Episode #8 - Concept to Market in One Year with Allen Walton of SpyGuy.com [Part 2]

Episode #8 – Concept to Market in One Year with Allen Walton of SpyGuy.com [Part 2]

In today’s episode I’m continuing my conversation with hardware entrepreneur Allen Walton of SpyGuy.com. Allen successfully brought his new hardware product called the Scout to market in only about one year.

My conversation with Allen was so valuable that we talked for nearly two hours. So I’ve split up my conversation with Allen into two podcast episodes.

In part one we spoke about his experiences of starting with an eCommerce store selling products of the same category as the Scout. We also discussed the boost he received from appearing on the Tim Ferriss Podcast, the pros and cons of being a non-technical founder, the advantages of competition, trademarks, patents, online marketing, and more.

Now in part two we discuss the pros and cons of selling on Amazon, prototyping, development, the transition to manufacturing, and lessons learned.

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Allen Walton, Founder of SpyGuy.com

Links mentioned in the show:
SpyGuy.com
AllenWalton.com
Follow Allen on Twitter
Knectiv.com
TheHardwareAcademy.com
Community discussion about selling on Amazon [Hardware Academy members only]

Podcast Transcript:

John Teel: Welcome to the Predictable Designs Podcast where we discuss all things related to developing, manufacturing, marketing, and selling successful new electronic hardware products.

I’m your host John Teel. This is episode #8. In today’s episode I’m continuing my conversation with hardware entrepreneur Allen Walton of SpyGuy.com. Allen successfully brought his new hardware product called the Scout to market in only about one year.

My conversation with Allen was so valuable that we talked for nearly two hours. So I’ve split up my conversation with Allen into two podcast episodes.

Now in part two we discuss the pros and cons of selling on Amazon, prototyping, development, the transition to manufacturing, and lessons learned.

If you are enjoying this podcast it would mean so much to me if you could give it a positive rating in Apple Podcasts or whereever you listen to podcasts. Thank you!

Okay, let’s now continue my conversation with Allen Walton.

John: You’ve been mainly selling SpyGuy– Scout, I’m sorry, through your website spyguy.com. I know also you were on ProductHunt for a while. I’m curious, do you have plans to sell this through Amazon or are you selling it through Amazon? What about brick-and-mortar retail chains, are they in the plans?

Allen: Yes. One of the things about my store that I always get asked about is, “How come you don’t sell on Amazon?” We’re 100% on our own website. There are a lot of reasons we don’t sell on Amazon. Some of our products are actually like on the prohibited items list. We can’t sell them. Other reasons are a lot of people buy our products and then they use them and then like 72 hours later they got the answer that they needed and want to return it. Amazon has 30 day return policies. It’s hard to stay in business when people use you as like a rental company.

John: That’s a common, I feel like– I remember at some point many years ago I felt like Best Buy and stuff, they started doing that with maybe as camcorders or something like that because people would just buy them, take them on vacation and then want to return it a week later.

Allen: That’s part of the reason. I’m open to the idea of putting this on Amazon, but every time I say that suddenly I hear a horror story about how Amazon decided to make their own version of it, an Amazon basics thing or like they’re they have a Amazon company. It’s like one of their brands that they decide to go ahead and make it like their own version of it. Then you get all of the all of the FBA people, they see that that is selling using like Jungle Scout or something like that. They decide that they want to go ahead and copy it and you get the Chinese counterfeiters and everyone starts attaching themselves to the listing and selling it at like below your cost somehow. That’s just not a game that I really want to play.

John: I can understand that, but I think that’s always going to be challenges you’re going to face when you, want to go scale it really big because the bigger you get, the more attention you draw, the more copycats. If Amazon’s going to try to copy your product, you obviously must be doing pretty well with the product by that point. They don’t, really copy unsuccessful products.

Allen: I can tell you that I hang out with e-commerce people. That’s my thing. I like e-commerce and I hang out with people all the time and I constantly hear horror stories about how their listing got pulled or Amazon came out with a competitor, or maybe like Amazon actually showed an ad for a competing product on their products listing page. I constantly get contacted by people who want to get off Amazon and build their own Shopify website and build their own audience. It makes me think maybe I’m missing out on a bunch of sales from Amazon. Could be, but life’s pretty good not on Amazon.

