Follow this Real Life Story of an Inventor, his Idea and
what happens as he tries to bring his invention to market!
Contact Chris Schutte at email@example.com or cell 678 472 5016
Follow this Real Life Story of an Inventor, his Idea and
The good news was that the LegalZoom.com TV ad looked great and was getting a lot of air play. The bad news was resulting sales were only one fifth of what I had projected. I was struggling to get my website to talk directly to my warehouse, but the PCI compliance issues were overwhelming. We were only selling 25 units a week from our website which was very disappointing, the good news was with a sales rate of only 25 units a week, I would be able manage the shipping process right out of my garage without any help from our warehouse. So goes a day in the life of a struggling inventor, but I did have one huge asset, a great looking national TV commercial, there had to be a way to capitalize on it.
I decided that the LegalZoom.com TV commercial would be the center piece of my strategy at this years Chicago Housewares Show and I would flank it with the Hotdog Ez Bun Steamer displayed as a clip strip product on one side and cooking demonstrations using the Steamie on the other side. By this point something very interesting was starting to happening to my product, the marketing concept was diverging. The Hotdog Ez Bun Steamer seemed best suited to be sold as a clip strip product hanging in the bread aisle next to the hotdog buns in grocery stores across America. While "The Steamie" with its new clip on steaming basket and condiment dish was so versatile it was better suited to be sold as a "seen on TV" product.
At least this time when my wife and I arrived at the International Housewares Show we knew what to expect. I had secured what I thought was the best location in the inventors corner and we began to set up our booth. This year we would have some additional support, Craig a guy interested in producing an infomercial was coming to help out and our manufacturer contact Stacy was also flying in to support us. We were well prepared and ready to have a great show.
Although the LegalZoom.com TV commercial wasn't creating the immediate website sales I was hoping for, it was creating a lot of market awareness. As the show started the pieces really started to fall in place. I had ordered some beautiful looking fake food from company called "Just Dezine it" to display on "The Steamie" and of course we were serving free Hotdogs. Every pitch I made ended with "and the Hotdog Ez Bun Steamer is supported with this multi-million dollar TV campaign" and then I showed them the TV commercial. It really made an impact, there weren't any other inventors at the show that had their product featured in a national TV commercial.
It was my wife that really made the show a success, while I was of auditioning for the TV show Pitchman, she spotted and started a conversation with the CEO from ATA, the countries largest distributor of clip strip grocery store produces. ATA was the key to our go to market strategy, now all we had to do is strike a deal.
The New Year was full of anticipation and unanswered questions. When will the new LegalZoom.com TV commercial start airing? What does the finished commercial look like and what will it do for sales? I didn't have time to sit around think about it. I was busy trying to get my website integrated into the new fulfillment company and credit card processors I had hired. This is when I first heard the term "PCI compliance"(Payment Card Industry). I didn't think it was any big deal, after all I had hired two large established companies whose only business was shipping products and processing credit cards everyday. Boy was I wrong, PCI compliance is the bane of small internet based businesses. It was now a race to get everything in place before the TV commercial started to air and to make things worse I didn't know exactly when that would be. The best information I had was that the commercial would start airing the end of January, which didn't give me much time.
This was a pretty scary time, I didn't know what the commercial would do to sales or even if it would air. I had $65,000 of inventory arriving at my new warehouse and a website that wasn't working. All I could do is cross my fingers and keep pushing forward. Then I received an email from the VP or marketing for LegalZoom.com with the video clip of the finished TV commercial attached. Wow, the commercial looked great! The Hotdog Ez Bun Steamer was on screen for almost 22 seconds of the 30 second spot. Based on the finished commercial it was time to celebrate, that night my wife and I went out for a nice dinner for the first time in several years. I was sure that within a few weeks we would be selling 25 to 50 units a day and our financial future would be secure. I turned my attention back to getting the connection between my website and warehouse working.
