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It’s Father’s Day time again…so feel free to support the cause by purchasing a MouseDriver. We hate the shameless promotional plugs, but hey, we could use the sales! Hope everyone is doing well.

Lessons Learned

We’ve decided to make Platinum Concepts bigger than just MouseDriver! The way we figure it, we’re in a prime position to take advantage of our knowledge gained over the past two years, our momentum (especially from a company awareness perspective) and most importantly, our channels that we’ve spent so much time developing. Plus, when in life are you really ever going to have the opportunity to “build out” a company? We may never be in this position again. And, we already have a new product in the works that we believe has much more intrinsic value than MD (i.e. not just a novelty item) and that we hope will have a lot of upside for both the company and our investors. We’ve done the research, we’ve set up partnerships, we’ve put together a business plan…we’re ready to go! So what ’s the product? It’s code named “BallTender” and it’s an electronic golf ball locator that utilizes military/spy technology to help find lost golf balls during the course of play. Pretty cool!! Here’s the only caveat: Unlike MouseDriver, this is not a “bootstrap” type of idea…we have to raise some money in order to bring this product to market. So, if you know any really rich golfing angels, feel free to pass along their names to us…we could use all the help we can get!!

When you’ve bootstrapped a company for two years, you give yourself an opportunity to do everything under the sun with regards to running your business. You get to design your products, play with the accounting books, develop marketing campaigns, fulfill orders, answer customer service questions, raise money, negotiate with manufacturers, sell your product, clean the “office”, etc. You get the picture. The beautiful thing about doing everything for two years is that you get a very clear picture of what you’re good at and what you’re not good at (and what you don’t want to do!). Well, we’ve figured out what we’re not good at. WE SUCK AT SALES!!! Not in the “selling the big picture” type of stuff…we can do that anytime. But in the day-to-day aspects of selling a product. Following up with distributors and retailers, cold-calling new prospects, sending out samples and information packets, etc. Basically, we lack the motivation/experience/energy/time to deal with all of the tasks associated with being a successful salesperson (btw, for all of you MBA types out there, Sales and Business Development, at the core, are completely different). So, knowing that we suck at sales, we’re now making an effort to find the first new employee of Platinum Concepts; a Sales Manager. It’s going to be tough to find, but we truly believe that a dedicated sales person will help us to not only increase sales volume but also expand distribution.

If you really want to grow your company, you’re going to have to increase the distribution of your product. We purposely kept MouseDriver distribution limited during our first year of sales because 1) we didn’t want to manage a bunch of distributors, 2) we didn’t want overlapping distributors competing on price (and thus lowering the retail price of MD) and 3) we wanted to make sure we knew what we were doing (i.e. get our feet wet) before selling MD en masse. Well, in order to grow, you have to increase distribution and increasing distribution means that you DEFINITELY will have some overlap between distributors, sales people, manufactures reps, etc. There are certainly ways to keep the overlap to a minimum, but even in our limited efforts, we’ve been put in the position where we’ve had to manage overlap between a few of our distributors. So, we spent most of April reassuring one of our golf distributors (whose primary account was called on by another one of our distributors) that we weren’t trying to squeeze them out, that we still considered them as one of our key partners and that we would do our best to “make things right”. The lesson learned: In addition to developing strong relationships with your distributors, make sure you’re also managing your distributors expectations and that they are crystal clear on your long-term distribution strategy.

It’s time for us to embark on the second phase of our product marketing strategy! Over the past few months we’ve been designing packaging for a version of MouseDriver that will be sold in mass merchandisers such as Walmart, Target, etc. Assuming that we can actually get into any of these stores, the idea is to sell the current version of our product in a “clam shell” package (clam shell is the name for the hard plastic packaging that you see hanging on hooks at Target that is next to impossible to open with just your hands) while at the same time, introducing a new and improved MouseDriver (in different packaging) in our current channels (golf and gift stores, specialty and department stores). This way, we keep all of our channel partners happy. Our current retailers are psyched because they have a new and improved MD that they can continue to sell at $29.95 and our new mass retailers are excited to be selling a discounted product that was one sold for $29.95 in the higher-end stores. Of course, actually implementing this strategy is going to require us to jump through hoops from a coordination perspective, but it will allow us to extract revenues from several different sales channels. Hopefully this strategy will work and we’ll end up selling a ton of MouseDriver over the next 12 months.

What We’ve Done

• Written the first ten chapters of our book, The MouseDriver Chronicles. It’s kind of weird “writing” a book when you’re really not “writing” the book. More to follow on this later…
• Developed a new logo, business cards and letterhead for Platinum Concepts (trying to reposition the company as Platinum Concepts rather than just MouseDriver).
• Developed a PCI Business Expansion Plan with an emphasis on our new product, BallTender.
• Designed, ordered and received 100 samples of our new “clam shell” packaged MouseDriver product (and this is the product that should really drive revenues for us!).

Priority Goals

• Raise money! Yeah, we know this is always a priority goal when you’re a small company, but this time, we can’t just float the money on our credit cards!
• Identify and hire a sales manager to help sell MouseDriver and other new products that Platinum Concepts introduces.
• Set up sales presentations with some of the mass retail merchandisers in hope of selling MouseDriver for the Holidays and in 2002.
• Finish writing the first manuscript of The MouseDriver Chronicles and convince our publisher, Perseus Books, that this book will be one of the hottest sellers of 2002.

Mood Meter

Excited, nervous and still scared shitless. Raising money and finding a sales manager are absolute musts if we’re really going to have a chance at building this company out.

The PR continues to grow!! Check out this clip on TechNow that was aired nationally on Saturday evening and try not to laugh too hard. http://playlist.broadcast.com/makeplaylist.asp?id=897288&segment=16691And by the way, phenomenal PR doesn’t necessarily translate into increased sales…but it makes for good bar talk.

