, precious, child that you just had, home, right? You need a car seat to leave the hospital, by law.
Andrew: Let me just understand one thing. You said, that in-depth interviews work best because there’s no group bias, but I’m kind of overwhelmed and intimidated by that. Because I feel like, she comes from Apple. She’s attention to detail. She had Business School students with her. It just seems like so much. Is it as big as I’m making it out to be, or are we talking about something simpler, that I have in my mind?
Vivian: Oh, no. It’s something simpler than I think you have in mind. As an example, when we do tests that she will bring the product over to your house, and we’ll watch you use it. So, for example, the first car seat that we had prototype, we brought over and we don’t say anything. We just observe to see what you were doing. Say, very little, and then we take, you know, back then it was just notes, now we video you. So, it’s not really an interview, it’s more of just like, behaviorally, we want to see how you use the product and what you like, or you don’t like, about it.
Andrew: And where do you find these people? Are they friends? Are you looking on Craigslist?
Vivian: Yeah. A lot of it is friends, or friends of friends. So, you know, we try our best to [??] people from, you know, different demographics, or different usage scenarios. There’s some people who don’t really rely heavily on driving. There’s other people who stroll every day to the store or go to the park or spend three, four hours in their stroller. We try to pick and choose.
Andrew: Okay. After all this research at what point did you know, it’s time for us to create a product?
Vivian: I think we, after the projects at business school, we recognized that there was a market for it. We didn’t want to play in that middle tier space. We knew we wanted to launch something premium. We had really tested whether or not people would buy a 900-dollar stroller.
Andrew: How do you test that?
Vivian: That was so long ago, I can’t remember the specific questions we asked, but I think the better answers to that is more, we really tested that by going to our first trade show. We went to our first trade show that was in May of 2005. We had two prototypes and we had an offer form.
We put together a really beautiful booth and people actually wrote down their credit card numbers and were willing to pay $900 for a system. In fact, we actually created a show special, if you bought $4,000 you got free shipping and people were willing to pay $4,000 worth of these strollers. We actually…
Andrew: For one stroller?
Vivian: No. No. No. That was a volume discount.
Andrew: Because they were buying it for their stores?
Vivian: For their stores.
Andrew: I see. You were testing to see, will stores buy this and put it in their shops for their customers to buy and that’s what you proved with your prototype and your appearance at this trade show?
Vivian: Yes, exactly. I should clarify. This was not a consumer show. This was a wholesale trade show. For a test that was even more effective because unless a consumer gives you there credit card for $900 and you have to actually ship it and everything, it’s actually really hard to gauge. You don’t really know for sure that they’re going to buy it, but we had enough retailers throughout the country who came to us and said, we really love it.
It works really great and we’ve been wanting some innovation in the car seat category. It was from there that we said, yeah, let’s do this. We hadn’t manufactured that yet. Remember this was before the Kick Starter days as well. We all remember those days.
Andrew: It was just a prototype and it was sales to resellers. Let’s understand then how you created a prototype because physical products aren’t like software where you can code it over the weekend, put it out online and see if anyone bites. You have to really spend some time and attention to even create the prototype and then of course, manufacturing as we’ll find out later is a challenge onto itself. Let’s understand how you went from idea to something tangible and visual enough for other people to understand it.
Vivian: We used a couple of prototyping houses in the Bay area and also in Hong Kong to help put together a prototype. We also used a small manufacturer’s, small factory over in China as well to help put together the first couple. I would say that was just a lot of back and forth. What we showed at the show was pretty much like what you see today. It was pretty close, but some of it was packed together, glued together and functionally it worked, but it wasn’t very crisp.
Andrew: Can you even sketch this out? Did you have experience enough to be able to sketch this out and to give clear instructions to the manufacturer?
Vivian: I wasn’t the sketcher of this. My background is more in sales and marketing, but my partner, he was able to do that and he comes from a product design background.
Andrew: Who’s your partner?
Vivian: My partner was my husband and then we also worked with another couple.
Andrew: Okay. What’s your husband’s background?
Vivian: He was a product design major at Stanford.
Andrew: I see. Okay. What’s the other couple, what’s their role in the business?
Vivian: The other gentleman, was also a product design and special mechanical engineer who studied at Stanford as well and then his wife, her background, was more in accounting, finance, and HR.
