EP186 - BottleKeeper CEO Adam Callinan
Adam Callinan is the co-founder and CEO of Bottlekeeper (@thebottlekeeper). In this broad-ranging interview we discuss Bottlekeepers origin, their experience on Shark Tank, Amazon strategy, protecting intellectual property, and challenges and opportunities of scaling a direct to consumer business.
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Episode 186 of the Jason & Scot show was recorded on Tuesday, August 20th, 2019. live from the eTail East trade show in Boston, MA.
Join your hosts Jason "Retailgeek" Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and Co-Founder of ChannelAdvisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.
Automated Transcription of the show
Jason: [0:24] Welcome to the Jason and Scott show this episode is being recorded live from the etail East trade show in Boston on Tuesday August 20th 2019 I'm your host Jason retailgeek Goldberg and unfortunately Scott was unable to join us so I am so low today but I've made up for it by to juuling a great guests to join us on the show Welcome today Adam Calhoun and he's the co-founder and CEO of bottlekeeper welcome to the show Adam. Adam: [0:53] Now you're having me. Jason: [0:53] We are super excited to have you as you have a great story as Messengers are going to get in just a minute but for those that haven't already had the life-changing experience of owning a bottlekeeper, what it what is the elevator pitch on bottlekeeper. Adam: [1:09] So it is a bit admittedly it's a bit challenging to just fully explained it is a very visual product but I'll do my best. Bottlekeeper is effectively it's a stainless steel bottle like a water bottle that we've all seen for 20 years, and the base of that bottle screws off and so the inside of the the body of that bottle is is insulated with neoprene so that you can put a beer bottle inside the body of the bottle screw the base back on there's a built-in bottle opener into the cap, I've been a seals being closed bottle and does all these great things will also helps to keep your beer bottle which is now enclosed much colder much longer and it's protected from what we say is gravity induced explosions, I lie when you drop your beer bottle on a pool deck Kubota Beach Etc broken glasses bad. Jason: [1:53] So so I have heard so if I called it a beer cozy on steroids would that be offensive or is that. Adam: [2:00] It's important, defensive and me to tell in 1981 was the first patent for the super old-school thumb is he so it was time for redo. Jason: [2:13] Time for an upgrade right so we get massively better cold we get the bottle protection I'm not sure you Market it this way but there's potentially a stealth elements to the product. Adam: [2:24] I need a wee wee Focus pretty heavily on that keep it cold and protected live there. Jason: [2:30] Fair enough and I feel like most of our listeners have imagined that their dream job would be to be a CEO of a company in the adult beverage base. I was going to ask his it's like are you going to ruin it and say it sucks and you were like 80-hour weeks and it's super stressful. Or you can nice. Adam: [2:49] Now it's amazing I mean we we were very very intentional early on in starting this company my co-founder partner Matt Campbell and I about doing, ignore my previous world was a lifestyle that was built around a business and so and going into bottlekeeper and launching and I wanted to do the polar opposite that was build a business around a lifestyle in my lifestyle, living in Southern California I spent a lot of time in the water and on the beach and traveling with my wife and so we built that mentality into the framework of the business which even now and we launched in 2013 even now six plus years later. It's fun I mean it's really casual it's really relaxed we have you know our team has unlimited vacation we have mandatory work-from-home Fridays because I literally I was trying to get people to work from home on Fridays and they keep coming in so now it's like. You got to work from home on Fridays so it's just it's a very fun casual flexible products. Jason: [3:45] That that is totally awesome and I know you guys have a pretty funny origin story like how did you come up with this idea. Adam: [3:55] Yeah so my cousin again co-founder partner Matt was sitting on the beach drinking a beer out of a red party cup. 85° outside we know how the story goes right it's warm in 4 minutes and drinking warm beer is about as fun as having a tooth pulled, so he at the same time he's also, that particular about drinking beer out of bottles that's just something you would always prefer to have a beer out of the bottle so he's looking around he sees people drinking out of we're just normal off-the-shelf water bottles with her everywhere today. And thinks himself why can't I just take one of those and put a beer bottle inside of it and really the only way to do that is by cutting it in half, so he went and purchased a bunch of off-the-shelf water bottles a handful and Vise grip them to a table hack saw them in half, cut up some old neoprene College Koozies and super glue them inside and his favorite beer bottle fit perfectly, and what this did was it created an opportunity to keep a beer a lot colder a lot longer while simultaneously protecting the bottle because again he's on a beach he lives in Phoenix Arizona has a pool is all these places where, it's hot and glass you know, doesn't make sense in this was the quick and easy solution to that problem. Jason: [5:06] That is awesome so we made a product for that and I heard a rumor that you you did a quick and dirty test to find out if there be a customer demand for the product. Adam: [5:20] Yeah when when you know we started doing this together we we burn it up in early 2013 we, I was not admittedly super I thought was a really really cool product to fit my lifestyle gray but I wasn't overly convinced him particularly have never been in the consumer product business before that we could sell it that we could get people interested enough in the product to sell it at a real price point NADA this is Hobby price why put a real price on with real margins so I built a website just a landing page with a video that I shot on a GoPro and plugged an email capture system into a MailChimp and, you know basically I spent $500 on Google AdWords in and sent people to the website they just basically said if you think this is cool and you want to know