Lessons Learned

We’ve been screwed by the downturn in the economy!! We made a decision a couple of months ago to expand our horizons a bit and sublease office space from a friends technology company. The thought of being in a “real” (i.e. lots of people and a coffee machine) space as opposed to a shed seemed appealing and the idea of continuing to pay office rent on a month-by-month basis were attractive. On Thursday of last week, after spending countless hour preparing for and actually making the move, our friend called to say that he and everyone else in his company had been abruptly terminated. So, after being in our new space for all of 30 minutes, we were told that we would now have to find someplace else to squat. No problem, right, we’ll just go back to the apartment and work for a couple of weeks until we find some other space. Well, it turns out that on that same Thursday, our DSL provider, bankrupt Northpoint, officially cut off services to all of its subscribers. Now, we’re back in the apartment with no high speed internet connection, all of our office stuff is sitting in the garage, and we’re dreading the idea of doing this apartment work/live thing all over again. At least we’re virtual!

History is repeating itself here at Platinum Concepts. In an effort to finance a large inventory investment, we have once again incurred a serious amount of credit card debt. This time though, being in debt isn’t so “cool”. Last year we just figured that the credit card thing was a part of the whole learning experience. You know, pay your dues, get your battles wounds, feel the pain, etc. But now, as the inventory investments are getting bigger and bigger, it’s becoming more apparent that we’re incurring some very grave risks here. We always assumed that our bank, Wells Fargo, would come through for us and extend a line of credit that was greater than $24k. We also assumed that we would have plenty of cash in the company to be able to cover our next inventory investment. Turns out our assumptions were wrong. The good news: there’s a very important lesson to learn here. The best time to get all of your funding sources lined up is when you think you don’t need money. When we were bored out of our minds last Summer waiting for the Holiday sales to pick up, we should have been applying for SBA loans and going to local banks in an effort to raise money. Next time, we’ll know.

We have a book deal!!! Well, we’ve been told by both our publisher and our agent that we have a deal, but we haven’t actually seen a written contract yet. So, we may be retracting this information in the next Insider. But for the time being, we figured that we might as well share this news with everyone. Apparently, our book publisher is intrigued with the idea of a business book that’s not a “how-to” book (we never claim that we know what we’re doing anyway) but rather an “experience” book that chronicles the ups, downs, experiences, emotions, etc. of two guys trying to bring a product idea to market. Basically, the book would be 250 pages of the Insiders…on steroids. Here’s the issue though: the publisher supposedly wants a finished manuscript by July. Given that we need to really focus on sales (otherwise, the book won’t have a very happy ending), neither one of us can really dedicate all of our time to writing this book. So, we’re looking into bringing on a ghost-writer…someone to help us write the book. If we can’t find an affordable ghost-writer, then we’ll probably have to pass on the book this time around. Focusing on sales is just too important right now…but how sweet would it be to have a book out there!?!?

Last year, we spent most of our time and effort focusing on introducing MouseDriver to the consumer retail market. The primary reason for focusing on retail was based on the research that we had done on the Advertising Specialty Industry (ASI). It turns out that the promotional products that do really, really well in the ASI are those that have done well as consumer retail items. So, given that information, we decided to execute our retail strategy first with hopes of building MouseDriver awareness and sales. Now that we’ve had some moderate success with MouseDriver as a retail item we’re going to shift our focus somewhat and start concentrating on building sales and awareness within the ASI. We’ve always felt pretty confident that MouseDriver, branded with a company name or logo, would make a great corporate giveway/incentive/gift/tee prize. Hopefully, our patience will pay off and our “retail first” strategy will prove fruitful.

What We’ve Done

• Did a photo shoot with entrepreneur magazine and a television shoot for a show called TechNow.
• Developed samples for a clam-shell (plastic packaging) package that we will present to mass merchandisers such as WalMart, Target and Sam’s.
• Put together our first book proposal. It’s basically a combination of a marketing plan (book people call it a platform) and the details of your product (chapter outlines/synopsis).
• Began doing high-level research on what we think could be Platinum Concepts next product…and this one has much more of a “tech” focus to it.
• Met with an editor for MBA Jungle Magazine; did an interview with Bloomberg News Radio; did a photo-shoot with Entrepreneur Magazine (much easier and less involved than the Inc. shoot with more of a product focus).
• Initiated our first marketing campaign into the advertising specialty industry.

Priority Goals

• Figure out what the hell we’re going to do about obtaining office space!
• Finalize new product research and conduct a feasibility study to determine whether or not we should continue to move forward with our new idea.
• Generate as much MouseDriver awareness as possible within the ad specialty industry.
• Find a ghost-writer who can effectively capture our voices and make a final decision on the book deal.
• Sales, Sales, Sales (seriously, we need to make some big sales really soon).

Mood Meter

Psyched that people are noticing us, bummed that sales aren’t higher, grateful for this incredible learning experience and scared shitless with regards to our latest credit card issues.

We’ve finally decided to add an entrepreneurial discussion forum to the website. So, if you have any questions you want answered or topics you want discussed, post ’em in the forum…just go to www.mousedriver.com and enter from there. We have no idea if this thing will take off…but thought it the best way to share information with others. Let us know what you think.

Lessons Learned

Finally!! Through a friend of a friends Mom, we’ve developed a relationship with a sales rep who has the contacts and experience needed to bring MouseDriver to the mass merchandisers. It’s wild…we spent so much time trying to locate a sales rep via trade shows, industry contacts, online resources, etc. and it turns out that all we needed to do was grab a couple of beers and talk “business” with a couple of skiing buddies. Amazing the contacts that you can find in your own backyard…so to speak. Unfortunately, finding a good sales rep is only half the battle. We’ve now discovered that the mass merchandisers don’t want to have anything to do with a single-product company. Why?…Paperwork!! The big buyers just don’t want to deal with all of the time, headache, and paperwork involved with setting up a new vendor in their system, especially if it’s only for one product. So our sales rep and all of his buying buddies are telling us that we need to go through distributors…which is good since that’s been our preferred strategy all along. Funny how things work out sometimes…still, this distribution BS seems like a never-ending battle.