By the end of January my manufacturer had come through and I had all the inventory I needed. My new LegalZoom.com TV commercial was scheduled to be phased in replacing the old commercial over the next 90 days. All I had to do was to get the website connection working and wait for the sales to come in. By the middle of February I started getting reports that friends and family were seeing the TV commercial, but instead of the 25 units per day I was expecting we only saw our sales increase by 2 or 3 units a days. This was going to a big problem because I had based all of the business projections on the assumption that 25 units per day would be the minimum level of sales. Once again my most conservative sales estimations were way off. By the time March rolled around sales were approaching 5 units a days, a far cry from the generating the projected cash flow I needed, needless to say and I wasn't sleeping at all. We had sold about $5,000 in product, but the $65,000 invoice was coming due. You don't have to be a rocket scientist to see that math just wasn't going to work. I had to raise $60,000 and fast.
Fortunately I started working with SCORE. over a year earlier and knew they could help me get a SBA loan. If you're starting a new business and not familiar with SCORE you really need to look them up, they can be a great asset to any small business. My SCORE counselor was incredibly helpful and he reviewed my updated business plan and helped me file for a small business loan. Luckily I had started the 3 month process back in December and was approved for a $25,000 SBA loan. Now all I had to do is raise another $35,000 to pay my manufacturer, so I contacted my primary investors and made arrangements to sell off another 7% of the business. My manufacturer got paid and it was time to head off to the 2010 International Housewares Show in Chicago.
Laying the ground work to support a national TV commercial was a real shot in the dark. There were so many unknowns; how many units do I need in stock, what website capabilities do I need, how am I going to ship out all the orders. The only information I had to go on was based on the sales increase caused by a single article on page 19 in our local newspaper. That one local article resulted in 30 extra units sales over the next 3 days. How do you extrapolate sales resulting from a single local newspaper article to sales resulting from a national TV commercial? My best working guess was that sales would start out at about 25 units a day and grow from there. I knew that if I was personally shipping out that many units a day that's all I would be doing. I wouldn't have any time left to work on the strategic issues and product development. It was time to hire a fulfillment company.
I spent several weeks researching various fulfillment companies. I wanted a company with locations in multiple states and one that had experience with direct response TV products. Once I decided on one I turned my attention to beefing up my website. Up until this time I had been maintaining my own website on GoDaddy.com, now it seemed like it was time to hire a professional. This was another case where having my own network of people to tap into was useful. I reconnected with some of the marketing people I used to work with and got the name of a good programmer. Then I turned my attention to inventory, this was my biggest dilemma because Chinese new year was quickly approaching. If you haven't imported products from China before you probably wouldn't know that manufacturing completely shuts down for most of the month of January during Chinese new year. The best information I had was that the LegalZoom.com TV commercial would start airing at the end of January. That meant either I commit to a production run in December or I wouldn't have any inventory until almost April. There comes a point in every entrepreneur's venture when they have to take a leap of faith and this was mine.
By the time Christmas came I had signed a contract with a fulfillment company, hired a webmaster and issued a PO for a container full of product. I was on the hook for over $100,000 and had made all of those commitments without seeing the finished commercial or even knowing exactly when it was going to air. For all I knew at this point LegalZoom could have decided to scrap it. I remember hearing the story of how Andrew Carnegie gambled everything he owned and everything he could borrow to start the first US steel plant. Somehow he managed to keep his factory going under tough economic times until he started turning a profit, within a few years he would be one of America's richest men. Everyone that has started a business from scratch at some point had to take a gamble. By December 2009 all my chips were in the middle of the table and I was doubling down.
After the grocery store test market program fell through I found myself regrouping from yet another major set back. One of my mentors said it best when he said "an inventor's journey is like an ant clinging to a YoYo, not only is your head is spinning but there are so many ups and downs you can't tell if you're moving forward or not, but the important thing is to keep moving forward". Six weeks had passed since I spoke to the vice president of marketing from LegalZoom.com and I had been through 3 different interviews along the way, when I finally got the email I had been waiting for. There's so many email scams, its not always good when an email starts off saying "congratulations", but this time is was. This was the email that told me I had been selected to appear in next years LegalZoom.com TV commercials and I would be flying out to Hollywood to shoot the commercial at the end of November. Talk about ups and downs, two week ago the test market program deal fell through and now I was going to star in a national TV commercial.
Its funny how my wife and I look at things differently, although we knew that me and my product were going to be featured in a multi-million dollar television campaign, we didn't know if I had won the prize money associated with the LegalZoom.com customer story contest. To me it really didn't matter, after all what's a couple of thousand dollars prize money compared with millions of dollars worth of advertising for my product, but to my wife it was a big deal, I guess she was looking at our checking account. It would be almost two more months before we got the news that I won the contest and another 2 months before we received the prize money.