Andrew: Why bring on not just another partner, which I understand one partner, but another couple? Why not just run it you and your husband?
Vivian: I think there’ s always [??]with starting a business with one person, two people, three, four. I think that as a start, the four of us actually had all the skills and the competencies to be able to know who to hire and how to grow the team. And then it was also good in the sense that we all kind of kept all that expertise among the four of us. So we kind of were in like this little nuclear team that enabled us to be pretty nimble, and do a lot without actually hiring on a lot of people from the start.
Andrew: What’s the place where you had your prototype manufactured? I want to give out some names to the audience so if anyone’s out there trying to build a physical product, they can refer to the people you’ve used.
Vivian: It’s in China, and I, actually, the first prototype factory, I actually don’t remember. We actually stopped using them.
Andrew: Is that the company? Good, then I’m glad we’re not mentioning their name, because is that the company where you had some trouble?
Vivian: No, no. That was way back before. So they really helped us get the prototype together. And then it was kind of a test to see if we wanted them to be our manufacturers. But I don’t think they had the right skill set we were looking for.
Vivian: How would someone even find a factory like that?
Vivian: You know, a lot of people asked us, how did you find your factory? It was a lot of Google. It was a lot of research. You pretty much can find almost anything nowadays if you just look hard enough.
Vivian: And then, after that, obviously, you have to net it out. Go for a visit and check their references. But that’s how we found ours.
Andrew: Okay. So you then found it. There was an issue with one of your manufacturers, though. Right?
Andrew: What happened?
Vivian: It was this first one that they just didn’t have the skills to actually, ultimately build the product. And you can see that from pretty early on. I think our product, if you look at it, it’s very, very complex. There are a lot of different pieces, a lot of sub-vendors you have to manage. And we have really high expectations on all the materials that we use. So unless you have a pretty wide network and a wide reach for getting to all those sub-vendors, you can tell pretty quickly whether or not they’re going to be capable to do the job.
Andrew: I’m looking at a photo of, actually several photos of your products. Anyone who’s listening or reading this transcript or even watching it can just go to orbitbaby.com to see it. But could you describe what that first version looked like so that we get an understanding of what you did that no one else had done before?
Vivian: Yeah, sure. So what we’re really known for is we have a car seat, a stroller, that’s designed to grow with your child and your family. So what we have is a ring, a circular interface that’s built in onto three of our bases. So the first base being the stroller. We have the second base which is the car seat base, which I had mentioned earlier. And then third being a circular interface on the rocker. And it’s not unlike, kind of in the valley, a lot of people talk about being able to scale it.
Like when your laptop is out of memory, you buy more. You know. Or if you want to basically add something to a server rack, you don’t just throw out your whole server rack. You can actually just go in there and add something. So with the Orbit, the idea was to build this platform. What it was is our smart hubster filler interface. And you can dock any of our four seats on any of these three base seats.
And so you can picture that there’s an infant car seat for your baby for when they’re first born. And then when they get older, to that one, you can switch it out to a toddler car seat which takes them all the way up to 65 pounds, which is a seven-year-old. But they won’t want to ride it that anymore when they’re seven, cause we know that.
And then you can also use, on the same stroller, the same circular interface, a stroller seat or a bassinet. So the whole idea is we build these four seats. You have these three bases. You can kind of mix and match and swap them around however you like. And you only have to learn the system once. So, as a parent, you don’t have to learn a new stroller, how to fold it, how to unfold it. You learn it once and that stroller is really designed to keep you going all the way up until you have your second or your third child.
So along the way, we’ve introduced a second smart hub interface. So another ring that you can plug into the back of your existing Orbit to transform it into a two-child solution. Or we have have sidekick stroller boards that basically tacks onto the rear wheels of your stroller so you can actually use it for three kids.
Andrew: I can see. There’s a child standing on one of them in one of your photos. You told April Dykeman here on the Mixergy team you, from the beginning, were thinking of a platform. The way entrepreneurs in software space think of not just one product, but a platform that other products can build on top of it. I understand the reason for consumer. What about for you as a business? Why a platform? Why is that helpful?
Vivian: Yeah. If you can figure out how to build a platform for consumers, then all of a sudden you’ve increased the lifetime value of your customer. Right. So our hope is that if you order the baby starter kit which is the infant car seat base so they can get home from the hospital, stroller base, that’s great. That’s a purchase that we believe is going to be awesome for you for the first six to nine months of your baby’s life.
