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Entrepreneur Energy – LaunchUp #35 20121101

LaunchUp had a pretty small group of about 30 people at University of Utah. There was a big football game the same night. Thanks to all the sponsors, presenters and companies. A couple of the stories tonight were very exciting!


I was part of Foundry One.
Soulpro – Is fashion. I went to Westminster College and started a production company. I started a documentary “In Football We Trust” which is about high school and NFL football players.
I wanted to shoot that documentary and now in the past 4.5 years we have soul profiles We became SoulPros because we were shooting the video. People liked the ring of the name and so they wanted to try ads for the video.
We put up fashion concept T-shirts and we had over $2000.00 of sales in five days. Ever since then SoulPro has become an animal of its own.
Skull Candy jumped on our brand and got us there.
SoulPro doesn’t have a formula.
“Passion is Purpose” – we trademarked and now that has done really well. Athletes, artist and others.
Our biggest success is that we went in without a plan but had passion. We didn’t know the fashion line industry. Most people don’t care about that. We went to Vegas and CA. We have reps there now. We have attracted attention. They have throw us stuff. We launched this video out.
The fact that I was in video. We created this material and we launched our video.
Video – SoulPro World video
A model to track the behavior of an outbreak.
We launched this art in August. We hit Facebook and have almost got 10,000 likes. The fact that we have got that much is great. This has been a viral outbreak. We love social media. We love sharing what it is all about.
Academics, Art, Music and wherever there is passion. We are going after everyone that has Passion. It’s unique and we all have it.
We did the Facebook thing and we got all the likes. We gained attention from some celebrities. Most clothing tries to go in to stores and distribution. We started with that. We tried to get in. Consignment and other things and we just were working to do it. They just put us next to everybody else.
Why are we doing to bring our product to your store and then put it up for you. I talk to other people who have lines.
1-2 trade shows. We have to war with them?
We are focusing on artists and athletes .. then lets look at celebrities, concerts and other places. We are putting ourselves in to blue and open waters. We went in to the concerts and the main person and we get them to wear our brand. We were doing everything and making money. We started doing 3-4 events per week and that has really been what has opened us up.
We are viral and everything we do is interactive. We have everybody who is sending us stuff. In the Philippines and stuff and where they are wearing it.
SoulPro sitings. You will get a picture on our page. We are working well. It is brand about the people and not just celebrities. THere is something for them to share their passion. That has brought us to this point. Investors.
Keep your books and when we went in to our investors, because we didn’t know what couldn’t be done was why we did it. We wanted everything. As long as we kept records and we were doing numbers. The people wanted to do a lot of money. We did more in one year than one fashion company in five.
We haven’t had a weekend in a long time.
Second video has been out for 4 days and has more than our first one had in a year (2000 views). This is the philosophy video that separates us from other fashions.

A. I have done well in sales and mouse and a ret side.
Soulrpo I didn’t’ go vert my whole life. This is something that I have been passionate enough about because I would do it for free. So the artists who understands the looks too. They get the brand of Passion is Purpose. It’s a great tag line.
An investor told us that you know what anyone has called themselves a brand.
I am Solupro. They are using it at parties. A person is cool and they are Soulpro. It is becoming something else. What I found in fashion.
We are learning the business side what we are supposed to do and all.
And it really is like we haven’t had to shut out things.
Clothing works in seasons .. we don’t have have just crowds. Every person can wear Soulpro. We are trying to target meg. We are getting a shirt for it. Everyone of our items sells to 40-50.
We had a lot of criticism because they asked. But for SoulPro it made sense. It has had a fraternity feel. They come back after buying one shirt.

Q? As you go and you get more people and money how do you keep consistent?
A. We’ve been luck y enough to really trust in our brand. I am the Creative Director and we have done what I want. We haven’t ran in to this problem because its working.
The investors that just came on are a dream team. They don’t want to change things. “We don’t want to touch the creative side of it.”
We do see it as a concern with me doing all of it as it gets bigger when we have to turn it bigger. In Vegas you have street and casual.(Polo Lacrosse) Street wear – has crazy energy . So I am watching this and it is going to be trying to figure out how to stay in the Passion and energy.

