[MUSIC PLAYING]
MARTIN OMANDER: My guest today is Joe Born from the start
up responsible for the Hale Dreamer device
that we have here on the table.
Welcome to the show, Joe.
JOE BORN: Thanks for having me.
MARTIN OMANDER: Could you tell us a bit about your startup?
JOE BORN: Yeah.
So we started up-- we're a hardware manufacturer
and we started up with the mission
to provide accessories-- particularly,
audio accessories-- for the underserved Android segment.
So first speaker dock with a remote control.
We released the Hale Dreamer you see here.
So first nightstand dock with the silence feature
and the snooze bar.
And we recently became [? Iowa ?] [? USA ?] so lots
of announcements coming up on that.
MARTIN OMANDER: Oh, great.
Congratulations.
So this is hardware.
I can touch this as opposed to most of the startups-- well,
certainly, all the startups I worked on
and most of the startups I interview
here are software-only plays.
Hardware is hard, I've heard.
Why do you do it?
JOE BORN: Well, two reasons.
One, obviously, sometimes you need a sensor.
We needed something to charge the phone, you need a speaker,
sometimes you need a pedometer, whatever it might be.
Less obvious is the fact that there
are very well-established, mature sales
channels that really do help you create awareness and sell
your product.
So all the brick and mortar that's
established and the online channels.
So you may say, geez, if Fry's or wherever
is very daunting with the amount of products on there,
but it's nothing compared to the Google Play Store,
for example, which the shelves would be endless
if you had a physical manifestation.
So it does help you to create awareness and sell products.
MARTIN OMANDER: Oh, I see.
Yeah.
Because I've seen this product on store
shelves here in California.
And as you say, there are far fewer products on there.
How do you become one of those relatively few products who
get shelf space?
JOE BORN: Well, this has changed a lot over my career.
And the good news is for the people watching your show
is that it starts online and it starts
in a very self-service environment.
So all the major-- virtually, most
of the major brick and mortars have
online, self-service areas.
So Best Buy and Walmart and Sears and most notably, Amazon
where you list the product yourself
very similar to putting it on the Play
Store with the description.
And then you get in the flow of Amazon and all the search
results so that now people looking on Amazon
will see your product side by side with all the others.
And it's the reviews or the sales history
that are all driven analytically and allow you to rise up.
And that's the first stage.
All the major brick-and-mortar retailers, small and big,
look at those reviews and look at that sales history,
and that gets you your start.
MARTIN OMANDER: Oh, so the reviews--
I've seen the reviews for your product online.
They're really good.
So the brick-and-mortar guys, they look at that?
JOE BORN: Absolutely.
All of them.
From the small early adopters to the big national chains,
all look at how you're doing and how well
your product is received on Amazon.
It just make sense.
They want to know if it's well liked on Amazon,
it's more than likely going to be well liked at Costco,
or Fry's, or Best Buy or wherever.
MARTIN OMANDER: Right.
Right.
Yeah.
So I could see if you're Samsung or a big, established hardware
manufacturer like that, it's very easy
to get into those meetings with Fry's Electronics
and the other brick-and-mortar guys.
How do you as a relatively unknown startup
get those meetings?
JOE BORN: Yeah.
Well, it can be a challenge.
Certainly, you are an unknown startup, like you say.
You've got a smaller line than the big, established players,
but there's good news here too.
One is that there are early adopter channels for this.
So Fry's, Micro Center, and the like pride themselves
on being very cutting edge and having everything that's
available an early adopter would want.
And two, again, all of them are looking
towards reviews and sales history.
So there certainly are national chains
that even reached out to really successful,
early Amazon products.
And regardless of whether they reach out to you
or you reach out to them, it really does matter.
And you're not at all starting cold.
Secondly, these sales channels are more open than, I think,
most your audience might imagine.
MARTIN OMANDER: OK.
JOE BORN: Yeah.
Well, you can hire manufacturers reps, for example,
that work in a territory, that have those relationships, that
have the expertise, and they work solely on commission.
So now you've piggybacked on somebody else that
knows this space and that gets you the meetings
and allows you to get up to speed much sooner
than if you're doing it by yourself.
MARTIN OMANDER: Oh, so you were using reps
like this on commission?
JOE BORN: Yeah.
So we use regional reps that have relationships
and expertise in any given territory
and they bring you in and get the meetings
and help to advise you as to what's working and what's not,
and what the buyers are thinking,
and what direction they're going, things like that.
MARTIN OMANDER: Ah, I see.
So do they handle the meetings or are
you also in those meetings?
How does that work?
JOE BORN: Both.
We always attend the meetings because you're
talking about buyers who have a lot of domain
knowledge in these areas and these categories.
There is such a rich volume of information.
This is what's working.
This is what we have found problematic.
This is pricing that we found to work and things like that.
So in a world where everything is so data-driven,
we forget that human expertise still does have a great value.
And those meetings to us are terrifically
rich in figuring out what we should do
and getting a reaction from those buyers
as to what has been a good area, and what's
been a good approach, and how to sell those products.
A whole host of details from packaging
to presentation in retail.
MARTIN OMANDER: Oh, so it's not just matter
of you trying to convince them to, hey, sell our stuff.
It is you're getting valuable feedback from them.
JOE BORN: Oh, absolutely.
You want to take their feedback.
You want to take your sales history at smaller channels--
take your Fry's, your Micro Center, of course,
Amazon-- learn from that and iterate.
The last thing you want to do is launch too quickly
in a giant national retailer to find out
that you have a product problem or you
have a presentation problem or something about your packaging
isn't clear.
Very hard to make changes on the fly
if you're already in thousands of outlets with huge inventory
investments, you really can be stuck.
So it's best to do it in phases where you go from one step
to another.
MARTIN OMANDER: I see.
So do you sell more of these online
or in brick-and-mortar stores today, Joe?
JOE BORN: So today, we're really just still getting
out to brick and mortars so we sell more online.
That's fairly typical.
You start online.
You start with these early adopter accounts.
And then you grow to national retailer at which point,
the national retailer tends to dwarf the sales of online.
Now for the first time, Amazon actually
outsold Walmart on electronics.
First time last year.
But you've got to remember, Amazon
has probably 100 times more products.
So for any given product that you
get on the shelves at a national retailer,
you're probably selling a lot more
than you were on Amazon, generally speaking.
MARTIN OMANDER: Oh, I see.
So you're seeing it as a three-stage process then?
Online pioneering, offline, and then mainstream offline?
JOE BORN: Yeah.
That's generally a good way to think of it with the two
clustered.
So your Amazon, your Newegg, and Fry's, and Micro Center, those
can be pretty early on.
You're talking about some dozens of stores,
so it's easy to manage that inventory and that feedback,
customer service, all that stuff.
You get to the national retailer,
that's a whole different category.
Thousands of stores, huge amounts of inventory
and product moving through the channel.
So you really need to have your act together
by the time you get on that stage.
MARTIN OMANDER: Oh, the major leagues.
JOE BORN: The major leagues, so to speak.
MARTIN OMANDER: Great.
Well, best of luck in the major leagues, Joe.
And thank you very much for coming on the show today.
JOE BORN: Yeah.
Thanks for having me.
MARTIN OMANDER: We hope you found something
you can use in your startup.
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See you next time.