[02:24] Trent: So let’s start off as I always do, Logan, for folks who maybe don’t know who you are. Let’s start with an introduction. Who are you? What do you do? What’s the company run?
- Logan: Sure. My name is Logan LaMance. I’m actually the founder and CEO of Kanga Coolers. Kanga Coolers is a company we started back in college about four years ago. We created the world’s first conceptual koozie for an entire case of beer or soda. So when, back in college, I had to create a solution to a problem that we faced for an entrepreneurial class project, and I just turned 21 at a time. So the biggest problem I faced was drinking warm beer at a tailgate, of course, naturally. So I realized that me and all my friends had these expensive $300 coolers that we just loved to spend money on and show everybody, but we never used them when we’re actually going to a tailgate or to go play golf or in just, in the real world, we never used them.
I kind of realized that, “Okay, well, what do we do when we go to enjoy a cold beverage at a tailgate?” Well, we’d walk by the convenience store on the way to the tailgate, just grab a cold case, and then take it and drink it as it gets warm, because we didn’t want to deal with the inconvenience of a cooler. So we decided let’s just take the convenience over the cold. So we saw there was a gap between using a cooler for two weeks to keep your drinks cold, and going through the ice and hassle versus finding something that’s convenient for three to four hours. That’s where the idea came from for the first product, the Kase Mate and thereby Kanga Coolers.
[3:59] Trent: I love it. Talk about scratching your own itch. So let’s fast forward a little bit to today so that we can give the audience some context as to what you’ve accomplished. Then we’re going to kind of go and open up the history machine and unpack the things that you did to get from where you were, “I got warm beer in college,” to where you are today.
So where are you today? What if you want to share either, you know, some metric that’s easy to understand. Revenue, number of things you ship per month, or something to give an idea of roughly what the company has grown to.
- Logan: Yeah, so we’re in our fifth year of business right now. And last year, we became a multimillion-dollar company. And this year we’re planning on 2x if not 3x-ing net growth depending on how Q4 goes for us, and then he has an e-commerce business. So we’ve come a long way. I mean, we are not that far removed from our founding. We’re actually just in a town over from our university, Clemson University where we started it, but it’s definitely crazy to see, with, through Shark Tank and just a lot of things that we’ve done along the way, how far you can go in that short amount of time.
[5:03] Trent: Yeah, no kidding. Okay, so Shark Tank, Greg’s great segue. You obviously were on Shark Tank, you got an investment from one or more of the sharks?
- Logan: We did, we got an offer from Mark, and we didn’t entertain any others. We just went for it. Which in hindsight, I think was a good decision, made our episode look very clean.
[5:23] Trent: Yeah, no kidding. All right. So for the folks who aspire to be on Shark Tank. Let’s talk a little bit about that. So you’ve got this idea because you got warm beer, and then your first big milestone as you got on Shark Tank. What kind of happened between those two things?
- Logan: It’s a lot. There’s a lot between those two things. It doesn’t happen overnight. From our vantage point now, it seems like it was just kind of right next to each other. But at that time, we had to realize, “Okay, well, we’re a class project. How do we go from class project to real company? How do we go from idea in our head to, let’s actually figure out how to scale operations on this thing. Let’s figure out our marketing strategy, how we’re going to build a website for it?” We had all that to figure out –
[6:08] Stefan: I’m actually interested in knowing how you even figured out a prototype. So I mean, there are lots of people who have ideas in their head. So I’d love you not to skip how you went from an idea that’s in your head, just something that you can physically hold, and then start to figure out, “How do we get this?”
- Logan: That’s the biggest win to begin with, right? That’s the biggest milestone, to start, is to taking it from here to here, and having it in your hands. So we actually, we you know, entrepreneurial to a T. We just said, “Okay, what are, you know, we want to make a koozie for a case of beer.” “What are koozies made out of?” Google what koozies are made out of, and then found out if we could get a roll of that material shipped to us. So we got it shipped to us, paid way too much. Had just, I take it, like a 30 foot roll of scuba foam shipped to us. Then we said “Okay, well, we have the material. Now we just got to get it turned into something that’s going to go around a case. Who has a sewing machine? Well, dress alteration shops have sewing machine.”
So we ended up calling around the local dress alteration shops and saying, “Hey, we have this project, we go to the local university, would you be willing to help us out with this prototype?” We actually found one, her name was Mary Hancock, so shout out to you, Mary. We brought it to her and she said, “I would absolutely love to do it for you, but on one condition.” We say, “What’s that, Mary?” She said, “You have to buy me a case of beer to use, and I get to keep the case afterwards.” We said, “Okay. All right. Done deal.” I’m sure she has a couple of botched prototypes as well with that material. We didn’t get all of it back. So it’s probably sitting somewhere.
[7:43] Stefan: Yeah, but that’s really smart. You know, thinking about not using, “How do I go and get a sewing machine?” “How do I go and build this myself?” I think that’s a smart note for want-to-be entrepreneurs, which is, think about the people that are already using the equipment, that already have the expertise, and figure out how you can work a deal to get them to do it for you.
- Logan: Absolutely, I mean our approach originally was very simple. I mean, it’s just a scuba foam sheet. Our product is far, you know, more complex than that now with the different layers of insulation and things. But yeah, just breaking it down to the fundamentals and seeing what’s my shortest way from point A to B and going there.
[8:19] Trent: So what was the next chapter in the journey? Once prototype is in hand, you know, then what happened?
- Logan: Got to get a team together. I’m not sure if you guys would believe it but sometimes your class project partners aren’t units or your best business partners. Sometimes. Randomly assigned a group in college doesn’t necessarily mean that it’s gonna work out for five years. So how do you go through that? We have one guy named Brian who was a part of the project and he’s still with us, which was, you know, amazing to have that fortune to find him there.
