Ep. #1056 - Consumer Electronics Startups
Let’s welcome the seventh founder for our Top Kansas City Startups series. And he is ready to help us learn more about consumer electronics startups.
In today’s episode of Startup Hustle, Matt DeCoursey says hello to the CEO and founder of Bryght Labs, Jeff Wigh. Their session circles around the real story behind building consumer electronics products. From product development to fulfillment—they tear into the particulars.
On another side of the story, are you familiar with all the businesses in our Top Kansas City Startups 2023? Get the details here.
Covered In This Episode
What are the challenges of building a consumer electronics product? How can you pitch your ideas in a pre-product way? Can anyone become an entrepreneur?
These are just some questions Matt and Jeff answered in this session. Both founders take you on a journey that most consumer electronics startups go through in building a product.
Let’s get the insightful time started. Tune in to this Startup Hustle episode now.
- Jeff Wigh’s backstory (02:23)
- The challenges of building consumer electronics products (06:42)
- Being agile and its importance in the world of startups (10:57)
- Making sure that you provide the right user experience (13:35)
- Managing your inventory well (15:01)
- The value of scarcity and exclusivity (17:47)
- Simultaneous fulfillment of Kickstarter and Shark Tank orders (21:48)
- Pitching on Shark Tank (24:39)
- The downside of being on Kickstarter (26:33)
- Why passion is key (28:15)
- Forcing accountability on yourself (29:27)
- Is entrepreneurship for everyone? (30:59)
- Fulfilling 1.7 million orders through Kickstarter: what to do and not do (35:16)
- Direct-to-consumer e-commerce vs. retail (40:30)
If you have some accountability forced on you, and having co-founders does that, too, you’re there for them. They’re there for you.– Jeff Wigh
If you think entrepreneurship is going to be a nine-to-five, it’s not. It is, in fact, in 2023 and beyond. It’s 24/7, 365. Especially if you’re in e-commerce or software because the internet never closes.– Matt DeCoursey
We know what our area of expertise is. We’re trying to de-risk everything else, you know what I mean? I just want a good referral. I want to go with an expert. I don’t care if I’m paying a premium for it. I just want to take a risk out of it.– Jeff Wigh
It’s time to hire the best developers for your tech product. Look for the available resources at Full Scale. They specialize in building a long-term team of engineers, testers, and leaders ready to work on your project. Moreover, they also have a platform to help you manage your team in just one dashboard. Start looking for the right professional today!
Make the right choice regarding business solutions aside from software development services. Discover what our Startup Hustle partners have to offer now.
Following is an auto-generated text transcript of this episode. Apologies for any errors!
Matt DeCoursey 00:00
And we’re back! Back for another episode of Startup Hustle. Matt DeCoursey here to have another conversation I’m hoping helps your business grow. Let’s talk about consumer electronics startups. Man, there’s a whole lot to unfold there. The complexity of consumer electronics is probably a lot wider and deeper than you might think. That’s what we’re going to talk about on today’s episode of Startup Hustle, which is powered by FullScale.io. Hiring software developers is difficult, and Full Scale can help you build a software team quickly and affordably and has the platform to help you manage that team. Visit FullScale.io to learn more. With me today, I’ve got Jeff Wigh. Jeff is the founder and CEO of Bryght Labs, as in B-r-y-g-h-t Labs. You can go to playchessup.com to learn more about what they do, and I’m gonna let him reveal why playchessup.com is the right place to go to learn more about Bryght Labs. But before I let Jeff introduce himself, I need to let everyone know that Bryght Labs is also in Kansas and on Startup Hustle’s Kansas City top startups list in 2023. This whole series of shows you’ve heard in and around this episode has been dedicated to our hometown and its top startups. I hope you’re enjoying it as much as I’m about to enjoy this conversation, which I will begin by saying, Jeff, welcome to Startup Hustle. Congratulations, you’re on the top startup list. That’s awesome. I’d like to actually start a conversation with a little bit about your backstory. So what have you got?
Jeff Wigh 01:43
Thanks, Matt. Oh, appreciate it. Alright, so I mean, we’ll go all the way back. I grew up in Indiana. My dad was actually a civil engineer and had his own engineering firm. So it’s a small company; he ran it from age 23 until he retired and sold his company back to his employees actually at the end. And so my background growing up has always been around that. You know, Dad would come home for dinner and go back to the office, and I used to work summers for him and everything like that. And it really made a big impression on me. You know, he did run his own business, but to me, my dad was a guy who would do any job that the company required. So if it’s cleaning the gutters, painting the roof, or painting, you know, the side and redoing the roof on his office building, like that was my dad; he would go to that. And, you know, as I turned into a teenager, I started working for him and doing those jobs with him. I definitely never wanted to be a civil engineer because what he did were landfill design and construction inspections. So my job during the summers was actually going with him to the job sites. We’d go out and work on a new set of landfill. That means it’s July; it’s hot, it’s humid, and it smells like garbage all day long. So that was day-to-day work for him. But everything I did pick up from him was that you know, I liked engineering. I wanted to eventually be an entrepreneur like him. And so when I headed off to college, I actually went to Purdue and studied engineering there. I started as a chemical engineer but learned I really didn’t like that and fell in love with computer engineering because I like programming. And so I got a computer engineering degree. After that, I bounced around a few jobs doing automated test equipment for automotive parts and then actually ultrasonic rail inspection in the railroad industry. And eventually, I found my way to Garmin, which is a big consumer electronics company that does a lot of outdoor and automotive electronics and aviation electronics. And so my job there was kind of a half-step into entrepreneurship. It was a product architect role, which meant that I was basically an inventor and market researcher for Garmin. Our job, we are in this innovation lab group called Area 51 was actually to come up with ideas, markets, and products that Garmin’s regular business segments want to be working on. So it’s not the iterative products, it’s kind of these higher risk, longer out there more risky research, and I love the job. It was amazing. I got to see a lot of ideas, some of them fail, got to see some that turn into real products. I