The Unintended Value Proposition That Sold Over 35 Million PopSockets

Transcript

Felix: Today, I’m joined by David Barnett from PopSockets. PopSockets is a unique smartphone accessory that provides multiple kickstands, management for your headset, and ergonomic grips for your texting, calling, and gaming convenience. It was started in 2012 and based out of Boulder, Colorado. Welcome, David.

David: Thanks very much for having me, Felix.

Felix: Yeah, so we were just talking a little bit off air about how much I’m a fan of your products, and I’ve purchased your products in the past before. I think I’ve had three or four over the years from different cell phones that I’ve used; and I’ll recommend them to anyone that has a cell phone. Especially for me, I live in New York and it’s super convenient for me on the subways to be … essentially have one hand free to hold on to the … bars when the trains are moving. For anyone out there that doesn’t know about what a PopSocket is, can you describe how it works?

David: Sure. A PopSocket is … It looks like a one and a half inch diameter button that sticks to the back of your phone or a case, and then it expands out about an inch, an inch to an inch and a half. It expands out away from the backside of your phone by way of an accordion mechanism. It’s kind of a soft … elastomer material. The accordion, it pops out; hence the name ‘PopSocket.’ Once your PopSocket is expanded, … the most valuable function is the grip; as you said. You can pull your hand out from behind the phone and access the whole screen, because you no longer have to use your hand to hold the phone and then try to type with it. If you’re trying to use your phone with one hand, you can pull your hand out and use that grip to allow your thumb to access the whole screen safely without dropping your phone.

As you mentioned, it can also be used as a stand, different angles of stand. I initially invented as a headset management system with a pair of PopSockets. You can use them to clip your phone on clothing, … and as a fidget. So if people get addicted to playing with their PopSocket … I’m not sure if you play with yours, David.

Felix: I definitely do. It’s certainly a tick of mine that I’m sure annoyed my neighbors when I’m playing with it.

David: Right.

Felix: Now, I think that’s a great description. For anyone that still needs a more visual look at it, definitely check out the website at PopSockets.com. You mentioned that you had originally invented this for one of the purposes that it turned out to serve. How did you come up with this idea? What was your process for coming up with a product like this?

David: Back in 2011, … I was tired of my headset tangling, my earbuds. I always talked on the phone with earbuds. I didn’t like holding my phone up to my ear. Every time I’d take them out of my pocket, they were in a knot. I was tired of that, so I can vividly remember just walking to my car and driving to the nearest Joanne Fabric sort of hobby store to figure out a solution to this problem. I walked around the store, found some giant clothing buttons. First, I tried gluing one to the back of my iPhone 3 back then. Of course, I needed to put a little spacer between it and the phone so there was space for me to wrap my headset around it.

The big microphone on the earbuds didn’t wrap nicely around a single … button. I decided to turn it into a two button solution. I had two giant clothing buttons glued to the back of my iPhone 3. Each had a little spacer button hidden underneath it. Then, I would wrap my headset around these two huge … They were like two inch diameter, big black buttons.

Wrap my headset around the two of them and it worked great. My problem was solved. … I had no intention of taking this to market. I just wanted my headset to stop tangling. Then, as more and more family and friends saw it, you’re probably expecting me to say they encouraged me to take it to market; but in fact, they laughed at me and said that it looked really stupid … and that I should be embarrassed to have it on the back of my phone. It was just the opposite.

I decided to start tinkering with ways to get the buttons to expand and collapse. The thought was to develop a case where the buttons would collapse flush with the backside of the case. Users, including myself, could wrap their headsets around these two buttons and then collapse them over the headset so that they wouldn’t stick out from the case.

I launched a Kickstarter campaign around that case in 2012. It wasn’t for another six months that I … invited the current product, the popular product. [inaudible 00:05:25] … that sticks to cases and phones, and can be repositioned. I invented that because I was unhappy with the case.

When I showed it to friends, family, students; I was a teacher at the time. I noticed they all used it for the grip, but very few people actually used it for the headset management. They liked a couple of the functions that … I wanted it to have, but I originally invented it for the headset management. It just wasn’t ideally designed for the grip, because the PopSockets … One was on the top of the case, and one was on the bottom. We needed the grip right in the center, the PopSockets grip. That’s when I invented the standalone so people could position it wherever they wanted … and launched the business on the Shopify platform around 2014 out of my garage.