I knew I was going to be in next years LegalZoom.com TV commercial, what I didn't know was how big a role my product would play. Was it going to get a casual mention or was it going to be central to my story? The excitement and anticipation was almost more than I could handle as I boarded the flight for LA. When I arrived at LAX there was a chauffer holding a sign with my name on it, wow this is cool. When I got to the hotel in Hollywood there was a huge gift basket waiting for me. It was apparent early on that something special was happening to me. The next morning a car picked me up to go to the studio and get fitted for wardrobe. What happened next was one of the biggest thrills of my life, as I walked into this huge sound stage, front and center was a 14 foot tall by 30 wide back drop covered with blown up pictures of my design drawings. Imagine the thrill of seeing your own 6 inch drawings blown up to the scale where they were 12 feet tall. It was as this time that I realized that my product would be prominently featured in however this commercial turned out. That night I had dinner with the people from the three other customer story's along with all the key executives at Legalzoom.com. Everyone was just plain good people and I enjoyed getting to know all of them.
The next day I shot the commercial, I have never had so many people fuss over me, makeup, wardrobe, lighting, cameramen and the director. For seven hours I stood in front of that camera while the director asked me questions and had me tell my story. I remember when we got to the cooking demonstrations they gave me a spittoon, I asked "what's that for?" "that's for spitting out the bites of hotdog, we are going to film you eating" the director answered. "Why would I waste a perfectly good hotdog?" I asked, she said "we may have you do several takes", I said "that’s not a problem" I was pretty hungry by this point. I think we went through about 7 rolls of regular film and 3 rolls of high speed special effect film to capture the steam in slow motion that day. The total film crew was comprised of about 25 people. These guys worked hard for 14 to 16 hours that day and really knew what they were doing. Before I knew it the shoot was over and I would be heading for home the next day. Now all there was to do was wait for the commercial to be edited and start appearing on TV, which would take three more months.
It’s hard to believe that we sold twice as much product appearing on QVC at 4:00 in the morning than we did at 1:00 in the afternoon, but we did. Most people don't realize it, but QVC is on the air, live 24/7. After the show I spent a couple of hours talking to other QVC hosts to get their take on my product. It’s very important to listen to your customers and encourage feedback, what you learn can really help improve your product. One of themes that kept coming up was that the QVC customers want color choices and I needed to find a way to incorporate color into my product.
After I made the larger version and started steaming foods like salmon I realized it needed some type of heat insulation on the handles, lifting the grill out of a pot with oven mitts was just awkward. I looked at other kitchen utensils and saw that many were coated with brightly colored silicone. It wasn't hard to put two and two together, I purchased some modeling latex, designed finger pads for the handles and sent them off to China for prototyping.
I can't stress how important it is to listen to your customers. The most common thing I kept hearing from my customers, was how great the larger steaming grill was at steaming tortillas. My own testing showed that as long as the tortilla was smaller than the pot the grill was very effective, but for tortillas larger than the diameter of the pot it didn't work. That’s because the extra large tortillas choked off the circulation of the steam in the pot. The solution was simple; place a small dish upside down on the grill and drape the tortilla over the top. This allowed the steam to circulate around the edges. To add value to my product I needed a self contained way to accomplish the same thing. My solution was two perpendicular "C" shaped pieces that popped up and formed a frame that extra large tortillas could be laid over. With these simple improvements The Steamie was born.
At the same time I was developing the Steamie, I was also working on getting the Hotdog Ez Bun Steamer into a test market program that would have it hanging up in 50 to 100 grocery stores next to the Hotdog Buns in the bread aisle. This is where I always believed my product would be most successful. The distributor I was working with wanted me to send them 500 units for free to conduct the test program. In my retail career we always taught our salespeople not to devalue our products and services by discounting them. It was a tough pill to swallow, but after consulting with a few of my mentors I decided to give them the free product they were asking for. I always believed that my product would be most successful hanging up next to the Hotdog buns and at this point in the game the most important thing was to get my product on the shelf. After 3 months of negotiations I received an email that the distributor had decided NOT to go forward with the test program, stating that the economy was too bad to launch such an expensive product. What, a free $10 item is too expensive to test market! Once again the big deal eluded me and I was back to square one.