had some of my own ideas turn into big-hit products. And that was the final thing, like okay, I could do this. So I left Garmin three years ago now and started Bryght Labs. On the way, I took a year to also get an MBA. I did that as an accelerated one-year program. But the whole time there, I was working at Bryght Labs, and I also had a couple guys. Adam and Justin are my co-founders. I knew them from the innovation lab at Garmin. They are working nights and weekends with me, and we are coming up with product ideas for Bryght Labs. And the idea of Bryght Labs is it is an innovation lab. What we did is our very first product was actually we all have kids, so everybody’s thinking of problems and things that they face at home. And one of the things is like getting the kids off the screen. I want some family games. So a natural thing we worked on was chess. Chess was an idea. My daughter was playing a mobile app with chess on it, and, you know, I got out the chess board, and we wanted to teach the family how to play chess. And the problem was, it’s like, it’s really hard over a real board to teach somebody, you know, how the pieces move. Why is that an illegal move? What’s a good move? What’s a bad move? So the idea was a chess board that taught you how to play. And that became what our product, Chess Up was. And that’s why our website’s playchessup.com. We didn’t have any money, and we didn’t have any consumer electronics products. And there’s an app component to this because the chess board teaches how to play it also connects online. You can play online with other opponents. A product like that is a couple million bucks to bring to market, basically. By the time you get all the engineering, software, work, tooling, all that done, and we had zero. So we went to Kickstarter with an idea, we built a prototype, you know, spent just a few 10,000 bucks on that prototype, hired a marketing agency for Kickstarter to film a video for us and run ads. And we put it on Kickstarter and did a $1.7 million campaign. So that was the launch of Bryght Labs officially. Before that, we weren’t really a company. It was a couple of guys working out of the garage.
Matt DeCoursey 06:02
2 million bucks.
Jeff Wigh 06:04
Yeah. So we got close to the total that we needed. And those guys quit their job. I had already quit. And we started. And from there, the product was just a prototype. So there’s still all of the engineering efforts that needed to go in to turn it into a real product, and then also distribution and also setting up the company.
Matt DeCoursey 06:20
Let’s get to that in a minute. So okay, so let’s back up a little bit. So first off, you have a history. So Garmin, I’m old enough to remember when Garmin was the brand name for GPS. Yeah, that was the very first thing it was like, hey, put it in your Garmin. But yeah, the learning how to build consumer electronics, I think you probably, as I mentioned, at the top of the show, there’s a level of complexity to this that is far deeper and broader than I think most people that want to bring a product to market realize, oh, yeah, so it’s not even just it’s design work.
Jeff Wigh 06:54
First of all, you have to find a product people want. And then you got to do all the design work. It’s not just designed. It’s designed for manufacturing because consumers, it’s going to be very tight on margin, you know, the price point is really, really important. It’s not a b2b or professional tool. So there’s a lot of design for manufacturing and plastic injection molding, you have circuit board design, and you have all this compliance work, too. Is it safe? Can you import it to all these different places? So there’s a ton of aspects that go into an actual consumer electronics product that makes it much more complicated than, you know, any kind of just plastic toy, versus or even software. It’s got tons of other aspects to it that make it a pain. Quite honestly, everybody that I’ve talked to that has had any consumer electronics product has helped me come to realize that you’re, in some ways, launching two or three different startups when you start a new thing because you mentioned you got to build a physical thing.
Matt DeCoursey 07:38
So that’s one whole thing right there. Just building anything that is physical that you can touch, is it that is a challenge in itself, and then you have software that also has to go inside it. So that’s a whole nother thing. Yeah, embedded software in embedded software is different from the software that you use in the cloud 100%. And then, most of the time, now in the modern age, if you have a consumer electronic, it probably needs to connect to something else, which is often an app like you mentioned. So there’s a third thing, and eating any one of those three by themselves is hard. So now you’ve So congratulations, you pick something that’s three times as hard as any of the singularly, and that’s, you know, the first person you talked about local startups and embedded stuff, it was David Ross from a shot tracker, okay, who as you know, a very big success story here in Kansas City. And they had to not only build a basketball that had a sensor in the center of it, but they also had to get the NCAA and NBA and all these people to adopt it. And there’s all these, you know, crazy, crazy questions through it. And the hard part that they have is as well. So you, if you want to build cloud-based or web-based software, and you know, we’re used to working with developers, and they’re like, hey, I’ll push that fix right upstream. Not as straightforward as a consumer electronics product. How can you even get the update to it? So that’s been a challenge. So out of those three, yeah, I would imagine you have to start with a physical product first before you try to embed anything in it, right?
Jeff Wigh 09:37
Yeah, we went, and this came up, and it’s like you can, you know, software, you get a compile and a recompile. When you design an injection molding tool, you go. You get one compile.
Matt DeCoursey 09:47
And those are really expensive to build. Yeah, that is the way I understand it.
Jeff Wigh 09:50
Right. I mean, we spent nearly $100,000 and tooling on molds assembled, and we got it done cheaply. You could spend a lot more if you have something that’s two shots or more complicated, as you mentioned. Yeah, it shot trackers. I am familiar with his great company. They had the business development aspect on top of all those other efforts with us. We add a fourth thing we are is we’re an e-commerce company. So we, you know, we deal with. I wanted to save that for a little.
Matt DeCoursey 10:17
You were one of the companies that LaunchKC gave a grant to, and we shared some interesting stories about what happens after because everyone’s like, how may I? Someone else’s lessons, do they? Is it 1.7 million on Kickstarter? Yeah, there’s a stick around. We’ll talk about that here in a bit now. But I want to kind of go back to you talking about the mold thing. And that is so in the world of startups, and especially tech. The word Agile is such a keyword. You can’t be agile with your mold.
