Ep. #1151 - Tech Innovation for Life Optimization
In today’s episode of Startup Hustle, Matt DeCoursey and James Wolfe, Founder & CEO of Alt+Esc talk about tech innovation for life optimization. Listen to them discuss the difference between doing business in fashion and hardware. They also talk about consumer awareness, building a moat, the importance of vendor agreements and relationships, dealing with IP imitations, and more.
Covered In This Episode
Wearable tech has become commonplace, but they typically tend to be on the utilitarian side. Alt+Esc marries form and function in advanced tech.
Listen to Matt and James talk about fashion as an evolutionary, its intersection with technology, and tech innovation for life optimization. They also discuss the logistics of fashion and hardware, plus lessons learned about starting a business. They touch on Alt+Esc products, how to get them to the target audience, their environmental impact, and dealing with imitations. Get some tips and insights from Matt and James, including the importance of having a vendor agreement.
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- James’s backstory (2:37)
- Fashion is an evolutionary process (7:02)
- Merging fashion and hardware supply chains (11:17)
- Lessons learned about starting a business (14:21)
- Listen, Charge, Wear: The products (16:39)
- Connecting Tech to Life and the environmental impact (20:52)
- How to get your product out to your target audience (25:11)
- What is a moat, and why you need to have one (28:24)
- Dealing with imitations (33:22)
- The importance of having a vendor agreement with the factory (35:58)
- Creating a sense of understanding and trust (37:45)
- Follow your dreams, but definitely listen (43:56)
- Focus and boil down your idea (45:12)
When I started this, this project, you know, I kind of did like the classic sort of amateur hour mistake where it took, like, every idea I ever had and tried to jam into one product, right? And then, as I learned, through the development, I had to do a couple of pivots to basically, you know, simplify it because it was too complicated. Because, you know, one thing I would say is that, you know, when you when you’re trying to do something that is a little different, you take a few risks. The first risk is finding someone to make the thing, right? you can find someone to make it, it’s going to be too expensive. And if you can afford it and you find somebody to make it, then you have the challenge of how do you communicate it to the consumer that’s used to a very intuitive product and doing something that maybe considered counterintuitive, right? So that’s essentially what we did.– James Wolfe
Folks, if you’re listening and you’re trying to launch a product, whether it’s software or hardware or fashion or any of it, if the world has no clue that it might exist, you got an uphill climb getting that word out there because there’s all this, think about all that stuff. I lost my earbuds again, man. There’s always a better lanyard for that. Man, I’m tired of carrying around these power banks. And then the thing is, first of all, you got to be aware that something is even a thing. Then you got to be aware that something is a thing at the moment you’re ready to buy the thing, and then you got to have a place to buy it.– Matt DeCoursey
At the end of the day, you know, what keeps us going is following our dreams and our passions. And you know, when you have a really good idea, sometimes people are gonna hate it, and you can’t let that discourage you. But at the same time, you have to listen, you know, and I think that, you know, that’s where even the pitch is great. Because when you’re pitching something, you’re hearing that everyone wants to hate things. So listen to the haters. Take a step back and see, hey, is there a component of that? That’s actually credible that I believe in, and apply it. And it helps you on your next pitch, and it helps you with your product. So, I say don’t get discouraged. Follow your dreams, but definitely listen.– James Wolfe
If you want to get something to market, you can’t add 10 million features to it and keep waiting and waiting and waiting and waiting, and waiting and waiting. Sometimes there’s only, you know, there’s usually just a couple things that make people buy something or find it invaluable focus on those things, focus on what they are. And yeah, I think I’ve gained a strong appreciation for that, as I’ve gotten older is, you know, like, you can have these really singular products like there’s a restaurant here in Kansas City that sells nothing but chicken fingers. Chicken fingers and french fries, and guess what they are the best chicken fingers I’ve ever had in my life.– Matt DeCoursey
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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. So often in life, tech innovation and life optimization cross paths. And when that occurs, we end up with the neat things that kind of, we learned that we can’t live without. And there’s so many of those and so many things going on around, I figured we should probably sit down and talk about it before I mentioned or let you know who I’m going to have that conversation with today. Quick reminder that today’s episode, Startup Hustle 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. Go to FullScale.io to learn more. There’s a link to go to FullScale.io in the show notes. So once you scroll on down and give that a click while I introduced James Wolfe, and James is the founder and CEO of Alt+Escape a consumer electronics and fashion brand out of Venice Beach, California. There’s also a link to Alt altesc.tech. And by the way, just go click the link. So because you don’t type out all to escape and all of that James is been clever with the naming of the company. We’ll talk about that. And so much more. But first off, James, Welcome to Startup Hustle.
James Wolfe 01:24
Thanks, man. Thanks for having me.
Matt DeCoursey 01:26
Yeah, and for you know, for those of you that don’t get to see the behind the scenes stuff, this is our third try doing this because as the founder and CEO of a technology company, I’m strong. I’m fighting technology today. Now, James, and that, you know, in the past, you have fought technology as well. And it seems that you have often come out victorious and on top as the winner. So why don’t you give us a little bit about the backstory about how you created a baby with fashion and technology?
James Wolfe 01:56
Matt DeCoursey 01:57
Not a real baby. But kind of like a business baby.
James Wolfe 02:00
Business baby, exactly. Yes.
Matt DeCoursey 02:04
James Wolfe 02:05
Yeah, exactly. Exactly. Business babies can make you money. They don’t cost you money, you know.