Felix: Got it. When you … You mentioned that you, the original intention was to help you store your headphones, your headsets.

David: Yeah.

Felix: The cables without having to have it all tangled. That was the original reason for the invention, but then you started seeing people were using it for other reasons, right? For the grip. Your reaction wasn’t … a reaction where you were like, ‘Oh, you’re using it wrong. Let me teach you how to use it. Let me force you essentially to use it the right way.’ Your reaction was, ‘Let me see why people are using it this way,’ then invent a product that improved that kind of … at that time, the secondary benefit. Why did you … How did you know to go in that direction, rather than trying to force people to use it more for the wires. To be honest, I have actually never used it for the wires. I use it only for the grip and for the stand. I wonder how did you know to go along with what people were using it for in reality?

David: It was a good guess, I suppose.

Felix: Yeah.

David: I mean, it was a … It was even more lucky that you would imagine, because in fact, when I would survey big classrooms full of students. I’d visit and talk to business school classes, or my own classes. The students were all really excited about the headset management.

When I asked, “Who in this room would use this product to wrap their headset and prevent it from tangling?” Almost everybody in the room raised their hands. But then, when I gave samples to my students and watched them after a week or two using the product, none of them were using it for headset management.

What appealed to people was not what they got addicted to. I just thought to myself, ‘Surely if people are going to use this for more than a few weeks, it’s got to be designed around the reason they’re actually using it for a few weeks, and not the reason they think they like it,’ which was the headset management. That was also an issue, once we went to market, convincing people they needed a grip.

It’s really tough, most people say, “I don’t need a grip. I can hold my phone just fine.”

If you asked someone, ‘Do you need a headset management system?’ A lot of people actually say ‘yes.’ It was a challenge to actually market this to people and get it in their hands, and get them to fall in love. Well, actually, that’s the easy part, getting them to fall in love with a grip; and sometimes maybe marketing it for headset management because that’s what they thought they wanted it for.

Felix: That’s interesting. A couple of points there that I want to touch on. The first one is about surveying; surveying and the validation. If you followed exactly what they were saying, that could have led you in the wrong direction, essentially, right? Because they were [crosstalk 00:08:51] using it completely differently than what they were saying they were using it for. What kind of lessons can you glean from that when you … about survey … printing surveys, or validation?

David: I mean it’s a great topic. I heard somebody say to me the other day, regarding a product we’re working on.

This person said to me, “You know, I showed it to my daughter, my middle school daughter, and she said she would use that all day long; and I showed it to my son, he’s in high school. He said he would only use it every other week, but he’d use this other product of yours that’s in the pipeline, too, every day.”

My response was, “Yeah, unfortunately, these kids also say they want to puppy dog and they’re going to take care of that puppy every day, and they’re going to love that puppy every day. But in fact, once you get them the puppy dog, after a week, someone else is going to be taking care of that puppy dog.” You really can’t take too seriously what people say in these surveys. You’ve got to get the product in their hands and watch what they actually do with it over time; is what I’ve learned.

Felix: Do you think that it’s … Should you avoid surveying and go straight for getting the product in people’s hands, and watching them?

David: Yeah.

Felix: Because it’s not so much that it’s just … is giving you not enough information. It’s almost giving you the wrong information.

David: Exactly. Yeah, no. They could close down an avenue that could be very productive otherwise; or send you down the wrong avenue. I would caution against surveys, and encourage people to build crude prototypes. Not too crude, but don’t spend a lot of money. Build as many prototypes as you can, and get people playing with them, using them, and giving feedback after they use them for a few weeks; not immediate feedback.

Felix: Got it. So talk to us about that process. You get a prototype into potential customers’ hands. They get to use it for a bit. What kind of questions do you ask them when you meet up with them again?

David: I mean, I was in somewhat of a privileged position because I was around hundreds of students. I was a professor at the time I invented this, so I didn’t have to ask them questions. I could just watch them.

Felix: Right.

David: I … gave PopSockets to all of my students. I had some friends give them to their class. After a few weeks, maybe I’d ask them, ‘Raise your hand if you’re still using it.’ Or, ‘Raise your hand if you’ve talked to anybody about it, or sent anybody to the website.’ Questions like that; but as far as questions about … how are you using it every day, I found it more informative watch them when they’re walking in the room. What are they doing with it when they’re walking out? What are they doing with it? Are they fidgeting with it during class? That information differed from …

Surely, sometimes I’d ask them, “What’s your favorite feature?” More important to watch the people. I suppose if people don’t have that opportunity, just … be clever in how you’re creating your questions. You know, ‘How much time do you spend fidgeting with it?’ ‘How much time do you spend doing this?’ Instead of, ‘What do you like the most?’ That might not be an accurate answer. It might not be in line with what they’re actually doing with your product.

