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On this week’s episode of eCommerce in the Trenches, JD interviews Mike Searls, Founder of Thin Air Brands. A former stock broker, Mike strived to create toys that would educate kids about finance. They discuss the importance of perseverance and Mike tells JD about the ups and downs he went through to become a highly successful entrepreneur. After twenty four years in the consumer products business, Mike offers great insight into how to build not only one booming business, but three.

JD: Hello, and welcome back to eCommerce in the Trenches. This is JD Crouse. Today I’m super excited to bring to you an interview with a friend of mine, a fellow entrepreneur, a trusted advisor, and really in a lot of areas a mentor to me, Mike Searls. Mike, welcome to eCommerce in the Trenches.

Mike: Wow. Thanks, JD. Thanks for having me.

JD: Yeah, absolutely. I’m going to T it off right off the bat with asking you a question, and then I’m going to introduce your background. Okay? I think it’s going to be fun. So, all the different things that you’ve done that we’re going to talk about in a little bit, what would you attribute … One thing that you have done that has given you the success in business that you have had over the years and the different things that you’ve done. What is the one thing that above everything else that you would attribute that success to?

Mike: Oh, jeez. One thing. Well, it’s not one thing, I think we know that. But, I would tell you that, without a doubt, it is perseverance. It is not accepting no, never quitting, never die, coming back over and over again even in the face of all odds and sticking to it, because you figure out all the other stuff eventually.

JD: I knew you were going to say that. I was so hoping that you were going to say perseverance.

Mike: That was a layup question I guess.

JD: Well, I just know that is you. So, Mike has a background going all the way back professional. You were a stock broker, and then you got the entrepreneur bug, and started a business, had a very successful exit in that, and kind of tried to retire, and that didn’t work out very well for you. I’d like for you to elaborate. And currently, Mike is a founder and owner of a company, a consumer products company called Thin Air Brands. And under the Thin Air Brands umbrella, you have a lot of other brands. And so, would you add a little bit of color to your background, Mike, and what has led you … Oh, by the way, I forgot that you owned four UFC gyms, which is super cool, at one point in time. So, add a little color to what has brought you to where you are today for the benefit of our listeners.

Mike: Well, I’ll tell you, I’m completely here by accident. This was not by design. When I was coming up, when I was a kid, I wanted to be a pilot. That’s what I thought I wanted to be. I didn’t have the money to do the pilot training and I didn’t want to go to the military, so I had to let that dream sort of die on the vine. I went into the brokerage business also by accident. That’s another story. But one day, as a stock broker, I’m handling people’s money and I’m on the back deck of my house and my little girl, my daughter comes to me and says, “Dad, can I have $20 bucks?” And I said, “Ashley, I gave you $20 bucks last week. What’d you do with it? Why do you need $20 more?” And she goes, “I don’t know, I spent. I just need $20 more. We’re going to the movie.”

And right then as she walked out the door … and I gave her the $20 bucks, of course … I had a napkin and I drew out an idea for a piggy bank that would separate money from spending, and savings, and giving, and investing, so that kids could physically separate their money so they wouldn’t spend it all. So I had this little idea and I sketched it out. And overtime, that idea kind of came to fruition. I killed it a couple of times, and I just couldn’t leave it alone. So, one day, I took it a little further and I showed it to a friend of mine who said, “That’s a great idea. You ought to make it.” So, all of a sudden I ended up in the consumer products business because I created this little device with no intention of going into business, but people seemed to like it. And so, I made it, and took the leap, and jumped into the consumer products business completely by accident with literally no business plan, no idea what I was getting into, and that was 24 years ago.

JD: Wow. And it was wildly successful, correct? Right out of the gate. You’ve never looked back, correct?

Mike: That first product was my single greatest failure I’ve ever experienced in my life. It was a great idea JD, it was a great idea. I think we’d all agree we want to teach our kids about money, right? But I didn’t package it right, it was too expensive, it was too complicated, I got it into a few stores, it didn’t sell. I beat my head against the wall for two years trying to make this thing sell and I kept throwing more and more money after it. I finally decided, “You know, this needs to be an infomercial. That’s what I need to do. I need to be in the infomercial business.” So, I spend the balance of my life savings on producing a very expensive infomercial and putting it out nationally.

And that was going to be the success. So, we all sat back one day when the infomercials hit and we were all by the phones, we were going to answer the phones ourselves to make sure that they were done properly, and the phones didn’t ring. We had nothing. One of my guys even spent the night in the office all night. Slept in a sleeping bag just in case it rang, because we wanted to make sure there wasn’t a problem with the phone system. It was so bad. So, now I’m on the verge of bankruptcy, I’ve got no money, no income, the product’s not working, and there’s where the first bit of perseverance kicks in. It’s like, “What do you do now?”

JD: Right. So, what did you do? What was next?

Mike: I went to a couple of retail stores. I thought, “I got to get it in retail stores.” I drove up … I’ll never forget the day. I put six of these in my trunk and I pulled up to the first retail store and I sat in the parking lot. It just freaked me out. I couldn’t go in. I was scared. I didn’t know what to say. I had no confidence. So, I drove away. Then I went to the next … It was a bookstore.