Matt DeCoursey 02:10
You know, that they right. That’s maybe why I mentioned that first ones at once.
James Wolfe 02:19
One generates revenue, the potential to generate revenue anyway, you know, so yeah, so…
Matt DeCoursey 02:22
True. True. I guess you’re right about that. I guess. Yeah. Bad business baby can be way worse. Expense wise. Exactly. Thank you, everyone listening to how to make a baby between technology. The back story, James what is it?
James Wolfe 02:37
Yeah, yeah, so yeah, so backstory. So I’m formally trained fashion, fashion designer, been working in apparel and fashion for 25 plus years, started out the very lowest level. I mean, I was basically a laborer, I was cutting fabric, worked in production, worked in sales, worked in accounting really worked in all aspects of the business. I really was passionate about the design aspect of it, went to design school at night. And, and started going in that direction and creating product about 12 years ago, you know, I’m really into music. I was traveling a ton, you’re visiting all the retailers. And you know, back then the big problem was our headphones, we get like kind of like this like rat’s nest like tangled mess in our pockets. And it was really annoying, especially traveling have all these wires everywhere. So I had this idea. I’m like, Well, what about putting the headphones in the draw cords of my hoodie? You know, I’m wearing a hoodie all the time and listen to music, like, has anyone ever done that before? And I looked it up, no one had done it before. So I literally hacked one together. And I showed it to a retailer and we got a 200,000 unit order from that sample. It didn’t work. But but they loved the idea. And I basically went to my boss and I said, Hey, listen, I go I have this order in hand. I guess I forgot to make it work that I think I can do it. So I got on a plane, I went to China and I and I figured out how to make it through how to make it the biggest challenge was how to be machine washable. Because all the earbuds were were embedded into the garment. So fast forward four years later, we ended up selling over 12 million units of that product. And you know, maybe some of your listeners may have seen it when they were in high school, it was really everywhere back then. And it was it was a big was a big moment. So you know, then then the, you know, fashion is cyclical, but technology is linear, right? So, you know, the cut the wires, things were wireless, you know, the company I was with at the time wasn’t, you know, really didn’t have the appetite to invest in the hardware. And what I what I learned too, is you know, developing hardware is exactly that. It’s very hard. And that’s why a lot of people steer clear of it. So but the idea kept me up at night now. I’m like, you know, why is it that you know, every time designers try to create tech, it doesn’t work and every time engineers try to come A fashion you don’t want to wear it. But every day in our lives, these two things coexist. And they’re just really kind of like, it’s like patch together, it’s like hack together. And the lifecycle, you know, for consumer electronics, it just sucks, you know that you either. First of all, there’s tons of packaging, there’s tons of waste. And then if you know, really engaged with the brand, until you either break it or lose it, or something better comes out, and I just was kind of sick of that merry go round. So I set out to create a more elevated product that sort of took starting with audio, because I’m just such a music geek, right. So basically, what I did was I developed a wireless audio product that you can’t lose, because I kept losing these air pods. You know, when I look at my, I lost like five or six pairs on an airplane seat one time I was mountain biking, you know, I mean, it was just really frustrating. So, so expensive. So I said, Hey, if I create a pair of wireless earbuds that you can actually like tether to something like the draw cords or hoodies or like the the leash on your sunglasses or on a bracelet or on a hat, you know that that could be a really great way to avoid losing these things and give you the options. So I set out and developed this kind of system, got the patent for it, you know, guy got the patent issued, and, and set out to build it. And it’s completely modular design allows you to not only have ways of customizing how you wear the earbuds when you’re not using them. But also you can customize the power, you can add capacity, it really kind of allows you to have a more a better lifecycle the product or you don’t have to, you know if something breaks or something you want to improve on something, you can basically add to it versus having to scrap it and buy something totally new. So that’s where we’re at right now. And we’re just getting ready to launch this thing. This week.
Matt DeCoursey 07:01
Well, I’m gonna tell you what the struggle is real. I’m on my fifth set of air pods. One I dropped off of a balcony on a 20th storey hotel room where I Yeah, where I just watched it tumbled down. And then you know, I’ve had some people like, Well, did you go pick it up off the sidewalk? No, I wasn’t that lucky. It fell on top of it. Like, you know, the restaurant or something? Yeah, it was gone. And my wife because you know, I’ll just admit, I’d have a couple of drinks at that point. My wife had already gone to bed and she was extra upset the next day when she woke up and realized that I had paired her air pods to my phone, so I guess I wasn’t gonna let that stop me. Yeah, I’ve watched a couple of pairs and lost another one. So yeah, Matt DeCoursey, air pods has a little five in a bracket around it. And you know, why? Apple? Can you just not always remind me that I’m a loser? Literally. Yeah, so the struggle is real on that. Now, you mentioned there’s your, your, your, your new stuff that’s coming out? Well, here’s, here’s actually probably a better question. You mentioned this ever evolving process between, you know, fashion can come back around, but but at the same time, fashion still has to innovate, because you look at all these, like, you know, different pocket designs and stuff like that. And they’re trying to prevent us from being ourselves. How do you build something that, you know, in hardware is, in fact hard? How do you even keep up with what’s coming down the road? Like, you know, I think all of us have experienced the frustration of buying a new something, and you’re like, great, now, I just spent $1,000 on the phone, which still sounds crazy on some days. And now I gotta go spend $300 and other crap to plug it in, keep it up with and as a product designer, and how do you even predict that?