Jeff Wigh 10:55
So yeah, there are ways around that.
Matt DeCoursey 10:59
But it’s not agile. That doesn’t make a new mold or do something that isn’t agile. Agile, by definition, would be fixed, nimble able to move quickly.
Jeff Wigh 11:09
Right? So what we do and to work around that a little bit as you 3D print everything you can prototype. And so we have various 3d printers in house for a smart 100. Sir, yeah, so we have a big one that can print something the size of a chess board, we have a very fine detailed one that can do different materials, soft materials, hard materials. So that doesn’t solve the problem that once you do the mold, it’s done. But like it does allow you some iteration and some functioning prototypes to consider that
Matt DeCoursey 11:34
through that but no technology. Well, 10 years ago, access to something like a 3d printer wasn’t I wouldn’t know it was. Now there’s I mean, you obviously have hobbies. And I’m sure that’s now that you’re working.
Jeff Wigh 11:47
The hobby stuff is what we do. It’s good. Yeah, I mean, for a lot of this. So I spent $1,000 on this big format. One, it’s a hobbyist machine. We did spend 1000 bucks, 1000 bucks. No, not at all. That’s what people buy for their hobby. And then the other one, we do have a little higher end, we have a laser one, that stereo stereo laser one that’s about four or $5,000, smaller, smaller parts still not outrageous.
Matt DeCoursey 12:11
I mean, there’s, there’s computers that, you know, developers might use that cost that much, it’s not the end of the world. Now does it require I would imagine that requires some, what’s the level of expertise needed to actually get it to make something I was able to do it.
Jeff Wigh 12:28
So it wasn’t that we had a mechanical engineer. When we started, there were four founders. And one was a fourth guy from Garmin. And he was a mechanical engineer. So he used to design all the parts. So he had a big leg up there. I never had to touch the design part of it, but using the printers was easy.
Matt DeCoursey 12:47
So interesting. Okay, so that’s going to provide some agility, because you could maybe see what it is or if it fits.
Jeff Wigh 12:55
Yeah, part of the fit 100%. And then I mean, a lot of this is also user experience. So you’re handing these prototypes to people to test out. I would imagine chess is something that can be finicky in some regards, because simply I think that’s what people are passionate about, and they play it for years upon years.
Matt DeCoursey 13:00
So maybe if it doesn’t look or feel the right way. Yeah, it’s the thing they get the most picky about is the feel of the pieces.
Jeff Wigh 13:14
So they should not, so that’s my point. Right? Yeah. It’s like they need to be a certain size that can be undersized, oversized, you know, how well did they get past each other? Are they waiting at the bottom like so. I think we got this right. We have a very nice set. It’s weighted, it’s fitted properly. It follows standards for heights and everything like that. But that’s exactly where we do something before the molds are done. We are 3D printing those and playing with them and we can know Matt Watson bought your chessboard.
Matt DeCoursey 13:41
Yeah. He loves it. Like I was at his house the other day, and it was sitting with his kids playing awesomely. Yeah, that’s sitting there. And so I got a chance to check it out. You did a great job in building it. Appreciate it. Now. That’s you got to play chess. club.com you have a new one? That’s for sale?
Jeff Wigh 14:04
That’s the same one.
Matt DeCoursey 14:06
Sure. Okay, so that’s about 300 bucks.
Jeff Wigh 14:07
Yeah. Right now it’s 299. We have, we’re on preorder, because we sold out a product, but it’s cut. Yeah. So that’s, that’s just bad. Sorry. And congratulations on that. Yes, that’s like, yeah, it’s a great problem to have, right?
Matt DeCoursey 14:21
It’s not it’s not a great problem to have. I mean, I think you know, that. You don’t get to sell anything until you make more of them.
Jeff Wigh 14:29
So I mean, we’ll cover this point a little bit. Some people might not realize when you have logistics as well, like we have distribution centers, and these are third-party, we don’t own them or anything. But in the UK and Canada and the EU and Hong Kong and Australia and in the United States. When you run out of stock, it’s a huge problem. You have contracts with these people for monthly minimums you have now you’re running out of one part here we have accessories as well in different color options, but you’re running out of one thing here and not the other one there. And so you have to manage your e-commerce platform. Frankly, too, with all of this inventory stuff, running out is a huge pain.
Matt DeCoursey 15:03
Well, the issue is the end that’s very immeasurable is opportunity cost. Yeah. Because here’s the thing is, and I want if you’re listening, go to play chess up an order for the next batch. But there are some people that won’t.
Jeff Wigh 15:16
Right? Yeah. Because like you’re looking for a birthday gift next week for your case.
Matt DeCoursey 15:19
And then some of those aren’t patient. We are in this new economy where Amazon will sometimes bring you stuff the same day. You know, what do you mean, I have to wait until May. So yeah, people have said that to me in the past, that’s why bringing it up is like, because at Full Scale, we grew really quickly. And at one point in early in the second quarter of 2022, I had a waiting list for clients. Oh, yeah. And people are like, Dude, that’s congratulations. I’m like, why? Because, like you mentioned with the minimums into the other things like well, okay, so what are my salespeople supposed to do? Maybe look for the next client, but it’s hard to get people who have now needs and if you can’t, if you’re not in our economy, then you miss the opportunity. Yes. And that was expensive. That was definitely expensive. And also you try to launch so you talk about doing like a launch or a grand opening or anything. And if you don’t have anything on the shelf, don’t bother.
Jeff Wigh 16:09
It’s so yeah, even to put this in numbers. It’s like, we’re an ecommerce company, we run ads, we convert, we have a cost of customer acquisition and return on ad spend. Right? When you’re live selling, those numbers are great. But when you’re pre selling the same thing you’re talking about, you’re not converting as well. Everything’s less efficient. And so you’re losing a lot of opportunities. And, you know, even to just put real numbers to it. I think our revenue when we’re live selling is 5x or more. Well, sure. So yeah, so yeah, it’s a big deal, it’s a pause on the company here for a couple months while we wait for them.