But yeah, we had to really set ourselves up as a business and change that mentality from “Let’s get an A on the project,” to, “How we’re going to form the foundation on this thing, how we’re going to get this thing protected with IP?” You really do, as an entrepreneur, become experts in these different areas as they become needed. So we had to become somewhat experts on filing for intellectual property, setting our company foundation, operating agreements, finding the right people, all that not so fun stuff, that everybody kind of just doesn’t think about sometimes, they just breeze past that focus on the product, but you really got to form a very solid foundation for your company to grow on. That was what that next chapter was focused on.
[9:27] Stefan: Were you bootstrapping that or did you get a seed, family, friends, angel round, whatever word you want to use, basically, you know, pre-real investment money, did you do that? Or did you guys just dig into your own savings?
- Logan: Well, we got a loan from a, kind of like a friends and family slash mentor. But that’s it. I mean that we’ve really adopted more of a bootstrap model since then.
[9:50] Stefan: By the time you made it to apply to the Shark Tank, did you hire a professional, meaning maybe a consultant that’s in your space in creating consumer products like this to then Shark Tank-ify it more, if you will, to make it more complex and more robust before you went, or did you go kind of with the prototype that you’d made with Mary?
- Logan: We had a ways to go between that. We did a test market with a different factory in our local area. They weren’t able to do it at scale, but they’re able to produce a couple hundred of these things. So we could really tweak the formula, you know, “Should we put a top flap on it?” “Do people care about a handle?” “Is this a cooler with handles on the outside, or this is a koozie, were that, you just open it up and grab the case’s handle?” Different little things like that, where we had to figure out what price point, all that stuff, just solidifying the product market fit.
Then going from there to actually being introduced to our first mentor who is where we got our first access to capital. He was an ex-Vice President at Under Armour, so there were a lot of connections that, and just wisdom and insight because he basically took a bunch of college kids that had a great beer-drinking idea. Imagine, you know, making it to a real company, trying to take our mindset in our perspective and shift it to one that’s more serious. He set up a lot of things with us, with factories, and we really got our product built out to where it needed to be. Then obviously we have to figure out how to market it and sell it so we naturally went to Kickstarter from there.
[11:20] Trent: Okay, so I actually, I had another guest of mine who, fellow by the name, Colin McIntosh, founder of Sheets and Giggles, had a great, he makes these bed sheets out of, I forget what it is. But another wonderful success story. If you’re listening, folks, and you haven’t listened to that interview, his product validation strategy was brilliant. I would encourage that you, just go into the search box on brightideas.co and type in either Colin McIntosh, or Sheets and Giggles, or Sheets, might be apostrophe, I can’t remember. Anyway, so you did your Kickstarter, Logan. You know, Kickstarter is not a new thing anymore, and there’s a lot of competition to get eyeballs, and if you’re not bringing your audience with you to Kickstarter, chances of you really lighting it up are pretty slim, because there’s so much competition. So what did you even do to make the Kickstarter a success?
- Logan: Yeah, it was tough, it was very difficult. We realized that we had a concept that we had to educate people on to begin with, An iceless cooler, that’s different. You know, it’s strange, so we had to educate people on that. Then you have to educate them on the platform and realize that to have success on Kickstarter, from our vantage point, it’s really key to have that serial backer, be inclined to buy your product, like someone who’s already natively on Kickstarter, you know, readily available, able to adopt your product and your idea. We found that our target customer didn’t necessarily already exist on Kickstarter, we found that we were dragging them, kicking and screaming, over to the platform to get them to learn how to use it, understand the pre-order process, as well as get them to take a leap on this new concept.
So we found, you know, every time you dragged someone that hard, that far, you pay a lot of money for not as much return. So, we learned a lesson on that, but we made it out alive, had enough to start our first run and turn the next page for the next chapter, where we actually opened up a bit of a different channel for our business. We had watched Shark Tank for a while, we wanted to go on the show and we knew how to build our company for that. We knew what kind of numbers they wanted to see, we needed to diversify some of our income streams in different channels. We also knew that we wanted to be a company, not a product. So a lot of things that we had learned just from watching the show we use to build our business and package it for the show.
[13:43] Stefan: Hang on, I was just gonna ask like it was it? Was it just by watching the show? Or was there some resource or research that you did? Because I’m sure there’s a lot of people out there listening, who are also dreaming, potentially, of going to Shark Tank. I know that I find that when I’m watching, I kind of cringe when I know that nobody’s coming to the table with what these investors are expecting and what they want. So was it just a matter of watching the show, or did you have other resources to figure out what you needed to do to be Shark Tank-ready?
- Logan: There were a couple different things along the way, as far as getting on the show itself. I was on social media to figure out when the casting calls are, just google, like, what are the best tips and tricks for getting in front of the people, even begin that process. As far as preparing for the show itself, we had some people at our university that came together, some professionals in their own fields, come together and do some mock Shark Tank trials. We wanted to practice harder than we play. We wanted to get absolutely destroyed, you know, multiple times and be just absolutely embarrassed of ourselves, so that when we got up on the actual stage, we weren’t, and they, you know, drilled into us.
Because the difference is, on actual Shark Tank, if we have a good take or we have something good to present, we can kind of create that positive momentum in the room. When we’re doing with people that are specifically there to roast us, we can’t get that momentum. Every single possible thing that they could find wrong, they’re going to exploit that, they’re going to pursue that. So we got to see you know how bad it could be. We went again, fixed some of the things, and then figured out how to present it. So we, when we went on the show, it actually only lasted, I want to say it was 20 minutes, usually they last about an hour, and they cut it down. Ours was only 20 minutes, the actual pitch. It was very smooth.