when it comes out leave your email and it converted reasonably well and it wasn't a 5% but even at 1% like we'd at least prove the people that were, you know we're interested enough in it not knowing what the price was to go on to the next phase which R Us was crowdfunding. Jason: [6:18] Play up first. That is totally cool it wouldn't have been that much earlier that it would have been super expensive than unfeasible to even do a basic test like that. Adam: [6:29] No question and that's when you look at these sorts of things you know you can it's really in hindsight it's really easy to point out that the things that were really lucky and one of those the timing I mean had we try to do this in 2008 it would have been a totally different story. Jason: [6:42] Yeah and you're not the first entrepreneur on the show to say hey we we put up sort of a faux buying experience even before we knew how to make products in fact I think we had tuft and needle on the show and he literally had a bye but and took an order in the first day. Adam: [6:58] That's awesome yeah we didn't take it quite that far but I can send there's a lot of Value Inn in doing that particularly when he basically combined what was Frost Phase 1 and Phase 2 he combined that into one phase which was can you get people out of the credit card information and click by. Jason: [7:13] So they also not available 5 years earlier would have been that that crowd crowdfunding component can you talk a little bit about that. I said you had any experience doing a crowdfunding project. Adam: [7:23] I mean I was pretty guy come from the medical world at that point and Matt is a also not turn over but has been in the alternative fuel conversion space since college so neither of us have any experience. Jason: [7:34] Kickstarter or Indiegogo or one of those. Adam: [7:36] We used fundable we actually got declined from Kickstarter at the time they were I guess we're focusing on our projects and things like that so I I met somebody who was a Founder CEO of honorable and they were super helpful and got us off on the right foot. Jason: [7:50] Awesome so then that's Circa 2013/2014. Adam: [7:57] That was the about September 2013 was the beginning of the crowdfunding it went on for 2 months. Was really successful for us not in the amount of funds raised it wasn't super expensive to start this company so that wasn't the point but we we set up a low goal, we more than tripled that goal and it was it the real proof of concept that we can get people to enter their credit card information and click by and having these people not be like our parents in front of him. Jason: [8:23] Yep but it and it's only gave you some sort of Market validation that you had a. Adam: [8:27] 100% of men. That is the validation right we had something people were interested in and we're willing to pay real money for. Jason: [8:33] Yeah yeah so now you so now I assume you start chewing up and Manufacturing you fulfill those orders was it easy to grow organically from there or how did you say. Adam: [8:46] No. Jason: [8:48] I was being slightly start a. Adam: [8:49] Yeah it was not easy at all I mean it with this was like a funny side project for almost a year and not because we didn't love it and think it was amazing we just haven't figured out how to do it yet. Sew-in yeah we we did that I built a real website on I think I'm bored press if plug-in woocommerce to it and you some funny Dragon drop that it hurts I don't have code. And we started taking pre-orders at the end of the crowdfunding cycle so we had started doing some testing on actually being an e-commerce business in the fall we ship those orders in the first week of January 2014 barely missing Christmas which is awesome. And I'm just literally just fumbled along for 8 months. [9:30] We are doing two or $3,000 a month in Revenue I had two other kind of side project things I was doing maths in a running as fuel conversion company, I'm so we're still doing this we're trying to do it we just haven't figured out how to make it work yet. And something really important happened for us and that was in in about August of 2014 Facebook launched their video advertising platform, so I thought of you again I'm not a videographer I'm not never done this before so I just took you off the shelf Camera DSLR that I had from some previous trip. And propped it up on a backpack in the sand and had this sort of demonstration video that was abusively long in today's standards of digital marketing at least with respect to Facebook and things like that and put it on Facebook and it exploded. Just went from you know 5 or so thousand dollars in August to like. 10 in September to 25 in October to 50 in November to 60 in the first seven days of December and we saw a lot of product cuz we had no expectation that this was going to have. That was that was the point of which you know we were. Clearly earlier on may be in September after like holy hell is actually working and then it just continued to work because with Facebook if you just keep putting money into a particular when you're at the smaller scale and you can achieve the same results. Jason: [10:46] Yeah that's awesome so during that that run up as you started getting that heavy Traction in this volume started really getting up did I did like WordPress break and all that sort of stuff and did you have to migrate I'm assuming. Adam: [10:59] Oh yeah we were we were in. Way over our heads and by we I mean me my was responsible for the front end of the business the tech The Branding the marketing OSF mats with multiple for the back end with the inventory is the manufacturing or financials on this important stuff so yeah I was weighing over my head I mean we. Do we couldn't ever get enough bandwidth to support the girl that we were doing and we Band-Aid patched it for. A year easily are removed to Shopify which was one of the smartest things we ever did in the summer 2015. Jason: [11:30] And then fast forward a couple of years and you guys were on Shark Tank. Adam: [11:39] We were in the November of last year. Jason: [11:42] I'll put in the show notes but it's like season 6 episode. Adam: [11:48] It season 10. Jason: [11:51] Episode 6. Adam: [11:51] Season 10 I think it's episode 6. Jason: [11:54] Sex so so we'll put it in there before you get you can get on the show as a regular follower I sort of thing marked even as an unbroken record of investing in every Beer Company. Adam: [12:06] There might be a theme there. Jason: [12:08] So I don't know I don't know if you targeted that at all but just a side note. Adam: [12:12] Yeah he had this great quote and up one of the Publications that came out of that nose actually became the title of this article it was something to the effect of every time I drink a beer I invest a billion dollars. Jason: [12:22] Well I hope he's got a good Roi on that that could be an awesome investment strategy if it's working, so you're so happen to have a guest shark A-Rod and in the beginning of your pitch to demonstrate the protection element of bottlekeeper you, I handed him a baseball and let him throw a baseball at your product and I'm actually thinking I would be in your shoes terrified at this moment because if I make a rod look bad. He doesn't like it at flush. Like this could go totally sideways so luckily there's no listeners on the show so I guess we'll never get out did he nail it in the First Take. Adam: [13:05] He did I'm in the guy's a Hall of Famer. Jason: [13:07] Yeah. Adam: [13:08] It was surprising how I mean he nailed it dead center in the middle 60 plus miles an hour in a full business suit and dress shoes on a hardwood floor from 30 yards. Jason: [13:18] Which. Yeah I mean he's there I got to do it but you still is I feel like it's impressive nonetheless so you took a risk until I paid off and on the show you Altima got a deal with Mark and Lori, like pretty meaningful valuation when the fun things to me is a lot of people come on that show, very early revenue or pre-revenue in like asking for sort of a wack evaluation and they get beat up, I almost got the impression they felt like you were a little silly until they found out about your your existing Revenue run rates and then it became a different kind of gum. Adam: [13:57] Yeah which any of that was is, very very planned out right I mean our goal it wasn't our goal wasn't to go on in and look silly but it was to go on and then get to the point where 3 numbers and have them all, set up in their chairs and even even with you got to structure all these things right even with a rod drawing we designed that around having a run on the show we didn't say we want to do this experiment that all the time we have a run it was what do we need to include in our patch so that we can, so that we can guarantee they will air our episode and it's like you have a rod throwing a ball on National Television there's no way they're not going to. Jason: [14:33] Yeah it's too. It's brilliant and I've been told by other shark tank entrepreneurs on the show that one of the things that can be frustrating is you don't actually know when your shows going to air. Until I can be, dislike again you're likely to have a big bump in in demand from the show in the band planning and hardening your systems can all be a challenge in your case I think you got a really lucky air date did you not. Adam: [15:01] We Dad we are the night before Cyber Monday. Jason: [15:03] Oh my gosh so tons of demand a peak time in you already on Shopify at that point so did things hold up in. Adam: [15:13] Yeah I mean from a from a texting Point yeah every everything that I'm in the fortunate thing for us in that experience was that we had already been in business for, five or six years we've already done millions of dollar in route dollars and revenue we had, you know we had put all the pieces in place through other learning mistakes and we were around that we've been on other TV shows prior to that's the we had these huge bumps in Things Fall Apart and so we got to patch all those holes in advance and the other part was we had we work this great deal there manufacturing group where they were basically they would create, I think it was it was up to 10 containers of product on their dime and basically hold them in a facility in the US and we could draw from them as we wanted so that really D risks, our inventories going into Shark Tank cuz you're right we find out three weeks before it was going to air that was going to air. Jason: [15:57] Wow that's awesome in my distant past we used to do some work with Oprah Winfrey in like early on in her list she would literally put these entrepreneurs out of business cuz she like you create so much demand and like so, you would have had to invent all these new disciplines about how you handle this this one ridiculous spike in your business that's a first world problem though my friend. So so you're on the show the product looks gray By Carolyn season on the show you get this nice bump and I think you said like, like a 300% increase in rent do I have that. Adam: [16:33] Yeah as of that night and then grilling to Cyber Monday we had we were already up W Revere so then we basically increase 300%, the night of and it lasted through the subsequent week minute tell off a little bit the beauty of TV now versus TV 10 years ago did you get this huge Spike spike lives on a movie still something like temperate not sock. It's slower it's like 5% of our traffic today we can still point of Shark Tank, start in November of last year it reared in Des in January of this year but even then this up lives on. Jason: [17:10] The rears its the DVR now and on demand you get this nice a long tail. Adam: [17:12] Horse HD streaming systems. Over the course of the week following the Airing weekend directly attribute an additional million dollars in Revenue just to Shark Tank nuts customer acquisition free which is a beautiful thing. Jason: [17:27] That that is awesome so that could be is valuable for being on the show you raise some Capital which I assume you were able to invest wisely and that's valuable I'm. An argument that sharks off and make on the show is did they have special skills and they'll help the entrepreneurs and so I'm always curious like I've done some math it's kind of funny Mark has done a bunch of deals and he's like oh I will help you with your website and take care of all that and I hurt your back is done a bunch of those basically they're putting people on Shopify in Magento. If you don't know about that. Yeah that's why I'm just like to the extent you can say like you like do you get intangible incremental benefit from a shark investor versus you know like sort of anonymous money from a Visa. Adam: [18:19] Yeah I mean. Anytime from our standpoint we're end up into this point we've had no investors are. So we've always looked at taking on Capital as a means of taking