James Wolfe 09:00
Well, I think, you know, this in fashion is is primarily, I mean, it’s a very evolutionary process, right? So, so trends don’t just come and go overnight. There’s silhouettes, key silhouettes, like the hoodie is an example that’s pretty evergreen. You know, it’s something that’s kind of a part of almost everyone’s wardrobe. I think, you know, a lot of the innovation that’s happening in fashion right now is, you know, sustainability, you know, innovation in like the fabrications, you know, different performance fabrications. And then obviously a lot of it is just marketing, right? Marketing and merchandising, I think on hardware, you know, it’s obviously a lot more challenging being a boutique brand. You know, when you’re up against these giants, you know, that have, you know, billions of dollars of money in R&D and have some of the best engineers on the planet, sitting there, you know, creating some of the most innovative and cutting edge tech. You know, really what I’m limited to is, you know, working on a much smaller scale and working with what’s available and buying the best in terms of the chipsets and what’s available in the open market. So I know I’m never going to be an Apple, and I’m never going to be a Google. But what I am, what I can do, is I can create unique form factors, you know, and having a little bit of a moat, you know, with my IP, you know, I’m going out there bringing out a unique different form factor because I tell you what I see is that Google and Apple, they’re not thinking about stuff like this. They’re not thinking about apparel, they’re not thinking about these things. They’re thinking about the technology, the operating systems, you know, the full vertical integration, you know, and I think that, you know, what I’m setting out to do is by bringing a unique form factor and doing something different in the space, and really differentiating, you know, what’s happening in the market because really, consumer electronics has turned into a very commoditized business. Do you hear me?
Matt DeCoursey 11:04
Yeah, you paused.
James Wolfe 11:05
Okay. Do want me to go back?
Matt DeCoursey 11:07
Yeah, you got it? Yeah, go ahead. I gotta take a note with the timestamp. But yeah. Go back to what Apple, what Apple isn’t thinking about is.
James Wolfe 11:17
Yeah, so what Apple and Google aren’t thinking about is they’re not thinking about, you know, kind of this, I would think it’s kind of maybe like IOT adjacent, right? It’s like, how can these things integrate into apparel and accessories and the things that I know about in my space. And that’s just not a priority. Not to mention that, you know, as with the experience I had with the initial hoodie idea, I licensed that technology to Under Armour, to Puma, to Old Navy, and I had to figure out ways of kind of merging the two supply chains. Because the thing that’s really interesting is that fashion supply chain and hardware supply chain are two different planets, they operate completely differently. In the fashion, moving a button, okay, may cost you a few $100, it might cost you a week or two lead time, okay, like moving a button on a shirt, weave in a button on a pair of earbuds can cost you a year and can cost you hundreds of 1000s of dollars, you know, so it’s an even down to the manufacturers, it’s consumer electronics is very, very planned capacities plan, it’s very controlled environment terms of how that is managed, where on the fashion side, it’s very fast, very quick turn, very reactionary. So I had to create a system that was really friendly to kind of merge these two different supply chains together. And knowing that, hey, listen, if you’re going to work with a Nike or Under Armour, you’re not going to only use their, you’re not gonna use your factory to make their hoodies, right, they’re gonna wanna use their factory. So I had to create ways of making it very easy to integrate this type of hardware product into into these fashions. And I don’t think that the Googles and the Apples of the world are that’s not on their radar, you know, it’s just not on their radar. So, I’m hoping that, you know, by bringing this kind of unique storytelling and and form factors have been kind of captivate you know, the consumer.
Matt DeCoursey 13:11
Yeah, that’s, I mean, that’s gotta be nerve racking man, that would probably drive me crazy when it comes to like the, you know, predicting what can go in there and do all this. And, and, by the way, congratulations on picking one of the hardest startups to get into. You’re in the Hall of Fame, because you’re doing software and hardware, which, by the way, isn’t uncommon on this show, but when you mix in the ever changing winds and waves fashion, you know, and think about that, folks, you know, things go in and out so quickly, your lead time for that you get stuck with yesterday’s product. And well, I mean, there, it’s AT T J Maxx for 90% off, you know, which is probably a lot more than you made it. Now you, you mentioned being in design school and and, you know, learning about fashion and doing stuff like that. What’s What are some of the things that the that the rise into entrepreneurship have taught you about starting a business and some things that you’re maybe surprised that you had to learn that, you know, you’re like, wow, I never thought I’d have to figure that out. But I did.
James Wolfe 14:21
Yeah, that list is so long. Well, first thing I learned was, you know, I raised capital to do this, you know, so I did two seed rounds. And the one thing first of all to learn how to do that, so that was was the whole experience. But you know, the biggest challenge I found was that I realized that raising I was raising the two worst categories on the planet consumer products and hardware. No one wants to touch that stuff. So you know over the years all the you know, the pop does your you know, things whether it’s you know, now it’s a I was you know, it was crypto and then before that, you know, it was it is There’s all these things that are trending that people are all just focusing on raising against. And I was kind of going after something really different, where, you know, a lot of investors aren’t excited about it, because the multiples really aren’t there on exit like it is for a lot of SAS and, and other other types of verticals, you know. So that was a big challenge for me. Now, I think what would differentiate myself maybe from others is that I have so much experience, and I have a lot of relationships at the retail level too. So not only do I know how to manufacture, develop design, and you know, I have multiple patents, I’ve done multiple patents in my career, you know, also being able to make it completely vertical to actually sell it through to a major retailer and to scale it, and also to have the experience with direct to consumer. So that knowledge, I think, helped me have the ability to do the raise. Otherwise, I think that if you were to go into this a little and obviously I think I was naive getting into this. To be honest, I didn’t realize how the first one I did I like I said, I taped it together. This thing, I had to get an engineering team, I had to like actually had to build an infrastructure to build this stuff. Because it wasn’t, it wasn’t ODM, which means that your listeners know what that means. But that’s essentially when a hardware supplier has products. That’s that they they make, and people just change the color the branding on it. And that’s most of you see in the market. And in mobile accessories, that’s what it is, you know, I had to create something were actually developed something kind of from scratch. And that was a heavy lift. You know, so our
Matt DeCoursey 16:39
who we need to define the something here I’d say I’m realizing that we talked about the, the hoodie drawstrings and whatever, and then what that evolved into, and then we kind of skipped over the, the one, you know, if you go to the Alt+Escape, and that’s A-L -T-E-S-C.tech link for that in the show notes. You know, right there in the banner Listen, Charge, Wear, and you know, so that the corded earbuds out, kind of out? Yep. And with that, you know, where what did this evolve into?