JD: Now hold on a minute. So, for the benefit of everybody that doesn’t know you … For you to have fear of entering into a sales conversation with somebody with your background being a stock broker, and being very, very successful, by the way, why was that?

Mike: I’m afraid every day. When I was a stock broker, the reason I was successful … I’ll tell you why. It’s because when I was going through training, my wife went to drop our daughter off at the day care. And all the kids were sick, and she called me and said, “I just can’t do it. I got to quit my job. I got to take care of our kids.” And I said, “I don’t know what we’ll do. I’ll figure it out. Just quit. I got it.” And so … I made more phone calls, I made more prospecting calls, I worked harder than anybody in the office because I had to pay the rent. And I didn’t know how else to do it. I wasn’t the best looking, I wasn’t the smartest. I just knew I could outwork everyone, so that’s what I did.

And I did that in the stock brokerage business, I’ve done it in the consumer products business, I’ve done it … And everything I’ve done, I’ve always figured out how to basically outwork everyone and succeed in the end, even when I fail in the beginning.

JD: Awesome. Do you want to tie a ribbon around your … I interrupted you there. Help me get through your sales resistance. Talk us through how you got into the stores, or if you even did. What did you do after you drove away?

Mike: I still had no luck getting into the stores, but what I found is that there were sales reps that would do it for me. I always found it pretty easy to talk to sales reps because I think they were … I understood their plight and their concerns, so I found a sales rep. He said, “Yeah, I’ll do it for you.” And he did a little bit. So, we started to get the product into stores little by little through the sales reps. I went to a trade show, that helped a little bit, but the product wasn’t selling. That’s the real problem. No matter how hard I worked, no matter how great my sales reps were … We would get distribution, but then we wouldn’t get a replenishment order.

So, we were like, “This is a pipe dream. This isn’t working.” So, I had an idea … “Well, maybe I need a different product.” So, I sourced out of China this little metal cash box and I got that into a couple of stores. And guess what? The store owners called me and wanted more. Within three weeks, they’re like, “Yeah, we need six more.” I’m like, “I’ve never heard that before. That’s a new one.” So, I thought, “Well, maybe it’s about product, and not just about perseverance. It’s about product, too.” So, I created that second product. And a third, and a fourth. And all of a sudden, started to see some success, was able to pay the bills, was able to bounce around and figure out my way.

And before long, I had six, and seven, and eight, and nine products. To kind of wrap it up, the first year we did zero in sales, second year we did $57,000 dollars in sales. Within 12 years, we had done $34 million dollars a year in sales. We had done over a hundred million dollars in sales, made the Inc 500 list, and sold the company, and retired. So, there’s your fast story.

JD: That’s awesome. That is awesome. There’s so much that I want to unpack. The business that you sold, consumer products business, primarily in the toy space, is that correct?

Mike: Yes, toys.

JD: Okay. You’re a hard charging business guy. Why toys, Mike?

Mike: Well, I never intended to be in toys. In fact, the first four years in business I denied. When I’d be on an airplane and people would ask what I did, my card looked like a stock broker’s card. My company was named Summit Financial Products Inc, which doesn’t sound like a toy company at all, does it? Because it wasn’t designed to be one. I just wanted to create something to teach kids about money. I didn’t want to be in the toy business. But, I failed at everything until the only thing left was I was selling a few of these through toy stores.

So, I asked the toy buyers, “Well, what else …” They’d buy it and they’d say, “Well, what else you got?” And I’m like, “I don’t have anything else. I’ll go create something.” So, I’d go out and create another little money device. Or, I’d source it or whatever I had to do to accomplish something. They’d buy that, and then they’d say, “What else you got?” And I’m like, “Well, I don’t have anything else. I guess I got to …” And before long, I had 20, 30 products in toys.

Then I realized one day that it was fourth quarter business and I was starving all year until I’d hit the fourth quarter. That’s when I’d make all my money. So, I thought, “Well, i need something for the spring time. I need something for spring and summer.” I was on an airplane, I saw a vacuum, and I thought, “That’d be cool to have a little handheld vacuum that kids could use to suck up bugs. Maybe that would sell in the spring.” Created that. Low and behold, that one took off. I talked to my customers, I asked them what they wanted, what they liked. I asked them about colors and packaging. One buyer told me, “The product looks great, but don’t cover it up with a package. Leave it open and let kids try it in the store.”
So, I listened, and I did that, and lo and behold, things started to happen. And that product sold millions of units eventually overtime. But, it started with an idea on a napkin on a United flight to New York. That’s how it happened. A little piece at a time. And the funny thing, JD, at about 10 years in, one day I looked up and for the first time I’m like, “Wow, I’ve been so busy building something, I didn’t realize what I had built.” And all of a sudden I had a very profitable $30 something million dollar company that was netting four and five million dollars a year. Like, “I’m shocked. I can’t believe I built this.” Because I built it one little brick at a time, one little piece at a time. And one failure on top of another eventually created a little success here and there.

And overtime, I created something that had value. When I was approached to sell the company, nobody was more shocked than me. And so, I took the money and ran. That’s what I did.

