EP 104 Insider Lessons Gained from Launching Successful Products Feat: Dale Backus

Dale Backus has a story with ups and downs, hard work and wins, and some really amazing entrepreneurial lessons. He’s won crash the Doritos contest not once but twice. He used some of these earnings to help fund his startup. That startup is now doing over $20m a year in revenue. That business is  SmallHD, a camera accessories company. Big wins for a young man of 31 years old.

 

Khierstyn and Dale are working together on a new project and it’s really exciting. Real world experience of taking a company from nothing, self-funding, and growing an impressive revenue stream.

 

That’s why Dale was invited on to the podcast. To give you a chance to hear from someone who has built from the ground up, from 0 to 8 figures, and is now starting at 0 again.

 

[04:30] 10 Year Journey in a Nutshell

 

Dale tells us that he had an entrepreneurial spirit from young age. When it came time to graduate high school, he wanted to take his own route. He didn’t want to follow what parent’s desired path. He knew he had skills and that it was just a matter of making money.

 

“It’s always a matter of money right?” Dale laughs.

 

He started a production company called 5 Point Productions and shares that it’s not something he would recommend. Products make more sense and it’s inherently harder to sell services. It was like a weight bearing down. They created some car ad, but he tells us that those are the worst. Then, the super bowl contest came along and they were inspired. It was only 4 days from deadline when they saw it, but they decided to go all in.

 

It was the first ever consumer sourced ad content contest – and they won. It was a pretty revolutionary marketing strategy at the time. A unique concept. That was the first of 10 years they ran the contest. It was unbelievable.

 

“We didn’t get a lot of money but we got a lot of credibility and an increase in business.” They leveraged that for 5 Point Productions. “We had some fun making things that WEREN’T local car ads.” Eventually, the fame wore down and they were back to the grind. It just wasn’t working for them anymore.  

 

In the process of running that company, they had to keep improving quality as they were getting bigger and working on accounts.  It was during this process that they discovered a need for this display to be able to plug in their HD camera into something they could monitor with. It wasn’t out there at the time and decided to go out and build it.

 

Dale loves creating physical products, likes it more than services, and edged everyone towards launching the product. They launched SmallHD which was building these displays.

 

[10:40] Meeting Sales Without Inventory

 

It can be tough launching product and meeting sales needs when you don’t yet have a physical product. Dale tells us that they tackled it head on. They threw together a few prototypes and crowd funded themselves on their own website. Kickstarter wasn’t around because crowdfunding was still a new concept. They ran a 24-hour campaign pre-order and sold 60 units which opened up the possibilities. When they got money, they ordered parts. Orders would trickle in but it was slow. Then they developed a real product, something developed as the next step.

 

There were many lessons learned in the process. At first, Dale tells us that they fought against MOQ (minimum order quantity) for a new board for which they couldn’t afford the MOQ investment. It so happens the Doritos contest popped up again around this time, though the prices had increased dramatically.

 

Against wishes and recommendations from those around them, they decided to enter again. Long story short, they created 2 ads and both were selected as finalists.  One became the second best commercial and they won $600,000. This was the boost they needed to meet those MOQs.

 

It’s a Cinderella story, Dale shares, and it doesn’t always happen, but it did for them. That’s how they launched the company and grown it so much over the past 8 or 9 years.

 

What they learned is that going and meeting the producers in person, especially in overseas cultures like China, it goes a long way. “They build their sales on relationships” Dale explains. If you make these connections you can often work them down and get the MOQs to something more manageable.

 

[24:54] Best Decision for SmallHD

 

Every thriving business experience highs and lows. For Dale, the best decision was to stay focused. Along the path, there were many opportunities to branch off or expand, but they stayed the course. Dale explains that the displays can work with and touch a lot of other technologies within the same vertical, so it’s natural to want to dabble in different opportunities.

 

Dale gives us some general advice. “It’s easy to get distracted by perceived opportunity. “ Until you dominate the space you are already in, why would go off and do something else? You must first achieve the primary goal of the primary focus first. That’s what they did.  Dale and his team wanted to make the best countertop displays in the world and they believe they’re almost there.

 

[27:15] To Swag or Not To Swag

 

When discussing focus, it stands to reason that the topic of swag comes up, because it can certainly take time. The thing is swag works.

 

You’re not trying to be the world leader in t-shirts, it’s an accessory. There should be limitations though.