James Wolfe 17:14
Yeah, so So, so basically, you know, when I, when I started this, this project, you know, I kind of did like the classic sort of amateur hour mistake where it took, like, every idea I ever had, and tried to jam into one product, right? And then as I learned, through the development, I had to do a couple of pivots, to basically, you know, simplify it because it was too complicated. Because, you know, one thing I would say is that, you know, when you when you’re trying to do something that is a little different, you take a few risks. First risk is finding someone to make the thing, right? you can find someone to make it, it’s going to be too expensive. And if you can afford it and you find somebody to make, then you have the challenge of how do you communicate it to the consumer that’s used to a very intuitive product and doing something that maybe maybe considered counterintuitive, right? So that’s essentially what we did. So you know, and I actually, I have one here, you may not be able to see it, but, you know, obviously, taking a very, very small, high quality wireless audio product that does everything you’d expect for a pair of $100 earbuds, right, that a wireless, pause, play, AI assistant, microphone, high quality, sound, etc. The thing that we did that was unique was that we created this, this lanyard, right, where the earbuds can connect to, and this is kind of part of our IP, where you can basically wear this you know, around your neck, or your wrist, right? And it to tether them if you want, right, from from dropping them. And then the power system is all modular. So the charging case can also have multiple batteries, so you can customize. So if you were gone, you know, I was in I was in China for 10 days, I didn’t charge them once, you know, I had enough power, I’d have to plug it into the wall to charge it, I had enough power with me, they didn’t have to charge it the entire time. You know, so for someone who’s off the grid, someone who’s camping, you know, or just are just lazy, honestly don’t want to plug them in. It’s a great way of having that, that customization so, so really,
Matt DeCoursey 19:19
I don’t like plug in my stuff and all this like everything. You know, like I mean, if you think about it, when you plug your phone in, or whatever to charge to your laptop or wherever, like that’s the same cord the same device that sends all your vital stuff somewhere and there’s been you know, a lot of a lot of reports and and you know traveler kind of things like hey, don’t just plug your phone into anything everywhere. And I’ve always been I’ve always been a little paranoid about that. And so you know, I think you’re aware I traveled to the Philippines three or four times a year which is this excruciatingly long flight, and travel and everything and so you I’m always lugging around those power banks are heavy dude. Yeah, for sure, you know, dragging them around and they’re awkward and you know? Yeah, well, you just show me was like a Lego set. Essentially. We’re here. We’re here doing show and tell on an audio show.
James Wolfe 20:16
Yeah. Right. I realized that and I was doing it.
Matt DeCoursey 20:19
But yeah, but that’s okay. I’m here to explain stuff. I’m here to ask the questions that, that everyone listening hopefully is thinking. And I’m not hopefully not dumbing it down too much. But I mean, you showed me your bud that’s comparable in size, what most wireless earbuds were. And then the the actual charging the power bank was much smaller, much more manageable, I liked that it had a little loop on it. So I could connect a few of them. Yep. And then you have, you know, a magnet, essentially. So like, maybe you need five of them, put them all together other though, it’s pretty clever.
James Wolfe 20:53
Yeah. So and then, you know, then we brought back the hoodie IP, where you can take the same ear buds, you can literally attach them the end of the draw cords, your hoodies, with a sunglass leash that we’re releasing, so we’re gonna create this whole sort of ecosystem of accessories are gonna be compatible with our hardware. And then, you know, we have a new mo some new hardware innovations that we’re going to be launching the beginning of next year, which would be the same concept, but with with wireless charging, so, so really, we wanted to kind of create these products that basically, you know, are saying is connecting tech to life, you know, how can we kind of improve the product lifecycle? How can we improve, you know, how it’s integrated into our, into our lives? Right? And how can we kind of, you know, improve even some of the environmental impacts of the product? You know, a lot of the the air pods are unrecyclable. Right? So, we designed our product, we partnered with a company called Homeboy Recycling here in Los Angeles, that does their recycling e waste is actually a big company they a give jobs to ex gang members here in Los Angeles is really a great great organizations check it out. You see on our website, we partnered with them to learn about, Hey, how can we make this product so it’s easier to be recycled, how to get the batteries out, then we also did a recycling program, where when you buy our product, you can recycle your old e waste for free. So kind of creating this one in and one out product. So we’re just constant trying to think of ways of like, how can we make this better, because honestly, the way it is today, I don’t I don’t like it, you know, I just there’s so much junk out there. And there’s, it’s like, if you look at the price range of this product category, it goes from like $1,000 to 10. I mean, like, so you’re never gonna beat on price. You know, that’s why I’m focusing on innovation and product, innovation and form factor and really kind of like creating awareness and storytelling, you know, and trying to solve a problem that we have in our everyday lives. And that’s kind of the angle we’re going out at. And really focusing on a more boutique strategy, versus a mass strategy, you know, which I think also kind of changes, you know, margin structure and all that stuff.