[15:27] Trent: That’s great, well rehearsed. I want to read you something real quick here. So I’ve been going through an exercise here today with my own software, business, marketing and product market fit and so forth, and this concept of positioning. There was a woman who I listened to, April Dunford is her name. She defines positioning as, how your product is the best in the world at delivering some kind of value that a well-defined set of customers cares a lot about. Do you feel like you have your positioning nailed now? And if yes, you know, like, was it always that way? Did you always know your positioning? And if not, how did you figure it out?
- Logan: I think with anything, we don’t have it perfectly nailed down. We’re constantly trying to adapt things, change things and improve things. But yeah, we evolved that over time, we thought that our customer would be a college student, just naturally. But in reality, we found that our customer was the person that recently graduated college. Some people have a preference towards ice cold beer for two weeks, and they want that premium name of some of our competitors. They want, they like the status of that. But other people would want to trim through that and just enjoy the experience and make it as seamless as possible. So we prioritize funding convenience for that type of customer. The type of customer that says, “$300 for a cooler? I’m still not cool with that.”
[16:55] Stefan: So the cooler’s made from Austin, Texas, I assume is who you’re talking about.
- Logan: There’s a bunch now, but we take a different approach for sure.
[17:05] Trent: So you have, it’s a very interesting marketing challenge that you were faced with, because you have a product that has wide appeal. Anybody who wants cold beer. Who’re you selling to? Anybody that wants cold beer. But that’s a really hard audience to market to because it’s too big. So then you could sit there and you could go well, “Okay, so people who watch football, or people who go to car races, or a college graduate.” How on earth did you even get the needle pointed in the right direction enough based upon hunches and assumptions so that you could hopefully, use data to validate those hunches and assumptions and then really get dialed in on who your target customer is.
- Logan: Yeah, just trial and error. I mean, we set out thinking our target customer was that college student. But through trial and error, with we primarily use Facebook ads for marketing, just segmenting those audiences and things. We saw that, you know, “Hey, this is the customer base, that’s buying the most.” I said 25 to 34 year old, male, young professional, that type of person that enjoys going golfing, that was a big thing for us. Tailgating, like you said, going to the pool, doing different things, you know, like on the boat. It’s almost like we didn’t actually have much of an idea at all, we just kind of tested a bunch of different things, and then found our conclusion through that.
We’re still testing that. We launched a new product. It’s kind of a different evolution of that concept called the Pouch. We’re testing a different age demographic for that, because we think it might actually resonate with the slightly older demographic. We’re pairing that with golf right now and it’s doing exceptionally well. So taking our assumptions, obviously, to know what to test, but then really letting the results decide where we take it.
[18:59] Trent: So the follow on to that that is, and I know Stefan has a question. So I’ll shut up and let him ask his next. The following is, how long did that testing take, and approximately how much money did you spend during that period of time?
- Logan: It took us a very long time, not from the sense that we ran this test where, so we had no idea what we were doing. I’d say even after Shark Tank aired, we had no idea exactly what we were doing from a cost standpoint. We were just kids that graduated college, we had a lot to figure out right how to make a product, how to, you know, find that product market fit, how to set yourself up legally financing everything, operations.
Marketing was, in my opinion, the last piece to fall for us to really, you know, we don’t know it all perfectly. We’re still constantly growing, but to really fall into place and also to understand it to an exceptional level to actually scale it. So we, it took us probably about a year after Shark Tank to get that nailed down and dialed in and truly understand how to test for those things. What are we testing for? What kind of creatives to show, messaging to show, interest groups to pair it with, to show what the customer resonated most with. Obviously, you know, Google Analytics is trying to helpful but yeah, it’s one of those things that we always want to check our assumptions because, yeah, we would have built the business to a college student had not we’re not
[20:19] Stefan: Speaking of noticing, like you said, you’re kind of looking at some golf partnership, or at least going down that path and noticing an older demographic. I was on your website, and I was looking at some of your creative. I noticed one of your models was holding an Island beer, which was founded by a buddy of mine, Scott Hansen, who I went to military with. Shout out to Scott Hansen. We’ll probably have him here on the show. He’s another great entrepreneur. But I’m wondering, tell us a little bit about how you started exploring brand partnerships. So I know that there’s an Island-Kanga Cooler. So what was that like and how did those begin? How do you kind of seek those out? Are they dragging you into other market—
- Logan: That’s a very funny story. We, so that’s a really fun story, because we actually built that side of the business for Shark Tank. Because we knew, okay, let’s say we film in July, our Kickstarter, it was over in May. We’re at that point in time we’re producing these things, and we haven’t even gotten him in yet. We actually got our first coolers in the week before we filmed for Shark Tank. So how are we supposed to get our revenue numbers into a position that’s going to make us look great to the sharks?
It’s tough when you don’t have inventory, when you just finished your Kickstarter, right? We are here to kind of talk from my standpoint. But one thing that we realized was actually we made our product fully dye sublimatable, which basically means you can just run a print file on top of it. So you can put any graphic you’d like to. We did that for us, because we wanted cool graphics. But then we realized, “Okay, wait a minute, we have a serious competitive advantage in that cooler space for custom embellish goods.” Actually, at that point in time, someone from Anheuser-Busch reached out to us wanting to do a custom good.
So we realized, “Wait a minute, this actually might be an extremely lucrative opportunity for us to get hundreds of these things made at a time.” So every order is now ones and twos, it’s, you know, 300, sometimes up to the 1000s of these at a time, and we’re making them custom for them. They’re fully printed with their logo. We had a really good advantage in that space. It helped us package ourselves, get the revenue number we need for Shark Tank. But it actually all started with us wanting to have cool graphics for ourselves and a random introduction from someone Anheuser-Busch, which, if that ever happens, that’s a lucky break for sure.