We pride ourselves on customer service. We’re small enough (and currently have the time) to focus on making sure that our customers are satisfied. That means we respond to all emails and phone calls on an extremely timely basis and do whatever we can to distinguish our company from the slew of other consumer product manufacturers out there. So, when we realized a couple of weeks ago that none of our info@mousedriver.com emails were being forwarded to our email accounts, we totally freaked. We had over 75 emails dating back to December 4th, 2000 from people inquiring about MouseDriver, our company, etc. Most of the emails were from customers who, for one reason or another, weren’t completely satisfied with the MouseDriver that they had received as a gift over the Holidays. (And this whole time we just assumed that we had somehow made it through the Holiday Season completely unscathed…seriously!) We ended up responding to all of the emails and offering free MouseDrivers and promotional mousepads to many of our customers who had been waiting over 6 weeks for a response. Still, we were pretty embarrassed and bummed about the whole thing…especially by the customers that totally ripped on us for not initially responding (i.e. some guy basically told us that are product was a sham, our company was a joke and we didn’t have the balls to respond to his email…it’s that whole ego crushing thing repeating itself).

If you haven’t heard by now, we made the cover of a major business publication (Inc. Magazine). We’re not exactly sure how we pulled this one off, but we’re obviously psyched that the “story” is being pushed to bookstores, newsstands and over 600,000 subscribers around the country. So does having your picture appear on the cover a magazine change anything?…ABSOLUTELY! Other than the slew of phone calls that we’re receiving on a daily basis, our workday now primarily consists of answering the 150 emails that we individually download each morning. Many of the emails are from other entrepreneurs who were inspired and motivated by the article while others are simply people sending us their kudos and signing up for The Insider. We’ve also received inquiries from other business publications interested in “the story”, potential customers interested in the product, entrepreneurs wanting advice, admirers wanting to give us their insights, literary agents/publishing companies who think book opportunities might actually exist and high school acquaintances that we haven’t spoken to in over 15 years. It’s crazy! Our guess is that all of this will be a “Flavor of the month” sort of thing and will die down over the next few weeks…but hey, if the media wants to keep supporting us, we’ll certainly support them!

With the addition of our sales reps and the running of the article, this whole venture has taken on a much different feel. We no longer feel as if we’re just the two guys trying our best to sell MouseDriver out of the massage parlor, but that we’re two moderately successful entrepreneurs who might have the opportunity to make some really big things happen (Note: this may or may not be true, but it’s kinda how we feel at the moment). A lot of doors have been opened for us over the past month and the business article has only helped to reinforce the fact that we’re a legitimate company. We’re now in a position where we can take the company in a number of different strategic directions and we really need to sit down and think about our goals…not only from a company perspective but also from a personal perspective. Regardless of what we end up doing, one thing’s for certain: We’ve got to stay focused and make sure that we can convert all of this positive press and door-opening opportunities into MouseDriver sales…otherwise, we’re doing the company, ourselves and most importantly, our investors a disservice. It’s a challenge, but something that we think we’ll be able to handle…let’s hope.

What We’ve Done

• Added a major golf distributor whose accounts include department and sporting goods stores.
• Met with a literary agent and four major book-publishing companies about the possibilities of turning the Insiders into some sort of book opportunity (alright, we’re a little clueless on this whole process, so let us know if you have any thoughts).
• Guest lectured at Pepperdine (phenomenal campus), USC, Wharton and Columbia.
• Met with a number of promising entrepreneurs including a 15-year NFL Veteran and 8 time pro-bowler (the cool part about this deal was that we actually remember watching this guy play).
• Met with an editor for MBA Jungle Magazine; did an interview with Bloomberg News Radio; did a photo-shoot with Entrepreneur Magazine (much easier and less involved than the Inc. shoot with more of a product focus).
• Added an entrepreneur discussion forum to our website…we’ll see how long this actually lasts.

Priority Goals

• Convert all of this positive PR into really BIG sales (aka: Cash!)
• Extend our line of credit at Wells Fargo Bank so that our next inventory investment is a little less stressful than the last one.
• Determine the strategic direction of the company. (i.e. Do we introduce more products or let MouseDriver run its course?).
• Personally respond to all of the emails currently sitting in our in-boxes.

Mood Meter

“Oh, how I feel like I’m alive for the very first time. Sit up high I’m strong enough to take these dreams and make them mine. Can you take me higher…” (“Higher” From Creed’s Human Clay Album).

Hope the Holiday Season is treating everyone as well as it’s treating us. We’re gonna start sending the Insider out on a quarterly basis (every 2-3 months) from here on out. Not that we don’t have anymore lessons to share…it’s just that some of the lessons keep repeating themselves.

Lessons Learned

When you’ve received a ton of positive feedback regarding your product, it ’s hard to accept that anybody out there might actually show some negativity towards your “baby”. Case in point: The same day that Reuters included MouseDriver in their Holiday Gift write-up (which is picked up by thousands of smaller publications worldwide), the LA Times included MouseDriver as one of its “Turkeys to Avoid” (referring to MD as a chunky, clunky mouse). And we thought MD could do no wrong! The lesson to learn here…you have absolutely no control over what the media is going to say about you, your company or your product. You can try and spin it anyway you can, but when the ink hits the paper, the last word is up to whoever’s doing the writing. The other lesson to learn here…Any PR is good PR. After all, we did make it into the LA Times.