Matt DeCoursey 16:42
And that’s why that’s not a good problem. Yeah, it’s better than other problems. That is still a problem. Sure, sure. I mean, I would rather take being sold out over not selling anything at all, and like sitting in a warehouse on top of all the stuff Google’s gonna do with this. But yeah, and those are things that there is something to be said, though, about the demand side of it. Because that is for something. So I used to be a ticket broker, I’ve done a lot of stuff, okay, that really, I have a strong understanding about the value of scarcity, and exclusivity. And I’ve worked in the music industry for a while as well. And like a booking agent will tell a band to play a smaller room and they can fill because you want to leave people out on the street. Because the thing is, if you feel like you can always go up to the box office and buy a ticket and you won’t know where there’s no urgency to do it. And then the thing is, the day of the show comes and there are literally like 150,000 reasons that someone will come up with tonight go Oh, yeah, nearby tickets to Sunday. Sounds like a great idea. And then as they sign up? I think a lot of people do this, like sign up for Iron Man. Yeah, like the mud crawler thing. And they’re like, Yeah, I’m gonna kill this thing. And then as it gets closer, they’re just dreading it. Yeah, so there, but you bought it. So you’re gonna go but yeah, but that’s that, that exclusivity or FOMO can play well in a lot of things and actually drives a lot of value. There’s the look at the secondary resale market, but zillion different things. And you know, like, their sneakers are big ones. Concert tickets. You know, there’s a whole like, I mean, that’s how Stella makes a living. Yeah, that’s how our ticket brokers make a living? Yeah, some of that’s just having people call us at the ticket brokerage. And they’d be like, Why am I paying so much for this? I’m like, You’re not paying for the ticket. You’re paying for us to have woken up and bought it for you on the day. And you shout out what you’re paying for right and or in some cases, you know, for that business is largely driven by relationships we had with teams and venues that had these VIP things that are only for sale, you’re gonna buy him for a whole year. Yeah. And no one’s really learned that many people buying a VIP table next to it, you know, like, and suddenly, yeah, but for the Kansas City Chiefs, hot commodity, believe in the Royals who are a shitty team right now. They have a hard time selling anything. Right? So take the buyer, right. Yeah. All right. So I want to talk a little bit about what happens when things go really well. And then before we do that, a quick reminder that finding expert software developers does not have to be difficult, especially when you visit FullScale.io where you can build a software team quickly and affordably. Use the Full Scale platform to define your technical needs and then see what available developers testers leaders are ready to join your team FullScale.io To learn more, if you don’t, if you’re not aware, that’s my company. We love talking to Startup Hustle listeners and at least giving you some good advice. So reach out, fill out that form. Okay, so as a reminder, Jeff Wigh founder and CEO of Bryght Labs, go to playchessup.com. If you haven’t already collected, there’s a link in the show notes. Alright, so a couple things. So you saw $1.7 million with stuff on Kickstarter. And you’re also recently on Shark Tank. Yeah. So that probably drove some sales. And then you also have to deliver $1.7 million with the chess boards. And that’s what we talked about when I saw you at the, at the grants. Acknowledged who it was? What was that? I watched Casey, if you will, I know. But what is that? Is that the showcase? That’s near announcing the winners? Yeah, I know. I just there’s always they always have weird names for that shit. They had to get up on stage and talk for one minute. I coached a bunch of people on that. Yeah, that elevator pitch. It’s actually a fun video of us doing that when we came here and learned. And they did so much better there. They had three I won’t say who you can say there’s a social video, but we made them give their elevator pitch on the elevator on the way down. That was the timeline, we felt that we found that and that’s on social media. You’ll find it at Startup Hustle stuff. So last time I talked to you. And if you saw Jeff Jeff has no hair. I feel like he may have before he went to deliver all these chess boards. What what? What’s it like when things go really well? So it’s planning for things to not go well.
Jeff Wigh 21:08
So what happens when they do this? Those two events stacked up right on top of each other. The fulfillment for all of our backlog from Kickstarter and Shark Tank Aryan happened at the same time. So yeah, it was a crazy period. What happens then is, so one thing is like we underestimated this was the amount of high touch interactions you have with a customer just to get them a box. You know, they gave you the wrong address. It’s stale, because it’s a Kickstarter order. They moved, they moved like the courier, they didn’t type it in, right, because it’s the address in South Korea. And the form only takes, you know, English addresses or something, or the courier loses the package. And so like, you put all that together, it was holiday season, we aired in December, we are finishing all of our fulfillment from Kickstarter all in December as well. And so it’s 1000s of packages going out, 1000s of new sales, 1000s of customer inquiries, how did you know they opened the box, I can’t figure out how it works. This kind of stuff is all going on all at once for us. And that was the last you know, right now. This is now about a month past it. But like we finally just cleared our customer support backlog of tickets that we track from going back six to eight weeks, basically. So a tiny company, we don’t have dedicated customer support yet. And you know, and it really, all of that happened all in one month. It was like two years worth of customer support packed into one month. And that was not so it was great though, because it’s like, yeah, we’re on Shark Tank, you get that permanent lift from that show, we sold a bunch of boards because of it. But we just couldn’t handle all of the customer support. And everything that comes on the back end that people don’t know is such a relief, we are done with it. Now we are almost even kind of happy that we have this pre-sale period for a couple of weeks so we can take a breather. And it’s you know, as us as a lab working on innovation lab, we’re already working on next products now and everything like that. So this is a huge relief these past few weeks versus what we’re going through December do you know are our fans.