[22:48] Trent: Well, they say that luck is the meeting of preparation and opportunity. So let’s, I’ve listened to many podcasts, one in particular on NPR, How I Built This. He always asks these ultra successful founders, to what do you know, how much do you attribute your success to luck? It’s pretty rare they don’t say at least half. So the question that I wanted to ask you is, once you got through this early testing phase of all the Facebook campaigns, and you figured out that, you know, “Okay, my ideal customer profile is this person over here.” Did revenue really accelerate after that because you kind of got it dialed in? Or was it more of just steady growth the whole time?
- Logan: Once we figured it out, it was a little more of a steady growth. Model, it didn’t exactly explode overnight. I mean, it takes a minute to kind of onboard these things to, you know, change up how you’re collecting your creatives to change up how you’re messaging, how you’re building your campaigns and Facebook, how you’re building your funnel as a whole, email flows and everything. But it’s for us to move that needle and say it was more of a gradual build from there. It’s not even that one day, we just decide, “Oh, now we know everything there is to know about this,” it’s more of just we gradually get better each day, each time we do some we’re even doing some new stuff right now that we’ve never done before from never trying a new optimization model out. But I think it just accelerated to a point alongside our growth to where you know, we were able to see a little bit of faster growth but still steady. Yeah.
[24:37] Stefan: Quick question about Facebook. Did you begin by trying to do it in-house and figure things out yourself? So you’re literally opening up, business manager and creating campaigns, ad sets and ad units or did you immediately go to an agency and if so, did you have to go through a lot of agencies? There’s a lot of turmoil I found with companies and brands as they experience In Facebook, there’s a lot of failure. I’ve also experienced with really big agencies that smaller brands don’t get the attention of the larger brands. So they’re at the right agency with the wrong people, and they’re not getting results. So what was it like for you to kind of figure Facebook out?
- Logan: That’s a great question. I would say that we didn’t really come into a place of understanding ecommerce and really becoming successful at it until we started understanding how to run our own Facebook ads. We don’t do it in-house right now, we partner. But in the beginning, we outsourced it to an ad company, we were fed a lot of information that we did not understand, and we’d buy into it, as most companies do, what do you what are you supposed to do, you know, snap your fingers and become an e-commerce expert overnight. Now, it takes time, and you have to trust people and believe people, and sometimes what they tell you is not necessarily true.
So we had a lot of volatility on some ad agencies early on. And I finally got to a point where I was tired of feeling vulnerable and tied to them and not understanding, and the battles and so I just decided I’m going to, you know, use my online resources and learn how this stuff works myself. I’m going to run this for a couple months, and then I’m going to invent a company based on that understanding.
So now we actually work with a single person. And it’s more of a partnership, as opposed to an outsource. We come together, and our head of content is here. I’m here, and he’s here in a meeting, and we’re sitting there talking about campaigns from all three of those vantage points. We’re setting structure, and then figuring out things from all three of those perspectives. The guy who’s going to collect it, the guy who, you know, “I’ve got access,” obviously, the resources and the direction of the company, and then the guy who’s going to execute and get the specific insight.
So having that level of understanding internally, while also maybe if you want to have some, you know, capacity outsourced and some brainstorming and some insight sourced, that seemed to work well for us. Because it’s not a great feeling being a company where you’ve got a lot of things to worry about, you’re just starting out, and you don’t know if you can trust your ad agency or your partner.
[27:04] Trent: So you’re now at a place where you’ve got traction, you’ve got some momentum. Let’s talk about sales channels from it. I’m looking at Amazon. Now I see your Kase Mate there with a review. So I’m guessing Amazon’s not a big channel for you. Maybe that’s an unauthorized seller selling that on Amazon. How did you do?
- Logan: But no, we opened up Amazon temporarily last holiday season, just to see if there’s anything, to always testing the channel a little bit, we kind of did our barebone things, we didn’t really spend a lot of time on it, we were more focused on other channels, and just kind of without looking at it and ended up pulling through very quickly. So we saw a lot of promise there, but we, in an ideal world, would already have that channel opened up and scaling.
The world we’re in right now as we have inventory shortages, which is a great problem to have, but it came down to a point where it does not make sense for us to open up a new channel that we’re not going to be able to fulfill on quite yet until we get ahead of the ball on our on our operations just you know growing pains type thing, but we’ll get to Amazon down the road without a doubt. That’s going to be an exciting endeavor.
[28:17] Stefan: Are you a Shopify or are you guys more enterprise at this point, like Oracle Cloud Commerce?
[28:27] Trent: So the inventory shortage, is this because of COVID? Or is this because working capital, there’s not enough of it to buy enough inventory to satisfy the sales velocity? Because obviously, any product based business working capital is always an issue.
- Logan: Right. Working capital is definitely an issue. We have a lot of good terms set up with our suppliers and things are looking very good from that standpoint. The challenge is capacity at our factory and the speed at which they can scale contrasted with the fact that we were opening up our wholesale channels a lot more. We actually just opened up Ace Hardware stores, which is great nationally. So we’re really excited about that, to meet that type of volume. It’s been a strain for sure. We’re making it work. We’re making it happen. It’s just it’s a you know, it takes time to build the supply chain out to be able to handle stuff like that.
[29:15] Stefan: Do you manufacture from one factory, one company that manufactures for you, or do you diversify that across different companies, different contracts?
- Logan: We diversify very heavily. It was to a fault previously, but now it’s definitely helping out in a big way.
[29:32] Stefan: In all Asia or other places as well?
- Logan: Asia and El Salvador, Central America. We’re trying to get a little closer, the national freight market is very volatile as anybody involved in importing will tell you. So we’re trying to just reduce the distance between where it has to come from to us.
[29:53] Trent: Let’s go down the Ace Hardware rabbit hole for a minute as I’m sure there’s other brand owners that are listening who are thinking, “Man, I’d love to get into retail.” So walk us through, you know, kind of how did that start? How long did it take, you just just tell us the story of how you eventually got on the shelves?