But if you decide to come back and buy the stroller seat, that’s awesome too, because then you’ve made another sale. Or the toddler car seat or the bassinet or the rocker. And if you have another child in two years, then you can also buy the sidekick or the double helix attachment.
Andrew: I see. So you get to keep this customer as her child grows and as he has more children. You don’t just have this quick interaction and then they’re done.
Vivian: Exactly. Yeah. And our products are designed so that it is durable so you can use it for two or three children. And we want to make sure that you’re happy with the products, and so we designed them so that they’re very, very easy to understand and to use. And again, it’s all about the learning curve. Right. Like after you’ve had experience with the Orbit, there’s really no reason for you to have to relearn another assembly when you’re expecting your second child.
Andrew: Right. The first, first prototype was wood and hammered together. Did you guys build that at home?
Vivian: Pretty much, in the garage.
Andrew: I see. Was there any hesitation? As I said earlier, you have the deep attention to details. Did that keep you from launching? Did it keep you from showing what you’ve created?
Vivian: You know, there’s always this fear that you’re going to come out with something, and people aren’t going to love it or aren’t going to buy it, or are going to criticize it. When we first came it, a lot of people said, oh, your stroller looks like it’s from outer space. It’s too weird for me. And I think you just get used to it. Well, it’s not for you or there’s a lot of, for example, I would never spend a thousand dollars on a stroller. How dare you sell a thousand dollar stroller. You have to recognize that not all products are for everyone, and you kind of just develop a thick skin.
Andrew: How? Before you have proof that your idea works, how do get comfortable with these things that people say about your idea? And worse, these things that you in your own head say about your idea? How do you get over them?
Vivian: That’s a really good question. I think you just have to really have faith that you designed a really compelling product. And when we launched, there was nothing like that out there. There still isn’t. We have a proprietary SmartHub interface. All these seats dock on and off. And nobody has really come out with anything lighter than that even ten years later.
And I think that you just have to really believe that you have built a really, really compelling product. You know we have over ten patents. Not patent pending, actual patents that have come out of this. We think that we were really on to something and that we really did create an awesome product. It’s just a lot of faith, confidence. Thick skin.
Andrew: Let’s see what else. You know what, actually, let me do a plug here for my sponsor. You know what I should have done earlier. Whoa, I just spilled this glass of water all over myself. Here. I just pulled it over and it all spilled, but it’s fine. I was going to say, I had this mug made for Scott Walker. I should have been using this throughout the interview, and I will in the future.
But I’ll be more careful with it when I have water in it. So that people can see throughout the interview who my sponsor is. But it’s a little shiny, isn’t it? Here we go. Scott Edward Walker. He is a local now. He is now here in San Francisco, but he is the start up’s lawyer. And the reason that I say that is because most people go to, at first, to any old lawyer.
Maybe they go to their father’s lawyer, the way I did. Or a friend’s lawyer who doesn’t understand the software industry, doesn’t understand how funding works here, doesn’t understand how sales work here. And then they discover it later on. Other people, they’re a few, who go to the top lawyers here in San Francisco, the ones with the big names, who we all know have an ulterior motive.
They want a piece of your business. They want to get rich off of shares, instead of get you to build a successful business. Where’s my phone? Oh, good. It’s in the other pocket. Make sure that I didn’t let it . . . Scott is reasonably priced and he gets the start up world and that’s why I recommend the guy on my mug and the guy on this site and the guy that all these people like. Walker Corporate Law. Do you know him? I saw you smiling as I said his name or were you just smiling at the fact that I wet myself here with this mug?
Vivian: No, I don’t know him.
Andrew: Okay. How did you incorporate or at what point did you incorporate?
Vivian: We incorporated in ’04. Yeah.
Andrew: Why did you wait so long to incorporate? I usually do it as soon as I have an idea because I want protection.
Vivian: It wasn’t too long. I mean, it was maybe only like six months to a year after the post. Yeah.
Andrew: Oh, I see. Okay, I thought you said four years afterwards.
Vivian: Oh, no, no, no, no.
Vivian: Yes. (?) a year.
Andrew: We heard how you got your first customers and validation. How did you get the next set of customers?