John: There’s something to be said for controlling all of it as we haven’t really talked about, but if you’re selling to retailers, whether that be Amazon or Walmart, first of all, they’re not going to pay you when you deliver the product. It creates all these cashflow issues. I guess you have that somewhat if you’re selling it yourself, you have to sell through your inventory, but they will a lot of times not pay you for 30 to 60 to 90 days after they receive the products. That’s really challenging. Or they may ship back unsold product to you. All of a sudden you find there’s this big order for Walmart and the product didn’t sell and they want to return it to you and now you’re stuck. There’s definitely it a lot of complexities and challenges that you open up as you try to go bigger.

Obviously, if you sell it through your own website, you retain the most control. For a lot of people, if you don’t have any traffic or any brand awareness then that’s obviously also challenging, but that’s obviously a benefit that you have is that that you had a website that was already well known and has been up and running for quite a while. I would just like to say for you and then for any listeners that we actually had a really great discussion on Amazon, the pros and cons of selling your product on Amazon in the Academy community. There was a thread where there was a quite a bit of back and forth, some saying go for Amazon, some focusing on the con. Anyway, just mentioning that if you’re start looking into that again, you may want to take a look at that post and I’ll include the link [only works for Hardware Academy members] in the show notes for this interview.

When you started the Scout, did you have any type of proof of concept prototype or did you– this is something challenging to do because it’s handheld and it’s small to do like an Ardwino or something like that. I assume. Did you start with just doing the full custom version of the design?

Allen: Starting out was really hard. First of all it was really hard for me to find an engineer. I did not trust finding anybody on the internet. I didn’t know where to go. I think I went to Upwork and I posted a couple of job listings on there and just asking how the hell do I get this thing to work, what’s needed here? I did post a couple of jobs on that. It was nice getting on the phone with an engineer to explain how things worked. A lot of it went over my head, but at least I came away feeling like I had learned something. After that I just started poking around my network. I knew that this was a product that I wanted to do.

I didn’t know any engineers personally, but I remember asking just my network of friends, “Hey, do anyone that’s like an engineer? Are they local? Do they have the ability to just like get lunch with me so I can ask them about this? I’ll like pay for their lunch and everything, we can go somewhere nice.” I remember not having any luck with that until one day I met for lunch with a friend of mine. His name’s Mark. He owns a business here. I’m in Richardson, Texas, which is just North of Dallas.

John: That’s where I used to live actually. I lived in Plano, which is just, I think just–

Allen: North of– no, it’s right there. Stone’s throw. We’ve, we’re grabbing lunch and I was telling about, I was having trouble finding an engineer for my product and he goes, dude, I used to be an engineer. I have a couple of friends that I can page and see if they’re interested. Me and him actually grabbed lunch with two other people. One of them, a really nice guy named Richard. He builds electronics that go on airplanes. I can’t remember exactly what it is, but I know that he is constantly going to Florida so that he can like ride around on a boat and fly planes and all this other stuff.

We grabbed lunch. I just showed him when I was trying to do, I had a couple of different bug detectors I was selling at the time and I showed them all the other stuff that was available. I gave them to him, he broke them down, came back with me like within 48 hours. He’s like, “This really isn’t much. I’m ordering parts off of Mauser.” I think there was one other website and I can’t remember what it was, Digi-Key maybe. “I ordered the components. There’ll be here in two days. Here’s my receipt, just reimburse me on this.” Which of course I did. Then a couple days later he’s like, “All right, I built this thing, here’s the circuit board.”

I had roughly told him like what shape I was trying to get the product to look. This was before I met the industrial designer, but he made it look the same way that I had envisioned it. I drove over to his house and we tested it and it works. I couldn’t believe it, that within a week of meeting him, he had made something that actually works the right way. He had like hand soldered everything with a buddy of his at his job. We had like a working prototype within a week of me finding this engineer, he was just doing it in his spare time.

John: How come you ended up migrating from him to working with Nick Frank at Connective? I assume this first engineer was just for your proof of concept prototype, but not a production version?

Allen: Well, I didn’t. We had that circuit board. It worked, but then I was like how am I supposed to get this thing into a plastic enclosure? I want this enclosure to look really cool. I didn’t know what I needed. I didn’t know what an industrial designer was at the time, I don’t think. I started poking around and I found out` I was at a hanging out with a friend of mine. It turns out he had went to SCAD, a design college. What does that stand for?

John: I don’t know. I’ve never heard of that before.