JD: That’s awesome. A couple things that jump out to me in your story is that you talk to the customer, and that you just kept innovating. One thing that I think I know the answer to, but I want to ask you is, the Bug Vac … My son had one before you and I ever met. I love the product. What percentage of revenue in your company that you sold did that one product, that one skew, represent? Did it carry your business, Mike?

Mike: Oh, no. Not at all. Not at all. It was my number one selling spring and summer item, but it wasn’t my number one toy by any means. Well, it was probably my third best-selling product. I’m guessing. I can’t remember. I’m guessing it represented no more than 10% of my business. But it was a good chunk. It was a good piece. And it was stable. My next best selling product was probably my ATM machine area. And then, my single best-selling product was one of the most uninventive of all them. I just created a better cash register for kids. And that was my number one seller by a pretty large amount. It was a higher price point.

Spring and summer business tends to be smaller than fall, so the Bug Vac was a nice piece of our business, but when I sold the company, I think we had 200 active skews. So, no one product made or broke us.

JD: Yeah. Very, very important. When you’re telling your story about the 12 years in and before you sold your company … You went through some recessions, and you went through some tough times. Talk to me about your attitude. Did you know how tough it was while you were building your company?

Mike: I was so focused on every day, surviving, getting through the difficulties, rejoicing in the successes that … I remember one year, I was talking with a group of guys and they were talking about the recession, and I didn’t even know there was one.

JD: Love that.

Mike: I try to take that approach now because … And I’m not proud of this, but I’ll tell you how focused I was. I was in New York at our show room on 9/11 and as this was all happening, I still had a couple of meetings that day, and then left, and had to walk through the dust to get back to my hotel. It’s that approach. Because we didn’t know what was happening, we didn’t know if it was … but what are you going to do? What are we going to do about it? And then halfway through the day we went out and helped them build stretchers that never got used.

It was surreal, the focus that is required. And you know what? It happens today as well. In my businesses, at times am so focused that I miss some of the things that are going on around me. It just doesn’t matter. The best times to take market share is during difficult times, because everybody else is hiding under their desk. The hardest times to take market share is when everything’s great. So, I don’t care. It doesn’t matter to me. I’m going to figure it out, good times or bad times.

JD: Man, I love that. I so love that. Let’s talk about your current business, Thin Air Brands. How did the name come about and tell me how it’s currently structured? It’s a consumer products business, you had an e-commerce channel. I want to talk about Amazon and I want to talk about your wholesale channel, and just kind of how you think about those different channels and how they interact, how the operations side of your business is structured. But, first start with the name because I think the name is ingenious.

Mike: Four years ago, once my non-compete was over and I … After I sold the toy company, I ventured into other businesses, and I just didn’t have the passion for them that I had in consumer products. I’m absolutely in love with consumer products. Building a business based upon consumer products. It’s just my passion, personally. It’s what I love. I couldn’t wait to get back into it. So, once my non-compete was over, I was able to re-acquire a couple of the patents I had, specifically the bug vacuum. And so, three years ago I relaunched a brand new company, simply to repeat what I had done before. And that is, create great products for kids, and in the toy category.

As I was in the mountains … I’m in Colorado … As I was in the mountains, my old company … the name of it was Summit. And I thought, “Well, I want to build something even bigger than that was. So, what’s above Summit? What’s above?” And I thought, “Oh, the only thing that’s above the summit of a mountain is thin air, so let’s create thin air.” Plus, my mom, when I was a little kid, she always said, “Gosh, you can come up with ideas out of thin air.” So, I thought, “That name sticks.” So, Thin Air Brands became the name of the company. And my vision is to create a toy consumer products company that has multiple brands. Some for spring, some for summer, some are for fall, some for all aspects of kids, all teaching kids either about nature, or math, or money.

And so, Thin Air Brands came to be three years ago. So, I have a diverse product line under Thin Air Brands, and my mission is to … I want to sell my toys everywhere toys are sold. That’s my big mission. I want to have toys everywhere toys are sold. So now, if you ask yourself, “Where are toys sold?” Well, they’re sold online, they’re sold on Amazon, they’re sold on eBay, they’re sold in stores, they’re sold … you name it. They’re sold, and worldwide. So, anywhere there are toys sold, I want to create and distribute toys for that market. I sell on Amazon, I sell on eBay, I sell to wholesale, I sell direct to consumer, I sell everywhere toys are sold.

JD: Awesome. I love that. I love your ubiquitous, in a sense. But, from a strategic standpoint, Mike … because I’ve gone through this on our business. Obviously, we manufacture domestically, right in Colorado, and we distribute … 90% of our sales historically has been direct to consumer. We fulfill out of our same office, we handle all the customer support here. When I meet with you at our Mastermind or at different events, sometimes we have lunch together … I think sometimes you look at me and your eyes go cross-eyed thinking, “Why are you doing all this, JD?”
But structurally, your company, you have a very different way of approaching the distribution of your products. We only have 24 hours in a day and we only have a certain amount of energy and focus. How do you really … Peel back some layers of the onion a little bit and tell me how you approach from an operations standpoint, and a focus standpoint, and an energy standpoint, the different channels?