- Logan: Yeah, I honestly would not be the best one equipped to tell that story. I’m not gonna butcher it, or head of sales, Austin, brokered that deal and had a great relationship. It’s one of those processes I knew outside looking in, and just got it from a management side, it takes a long time. It takes a lot of relationship-nurturing. It, basically, you just have to be there and already known by that person, or you have the contact for when that opportunity does arise.
So as soon as that kind of like you’re saying, with luck, like when preparation meets opportunity, you have to be kind of ready for as soon as that opportunity comes up, you know, it’s plug and play, you’re there. But you have to build that relationship on the front end, you have to have those independent sales reps that may know more about selling into these types of retail accounts than you do. It’s a big game to learn and so obviously, having the right partner that can help you understand how to play it is very important.
[31:10] Trent: Do you see wholesale eventually eclipsing the velocity, the volume of product that you’re moving? Like, did you see wholesale becoming a bigger channel than your DTC channel
- Logan: From a revenue standpoint, it’ll be very close long term. From a quantity of unit standpoint, it’s already there, from wholesale, and then our custom channel, which to kind of break it down, our b2b side of the business, does about 40% of our revenue, and our our b2b is split up between about 50%, custom and 50%, wholesale.
31:43 Stefan: I got to see that custom as a huge opportunity and the minute you mentioned that Anheuser Busch got a hold of you, my eyes would have almost been like, “Do we pivot entirely into that?” “Is our business just entirely providing this product to all of these brands, and allowing them to sell it and not have to worry about customer acquisition.” “I don’t need to worry about, there’s a lot of things I don’t need to worry about anymore, what I need to do is just lock down more and more brands who want this product.”
- Logan: Yeah, we definitely made a full income stream out of it. I wouldn’t say it’s viable to be our sole source but it pairs with our cash flow model extremely nicely. When we have wholesale, which has its own cash cycle, we have e-commerce, which has its own cash cycle. Then you have the custom side of the business, which is a lot more, accelerates it, I guess, upfront, a lot more prepaid. Because our biggest fear would be, “Oh, let’s make this custom good for someone,” and then they don’t, you know, don’t have any skin in the game, and then they don’t pay or they don’t want it at the end of it, then we’re stuck with it, we can’t do anything. So it really, the way it floats our entire system is extremely valuable. The scale is great on it. I just think it might be tough to make that the sole income stream, but it definitely—
[32:55] Stefan: The fact that you’ve got multiple business, the moment you have multiple revenue streams for a single product, I think it’s also really impressive,
- Logan: Right. As we’re building out more products to have more places to plug it in, it’s a very good asset for us. Just kind of going back to last year with COVID. Had we not had the e-commerce channel, we would not probably still be here. So it’s a lot. It’s a lot of stuff going on, but that diversification I’d say is very valuable to our organic growth.
[33:25] Trent: So you have just six people, I think you told me before we started rolling on the team, currently six full timers, and then you have a number of interns. I think you said four, maybe.
- Logan: Four interns and actually have one more full time this summer. But yeah, not not a very big thing.
[33:40] Trent: How many hours a week are you working right now?
- Logan: I’d say about 50. I mean nothing crazy. Nothing, not the entrepreneur 80 I used to have to. Okay, I’m at a position whereby each hour can go farther than it ever has, which is great.
[33:55] Trent: Yeah. The joke among entrepreneurs is the great thing about being an entrepreneur is you have the freedom to work 24 hours a day. That’s entrepreneurial freedom.
- Logan: It’s like part time for Trent. Yeah, it’s my monthly goal, but it’s really, his weekly target is my monthly goal.
[34:14] Trent: I’m about 50 hours, 50 something like that. Alright, so let’s talk a little bit more about DTC. So from what you’ve told us so far, Logan, it does sound like your largest source of traffic is, or at least it was, maybe it still is, Facebook ads. Is that still the case?
[34:32] Trent: Okay, so any, are you doing any Google Ads at all? Because I mean, our people—
- Logan: We were. We used to spend a lot on Google ads. That’s something we’ve kind of gotten out of a little bit. We make sure you know, if you search Kanga or anything related, you’ll find this, but we were not able to get any profitable cost per click campaigns up or really anything comparable to what we’re able to do on Facebook. So most of the success we saw on Google was indirectly or directly a result from Facebook ads. We have other things that we do, but I think Google is something that we can look into a little bit more, but we’ve kind of not made it a priority or quite yet,
[35:12] Stefan: Since the update to iOS, I’m seeing in people that I deal with, deal with Facebook, that there are significant impacts to campaigns, as only 4% of iOS updaters have allowed targeting. Have you seen this affect your campaigns already in the last couple of weeks?
- Logan: We are in that battle right now. Our theory on it kind of, approaching it, was that content is already king. But content is going to be even more important in an age where you can’t specify exactly who’s going to see it based on your best preferences, right? So having a super high quality piece of content that’s going to be more relatable to more people to a broader audience is going to be even more important than ever has been.
We’ve seen some of our best campaigns, no matter where we put them, they would be successful, doesn’t matter if we put them in the retargeting site, doesn’t matter if we put them in a look-alike or here. We realized, “Okay, our best quality content that has x, y, and z, all these different variables that we have to check off. It transcends a lot of those different interest groups to different buckets.” So now our strategy is a lot more focused on the interest group, a little less on the look alike algorithms and things like that, just kind of going more bare bones fundamental, and really focusing on the creative and making sure—
[36:28] Stefan: When we talk about content, there’s a difference. There’s ad content created for ads that are meant to you know, that have calls to action. Then you have companies like Red Bull and GoPro where they actually create actual content with no calls to action. They have become content companies. In fact, I would argue Redbull is an entertainment company that just happens to make its revenue on a drink. So with your brand and the fact that there is kind of lifestyle surrounding the outdoors and fun and parties and kind of beer and all of that stuff. Do you only think of content in terms of ad campaigns and ad creative? Or do you also think about content, maybe in baby terms compared to companies like Red Bull and GoPro?
