High Tech Meets Low Tech: 26 Rules to Launching Low Tech Products Using High Tech

I've been "laser" focused and very focused on launching Pooki's Mahi (brand/subsidiary of The PMO Practice) etail store on a new platform!  We launched the new ecommerce store on 5/27, Monday and our growing customer base loves it!   Thanks to the core team and partners that helped launch Pooki's Mahi store.  

Check out the new store:  http://pookismahi.com

 

The road to creating Pooki’s Mahi as a brand and company has had its challenges.  I quit my leadership role at a public high tech cloud company to focus on Pooki’s Mahi.  The concept of Pooki’s Mahi began in 2010.  Pooki's Mahi™ is bridging the gap between product development and launch by implementing an e-commerce solution complete with supply chain management, distribution and channels.

 

Took my expertise in New Product Introductions and Product Lifecycle Management and started to craft out Pooki’s Mahi:

 

  • We began with a simple idea:  Bring hard to find, highly valued, and award-winning packaged food products to customers at an affordable price, quickly and efficiently.
  • We ideate and innovate with our partners/suppliers by using key customer insights to drive decisions.  Our NPI expertise from the high tech industry influences new product launches as well as End-Of-Life of existing ones.
  • Launch:  We’ve Just begun!  As experts in bringing new products to market, our product lines are always expanding.  We’ve just gotten started and why not be part of it.

 

Our first estore opened up in Q2 2012.  Learned a lot from all the pilots to make the products better and to operate Pooki’s Mahi efficiently.  Q2 2013 is about to close; I’ve already beaten the 2012 revenue numbers.  2013 is about growing the repeat customer base and significant growth.

 

Below are the key “rules” in starting a company with physical products that generates revenue consistently. 

Assuming you have a huge passion for the products and industry your venture will be in.

 

  1. Be very familiar with your areas of expertise vs. somewhat knowledgeable because this plays into the success of the new venture.  For areas where you are not an expert in bring in advisors who can guide you in these areas. 
  • For example, I consider myself an expert in New Product Introduction – taking ideas from concept, developing and launching it into the market place with staying power.  This expertise requires a solid foundation in operations excellence, supply chain management (first and foremost), product development and sales and product marketing.  There are several key areas I am not an expert in.  These areas include Market Communication (MarCom), Online Marketing, EOF (End of Funnel) Conversions, FDA Certifications (Organic and Fair Trade) and web development.
  • For the areas I am not very knowledgeable in I augmented my team and brought in experts who can do the job (as well as teach me).  For example, Eve and Collean have done a great job understanding my needs and leading my online marketing efforts.  I know in four months I will have more than enough data to measure, refine and improve the online campaigns.  In the case of product development Shappify and Yotpo has a solid team of developers who take the time to fix my issues and teach me how to trouble shoot my own ecommerce store.  I’ve had quite a few challenges making Shappify’s apps work in the Shopify platform. They provided solid support and were quick to resolve many (not all) of the issues I raised.  Regarding Yotpo – I doubt anyone can come close to the support Dave/his team has provided.  Not only did they walk me through the steps, provide a template but they also reached out to check if their app was working to my satisfaction.  In the case of market communications Amanda and Charles have been very helpful in re-educating me on a best practices setup and for a small fee are in the process of creating a template for me to use to connect with my customer base.  All three functional groups provided support at the level I expect (which is very high) and were willing to provide guidance.  They’ve (unknowingly) taught me a lot and gained a business partner that will evangelize their services and products.
  • The biggest rule is to walk away from people who claim to be experts but are unable to teach you.  If you are not learning anything new within <3 weeks, then why drag out the work relationship?  You will only be frustrated and annoyed.
  • Use existing processes and framework familiar to you to launch products and the company.  I believe everyone has a decent understanding of creating a schedule, aligning tasks and theorizing on executing them. Anyone can be a project manager.  Those who are experts in this have a very deep product program management background.  Very few can be a (product) program manager.  I happen to be one of the few program management experts who can ideate/conceptualize, develop and launch products consistently.  I can also specify which framework (Product Lifecycle Management, New Product Introduction) and methodology (Waterfall, Agile, Six Sigma, Lean Manufacturing) to use.  Launching a product company requires a foundation with a combination of the above frameworks and methodology.  If you are not familiar with any of these concepts, then start with the basics.  For Pooki’s Mahi I used a combination.
  • For Pooki’s Mahi product lines I used PLM, NPI and Six Sigma to create, prune and stack rank the product lines.

