When one is about to launch a new venture, someone has to take the risk and dedicate years of their life to get it going. One important question arises when funds are being raised. How much do we pay the CEO of a start-up or the founders? The CEO has to pay his personal expenses and survive and the investors want as much of the seed money to be pumped into the development and marketing of your product whether physical or digital.
What is the right number? How do you find that sweet spot? I can say from personal experience being the CEO of a start-up that I made my investors feel comfortable by taking a pay cut from what I was making as an electrician when I started. That showed that I believed and would put in the energy and time to generate enough business for the company to meet and surpass my old salary. It has been 3.5 years since launch and I am close to pushing past that original number. It takes some time since revenues need to cover cost of good, overhead, and then what is left over changes the game.
I have heard of start-up CEO’s demanding large extravagant salaries and that is not the right attitude. Sacrifice is the energy a start-up needs.
Imagine it is like you have a new garden of vegetables you planted. They need water (funds) to grow and you only have 100 cups of water a day to feed your plants and yourself. You could survive and remain healthy and strong on 15 cups a day but you want 25 cups or 30 cups. Sure you can take them but your plants will be lacking and possibly even die.
Think twice if you are in this position and make sure you take only what you need until the crop is plentiful. Than you can share in the harvest and distribute to yourself and the whole team involved.
Now that we have 3 years behind us and a strong penetration into the worldwide market, I get asked a lot of questions about how we were able to get a new innovation out there with so much power. The answer is, it took an extraordinary amount of fuel and specific kind of energy.
This reminds me of a volcano forming a new island in the ocean. I am sure you have seen the energy, heat and power that is released in order to create that new piece of land in the cool ocean.
My team and I had to generate this same kind of energy inside of ourselves. The heat is what melts the stone to liquid so it can be moved and reformed into the new land. This heat is the desire, persistence, and dedication to see the project through all of the obstacles and hurdles, whether external or internal. Often fear and doubt are the toughest obstacles to overcome. The rock is the idea that was formed out of thought energy. The process has to be fluid in order to grow but with a ton of energy behind it otherwise it won’t move.
The new island then needs time to cool and time for plant life to grow onto it which is when it becomes useful to the organisms who will live there. A start up also need a certain amount of time for it to grow. There is daily effort but patience is so key. All the while you are staying present in each moment giving it your best, at the same time there is a small part of you that is connected to the success that you are striving for. It is simply staying connected to your vision while getting your hands dirty each and every day.
At some point if you follow the hidden rules, put in the correct amount of energy for the right amount of time and survive the fury of the elements you will eventually have a fully functioning company which corresponds to that newly formed Island with Nature flourishing on it.
We can learn a lot from a Volcano if we mimic its creative power in our start-up. Harmonizing with Nature is key because She has the Blueprint for everything. There are certain rules that Nature follows in Her creations and we must be in harmony with those rules if we want Her support. I don’t want to say too much so I will leave the rest for you to experience on your journey.
Happy building to all of the start-up adventurers out there.
I hear a familiar question from budding entrepreneurs all over the country: when your product gets into some of the biggest retailers and distributors in the world, can you sit back, relax, and collect the checks? Not even close. The practical trapping of reality rears its ugly head and the day-to-day tasks only multiply. Unfortunately, most entrepreneurs don’t get paid much in the early and even mid years. It’s a long and complicated journey.
Building a company is a marathon, not a sprint. When we first started, we had an investor tell me that I would always be raising money at least for the first 5-7 years. He was right. Half of my work is raising capital to maintain what I have established effectively while expanding. Luckily, I have great backers who support my company with positive energy, financing, and encouragement. But maintaining success requires a lot of unexpected details. Things like legal fees were not top of mind when I was designing and creating my product.
Those realities again…we are still a tight group working 70-80 hours a week because we want to keep the monthly burn small until we can generate enough sales to build the team and expand into new arenas. We have accomplished great things in three years but time flies.
With a master distribution agreement with Hillman, permanent integration into 200 Home Depot stores in the North East slated for Q1 2016, permanent integration into all of the B&Q locations in England, permanent integration into the set in Rona in Canada through Onward, and other deals in the works, we have our hands full with production and logistics.
What’s next? There is no time for “next” right now. We have a fully functioning engine that requires constant attention and energy to run smoothly. We have new ideas but we spend minimal time on them in light of immediate tasks and obligations. We have a business to build, aiming to generate enough cash flow to pay the bills and compensate our investors. The future is always in the back of my mind but the pragmatic grind of the here and now is at the forefront. In the years to come, this will change but running a start-up as it starts to achieve success requires keenly focusing on pragmatic details. But all entrepreneurs are dreamers and the dreams keep churning in the back of my mind, ready to flourish.