Q? Next goal?
A. Next step is to push the online store. Next 7 days.
3 points.
Shop, Blog and Connect
Work with our guests and channel our brand.
You will find this interesting. We are not in stores but we need to be out there. Online and events. So we thought how do we do that. We started creating reps that prepay a minimum on clothing that we sell. But we give them a higher commission.
We did not say they can go downline. We said if you want to be a mobile rep. You can’t do wholesale and they sell retail. We have reps in LA.
Our investors think we are crazy – a lot of what we have done.
We are going to start a flagship store. TV, celebrities, real people and establish the brand. Nordstroms. We are waiting now.
Our investors are comfortable to do that.

Q? Foundry?
I was a part of them. What Rob said earlier about network is important.
We people trade out networks. If we did we would win. We had to ask for help. We had to get out there. We can’t go public. Aaron Wendall.
Be flexible, be coachable …

We are all about agile development and lean startup.
We are a lifestyle watch brand. I love SF and skateboarding. It has a very different feel than in LA.
It is built around site and technology. Skateboard and snow board an music. I plan to target the action sports gap in the Sub $75 category.
12/2011 at Foundry. Kickstart in 2/2012, Launch 3/2012.
Instagram the photos and then you could target people who were searching.
Quick 2 page website with Instragram. Add cart button which then sent them to a page “out of stock”. Got a name and email and we followed 100,000 visitors and then got 30,000 email addresses.
We have spent money for domain we have $10,000 in February.
We launched in March on line.
$42,000 in the last 9 months
1000 unites sold. 50k followers with no investment.
Seeking $75K from friend and family for retail launch
I have to constantly drive traffic and Instagram has limited traffic.
Spent on travel, packing and POP displays, photo shoots, catalogs, founding team salaries., production, website.
We plan to go to Kickstarter in next round 1/2013.
Because we were successful we were able to work with Process Agency (7/2012)
This last month Jeremy Murray was the second senior designer at Skull Candy (9/2012) who joined us.

Pipeline – we are going to focus on core shops with specialties.
Secret sauce
1) Own existing models and distribution rights
We partner cases at scale for the Asian markets. We partner and stamp our brand without having to do a new work. $200.00 can be done for 1/3 the cost. I can come in under $75 without compromising quality.
2) Manufacturing at scale of Asian market

Q? Your Christmas weekend?
A. The class we took from Rob this summer and we are sitting on the samples and decided to do something with them.
Q? How do you differentiate?
A. Our price. In my competitive landscape – Nixon, Getstalt, GShock. When you go to China to manufacture a watch. You have to pay 15-18 dollars. which with retail which watch. Once you are over $100 you become less picky.
Since those 3 companies are in that place they can’t come out with something under 100 since it would “cheapen” their brand.
They are stuck and do what they do.
Neff is trying to eat up every product category. They sell 20-40 watches.
The problem is that they can’t spend the time to do a real nice watch.
We are coming in at the quality price for a point that we can break even.

Q? Artistic side?
A. We can’t look like them because we don’t want to be a rip off. One of the reason bringing on Jeremy is we can have that conversation of Design. We didn’t serve a log until now.
We are actively engaged with that. What resonates is science and technology and how that overlaps with hipster and fashion
What does that mean in an art direction?

Here at the UofU Scott Thompson was supposed to visit last month.
Meg Whitman should visit sometime next year. This is just through cold calls or email at conferences. Why do powerful people want to be mentors and fly to Salt Lake City without incentive? They are just talking to students. Based on my experience is that is that they feel good to give back to society.
There are more among us and passing on the legacy and helping the next generation. That is the reason for most people. It is not popularity or personal benefit. They were once students and struggling to get some knowledge.
Through my connections I have found that the networking is important. It is important among mentors then that they can expand their network.
This is something in the future. They have referral programs. This is something that is better because they stay longer and are more satisfied in their jobs. They don’t have to pay recruiters.
TalkValley – Inspiring excellence among students.
Mentor can interact with students.
Once I have a number of interested students I push to mentors who want to talk to students. They can then schedule a time and make a conference call with the students and mentors. We bring the students together and then bring in the Mentor.
4 years +
Invested $200k from salary, personal debt and credit card loans.
Overcame server hack and bad guy who held code ransom.
Good team in India
R&D – browser extensions, asterisk (open source telephone system), sharded DB, Solr and other geeky stuff
Successful test runs with mentors at eBay, Microsoft, LDS Church, Adobe, Domo.
Focus on CS students (U and BYU)
Expand to other CS departments in other Universities
Revenue: Departments pay 500/year for 125 conversations + $4/conversation
Suggest mentors (using Mahout)
Other Universities
Paid consultancy
Celebrities talk to fans

Q? Lead to other things within companies and employees?
A. I have thought about group sessions and other situations. Get consultancy and training sessions. I haven’t explored it much because I want to focus on the one domain that I know well. That would be a natural progression.