It looks like we’re going to get some of the business PR that we’ve been hoping for. The fact checker from Inc. Magazine contacted us a couple of weeks ago to make sure all of the article information was correct (and even followed-up with a number of Insider subscribers). We’re not too sure what the article is going to be about, but assume that a portion of it is focused on The MouseDriver Insider (i.e. why we write it, why people are (hopefully, still) reading it, etc.). In fact, the photographer from Inc. Magazine came to our office on Friday and spent the entire day trying to make us look a lot better than we actually do. Taking photos is hard work. You have to stand around and pose while the photographer gets the lighting right, makes sure he has the right angles, assesses the type of shot he wants, etc. and then you get to be as still as possible while he cranks out about 100 shots of every picture. It was actually a pretty cool (and very exhaustive) learning experience…and Kyle even got a new nickname out of the whole deal!

As a single product manufacturer who sells a novelty gift item, we REALLY like this time of year. Around mid-October we began to see a huge spike in everything…sales, phone calls, customer service inquiries, PR, website sessions. This spike lasted around 6 weeks and has just recently tapered off. We haven’t run the final numbers yet, but we’d be willing to guess that around 40% of our sales occurred during the October/November timeframe. Now, the sales are good and we’re not complaining, but as our accounts receivables (AR) increases, other small issues begin to surface: I.E. How and when do we collect our money? Although we’ve been in business for over a year now and have a recognizable product, we still have NO LEVERAGE with the major retailers and probably never will. The larger stores can choose to pay us whenever they want and we can’t do a thing about it….we’ve tried calling on a weekly basis, but that doesn’t seem to do anything but annoy the accounts payable people…who now simply screen our calls as our number comes across the caller id screen. It’s basically a waiting game and you have to plan accordingly.

OK, so our strategy is pretty much going as planned and we’re ready to move into the larger stores and mass merchandisers. However, we’re having some problems actually getting MouseDriver in front of the buyers of these stores. It sounds really easy…just mail the buyer your product and company information, show them that you’ve got good sales and tons of PR and wait for them to come knocking on your door. Yeah right! Talk about being naïve. There’s definitely a relationship factor and a “who you know” thing going on with regards to introducing new products to the big merchandisers. We’re working frantically right now to make sure our product gets into these stores, but it ain’t easy. Once again, we find ourselves randomly calling up contacts that have been passed along in hopes of finding the right connection. It seems as if we’ve been going at this for a year now with limited success. Bottom line: in order to make MouseDriver a “financial” success, we’ll have to find some sort of mass merchandiser distribution in 2001 who can move a boatload (literally) of novelty computer mice!

What We’ve Done

• Initiated a direct mail campaign to independent gift stores in the US that resulted in a 50% ROI.
• Provided cursory consulting services to several start-ups in the Bay Area looking to “bring their product to market”. (We actually know something now!)
• Guest lectured at Cornell and hung out with Tony Bennett and The Money Honey from CNBC at Wharton/UPENN fundraiser in Philly. We donated 800 Wharton logo’d mice for this event.
• Began planning for the 2001 selling season…includes looking at mass merchandisers, contacting sales reps, forecasting inventory, and most importantly, figuring out cash flow constraints.

Priority Goals

• Get MouseDriver in front of the buyers at the big stores. This has been much easier said than done…in fact, it’s been a real pain-in-the-ass.
• Develop a complex algorithm to help us forecast 2001 sales. Yeah right! We need some sort of forecast though and we’ve got a little bit more information this time around.
• Begin identifying the lead times required by magazines and publications for Father’s Day PR.
• Write a MouseDriver Case Study.

Mood Meter

Absolutely ecstatic that we’re no longer carrying any company related debt on our personal credit cards!

Everyone should go to Las Vegas at least once in their life. We went for the first time early last month…definately not a place to go when you’re already laced with school and credit card debt.

Lessons Learned

We can’t believe that we’ve been writing The MouseDriver Insider for over a year now. The fact that we were working out of our apartment for 13 months was pretty amazing, but knowing that we’ve been focused on selling a novelty computer mouse since we graduated in May, 1999 and able to keep people informed of our progress is even more amazing. On that note, we’ve found that we get a ton of satisfaction out of not only sharing our “bring your product to market” experience with others but also in advising people who have product ideas but are a little unclear with regards to what steps they should take next. We received a number of inquiries via email and phone over the last couple of months from people who have some pretty amazing ideas and are looking for our insights and perspectives. It’s cool. They tell us their idea and we briefly run through all the different issues that they might run into; manufacturing, operations, marketing, distribution, raising money, knock offs, etc. It ’s been very satisfying and makes us realize that we’ve actually learned something since graduation. Maybe a consulting career beckons after all!

Running into a manufacturing issue on the eve of the Holiday Selling Season is the very last thing that a company wants to see happen. That being said, we’ve run into a little issue with our manufacturer in China that has, at the least, tested our abilities to deal with stress. The major disadvantage of manufacturing overseas is a lack of control, and unfortunately, that lack of control has led to a substantial delay in the delivery of our Holiday units. The bad news: if things get any worse, we could end up missing part of the Holiday Selling Season…again. The good news: we’ve got a very good relationship with our manufacturer and are fairly certain that we will not miss the Holidays (knock on wood). Still, it kind of sucks when you’re only focus for the entire year is to get ready for the Holidays and because of something completely out of your control, you find out you may have less product to sell than you’d like.

We’ll be the first ones to admit that there’s a very good chance that the marketing strategy that surrounds MouseDriver and Platinum Concepts, Inc. may or may not be the best strategy out there. When this is all said and done, we’ll be able to look back and say “hey, we were right on” or “we totally screwed up”. But right now, all we can do is stay the course and focus on the strategy that we developed during all of those marketing classes at Wharton. So, just to remind everyone, our strategy is to focus on positioning MouseDriver as a high-end, quality, impulse gift item through the Holidays so that we can do our best to help retailers maintain a $30 price point. Keeping a higher price point helps us brand MouseDriver as a great impulse buy gift item within our target demographic (the golf market). Next year, once we feel like we’ve reached acceptance within our target market, we will focus on mass distribution. Although we could have gone mass this year (and we turned down a number of fairly la rge sales deals), we felt that by building some sort of brand awareness and staying high-end now, we could generate more sales through mass distribution next year. (Please note: “building a brand” is used very loosely here…anyone who thinks a brand can be built in a year needs to check out DrKoop.com’s stock price!)