For anyone who has launched a new product into the market, you know how important it is to be able to demonstrate, within 2 seconds, what the features and benefits are of your product. If you can’t do that, you have failed before you begun.
Arman and I attended our first hardware trade show in Boston in August of 2013. We showed up there with 4 Ajustco products and, well, that is all we had. We had just started and hadn’t had time to do anything else since we had just launched in Vegas in May of that year.
The buyer visited our booth numerous times and expressed how much he loved our innovation. He knew that we were going to face a ton of adversity toward gaining space into the builders hardware set of most stores. He suggested we build multiple merchandising displays that would fit into almost any store size. We did just that and when the next show arrived, he was impressed that we actually listened to him and executed.
We needed a turnkey solution that would give the stores a no-brainer feeling to give our innovation a try. It has worked like a charm to this day. We have won numerous awards for our packaging and merchandising at the trade shows and we continue to produce new ideas that help get into stores which gives us the opportunity to then educate the customers once they see our new product in the isles.
It has been a key component to our success and I am glad we put in the time and cash to build these introductory solutions. Now we are starting to be placed into the builders’ hardware sets around the globe. It wouldn’t have happened if we had not first taken that first small step. Best of luck on your ventures.
Spring is here and we are super excited about our year 3 which has officially begun. Next week we will be in Las Vegas where it all started but this time in a 20X20 peninsula with our overhead sign so it will be easy to locate us. We will be in booth 46053. Come stop by and see us if you will be in the area.
As of now we have 51 SKU’s available. In just 2 years we have had to grow fast. We have barrel bolts, slide bolts, pad bolts and a few merchandising display packages. By next year we should also have tower bolts and Brenton bolts followed by surface bolts. If you google these names you will see that they are just different styles of door locks. The one thing they all hold in common is that they can benefit from having our AjustLock technology applied to them to solve the offset issue they all face due to gravity or temperate changes.
We also have a variety of finishes. We have traditional silver zinc, yellow zinc (brass color), black, stainless, and we have galvanized on the way. Later we will launch brushed bronze, nickel, and other finishes to match whatever hinges or door knob you have on your door or gate. There are many options that we can expand into as we move forward.
A company needs to launch new products to keep the energy moving. Look at cars and cell phones. Every year they are unveiling the latest innovations and upgrades to their line.
That said, we do have a new item we are working on that falls under the Adjustable category to remain in line with our company foundation (AJUSTCO). How could we not continue to innovate? That is the very core of this company. We make game changing adjustments to outdated products. We look forward to launching it. In the meantime we are plenty busy with expanding the Ajustlock product line with plenty of runway to keep us busy for years to come.
To Be Continued…
I have been so busy I haven’t been able to write a blog since October 2015. I apologize to my readers. The start-up frenzy can swallow up your time real quick. So, to update you, we have made a lot of progress since last fall. Our product hit the shelves of some major retailers in Canada. We have 4 SKU’s in Home Depot Canada under their private label (Everbilt). We are also rolling out into Rona through our Canadian distribution partner Onward. The product is in an Onward/Ajustlock co-branded package.
We have some other big deals brewing in Europe with our partner B&Q launching 10 of our SKU’s in their big box stores. We are also working on a deal with Castorama in France and Hornbach in Germany. And in the US we have the rest of our product from our Home Depot USA test placed in 22 locations near Washington DC. They are talking about adding 1 SKU to all 2,000 locations toward the end of 2015. That would be a big accomplishment for us.
We are officially ending our year 2 of operations on March 31st. We have come a long way in 2 years. Our 3rd year is looking rather promising. We have worked hard to get here and we will continue to push relentlessly until we are in every major retailer in the world.
This is the year where we should be transitioning from a Start-up to a fully operation company able to stand on its own two feet. Three years is fast if looking at the statistics of start-ups but when you have a great product and the right financial backers, the market accepts it fairly quickly and you have the capital you need to meet the demand.
A good analogy for the growth of a company is a fruit tree. The seed is the thought. When, how and where you plant it is critical. When it first starts to grow you need to protect it from the harsh elements which would be compared to telling too many people about the idea. Most fruit trees take a certain amount of years to mature before they will produce fruit. If you can make it through this initial growth stage than you will have a big healthy tree that will yield fruit that you can benefit from for years to come. We are right at that tipping point where our tree is going to produce fruit for the first time this year. It is an exciting time and we are ready for the harvest.