Matt DeCoursey 23:05
What day is the Shark Tank episode?
Jeff Wigh 23:10
Because somebody wants to go find out December 9, it’s season 14, episode nine, there’s four or four different companies on that show or the third slot. So if you want to fast forward, we don’t need to get into the details.
Matt DeCoursey 23:18
But did you get a deal?
Jeff Wigh 23:21
So on the show? Yeah, we got Laurie to offer us a deal. And you know, we accept and it’s like what you see on the show is very accurate to what will happen in the studio. I don’t know if you’ve had other Shark Tank guests on it or anything like that they it’s about 40 minutes of filming, and they edited it down to you know, eight minutes or so but it’s pretty accurate as to what happened and everything so it was fun experience it’s a lot more stressful than I ever could have imagined actually being up there on the stage because it’s one take and it’s a pitch that’s shown to 4 million people basically and so that was that was something but it went excellent like it went awesome for us.
Matt DeCoursey 23:58
How do you prepare for that?
Jeff Wigh 23:59
When you go through the process for Shark Tank, like you apply and they make you make pitch videos so you’ve got basically several opportunities and the producers give you feedback on on the pitch the walk in and who’s here we are but that last one minute, two minutes out of the out of the 40 minutes you’re up there so on the preparation side you know if you’re already running the business and you know your numbers and all this stuff, you’re already prepared. So we didn’t really do much obviously.
Matt DeCoursey 24:26
You know Mark Cuban yelling if you don’t know your numbers, know your business.
Jeff Wigh 24:31
Yeah, we didn’t get that line. But yeah, yeah, got another tussle with him. Then they edited that out. But there’s, it’s pretty easy. Honestly, if you’re if you’re involved in the day to day in a small company, you’re going to be doing all this stuff. There wasn’t much preparation other than getting the set design.
Matt DeCoursey 24:52
I feel like if you know your shirt, you know your shirt. Yeah, it’s I mean, I know that sounds super cliche, but if I don’t know, I feel pretty comfortable pitching my business or discussing it in detail at any given time. You know, the basic understanding of it, I mean, real time, like analytics and data is less practical, you have a pretty good idea. And you know, keep in mind for those of you who didn’t want to make a pitch, we’ve talked so much about this on the show that we actually just finished recording an episode that was all about getting funded in a pre-product kind of way. Okay, someone else stole your stole your thunder, in some regards, but, but with that, remember when you’re going out and given that pitch, the thing that I really want to remind every founder or entrepreneur hopeful of is that at that stage investors are more interested in you than they aren’t in the product, the product is great, but you can have a great product and if it’s terrible founder or founder team, and they’re not going to read check.
Jeff Wigh 25:53
So here, I’ll even reinforce this, like, we have a launch product, right? But one thing this is one downside people don’t catch on Kickstarter is before you when you just pitch an idea. There’s an infinite range of outcomes, you can imagine huge outcomes. Imagine nothing Kickstarter brings both of those ends in like, you know, now it’s defined, here’s, here’s how many sold? Yeah, so there’s no more pitch than 100x upside on it or anything like that. So when we pitch, and this helps with Shark Tank as well, we were pitching actively anyways all the time. You have to pitch something other than that product. Because the products are already kind of defined, you know, you’re not going to be telling a 10x growth story 100x growth story on one product. So it’s for us, it’s always been about pitching the team. In the innovation lab, which is the truth, we’ve come up with hit products many, many times over just under a different brand.
Matt DeCoursey 26:43
Well, in your case, you came from like one of the premier consumer electronics companies out there. Yeah. And that experience is part of my point, though, because it’s not like, Okay, if I show up, and I’m pitching here, first off, I’m not a chess enthusiast. I mean, I know how to play chess, I don’t spend a lot of time playing, I might need to buy your board and learn. I tried to teach my son how to play and we had the stupid Harry Potter chests, I couldn’t tell the characters apart, it turned into checkers. And yeah, there you go. But you know, so with that, without that passion for the game, I don’t have a background in consumer electronics, I do have a background and a lot of the other stuff from software to e-commerce. Without those two things, especially the passion, this thing telling you, almost every investor you could ever find is going to know that right away, they could tell right away I’ve had so many people pitch me for investments. And I can mean, I’m telling you, I’ve told a lot of people, it’s pretty clear that you’re not passionate about this, it’s it, the passion has to exist. Now look, you can be passionate about making money. But I sometimes don’t even sense that the reason that the passion part is key is there’s a lot, there is a day, there’s a problem, not just you’re gonna say days, where you’ve woken up since you took on being an entrepreneur you’re like, I mean, if anyone tells you, if you talk to any entrepreneur, that tells you they haven’t considered quitting or lying. It’s because it doesn’t mean to run through your head. It’s there, it’s there. It’s always an option, man, the door is right over there, people ring the bell, go ring the bell, and you can get out of this Navy SEALs training. The whole thing and business and entrepreneurship are very Darwinistic in that regard. And, and you know, the tough, tenacious people, it’s a tough climb. It’s a tough fight. Yes. And when you’re passionate about something that doesn’t feel as much like work, you’re gonna get up, and execute that mission with a little more. I mean, I defined self discipline as doing the things you need to do at the time. So you want to do it. That’s a very simplistic view.
Jeff Wigh 28:47
But it’s true that Mizel defines entrepreneurship. Right, right. So yeah, here’s a tip if you really want to make sure that you have no option to quit, like, borrow some money from family, you’ll show up to work every day. So like, I mean, we have I joke about it, but like the Kickstarter money doesn’t cover the product development. I already covered that right but like so we had to get funding and we took family and friends money. Passion, yes. Got that love consumer electronics, love invention, don’t love logistics, don’t love all these other aspects. But I tell you if you have some accountability forced on you, and having co founders does that too, right? You’re there for them. They’re there for you. Each of you is gonna run out of energy at some point. And like so to me. the most critical thing there was having co founders, I didn’t believe in co founders like 15 years ago.