So now we have to start thinking about what’s next for Platinum Concepts, Inc. MouseDriver is going to be around for a while, so we’re not too worried about its lifespan. However, our distributors and retailers are starting to ask us for other products…seems like they’ve taken a liking to our company and the way we do business…which is a good thing. We definitely have some other products in the pipeline, but really need to figure out if we want to expand beyond the golf and gift industries. With all of the guest lecturing and PR that we’re receiving, we’re hoping that Platinum Concepts gets “branded” as a company known for bringing very unique, quality products to market and as a company who develops very strong relationships with partners in the supply chain. The big questions: What industry do we want to focus on? What types of products do we want to manufacture? And most importantly, how are we going to source new products? If anyone has any comments, feel free to share them with us…we’re o pen to any suggestions!

What We’ve Done

• Spent two days with a reporter from Inc. Magazine at our offices in San Francisco. It made us feel like a legitimate company/organization!
• Attended the International PGA Show in Las Vegas. We didn’t have a booth this time (thank goodness) so we actually got to enjoy walking around the floor and meeting with people.
• Did a “product spot” for an in-flight video that will air on Delta and British Airways in December and January. It’s called CEO Bytes…look for Kyle in the MD T-shirt!
• Volunteered to perform a workshop seminar at the National Collegiate Inventors and Innovators Conference in Washington, D.C. next March. It’s a long shot, but could be very cool.
• Moved into our new office space. Huge difference between the new space and the apartment.

Priority Goals

• Be fully prepared for the onslaught of MouseDriver Holiday Sales that are about to occur.
• Put together presentations for the different MBA programs and universities where we will be guest lecturing over the next couple of months.
• Launch a direct mail campaign to independent gift stores. We’ll let you know how effective this one is…at least we can track it.

Mood Meter

We’ve been through all sorts of different emotions over the past 15 months. We’re not really sure what the mood is this time. If anything, it’s impatient and unknowing.

OK, we’re running a couple of months behind on The Insider, but we have a great excuse. The retail industry comes to a crawl during the Summer. We would have written something last month, but nothing happened…literally. At least our golf games have improved somewhat.

Lessons Learned

John is thinking of dying his hair Platinum Blonde! We’re not talking about the casual highlight here…we’re talking jet white. We’d like to think that he’s contemplating this because of his desire to be a renegade, to show the world that he’s not afraid to be different and go against the grain. And, of course, to continue to bring much needed awareness to the company (Platinum Concepts, Inc.). However, we know that if he actually does make a visit to the salon down the street, it will be a direct result of working out of our apartment kitchen for 13-MONTHS (seriously!)…it’s absolutely amazing the things you’ll do to “change your environment” when your creativity and motivation are stifled in such a lackluster setting. On that note, we’ve finally found office space, and it’s conveniently located two doors down from our former strategic boardroom… Starbucks. Thanks to a friend on the Insider Distribution list, we’ve secured the back room of…get this…an old massage parlor. It’s not much, but it’s relatively inexpensive, has phone and network connections, and adds another virtual stop to our repertoire of workspaces.

We’ve run into a little snag during our search for regional, stock-holding gift distributors. THEY DON’T EXIST!! Although we were hoping to find distributors who would purchase MouseDriver from us and then deal with all of the selling, shipping, invoicing, collecting, etc, we’ve discovered that products in the gift industry are primarily sold through manufacturers representatives. So now, we’ve got a huge decision to make with regards to our overall strategy and our company structure. Do we continue to hold out and hope to stumble across a distributor (or another manufacturer) who can actually hold inventory and sell MouseDriver to gift stores and department stores, or do we start utilizing rep networks and find a way of billing, collecting, etc. ourselves? We’ve pretty much decided that the latter is a “no-option” as neither one of us is particularly excited about spending the majority of our time in QuickBooks (our accounting, invoicing, financial software package) and essentially becoming a collection agency. Hopefully, those expensive MBA skills that we acquired will help us to very quickly come up with an alternate, creative distribution strategy.

On Monday, August 14th, we will officially launch a broader public relations campaign to help generate more product awareness, to help us secure some speaking engagements and to help tell the “business story” of MouseDriver and generate credibility for Platinum Concepts. We’ve been planning on launching this campaign for some time now, but the search for the right public relations agency/individual took a lot longer than expected. In the end, we were torn between an agency in NYC and an independent consultant in LA (a reference from another Insider member). Here’s what we found out: Agencies can offer lots of resources, experience in launching other consumer product campaigns, credibility with the media and potential overlapping synergies with other clients. Independents can offer lots of motivation/pride, lots of time/availability to dedicate specifically to you and your product, and most importantly, the ability to align themselves with your company culture. In the end we chose the independent consultant in LA for two reasons: she’s a 45-minute plane ride away and she has shown a tremendous amount of enthusiasm in working with us. Look out…the publicity is just beginning!

Managing inventory sucks! If you don’t buy enough for the Holiday Season, then you get to kick yourself and think about all of those sales that could have been made. If you buy too much (like we did last year) you get to kick yourself and think about all of the money that was spent inefficiently. It’s a never-ending quandary and especially difficult when you don’t really have past sales in which to base your next inventory investment. For all of you business school crods out there, we are living one giant beer game simulation (aka inventory simulation). Fortunately, we’ve spent an exorbitant amount of time developing a financial model that allows us to perform all sorts of different inventory what-if scenarios and have a pretty good idea of what we should and can afford to invest. It’s all still a crap shoot though…let’s just hope MouseDriver will be as hot as we expect it to be.