Allen: I’m looking it up right now. Savannah College of Art and Design. He had gone there and had a degree in industrial design, I think. He told me exactly what I was looking for and I started poking around my friends, seeing if they knew anybody like this. The guy that was running my marketing stuff at the time, I had a marketing agency. He goes, “Oh , actually my brother’s an industrial designer. Let me introduce you.” I chatted with him. He was too busy, but he referred me to another person. His name is Eric, and he was down in Austin, Texas. I drove down there, we grabbed lunch. He had like this giant drawing pad that he brought to

Lunch and over the course of like two hours, we started sketching out what this thing was going to look like. He came up with, I’m really accelerating how quickly this all happened now.

John: Yes, you’re making it seem so easy.

Allen: Over the next six, eight weeks I’ll say he had come up with a couple of different sketches. He made a rendering of it, like a 3D render of it. Then he eventually designed everything so that it would– I’m trying to think here. I remember that the engineer, Rick, he had exported everything into Eagle or something like that.

John: That’s a piece of edesign software?

Allen: Yes. Then he had also exported it into some other like open-source file that I can’t think of at the moment.

John: Maybe Gerber’s.

Allen: Gerber files. Gerber files and one other thing and I just handed them over to the industrial engineer. Then he imported the Gerber files. We had this one big file that had everything that we needed for this product. I was getting really excited. Then things came to a halt because I, I didn’t know where to go from there. I’m like, “Okay, excellent. I’ve got this enclosure. That looks cool.” But the industrial engineer doesn’t know anything about plastics engineering. He just knows how to make something look really cool.

He’d actually previously worked at is it Oxo? O-X-O, they make home goods like appliances and coffee makers and all this other stuff. We made it look really cool. I just didn’t know where to go from there. How much [crosstalk]

John: That’s interesting. He was a professional industrial designer and he didn’t have an understanding of injection molding production?

Allen: That’s not true. He did understand a lot. He had a generalist perspective of it, but he didn’t do a DFM.

John: Got you.

Allen: Design for Manufacturing. There wasn’t uniform wall thickness, there were a couple of other issues that I can’t remember since this was a while ago. He’s like, “Look, you got to bring a plastics guy in here. This is not my forte at all.” I just didn’t know where to [unintelligible 01:12:16] I started poking around with sourcing agents that I met previously when I’d flown to Hong Kong and attended trade shows. They were no luck.

Sourcing agents over there, they’re not used to electronics at all. At least I wasn’t able to find any that could help me do that. I also tried using a couple of online services, like Novella was one of them. Sourcify is another good one. Actually, I know no Nathan over at Sourcify, a really cool guy. Basically, it’s you upload all of your files for them, and then they have a network of factories that they’ll speak with, and they’ll get you quotes and all this other stuff. That was really, really cool. I’d totally use them if I wasn’t doing electronics.

Because frankly, when they would come back at me with pricing and all this other stuff, it just didn’t jive with what I was reading on your website or just what I was seeing on the internet. Their pricing just seemed too low and they weren’t very specific at all. They’d say that they could do it but then I’d asked certain questions and I wasn’t getting a complete answer.

John: Yes, you have to always be careful. Someone that I’d interviewed on another podcast, he does manufacturing in Taiwan and he had a great point that don’t ask them if they can do it, ask them how they’ll do it because it’s very common in China to– I don’t think they’re being misleading but it’s just their way of-

Allen: They over promise and [inaudible 01:13:48]

John: They over-promise. “Oh, and no problem. We can do that. No problem.” Then as soon as you ask, “Okay, well, no problem. How are you going to do this then that’s usually where you start to see-

Allen: Or they’ll say it’s no problem and then they do it but then they compromised on something else. They started using a lower quality material or [inaudible 01:14:05]

John: Yes. They don’t tell you that.

Allen: No, they don’t.

John: They don’t tell you the con side of it. They just give you the pros that you have to [unintelligible 01:14:13]

Allen: Yes. I was getting a lot of that. I just felt pretty defeated. There was a several month period in there, probably a six-month period after I had all the files that I needed, for the most part. We still needed the DFM, we still needed some other stuff sorted out, the bill of materials, the cost was too high. Apparently, a lot of the components that were originally suggested– he had used all American components, which have a high price point and lower– what is it? Lower worldwide quantity or whatever, like you actually see how many of those were available for purchase. I’m like, “They don’t have enough components here.” If I ordered the amount of components I needed, then it would have been they added six months or something like that until those components would be available, if I’m remembering correctly, at least.