Matt DeCoursey 23:09
Speaking of awareness, I’m going to talk about that a little bit more. But if you’re not aware of finding experts, software developers does not have to be difficult, especially when you go to FullScale.io, where you can build a software team quickly and affordably. You can use full scales platform to help you define your technical needs, and then see what available developers testers and leaders are ready to join your team. Visit full scale.io to learn more. There’s a link to that and a link to James’s business in the shownotes. Scroll on down and give those a click. Let’s talk about it. Now, when it comes to awareness, you know, for those of you listening, James and I were introduced to each other by a guy named Joel Cummins. And Joel’s co-author of a book with me and, and our inner rock star, we share the you know, the passion for music together. And we did a call several months ago. And I remember one of the notes I had from the call was I had written down and customer awareness slash education. Folks, if you’re listening and you’re trying to launch a product, whether it’s software or hardware or fashion or any of it, if the world has no clue that it might exist, got an uphill climb getting that word out there because there’s all this think about all that stuff. I lost my earbuds again man there’s always a better lanyard for that man. I’m tired of carrying around these power banks. And then he says thing is first of all, you got to be aware that something is even a thing. Then you got to be aware that something is a thing at a moment you’re ready to buy the thing and then you got to have a place to buy it. And the internet solves a lot of that but you know, there’s like this just like a gazillion like I feel like your stuff would sell really well. Well in airports. Yeah. How do we get it in there? You know, going through All that what kind of what kind of overall? Oh, man dreams and nightmares have occurred with your customer awareness journey?
James Wolfe 25:11
Yeah, well, I’ll tell you. I mean, we’re, you know, we’re just about to embark on that. And I would say, you know, we talked about you said it were some of things like some of the some of the challenges, right. And we said earlier, you know, the things that you know, you don’t know this, you don’t know, you don’t know. So one of the biggest challenges, and if I were to give advice to anyone who would want to try to do this, something like this, I would say that you really have to be willing to pivot. And you have to really be willing to boil your idea down. Because really, you know, through a direct to consumer strategy. It’s very noisy out there. I mean, how many ads do we get through our, through our feeds a day, I mean, hundreds 1000s. I mean, we get so many ads. Now, because of the privacy settings, you know, on a lot of the phones, you can’t really get super, you can’t really target that, you know, you can’t really can’t really bring your wedge super tight, more broader.
Matt DeCoursey 26:10
And you’re a product that everybody kind of uses in some roundabout way. So that makes the target targeting is a nightmare mark. Because anyone can buy like, I’m selling software, to software company founders and CTOs, which is still a pretty big audience, but it doesn’t have a seven digit on it.
James Wolfe 26:30
Yeah. 100%. So I mean, I think they’re, you know, the bright side of that is that if you crack the code, you know, the scale, the scalability is great. But the question is, how do you cut through the noise. So that was something that we really had to do. So really, there was kind of like, you know, it really comes down to the content, and the storytelling, which has to be broken down into little bite sized pieces of information that you hope that draw people in. So our first campaign that we did, you know, was very visceral, very vibrant, really, and that was really kind of designed to bring you in, be like, Whoa, what is this, I want to check this out, then we had to do another, another suite of content on life use, you know, going for a run, riding the bike, you know, a whole nother category of content. And then And then, you know, this is where the art and science meets, creating these ad sets, and these customer segments, that we had a really kind of, we’re doing a B testing, you know, we’re trying to figure out like, Hey, what is that sweet spot, or we’re getting the conversion, you know, and while we’re doing that on direct to consumer, which, you know, obviously has the highest margin, we’re having conversation with retailers, because of my relationship with the buyers, I have relationships with companies retailers, and how we can scale this, and revenue conversations with companies that, you know, are in totally different, you know, markets like construction, hunting and fishing, you know, that could basically use this technology. And that’s why the patents were so important. I wouldn’t recommend anyone to get a patent unless you’re planning on licensing it. Because first of all, it’s very difficult to get them they are very expensive, takes a very, very long time. And, but if you have it to license to license your technology or license, your product, your IP, it’s almost critical that you have some sort of moat, and a patent is really the way to do that. So. So that’s
Matt DeCoursey 28:24
Let me define, let me define moat for people real quick. Because no, no, once again, that’s part of why I’m here. So a moat, if you look at any company, okay, so you can look at Google, which is considered to have a very wide moat, which means there’s a lot of distance that a competitor has to travel across to even get to the castle much less attack it. So products similar to yours without the niche spin on a can actually have no moat, in some regards. You mentioned the $10 earbuds. Their only moat is probably about a hairline wide and that’s price, right? And now with your stuff, though, because of a different level of compatibility or stackability, or even fashion fashionability. It’s fashionability a word, I think it is, it is now but but with that you can create that moat. So at the time let’s go back to the 12 million unit drawstrings you were the only one that had that. Yeah, but but with that any consumer products or anything like that anything fashion related? That moat is shrinking. Now in my book, Million Dollar Bedroom, I have a section that talks about this. And that is anytime you’re successful with anything. It doesn’t matter what product or service it is. Once it gets hot for you. You have set up a signal flare to the rest of the world that says do this. I was at a department store yesterday and I was walking through the shoe section and I noticed that there was like 10 different kinds of slides like for, you know, like flip flops that all look like the Yeezy ones that came out like a year and a half ago that were sold out everywhere for years. That’s an example of the moat being gone. Did they look exactly like them? No, but you can see where the fashion it influenced it. So, like, these are tough things, both with hardware and fashion, because someone else is gonna come along and start doing that as well. Have you had an issue with that someone ended up making drawstring?