Vivian: It was really through PR I would say. We use PR pretty heavily to get consumers so when I say consumer I mean the end customer not the wholesaler to buy so we drew a lot of pull-in from that and what I mean by that is we really leveraged celebrities to kind of help us spread the word. And this was not, you know, a new concept. But you do have to remember this was back in (?) six, right?
So this was before full on – Facebook was around but before really social media. There wasn’t really a lot of people using social media back then and we had to kind of rely on just innovative PR to get our product out into the world.
We did have one of our competitors who, you know, their stroller was featured on Sex in the City and it had been used by celebrities and so we also just tried to get our product in the hands of celebrities and that-
Andrew: How did you do this? Did you hire a PR agency?
Vivian: We didn’t hire a PR agency. We hired a PR, like a contractor. And she had some pretty good connections and helped us, you know, kind of get into the right hands.
Andrew: How did you find her?
Vivian: Just through research.
Andrew: And one person was able to get you into, let me see, there’s a ton of-
Vivian: Not all those celebrities. It was really through word of mouth too. You know, after one celebrity was really interested in the product they would tell their fans and then their fans-
Andrew: So she would get it into the hands of one celebrity and then that would spread it.
Vivian: Yeah, I mean, of course, like the more the merrier but I would say a lot of the celebrities that we have wasn’t because we approached them. It was because they heard about it from a friend and they actually, their publicist approached us and asked if we could get them a product.
Andrew: Jessica Alba, Nicole Kidman, Heidi Klum.
Vivian: Yeah, yeah.
Andrew: These are three of the celebrities who use your stroller.
Vivian: Yeah, yeah. It’s really exciting when- I think Heidi Klum was one of the first ones. We were very excited when she started using it and maybe my-
Andrew: How do you get it into her hands?
Vivian: So it’s usually their publicist will contact our PR manager and then we’ll usually ask them what product they want and what color they want just so we know that they’re pretty serious, like they’ve done some research. So if they said like, “Purple,” we would know, oh, you know, they don’t- because we don’t have purple, you know?
Andrew: Got you.
Vivian: And so usually we would want to make sure that they truly were passionate about-
Andrew: But they contact you and they say, “We can- Heidi Klum,” or maybe it’s not Heidi Klum. Let’s pick another celebrity. “Mr. Bigshot Andrew Warner would like a stroller.” That’s the way they say it? That seems pretty, pretty forward.
Vivian: No, it totally depends. It just depends on the celebrity, and in some cases we will be proactive and we will contact them, their publicist to see-
Andrew: Okay, and you’ll say, “I heard that Andrew Warner gave birth yesterday to a daughter. I think he’s going to love this stroller that we have for him. Can we send it to him?” And then you’d ask the color and then you’d ship it out.
Vivian: Yeah, something like that, but usually they would do it before you gave birth.
Andrew: I see.
Vivian: So you have it.
Andrew: “I hear Andrew has a bump.”
Vivian: Yeah. “I heard Andrew was pregnant, is expecting. If you, you know, I’m not sure if he already has a car seat or stroller yet. If he’s interested we would be happy to [give it to him].”
Andrew: You send it out for free with the hope that if the baby is photographed or if the stroller is photographed that people will understand that this is your product.
Vivian: Yeah, yeah.
Andrew: I see. There’s not a quick pro-quo. If we send it out, we want to use your photo or your name on our website.
Vivian: No, no. We don’t do that. We don’t do that.
Andrew: What about the magazines? How did you get in there?
Vivian: Well, a lot of the magazines we work with the editor so they’re doing the stroller roundup or a review, then we try and make sure that they will review our stroller and our car seat. So that’s more like traditional PR where you work closely with editors who are writing reviews. And you kind of figure out which ones are influential and which ones are interested in our product.
Andrew: I’m looking here at your website, the way it looked, let me see, over the years. I see it in 2005, 2006 and so on. Usually, I do this because I want to see what did that first version look like? How different was the messaging from today? It looks almost exactly the same. If I showed all of these images to my audience right now, they couldn’t tell which is the new and which is the old, except for the copyright on the bottom.
Vivian: Yeah. We were pretty consistent from the beginning.
Vivian: With the look and feel. And we’ve only really had two models. Generation 1 and G2. And we’ve changed things slightly, but for the most part, an Orbit’s an Orbit, if you were to spot an Orbit on the street. I can tell right away and probably a lot of designers can tell right away that they’re different. But we’ve pretty much stayed true to how we wanted the product to look from the beginning. And functionally as well, as the product has aged, it’s also functionally very similar.
