Just want to let all of you know that you’ll be receiving a few more emails from us between now and the end of the year regarding our book, The MouseDriver Chronicles: The True-Life Adventures of Two First-Time Entrepreneurs. If you don’t want to receive the book emails, just let us know. Otherwise, there will only be a few, so if it gets too annoying, just delete ’em! For a little more info on the book, visit Amazon.
Lessons Learned
We’d be doing ourselves a terrible injustice by not self-promoting the book a little more in this Insider, so here goes. This thing is going to be BIG! Well, actually, we really have no idea how big it’s going to be, but intuition tells us that the book is going to do pretty well. If it does poorly, it definitely won’t be from lack of effort. We’ve been putting in 80-100 hour weeks over the past month or so developing a marketing plan for the book, coordinating stuff with the publisher, solidifying schedules and basically ramping up for the release in January. To tell you the truth, it’s been pretty damn exciting…nd the recent reviews that we’ve received have only helped to fuel this excitement. According to Kirkus Reviews, we “share copious amounts of information with generosity, humor, and All-American spirit” and the book is “a must-have for those in the business of business”. Not too bad for a couple of dudes hocking computer mice out of their kitchen.
Before we get too caught up in the book, let’s revisit our original marketing strategy once again. Remember, the strategy has always been to tie a “story” around the product (The story being why would these two Wharton MBA’s bypass all the great opportunities of 1999 to bootstrap a novelty computer mouse company out of their apartment?). We felt that if we gave people an emotional tie to MouseDriver, we would give them another reason to purchase besides the fact that it was an ultra-cool novelty golf gift item. Think about Coca-Cola. Whenever you see that one hour special on the history of Coke, it kind of makes you feel like going out and buying a Coke, whether you like the drink or not. That’s what we were kinda after. So, given that the book is the “story”, it plays right into our original strategy. We’re really hoping that the book helps to drastically increase sales of MouseDriver. That’s the whole point, right? You develop your strategy, you patiently execute and you pray that you chose the right strategy. If sales don’t increase because of the book, well, at least we tried and hopefully learned what went wrong. At least we get a book out of it!
Let’s talk about irony. This whole time, we’ve been waiting and waiting to get into the department stores and the mass merchandisers. Well, now we’re there and it’s an enormous headache! Here’s the deal; once again we have no leverage with the big retailers. Just because they buy, let’s say 15,000 MouseDrivers, doesn’t mean that we’ll actually ever get paid for that amount. The sales process works something like this. Somebody like Lord & Taylor gives us a purchase order. We honor the purchase order and ship L&T product. L&T receives the product, but the label on one of the boxes is supposedly off-white instead of gray. So we get a notice from L&T saying that they are going to charge us $150 b/c our label was the wrong color. Now it’s up to us to prove to L&T that the label was actually the right color and that the chargeback was unjustified. In the meantime, L&T just sits on our invoice until they’ve sold through all of their MouseDrivers. If they don’t sell all the MouseDrivers, they either 1) send them back to us (with a check for what they sold minus the $150 chargeback) or 2) they discount the price, sell their inventory and then pay us (what they owe us minus the $150 chargeback and whatever amount that they had to discount). It’s brutal, frustrating, time-consuming and extremely labor intensive. And expensive…especially if they charge you back so much that you end up owing the department stores money! It makes you really appreciate distributors and all of the warehouse folks who have to deal with this on a daily basis. We only hope that we end up collecting on all of our department store accounts.
We’re getting absolutely crushed by our inventory holding costs. In business school, we always knew about holding costs, but it was never really a “visible” expense. Now that expense is crystal clear and it sucks! Think about it. Our product really just ships a few months out of the year. The month leading up to Father’s Day and the two months leading up to Christmas. During the other months, we’re just taking up space and selling onesey’s and twosey’s here and there. But, because our warehouse and fulfillment center in Reno doesn’t like to have little guys like us around, they decided to levy a $1500 minimum monthly fee. So even if we don’t ship a single unit during the month of January, we get hit with a $1500 charge. That’s $18,000/yr in minimum warehouse fees! And that doesn’t even include the labor expense that is incurred during the several months in which MouseDrivers are shipped. Needless to say, we’re trying to alleviate this inventory holding cost issue and are searching for other companies out there. We’re also hoping that in 2002, most of our inventory investments are made based on purchase orders that we receive beforehand. That way, we just drop ship product in our customers warehouse and they incur all of the holding costs. We’ll see what happens.
What We’ve Done
- Sold the UK and Commonwealth country book rights to Simon & Schuster. They will be releasing the book next Summer.
- Spoke at the Inc. Magazine Thinc Out Loud Conference and a Glasshouse dinner event (Glasshouse is a UK based entrepreneurial organization…pretty cool).
- Solidified all of the viral marketing plans for the book and met with Perseus to coordinate schedules and gain a better understanding of what to expect in January.
- Sold a MouseDriver clamshell bundled package to a couple of retailers for them to test during the Holidays. If it goes well, we hope that they’ll order a ton of product in 2002.
Priority Goals
- Continue to approach mass merchandising buyers in hopes of blowing out MouseDriver in 2002. The book should help in bringing awareness to the product.
- Continue to try and figure out what we’re going to do moving forward. Do we build-out the company, go into consulting, take “real” jobs, start something else, etc? Big decision here.
- Make sure that we do all that we can to market and promote the book and convince people that it’s not only educational, but also motivating and inspiring.
- Collect on the majority of our accounts receivable from the department stores, pay off all the company debt and try to figure out what to do about our next inventory investment.
Mood Meter
You’re 8 years old, it’s the night before Christmas, it’s snowing outside and cookies and milk are sitting next to the fire place to welcome Santa Claus. You know that feeling of excitement, sleeplessness and the whole “I can’t wait” attitude that you had…that’s how we feel. If you don’t celebrate Christmas, substitute another holiday, or your first date, or a big game…you get the picture.