Matt DeCoursey 29:35
I just didn’t like it. And now I don’t think I’d want to do it without one. You want to find co-founders that are good at stuff. You’re not good out preferably and or at least interested in doing the things that you’re not good at or interested in.
Jeff Wigh 29:52
Yeah, so our team presents this consumer electronics we already covered. It’s like mechanical design. It’s a circuit board design. It’s software, it’s firmware, it’s all this, we built our team as the minimum headcount that can release a consumer electronics product. That’s our founding team. So it’s a designer, it’s electrical engineer, a computer engineer, and we had a mechanical engineer. When we started, he ran out of personal runway and went back to Garmin. But like, that’s, that’s, you have to have at least that to get a product to market. That’s all that’s gonna happen along the way, you know?
Matt DeCoursey 30:20
So you talked about some people, this is not for everyone. No, it’s certainly not. I’ve also given a lot of people that advice over the years. It is for me especially since Startup Hustle came out, I get a lot of the Hey, man, I’d love to talk to you have an idea? Yeah. So there’s I’ve sat down with quite a few people and just said, you know, what, I don’t know if this is for you. Cuz they’re the things that they say they’re just, you can just tell that the risk is going to the risk and the stress and the anxiety is probably going to consume them.
Jeff Wigh 30:54
It’s, yeah, and so 100% I agree that it’s not for everybody. And I don’t even mean that it’s like some exclusive club or anything like that. It’s just not as fun as people think it is. It is fulfilling. Yeah, I do like the risk meaning the upside, and the downside, like you enjoying the upside and all that stuff. But like, it’s definitely not not something that everybody wants that kind of risk in their life.
Matt DeCoursey 31:17
And there’s just certain personality styles or people and certain just spots in life. Yeah, it’s tough to handle. And that’s and that’s part of it is there’s, if you think entrepreneurship is going to be a nine to five it’s not, it is in fact, in 2023 and beyond almost a 24 hour, it’s 24/7 365 Especially if you’re an E commerce or software because the internet never closes now the internet is open all the time every time and and, and you know, they get old Murphy’s Law thing, you know, talking about how anything that could go wrong will happen will do so at the worst possible time. Murphy’s an entrepreneur that is somewhere just extracting revenge, I guess I’ll tell you what, if you’re gonna have a problem with something, it doesn’t usually happen from nine to five. It’s like 2am On Christmas Eve. Yes, something weird like that. You talked about the logistics thing that I’ve been doing. So I actually had a history with E commerce and retail and man, that struggle is real. And it’s a lot better now than it was like 1015 years ago. Shopify makes things easy. Shopify makes things a lot easier, but also just even the carriers. Yeah, so you know, you can click a little bit, I just got an email that said I had to drop UPS packages. And, and you know, I’m not worried that those aren’t going to be on my porch when I get home. But there’s someone that got that notification that’s like, hey, go out and get those off the porch. Now, look, if someone had to do it, I see a new reel, or short or something like that, every other day that shows someone’s ring camera showing shit getting stolen off their front porch now, like that comes back to you. Yeah, a lot of times, and we would get that too, as is at the ticket brokerage because we’re shipping out hundreds of tickets sometimes. And when we switched to electronic delivery, it was a little bit of a learning curve for society with that, but it was so much better because we weren’t having to track down or cancel loss tickets and their barcodes and like a lot of that. So half the time people would want to cancel in there like it never arrived or a refund delivery confirmation and it shows you signed for it.
Jeff Wigh 33:33
And so like electronic delivery is a game changer for you guys that well what was in that regard.
Matt DeCoursey 33:37
And that’s in that that kind of removes that but I you know, I work with clients and other people that are in the sneaker game. So like, like one of our clients is a big sneaker resale shop and you know, part of the issue there is like actually people that work at the carrier will steal your shit. Oh, and so they have to like to mask it. Like it’s not from Nike, you know something and by the way, when you take a shipment from Nike, notice that the box that it comes in play with doesn’t say Nike. I didn’t even say I’ll be like a fulfillment center. Weird stuff. And there’s a lot of stuff you know. And so I used to work in electronics and some other sorts. I used to work for Roland and that’s the world’s largest maker of electronic musical instruments. Okay, 5 billion a year in sales and as their district manager in the Midwest for a few years like oh my god, you get like we do so I worked in piano and keyboard and those are big boxes. You know, forklift stuck in the side, or something? It’s just like, God, I can’t imagine what you went through with the delivery. How many? How many deliveries was 1.7 million?
Jeff Wigh 34:44
We Kickstarter loans about 6000 units of chess boards. Now we have accessories too. So they were packed, we’re picking them as well. In November, December, we delivered something around 10,000 deliveries or something like that. So even if 1% gets stolen and goes wrong, that’s a whole Under things you have to go file, but and think about that people, that’s the whole, that’s the whole thing.
Matt DeCoursey 35:00
So that would have actually been a little high on the shrink side when I was in retail. So like our goal when I managed a chain of retail stores that sold musical instruments for a couple years, and like, we were aiming for a quarter of a percent, okay, and anything over that was high. And that was like a lot, though. I mean, that could be just missing, broken. What was stolen? I mean, and that’s, but that’s still a lot. Yes, it doesn’t sound like a lot when you look at it. And you think about the volume of transactions, or the number of SKUs or things that you handle.
Jeff Wigh 35:34
And just like domestically, it works pretty well in the US. But we’re delivering 72 countries on our Kickstarter list.
Matt DeCoursey 35:41
That’s what I wanted to talk about less how you had to have just I had to have, I have a feeling that you probably learned a little bit about shipping costs in some of those places.