My first appearance on QVC was a major disappointment, but the only thing I kept hearing in my head was "when the going gets tough the tough get going". The first thing I did was call my biggest investors and give them the results of the show. The second thing I did was measure my garage to determine if QVC decided to return their remaining inventory could it all fit in my garage. The answer was yes but the car would have stay outside. Next I contacted my QVC agent to see if there was any type of deal I could work out with QVC for another appearance. As it turned out, QVC had already realized that many of the products that aired the day that Kennedy died under performed. The news cycle surrounding the death of senator Kennedy was the most news intense event since the death of Michael Jackson 3 months earlier. Looks like I was going to get one more chance.
The last Saturday of every month I attend the Inventors Association of Georgia meeting. It’s a great place to network and talk to other inventors. Each time they have a different guest speaker that talks about different aspects of the inventing process. This month the guest speaker was from a law firm and was going to discuss the legal issues that inventors face during product development. As I was sitting there waiting for the guest speaker to start, the club president came up to me and whispered that the guest speaker was going to be late and asked me if would mind sharing my story, "my inventors journey" with the group?. The first thought in my head was "No I'm not prepared" but before I could say a word my mind had changed and the only thought in my head was "go for it". I had about 5 minutes to get my thoughts together before it was time to stand up and speak to a room full of hopeful inventors. I always seem to do best under pressure and speaking straight from the heart, it felt like I did a good job. Several people came up to me afterwards to tell me how much they enjoyed my story. Hopefully someday in the future I will have the opportunity to speak to even larger groups and inspire a whole new generation of inventors. I believe its important to give back.
A few days later I received my second air date for QVC, 4:00am on September 29th on the Kitchen Clearance Show, at least I got a second chance. In the mean time I received an email from LegalZoom.com inviting me to enter into their "Customer Story Contest" where the winner has a chance to star in the next years LegalZoom.com TV commercials. That was exactly what I was trying to do when I contacted their PR firm back in the spring of 2009. I quickly went to work, writing my story down in script form, making every word and sentence count. With in a few days I was standing in front of my video camera telling my story and how LegalZoom.com helped make it happen. It must have taken me 15 takes to finally get it right, but I made it through my 5 minute story without making any mistakes. Then all I had to do was upload my video and wait.
A few weeks later it was time to head back to West Chester, Pennsylvania and the QVC studios. Counting the training classes I attended, this was my 4th trip to QVC. I finally found a hotel I liked and was just relaxing in my room a few hours before the show when I receive a phone call from the Vice President of Marketing for LegalZoom.com. He said they loved my story were interested in having me do a radio commercial for them, then he added I would still be able to stay in the Customer Story Contest for next years TV commercial. Wow... me and my product in a national TV commercial, now that would be a once in a lifetime opportunity!
It was the middle of summer and time to head back to Pennsylvania for QVC guest host training. Once again QVC showed why they dominate the cable TV selling channels. Before you ever step in front of a live camera you need to pass through their certification program. Three hours of class room training followed by several takes in front of the camera and critiques in between, it was very exciting. I got to work with David Venable, a total professional and a really nice guy. By the end of the day I was a certified guest host and ready to be scheduled to appear on air.
Like most big companies, QVC has very strict inventory requirements. Which means when they give you a purchase order they also give you a specific delivery window when your product needs to arrive. For the first time I was trying to manufacture my product in China and ship it across the ocean. Then import it into the US, truck it from the west coast to the east coast and have it arrive at QVC's warehouse no earlier than August 5th and no later than August 12th, piece of cake right... NOT! Stacy, my importer from Sun Products Ltd, was great. She followed the progress of my order every step of the way. Everything was right on track and then 10 days before delivery, US customs selected our container at random for "an intensive examination". In laymen terms that meant customs was going to go through our shipment with a fine tooth comb and at their discretion delay it for up to 30 days. Its not the first time I got a sinking feeling in my gut and it won't be the last. Lucky for me, my QVC buyer was more accommodating than then the new vendor rule book said they would be. My shipping delay turned out to be not a big deal and soon I had my first airing date.