Felix: Right, that makes sense. I think I’ve only seen the final iteration of your product, or the current one. I’ve only used the current one. What changes did you make to either the product or the way you presented the product based on these kind of early validation or those observations that you were performing?

David: Sure. The original product was a case, an iPhone case with two PopSockets, one at the top of the case … of the phone, one at the bottom. They collapsed into a cavity, so that the … they collapsed flush with the case.

Felix: Got it.

David: When you expanded one of these and used it as a grip, there wasn’t a lot of room for your fingers because the cavity was taking up some of that space. That was one problem. Then, the second challenge was getting that … the PopSockets in the right place. One on the top, one on the bottom, when in fact, the majority of people like their PopSocket right in the center. I just reconceived it as a non case product. The re-positional PopSocket, it has extra finger room because there’s no cavity. It can be positioned wherever one needs it.

It can be repositioned, too, for different functionality. If you want it down near the edge of your phone for a vertical stand, you can move your PopSocket down. Or, if you want to have two PopSockets one day, Jenna Marbles and certain people still use two PopSockets on their phones. She’s a YouTube-

Felix: Yeah.

David: Yeah.

Felix: Yeah, I’m not that level yet of two PopSockets. I only use one right now.

David: Probably [inaudible 00:13:21] … I went from two to one, and I’ll probably never go back.

Felix: Yeah. So you mentioned as well that sometimes you have to, or in your case, at least, that you have to market a product for the reason that customers think that they want it. You know that they’ll ultimately fall in love with another reason why they like the product. The example you gave was the headset management tool; was the reason or was the way you marketed it, but then most people were using for the grip, for the stand. Talk to us a little bit more about that. What does that actually mean in terms of the way that you market a product?

David: Sure. I mean first I can tell you how I discovered it, at trade shows, in groups when I was pitching the PopSocket. I had a spiel where I would go through the different functions of the PopSocket. With two, there’s quite a few functions. The PopSocket also articulates at different angles, so you can have a shallow landscape stand. You can have a steep landscape stand. You can have a shallow portrait stand, a steep portrait stand.

With two PopSockets, you can easily clip your phone on the side of your monitor and back before … messaging was coming up on people’s screens, it used to only come up on our phones. This was really helpful to clip your phone right onto your monitor so you could see the messages come up. As I was going through … and then clipping it to your clothing, clipping it to gym shorts if you don’t have pockets.

As I would give these pitches, I would realize that people got really excited about features that I knew they weren’t going to use. I’d go through headset management, and wow, I’d get an ‘Ahh.’ Then finally, the finale was clipping the phone to the monitor and every time, people would go, ‘Wow.’ Sure enough, when I see people using PopSockets, almost nobody’s actually doing that.

Felix: Right.

David: That led us with packaging design to not package this just as a phone grip. Now we can do it, I think, because I think they’re pervasive enough in society that people have seen other people using them. They appreciate that there must be some value to the grip. Initially, we were marketing them with our packaging and displays as headset management, and stands; just all the different functions except for the grip, which is the one thing people fall in love with.

Felix: Yeah, and does this like bother you that you know that it’s … that the real reason or that the main reason why people continue to use your product as one way, but then you have to market differently just to get them to try for the first time?

David: No, we’re lucky … Well, we don’t anymore have to change that marketing.

Felix: Right.

David: Now we do market it just as a phone grip and stand. I was lucky enough to be able to be patient and let … Our main marketing tool has been word of mouth; so let our evangelists convince people to put these in their hands and try them, our army of evangelists. All the people that have PopSockets, they’ve been using them for either a month or three years.

Whenever somebody asks one of these people, ‘What is that?’ They’re going to hear that spiel. I love the saying, ‘It’s changed my life, and it expands.’ We let the evangelists talk people into trying one; even if they don’t think they need it for the grip. Once somebody tries it for a day, typically they leave it on their phone. It wasn’t … No, it didn’t upset me. I was just patient and waited for …

Felix: Sure.

David: … For these people to give it a try.