- Logan: Yeah, we definitely have more of a long form model as well. I mean, we have our own podcast, ?Business One-0-Fun Podcast. We have seasons every once in a while. We have a series, kind of like a vlog series called The Fun Factory that we’ve used to kind of document our journey to this point. We got a NASCAR truck out in Iowa, we documented the journey, we did some behind the scenes Shark Tank stuff. So we’ve definitely loved the long form.
Our favorite type of content, I guess, you would say is actually TikTok right now. It’s those short 10 to 15, 10 to 30 second clips, we’ve had our most successful social channel on TikTok, and just the amount of virality you can achieve on that platform is just absolutely insane. If I asked you guys, which one do you think we got more? I guess, Which Avenue do you think got more eyeballs on Kanga, TikTok or Shark Tank? You guys would probably say Shark Tank, right? As most people would. It’s actually TikTok.
[38:09] Stefan: But are you able to track attribution of sales back to TikTok? I mean, it’s one thing to talk about the vanity metrics of the views and the virality. But I want to know about attribution. How are you kind of tying a line back to say, “Okay, we actually know that this sales increase or whatever is because of TikTok,” are you able to do that?
- Logan: We don’t have a direct, quantifiable metric. We see spikes in traffic when we have videos go viral. But the thing is, we don’t pay for TikTok ads, we just do organic. So our entire goal with TikTok is just general awareness, just top of the funnel, everyday consumer, mass awareness, so that when we hit them again later through one of our other means, it’s a little bit softer of a person to convert.
[38:48] Trent: So Stefan stole my thunder a little bit on some of the questions that I wanted to ask, but I’ll pick on the bone. In the world of SaaS, SaaS companies are starting to realize that media, long-form content, like what Red Bull is doing, is a valuable asset. HubSpot recently acquired a company called The Hustle. So I’m wondering, and you’re already, because, Stefan stole my thunder, rotten bastard. He went and looked smart ahead of me. So you’re already creating some of this content.
But my question that Stefan didn’t think about is, have you thought of making a media acquisition, maybe it’s a website that just happens to have a lot of traffic that’s poorly monetized, and the traffic that it has would be great traffic because it would align and then you could literally just put your ads all over that site and you could either continue to produce content because it’s relatively easy to do. Have you ever thought of anything like that?
- Logan: We haven’t gone that route. That’s something that’s gonna actually spark some ideas in my head. So I really appreciate and appreciate the direction on that.
[40:07] Trent: You’re saying I outsmarted Stefan. That’s what you’re—I hope the audience is having as much fun as we are. So I bring that up only because, I’ve seen it done before HubSpot obviously, is a big example recently. But I also know of a fella here in my town, who’s in the e-commerce business, he owns a number of micro brands, and that’s his primary go-to market strategy. He goes, he doesn’t think, “Hmm, I’m gonna make a product. And then how can I market that product?” He goes, “Where can I find an audience that I can buy and own so I don’t got to rent it?” Because basically, ads is just renting it. Where can I find out, “Oh, there’s an audience. I’ll buy that one. Now what does that audience want to buy and then I’ll just figure out how to make what they want to buy.” I don’t have insights in these financials. I don’t know how well it does. But he’s been taking this approach for years. So I gotta assume it’s working for him.
[41:15] Stefan: We should interview that guy. I mean that sounds like, I mean, I’d like to know all about, but I don’t know where you find audiences for sale. But I would like to. I’m buying audienceforsale.com as we speak.
[41:28] Trent: You find it at website closers and you find it at all website clippers or something like that. There’s a bunch of website brokerages. If you just Google website brokerage, you’ll find them. bizbuysell.com although not really the best. You can find them or you can, taking a page out of an interview I did. The problem with when you’re trying to buy an asset that is publicly listed for sale is what, competing buyers, right? If it’s a really valuable asset, you’ll have a bidding war. I know this now, because I’m actually trying to buy a house in the Bay Area and it’s just ridiculous. So much. So many bids, I actually gave up.
But here’s, so I interviewed a fellow who owns a company called Elements Brands. His name is Bill D’Alessandro. His growth strategy is growth by acquisition. He doesn’t create brands from scratch, like you, he just buys them. But the way he finds them to buy is brilliant. I’ll explain it in a real, real, short, short way. What he does is he networks with local business brokers, the business broker that’s in Tampa, the business broker that’s in Denver, the business broker that’s, you know, name your town. Because what he’s able, what he’s discovered, is that sometimes the people that own these assets aren’t the savviest and don’t really know the best way to sell them.
So they Google, “business broker Tampa”, and they go give this guy the listing, even though this particular local business broker might not be the best expert, might not be the best broker to sell that online asset. So he’s built this network of people that he’s constantly keeping in touch with, his team is keeping in touch with, “You got anything, you got anything?” So that he’s able to get deal flow, without the bidding war that can occur when you list the website for sale on, you know, whatever. And that whole strategy is not rocket science and you could employ virtual assistants to do a lot of that legwork for you if you had the right processes that are in place. I don’t know what kind of software you could use for that. But, Stefan, any ideas?
Anyway, I digress. Alright, so TikTok, big source of traffic. I’m just looking at notes here. Talking about traffic. What about SEO, has that been much of a thing for you guys
- Logan: It’s something we’re going to try out a little bit more in the future, we have a build that we’ve had running for a couple months now, just trying to get that habit built out, by a guy that’s just done a great job so far with it. We haven’t really done a huge SEO focus with it yet, we’re just trying to get it more established, get to have it built out, make sure it doesn’t fall by the wayside like it has in the past. That’s something we’re gonna have to really focus on, when it comes down to building out a little bit better.