My first QVC on air appearance was scheduled for Wednesday August 26th. I was so excited to plan my trip from Atlanta to West Chester, Pennsylvania, I couldn't wait to get in front of a camera and start selling my product. QVC had ordered 3200 units and my goal was to sell out in 5 minutes, that way they would re-order and have me back on. I reviewed what I was going to say and practiced my cooking demonstrations over and over again. QVC has two full size gourmet kitchens and a dozen top rated chefs on staff, standing by to help prepare the best looking food for the cameras. Its not a free service but well worth it. These chefs really know how to make the demonstration food look so good for the camera and for me it was one less thing I had to worry about. That morning as I was getting ready for my first QVC appearance, the news reports starting coming in that Senator Ted Kennedy had died. At the time I didn’t give it much thought, I was way too preoccupied thinking about going on TV to give it much thought, after all my dreams were within my grasp. I knew that if I could sell out or at the very least sell a couple thousand units I would be well on my way.
Arriving at the QVC studios two hours before my air time I had enough time to meet with the chef preparing my food for the show; wow, did she know how to make food look great!. After seeing the food she had prepared I was even more confident than ever. With twenty minutes to go, I was getting mic'd up and led into the standby area. Inside the studio its easy to see the organization that has made QVC the number one selling TV channel, these people really know what they're doing. I wasn't nervous, but before I knew it I was in front of the camera and it was show time. Working with the host was fun and it seemed like things were going well and then, in a flash it was over. I was so excited leaving the studio, it felt like things went well, but at the time I didn't know if we had sold 2,000 units or if we sold out. Imagine how I felt when I found out that we had only sold a couple of hundred units, a far cry from my goal or even my minimum expectations. I was devastated... I stuck around in the green room, numb and watching the results of the products that followed me. As the afternoon went on I saw that most of the other products were also struggling. Could it be that America was watching the news coverage regarding Kennedy's death and not the shopping channels? Either way, that sinking feeling in my gut was back, the results were less than one third of what I imagined could have been the worse case scenario. What was I going to do if QVC decided to ship the remaining units back? What was I going to tell my investors? My head was spinning as I waited for my flight to board. What now?
The pieces were slowly starting to fall in place. I had a patent, market research, great customer feedback and a viable cost structure. Now it was all about sales and marketing. 16 months had passed since we attended the International Housewares Show in Chicago and were featured on the 9 o'clock news. We were coming up on our first $1,000 in total sales. It felt like a big deal but if you do the math that's less than $65 per month... not even enough to cover my Starbucks habit! When you factor in the $50,000 I spent to get to this point, you really have to wonder if I had a viable business model. QVC was still a few months off and even with all of the support and training QVC provides only 3 out of 10 new products are successful on air. I knew I had to keep looking for other ways to promote my product.
By this time I had sent samples and spoke to almost sixty different companies, not one wanted to step up to the plate and give my product a chance. The market research indicated that consumers that own a "Hotdog Ez Bun Steamer" loved it and after using it ate more Hotdogs. I was hopeful that one of the hotdog manufactures would see the value of promoting my product and agree to some kind of joint marketing effort. I contacted every Hotdog manufacturer I could find. I hoped to closed a deal with one of the premium Hotdog producers like Nathans, Sabretts or Vienna Beef, but these companies are focused on making a great hotdogs and didn’t have any interested in promoting a little kitchen gadget, even if it did make better hotdog. Early on I had contacted the major hotdog brands produced by the big food conglomerations. It took almost a year, but one by one, I eventually received a generic rejection letters from all of them. If you really want to be an inventor you better be able to handle rejection, because it will be part of your everyday life, if its not your not doing it right! One thing I learned during this part of my journey is "the bigger the company the smaller their vision".
There was a promotion model I was trying to emulate. Subway sandwich shops adopted Jared Fogle as their spokesman, an ordinary guy that lost 245 lbs eating subway sandwiches. Ten years later the name Jared is synonymous with Subway and healthy eating. If a hotdog company wasn't willing to join forces with me maybe there was another company that would.