I felt pretty defeated. After I was on the Tim Ferriss podcast then I mentioned that I was having trouble with hardware is when I started hearing from everyone. Nick reached out, got to know him a little bit, I showed him what I had, he was like, “Okay, so here’s what we need to do, we need to actually design this thing so we can manufacture it at scale. We need to rework this board so that we can get lower costs. The injection mold, we got to make this injection mold, but there’s not uniform wall fitness and X, Y, Z and we need to use this.

He was able to bring everything that I needed to get this thing over the hump and like drive it across the finish line. We ended up teaming up on this. There was some upfront like development costs because they had to rework a bunch of stuff to make it so we could actually make this thing in large quantities and at a lower price point. They did that. It was like, let’s just say it was probably about half a year of that sort of thing. We ran into some problems, I mean, everyone runs into problems.

John: Oh, absolutely.

Allen: Some of them were like the factory in China’s fault or some of it was me just being indecisive or taking too long to respond. It went a little longer than I would have liked. We were able to get the product launched. We figured out we had a couple of issues that need to be sorted out with the enclosure itself. With packaging, we wanted to get the packaging, right. We had to get FCC certification, trademarks, that sort of thing and we ended up launching the product. I guess it was about eight months or so after we started teaming up. Also, I needed to set aside money so that we could actually pay for the initial MOQ. Man, I just kind of rambled on there for a little bit, didn’t I?

John: Yes, I know you said there were some delays that you ran into, and you would preferred it to be maybe a little bit faster. Overall, I think you did a– you and Nick did a really good job of getting it to market quite quickly. It does-

Allen: Yes, all things considered, we absolutely did. Maybe I don’t appreciate as much as somebody else that has had more trouble than me. I guess you could say. Just how quick we were able to get this thing launched.

John: Well, I think everyone if it’s something you’re not familiar with, I think in general, everybody underestimates the work, the time.

Allen: Oh, yes.

John: The cost and everything.

Allen: Twice as long twice as much [unintelligible 01:18:07] that.

John: Yes, exactly. I think you did a pretty quick development time. I was quite impressed when I knew that it was less than a year that you had gotten it to market. I think that’s actually quite good. I don’t think you would have probably been able to-

Allen: Less than a year after I brought Nick on. Yes, it was still probably– If you want to say it was probably an additional year of me trying to figure out what the heck is going on here.

John: Yes, and that’s still a pretty good time.

Allen: That’s just because of me not being technical.

John: Yes. Or just imagine I think you would have found that you probably wouldn’t even have the product on the market if you went for the let feature creep takeover and added the signal detector and all of that you would probably still not be quite to market yet. I think-

Allen: Yes, you’re absolutely right.

John: That’s one of the benefits of keeping the product simple. Now that you’ve gone through the entire process from having an idea to getting it developed, to manufacturing it, to selling it. Are there any big lessons that you’ve learned that we’ve not talked about yet that things that you would maybe do differently? If you had to do it all over or for the next product that you’ll do differently?

Allen: If I had to do things differently. Man, give me a second to think about that.

John: I think you’ve kind of hit on a few things. You mentioned that I think that your assumption about not needing the signal detector, you wish that you had done that differently. I’m not sure that that was the– I tend to think you made the right choice on that. I don’t know if there’s anything else. If not, that’s fine as well. I know it’s sometimes difficult to summarize everything you’ve gone through and try to come up with some grand lesson learned from that experience.

Allen: Yes, there was one thing I would have liked to try but I didn’t get the chance to so I’m kind of side stepping your question here because I can’t really think of [crosstalk]

John: No, that’s okay. Go for it.

Allen: I can’t really think of anything that I really regret. It was a really great experience coming out with my first product. I remember when I came back from picking up the prototype that my engineer friend Rick made, I couldn’t believe it. I held it in my hand and I remember thinking, “Wow. This is my product and I can sell it and it’s going to have my name on it-“.

John: Yes, it’s pretty exciting.

Allen: It was super exciting. It lit a fire to keep going, right? I’m still excited about it, every time we get a sale on our website, I get excited about it. Every time I get a media feature, it’s fun, right? I like making my own products. As far as what could I have done differently to make this thing launch faster or have bigger success, honestly, if I’d priced this thing– I’m still not certain that that this is the case. I think that maybe I priced it too high. Then again, if you’re going to make a mistake on pricing, it’s better to price it too high than too low.

John: Oh, absolutely.

Allen: If you price it too low then you can make– yes, you could lose a lot of money that way. You’d run into problems with cash flow. It’s really hard to raise the price on something so soon after launching.