Felix: Right. Now, speaking of getting people to try it for the first time, it’s a product that requires a hands-on usage, right? I think you … hit the nail on the head where it’s such a visible product because it’s on your phone. Everyone’s always holding their phone up. Whenever I have mine out, someone asks me, ‘What is that?’ I almost have to … I’d rather them just try it out themselves, rather than try explain to them how it works. For people that … especially early on, before it actually was pervasive where you could see it in the physical world, how did you educate people on … A) why is this a … why do I need this product? Not so much why do I need this product, but how does this product work?

David: That’s a great question. I mean, I could almost answer it by saying I couldn’t. We tried. I mean one of the methods was diverting their attention, like I said, from the grips; since people didn’t want to try that aspect. Then, giving visuals of it expanding and collapsing; try to give people a sense of what it was.

You don’t have long in a retail setting, or even online, to convince someone to buy your product. It was a little easier with our website, PopSockets.com, because there we could have videos. If somebody’s willing to watch a 10 second, 15 second video of the PopSocket actually working, they’re far more likely to buy it, because they’re far more likely to understand what it is and not dismiss it out of hand.

Felix: Right.

David: We, I mean I should say though, our momentum really did come from word of mouth. It was people telling other people in person, and showing them, and handing them their phone, and saying, ‘Try it.’ That’s how this fire really spread.

Felix: Yeah, it’s certainly … a product that is simple once you get the hang of it. I think one of the potential downsides is that because it’s such a simple product in the sense that it’s not a complicated product to use. You must have a lot of copycats that come into the space. I’ve seen other devices that aren’t similar … to yours, but is a similar idea of some kind of grip on the phone. Of course, I’m sure there’s a bunch of copycats that are making the exact same design. What has that experience been like for you?

David: It’s been interesting. I remember when I first discovered counterfeits and I talked a former intellectual property manager from OtterBox. OtterBox went through … great challenges with counterfeits, and they still do have some.

When I told her about my issues, her response was, “Oh my.” She smiled and she said, “You should be so flattered.” I thought to myself, ‘Yeah, that’s not exactly my reaction.’

Felix: Yeah.

David: I’m pretty angry about this. Fortunately, we ended up hiring her and she’s built up a team. We’ve been ahead of this. Most companies, they just start waking up to it before it’s too late. It’s just really hard to wrap their hands around it once it’s out of control. We have a team of, I think now six people working full time to … enforce our intellectual property around the world. We have law firms all around the world. We take down thousands of listings for fake PopSockets every week, from marketplaces around the world. We’ve filed lawsuits against individuals and companies around the world. It works, so … various people tend to go do something else once they realize that not only are they not going to make money doing this because their listing will get taken down within a few hours, but they could potentially lose a lot of money if we end up suing them.

Felix: Then what did you recognize early on that made you realize that you needed to get control of it? Like what was happening? What did you see happening in the marketplace that made you realize that this can become a much bigger problem over time?

David: I wish I could give myself that much credit. I didn’t. Actually, I didn’t see it coming as big as it … I didn’t see the problem coming, the problem that actually came. It was a bit of luck. It’s that I ended up hiring an expert and at the time, the expert said to me … So this was last fall.

She was from OtterBox, and she said, “Sure, I’ll start in January of 2017. Let me just put some things in place for you in January, and then I’ll probably work about two days a week starting in February. I’ll just keep everything kind of going.” By March, she needed to hire three more people. She was working 80 hour weeks. Now she’s got a team of five or six people beneath her, and law firms all over the world. Neither of us expected to get hit as hard as we did.

I don’t know. It’s been kind of fun because we are … doing well in the battle. There’s a whole industry of companies fighting this battle. We work together with other big companies on how to protect our brands, you know, at conferences. These other companies are really excited about what PopSockets is doing. They’re watching us in this big battle, epic battle that some of them have gone through, say at earlier stages in their lives; like Crocs, OtterBox, Nike is always with these sorts of issues. It’s kind of a team effort.

Felix: Right, now what does it … How do you manage all of this? Maybe there are listeners out there that have also invented their own products that aren’t being counterfeited at the scale that you’re being counterfeited at. If they were just working it by themselves, what are some ways to try to get ahold of it, or at least slow it down a bit so they can get the resources to hire professionals and the team.