Zarbees has distribution through 45000 retailers. We have experienced growth at 400% per year.
I found Les Walgreen, son of Walgreen’s founder and got him some dinners and he got us in with Zarbees. We started with the two all natural Zarbees.
To build our logo and image I asked some BYU guys I knew and we got a side deal for $400.00 versus $10,000 (which would be there usual fee).
Adults want to drug themselves to death but they are careful with kids. So we have the all natural and safe products.
We got in to Walgreens. We became the #1 cough syrup. We knew we were shipping to Walgreens. We bought a report for $18,000 Nielsens to find out who were out competitors. We found out that we were number one.
There was a little bit of a secret sauce in our marketing. You never know who is going to help you out.
Corporate finance lawyer. I called him up (Larry) and met at Starbucks.
This is what we are doing and I said that I moved to #1 at Walgreens. He tried it on his kids and liked it. He sent it to an old roommate who is the Catterton private equity firm and they gave it to one of the lead partners. I got a call from the guy who has the money because it worked on his kids.
We want to do $10 million. But we only need 2… What they bring is print to supervision. 2 days after they invested I got a phone call from a guy who is getting more money from GSK. Be scrappy and we are now in CVS, Rite Aid, Rexall, Walmart, Krogers, Kmart, and Target.

-IQ vs Brain Damage
IQ is okay but brain damage is more valuable. My first company was telecomm. I went all kinds of different companies. Then Etextbooks. That is always risky. I would never have done textbooks if I had known haw messed up it was.
With consumer goods I had no idea how bad. It’s always risky.
Start to know who will buy
Google, Amazon, B&N and Follett
I already have a tie in to the buyers
Don’t get greedy. The term sheets come and go just as fast (2 days before Christmas it disappeared from us. Who is going to buy and why.
Lots of homeopathic crap but we have a clear vision of what we have.
!Karma and Network like your life depends on it.
Everyone left on eTextbook. Barnes & Noble and Amazon and whoever does the deal. I kept in touch with Steve@amazon and he played soccer with Jeff Bezos. He thought what we had was really cool. Can you fly up here and show us? Competitive bid was back on, so stay in touch.
Support system (partner friend)
Surround yourself with good people
Scrappy approach
Sales background
Do your best to not be a jack ass

Q? How many people do you talk to a day?
A. I talk all the time. I try to take as many calls as I can. I try to work with younger entrepreneurs. Like 2 days a go I had a lunch with Goal Zero. We have 140,000 fans. Goal Zero, they have a lot more revenue but we can kelp with social. It’s about Karma.

Q? What do you do internationally?
A. This is a constant debate. We are in Canada. The guy that I hired from GSK is that he was over global brands. He has lived in France South America, China. He ran Nicorette and Aquafresh.
We are only 8 guys and a very small team. We got a call yesterday from GSK and we said do the regulations. As long as you don’t impact my team then I am okay.
Someone from Canada got through the regulation and is now selling.

Q? What happens?
A. You sit in front of Target and they ask about your $30 million dollar TV budget. They don’t warm up to what we do easily. Our secret sauce was Dr. Samuel. We carpet bombed the United States. We covered the doctors within a 3 mile radius of each Walgreens.
We put our cough syrup in the squeeze packs. We sent 100 samples to the pediatrician. We sent out 1.5 million to them and they became direct salesmen.
There was no other way to complete with Robitussin or Triaminic. They are a $40 million brand for one SKU. Also, Johnson and Johnson dropped from 600 million to 60 million because of a recall. So right place at the right time.

Q? Better product versus logo and what made the decision?
A. With Zarbees, you can’t get a patent on it. We have a patent on some of them 3 of 6 do. Honey has been used by the Native Americans. We couldn’t patent that. This had to be a land grab. The brand was more of a luck thing with getting a break. I gave them some equity to build the Brand.
The developers from Ukraine that I was paying them. When we did well on a prior project I didn’t have to pay them. But when we sold I sent them some money and they bought really nice cars. Any time I want them they remember.
That is my style. I do believe in Karma. Those guys in Ukraine have helped a lot of my friends.