[44:28] Stefan: Part of the struggle with SEO, as far as I’m concerned, is that it means there already has to be a group of people looking for that particular thing. Then you’re writing content to be able to kind of serve up those long tail key keywords. And so, because awareness of an iceless cooler is not ubiquitous enough. There’s not necessarily a lot of people looking to solve that problem because they don’t know that it exists yet. So from my perspective, I feel like SEO in the long run, frankly, even when you have competitors. When there’s a lot more of it out there, there might be more search. But what I’m more interested in is a channel we haven’t talked about, and that’s the influencer channel. Have you gone down that road of influencer marketing and was it successful for you?
- Logan: We haven’t done anything major for an influencer marketing standpoint. We’ve done it a couple different, I guess, deals with people with, you know, more Instagram following and things like that, where they would just it would be like, a commission based, you know, cut of the sales they bring in and things, but we haven’t seen—
[45:39] Trent: Have you heard the term, Instagram shout out? I mean, you can literally just buy a post, you don’t have to come in or anything like that. Those are going to be much easier deals to do because then the person that owns the Instagram is just like, “Oh, if I make a post, I get money guaranteed.”
- Logan: Yeah, that is true. I guess what we saw in the past too was when we did the percentage, we didn’t get a lot of sales from it directly, to be transparent. We did a percentage, we actually paid less than doing that flat fee because it was based on the result of it, which, the way the metrics we set up for that. It wasn’t that great. It’s not a strategy that we’ve really pursued in depth to this point. It’s something that down the road we’ll definitely look at.
But our biggest source of I guess, an influencer on social media is actually our customers and it’s our ambassadors. We have a big ambassador program we utilize for that. But also we partnered with a company, I can’t exactly name actually right now, but they actually plug into our website and they give a percent off the cooler in exchange for the customer posting that on social media to their 1000, 1400 followers to get more of an organic outreach instead of that paid influencer look. So it’s more of a—
[46:50] Stefan: So your Ambassador program is a discount based on posts, based on participation?
- Logan: We have a good grip of about 400 college students right now, you can, young adults, that really just you know, embrace the brand, they get a lot of perks for it and they promote it. We also have for, any customer out there, which could be for better or for worse, they can get a percent off for posting their cooler on their social media.
[47:17] Stefan: Yeah, I’m working with a brand now in a different space but they have actually found success in working with some influencers. But what they had to do was put budget behind the influencer posts. So the influencers were doing the post, but they were also putting supportive budget behind it to kind of spread it far more than they’re receiving return on investment there.
At the same time, I can tell you that there are plenty of stories of, almost influencer marketing fraud, in the sense that the agencies sold this incredible story about how much lift and growth you’re gonna have. In fact, it just wasn’t there. It was tremendous vanity metrics, lots of clicks and engagement, but there wasn’t a lot of sales. So it’s still a slippery slope. And I think each company has to kind of dabble in and figure out if it’s working for them.
[48:02] Trent: Right. So absolutely. I just thought of I’m going to make an introduction for you afterwards to a guy by the name of Tyler Sullivan. He goes by Sully, he’s got a golf brand. You’d mentioned you were getting traction in golf. I interviewed him, gosh, a year or two ago and he was doing about 6 million back then. Super cool guy. If that’s of interest, I’m happy to do that. I got to think you and he could, you know, do something pretty cool together. Like—
- Logan: We’re always open to new ideas. That’d be perfect right there. Absolutely. It’s a match made in heaven. I mean, you’re playing around a round of nine, or you call 18 holes, you need cold drinks all the time? That’s why we find success, there’s a great use—
[48:48] Stefan: All you need is the seven iron and a putter anyway.
Trent: You know–
[48:52] Stefan: if you’re like a slap those right onto your cooler and no longer have to schlep my club now. I’ve just got my fits right in the little box behind there.
Trent: I have a simple rule for golf. If you can play the back nine, you didn’t drink enough beer on the front line. That’s my golf game.
[49:13] Stefan: I can’t play the front or the back. Doesn’t really matter. My golf score and bowling score are similar and that is a problem for both sports.
- Logan: But you’re not trying to see which one you can make the highest.
[49:28] Trent: That’s, there was a guy I used to golf with, he was telling me his strategy with golf was he was always trying to lower his average cost per stroke. Which is to say the more strokes he made, the better he was doing according to the law.
[49:44] Stefan: What’s next for Kanga? As we get closer to rounding out this hour, where are you looking ahead and what do you think, your biggest challenges, you mentioned right now, that kind of inventory was a bit of a challenge that you’re working through. What else do you see either as a challenge or a big opportunity for the future that you’re starting to work towards long term?
- Logan: For sure, yeah, so the scaling process is definitely a challenge for us. You mentioned that, you know, it’s great to have those multiple different distribution channels for that single product, you know, kind of maximizing those with that one single product is something that’s going to be a challenge, introducing the new products that we do have lined up around our product development, philosophy, and kind of our mission statement to bring fun and convenience to beverage cooling solutions. That’s going to be a challenge to, you know, bring those new products to market, and then plug them into those channels.
Then on top of that, opening up new channels email on top of that, so Amazon, being a big key player, and then some other options that may come down the road. It’s a challenge for sure to grow the business. But I think at this point, you know, it’s all fun, it’s all exciting. I mean, we’re getting to see our dream come true every single day. When we started that, that thought, of, “If only we could make it on Shark Tank, if only people would actually, you know, think of this as a Kanga Cooler, the iceless cooler, and, actually, you know, find a name for the product.” So it’s been cool to this point. But we’re excited to see where it goes from here.
[51:11] Stefan: Is big box stores part of the vision for the future, do you want to be at all the Walmarts and the Costcos and whatever, even though what that means to your margins?