on, assets that go far beyond Capital what do we you know what is the person bringing to the table outside of just money cuz we don't necessarily need the money that bad now it's part of the pushback we got with going on Shark Tank, I was worried it was relatively apparent that we weren't there only for the money which a lot of companies go there for cuz they're about to die. So each of them has a different skills that each of them has a different. Thing they can they can contribute teams of people that can contribute I'm I can't really speak to them specifically prank their deals on going so, we don't have a ton of experience in working with him directly but you. Jason: [19:08] Yeah it's going to be interesting to follow and it certainly is a fun story I want to turn the O2 what is often done fun part of the School entrepreneurship which is the whole hassle around knockoffs in protecting your IP and this came up on your episode even a little bit like it is and I I get that they film this long for our thing and they added it down to 30 minutes, that would like 8 minutes or whatever and it's but like it almost seemed like you came on you totally shocked them with your Revenue run rates and you have good margins of good unit economics and then they're like we'll how much of you netting and it wasn't a huge number in it it took awhile to figure out they like oh we've been spending a fortune protecting r i p, so tell me a little bit about that. Adam: [20:07] Yeah it's. United consumer product world where you have to deal with patents and knockoffs it's just a very unfortunate and mind-numbing part of the business but it but a reality so, we we started to see knockoff products show up in on Amazon in 2015 late 2015 it exploded in 2016 and although we had patents filed they were still pending or inactive so you can't do anything about you just watch this happen which is brutal, through that explosion in 2016 we we had over a hundred companies on Amazon selling fake they're not saying they're bottlekeeper so it's not counterfeit product released Amazon takes up are really seriously swear able to deal with that because of the trademark something that we had but, when are patent did go live in November of 2016 we had to get really really really aggressive with defending the brand we had to make a decision, are we going to grow more in Top Line and effectively bottom line. [21:04] In 2017 or are we going to take some money out of marketing and aggressively Defender Brandon we did the ladder we know we're in this for the long run we spent a lot of time your building what we, you know very much believe in and then and so we spent about a half a million dollars in 2017 and lawsuit suing a different companies. I'm getting consent judgments and doing all these important things as part of a strategy that will and update thought at least at the time that would put us in a position to better Defender patents moving forward which worked in Heights at work really well but it was really expensive, when you can take in the you know what I'm talking about that on the show that half million dollars we have to take out of her marketing Budget on retained earnings were Castle business, so how to come from somewhere in the only place I could come from was was marketing so. Jason: [21:54] So I should have asked before but were you already selling on Amazon prior to the counterfeiters or did the counterfeiters show up on Amazon before you. Adam: [22:04] They should open Amazon before us that's why we went on Amazon. Jason: [22:07] Yeah I was going to say okay so you're selling direct if I have this right you filed a provisional patent before you really started selling the product or early on. Adam: [22:19] The provisional is something and it said this early I'll preface is that I'm not an attorney so talk to you later but the provisional something that you file that's kind of like a placeholder it's an inexpensive patent it last for a year, and it basically like puts your place in line if it ends up working out and you want to come in I want to file a utility or a designer whatever patent on top of that so we had a provisional in place I mean frankly before Matt and I even came together and decided to do that. We filed the Utility Patent didn't think December of 2013 and it didn't go live until November 2016 is it really long. Jason: [22:52] Yeah not fun either so also not an attorney on the side but like in general the, super important thing about those patent filings is your filing date, right and so you don't cost a certain amount of money and and both filing fees but also just to prepare a patent and so instead of spending all that money to file a full patent you can in fact, take this cheaper path which is a provisional patent but the provisional patent gives you that all-important filing day, I'm so if you have a bunch of money provisional patent actually not a good idea you should just go right for the patent and save the thousand bucks from the provision. Adam: [23:32] I mean I haven't even believe in that if you're testing a new concept as we come out with new stuff the first thing we do is file a provisional patent we're not sure it's going to work I mean our first and that's not like a small. Jason: [23:46] No no that's it shoot. So so you get the date from this provisional. Adam: [23:53] That's the important part. Jason: [23:54] Yeah and then when it converts to a full patent application that still retains the provisionals date so that's the whole point of the provisional patent, it's totally unpredictable how long the pageant can issue in it, it comes down to a bunch of luck about the examiner you catch and if there's a lot of questions and you have to do a lot of defense and you know do additional primary and all that stuff so you could issue in a year, and you could issue per your point in 5 years or longer so in your case, people say you selling direct knock it off and start selling the knockoffs on Amazon under a different brand before your patented issue. Adam: [24:38] Yeah an end of the challenge there is that weird. Heavily marketing bottlekeeper spending millions of dollars your marketing bottlekeeper on Facebook and all these other channels so why we had to be there is because people were then going to Amazon searching for bottlekeeper and please knock offs are coming up so we had to be at the top of the list for Bobby's reason. Jason: [24:55] Yet so you had to show up