Mike: Okay. How do I break that up? Because that’s a complicated answer. Let me first back up a little bit and say that your business model of selling direct to the consumer is neither right nor wrong for me. It is right for you and it’s what you should be completely, solely committed to. It doesn’t mean you shouldn’t look outside of that and consider other things, but if that’s your focus, you need to go all in with that focus. I have no problem with that. So no, I don’t look at you with crossed eyes. In fact, I respect what you’ve done and what you’re able to do, because I’m not able to do that. I have a different skillset.

I have the approach of, “I don’t know who I can sell to because I’ve had a lot of failures. So, I’m going to try to sell to everyone knowing that I’ll never be able to sell to everyone, but I’m sure going to try.” If I know someone who buys or is a reseller for toys, I want them to carry something that I have. And if I don’t have it, I want to go create it, because I want to fill the market with my brands. And so, it’s just a different level of focus. To really kind of give you some specifics about what I do is, when I created this company three years ago, one of the very first things I did, before I ever pulled the first trigger is, I created a spreadsheet of everybody that was a possible customer of mine.

Now, the difference between my list and yours is, you’re not going to list the millions of people in the world that can buy your product. You’re going to pinpoint a certain market, let’s say direct to consumer. Well, that was one of mine, direct to consumer. But, I also had on my list Walmart, Target, Toys”R”Us, Walgreens, Shopko, Rite Aid, Costco. I listed every retailer I could think of that sold toys. And so, I had a list of … And I believe that list is around 400 potential customers. So when you look at my business, think about it. I really only have 400 potential customers. I don’t have four million, or 400 million, I have 400.

And when I say I want to sell to, for instance, Toys”R”Us, there’s only one buyer in my category at Toys”R”Us. I know her name. I’ve been able to find out her name, and I know who she is, and she goes on my list. And so, Toys”R”Us isn’t really Toys”R”Us, it’s really her. I just have to sell to her. The difference is, instead of selling her one piece, I might sell her 10,000 pieces. But, it’s still one piece of paper, one transaction, one relationship. So, my argument is, I like selling to wholesale because I don’t have as many customers as you do. I don’t have to be spread as thin because I really only have dozens or hundreds of customers. I don’t have thousands or tens of thousands.

The way I focus my time is, I make that list of my top 300, 400 perspective customers, I rank them, and then I go after them all, because going after 400 at once is really not that difficult. If you just go after 10 a day, you cover your whole list in two months. So, it’s really not as difficult as you might think. A lot of people are intimidated by the process. It’s actually easier, I believe, to work with fewer customers than more.

JD: Right. Well, especially when they have 2,000 locations or 3,000 locations. If you hit a winner and they put you in every store, and they sell X number of units per day per store, the numbers get pretty exciting pretty quickly.

Mike: Yes. And there is so much leverage in selling wholesale. So, I sold both. I sold direct to the consumer, but that’s not my focus. You’re way better at that than I am. But, it’s a part of what we do because we need a place for people to go and buy our product if they want to, if they don’t want to go to the store. So, there’s a place. And then there’s also controls. Through my Shopify store, I have all products up. I don’t have to worry about inventory outages, I don’t have to worry about that. But, the consumer also … some might prefer Amazon, so I’m Amazon. Some might prefer eBay, so we’re on eBay. Some might prefer Walmart.com, so we’re on Walmart.com. And the list goes on and on.

I want to make it as easy as possible for the consumer to buy my product. I have no walls, no barriers, no preconceived notions. I want to give the consumer the experience they want, whether they want to drive to the mall and buy it, or they want to click on their phone and buy it. I want to make it as easy as possible, because I’m on a mission to have my products everywhere toys are sold.

JD: That’s awesome. I want to pull back the veil a bit, because with perseverance, you have to play the long game. I think if I were to summarize the way that you approach your business, especially in landing, developing relations. It’s a relationship business. It’s a relationship with a person, one human being, who happens to control the keys to their kingdom that they’re buying for in the category that you fit. But, it’s still difficult to get them to say yes. You just got a really nice size order, if we could talk about it a little bit, with one of, if not the large retailer in the world. How long did that take, Mike? How long did it take for you to get them to write the purchase order?

Mike: Let’s see. I started in 2014 with a trip to … I called the buyer, they wouldn’t answer, so I sent them email after email. He finally said, “I’ll meet you in my Shenzhen China office on January whatever it was. And I’m like, “Accepted. I’ll be there.” So, in 2014, I flew to China, met with the buyer, and was told no. Later in 2014, I went to Bettonville, was told no. 2015, I went to China once, Hong Kong once, and in the states in Dallas. Met with the buyer once, was told no. In 2016, similar. Three, four communications meetings, no. This year, meeting in May, in … can’t remember where it was, in the United States. Buyer said no, passed it along to another buyer in another category. That buyer I had never met in my life said, “Yes. Place the order.”

And so, it took three years. It took 15 or 20 … not just emails, but … And by the way, I do not suggest anybody just start pounding a buyer with emails. Nothing will upset them more than if you pester them. You can not be annoying to a mass merchant buyer. That’s the fastest way to get blocked out. You have to be professional, you have to treat them as a person, and not as a number, and with respect. And if you do that and you’re respectful, and you take your “nos” as professionally as you take your “yeses”, they’ll always say, “You’re welcome to come back any time and show me.” If you’re concise with your time, respectful of theirs, they’ll see you. And that’s with every retailer in the country.