Andrew: That first version from 2005 says, welcome to Orbit Baby. Our mission is to combine sophisticated design with smart function to make world class solutions for taking your baby on the go sensibly, easily, safely, and always with style. And here’s the part that I wanted to make sure to read. We’re up in Orbit now. Please check back for our new site in the winter. So you weren’t selling from your site at that point. You were basically going through retailers. Why didn’t you sell from your site or take pre-orders?
Vivian: We recognized pretty early on that our product is a very high touch product. So basically, you really need to go into the store and handle it and touch it, and figure out how it works before you want to buy it. Or, in many cases, basically we sell on to word of mouth. Right. So if your friend has it and you push it around and you figure out how to undock and dock the car seat on, it’s really very easy.
But with such a high price item, most people do want to go to a store. I think the baby and the child market is a little bit different as well, because most people still register in the store, so they have a baby registry, and kind of like to go . . .
Andrew: I see.
Vivian: . . . and check off the list of all the stuff they need. It’s kind of like you’re preparing to have this new human being in your life. So people will make the effort versus going online. Of course, a lot of people do do that, but I would say the majority of them, even if they have an online registry, they probably went into a store at one point or the other to check out that crib that they’ve always wanted or the high chair. Or products that they didn’t even know existed. Before we had kids, we didn’t even know that they had these kinds of . . .
Vivian: . . . high chairs.
Andrew: Yeah. Who notices it? A lot of this stuff, so far, seems expensive. Where did you get your funding?
Vivian: We used angel investors. So we had angel funding from the family.
Andrew: How’d you find the angels who weren’t family?
Vivian: Just friends of friends.
Andrew: Okay. How much money did you raise?
Vivian: I don’t know if I can share that.
Andrew: Okay. Are we talking over a million or under a million?
Vivian: Over. Over.
Andrew: Over a million. Okay. Here’s another thing that I see. You eventually did start, I think, to sell from your site. Right?
Vivian: Yeah. We did. Eventually. Yeah.
Andrew: Ten percent of your traffic today comes from paid ads. Was that something you did early on, or when did you start with that?
Vivian: We didn’t actually really start with digital advocate until really recently. So I’d say for the last year and a half or so is when we started doing that.
Andrew: Okay. So we’re talking after the sale.
Vivian: Yeah. Yeah.
Andrew: Okay. Here’s another thing that stands out in my research. I hired a researcher to look up your background, to do some research, and make sure I’m prepared. I don’t like these interviewers who walk in thinking, I don’t know anything. The audience doesn’t know anything. Well, yippee. We’ll all learn together. No, do some research to find out where the questions are, and then you ask them.
Here’s another interesting thing that my research turned up. You get a substantial amount of your social media traffic from YouTube. Why do you think YouTube is such a good source of traffic to you, not just use on their site?
Vivian: Yeah. I think it’s two reasons. One is that we actually have quite a few bloggers or mom/dad experts that have reviewed our products. So they’ve actually videotaped how they use the car seat or the stroller with them, which I think is really helpful if you’re an expectant mom or dad. Because you have no idea what a car seat even looks like, or how it even works, or what’s different between the infant and convertible and toddler and rear-facing, fore-facing. It’s very, very daunting.
So I think a lot of people will turn to YouTube and start watching these reviews. We’re just very blessed to have had these people put them on for us, because they really love our products. And then the second thing is we also have quite a few YouTube videos on installation of the car seat. So how an Orbit is installed. We also have videos, obviously, when we will be launching the product, and we’ll also have a video that. So there are two avenues that basically people can get to learn more about the Orbit Baby through . . .
Andrew: Why? Why do customers who have busy lives because of their babies, why do they choose videos? I mean how did you get them to do it? Did it just happen?
Vivian: It depends on the blogger/person who did it. But a lot of times, they will show up at the industry trade show that I spoke about earlier, and they will just go around and check out all the new products.
Andrew: I see.
Vivian: And they’ll do a video and one of the ones that I think it’s done by DadLabs that I’m in that gives a full demo, that one has a whole bunch of views. And they were just at the show going around checking out all these new products. And they just really liked the products. And, of course, they do it so they post on their site, and then they can get more views and get more people interested. And then the other avenue is it seems there a lot of mommy bloggers out there as well that just they do it because it’s fun and they like it. And also they can get more increased views that way.