in their search I won't make you say it but many people would also say that a lot of the amenities that Amazon does offer for brand protection, are easier easier to Avail yourself of if you're a seller on Amazon so like frankly a lot of people become sellers on Amazon specifically so they can do brand registry and and eventually get a wrap and have some recourse is for some of this. Adam: [25:23] Yeah I know the kicker there is he that doesn't happen till you get to a significant amount of scale. Jason: [25:28] Yeah which feels kind of oily, it's also like, repeatedly how it plays out on most of the international market place is so you know you're trying to be on Team all at Ali Baba you know again has a lot more, IP protection tools when your seller then when you're just a disinterested third party, so so that prompts you to move to the Amazon platform so now you're playing at a crate on the same sales that you in the past would have captured direct but presumably also exposes you to a bunch more customers so you may not have gone on Amazon for, necessary the best of reasons but in hindsight. Are you sort of neutral about being on Amazon like you feel like there is an at economic Advantage if you like is a disadvantage or not prepared. Adam: [26:22] Oh man how much time do we have. Jason: [26:23] I'll do a long show forever talk. Adam: [26:27] We if we look at the from a consumer brand if we look at the overall picture of what Amazon does for us is consumer brand I would call a negative. You're right that we get exposure to new customers but the problem with our product is it's really hard to sell in a still image it's really hard for someone to look at it that doesn't know what it is and go I know what you do with that you put a beer inside of it so it's not like we're selling socks, yeah I mean when someone goes to Amazon looking for socks and we're one of the results that comes up and they love our socks and I wish it was it was that it was that simple I mean, that be a beautiful thing but unfortunately it's not so the other challenging part is that in the customer that purchase purchases from Amazon is Amazon's customer is not your customer that our customer we don't really know who that customer is they don't get to experience any any part of our Brandon and buying Direct in the processing funny copy and follow-up emails that are super fun and engaging in personal thank-you note every single customer that buys from her site gets from me personally that comes from my address they respond to it it comes to me and I respond every one of them. That's a really really important part of our brand that's how we get tremendous feedback that's how we design our new products, so we've. [27:41] We're hoping with some of the things Amazon is has put in place and we need to give them credit they have put in place a number of things that have been tremendously helpful like the patent infringement portal and brand registry which they just launched in the fall of last year that has been tremendously helpful. But from a consumer brand stamp when it's really really really hard to invest heavily in acquiring customers on Amazon when they're really not our customers. Jason: [28:07] Shirt and you can act like if you think about it there's two kinds of traffic that's hitting your PDP like there's people that got exposed to your top of the funnel marketing activities off Amazon, and so I want to hear funny YouTube videos or the television ads you're not doing which will get you in a minute, are all these other things and like you already created an intent to buy they go to Amazon and buy it instead of to your website and buy it and so it's lower-margin I didn't ask but you're probably also fulfilling via FBA and paying all those fees. Adam: [28:41] Yeah maybe actually Mark the product up on it was on the weekly or so to cover those please number one and also to give the customer incentive to come back. Jason: [28:50] I like it in that still gives you that visibility in search but protect you from some of that Marginal Road and that's a great tactic if, the product still Converse at that high price I promise if you price at to hide and no one buys it then it actually doesn't show up in search. Adam: [29:06] So it's it's funny when, when we first launched the product we launched it and one color one size and it didn't have the built-in opener wasn't powder-coated didn't have all that sort of bells muscles that it now has. And as we launched colors and then when an Amazon we did it with our what we color 1.0 product. That one for the product we were selling our website for 24 1999 $20 and you're selling it on Amazon for 25 but it was selling perfectly well on Amazon a 25 which was kind of that light bulb of did we underpriced are Prada, and that is we launched new bells and whistles and things that came directly from feedback from our customers, we looked at that pricing auto very differently and priced it well above what we thought would be reasonable and realize that we have not yet got to that pricing ceiling yet, Amazon for helping us figure that out. Jason: [29:54] That that is a terrific unintended benefit I guess. But so you have that version of the traffic in that converts and it's great but, that again we'd rather you don't get to meet that cuss around that thing and then you have people that maybe didn't know they needed your product Discover it on Amazon and prove your point, when those people at your PDP they probably don't convert near as well because your your storytelling and you're you're sort of want to buy contact content on Amazon is less compelling than it is on you. Adam: [30:27] Yeah it's it's significantly more limited. Jason: [30:29] So now I want to Pivot to another thing that I was actually expecting the Sharks to beat you up about and the Beast in the final edit it it you got a total pass on it, you mention what a boom Facebook video ads for you were, it sounds like it one point in your Evolution like you were you were very dependent on Facebook that that was your primary marketing via. Adam: [30:55] Yeah I mean even through today we're still dependent on Facebook we're just being very aggressive and diversifying that Revenue. Jason: [31:01] Yeah and for your point, early on it's like as much Capital as you have you can buy more more profitable eyeballs from Facebook with that that capital in your Capital constrained. There comes a point though when the cost per