Q? When you negotiated deals. Some people believe they need a founder level of equity for consulting. How do you defer that?
A. You have got to figure out what is going to work. We did a equity as a crap shoot. The KY Jelly they designed. I put myself out there with $10k and I was betting that they were worth it. I said they had to accept market. I haven’t done that with anything else. I put my own equity on that one. I don’t regret that. I grew the pie rather than shrunk the pie.
Catterton – is shrewd. They get 8% coupon every year and it is expensive. Two months ago we wanted to build massive area of our product. Catterton had us hooked up with top level decision makers (CXO) to do a whole bees rollout.

Rob Wuebler
Remember what Bryce said in his last two slides. You don’t have to pay attention to me.
I have spent about 15 years building venture backed start ups. Then 5 years of coaching private equity. Then I have worked as an Executive Coach with Corn Fairy. My main focus is to give back to the ecosystem. You guys are all tech based. What can I do in 10 minutes to make technologist cry.
These are some books you can read:
Nail it, then scale it.
Business model generation
The Lean entrepreneur
Startup owners manual
Lean startup
Entrepreneurs guide to customer development
You can take classes and have people come to your office and tell you this stuff. The Large elephant in the room that no one talks about though? What is the evidence that any of these systems work?
There are an abundance of failures. 7 of 10 times you will fail. Are you getting outcomes using these technologies?
Pictures of “permed hair versus straight hair Meg Ryan.”
You want to see if they work for your company. The burden of proof is on the lean community. Maybe accelerators not just the manual.
Kaufmann Foundation study tells you that accelerators provide no effect or slightly lower. The only thing that might be positive outcome is length of time to survive. The idea is to fail fast.

Noam Sasserman – The Founders Dilemma
The company may be an “internal cause”.
Sometimes we are Gollum. Someone who is a collection of biases and leaning on an idea and they can’t see things outside. We have a defective apparatus and we are biased.
Webware upstairs needs to do something.
“Ali” – I am the king. We all overestimate our ability to get work done. Are you a great driver? Oh yeah, but that can’t be true.
Until we can overcome these issues we have to be slightly better? No you have to be an order of magnitude more productive and therefore you are overestimating your ability.
How to resolve the extreme uncertainty. You can’t “de-risk”. Yes they can assist but they do not win the day.
No Mentor, no book or solution for the untrained.
Evaluate new tech to help, new book and get consultants BUT consider for efficacy?
Do they generate “lift” in a situation? Incredible ability to execute?
Help you process uncertainty?
The skills required to build a company and escape velocity are not necessarily the same skills.

Q? No controlled environment assistance or lowered costs to create company?
A. What you said is interested in cool is the digital nation is that you can start very cheap. I don’t disagree with that. How do you test what works?
I personally view the Foundry (which I helped to create) is an assistance group. I teach people to deal with bad news. That is our focus. We are business validation agnostic. I am focused entirely on reducing peoples ability to make fools of themselves. Increase precision, execution, and improve network.
7 of 10 in Foundry succeed. I don’t care about several but they do well.
You don’t need a book or anyone else to tell you want to do.
Networks matter a ton.
You need will power and a capacity to be coachable.
Treat startup as a craft and do it well. You don’t need books.
Willpower and action.

?Q Throughout that lens what makes a good entraps?
A. Being coachable.
Overcome your own willingness – it helps other people help you learn what you can’t see.
Using your own network to overcome the be right, look good. Most people are unwilling to do that.
Those who fail are attached to their own ring usually fail.

A. My feeling is that the movement for funding is exciting. Old people like me who are looking at Solupro and guest guys. I have no idea about some of the products.
Crowd funding provides social proof through traction.
You should chat with Gary and Chase who have built businesses through a number of iterations.
We have helped do some bootstrap runways and social traction. In a world of uncertainty what can you use? You need other proxies for velocity. Crowd funding is one of those.

Q? Do you have any point of view how culture and community impact success.
A. Proof is in building a culture like the Foundry. To solve the two problems related to failure. We have a very strong culture.

Q? Some in this area are different because they don’t look at the right things – right culture in the right area. What is now happening in Salt Lake what has happened in Silicon Valley?
A. Randy Cammisar says that in the Valley they tolerate failure. There ar more cultures that allow for failure.
My own experience has been in New York when you say that you’re not working. You are a consultant. In the valley when you say I am done and not working anymore you must be “giving back.” That is the experience at the party.

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