What We’ve Done

• Played two rounds of golf in Pebble Beach free of charge (and made complete jackasses out of ourselves).
• Gathered sales estimates from all of our current distributors and retailers for the rest of the year.
• Redesigned MouseDriver packaging and point-of-purchase display based on customer/retailer feedback. It’s going to have much more of a gifty feel to it.
• Began discussions with distributors in Asia, New Zealand, Australia, Canada and Europe.
• Purchased wireless web phones so that we can continue to work virtually (the email feature works great, but everything else is pretty suspect)

Priority Goals

• Complete our inventory production run for the 2000 Holiday Season.
• Achieve full-penetration in all of our target segments by Father’s Day 2001 (golf stores, gift shops, department stores, sporting goods stores, and mass merchandisers).
• Kick-off and support a broader PR campaign. We’re hoping to be spending a good amount of our time speaking/guest lecturing and different schools around the country.
• Move into the new office space ASAP!

Mood Meter

Let’s be honest here. We’ve put in the work, we’ve paid ourselves 3 times in the last 13 months, we’ve solidified distribution and the Holiday Season is just around the corner. We’re ready (and very anxious) to bank some serious cash!!

OK, here’s our shameless promotional plug. Looking for a great Father’s Day Gift? Go buy The MouseDriver Set at Brookstone!

Lessons Learned

We’ve finally paid ourselves!!! On June 16th, 2000, exactly one year after donning the cap and gown at The University of Pennsylvania, we cut ourselves a modest paycheck. Now, from a financial perspective, we’re still below our initial sales estimates, but at least we know we’ll be able to pay ourselves through the summer and hopefully through the end of the year. Of course, we’ll need to make a lot more money before deeming this venture a financial success, but it’s pretty cool when you’re able to take an idea, bootstrap that idea with mostly personal savings and credit cards, sell that idea to others and then watch that idea provide you with some badly needed income. It wouldn’t be the same if we had millions of dollars in funding!

MouseDriver is now being sold in all of the Brookstone stores in North America. In fact, MouseDriver has been in Brookstone stores since late May and has been in such demand that Brookstone reordered within one week of putting the product on their shelves. We can’t begin to tell you how huge having this product in Brookstone will be for us. Last year, Brookstone sold over 800,000 electronic BBQ forks (you stick it in your piece of meat and it will tell you if your piece is well done, rare, etc.), and this year they’re expecting to sell alot more. Go into a Brookstone store and its BBQ Fork city…they’re promoting this thing everywhere. We’re not expecting to sell over 1M MouseDrivers in Brookstone, but we’re hoping that they will provide a significant amount of our sales revenue. 2000 sales projections will be given to us shortly after Father’s Day and then we’ll have to deal with financing (again) another inventory investment…we’re waiting anxiously. By the way, our new hobby is walking into Brookstone stores, talking up the product to random shoppers and watching people purchase The MouseDriver Set. It’s a pretty rewarding feeling.

Given our recent increase in sales, we found it necessary to put together a marketing budget. Granted, our budget is very, very small, but it allows us to strategically think about the most effective ways of promoting MouseDriver to the public and generating some brand recognition. After much debate, we’ve decided to allocate about 90% of our marketing budget to obtaining business PR. Our goals with obtaining business PR aren’t necessarily to increase sales, but rather, to help tie the “story” to the product and hopefully, give people an emotional tie to MouseDriver. The “story” that we’re pushing is a combination of two things: 1) Why would two Wharton MBA’s forego other lucrative career opportunities to manufacture and sell a novelty computer mouse out of their kitchen?.and 2) You don’t have to have a complex business idea to reap personal and financial reward…sometimes the simplest ideas are the best. Since we can’t afford to pay a major PR firm $20,000 a month, we’re researching more affordable independent PR consultants to help us take The MouseDriver Story to the media. We hope this works.

We’ve got Cabin Fever…Big Time!! Not to say that working out of your apartment doesn’t have its advantages, but we are seriously hurting for some additional interaction. Sometimes, regardless of how much work there is to be done, we found ourselves lacking energy and motivation. We’d love to obtain office space, but it just doesn’t make sense to spend $80/square foot when we can take our “virtual” office anywhere. So, we’re going to start making an effort to work in other places…coffee shops,the beach, friends offices, exotic travel destinations, you name it…we’ll see if that helps us.

What We’ve Done

• Finalized the initial design of our new retail single unit package and our retail bundle package.
• Placed and ran our first consumer ad in Golf Extra Magazine (Southern CA publication).
• Donated MouseDrivers to be used as tee/awards prizes in several high-profile charitable golf events. Hoping that this will generate brand awareness and goodwill towards MouseDriver.
• Initiated our own business PR campaign and began researching independent PR consultants.
• Began preparing for the 2001 Holiday Season. Seriously! Retailers/distributors start making product decisions 18-24 months out.

Priority Goals

• Obtain accurate sales estimates from our current retailers and distributors.
• Determine what our next inventory investment is going to look like and quickly determine how we’re going to finance this investment. Oddly enough, even if you do have access to cash (i.e. investment, bank loan, etc.), credit cards are sometimes the cheapest way of accessing money…especially if you have good credit and large credit lines!
• Find a PR consultant and launch our business PR campaign.
• Find for 3 or 4 more large gift distributors in different regions of the country (i.e. Northeast, Midwest, West Coast, Southeast).
• Begin looking into guest lecturing at local universities.

Mood Meter

Mood Meter: We’re not too sure what our mood is this time around. Once all of the Father’s Day numbers are obtained, we’ll let you know what we fee like.

Again, please feel free to send us your comments/questions/suggestions/criticisms or let us know if you want us to discuss certain topics. We’ll always respond.