eyeball starts going up as you have to buy, broader and broader audiences and as Facebook just as the monitor talk about their their cpn's are CPAs, while they going up over time and as they scale and if that's your primary marketing vehicle you you have to worry that you're eventually going to hit some inflection point when. We can't keep growing the same way you were and so like what are you doing or what hat what are you trying to sort of diversify that the customer acquisition from Facebook info sorry, super long question when we're saying Facebook are we primarily talking about classic but Facebook or do you mean Facebook as sort of Facebook and Instagram. Adam: [32:03] Separate the two so classically Facebook we treat those two channels differently so looking, I mean everything you said it sounds like crack the bigger you got the harder it is to generate Returns on Facebook now. Combined with that is the fact that today you know Facebook isn't growing like it used to grow up really domestically at least which is where our main consuming audiences and. The number of marketers advertises on Facebook is up significant let me know anybody with a harpy can go in and create an ad account on Facebook and sell their Wares. Jason: [32:37] Even I could do it. Adam: [32:38] I could do a lot I mean I figure it out, the kicker bass simple supply and demand economics at least flatlined Supply and increase demand just gets more expensive, couple on top of that we have Facebook removing a pretty significant amount of targeting as a result of all the scandals and things have come out which just means it's more expensive for us to go and find, customer that we know exactly who that customer is and if we can Target them based on these Civics then then we do have to go to your point go broader which just makes more expensive naturally so we're focusing heavily on, we do advertised on Instagram that doesn't convert that's a great brand building getting eyeballs to a but hasn't has to work we can but it real well for us. We advertise in some capacity on all the socials Pinterest has worked really well for a tickly seasonally in and around Father's Day and key for the one that really surprised me and our marketing team is TV. I'm TV is at a place where there is a lot of additional technology that wasn't there 10 years ago. [33:45] TV ad-buying so the technology is not only in being able to attribute a sale to somebody saying. Adam TV commercial on a specific Channel but it's also being able to buy the space on that channel now they're these live auctions that are all you know automated that a really good TV buying company can go and get really inexpensive ads based on really good channels during great times a day that are in and I'll say the third position in a channel lineup rap commercial instead of the first, but it's like $200 for an ad on Hallmark Channel during the holidays he was the sort of thing it could be really really really inexpensive when it's done correctly and combining that with the fact we're doing all around creative in house, we can crank out high-quality creative and test the hell out of things before we hit need to go and put real budgets behind them. Jason: [34:34] And so it would be great if I said like that there this nice combination of there's way more inventory of Television than there's ever been before and there's slightly less competition for that inventory and so. Adam: [34:46] Yeah I mean if people are moving the advertisement for the attribution when you can just get it's just so much more clear. TV gets less expensive I mean there's not necessarily less viewers there's less linear TV viewers but even in the in the Digital streaming advertising and Digital streaming TV is great because you that's much easier to track that attribution issues IP matching and that's crystal clear in the linear side where it's somebody you know I'm sitting down watching TV. Yeah you you kind of got to follow him a little bit one of the ways that we've been successful doing that as is with a simple hear about us how'd you hear about us and our checkout funnel and being really specific. To the name of the channel in that dungeon feel like TV cuz if you're advertising 10 channels you're not going to know which ones doing well cuz I'm going to do really well in summer like any normal advertising Channel. Jason: [35:34] Yeah I think it's the old I want to make a quote half my ads are working I just don't know which half the, so TV has been good the I also heard a story that you were doing at least an outdoor, pilot it's a week like normally we've got digital outdoor and that means you're buying like a digital billboard or something that you are buying a digital boat. Adam: [36:02] This is Mike's American are a head of marketing is really really really smart guys I was coming up with these funny. Interesting things to test a nut wheel of testing stuff so we starting earlier this Summer started testing a bottlekeeper add video that's on a digital screen on the side of a boat that just drives up and down the coasts I named Ali in Florida and a couple other states as a 5 or 10% off discount code on and try to help us track conversions and it works really really well the challenges scale most of these marketing things that work really well as getting the scale and it but I was another pleasant surprise. Jason: [36:36] Yeah yeah and did the guy that pitch that happen to own a boat in like. Adam: [36:40] Yeah it was like this is this guy's belt that's that's the downside of this is It's not like there's one company that does this it's like Joe's boat in Miami Jimmy's boat in Baton Rouge like it it's quite desperate see if we work them individually but it is an interesting. Jason: [36:54] And eventually one of those boats is going to hit a manatee and there's going to be all kind. Adam: [36:57] That'll be the end of it. Jason: [36:58] Yeah yeah I hope I hope that doesn't happen to you so lots of stuff in flight for customer acquisition the other big change I heard is you are now if he's piloting some retail. So hot like talk to us about how like how you come to the why weren't you in retail in the beginning what changed that made sense for retail now and how's that. Adam: [37:21] Yeah you know what the beginning from my, prior 10 years in the medical world experience was really labor-intensive and really hard to manage at least from a logistic stamp why there was lots of just stuff