Jeff Wigh 35:53
So, here, if anybody’s listening and is thinking about a Kickstarter, I’m going to tell you the wills and wants that we won’t do again, not going to collect shipping during the campaign, because now you’ve taken like, oh, you know, international shipping was change, or 3545 bucks. Oh, it’s way more than that for some of these destinations. And we would actually next time around we’re going to not take certain countries with high import tariffs and duties.
Matt DeCoursey 36:16
Well, we talked about that in the Philippines. So in the Philippines, a lot of these countries keep in mind that they don’t make a lot of stuff in the country. So there’s the same way we it’s tariffs, you remember and it was it and what’s the class that weed civics or whatever, you’re talking about tariffs and import export taxes and stuff like that? Well, like when we saw in the Philippines, it actually cost me more money to buy an Apple product than it would here, right? Because it’s an import there. So they charge it and it’s like 12% or something. But that’s the hundreds of dollars. And then what we run into and I think you have to there is they will oftentimes just something just stops in customs. And it might be weeks or months before they actually get around doing anything.
Jeff Wigh 37:05
We have one customer and chili that’s been four months since the package has been in customs.
Matt DeCoursey 37:13
And there’s not a whole lot you’re gonna do.
Jeff Wigh 37:15
Yeah, it’s like you refund them and tell them sorry. And we eat that how many times the deal done the
Matt DeCoursey 37:18
shipping to like, I would imagine that something that might be like 10 to 15 bucks to ship in the US might be 150. Yeah, it’s easy to get killed by a few.
Jeff Wigh 37:28
And so yeah, I mean, you get to this thing where it’s like, at the end here, we’re down to the final few dozen orders. And it’s these high touch ones that are countries that we don’t have a good shipping solution for. And it’s like, well, you can reach out to the person and try to work something out. But that’s time that we don’t have as well. So we ended up just eating them and sending it along because it was just as though it was expensive. It’s like the customer touch point is delaying us from doing other parts yet. So yeah, we ate those.
Matt DeCoursey 37:56
Yeah, well, in some regards. You’re better off doing that. Yeah, I see a lot of people stepping over dollars picking up dogs. That’s exactly their business. And sometimes it’s best to just give people their money back. So if you’re gonna spend more money messing with it, yeah, so we refund or even just eat the $150 delivery.
Jeff Wigh 38:09
And it’s like sometimes we paid for delivery. And that’s why there’s another kind of be careful about Kickstarter sums. 1.7 million isn’t 1.7 million. It’s you’re signing up for liability to deliver all these products you’re signing up like Kickstarter takes a cut of that if you have that big of a campaign, you run marketing.
Matt DeCoursey 38:31
Oh, yes. Well, that’s one thing I’ve learned from people that have run Kickstarters is that if you build it, they will have this kind of mentality. That’s not true. That’s not the case. So you’ve got to be ready to promote the shit out of your Kickstarter. Because if you don’t, it’s gonna sit at the bottom of the list.
Jeff Wigh 38:45
The best way I saw it put his Kickstarter is a sales platform, not a marketing platform, you have to bring your own audience. So if you have a great big social following already awesome, but otherwise, you’re paying for traffic through Facebook ads and stuff like that. It’s you know, it’s like typical ecommerce you’re gonna be paying. If you have a $200 item you’re paying 3040 Maybe some tickets are just pay way more for customers here a couple $100,000 in marketing expenses for a big kickstart
Matt DeCoursey 39:11
with Amazon. So with the products that you buy for Prime and if you want to learn more about Amazon and E commerce, listen to our episodes that Andrew Morgans has every week because Amazon charges close to 30% for most categories. Now, they do provide a third party logistics angle and they’ll handle the customer support and a lot of the other half. And that might sound really good to you right now. Would you have paid 30% To have someone deal with the rest of that crap? That included the facilitation of the sale? Because let’s break it down. So you have $1 Okay, so when a lot of people don’t know this, when you buy something with a credit card, that merchant is already down to 97 cents?
Jeff Wigh 39:50
Yeah, you do your payment processing 2.9% plus 30 cents and you have things like, yeah, well that’s another thing with a micro transaction.
Matt DeCoursey 39:53
So 30 cents, 30 cents doesn’t matter. So if an $8 transaction is now you’re really high up there, and you have things like, you know, shipping, logistics, insurance, breakage, you know, all that stuff, and then you get back down, you’re down to it, you’re like, Wow, do I might have spent more than 30%.
Jeff Wigh 40:17
And this comes up when as a consumer company, you’re looking whether you do retail, or whether to do direct to consumer ecommerce, right? And so, first, a lot of people look at it, they’re like, God, you know, retailer costs gonna be 30%, give or take. And people are like, that’s way too expensive. We can do it directly, actually, those retailers are probably more efficient at doing all those other things than you are. So they’re actually probably even in some cases cheaper, and you’re better off going through retail, and they’re going to make bigger orders, not just one at a time.
Matt DeCoursey 40:40
So yeah, exactly that.
Jeff Wigh 40:45
Like your 30% wasn’t just pure profit for that retailer, they did a lot for that. 30%.
Matt DeCoursey 40:52
So same thing with Amazon, like that’s a marketplace with ready buyers. Amazon’s a search engine. It’s really what it comes down to. And it’s actually in my opinion, the best search engine when it comes to selling things because people are there to buy.
Jeff Wigh 41:04
It’s the highest converting, we sell on Amazon as well. And we use Amazon in two capacities. One we sell on Amazon, too. We use them as a fulfillment partner for some of our orders. And even our orders on our Shopify site. We’ll ship through Amazon sometimes. But yeah, exactly that our categories 15% Take for Amazon. It’s it’s bargain. Because like you said, those are high intent to buy people they’re searching for your product on ready to check out.