I was very satisfied with all the Legal services I purchase from LegalZoom.com. I can honestly say that the work they did for me was the foundation and key to my later success. They conducted a patent search, filed a provisional patent, created a trademark and formed my LLC. Each time I used them they exceeded my expectations, maybe there was an opportunity here. In March of 2009 I contacted LegalZoom.com's PR firm to share my story, with in a few weeks I had established a dialog with the head of their public relations team. This is another example of how important it is to build relationships and network with people. In June 2009 I received word that LegalZoom.com was going to use my story in a July press release having to do with summer time inventions. Its was just going to be an online press release, not supported with radio or TV, but it was a start and I was thrilled to be a part of it. This was another step forward and a solid promotion opportunity for my product.
You should never underestimate the value of good training, in fact quality training may be the single most important factor when it comes to consistently delivering an excellent customer experience. Over the years I've conducted and participated in many different types of training, but I have to say that the training program that QVC requires its new vendors to take, was one of the most thorough "non-employee" vendor training programs I've ever been through. QVC really understands their business, what their customers want and have a very clear vision of who they are in the market place.
QVC's sales philosophy is straightforward, honest with an emphasis on value. In a nut shell, when you under promise and over deliver you're always going to have winning customer service model. They do over 7 billion dollars a year in sales and every single product is delivered by UPS; that makes QVC one of UPS's largest customers. To make sure every purchase arrives in perfect condition and works as promised, QVC has an intensive QA (quality assurance) process, if your product doesn't pass QA it won't make it to the purchasing department and you'll never see a PO.
The next topic covered in training was how to properly ship to one of QVC's six warehouses and most importantly what you need to do to get paid. As companies go QVC offers more support and online reports than just about any other company around. Out of all the companies I contacted or tried to do business with, QVC is by far the most pro-entrepreneurial to work with, they are an inventors best hope.
After months of preparation, multiple phones calls to my agent, developing a solid relationship with a Chinese importer and successfully passing through quality assurance, on April 28th I officially received my first QVC purchase order. Now I just have to complete their Guest Excellence class and get in front of a camera. I'm almost home free, or maybe not!
In my 30 years in sales and marketing, I had never been fired, never been laid off or never spent more than a week looking for a job. Now I found myself laid off and unemployed for the second time in 18 months. What's up with that? Clearly I was destine to do something else and in my mind that meant it was time to finish my inventor's journey and bring my product to market.
The larger unit was ready for production so now I had two sizes, the smaller original unit, ideal for cooking hotdogs and steaming buns together; and the new larger unit great for steaming everything from tortillas to lobster. The two sizes could be bundled together and sold as a set, which was exactly what the QVC agents I had met at the International Housewares Show, had ask me to do. Now it was time to circle back around with them and see if they still had any interest. As so often the case in business, people anxious to do a deal with you one month end up not following up with you the next. Its nothing to take personally its just the nature of enthusiasm and the root origin of the phrase "strike while the iron is hot". Disappointment is part of the inventors journey and you just need to keep pushing forward.
Even though I had made several QVC contacts at the International Housewares Show, it turned out to be a personal connection through my mother that helped me present my product to QVC. A former neighbor of hers had relocated a few years early and taken a job with a company that presented products to QVC. A few emails, phone calls and a sample got the ball rolling. On Tuesday January 20th I got the phone call I had been waiting for almost 9 months, QVC was going to purchase 2500 pair and we were in business. This was one of the most exciting events of my life, this was my dream, my invention and now I had my 1st commercial order for almost $20,000.
By this time I had sent samples to over 50 companies the vast majority turned me down without even trying out my product from themselves. How can you evaluate a new product without trying it out? When people are handed my product they don't see much more than a round grill. When I tell them what it does and how it works then they think it sounds like a pretty good idea. But when they experience the Hotdogs it makes they think it’s a fantastic product. This is bore out in my market research as 90% of my customers report that the results my product produces far exceeds their expectations. You would think that several companies would be able spot a new product opportunity when presented to them, but surprisingly enough only 1 or 2 of them even tested out the sample I sent them. QVC on the other hand is always looking for new cutting edge products and encourages their buyers to take chances. Their "guarantee sale" policy is good and bad news for inventors and entrepreneurs. Good news because the buyers are more likely to take a chance on a new product, bad news because if the product doesn't sell well QVC will ship the un-sold product back. Either way, I'll take a shot at a sale over a rejection letter any day of the week, that’s just how successful salespeople think.