John: Absolutely, yes. It’s much easier to go lower than higher for-

Allen: Yes, without a doubt. Yes, maybe if I could have been a little bit more accurate with pricing, then that probably would have been cool. I’d really thought about doing Kickstarter for this because I thought I had a little bit of a viral component. I ultimately decided against it because I have friends that have done Kickstarters, successful ones like seven figures. I consulted with them and they were like, ” No, don’t do it. Kickstarter is like a dead platform”. You have to bring your own audience-

John: Oh, absolutely. Yes.

Allen: Yes and so I decided against that. I was thinking that maybe– I look back and I’m still, you know, I could have tried but-

John: I’m assuming that you self-funded everything yourself. Is that correct?

Allen: Yes, I did.

John: Okay.

Allen: Yes, so to get back to one thing that I wish I had tried at the time, was I wish that I could– maybe I could have done this but my wife was pregnant at the time so I would have felt guilty but hopping on a flight over to Hong Kong in China and hanging at the factory for two weeks. If I could have just done that and found a factory that was willing to work with me and we could get across the language barrier and just hang out there for like two weeks I feel like I could have got a tremendous amount of progress done. Just by doing that. I had previously communicated with factories by email and it would just take forever, right?

John: It is, yes.

Allen: It would just take forever because you’d email them and they won’t respond for like two days and then when they do respond, they’re like, we don’t understand. Or they didn’t answer the question correctly-

[crosstalk]

John: Yes, they’ll just one in five questions or something like that.]

Allen: Yes. You get tired then you hop on Skype, like let’s see if this goes any faster. Then it’s like 1:00 AM on Skype, local time. It just becomes a really big drag but I’ve had numerous friends have success with this. I’ve been over there and I know just how much faster it is to do things when you’re right there. If I could have just have posted myself up for even two weeks, I feel like we could have gotten a lot done. I could have built a really solid relationship with a factory or mutiple factories, I don’t know. I think we could have moved a lot faster as a result.

John: Yes, that’s definitely one of the advantages of doing things, at least initially, locally or domestically. Not necessarily in your home town but at least on the same side of the globe that you’re on.

Allen: Yes, and I probably- [crosstalk]

John: The time differences and communication and it’s like those are all challenging, especially in the beginning when there’s so many things you’re still figuring out. Whether that’d be development or getting manufacturing set up. Eventually most products will need to move to China for manufacturing just to get the margins. Initially, if you can do maybe low volume for the first few 100 units locally or I would a lot of times recommend like a hybrid strategy, that I call, where you have the PCB and enclosure and everything manufactured in China but then you import it and you do all the assembly and testing and packaging yourself. Just because you can control it better. Each strategy has its pros and cons, definitely.

Allen: We’ve been talking for a little bit so hope we’re not boring everybody. If it’s possible, I’d like to just add one more thing.

John: Go for it, I don’t think you’re boring anyone. This is all really good information.

Allen: I haven’t thought about this in a little while but as we start talking about it, I start thinking of more and more things. I want to say that there’s several different paths that you can go down that I tried going down and they didn’t really work for me but they might work for you. Or let me explain why they didn’t work for me. The first one is if you’re going to go to– if you want to try and talk to a factory in China, then it’s really hard to just approach a factory just cold. Like by email. They really don’t care. They often have more business than they know what to do with. Having a Westerner email them, kind of just poking and asking questions and stuff, they couldn’t care less about that sort of thing, right? If you want to show that you’ve got some skin in the game, you should hop on a flight and go to the Global Sources Summit. Are you familiar with this?

John: Yes.

Allen: Okay. There’s a Global Sources event which is like a three phase event and then they have a summit where they teach you about selling on Amazon and dealing with Chinese factories or digital marketing. A really good summit, I like it a lot. I’ve been a couple of times. It’s almost always while phase one of the exhibition is going and phase one is electronics. They just have a massive expo full of booths from people who have come from Shenzhen or wherever and they want your business. They paid to send their team out to Hong Kong and they’ve been vetted by Global Sources. They’re real businesses, not training companies. You can go and you can meet with them and when the conference is over, you can hop on the train and go in and they’ll pick you up and give you a tour of the factory and take you to lunch. That’s how you can build a really good relationship. I think that there might be listeners of yours that find that really exciting and they know about electronics. They can know if the factory is like the [unintelligible 01:17:19] them or not.