people in multiple States and delivery vehicles and warehouses and all the stuff, she couldn't get away from it so when we started bottlekeeper the idea was to do the opposite of that let's think I said earlier let's build a business around a lifestyle, the sort of like Drop Dead question when we looked at opportunities was do we need to hire people to to accomplish it if the answer was yes and we just didn't do it, one of those things as retail as we started you know murdering people hammering stuff on Facebook with millions of dollars on Advertising retailers, none of that and they are start sending an enquiries and interested in whether it's a big retailer with small Roots retailer we didn't know what to do with them cuz we couldn't read that just set that we're not doing this. You know I was looking kind of at the GoPro model where they went completely direct-to-consumer for a long time and by the time they went to retail they got to make some, in a pretty decent demands because they had the consumer yeah they had way more leverage and I always made sense to me and it sort of fit my my operating model of let's do this without people so. Fast forward a couple years we as people retailers were coming to the site we were just saying hey we're not ready at between this waitlist and we'll let you know when we are so we had. [38:40] 3000 us retailers on a waitlist, we had a significant in the the how did you hear about us on the waitlist was customers coming in and saying why don't you have this which is really important piece owning the customer which was back twice challenging to design Amazon is a huge part of the puzzle, so come 2017 or patent infringement staff gets largely cleaned up, I'm 2018 we see the writing on the wall with Facebook we're starting to hit that point at which, you know our Yang and yang with expense and return it starting to get out of alignment we're looking for other Revenue models, so that one we were we have historically been a pretty seasonal business we do about a third of our Revenue during Father's Day and half of Revenue in the last 6 weeks of the year, so that gives us 9 months of the year that we know have low sales were losing money and some of those, I mean as we continue to grow our losing money in a lot of those, I mean that's made up for in these other two seasons so it just got to the point where retail we had enough demand we needed to try to level out a revenue throughout the year and not be so dependent on Facebook and our other social channels doing marketing, and some retail started to make sense so we actually this all started when a sales and he's now our director of sales this guy that had been in the the consumer space retail space for a long time. Reach Out blindly ends at Ace Hardware wants you. [40:06] And one company that I will totally plug happily that we've always looked at as sort of a model of brand building Done Right is yeti. It's an amazing job building a brand on relatively limited amounts mean I know they have a huge patent portfolio now that early on they had a couple of Pattinson, and protective of their drinkware lines in the sort of stuff that's that's hard to patent cuz it's that's been around forever yet, they build this following where people will go and spend 50 or $70 on a cop that you can buy for $5 literally anywhere else and I mean they just IPO they were filling the dollars, clearly that works for them so. Is a store that Yeti is heavily in so that was the first big retailer that came to us and they were you not saying we want to work together you want to sell your products that and then it started to make sense so we, brought on this order for Versailles who's awesome and what he does and started that conversation we started opening up Ace locations they have four thousand or so domestic stores, started opening that up in the fall of 2018 so by the end of the year we had two hundred or so stores, started explaining to a bunch of a very select retailers, and as of the first six months of this year we're going over 4,000 domestic store so we're growing rapidly into retail and now with launching new products and stuff just on our our big pipeline we get to add to those shelf the Shelf space that we now have. Jason: [41:28] That that is awesome I'm curious you you mentioned earlier on that like the product really needs the video demonstration to sell so one of the challenges of that retail shelf is your problem actually looks a heck of a lot like a Yeti water bottle, on that on that shelf like a bee are you thinking about or if you experimented with any like video pop or anything to try to tell that story in retail. Adam: [41:53] So this is this is a huge consideration in launching into retail my nightmare is that bottlekeeper ends up in the hydration Isle of a store sitting with all the other water bottles it will get lost so the benefit of having a bit of Leverage and going into the retailers that are saying please please no I'm not I don't know me to oversell it they wanted the product and we had enough leverage to be able to say I'll kill you can you can have it if you do these couple of things and one of those is used our merchandising that we created, I mean our counter display has a physical bottlekeeper unit broken open on it like glued to the front of this would display so you can't miss what this product is. It's like they have to use the kicker. Jason: [42:34] Yep and is it like do you try to get merchandise in the beer section is that. Adam: [42:40] It just depends on the store I mean our again our sort of no-go zone is is hydration yet this is cousin doesn't but in entrance doors yeah I mean we have like, Meijer a great you know high and grocer that's perfect to be in the beer in the rear section I mean on a couple of sets a Whole Foods all these places that have grape your collections it works really well. Jason: [43:02] Awesome the I forgot to ask International so are you guys selling much International now is that in the expansion. Adam: [43:13] It is a big part of the expansion we have we actually physically launched into Australia in 2015 were some really good learning experience. Jason: [43:21] Then think about that but that's like one of your fate area would be where is it hard to keep beer cold. Adam: [43:25] Yeah and Australia versus a lot of the other places you can lie. Jason: [43:27] Like Greenland probably not as high on. Adam: [43:29] Yeah UK is not quite up there