David: I mean step number one is the intellectual property; so filing your patents, appreciating the value of a design patent. This was a mistake I made early on, due to lack of experience. I applied for a utility patent, meaning that the patent covers anything that … fits the description of the invention, sort of at a functional level; but it doesn’t matter how it looks. Then, I thought, ‘Huh, if I have that, that will also cover the ones that look like mine, because they [inaudible 00:22:45].’ Utility patents are typically tend to be more valuable than design patents, but it turns out that when you’re enforcing your IP, when you’re trying to confiscate counterfeits, when you’re trying to shut down factories that are making counterfeits, it’s much easier to use a design patent.

I would urge people to go ahead and file for that design patent, in addition to any utility patents that they might file.

Felix: Why do you find that, that’s the case that design patents are easier to enforce?

David: Because if you’re … suppose you’re a customs official, and you open up a box of SchmopSockets, you take one out and you ask yourself, ‘Is this infringing on the intellectual property of PopSockets?’ You’re not going to take the time to pull out a utility patent and read through all the claims, and try to digest what the claims mean, and then cut open that product and think, ‘Huh, does this really every component of the claim needed to infringe on their patent?’ You just don’t have time to do that; and because you don’t have time, the agency itself, customs agencies doesn’t give you the authority to do that, to spend your time.

They say, “We’re not going to enforce these utility patents unless we’re ordered to,” by what’s called a general exclusion order. We’ve applied for one of those. Unless the company has one of those, we’re just going to pick up that SchmopSocket out of the box and we’re going to compare it to a picture on a design patent, and if it looks just like it, we’re going to confiscate them. It’s just much easier to enforce.

Felix: Got it.

David: Same with a raid on factory in China. If the police were raiding the factory, they can just look at a picture of what’s in that factory, and look at a picture on a design patent and say, ‘Huh, looks the same, so we’re confiscating and confiscating everything, and destroying the molds.’ It’s a much easier process.

Felix: I see; so like the design patent is more of like an eyeballing technique.

David: Exactly.

Felix: [crosstalk 00:24:35] … looks like it’s a counterfeit because it looks like this photo, and it’s much less work on the folks that are actually enforcing this, which makes it … them more likely to help you enforce it.

David: Exactly. The same holds for trademarks and copyrights. So if somebody opens up a box and it says PopSockets on it, but it doesn’t come from one of our factories, then they’re going to confiscate that. It’s as easy that. Those other factories are not authorized to be shipping with our trademark, PopSockets; and likewise for copyrights. If somebody has an image on their phone grip that looks exactly like our image that we’ve copyrighted, or our graphic, somebody can confiscate that or enforce it.

I recommend that. Yeah, I recommend that entrepreneurs appreciate the value of copyrights, trademarks, design patents, over the value of a utility patent when it comes to enforcing and protecting their actual products; really invest in that. Then, the question arises where in the world are they going to file? Just in the United States, or … it’s expensive, right? If you want to start filing patents around the world to protect an invention; and at the time you invent it, you often don’t know whether anyone’s going to buy it. It’s a big risk if … a patent lawyer tells you, you need to spend $30,000 filing your patent around the world; and you don’t even know whether it’s going to be a hit or not.

It’s just a gamble. I don’t have a lot of advice there. Get as much feedback as you can. Often, entrepreneurs are overconfident. They have to be to overcome all the resistance. If you’re overconfident, you got to be a little careful because you can easily overspend on all that IP, and then not sell a single product.

On the other hand, if you end up with a big hit, … you want your protection around the world; and it’s too late, by the way, to then file by the time you have a hit. There’s windows that close after say one year, then after a second year. You can no longer file internationally, so you got to make these decisions early.

Felix: Got it, so did you file for your utility and design patent from the very beginning, or how long did you wait until to-

David: Well, I made the mistake. I didn’t file for a design patent, so that was a big error that I made early on. We have design patents now covering other products, but the main product is covered by a utility patent here in the US. We’ve had it granted in China, Japan, … Europe. It just got granted. We’re waiting to hear from India, Canada; maybe I’m missing someplace, but-

Felix: How did you prioritize those countries, those places to file the next patents?

David: Well, how I prioritized them to file the original patent was just by cost of patent versus number of people who live there. India was a no brainer. The patent cost me I think $850 to file in India, and I don’t know what their population is today, but …

Felix: Large.

David: It’s pretty large, so that was a no brainer; more difficult choices were, say, South Korea … areas like that, in Southeast Asia. Then, moving forward, now that we have momentum, we spend to file … almost everywhere around the world.