That’s one way. The second way is to use the online sourcing thing like Novulane or Sourcify. I didn’t have a whole lot of luck but mostly because I didn’t really know what I was doing either when it came to electronics. I couldn’t call the factory out and be like, “I don’t think this is right”. Another thing that I had previously tried working with Macrofab down in Houston and then Fictiv [crosstalk] out in San Francisco.

John: I know both of them.

Allen: Yes, so they have really good resources on their website and they’re really cool to speak with. Macrofab in particular, actually both of them, they both have this really cool feature where you can upload all your files and they’ll point out problems-

John: I’ve seen that.

Allen: Yes, really cool. I kind of thought about doing business with them but I still didn’t feel like I knew enough to do it myself. It still felt like the price point was slightly too high for me. Then also– there was something else– I didn’t like the idea of having two different companies do it. Fictiv doing the injection molds and then Macrofab doing the hardware stuff, right? I felt like there was just too many variables to actually get it correct with me not knowing what I was doing. [crosstalk]

John: Usually– if you don’t have the technical skills, usually it’s best to have one place do everything.

Allen: That’s where Nick of Connective comes in, so he was able to take care if all it for me. We opened up a Slack channel and sometimes we’d hop on the phone or like I would be in Austin and so we’d meet up. Just a couple of times, nothing– almost everything was done in Slack, actually. It was really nice because I could speak in plain English during the day, I didn’t have to go anywhere. He was able to handle the hardware and the plastic enclosure and the packaging and then handled all of the quality control. Got it shipped out here to me and everything had ended up fine [chuckles]. I was really excited about that. Having that partner allows me to– and we have other products that we’re developing right now which is really exciting. We’re going to take some of our best-selling items and then just make our own version of it.

John: Okay, cool.

Allen: Immediate hit to our bottom line– not a hit actually. A boon to our bottom line. It’s really great, I don’t have to think about engineering at all. He asked me a couple of questions like what color do you want this thing, what’s the battery life? What size memory card needs to go inside of this? I tell them and then that’s pretty much it. They just make it happen, and I get to focus on bringing more customers to my website and getting press for the company and growing the company instead of getting neck-deep in hardware stuff that I don’t know anything about.

John: Absolutely. Now, that’s a great point. It’s can be sometimes hiring a firm that does everything well, can be a little more expensive at least when you just sort of do the estimates versus hiring freelancers. You may be able to hire freelancers for a lower hourly rate, but now you have all these engineers and developers and you’ve got to be the one to make sure everything fits together. You may have the electrical engineer blame the firmware programmer who blames the mechanical engineer for something that’s a problem.

Allen: We had a little bit of that for did they connect two things? The industrial designer and the circuit board guy, we had a little bit of conflicts there. I was the middleman too. I was the bottleneck in all of this stuff too, so it’s like a little triangle of conflict going on.

John: Yes, absolutely. I think that’s a great point. One thing I would like to mention as far as you talked about, as far as finding a manufacturer, and that the Global Sources conference that you recommend going to which I think are really great points, and you’re totally right that most manufacturers there if you just cold email them, they’re not going to give you the time of day. I do think there’s one exception, and that’s the exception that I use for my product was, I already had it developed enough that I had presented it to Blockbuster Video and had them give me written interest in the product. By having that and being able to leverage that I was able to find a manufacturer just through a cold email, and they actually flew from China to Alaska where I lived at the time to meet with me.

Allen: Wow.

John: None of that would have happened if it wasn’t for having the customer, a big customer having expressed interest. Otherwise, they would ignore me just like you said. I just want to throw that in there as another option if you can get a customer express interest that’s well known before you find a manufacturer that makes everything easier. I was able to get salespeople on board that I wouldn’t have been able to get if I hadn’t presented it to Blockbuster myself and gotten them interested in it. Because now salespeople felt more confident that they could get other retailers to buy it. I just wonder-

Allen: I love it.

John: Put that in the mix as well.

Allen: That’s really cool. I wish I could have done that.

John: It’s not going to work for everyone but it worked for me. There may have been some luck involved in that as well, but that’s just a strategy that I’ve recommended because it worked for me. Okay, wow, I could talk for hours I think. This is so good, and I think we’re coming up on an hour and a half. I just want to maybe wrap up by asking, now that you’ve manufactured the products, at least a few thousand units– I’m not sure of your production volume, but you’ve at least manufacture probably a few thousand units, and you’ve done some sells have there been any big things come up like product tweets that you want to do or any manufacturing issues that you’re going to optimize in the future, anything like that that you’ve learned?