  • For the specific products I used PLM, Waterfall and Agile to crate the epic stories and time box my launches.  Essentially went after the 2-week sprints.  At the end of each week I have accomplished a lot which led to a month’s worth of work.  Accomplished meant the product was launch ready or the services to support the products were delivered – it was done.  My low-tech products did not fit into an Agile methodology – you can’t inject a coffee bean, douse a tea leaf and expect it to change, grow and be launch ready in two weeks.  It’s not software.

  • For Pooki’s Mahi services I used Agile or Waterfall depending on the service.  For example, launching the new estore required a more Agile approach.  Adding a new fulfillment partner required a Waterfall approach.

  • Boot strap/Self Fund the company and allocate 30% to SG&A costs. 
  • My previous life was to lead cross functional teams.  I allocated 20% to general sales and administrative costs.  Costs that fall in this category include the standard monthly expenses to generate sales for the product.  Expenses such as facilities, salaries or product CoGs do not fall in this category. 
  • 30% is a good number to use to cover unexpected legal, tax and augmented marketing teams.  A simpler way to think is for every $1 where do I want to spend it?  Over time you want 30% dedicated to sales and 20% saved for product R&D, 10% tied in SG&A.  Why so high for sales?  If takes a lot of money to gain new customers.  I’ve recently expanded my marketing/sales teams by adding Eve and Colleen.  Their role is to own the online marketing and drive conversions.  We divided the work so that I would focus on product marketing (since I know the products well and have done a decent job driving sales marketing it) and they would focus on the bigger picture of online marketing.  In a quarter’s time I’ll be able to share results.
  • Boot strap or self fund the company.  You fail faster which makes you learn quickly, be agile and pivot from the plan.
  • Make a revenue generating P&L plan:  Cash is king, especially for a startup. Always underestimate and overshoot.  Pooki’s Mahi is 100% ecommerce.  Have a plan to contain costs and to grow the top line.  Do not invest in growing the top line if you cannot stabilize the costs. 

  • Anyone can come up with an idea.  Very few can execute very well on ideas.  How wide and deep your cross-functional expertise will determine the execution success of the idea.  Be careful who you surround yourself to make any of the product ideas better.  For example, my core team of 8 former employees, peers and colleagues is the group I go to help me figure out if a customer request makes sense.  Each person is an expert in three functional areas.  This is the group I place a lot of trust – working with each other for several years built the strong bonds.  We all observe that anyone outside this core group were quick to shoot down my ideas, negative and were not constructive in providing feedback.  I call this the Killjoy.  I quickly took the Killjoys out of the conversations.  On a more evil note I would rub it in and ask (in front of others) how their startup was doing.  They quickly realize their inability to listen, learn and be positive holds them back from success.  Who wants to be around colleagues who are quick to kill an idea before you even mention it?

  • It isn’t what you say but how you deliver the message that will make/break a partnership or core team’s synergy.  In 2011-2012 I considered having a junior partner for Pooki’s Mahi.  This was one of the biggest mistakes I’ve made in Pooki’s Mahi history.  We played golf, discussed product ideas and I learned that she did not want to do any work.  She wanted to take credit for the company, travel to meet suppliers and spend my money.  By mid-2012 our conversations were painful.  I wanted the partnership to work because I was a mentor to her.  I thought I was doing her a favor. After all she was laid off in 2010 after <25 years in a Small Medium Business (no more than $750M in revenue, 5000 people) in the hardware/software for the entertainment industry.  The junior partner did not reflect who I am.  She was very mean to suppliers and potential partners, came across as very entitled, quick to give out harsh criticism but not take critique from fellow peers, gossip, extremely sarcastic and was a killjoy.  Her attitude and desire to speak on my wore me out! She made me feel like crap.  Each time I told her she was insincere and needed to be careful how she delivered her message she would retort and increase her personal attacks.  I heard a lot of complaints from suppliers, potential partners, customers and my core team of advisors.  In 2013 I severed our relationship – cold turkey style.  I’ve added another rule to my hiring – do not hire anyone who resembles this personality.   It isn’t a cultural fit for Pooki’s Mahi.  I’ve fired 3 people since 2011 because of this behavior.  Refer to Rule #16.