James Wolfe 30:30
Oh, yeah, well, actually, our, actually our factory at the time, they actually took her IP, we had a lot, we had a, we actually had one of our licensees, who we licensed the technology to their manufacturer, actually took our product, removed our logos found another patent that was similar did a deal. Uh, yeah. And we went the litigation that we won, we were triumphant. So you know, actually have case law on the on the hoodie, IP. So that’s a very strong, very strong IP. But ya know, we had those problems, and those problems come when you’re successful, you know, they don’t, when you’re just starting out, no one’s gonna care. But when it starts becoming successful, that’s when you have those risks. And that’s why I think it’s so important to really establish yourself, you know, across, you know, retail, just the market in general, you know, and really kind of establish yourself as the original, and then to keep innovating, and to keep evolving. You know, not only are our relationships with retailers, but also with some of the biggest brands in the world, you know, so eventually, as we show proof of concept here, we want to scale and do some of those partnerships, and really kind of making ourselves keep ourselves in that position as the original of this concept, you know, but yeah, those are all risks that you take, and you can’t let them keep you from doing it. Because you’ll never do anything, honestly, I mean, like, fashion is, is very influenced by itself. And I think that, you know, make it if you’re a slide manufacturer, which is all done with injection molding, right? You see a hot silhouette, like Skechers does this all the time, right, you basically just come up with your version of that silhouette, you know, that shape, and you make any mold, and then you’re in the business, you know, and you’re just kind of you’re just chasing, you’re drafting, you’re drafting and it’s legal to do that, you know, you know, it’s not, I don’t think it’s something I would be personally proud of. But if you’re making hundreds of millions of dollars, you get over it real quick, you know, so I think that’s a very common part of the space, I would say this, from my experience of this product, it’d be very hard for a fashion company to do what I’m doing, because they’re just not wired that way. Um, no pun intended, they’re just not, they’re just not meant they just don’t work. That way. They don’t understand this business, they don’t want to make the investment. They’re not there. Now, a tech company could do it, but they don’t understand the fashion supply chain. So I’m not saying it’s impossible, but there’s a reason why it hasn’t been done. And that was something that I found was really a core part of the issue is that these two different, you know, verticals are just on different planets.
Matt DeCoursey 33:22
You know, they like to say imitation is the greatest form of flattery. I know a lot of entrepreneurs that would not call it flattery. Just because, you know, like you said, you get these hot ideas and these things that are going on an intellectual property control as is real. As a real bear. I think we had talked about that when we did our original call. And I asked if you hadn’t had had any issues with that because, man, James at this point, I swear, I’ve talked to what feels like dozens of people that have had that manufacturer something next thing, you know, that same place in China or Bangladesh or wherever it’s making this making it for all the competitors to with a very slight iteration. You’re sitting there going, what is Yeah, and that’s that that’s, I think that’s where I may have confessed, I’m like you’re braver than I am to deal with all that because I don’t think I would have probably got on a plane and started fighting people and I’d probably
James Wolfe 34:21
another reason. Another reason why I was you want to be in Chinese jail, that would be not
Matt DeCoursey 34:26
Yeah, true. That’s, that’s why I kind of like looked off when I saw like, the next 40 years of hard labor and I was like,
James Wolfe 34:36
you know, your 100% Right. And again, that was another reason why I was very hard to raise on this on this project. Because they’re like, well, we’ll when he when he get knocked off, you know,
Matt DeCoursey 34:45
because you don’t have recourse people. That’s why it matters. And that’s the tough part. Did you actually collect any money from the from the suit that you want?
James Wolfe 34:54
Well, no, essentially, we didn’t collect money but we it was set Hold, you know, we ended up settling, eventually. But what we did do is we got the other IP that the other company license or bought from this other inventor that was that was similar to what we were doing. So now we have that patent as well. So and it made our IP even stronger. So I think that was probably the big takeaway from that whole situation. I would say this too, is these are, these are all risks. And these are all challenges to have. And I think that kind of comes with the territory where you kind of embark on a project like this, I think there’s some things you know, and again, if if anyone was asking for advice, what I would say there are a few things you can do. One is find a really great supplier, okay, there is 1000s of, you know, 10s of 1000s of suppliers and in different countries, most of them are terrible. Okay, so having a really great supplier, you know, is huge going there, and until the
Matt DeCoursey 35:58
difference and an initial kind of exchange.