Allen: I feel like most of the manufacturing issues were handled before we did our full run, so like they printed off a couple of samples off the production line. Although they weren’t like 100% perfect, Nick made it clear that once we did the full-scale production that those problems would be fixed. They sent over a couple of samples, I would explain like, “Oh, we noticed that they’re like these weird markings on the back of the unit”. All I would do is I would take a photo of it, and then I would mark it up. I used a thing called Cloud App, and it lets you annotate and draw stuff on photos. I would just do that real quick and I’d circle if you see there’s a blemish right here or like this LED. The product has six LEDs and this one is off for some reason, or like the battery compartment didn’t fix-up. We had a really weird issue with the battery compartment where and I have to tell you this, I know we’re going over but I got to tell you.

John: No, that’s okay. Go on.

Allen: There was this one issue that was driving us crazy and we couldn’t figure it out. Because every time that I would send over a sample unit, I’d shove some, like Amazon basics triple-A batteries into it, and the way– the enclosure’s four different parts and when I would shove these batteries in, it would expand the enclosure and it wouldn’t look right, and the button on the device wouldn’t work at all. I’m like, “What is going on here?” The factory in China, they’ll send us a video of them putting triple A’s in, and it works completely fine. The same exact sample unit that we got. We later found out that the triple-A batteries that they had over at the factory in China were smaller than the ones that we had here in the US. I don’t even know how that’s possible. I thought this was like a standardized.

John: Yes, that’s a standardized size. That I think-

Allen: Well, I could tell you right now, the ones they had over there were smaller than the triple A’s we had over here.

John: Oh, wow.

Allen: Just a matter of a couple of millimeters I guess was the difference between the product, working and looking and feeling exactly the way it needed or the product exploding and the button being all mushy and not working and all sorts of stuff. We had to fix that issue. That was just such an annoying issue that we just couldn’t figure out why it wasn’t working after they sent it over to us. Those were [unintelligible 01:36:08].

John: I can see you that being sort of a thing. You’re like pounding your head on a wall trying to figure out. Because you just sort of, obviously for the longest time made the assumption that their battery size is the same as what you’re trying and maybe you’re like, “Are the laws of physics different in China or something?” I don’t know.

Allen: Well, I think we’re going to change the packaging just a little bit. We had included a real pinhole camera with every Scout unit, but that adds up costs pretty quickly, and so we’re making a little like a fake camera using an infrared filter, and just like some plain plastic that drastically reduces the cost. It works the same way but it’s not an actual like real camera with electronics in it which we’re currently offering.

John: Oh, okay. I didn’t realize that. I didn’t realize you were including a real camera.

Allen: A real one. That was the last-minute thing. We realized that customers were going to get this product and they like didn’t even know if it worked or not, or maybe they don’t have a camera that they can test it on. If we do it on an iPhone, it doesn’t work all that well because it has like a mirror-like finish, like glass or whatever. It makes it really difficult to actually get the product to work correctly. We included a real pinhole camera because we knew that once people actually tried it and saw how it worked, then great, they love it. The cost is just so high so we’re dropping the real camera and replacing it with like a fake one that works just as well, and has a way lower cost.

Then also we call it Scout the hidden camera finder and using Atrust, which is like an SEO tool, we found out that search traffic is way higher for a detector. If you do hidden camera finder versus hidden camera detector, there’s significantly more searches for a hidden camera detector than there are hidden camera finders.

John: Oh, that’s a great point. That’s a good thing to mention is do some keyword analysis to see what people are calling the product?

Allen: For sure.

John: That’s really good. Because I think a detector to me, I could see that’s what I would Google and not finder.

Allen: I don’t think there’s a whole lot, I think we really polished this thing before the first run. Other than those couple things there which don’t really have anything to do with like the Scout, it’s just like accessories or packaging. I think we’re good to go.

John: Yes. Well, that’s great. That’s great. You already mentioned that you’re working on future products. Is that correct?

Allen: Yes we are.

John: Great.

Allen: We’ve got a couple in the pipeline here. Hopefully, we’ll make some more progress on it than we have in the last a month or so since the virus broke out.

John: Yes. I think that’s obviously impacting a lot of people not just-

Allen: I’m actually really concerned about that. I feel like if this thing keeps going like another two weeks or so then I feel like there’s going to be a lot of businesses hitting the dirt here.

John: Absolutely. Already there’s been some good conversation on this in the Academy as well. Because I know one member he had promised a delivery date by a certain date and now he not going to be able to meet that because of the Coronavirus. It’s definitely going to have a worldwide impact.