  • Be willing to do the work: You will understand the time commitment and what it takes to do the work.  Example:  I am suspicious of copy writing content quotes that exceed 8 hours.  I wrote descriptions for 30 different products in 8 hours.  Add 2 hours for the fine tuning of description.  My benchmark is to allocate a maximum of 1 hour for each product description between 75-125 words.  Since you have the understanding you will quickly question suspect quotes and deal with the pesky Account Executives.  No pain no gain.  

  • Do your research and know your market for your business, the industry you will be in and for the products.  Do it thoroughly and make sure no one knows your market better than you do.

  • Pooki’s Mahi is a product company that is 100% ecommerce and has multiple channels to sell through.
  • For Pooki’s Mahi products – I’ve focused on five specific product lines.
  • For Pooki’s Mahi multiple sales channels – I was realistic; focused on 1 marketplace in 2012.  It wasn’t until Q1 2013 did I add two marketplace channels.  I’ll be adding more marketplace channels after I’ve collected enough data (cost and ROI) to make the decision.
  • Take care of your first sales personally.  The founder is visionary, strategic and should be the best sales person.  Don’t be desperate when landing the first set of sales.  You’ll also learn from the feedback of your prospects, customers and partners.  Cherish it.

  • Run a pilot before introducing an entire line of products that might not sell.  As a small company it should be agile and can quickly take feedback from customers, pivot the product idea and launch the next improved version.  When you pilot you learn a lot about the customers (new and repeat), the partners and suppliers.

  • Dual and triple source your product.  Benchmark the suppliers and be prepared to pull the plug.  The suppliers that roll out the red carpet, are plugged into Pooki’s Mahi vision, strategy  and are consistent in delivery (from the initial conversation) are the ones I’ve kept.  I’ve treated them the same as they’ve treated me.  The ones who take a freakin’ long time to respond to Requests for Product Information or Requests for Technology Proposals and are not respectful of my time I’ve kept at bay.  Why spend time collaborating with a supplier who clearly does not want to grow your business?  I’ve actually ran into this on two product lines.  For my next product launch (macadamia nuts) I’m going to grow my business through a third supplier based on mainland US vs. use the second supplier (US).  The first supplier (based in the mid-west) did not score well when I score carded all the suppliers in this category.

  • Score card your suppliers within similar product lines or categories.  Use no more than 5 critical criteria important to your business.  In high tech I’ve used KPIs (Key Performance Indicators) to measure launching products.  This included Operations/Supply Chain Management Efficiencies (speed to fulfill sales orders), Priority 1 bugs when the product launched (Is the product DOA, Dead On Arrival?), Sales (Sales orders processed within the first 3 weeks), Customer Success (How many calls  did you receive within the first week?

  • Be careful who you choose as your company advisors, partners and employees.  Make sure whomever is selected adds value and significant expertise (not knowledge) in an area you don’t have a lot of knowledge.  The company that you keep and surround yourself is a direct reflection of who you are.  As the CEO you are responsible for the company culture and its success.  For example, surrounding yourself with a team of kill joys and pessimistic colleagues will not grow the company – it will kill it.  There is a group for this – it’s called group therapy.

  • Don’t let another person, colleague to sway you to launch faster.  You know your market, products and timelines.  Letting a pesky Account Manager, a colleague who has never been in a sales function (like a tech writer, designer or copy writer) or an under qualified junior partner push you to launch faster will lead to bigger problems.  You will lose money.