either but I mean Australia it's hot most of the population lives on the coast they like beer speak English, it made sense to do that really good learning experience you know we sold physically they're out of a warehouse that was contracted and had a physical presence there learn quickly that there, Amazon doesn't have quite the hold their that they have here so consumers aren't quite trained up on e-commerce, so having a physical presence there is really really important over in the midst of working with Distributors to go the more traditional retail route as well as in a bunch of different countries yes is the really long answer to your question. Jason: [44:05] And obviously I'm sure you're ahead of me on this one by one of the sake things is of course all that IP work you did in the US you now have to start thinking about duplicating time what time is potentially a lot. Adam: [44:19] Yeah I mean there's you know that, the downside of the very beginning of the company of not going in raising a bunch of money is that when it came time to file patents lien filing patents in all jurisdictions is phenomenally expensive and so there's some places that we just don't have coverage we just have to rely on the fact. Certain countries really enjoy using American brands and. Jason: [44:44] For sure until we're getting we're running up on time I want to give it to the last topic but I would be remiss if I didn't point out one of the funniest things of the day so you were funny only to me but you were on a panel at detail on Startup founder stories, until they were like three three great Founders that had you each had heard of a wildly different story that you all share it and I feel like there's actually a bunch of, useful practical learning that the audience probably got from all three of you but the one thing that all three of you had in common that it seemed like there was violent agreement on was that you should do all this marketing and concentration in house and that agencies don't work very well and I don't know if you know this but I work for a giant agency, so I'm laughing I'm thinking of my French overlords listening to this podcast and they're like nice TV is coming back we have a hundred and twenty thousand people that know how to produce great TV and then the next thing is but, it's now easy enough and there's a bunch of significant benefits to do it in-house which I would totally agree with. Yeah so I just wanted to get that out there for all my co-workers listening to the show I think the takeaway was agency sock was kind of. Adam: [46:01] No I buy my ticket would be that there is there's a time and we do use agencies were multiple points throughout our growth there's a time and a place, and even today we are TV buying we're not doing RT to buy internally like it would be impossible for us to do that so we still do use agencies in a couple. Jason: [46:17] No I die till I get I just thought it was funny so I'm having fun. Adam: [46:20] Glad the other guy Adam really got into that one so you can lay down. Jason: [46:23] T it sounds like a couple of the other guys had some like particularly bad rebranding experience, what does not hard to imagine so pivoting forward you put your future hat on in your imagining 2025a. What does the world at bottlekeeper look like a view. Dramatically expanded product lines have you like so this business to somebody in your living on the beach with like a concierge to bring you cold beer so you don't care anymore like what's the. Adam: [46:55] I mean we're not we're not even remotely close to where I would think of the acquisition time there's a lot of stuff you want to accomplish and we're certainly in it for the long haul I mean you know we we spent a lot of time internally part of the downside of naming the company after your first product is launching your second product becomes kind of interesting so we spent a lot of time internally, being able to better articulate why we as a business are doing this why is we we as a group of people are coming in and doing all the stuff everyday and as we get to better articulate that I'm at we are getting a lot better at articulating. That will allow us to expand into other. Verticals that I can't even imagine today I mean again looking at yet either a good example they started as a cooler and I was all a dog bowl expensive dog bowl, so it took 10 years to get to that or what not but but there's a there's a lot of a lot of room for growth. Jason: [47:47] Yeah it's a crazy story like that you. 8 years ago they were primarily super expensive cooler manufacturer that was like known as are the niches today that they had this like super powerful brand and a Scraper on a product some people are like wow overnight success you did all this stuff in 5-day years there 23 year olds. Adam: [48:08] Yeah I was definitely not 5-day ears that's for sure. Jason: [48:10] Yeah I mean it's like it's it's the age-old story everybody's an overnight success 20 years it, will listen am I super enjoyed talking to you about this is going to be a great place for us to leave it because it's happen again we've used up all our a lot of time but if listeners have any burning questions or comments and they want to continue the dialogue they're totally welcome to join our Facebook page where you will see a lot of bottlekeeper ads I did some research for the show and your retargeting is now stalking me. Adam: [48:43] Perfect it's working. Jason: [48:46] Yeah yeah yeah and I'm a good guy so I clicked on every one of those ads for you. Adam: [48:50] Okay yeah thanks thanks for that. Jason: [48:52] Yeah I'm here for you maybe I should buy a product after I click on that. I don't know if that would be better I'm kidding, but that we would love that as always if you enjoy the show please give us that five star review on iTunes Adam if people are inspired by the show and want to get in touch with you like what's the best way to, to reach you. Adam: [49:12] I mean you can find me on Twitter Adam underscore callanan out. I will tell you in advance I don't use it a whole lot much to my had a PR sugar in, I mean our bottlekeeper accounts of the best way we're still a small team super connected so if something comes to that I'll definitely about it. Jason: [49:28] Awesome I will wish those social accounts in the show notes and Adam really enjoyed their conversation thanks very much for making the time until next time happy commercing.