James Wolfe 36:02
So like, if you’re going on like Alibaba, and you’re just kind of surfing the web and trying to find a supplier, most of the suppliers, you know, are probably not going to be, you know, trustworthy, you know, so what, you know, partnering with an agent, or partnering with someone, you know, on the on the western world, you know, that that is that has competency in the space is a really great step, because you’re kind of leveraging their relationship with the factories, because they probably have other business with the factory, so they’re a little bit more meaningful to the factory, right. The other thing, too, is really investing in a strong vendor agreement, you know, both of the agent and with the factory direct, if you can, sometimes agents don’t let you have access to the factory direct, but if they do, having a strong vendor agreement is really important. And that kind of just sort of sort of sets up sort of like, what are some of the expectations? What are the recourse? You know, and how do we kind of resolve some of these problems that could happen in the future. And then the third thing is, go visit your factory, go physically in there, break bread, you know, I mean, I just went to China the first time since 2019, pre pandemic, you know, and, you know, sat there had dinner, learned about how the stuff was made, I mean, I went through the factory and learn, ask questions and learned and, and that was really a gave a lot of ideas like, oh, that’s why we couldn’t do that, or, Oh, this is a great thing that we can do, and have that rapport with the, with the factory. And that really is means a lot, because now you’re not just WeChat, you know, now you’re actually a human being, you ate dinner with them, you drank with them, you know, I mean, like, that’s what they that’s what they want, you know, and building that rapport.
Matt DeCoursey 37:45
I think that’s what everybody wants. And some levels, like, that’s why I go to the Philippines three or four times a year. Some of that is just to be able to look at the 300 plus people that do so much for our company every day and and shake their hand, in their at their place. Just a little over place. Sure. But with that, you know, that’s that that effort. And, you know, I mean, I am a godfather to a couple of different employees, children at this point, and so much of that, but it’s a meaningful thing. And it creates a sense of understanding and trust that I think gets lost and our zoom culture that has developed over this last five years is yes, dude, it is way easier for me to do a zoom with you than it is to travel 9000 miles. But there’s a mean, there’s, there’s just something that is different that happens there. And you know, for me and the Philippines, it’s understanding the culture, understanding the mentality, understanding the pros and cons that our employees see with in life. And we’ve structured our entire business around that. And you know, in 2022, we had a 93% employee retention rate and the year that the Wall Street Journal called the year of the resignation all year, but that’s how you do it. And like you mentioned, like you you want to find quality relationships. I mean, you can tell me all kinds of shit on the phone. But there’s something about having you right in front of me, that gives me a much better sense of all of it. I’m not I’m not saying that supernatural dude, I think that we all kind of get that like, this feels shady. And also keep in mind, like, what’s easier to do fake something, and then, hey, look, here’s our factory. Is that really your factory? Yeah, yeah, no, a lot of factory footage and a lot of places and probably show you a lot of stuff in this. There’s a lot of stuff out there. That is legitimately vapor. Yep. So
James Wolfe 39:53
you’re wiring hundreds of 1000s of dollars. Yeah. So, I mean, these are these.
Matt DeCoursey 39:57
I’m doing that here and I want to build a deck On the back of my house, you know, half of the money,
James Wolfe 40:02
ya know, for sure, and I think to, you know, just also for the listeners, like, I went through like four or five different factories before I landed on my factory. So I mean, like this this project is I’m working on this project for eight years, you know, I mean, eight years of literally burning the midnight oil building this thing, I burned to lots of factories, I thought I could use the factories engineering team, that didn’t work because they want they want to push people into ODM, they want to push into something off the shelf that they can just swap a logo on once you start going beyond that, it’s very, very difficult and very expensive. Again, maybe a little naive. But you know, this is the one thing you know, I’ve been doing this a long time, you know, I’ve sold billions of dollars of product to retail, you know, in my career created, developed designs sold in, you know, what gets me excited is innovation. What gets me excited, is doing something different. That’s really what gets set through what keeps me up at night. That’s what wakes me up every morning, you know, that’s the stuff that I want to do. And you know, to do that, you got to take risks. And to do that you have to really, like I said, boil it down and get down to the essence of the idea. And like, like you said, what problem are you solving? Right? How are you bringing value to somebody? Right? Like, is it? Is it sticky? Is it something that people see that and go, Oh, my God, I want to have that, you know, like, you need some of those components to be successful to capture the imagination, the attention of people, because you have about point two, five seconds, some of the time, maybe not even that much, maybe point one zero, right? I mean, you don’t have a lot of time, and you really got to kind of smack them over the head and be like, this is cool, check it out, and get them to stop. And that’s very, very difficult to do. And that’s kind of where we’re at right now we’re just in that just about to, you know, to launch this this brand. And that’s been a big a big, I would say that’d be the one thing that I’ve learned the most or big, big learning experience for me is really been able to like, let go of the ego, let go of the big dream idea. And say, for us to make it to the next milestone, which is proof of concept, we’re going to sell your buds. So how the hell are we going to do that without compromising our, you know, our, you know, our core, our core foundation? You know, how do we do that, and we got to get that done. So that’s kind of been that, like I said, the art and the science.
Matt DeCoursey 42:37
You know, if you listen to the show regularly, regularly, you know, I love baseball, and you don’t get to score until you have the first base. To third get to go forth. That path is different for all of us kind of like the path to hiring software engineers, testers and leaders, which Full Scale can certainly help you with we have the people the platform and the processes to help you build and manage a team of experts go to full scale.io. And all you need to do is answer a couple of questions and let our platform match you up with our fully vetted, highly experienced team of software engineers, testers and leaders. At Full Scale, we specialize in building long term teams that work only for you. Listen, learn more when you go to FullScale.io. And you can listen to James earbuds if you go to Alt+ Escape, that’s A-L-T-E-S-C.tech, there’s a link for that in the show notes too. With that, you know, with all this James’s time for the founders freestyle. That’s how I end my shows when I get to chat with the founder. And I’m going to give you the microphone for your freestyle. Now look, you can sing you can dance, you can recite poetry, I think maybe we may enjoy it more if you went over some of the highlights of what we talked about today. And then I’ll take a turn and then we’ll we’ll I’m going to head down to the store and try to get my preorder on for your stuff.