The problem that I see is … I’ve got a story. I was at a trade show once, and a major buyer, she said … I asked her, I said, “It’s probably tough being at this show. You’re just pounded with that badge on. Everybody’s trying to get your attention.” She goes, “You wouldn’t believe.” She said, “Yesterday I was in the lady’s stall and somebody came in to the next stall next to me and slid a piece of paper under the stall and said, ‘Can you come to our showroom? I want to meet with you.'” She goes, “While I’m sitting in the stall.” She says, “I’ll never go see them, ever.”

And I think that’s kind of the thing. You’ve got to be a professional. So, the summary is, when you’re selling to a retailer … I don’t care if it’s an individual gift store on main street, or if it’s the world’s largest retailer, you’re not selling to the company. That company’s name is just a name. It’s a person. That person has a name. That person has a personality, they have a family. That’s the person you’re selling to. However, they have a title. And what other business can you be in where their title is named, “Buyer.” Right on their business card, “Buyer.” That’s who I want to sell to, is buyers.

I don’t want to spend my entire day trying to generate a prospect. I spend zero time generating a prospect. All I spend my time on is working with buyers. Buyers are paid to buy. So, I have to be the best choice of all other choices, including doing nothing. So, I have to treat them with respect, and courtesy, but consistency and persistency, so they know, “This is a player, this person’s going to come back over and over again, but they’re not annoying to me. I’ll meet with them. What can it hurt?” And eventually, you get it. Eventually, you get it right. I know what I’m doing at times and it still takes me doing it wrong a few times. So, that’s a lot answer to your short question. Took me three years.

JD: Yeah. I love it. Most people would give up. I think the difference with the … Really where I was trying to go with the mentality and the way operationally, and even just the way that you think about the different channels of your business … The wholesale game is the long game. The direct to consumer. It’s the challenge with direct to consumer, even if you own your brand and even if you have patents. If you have patents, you got to enforce them and all of that, but the barrier to entry today, of starting a direct to consumer e-commerce store on Shopify, BigCommerce, Magento, whatever, is very, very low. Even Amazon. Obviously, you can get up on Amazon very quickly.

And being successful with the wholesale channel, it’s a different animal. Like, success … You’re going to be profitable. What would you say, Mike? Most business in year three, year four, year five?

Mike: I don’t think it has to be that way, JD. Not in this day and age. Here’s the beauty of it. I think if you build your business … There’s two approaches. One is, just stick with the direct to consumer model and build that. I’ve got no issues with that. That’s no my model, but that doesn’t mean my model is right for everyone. If you like my model, my model is, I do it all. I go after the direct consumers because that is how I learn. What does the consumer want? What do they not like? I love the emails I get from a customer that says, “Oh, I love your product, but …” Right? “I wish it was in blue,” whatever.

So, that’s how you learn. That’s how you perfect it. You need that feedback, you need customers so that you can perfect your product, so that when you go to the wholesale channels, you’ve got a story. And you know what sells and what doesn’t, because the last thing you want to do is fill up your wholesale channel with product that doesn’t sell. That’s not good for everyone. All it does is taint your name. What you want to do, in my opinion is … When I started this company three years ago, my first order was an online consumer order on my Shopify site. They bought one piece for $15. That was my first order.

My second order was for six units to a little store in Wyoming. That’s how you start. You learn. You get feedback, you adapt, you change your packaging a little bit. But, while you’re doing that, there’s no reason you can’t make your list of 300 prospects and start pursuing them, because, yes, it takes time, but my argument is, within six months, you’ll know if you have something right away. And you’ll have some retailers that’ll jump on board. I think you can be profitable in year two. It depends on if you have to do tooling and a lot of concepting and all that, but other than those expenses. It takes a little longer to get a wholesale customers, for sure. I think you got to figure it takes six months, and it can take up to 18 months to …

Now, the big, big, big retailers, the biggest in the world, they might take three years, but that just comes with it. But, there’s a lot of regional chains, there’s a lot of local chains that have six stores, 60 stores, 360 stores … They act pretty fast, within a few months. You can argue that direct to consumer happens faster. It does, but it’s smaller dollars. In a wholesale channel, your opening might be $10,000, $20,000, whatever, and so you make up some lost ground pretty quick with those POs.

But my attitude is, I’m going to fill my pipeline with my 400 or so prospects and I’m going to pursue them while I’m pursuing the direct to the consumer market, and paying the bills with that one.

JD: Well, like you and I have talked, you can actually launch … which is what you’ve just said. You can launch direct to consumer and get immediate feedback. If there’s a button, or a sound, or light, or something that can differentiate your product, add value in the consumer’s mind, you can build that into the next version of your product and perfect it before you end up showing it to a big buyer.