 

There’s not a lot involved in swag like t-shirts. It’s about how much time it will take away from the main project and what resources it will divert. It shouldn’t slow you down from reaching that primary goal, it should be a support feature.

 

As an entrepreneur you need to, every day, decide to work on the most impactful things. “I strongly recommend making sure there’s good people around you,“  Dales stress that having the right people around you is how you accomplish those supportive tasks without splitting focus. You are the leader. If you are working on mugs and t-shirts all the time, it may not be a good thing, but if you have someone to do it for you, it’s likely a good deal.

 

[29:38] Lessons Learned: Part One

 

Like most entrepreneurs, Dale insists that he has made an innumerable amount of mistakes. Reflecting on those mistakes is something he does frequently. Still, there’s the number one lessons Dale feels we should all learn.

 

Hire with purpose and have a hiring strategy. There are lots of things that could be problematic, but hiring properly can take care of 80% of those things.  Dale says, “Most of your time should be spent on hiring and developing people.” Only hire when necessary, not because it’s fun.

 

When they started, hiring was fun. It was a sign of growth, but what he didn’t understand was that you need to hire the right people. This is the number 1 thing. You see (and can clearly hear) that Dale has been burned which is why he is so passionate about it.

 

As a founder, you need to get people to believe in your vision. The smaller you are, the harder it is to do that. As a result, you hire those that are easy, that you’re comfortable with; friends and family. They know you and it’s easier to hire them as they are already supportive. However, they aren’t always the best fits for your company.

 

Dales shares, “We hired the first 5-0 people and they were all friends or family.” When he hired his first team, he hired fast and hard and didn’t get the right team. It meant major delays and nearly bankrupted them.

 

After learning that lesson, they have a great team now, and it’s helped grow the company by leaps and bounds. Bottom line, hire the right people.

 

[40:21] Lessons Learned: Part Two

 

Though since we got Dale rolling, we thought his second and third most impactful lessons would be good to dive into.

 

Dale’s number 2 -Don’t over optimize too early. He shares that it’s very easy to want to do things the right way, almost to a fault. You can spend too much on big shiny systems before you need them.

 

Develop and spend as you need it. You shouldn’t be bleeding because of a system. Before you start spending money on a system, you should be desperate for it. Keep your overhead as low as you can as long as you can.

 

Lesson 3 for Dale, is more data driven, know your numbers. When they started, they didn’t have any idea what the number really were ever. Often they wondered where the money was. They were making money but there never seemed to be enough when it was needed. Know your margins, your costs of goods, your KPIs. It sounds corporate but it’s’ really valuable. You don’t have to be rigid but you need to know what it’s going to cost you to get a customer. This helps you better know where to spend your time.

 

[42:13] Something Nifty This Way Comes

 

Before he signed off, Dale helped get us hyped up. He’s getting ready to launch a simple product business. He invented this product and wants to get it out fast and hard. Dale’s working on learning more about online marketing. It’s time to get back into the entrepreneurial side, the startup side.

 

Dale is launching Oh Snap, a cell phone accessory. Want to know more? We urge you to visit getohsnap.com.Dale can hardly contain his excitement about getting it out to the world.

 

As part of the new venture, Dale says that they are looking for a marketing person, looking for a marketing strategist so if this is you send email to dale@fornom.com

 

Nothing beats listening to the episode, so if you’re reading this and you haven’t tuned in, check it out above.

 

Episode Outline

 

Introduction: Insider Lessons Gained from Launching Successful Products

 

[04:30] 10 Year Journey in a Nutshell

[10:40] Meeting Sales Without Inventory

[23:42] Backetkit

[24:54] Best Decision for SmallHD

[27:15] To Swag or Not To Swag

[29:38] Lessons Learned: Part One

[40:21] Lessons Learned: Part Two

[42:13] Something Nifty This Way Comes

 

Resources and Sponsor

SmallHD

getohsnap.com

Crowdfunding Product Launch Guide

Crowdfunding Product Launch Academy

 

Sponsor: BackerKit – use the code “uncut” to get 50% off setup services

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Backerkit is a crowdfunding fulfillment software service that helps you take care of managing customer data post-campaign.  They’ll help you with upsells, down sells, changing customer data, and streamlining communication. They are the service you desperately need but don’t think about until it’s too late. They’ve helped more than 2,000 creators deliver more than 3.5 million products to their backers. Get 50% off of their set up fees using code ‘UNCUT’ at checkout.

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