Allen: I’m a member of a couple of different forums like, sorry to interrupt you, like the hardware forum. I’m in an E-commerce forum, and then one for location-independent business owners, it seems like an online forum for people who run online businesses, but they like are digital nomads, I guess you could say. A lot of those guys are manufacturing products too, mostly soft goods but they’re all concerned because they’re out of inventory and they’re not getting a whole lot of communication from the factories. A lot of them haven’t even come back from China yet.

John: Yes. I think there’s a lot of unknowns of exactly what’s going on there. It’s small companies and big companies that are worried. I know I told my wife because we had learned recently that ibuprofen is– I don’t know. It’s like 99% of the stuff comes from China so they have inventory that pharmaceutical companies have enough back supply to maybe get by a month or two but after that, they’re going to– Even something like Advil, I can see coming in short supply. I was telling my wife, she may want to stock up on that before it becomes unavailable.

Allen: Yes. Well, hopefully, this gets cleared up soon.

John: Yes. I hope so. Hopefully, the warmer weather also will help kind of tame it down some. Well, this has been so fantastic. I so appreciate you coming on and sharing all of this. I know it took a little doing to get this call scheduled. I think you had something come up. Then I caught the flu and so we had to reschedule a few times. I just really appreciate you taking at least an hour and a half of your time to share all this. I know you don’t necessarily get a lot of benefits from sharing all this so I just really appreciate it.

Allen: No. I don’t get any benefit. If anything, I’m just going to have all my competitors listen to this thing and figure out what I’m doing.

[laughter]

John: Yes.

Allen: But I like meeting people so if anyone heard this and they enjoyed it, then let me know. Plus, we have a whole bunch of other stuff that we didn’t really even talk about [crosstalk].

John: Oh, I know. I definitely would love to have you come back on later because honestly, I skipped through a lot of the questions I had for you just because we didn’t want this to go on. I know Tim Farris does like two, three-hour podcasts but normally I try to keep this about an hour or so. I’d love to have you on down the road at some point and we can talk more about maybe your progress on your new products or something at that point as well.

Allen: Yes. Okay. I’d be happy to do that.

John: Can you just maybe tell listeners– I think everyone knows spyguy.com. Is there any other way for them to find out more information about you, Linkedin profile or is SpyGuy the best way to find you?

Allen: I’m on Linkedin. I don’t really check it at all. At all. Best way to contact me, you can email me. It’s just allen@nullspyguy.com. Let me know if you like this, I guess. I’m on Twitter, really active on Twitter. Twitter handle’s allenthird. I’m the third Allen in my family. I don’t know. All the good Twitter handles were taken. Active on there. There’s a really really great e-commerce and direct to consumer community that’s active on twitter so highly recommend it. A lot of good SEO and digital marketing people as well. I don’t know. I’m big on Twitter, man. I only add friends on Facebook so don’t bother. That’s pretty much it. If you want to know more about me, story, whatever, I was on the Tim Farris podcast so you can give that a gander.

John: Yes. I recommend everyone listen to that. I had listened to it several months ago. I think it’s good for everyone to listen to that so that’s great.

Allen: Thanks. Tropical MBA had a podcast with me as well. Really great business podcast. If you just like the idea of talking about businesses in general, I highly recommend it. It’s one of my favorites.

John: Yes. I know that podcast. I’m a podcast junkie so I listen to a lot of podcasts. I love podcasts because I can– It’s the only way I found where I can learn while doing other things. Being an entrepreneur, you have a million things to do. You can’t just always be sitting in front of your computer so I love to learn while I’m out hiking or driving or whatever. It’s a great way to squeeze some more education into your life.

Allen: Yes, man. Other than that, that’s– Well, I also have my personal website which is allenwalton.com. It’s long-neglected. I’ve only got a couple of blog posts on there but I do have an email list that you can sign up for. It’s just kind of like I’ll send stuff out that interest me, stuff that I found on the internet that I found useful in some way. Typically it’s like e-commerce or personal development and a little bit of hardware stuff too.

John: Okay. Well, this is great and once again, I really appreciate this.

Allen: Yes. Thank you for having me.

John: Okay, that’s it for today. Be sure to tune in next week for another episode of the Predictable Designs Podcast.

Episode #8 – Concept to Market in One Year with Allen Walton of SpyGuy.com [Part 2]

Episode #8 – Concept to Market in One Year with Allen Walton of SpyGuy.com [Part 2]

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