Andrew: Did you do anything to cultivate them as your PR freelancer who you hired? Did she have a whole strategy for staying in touch with mommy bloggers because they are so active and so popular?
Vivian: Yeah. We definitely reach out to a lot of mommy bloggers that do have quite a bit of influence. There’s also conferences and stuff that we’ll go to, as well, to meet them. So I think almost all baby manufacturers kind of have to do that now.
Andrew: Here’s an interesting thing that I see. Craigslist sends you a lot of traffic. One of your biggest sources of traffic. Why Craigslist? I mean I have a hunch, but I should ask you.
Vivian: I used to blog before selling old Orbits on Craigslist.
Andrew: That’s what I thought.
Andrew: So people will go to Craigslist. Here, I’m looking at one right now from Craigslist, New York. Orbit Baby Double Helix stroller with car seat and bassinet rocker for $1,250. And then often they’ll say, similar to, and then they’ll link over to your site where people can see it for themselves, and then maybe even buy directly from you.
Vivian: Yeah. Well, I think the greatest thing is I’ve heard that the resale value of Orbits is still pretty high on Craigslist. And so, I think, clearly, if you are done having kids, there’s no reason to have that sitting in your garage. So I think a lot of Orbits get sold on Craigslist.
Andrew: Does that eat into your business?
Vivian: No, I don’t think so. I think the number that gets sold is such a small percentage of the total.
Andrew: I see. And then do people end up coming from these ‘for sale’ ads to your site and buying?
Vivian: That I don’t know. I don’t know what the conversion is like. Yeah.
Andrew: Okay. I might be a little too obsessed with this traffic. I should put it away and come back to our conversation here. Are you obsessed with data? I see some entrepreneurs, they are so obsessed with their KISSmetrics data, with their onsite activity. You don’t seem to be obsessed with that.
Vivian: You know. I am obsessed with it. I think it’s just a matter of having the time to be obsessed with it.
Vivian: There’s a lot of stuff that needs to get done as a small business, so it’s just a matter of prioritizing it. But I’m obsessed with the data. I would want to know exactly how much time people are spending [??] rates, etc.
Andrew: Before your sale, what kind of revenues were you guys doing?
Vivian: I don’t know if I can say.
Andrew: All right. Here’s what my researcher found. Tell me if this is crazy of us or not. This is way too big a band. Over $10 million, under $50 million.
Vivian: Yeah, that’s . . .
Andrew: It’s a big enough band that we can talk about that publicly without revealing anything too secret, but you can say, “Hey, Andrew your researcher is not nuts.”
Andrew: Okay. What did you sell the business for, how much?
Vivian: Can I talk about that? Do you have that number?
Andrew: I do not. I do not. My researcher let me down. We did what we could, but we couldn’t come up with that number.
Vivian: Yeah, just in case I had better not say just in case I get in trouble.
Andrew: How did life change after the sale then? Let’s get to the personal stuff. What were you able to do after your sale that you couldn’t do before?
Vivian: I don’t think my life honestly changed that much personally. I do think we still up until very recently, I was still at Orbit and my husband is still there as well. We still wanted to keep creating a great product and create market and create great products. We stick around even after the sale. We also wanted to make sure that the team was still happy. We didn’t just, oh, see you, where out of here, we really wanted to stick around for a little bit.
Andrew: Did you get rich enough to afford a butler?
Andrew: Oh, okay. Actually, I come back to the researcher. I do have the acquisition price and this comes directly from PR Newswire, so we should have had this before, 17.5 million dollars. Apparently, this is “Compass Diversified Holdings, an owner of middle market businesses, announced today that its subsidiary, Ergo Baby Carrier, Inc. has acquired Orbit Baby, Inc. for a purchase price of $17.5 million.” So there, it is public. I’m surprised actually that they would make it public.
Vivian: Yeah, I think we were a little surprised by that too.
Andrew: Does it feel weird for people to know?
Vivian: A little bit. Yes.
Andrew: Is it going to be hard for us to be friends after I know because now I suddenly pried a little too much. We should…
Andrew: No? Why did you sell? Let’s go back to the business reasons. Why make that decision when things were going so well?