James Wolfe 43:56
Ya know, for sure. Well, we’ll we’ll take care of you, Matt, don’t worry, we’ll get we’ll get hooked up, you know, a guy. So it’s all good. No, I will say this, I really appreciate the time today. I think that you know, if anything to your listeners, anyone who does want to embark on trying to do a consumer product or a hardware product, you know, maybe listen to some of the things that I had said because I wish that I had someone that said those things to me when before I started this project. And I think that, you know, listen, at the end of the day, you know, what keeps us going is following our dreams and our passions. And you know, when you have a really good idea, sometimes people are gonna hate it, and you can’t let that discourage you. But at the same time, you have to listen, you know, and I think that, you know, that’s where even the pitch is great. Because when you’re pitching something, you’re hearing that everyone wants to hate things. So listen to the haters. Take a step back and see hey, is there a component of that? That’s actually credible that I believe in and apply it. And it helps you on your next pitch, and it helps you with your product. So, I say don’t get discouraged. Follow your dreams, but definitely listen.
Matt DeCoursey 45:12
Yeah, when when you’re doing that listening, listen to the echo. And you know, if you’ve got a bunch of people, I’ve talked to a lot of folks and, you know, they, they’ve done, you know, 10 or 12 pitch meetings with potential investors. And they’ll be like, yeah, and they’re all saying, bla bla, bla, bla, bla, and fuck that. And I’m like, dude, you need to listen. Because if they’re all saying that there might be something there, what you need to avoid as the one-off stuff. And I will tell you right now that all of the biggest moneymakers in the history of me as an entrepreneur, I can look back at someone, if not multiple people that were like, dude, how are you ever gonna make any money doing that? You know, like, it’s a thing. And some people are just wired like that. That’s why they’re not entrepreneurs, because entrepreneurs don’t have this mentality. There’s a couple things that well, one of the things that you said that I wanted to go back and mentioned, everyone is, you know, James mentioned earlier, he says, you talked a lot about boiling down your idea, and you don’t look, if you want to get something to market, you can’t add 10 million features to it and keep waiting and waiting and waiting and waiting, and waiting and waiting. Sometimes there’s only you know, there’s usually just a couple things that make people buy something or find it invaluable focus on those things, focus on what they are. And yeah, I think I’ve gained a strong appreciation for that, as I’ve gotten older is, you know, like, you can have these really singular products like there’s a restaurant here in Kansas City that sells nothing but chicken fingers. Chicken fingers and french fries and guess what they are the best chicken fingers I’ve ever had in my life. And the fries are okay with that, you know, but they’re killing it, I mean, there is a line outside the door, it’s the same idea as a coffee shop, like Starbucks is way out of line, if they want to start selling fried chicken and making it they’re in the store. Sometimes just because they have a market for it, or just because you have an idea, just something could be good. You know, doesn’t mean you need to do it. And it really in the end, the more features and the more bloat you add to whatever it is that you’re building the prop, the probability is that you’re not going to be world class at eight different things. And a collection of average stuff equals a very average product, if it even makes it that far. So we’re in this in this this this highly specified world, you know, we have a, I think one of the better technology examples was Linktree, we had their CTO on if you’re not familiar with Link tree, that’s the link that people put on Instagram and other places that essentially just is a little directory that it goes to talk about a simple product. eight bucks a month, I’ve got 10s of millions of users. It’s a huge it’s a billion dollar company now, and just focused on one simple thing. And you know, well, I don’t want to say simple because none of that a lot of this stuff appear simple. In the beginning, it’s the last thing I want to say is it you know, you alluded to kind of the entrepreneur way of kind of just getting into certain businesses, be careful about what you’re getting yourself into. Because like you think about the things that James went through from manufacturing, to timing, to funding, to, you know, a lot of stuff and if you haven’t traveled around the world, I’ll tell you right now that the double XL t-shirt that I’m wearing right now, is not a double XL t-shirt in Asia. It’s like a 4x, dude. I mean it is like it’s a some of that you know, these and that’s where getting your, your own boots on the ground, touch it, feel it, wear it, try it, rip it, wash it, you know, like a lot of these things and and see what happens because if you’re not careful about this, and this is the world of tangible things, like, software platforms now can be updated or repository sense something up line and boom. Now, you know, like that’s been that’s one of the harder parts of hardware and you know, we’re doing a little better with a you know, over the air updates. My car does that. Yep. Gosh, if I had had that on the last three cars I sold before I bought a Tesla, I might still be driving some of them because they weren’t ever up to date. Eventually something just kind of got goofy in it and got weird and that can be a real challenge. Selling hardware is hard. Yep. It’s that simple. So well James, congratulations in making it into the newly formed Startup Hustle Hall of Fame for most difficult stuff. I really did try to think about it I’m like and that’s an exponential scoring system. So you got three on that. So you were to the third power hardware, software and fashion. All are very daunting to get into I know you’re going to be successful with this. You have seen winning before. Folks, if you’re listening in, you know you’ve lost Hey, what’s cheaper going and getting three sets of earbuds from James or losing the air pods that are in your pocket right now think of it as like a hedge fund kind of thing. So go down, click that link and place an order this stuff’s going to be ready to go. By the time this episode comes out, James, thank you so much. I appreciate it and all the best.
James Wolfe 50:24
Thanks, man. I really appreciate the conversation. A lot of fun. Thanks so much.