Last Monday I did a write-up about my friend Chad's experiences as an investment banker in Los Angeles and why he chose the path of entrepreneurship instead of the more frequently traveled roads to Private Equity or, to a lesser extent, Hedge Funds. You can find that interview here.
This week we'll be focusing more on Chad's product - the PillowPocket - and what he has learned so far during his stint as his own boss. And for all you naysayers, since last Monday, I myself have received a PillowPocket and while the idea is simple, the product has already been useful to me in several meaningful ways.
Let's get right to it!
Q: So we all know being an entrepreneur involves trying a lot of new things and sometimes failing -- was the PillowPocket the first thing you came up with and now it's going all the way, or were there a lot of bumps in the road involving some failed projects as well?
A: Yeah, I was trying to launch a coupon company before, which was partly a function of working at a boutique, since they wanted to know about a year in advance whether I would be staying or going. They knew I was going to leave and basically already hired some replacement people for me, which put me in an interesting spot for a while because they couldn't really give me any more deals. I still worked really hard, but during the last 6 months I had a bit more time, so I started a coupon company with a partner -- we were essentially working on digitizing coupons for consumer packaged goods. He was a good bit older than I was, with a wife and kids, and unfortunately received a high-paying job offer mid-way through the project, which caused me to lose my "tech guy". I didn't know enough about the hardcore tech stuff, and had been really depending on him to build out the project, so I joined Founder Dating, which is essentially a formal program for business guys who want tech guys (and tech guys who want business guys). It worked out fine, but I didn't find anyone that I really wanted to work with -- and part of the reason I think is due to the Instagram effect, because now all of the sudden it is possible to sell a piece of technology with no business model, essentially cutting the "business guy" out of the equation. So I learned a few things from the coupon experience: 1. I didn't want to be dependent on a tech guy for my next venture. 2. I didn't want to rely on getting my idea into an accelerator, I wanted to essentially fund it myself.
Q: So...the Pillow Pocket?
A: So there was another guy who I worked with at Montgomery & Co. and we joked a lot about a lot of different things during those very late nights in the office. One thing we jokingly talked about as a venture were "Bedsheet Spreadsheets" -- sheets with, quite literally, Excel cells and models on them -- but, you know, no one would like that. This conversation evolved into sleeping with our phones, and we said "Hey, we should do a pillowcase product that has a pocket for your phone". This was definitely a 2AM conversation, and here we are both wondering what life would be like if we weren't in banking -- so I told him I'd do it, and I was completely serious. We launched everything without leaving the office: used TaskRabbit to build a prototype, crowd-funded it through IndieGoGo after KickStarter said the idea wasn't creative enough for them, and also crowd-sourced the logo design, among a few other things. So we used all that cool stuff, launched it, and essentially did it just to see what would happen. It wasn't dramatically successful outside of family and friends, but someone suggested that we use the pocket for aromatherapy. I ran a Google Consumer survey and I told myself that if 1 in 20 people were interested in using this for aromatherapy, I would go for it, and shockingly 1 in 4 replied that they would be interested. So now we're in the process of creating an infomercial, and I've outsourced the production to Bangladesh -- and now it's all coming down to execution, building a new site, and trademarking. We'll be launching an "aromapocket" website here in the next couple of weeks!
Q: Okay, so you're talking about all of this like it's a walk in the park. I have absolutely no clue of how to trademark something. That seems difficult to me. Would you say all of these steps were harder than you'd anticipated, easier?
A: The resources are there, and you can certainly do everything from your computer. People intuitively think that it's very hard and overly-complicated to go through these steps, but there are A LOT of resources out there that most people have never heard of. I used Rocket Lawyer to incorporate the business, and they've put me in touch with some people to do patent work for me. I didn't know how to put all the pieces together starting out, but it's really part of the job...you need a little bit of runway, but it'll work out. If you can do banking, you can do this.
Q: Okay, fair points...what would you say you took from banking that has been most useful to you so far as an entrepreneur? Does proofreading a document 24 times really transition well to being an entrepreneur?
A: For me I think the diligence process was most useful. When a company acquires another, they want to know EVERYTHING about the target. They need to know the business model, every trademark, the web domains it owns, among many many other things. That diligence process takes place over a short period of time, and getting as involved as possible was really helpful. I think in banking you get more modeling than you really need to be honest.
Q: So what are your next plans? Continuing the PillowPocket for a while, starting something new, both?
A: The goal of the PillowPocket is to obviously build it up to be as large as possible. The "small" goal for us is to produce a movie using money from the PillowPocket, first using the web-series platform, and eventually if we're lucky enough, the silver screen. YouTube is no longer really "broadcast yourself" -- there are huge channels and huge networks, many of which are growing up here in Los Angeles. No one has effectively gone from a digital environment like YouTube to a feature-length film, and we have a script that is set to do that. The pilot will be releasing in January, and in a lot of ways it's a West Coast version of "Good Will Hunting". It has been really fun, and we're shooting to only spend $10,000 -- we'll see what happens! Making money off of YouTube isn't easy, but it's possible. We're also working with some independent music artists (who also want a platform to launch off of) for the soundtrack, for example, to both cut costs and help out other artists.
That's all we've got from Chad, folks. Hope you've enjoyed reading about his experiences. I'd be happy to post links to his web-series once the pilot hits YouTube, for those of you who are interested. Have a great week guys!
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