Vivian: I think you know, we’d been running the companies for a while by the time we thought about selling. I think we were just in I think our seventh year. Yeah, our seventh year, which is a long time to be doing something and we just felt like the timing was right. We had been approached by a couple of different companies; and I think there’s never a good time, there’s never a bad time. I think if you look at it numbers, seven years is a long time. We were ready to sell it and hopefully, go and do something else.
Andrew: It sounds like you have something in mind. I think when we talked over, it wasn’t even drinks, it was over tea.
Vivian: Yeah, it was tea.
Andrew: What was the name of that place? I keep forgetting.
Vivian: It’s called Samaa Bar.
Andrew: That’s right Samaa Bar. They have a few different locations and Olivia, my wife, loves it and I do too. It sounds like you have something in mind. Are you ready to talk about what you’re going to do next?
Vivian: Not quite yet.
Andrew: It makes it a little tougher that I don’t edit because now you just can’t be free and figure it out later on. Right?
Vivian: Exactly. Exactly. Will see. I’m sure you’ll hear about it. I’ll let you know when.
Andrew: I would love to help with it if I can. I feel like you’re a winner. I want to bank on a winner.
Vivian: Thank you.
Andrew: Let me see what else we have to go. Oh, here one more thing, boy, this press release is saying everything. It might as well have included your shoe size and hat size in it. “With this acquisition, Ergo Baby would have reported pro forma combined revenue of approximately $53 million or the twelve months ended September 30, 2011.”
So our researcher is a little bit under with that ballpark. The price was funded with $15 million in cash $2.5 million in Ergo Baby equity. No, actually I take it back that’s Ergo Baby, not your business that did that revenue. That seems like a really interesting company too, Ergo Baby.
Vivian: Yeah and they make stuff for baby carriers.
Andrew: That men and woman carry right in front and they’re more comfortable than others, right?
Vivian: Yeah. Yeah, they’re extremely comfortable and you can wear it in the front, wear it in the back. I have a couple myself and used it with my third. Yeah, It’s a really, really, ergonomically designed carrier. It’s designed so that it relieves back pain and you don’t even notice that you’re wearing your baby on you.
Andrew: Yeah, no. It looks really comfortable. I wouldn’t mind sitting in one of those. I was also researching them on their website. What else? I think, oh, let me just say this one more time. This is Soma Water. It’s not a sponsorship. It’s a thank you to Mike who invited us out to that interview and that’s how you and I met. And Mike is also a Mixergy Premium fan. He wanted to learn how to do interviews like I do years ago and he emailed me and he checked out Interview Your Heroes and he learned from that. And I actually don’t know if he ended up doing interviews but God knows he ended up meeting a whole lot of phenomenal people including Tim Ferriss-
Andrew: -who recommended that I interview him. And so as always I recommend if you are interested in doing interviews, don’t be afraid to ask me for help or better yet just go take that Interview Your Heroes course and learn how to do it. It’s a great way to connect with people, others have done it for bus develop For BizDev so that they can connect with people and potentially do partnerships with them after an interview.
Many people like me do these interviews because they just directly want to learn from people they admire and if you’re at all interested go to Mixergy, type in Interview Your Heroes, and I’ll walk you through the whole process including the almost exact email that I used to ask Vivian to come do this interview. And it’s all available if you’re a Mixergy Premium Member at mixergypremium.com. If you’re not a Premium Member, go and sign up.
Not only will you learn from that course and over a hundred others, you’ll have access to hundreds of interviews and an unselfish place you’re also funding all the research that goes into putting these interviews together making sure that they’re not like the average chumpy interviews that people have out there where, unfortunately, people do not take my course, do not understand that you should do a little bit of research, you should do a little bit of background checks to see who you should interview and why, what makes them great. It makes for a much more useful interview for you and for your audience.
So anyway, that’s all at mixergypremium.com. I highly recommend it. I’m impartial and, of course, I would never lie to you. Mixergypremium.com. I guarantee it. Maybe I’m partial, it’s true. But I guarantee it so if you’re not happy I’ll give you your money back.
Finally, Vivian, April, in the pre-interview asked you about books that you recommend. I don’t expect you to remember. There are probably a ton that you recommend. Why don’t I just read from the list and then just ask you to tell us why you recommend them?
Andrew: “Lean In” is one of the books. Why do you recommend that our audience read the book Lean In?