Just to note, we spent 4 years before we launched the product preparing the patent, building prototypes and raising funds. The first year after we launched was spent on getting our production correct and our capacity increased. Year two was spent meeting all of the big decision makers and negotiating orders. We really didn't start to have product on the shelves in a big way in until month 18. We are just starting to see some sales reports and they look great considering it is the winter when everyone is buying salt and shovels.
Spring is right around the corner and we are looking forward to the having everyone hit the stores to repair their houses and yards after this long harsh winter. In May we will be attending our 3rd National Hardware Show in Las Vegas. That is where we celebrated our Ajustco's first birthday. We also won the Retailers' Choice Award at the 2014 National Hardware Show. We will also be attending the Do It Best market for the first time in May in Indianapolis. Stop by our booth and check out our events section to see what we are up to. Just in the past few months we added Black and Stainless versions of Ajustlock. They were a big hit at the Orgill show in Orlando last month.
We have a lot of new versions of the Ajustlock that we will be rolling during the next few years. We are also working on a new product. It is a hardware item but not a door lock. Maybe we will launch it next year. For now, we have to keep it a secret to protect its energy just like the seedling. I will do my best to write a monthly blog again. On that note, see you in April.
It has been a while since I have written an entry. The company has been keeping me real busy. That is good news. I want to be busy. I want the pressure to be on. That means we are growing. It can be stressful and frustrating at times but that comes with the package.
Right now we are selling product in the USA, Canada, The Caribbean, England, South America, and Australia. To make that happen we have to have distribution partners to receive the product, ship it to the retail locations and get the product set up correctly in a display, clip strip, bin, or on a peg. We handle some of the smaller distribution to Amazon or to Mom and Pop hardware stores around the USA but for the big box retailers and international we need partners. Many aspiring inventors, as I once did, have a foggy idea of what happens after you get a purchase order. In the past I thought it would be a 1, 2, 3, process. Get interest for the item, deliver the item, and get paid for the item. If it were only that simple.
First we have to produce the product correctly and on time. This is a whole other challenge and you can see my experiences with this in my previous blogs. Once you have production quality and capacity to handle large orders now comes the next phase. I am not even going to get into how to meet the buyers and get the orders. That is another topic for a later blog. We are talking about what happens after the order is in and you have delivered the product to the distributor or store set company who is going to get it into the stores.
What I have just learned is that you have to have a clear agreement with your distributor about how the product is going to roll out into the stores. After you have negotiated the price, your job is not done. Most likely you are rolling out a new product that the customer has never seen before and they need to be educated about the new product otherwise they will walk right on by it in the store and that will be the only order you ever receive from that retailer. You need to merchandise it in a way that gets their attention and tells them why it is better within 2-5 seconds. It is highly recommended that you hire an expert to help you with this. We hired a great company who helped us design an award winning display. You are only going to get one shot at this. Now, once you have this excellent packaging, display, product resource videos, or whatever you are using to get your message across, you have to make sure that whoever is setting up your product in the store is going to set it up correctly. Try a few stores out with no education merchandising. Most likely the product will collect dust even though it might be a great product.
Don’t just assume that everyone is going to care about your one new amazing product. Distributors are real busy dealing with the hundreds or thousands of other products they are managing in the same and other locations. They are currently making a lot of money on those tried and tested products. They are now taking a chance by putting your product in the store. Don’t be afraid to go check everything out and report back to them. They are a large operation with a lot of moving parts and have just as much trouble keeping everything in order as you do. Communication is key and so is following up on everything. Check into it. Ask questions and go see what is going on out there. You can’t understand what is going on from your office. Remember that the distributor is getting a piece of the pie for their services and you should hold them accountable for what they are getting paid to do. The retailer is busy getting the customers into the store, and helping them once they are there. They are relying on you to get the product produced, delivered, and set up.
Be patient but don’t sit around expecting everything to just work itself out. You have to be involved and manage the whole process from delivery to sale. Once you are in the store and you figure out what works to get the sales, than repeat, repeat, repeat. Hopefully you will figure it out before the retailer pulls the plug. They will only give you a small window to prove that your product will sell through.
This is a work in progress for me. I am learning this step by step through experience. I was warned that this was going to be a difficult task and those wise words were correct. I love this process though. I am literally bringing a dream to life. A 9-5 would be much easier but that is not what my Heart called me to do. Stay tuned for my next blog. I plan on talking about how to meet the buyers and get the orders.