Matt DeCoursey 41:29
Another thing I like about Amazon is that it’s just you talk about the ease of use of buying. So I think a lot of people think I am one of them. If I could go to an e-commerce site and see the same thing, and because I could buy on Amazon with one click, and I feel really comfortable with how quickly it’s going to arrive. I’ll end up doing that. Yeah, some cases. And that may mean that I don’t support it, but you know, honestly, I don’t care. Because I’m a peon supporting my own time.
Jeff Wigh 42:02
It’s also their social proof on Amazon, because there are reviews, you get a brand lift just from lifting on Amazon, people will check to see if it’s listed there before buying it on your own. Because they trust it now.
Matt DeCoursey 42:13
Yes. So if you have three reviews, that’s also a red flag. There’s been a whole school of thought around that, all of that. And there’s a lot to be said. Now, speaking of such social proof and wanting proven things if you need to hire software engineers, testers, or laters Full Scale can help we have the people the platform in the process to help you build and manage a team of experts who said proof we’ve delivered almost 3 million service hours, 3 million, that’s a lot of human time for many happy clients go to FullScale.io. And all you need to do is answer a few questions. Our platform is going to match you up with full data of highly experienced software engineers, testers and leaders. Sorry about having the experience and the value. That’s what we do, we’re going to, we only hire about one in 30 applicants, so you’re paying us to get the 29 that you didn’t want to hire and find the one all star that you really did learn more at FullScale.io. Sir, once again with Jeff Wigh from Bryght Labs, probably better known at this point as playchessup.com. And you know, that’s the key product of, we’re near the end of our episode, I’m excited to have another one of Kansas City’s top startups, once again, congratulations on that we take that list pretty seriously, as well as every less tune in every month because we feature a new city every month just happens to be our hometown. This month now. I like to end my episodes of founders with the founders freestyle. And I’m gonna go ahead and do just that and hand you the mic for your closing remarks, comments, songs, rap poems.
Jeff Wigh 43:54
The man I wish I’d come prepared with a wrap. But yeah, to wrap it all up, I guess it’s just like, check out the product, check out the website. Honestly, just some things to really cover. If you’re following our story. Consumer Electronics is really hard. If you’re gonna go the Kickstarter route, I highly recommend that because of all the startup capital, it’s awesome. But be careful what you sign up for because of all of the different different things you’re signing up for with consumer electronic circuit design, manufacturing, distribution, compliance, all of that comes with it. So make sure somewhere on your team you have somebody experienced with it. I’ve seen too many friends reach out when it’s too late and they’ve gone through three design firms, and they’re running out of money and they can’t they can’t deliver. So I think that’s important to realize. Other than that, you know, on the podcast thing, it’s like yeah, please check out our product playchessup.com We got a bunch of big things coming soon too Bryght Labs is the company you know, so we’re working on next products. Then it’s not just chess. You know, we’re actually any kind of consumer electronics. A lot of cool stuff is coming out soon.
Matt DeCoursey 44:57
Well, yeah, for my free so I think that I want to go back to the very beginning of the episode, and I want to remind you if you want to, okay, first off, I’m not trying to discourage you, I don’t want to sound negative, if you listen to show regularly, you know, I’m a realist, if you want to watch a modern 2023, and beyond consumer electronics product, it’s about more than just building something physical, there are multiple tiers, and you actually added a fourth one on there, which you know, but you’ve got the physical product, you’re gonna have software, and then and then connectivity, you know, whatever that is that you connect to. And then, as Jeff mentioned, you know, in some cases, you may be an e-commerce store as well. And that’s a whole nother thing. That’s a lot of stuff to manage, people. I was just being realistic, like most entrepreneurs and founders that I have on the show are really struggling, have struggled, or are trying to get their arms around one of those four things. And that’s a lot. So you know, just know what you’re getting into. Now, if, and that’s like Jeff said, he’s run into people that, unfortunately, do get a lot of people that go to Full Scale. And by the time they fill out that form, they’ve already had a couple bad experiences. We’re running this rescue operation, and it sucks. I feel bad for people. And it’s tough when you have to tell someone, I’m sorry, you spent had a terrible offer to have a terrible experience with me, because by the time that I’m dealing with him, or we’re dealing with them, they’re already jaded at this point, either, like, I spent $150,000. And then you have to tell someone you’re like, well, that’s not even the worst part. Because you have trash.
Jeff Wigh 46:37
Yeah. So here 100%, I think the way we’ve approached things is like, we know what our area of expertise is, and we’re trying to risk everything else, you know what I mean? I just want a good referral. I want to go with an expert. I don’t care if I’m paying a premium for it. I just want to get the risk out of it.
Matt DeCoursey 46:52
I’m in that boat. I didn’t always like to be like that. And, you know, I talked to people, and they’re like, Well, I didn’t know that lawyer was 400 bucks an hour. You’re not paying for that hour. You’re paying for all of the hours prior to that, so they could learn and understand what you need so; that 10 years ago they went to a legal appointment and were like, oh my god, this is like 400 bucks an hour, right? And I needed a couple of hours. That’s like 800 bucks. I saved about half a million bucks from some extra over the following years from it was about the way my business was set up moving at and all of it now you mentioned you’re from Indiana. Yeah, I was in Indianapolis for quite a while. That’s actually where my higher-level entrepreneurship story started. And, you know, and moving the business from Indiana to Kansas. And a lot of that, like, if I have done it the right, if I have done it the way that I thought that I needed to do it, it was I, oh my god, it would have been like walking into a minefield without knowing you’re in a minefield and then realizing you’re in the middle of it. You somehow made it safely to the middle of it. And now you gotta kick it out. Yeah. Oh my god. So yeah, the advice and experts, you know, focus on the things that you can control that you’re grayed out and find other experts to help support your dreams on the side, and you’ll get to where you want to get a lot faster. Jeff, thanks for joining me.
Jeff Wigh 46:53
Yeah, thanks, Matt.