Lessons Learned

We’ve made a ton of changes to the website lately, including the addition of zip code search functionality, the Insider Online and back-end marketing analysis. We’d like to say that as former IT consultants, we had no problems implementing these changes ourselves. Truth is…we don’t know crap about web development and we don’t have the budget to spend $300/hr on a college level html programmer. So, in an effort to save time and money, we enlisted the help of a very tech savvy, knowledgeable friend…let’s call him “Ed”. “Ed’s” been an invaluable technical resource and someone that we’ve been able to go to with all of our technical questions. “Ed” helps us do research, identifies cheap shareware, modifies our html code, and provides sound technical advice. He’s also a “friends and family” investor. Our point here: if you’re bootstrapping a company, make sure that you have very, very cheap access to a good technical person like “Ed”…it will make things a helluva lot easier.

Our distribution networks are finally kicking in. It’s amazing…these guys are able to close large sales with retail buyers who refused to take our phone calls a month ago. One thing that we’ve done to help cultivate the distributor relationship; kept our wholesale price higher than our distributors. Not only does this signal to your distributor that you don’t want to compete with them, but it also pretty much forces retailers to buy from distributors (who can give them better pricing). We know that our distributors have been around for awhile and have a ton of great retail relationships. We want to do whatever we can to incent them to push MouseDriver. In the long run, it’s these guys who will bring us the volume sales. One thing that we’ve found strange in this industry though: Retailers who contact us directly are shocked (and some actually get a little testy with us) when we tell them that they can get better pricing by going through a distributor. Any clues on what we’re missing here?

Entrepreneurship is a great thing. You have the personal freedom to do whatever you want whenever you want. If it dumps 8 inches of snow in Tahoe on a Tuesday night, you have the choice of heading up to the mountains the next day. This option and ability to “get up and go” is absolutely priceless. However, this freedom doesn’t come without sacrifice. Over the past 10 months we have had no income, spent most of our personal savings, maxed out a couple of credit cards each, performed very menial and unchallenging administrative tasks, been turned down for office space (b/c of too much personal debt), had our egos completely crushed, and lastly, been told that we have no vision and no idea what we’re doing. All of this for the price of personal (and hopefully financial) freedom. Is it worth it…absolutely. Since the last quote seemed to be pretty popular, we’ll leave you with another one from Mitch Albom’s Tuesday’s With Morrie (a great read by the way):

“Life without freedom to get up and go – mountain bike beneath you, breeze in your face, down the streets of Paris, into the mountains of Tibet – is not a good life at all.”

What We’ve Done

• Completely outsourced most of the operational aspects of the business so that we’re now focused on sales, marketing and PR.
• Spent an hour with a customer who wants us to design and develop The Ear Mouse…yeah right!
• Developed and submitted our first two print ads. One is targeted towards golf retailers and the other is targeted to consumers.
• Signed an agreement with a movie studio to use MouseDriver as a prop in some scenes. It’s a golf movie…the principle from Ferris Bueller’s Day off is one of the stars.
• Sold MouseDriver to the defense crisis department at The Pentagon.

Priority Goals

• Find for 3 or 4 more large gift distributors in different regions of the country (i.e. Northeast, Midwest, West Coast, Southeast).
• Begin brainstorming on the possibilities of introducing a MouseDriver bundle package. Basically means identifying the bundle, researching the numbers and designing new packaging.
• Develop some very creative ways of marketing and promoting MouseDriver without spending a ton of cash. Any ideas that you might have are welcome!
• Pay ourselves!

Mood Meter

Remember the last scene in The Breakfast Club when Jud Nelson is walking through the football field? He opens up his hand, sees the diamond earring that Molly Ringwald gave him and raises both hands in triumph…he’s (a.k.a. MouseDriver) finally made a connection with a “social society” that was always so foreign to him. That’s kinda how we feel.

When you get tired of watching the markets collapse, go check outwww.mousedriver.com/newsletter/newsletter.htm. We’ve posted all of the past Insiders on-line…please pass on the link to anyone that might be interested.

Lessons Learned

Sometimes, when you’re already taking a risk, taking more risks just seems natural. Anybody who’s experienced the pleasures of a casino should know what we’re talking about. Over the last 9 months, we’ve tried to share our MouseDriver risk-taking experience with all of you by putting together and distributing The Insider. Now, in an effort to generate more “buzz” around the product (and to allow others to share in our experience), we are opening up The Insiders to anybody interested. The way we see it, there’s nothing in the past Insiders that can really effect our current business…we’re too far down the line. I mean, who cares if a major distributor reads that we were working out of our kitchen…right? So, all of the past Insiders can be found at www.mousedriver.com/newsletter/newsletter.htm. Feel free to pass this link on to all of your friends, family, work colleagues and anyone else who you think might be interested in our gig. We’ll keep tabs and let you know how this viral marketing campaign develops.

As part of our marketing campaign, we’ve set up a web affiliate program for MouseDriver. Affiliate programs allow other websites to sell MouseDriver without having to deal with processing the order, holding inventory, shipping product, billing, collecting, etc. An affiliate just puts a picture of MouseDriver on their website that says “Buy Me” and when a visitor clicks on the picture, they are directed to MouseDriver.com. We’re hoping that the affiliate program will help to spread the MouseDriver name, generate more brand awareness and increase sales. The only problem with all of this stuff is that we have to manually approve each website that wants to sell MouseDriver. Otherwise, MouseDriver ends up being sold on random sites that sell stuff like guns and logo’d condoms.

MouseDriver has been generating a ton of interest overseas. While we would love to introduce the product to the whole world, we’re a little hesitant in fulfilling the 10,000 unit order sent to us by a Chinese golf ball manufacturer. Call it a fear of knock-offs, but sacrificing the cash flow right now to maintain our product positioning is well worth it. We’re still sticking with our strategy of finding US distribution first, outsourcing all of the fulfillment crap and focusing on selling/marketing this thing in North America. Not to say that we won’t entertain overseas distribution inquiries (in fact, we have sold very small quantities to European distributors), just want to make sure we focus on the strategy that we set way back in the Summer. Keep the product high-end, maintain the price point and help “pull” the product through the retail channels.