Vivian: You know, that I think it should just be everybody should read it just because, you know, I think Sheryl Sandberg is brilliant. She did a lot of research for this book. It’s not just her opinions and her thoughts but there’s been a lot of research done about women in the workplace. And, you know, I think that, you know, as a parent, as a mom of three girls it’s of very, very great interest to me to get more women in higher level positions in the workplace.
And I think men should be well aware of it as well because, you know, as I think Sheryl says that you need to choose your partner wisely because if you, you know, get into a marriage the guy should be really supportive of your career aspiration just as you should with him as well. So it’s a great book. If you haven’t read it yet, you should definitely read it.
Andrew: Steve Jobs Biography? Why?
Vivian: You know, he’s just such a, you know it sounds so cliche but he’s such an interesting character, you know? And I think when you read about how, just what he did over, you know, his lifespan it’s just incredible. It really is. And, you know, I think there’s just a lot of these little stories in the book of Silicon Valley that are just really, really cool to have like that insider knowledge I guess. And, you know, he was really creative, really creative, sharp guy. And yeah.
Andrew: We’re talking about Walter Isaacson’s book, right?
Vivian: Yeah, yeah. It was-
Andrew: Yeah. One which not just talks about the business but talks and maybe even more than talking about the business details, talks about the personality of the man behind the business.
Andrew: Complete with flaws and I like that.
Andrew: Not because I like to see people’s flaws highlighted just for the sake of pointing at them but because I think that when you get to know the real person, the story becomes more identifiable, more meaningful, and more memorable.
Vivian: Yeah, definitely.
Andrew: That’s why I started this interview by asking you about your background and I think to hear about your background, having grown up and traveled so much we can understand why you’re so adaptable to change, why you’re so willing to really re-do the whole business that you’re in, right? We’re talking about different prices, different structure, different way of thinking including a platform. I’m inspired when I hear your story. What’s most inspiring for you, having done all this?
Vivian: Well most inspiring things, honestly, is seeing an Orbit on the street I have to say every time I see a Orbit stroller on the street whether it’s over at Stanford or it’s at the airport. I saw one I think in Germany once, I was just floored. It’s a really cool feeling to be like, oh my gosh, they have an Orbit.
It’s not somebody we know and they look like they’re having a good time and we’re helping them get from point A to point B and that’s always been our aspiration is whether you’re going to the mall or you’re going to Maldives. Orbit helps you get there faster, easier and more stress-free and always in style. So that still inspires me even to this day I see Orbit and I’m like, oh there’s an Orbit, my kids can spot one.
Andrew: I see it all the time. Here’s something cool that made it really stand out for me was when you walk on the Embarcadero sometimes the sun would hit your baby directly. If your baby was positioned in the usual seat spot, parent’s will angle it I guess, right? The Orbit allows them to angle the baby away from the sun so that they’re facing the water, I forget where but, away from the sun and towards something that is easier on the eyes.
Vivian: Absolutely, I mean one thing that didn’t come up is the SmartHub circular interface is great because you can dock and undock these seats but what it’s really great for is that you can rotate the seats 360 degrees and you don’t have to take the child out. So with every other stroller if the sun is shining this way you’re strolling, you have to take the child out, take off the seat and put it in, move the seat so it’s facing that way.
With ours, you just rotate the child in it, if your child is asleep you don’t have to wake them up. You rotate the seat they’re away from the sun or the wind or the dog that is launching right at you, so that’s what makes us really unique.
Andrew: What an inspiring story I got to tell you over and over again, Vivian, everybody wants basketball players to be role models for kids, forget that, why do we need them to be role models. Let them play on the basketball court, you should be a role model for kids. Right, don’t you think?
Vivian: Thank you.
Andrew: That’s the way I think, not just you but entrepreneurs like you, this is where the future is getting invented in the minds, in the hands, in the creativity of entrepreneurs like you. I’m so honored that you would come here and tell your story, especially now, you don’t need me to sell strollers. I’m so honored that so many others have come here to tell their stories.
Looking forward to you in the audience, who’s listening to me right now, building a successful company and showing up here someday, one day, just like Mike did. The guy who created this, just like Vivian did I’m looking forward to you telling me that you listened to Vivian and you were inspired by her the way that I was and hear what you did with it. Vivian, thank you so much for doing this interview.
Vivian: Thank you, Andrew.
Andrew: You bet. Thank you all for being a part of it. Bye guys.