  • Hire slow and fire quick.  Ideally if you are not sold on working with the person, then do not hire the person.  Trust your gut instinct.  Your past experiences will provide the warning signs if a individual is a fit for your company, the team they will work with and for you.  Stick to this rule even if the person is a friend, a former colleague or recommended from your network.

  • There are no friendships in business.  Do not let your emotions drive your decisions.  Passionate conversations does not mean emotional conversations.  Some cultures pride in having very passionate discussions.  An outsider might think the people involved in the conversations are pissed at each other when in reality they just love to talk loudly to each other.

  • Create a overall roadmap to launch products, integrate tools to support the product launches and grow the existing customer base.  This alone will cut down on the shoot from by hip to spend money on every tool or service that may not grow the business.  For example, there are a lot of social media tools.  Before I used Facebook or Google+, I spent a lot of time analyzing my customer base’s behavior:  Are they savvy with social media?  What tools are they engaged in?  Which tool platform is used for what message?  How do I grow my followers?  Between all of my Twitter Handles I have about 500K Twitter Followers, over 10K+ Facebook likes and I’m slowly growing my G+ and Pinterest followers. 

  • If a quote or service sounds too good to be true, then walk away.  It’s trouble.

  • Stay focused.  It is easy to be distracted.  Refer to Rule #2.  If you box yourself into a schedule with a specific start/end date and the completed deliverable in the end, then you will accomplish a lot. One of my office walls is a white board.  I had a long list of action items on a white board.  I affinitized the action items into categories that made sense.  It was easy to sequence the action items.

  • Passion, cross functional expertise and the thirst to learn trumps anyone who has an idea.  There is a science to picking the products in Pooki’s Mahi’s product catalogue.  I did not wake up one day and decide to bring coffees, teas, macadamia nuts, salts and sweeteners to Pooki’s Mahi customers.  My eagerness to learn more about functional areas I am not an expert in (such as online marketing, customer loyalty programs for low tech products) and my product areas drives me to be improve upcoming product launches. 

  • The biggest critic or kill joy will come from those close to you or over aggressive sales people (Account Executives, Business Development) whom you’ve met for the first time.  Pay attention to human behavior.  Run away if you see the kill joys.  Who wants to be around a pessimist?  Starting a company takes hard work and it is an emotional roller coaster ride.

  • Find a mentor but be careful how you select them.  Not many people are qualified to be mentors.  They just want to meet you and tell you how craptastic your company is doing.  Very few can take ideas and collaborate with you to make them better.  The same is true with challenges.  Very few people will listen to your problems and help you work through it and find the solution.  Often they will jump up and down and tell you have the solution without listening to the circumstances.

  • Bite your tongue if you, your product or your service is criticized.  I know that is hard, but in defense mode you’re not listening and thus missing out on some free advice.

  • Always smile, even when things are going wrong.  People want to be in business with positive people.  Whine and complain as much as you like behind closed doors, but don’t do it in public.  Stay humble, under the radar and positive.

  • Who would want to work for (or with) someone who is negative, overly critical, sarcastic, always think the glass is half empty and is a "sour puss?" No one. You can't "teach" someone to be positive or have passion. They have it or they don't.

  • Question the information provided to you.  If the information you seek sounds too good to be true or too theoretical then do more research.  By asking yourself, “Why…” five times the answer will eventually present itself.  Don’t settle.

  • Stay positive.  It is easy to question if you will be successful.  Once the business becomes revenue generating or cash flow positive you will not regret your decision.  I’ve experienced the emotional roller coaster ride.  In mid/late 2012 Pooki’s Mahi was revenue generating with a growing number of repeat customers.  It’s Q2 2013 and I’ve already beaten the 2012 revenues.  I’m focused on growing the repeat customer base and growing the top line. 

 

Most important of all – enjoy the ride and learn from everything that comes your way.  You will have an emotional roller coaster ride.  Stay grounded.  Keep things real. 

 

In my future blog posts, I’ll go more into details for each of the bullets above. 

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Les Magsalay-Zeller
Les Magsalay-Zeller

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