Mike: Exactly. That’s the whole goal. And the other thing is, don’t use time as the excuse to not pursue the retail channels. If you are, as a company, if you’re committed to going after … Like, “Okay, I’m selling direct to the consumer. Now I want to sell in to some stores.” If you procrastinate that until you’re “ready”, it’s sort of like waiting until you’re ready to have a baby. Right? You’re never ready. You’re never going to be ready. You’re going to learn on the job. Same with having a baby, your first child. There’s a big learning curve there. And if you wait until you’re ready, it’ll never happen, you’ll never have a baby. Same with going into the wholesale channels. If you wait until you’re ready, you’ll never be ready.

So, you can, in an afternoon … You can create a little spec sheet and a little flyer, and start getting that out to perspective retail buyers. You can do that in an afternoon. And then, from then, you adapt and learn. And you get a little better, a little better, a little better, maybe pick a trade show to go to. That’s a great learning curve, is to attend a trade show when you can talk to even more people and hear even more reasons why your product’s never going to make it. That’s what you’ll hear, is a million reasons why you’re never going to make. But, you learn from each of those, and you adapt, you get better and better, and all of a sudden you start to get yeses here and there. Little yeses. Somebody takes a chance on you. And they go, “Yeah. You know, I really liked this. My daughter had one of these. I think I’ll give it a shot. Let me just test it.” So, that’s how you start. And you start to build on your successes. And before long, you’ve built something.

JD: That’s great. How do you think about attracting, and converting, and retaining customers with Thin Air Brands? Now, in the digital ages, in the direct to consumer age that we are in right now. How do you think about attracting them, converting them, and retaining them?

Mike: I think that it is an art, not a science. Here’s what I do not do. When it comes to wholesale customers, my little list of 400 wholesale customers, here’s what I do not do. I do not email blast them, I do not canvas them in any way shape or form. I do not want it to be that way. What I do is, I create my little list of 400. And yes, I do create a database, but I will one at a time send them an email. Buyers tend to like email communication usually better than telephone. They don’t answer their phones much. Some do, some don’t. You’ll learn the preferences overtime.

And I have some buyers that tell me, “Don’t email me. Only call me. But only call me if it’s important.” And so, you just learn. You make that little note, “Never email that person.” They all have their little idiosyncrasies. But, I like to start with an introductory email that is personal, one-on-one. I don’t blast it 400 times. I do it individually, one-by-one. And I might pick 10 today that I will craft an email, send them attachment of a picture of my product or products, and open the door, try to start the communication. So, one step is email marketing, but one-on-one, not one-on-many.

JD: Do you use a specific tool for that or just Gmail?

Mike: I use Infusionsoft, but I don’t blast out the email through Infusionsoft. I use Infusionsoft because it helps me stay organized and it’s a great CRM for … Because, remember, I want to sell toys to everyone, so my consumers go in there, too. People that opt in on my website, they buy a toy on my website. That goes in there. So, I have thousands of names that accumulate there, but inside there is also my list of prospective wholesale customers, as well. I have my reps in there, my sales reps I keep them under a different tab. So, I can communicate efficiently, but that’s my tool of choice, is Infusionsoft.

JD: Does it track opens and whether or not somebody’s downloaded the attachment, and all of that?

Mike: Yeah, it does. I’ll be honest, I don’t really pay much attention to that on the wholesale side because I don’t really care, I’m going to keep coming anyway. My attitude is this, my attitude is buy or die. If you are a buyer for a retail chain, you are either going to buy my product or one of us has to die. I’m going to keep coming. I’m going to make sure I don’t alienate you though, too, so you don’t blacklist me. I’ve never had a buyer ever say, “Don’t ever call me again.” I’ve never had that happen because I know when to back off. I know when I’m being annoying. But, my attitude is, one of us has to die before I stop this, so we’re going to get this eventually. We’re going to get you something. And if my products aren’t right now, maybe next year we’ll try again. But, I’ll keep trying.

So, step one is, reach out with email. Step two, I make a phone call. Step three, I try to attend a trade show where I know they’re going to be. I don’t like a lot of little trade shows. I go to one big trade show a year, that’s it. I don’t spend any time on the regionals or anything like that. And then, the next thing is, I’m always asking for an appointment. I will get on an airplane and fly to see a buyer anytime, anywhere, anyhow, if that’s what they prefer.

And so, I’m not going right for an order. I’m not hitting them up for … I’m saying, “Hey, give me an opportunity to present what I do and show you what our capabilities are.” One of the first buyer meeting I had with this new company, I flew to the largest retailer in the world, and I only had six mock-ups on cardboard of what I was doing. But, I got his feedback, and he told me what he liked and didn’t like, and I handled it professionally. And he said, “Come back when you’re further along.” And I did.

JD: It reminded me of … In the 15 or 20 meetings that you have had with that world’s largest retailer, you did not sell them the product. All of the “nos” that you got, you were not pitching the same product, or even the same products, correct? The one that you got them to bite on, was that one of the first times that they had seen the product that they ordered however many … How many units did they order?

Mike: 64,000 pieces opening order. So, that’s a lot of direct to consumer orders I’d have to process through my Shopify store if I did it that way. However, I still feel a failure for that account because they’ve only committed to one item, it’s an opening order. We’ll see what happens. I’m not a key vendor at all. I’m still new. I’ve got a lot of work to do on that account because my vision is, I want a four foot section with all my product in there. I want 15, 20 skews with my brand and my section. And until that happens, I haven’t achieved success. That’s years away, but that’s okay. I’ll keep coming and keep trying until I get that.