- Logan: Yeah, we’d like, we like preserving the brand, with all the investment we make in the long form content and all the different things we do across the board from a graphic standpoint, and just the ambassadors and everything across the board all the way built to this point for the brand. We want to be very protective of that. We feel like that will be a challenge for us. So you can do a lot of things, but I’m not sure we could do everything well. So we do have to pick which route we go, pick which things we can become excellent at. Then once you’ve mastered those, we can look at some other threads, roads to pursue. It’s definitely an interesting journey.
[51:57] Trent: That was one thing that I was going to give you a little warning about earlier, which I’ll bring up now, when you go into brick and mortar retail, and just for context. So I have a business where I partner up with brands, and we resell their products on Amazon. We’ve been doing it for about five years. So lots of experience in this regard. This is something we see all the time. If you lose control of your distribution because of the wholesale, now you’re on retail shelves, there can be this real negative effect. That basically happens.
People will go and they will call it, backdoor your product on Amazon without your permission. Then they will, if you have a MAP policy, minimum advertised price. So let’s say it’s on Ace Hardware for 20 bucks, right? And it gets on Amazon for 18 bucks. Guess what, Ace is not going to be too happy about that. I’ve seen, I’ve talked to companies who’ve nearly gone out of business, because it got so bad, you know, like they had, Walmart was 80% of their revenue. Amazon was 5% of their revenue. But because MAP was being violated on Walmart, they damn near lost, you know, the Target, the MAP was being violated on Amazon. They darn near lost the Walmart account.
So, I think you’re a pretty smart enough guy to prevent that from happening. You talked about putting the right procedures in place and IP protection and all that kind of stuff, and there are law firms that specialize in this. If you need a referral, I can give you one. Just throwing it out there so that you and anyone who’s listening goes into that like eyes wide open, Amazon can be this awesome marketplace, but it can also be a rat-infested hellhole if you don’t have control of it.
- Logan: That’s great advice. That’s something we’ll have to think about as we go that direction for sure.
[53:51] Stefan: Just in case anybody’s listening and good old Trent here doesn’t want to plug his own Amazon playbook on Flowster, his own company. I will tell you for those listening, if you would like to stay out of Amazon jail and hell and figure out how to make some money at it and do it the right way. Help your things out for yourself, just follow step by step process that Trent has written out in a very detailed Amazon playbook that you can get if you go to Flowster dot app ford slash something, finish this off, Trent. Come on. Help me out.
[54:19] Trent: ASP for Amazon Seller Playbook? Yes. Thanks for the plug.
Stefan: One last question I have for you and then I’ll let Trent end the program. What does the exit look like for you? Do you guys talk about being acquired? Do you want to sell, roll up elsewhere, acquire other companies and grow or just have your exit, get out and do something else. So would you rather cash out at the right time? I don’t mean that you’re itching to get out now. But is there a number in your head that this would be great and the six people that are full time do pretty well and we move on to the next project or is this something that you really want to keep showing up for work for the next 10 years or wherever they take it?
- Logan: That’s a great question. I say, first off, we love what we do. I mean, you can’t pick a better line of business to be in as a middle-20 something, than making beer coolers, and one of the core pieces of your mission statement being fun. So, you know, no matter what the money side looks like, you know, if we were to sell, and then, you know, replace our time with something else, I’ve yet to think of something personally, that, I would rather fill my time with, and then what we do here.
So that, you know, leads us to be a little more close to chest with those types of things, and we enjoy what we do. We’re gonna keep seeing this thing through, we’re gonna scale and grow and then keep our options open. That’s kind of where we’re at. We have some options, and we have some, some things we consider. Every once in a while, but at the end of the day, we love what we do, and we’re growing this thing.
[55:51] Trent: Great. So thank you very much for coming and being victimized by my co-host, Stefan and myself, it’s been a gas. This live, having the three people on is a new approach for the show. Folks, regular listeners who are listening right now, I really need your feedback on having Stefan be the co-host. He hasn’t got the full time gig yet. He’s still in the interview phase.
[56:22] Stefan: Help me out, I’m trying to help this guy!
Trent: I think it adds great stuff to the show. So I’m probably going to have him back. But I really want to hear from my regular listeners. What did you think of this episode? If you happen to watch it live stream? I’m not sure that anybody did, because I didn’t we didn’t see any questions submitted. So I don’t really know. I won’t know until I go look at the metrics on Facebook afterwards, if anybody actually watched it live or watch the recording, or whatever.
So it’s been a great pleasure. Logan, I want to thank you very much for being the guinea pig. For folks who are listening, Kanga Coolers just as it sounds, kangacoolers.com. I bet you go. I didn’t ask you about this beforehand, but you’ll have time between now and when the episode goes live on iTunes, and so forth. If you want to come up with any promo code or anything like that, do and I’ll put it in the show notes. But if you don’t have anything or you don’t have the ability to do that, that’s cool, too. I just like to try and always give my listeners a little bit of a deal and help you to make some sales at the same time. If that works. Really cool. Just send me that afterwards. And I’ll make sure it gets in the show notes.
So with that said, we’re going to put it into the live stream, put an end to all the fun and go back and do whatever is in our calendar next. Logan, it was a pleasure to have you here, when the episode goes live on iTunes and all that, my team will reach out to you to let you know so you can share it as you see fit.
- Logan: Well, thank you guys so much for having me, I guess the guinea pig made it out alive. So I’m thankful for that. It was a very insightful and productive podcast. Not often do you get to kind of break it down that granular. So I really appreciate it.
[57:59] Trent: All right, super cool. Thanks very much, everybody. Take care. Bye.
Thank you so much for listening to this episode. If you haven’t already done so I would be super grateful if you would take a moment on your favorite podcast listening app and like and subscribe and leave a review and so forth. That’s the best way to get the algorithm to tell other people about the show. And again, I would be extremely grateful if you would take a moment and do that. To get to the show notes. For today’s episode. Go to brightideas.co/367. That is it for today’s episode, folks. Thanks very much for tuning in. We’ll see you again soon, bye bye.