On a more personal note: We are putting a lot of pressure on ourselves to make this MouseDriver gig work. Since graduating from Wharton in May, two of our classmates have already sold their .com company’s ($68m and $30M respectively). Every time we hear something like this, we tend to question what we are doing…especially from a financial standpoint. Recently, we’ve fielded a number of questions from friends asking us “Why would you manufacture a computer mouse shaped as the head of a golf driver when everyone else is going into ecommerce and making millions of dollars?” It’s a very thought provoking question and the only real way that we can answer it lies in the quote below:

“If you want to make your dreams come true, you must sacrifice the need to follow.”

What We’ve Done

• Signed up with Commission Junction to help us manage our affiliate program.
• Collected on all of our PGA Show sales as well as our outstanding account receivable.
• Spent 2 hours being interviewed by a major business publication/magazine. Hopefully, if the story does run, we won’t come out of it looking like complete jackasses.
• Added zip code search functionality and The MouseDriver Insiders to our website. Retailers like the zip code thing because it tells on-line customers where they can purchase off-line.

Priority Goals

• Initiate a PR campaign that is focused more on business rather than golf publications.
• Continue to find distributors in other MouseDriver market segments.
• Find larger office space (preferably for less than the $70/square foot that we’re being quoted out here in the Bay Area).
• Launch a massive viral marketing campaign.

Mood Meter: Hungry and Motivated

OK, so we were a little slow in getting this Insider out to everyone. We’ve been pretty swamped here in the “office”, taking/fulfilling orders, responding to media inquiries, doin’ deals, etc. Thanks to everyone whose recommended MouseDriver to friends and associates…the effort is very much appreciated.

Lessons Learned

Trade shows are a real pain-in-the-rear! Not only do you have to spend time and effort traveling, setting up the booth, scheduling meetings, etc., but you also have to try and convince thousands of people to spend their hard earned money on a computer mouse that looks like a golf driver. You become an instant salesperson and you have to take (with a grain of salt) everything that people throw at you. Everything from “this idea will never fly” to “you must be the R&D guys of the company” are a serious crush to your ego…especially when you were riding the high seas of the Wharton MBA program 9 months ago. (Oh by the way, this is where having two different types of people working together is beneficial. Whereas John wanted to rid these types of people with a swift kick-in-the-ass, Kyle was much better at handling these situations in a very humbling sort of manner.) But, unfortunately, for a product such as MouseDriver, trade shows are a necessity. And, fortunately, the PGA Show has given us the exposure and confidence needed to make MouseDriver one of the hottest golf gift items of 2000. Despite all of hassles, we came out of the PGA Show with orders (and cash!) in our pockets, tons of great PR and lots of really cool golf things.

Have we mentioned that distribution is key? We’ll reiterate…distribution is huge and it’s a painstaking process finding the right people to sell your product…especially when you don’t know an industry that well. First, you have to decide whether you want to sell the product yourself (no way!), utilize a sales representative network (too much time to set up) or sell your product to distributors (who use their own sales reps). We decided early on that we wanted to minimize the number of selling contacts by focusing on distributors rather than sales reps. So, we’re currently focused on finding distributors who can sell in three different MouseDriver segments: green grass (pro shops, specialty golf stores, etc.), department stores/mass merchandisers (Neiman Marcus, Macy’s) and gift stores (Hallmark). Once we have distribution all figured out, we’ll just kick back and find creative ways of marketing MouseDriver. FYI, most of the buyers at department stores are extremely arrogant. One buyer even hung up on John when she realized that Platinum Concepts was not a brand name manufacturer. Just another thing that crushes your ego.

Unlike all of the .com’s out there, we’re not going to blow our marketing dollars on a highway billboard (or SuperBowl ad) that reaches the masses. We fully understand that there is a niche market for MouseDriver and will focus on some very targeted marketing in the near future. In case you were wondering, we are positioning MouseDriver as an impulse buy (hence the $29.95 MSRP) gift item for the golf enthusiast. Our customer base is primarily women (who usually purchase more than one) and the avid golfer whose office is full of golf stuff. One thing that we have learned about this product is that it’s an easy sell for people in the target market as long as they know what MouseDriver represents. So, we have to educate our target market on the product and hope they have an impulse to buy. We’ve had tons of comments with regards to MouseDriver improvements (i.e. scroll wheel, smaller size, etc.) and will take these into consideration. However, we must keep in mind that this is a “golf gift” item and not something we’re trying to convince the individual to buy for themselves (except for the really avid golfers).

What We’ve Done

• Signed a deal with a major mall gift retailer who will carry MouseDriver in their 200+ stores for Father’s Day.
• Added a ton of new “golf” retail customers who, eventually, will be handed over to a distributor.
• Managed to walk away from the PGA Show with Top 10 product honors from such publications as CNN Sports Illustrated, Golf For Women Magazine (p.42, current issue) and Fore Florida Magazine.
• Began developing a framework for our initial print advertising campaign (going with a theme motif).
• Bartered MouseDrivers for two separate golf vacations: The Running Y Ranch in Oregon and The Chateau Whistler in Whister, B.C.
• Completely turned over the corporate side of things to distributors…which frees up lots of our time.

Priority Goals

• Complete negotiations with retail distributors and get MouseDriver in all the channels before Father’s Day.
• Begin to execute the 2nd stage of our marketing campaign (educating target market on product).
• Find office space and begin looking for an administrative assistant of sorts.
• Begin collecting on all of our accounts receivable that came out of the PGA Show. Collecting really sucks…another reason for going with a distributor.
• Establish an internet affiliate program.

Mood Meter: Overwhelmed