So, I have not been “successful” until I achieve the ultimate goal. And then when you do that, you expand your goals. So, you never … The one thing I’ve learned in this business, in the consumer products business is, there is no ceiling. I am friends with some guys that started a business the same time I did, and they’ve built theirs to a $1.2 billion dollar publicly traded company now. So, they made me look like I was stuck in mud. And I look back and I realize, my vision just wasn’t big enough. And so, no matter how big you can think, it’s not near as big as what the marketplace really is.

JD: Innovation and product development. How important has that been in your company’s success? Both Summit and your new company, Thin Air Brands.

Mike: I would tell you that it all starts and finishes with product. All the things we’ve talked about so far are, once you have a product, then you have the perseverance to get it into the marketplace and just do more, more, more. That’s fine, that sounds great. But let me tell you something. If you have a bad product, meaning that it just doesn’t resonate with the customer and it’s not selling well, your work, it’s not going to work for you. It’s just not going to happen. You need to continue to develop your product until you have that nailed. You’ve got to have products that consumers want, at the price point they want to pay, and with the features and benefits that they want. You have to have the packaging right, the presentation. It takes a lot to get it right. It can take weeks, months, or years to really get it right, but once you do, a great product makes everything easy.

It solves all problems, because if you have a great product, everybody wants it, they want more of it. The more they buy, the more they want, and it’s limitless. If you have a bad product, you might get lucky and get it in some place, but if it doesn’t sell, they’re not coming back to you for anything more. So, you’re starting over every day. So, you have to … Now, not every product’s a winner. I will tell you that I build my business on base hits. I have never had a grand slam home run. I’m not the fidget spinner. I’ve never created something that … And that’s just not something I’m interested in, is a fad product. I like bread and butter, consistent selling products that I can build and sell ten years from now. I don’t want just fad products. If that’s your thing, to create fad products, hey, more power to you. It’s just not in my skillset. I guess I’m too conservative for that.

So, I want base hits. But if it’s a bust, I’m the first to run from it. My ego’s out. I’m not going to try to force a bad product into the market. If it doesn’t sell, it doesn’t sell. And I’ll tell you this, too. In my years of experience … I’ve been doing this for 25 years now … You know right away. If a product sells, it pretty much sells right away and consistently sells. If it doesn’t sell right away, it usually doesn’t ever. You probably know that in your business. You create a new fabric that you think is going to be hot and it just doesn’t resonate, doesn’t sell. It’s hard to turn that around. It’s hard to make a failure a success.

JD: And it’s channel agnostic, right? It really doesn’t matter. If it doesn’t sell on Amazon, it’s probably not going to sell Shopify Direct, no matter how much ad spend you put behind it. And if it doesn’t sell there, it’s sure enough not going to sell direct through the wholesale channel.

Mike: I’ll tell you this, too. If you look at my products on Amazon and rank them best to worst, it pretty much holds up at retail, as well. Those are pretty much the same products that are best to worst on the retail shelf. It really doesn’t matter. Online is really just another way to see the product versus standing in front of it. I think a lot of people look at Shopify or Amazon and they think that’s a business. I don’t look at it that way. To me, that’s just an avenue for business, but it’s no different than if it’s in Nordstrom or Dillard’s. Those are two completely different retailers with different strategies.

But, a product that does Nordstrom probably will do well in Dillard’s, and vice versa. And it does well on Nordstrom, it probably will do well on Amazon. It’ll probably do well on my Shopify site. But if I have something that’s a bust on Amazon, it’s probably going to be a bust at Nordstrom too.

JD: What does your product pipeline look like right now? You and I have talked a lot over the years about when you had Summit, you had a lot of product designers. And when you launched ThinAir, it was pretty much pen and paper, you, and you outsourced some design. But that’s the real value that you bring to thin air in addition to operation chops, and finance chops, and sales chops, and marketing chops. I mean, you wear a lot of hats, but how far out are you thinking? Do you have sketches or ideas of the next how many products that you’re going to launch?

Mike: Well, if you were in my office right now, JD, you would see I’m surrounded by about 15 different concepts that I’m working on. My annual trade show is in Dallas in October, so I’m getting everything for that show. And I’ve been working on it for months, getting ready for that October show. So, here’s how my cycle works. I come up with an idea. It’s usually just some weird idea that I’ll have, and I’ll write it down real quick so I don’t forget, because if I don’t write it down I’ll forget the idea within 10 minutes.

So, I’ll have some weird idea, I’ll sketch it, and then from there I’ll keep thinking about it, I’ll go on Amazon, I’ll go to stores, I’ll look to see if there’s anything like it. I’ll try to figure out if it’s really a good idea or a bad idea. And by the way, I don’t like … I’ve learned I don’t like to pursue inventions because it’s very difficult and time consuming. So, I don’t like to re-invent the wheel, I just want to make the wheel better. So, I like innovation, not invention.

I try to find things … I’ll give you a great example. One of my products is a net, a butterfly net, and I just looked at the butterfly nets that were out there and just made a better one. And I made it at a price that was very reasonable. So, did I invent the butterfly net? No. Do I have a corner on the butterfly net market? No. I have one that’s as good as any that are out there at a fair price. And now, I just out and work it harder. And I’ll find my successes.

So, I have ideas like that that I’ll sketch. From there, I’ll find somebody … I found my original people on Elance, which I think is now called Upwork, and I’ll have somebody professionally sketch it, because I am a terrible pencil artist. I can kind of draw boxes and circles, but I sure can’t make it look good. So then, I’ll hire someone to make it look good. Then from there, we’ll have somebody make it like an engineer drawing, like a CAD drawing. I have no idea. I can’t even spell CAD, but I have somebody that can do it for me and they make it.

They send it back to me and I go, “Yeah, looks good, but let’s round this corner, or let’s make that bigger, or make this smaller.” And then we’ll just kind of figure it out. And then we’ll come up with a color sketch. From that, I will print it out on my computer right here in my office in color, I’ll cut it out with a razor blade and stick it on a foam core board, and I will present that idea to a buyer. I’ll go no further than that. So, I’ve got totally invested maybe $200 in it. I’ll show the idea to a buyer at a show or what have you, and if the buyer likes it I’ll go to the prototype stage, which then I’ll spend a couple thousand dollars. Maybe a thousand to two thousand dollars on a prototype. If that looks okay, I’ll show it to the buyer again. And then from there, I’ll go into the tooling and production phase. Altogether, that’s a six month process. Sometimes it can be faster, sometimes it can be slower.

JD: So, really, you get feedback from the buyers but you still don’t have a PO when you go to tooling because you don’t really know where your price point is going to be, so you can’t even quote a price. Is that correct?

Mike: No, I know the price. What I do … I’ve been doing it long enough. I can tell you, within pennies, usually just by my gut where I think it’s going to be. But, not everybody can do that. I get it. For instance, if you create a new style headband and you want to add Velcro and take off this, you probably have a pretty good gut feel for what that’s going to cost you. And then you can go to your [inaudible 00:51:41] or your factory and you can confirm what it’s going to cost. And you’ll come back within a few pennies, and you’ll know what your cost is going to be. You’re pretty much ready to go from there. I have the same kind of relationship with my factories in China. I can send them my sketch and my specs, and they’ll be able to quote it to me before I ever present it to a buyer. I’ll know my cost, yes.

JD: Will you tool up before you have a PO?

Mike: Some cases, yes. Some cases, no. I’m getting to the point now … The market’s changing where buyers are no longer making massive commitments to a new product, so it’s getting harder and harder to wait for a PO to tool. So, I’m finding that I have to pretty much go ahead and go and take that chance without having a PO upfront. My preference always is to have a PO from a buyer before I go forward, but those days are harder and harder to come by. My business is very tooling intensive. It costs a lot to build a tool. I would much rather be in a business that had no tooling because that’s my big mote around my business.

That makes it very difficult, when you’ve got to spend that much money on tooling and engineering. Makes it very different. I’m jealous of your business, JD, because I don’t like the tooling, but it’s one of the challenges I have.

JD: It’s funny. The grass is always greener on the other side. I’m thinking, I wish I had a wider mote in my business, so … We could talk for another, Mike, and I hate to have to cut this off, but I love your energy. We didn’t even get to talk about the UFC. You love MMA fighting, you got involved in that business. Maybe I’ll have you back on down the road. I really appreciate your time. Tell me, Mike. If you had one parting thought of wisdom … You’ve been around a lot of different businesses, you work with entrepreneurs … One of the things I didn’t tell you listeners is that Mike actually has a coaching and consulting business as well.

And if you want to connect with Mike, go to Thin Air Brands.com or email him at Mike@Thin Air Brands. It’s plural, yes. Thin Air Brands.com. What you see is what you get with Mike. But if you had something to leave us with, what would that be?

Mike: Gosh, there’s so many things, but if I had to pin it down, I would say, ready, fire, aim. If you wait too long … Time works against you. As an entrepreneur, time is your enemy. Folks that I work with or that I’ve been around that hesitate, they never make it happen. The ones that just go, and execute, and start doing, they eventually figure it out. You figure it out once you make the commitment. So, to me, the key point is the deciding to. Decide what it is that you want to accomplish, whatever that is. I want to sell only on my Shopify store direct to consumer, great. If that’s what it is, make that decision. Now, let’s go. Login, let’s start going. You know what? You figure the details out as you go.

So, the key, I think … Decisive factor is, you really have to … As an entrepreneur, you have to really decide what it is that you want your outcome to be, and then start executing today. Don’t wait until you have a business plan written, don’t wait until it’s all done. Just go, go, go. And it will be the hardest thing you will ever do in your life, and it will be the greatest thing you ever accomplish in your life. Win or lose, you’ll never regret it.

JD: I love it. Well, I could not end it any better than that. Mike, thanks so much for spending time with us and sharing all these nuggets of wisdom. Listeners, thanks for being here and come back and check out another episode on eCommerce in the Trenches. Again, Mike Searls and JD Crouse. We will talk to you all later.