Felix: It’s not necessarily about how many sales at that moment you’re generating from those places, but what’s the market potential.

David: Exactly.

Felix: Got it. Now, I want to talk a little bit about how you grew to this size. I think one of the things you mentioned, too, to us was that you’ve teamed up with influencers who already have taken a liking to your products. Now, were you able to reach out to these influencers early on to get your product in front of them? How are they hearing about your product to begin with?

David: That, too, was a lot of luck. We had two … hotspots on the map of the United States, as far as who was buying PopSockets early on. One was in Colorado, which is no surprise; because that’s where our headquarters are in Boulder. We were doing some school programs around Colorado selling PopSockets to middle schools and high schools. Then, those schools would resell them, and raise funds that way. That started a bit of a hotspot here in Denver and Boulder.

Then, the second hotspot on the map was Los Angeles and Hollywood. Several people have taken credit for this. I don’t know the true story, but I’ve had several people tell me, ‘Oh, I’m the one that got PopSockets in Gigi Hadid’s hands.’ Or, ‘I know,’ … Yeah, I also hear frequently that somebody knows the inventor of PopSockets. It’s usually some college kid, or someone’s uncle. I don’t know what truth there is to the actual story of how this happened, but celebrities started falling in love with PopSockets. Some of them approached me wanting to invest. It gave us great exposure.

Ryan Seacrest, … Gigi Hadid, … I think Kendall Jenner was seen using one. You may know the list better than I do. They’re not popping up right now.

Felix: Yeah, so obviously lots of big name influencers. When you say ‘teaming up with them,’ what does this usually mean?

David: At first, we didn’t team up with them. We just watched and we … enjoyed the word of mouth … advertising.

Felix: Right.

David: From them using PopSockets just organically on social media. Then, we saw Jenna Marbles, a YouTube star, using PopSockets, and that was the first time we decided to do a partnership because the personality of the company seemed to match her personality; just a fun, lighthearted attitude. We created a cool collection centered around her dogs. She did two campaigns last year. They were hugely successful. Her fans ended up buying a lot of PopSockets. We’ll do another campaign with her most likely next year.

From there, we then connected with the main talent agencies in Hollywood; three main talent agencies and just went over their lists of talent to see who was already using PopSockets and who might fit with our brand for partnerships.

Felix: When you reached out to like a talent agency, … what’s involved in that? Are you coming to them and saying that you want to essentially offer a commission, or a cut of the sales to one of their talent, or how does it work?

David: Yup. We’d reach out and … describe the product, say which of their talent is already using the product. If it weren’t for that, I don’t think we would have gotten a response from any of them. I think our emails would have gone straight in the trash, because I’m sure they’re receiving a lot of emails every day. The fact that celebrities were already using these, and these celebrities were represented by one of these three agencies.

Felix: You were finding out about these celebrities through Instagram, like them posting it with your product?

David: YouTube, Instagram, or news, People Magazine. We’d see these celebrities using PopSockets in magazines. Serena Williams was another one. We haven’t partnered with her, but she’s been using a PopSocket. She often shows up in … the media with her PopSocket. We spot them, approach the agency, and … now it’s relatively easy because PopSockets gained popularity; but then just sit down with a list and see who makes sense in the most organic fashion. Ideally, it’s somebody that’s already using a PopSocket so they can be authentic when they talk about PopSockets.

Felix: Got it. When you do work with a celebrities, how do you like to … typically structure the deals? How did they usually work?

David: I guess the most common model is just a royalty model. We develop a special collection that has a theme centered on the celebrity, so it resonates with their followers. We try to make that authentic, too. Whatever Jenna believes in, Jenna Marbles, and what she stands for; that’s what we want the collection to look like. Her collection, both of her collections are very zany. She’s very zany. Zany graphics of her dogs. Then, she would do some social media posts, one major video on YouTube talking about her collection, sending her fans to our website on PopSockets.com to her collection. Then, she would receive a royalty on whatever sales were generated.

Felix: Do you have like some kind of service or tool that you use to manage all of this?

David: Today, I’m not sure what our eCommerce team is using. For the original Jenna programs, these were Excel sheets. We were exporting reports from Shopify.

Felix: So they were just anything that … anybody that bought her product, regardless if she drove them … I mean mostly were driven by her, but if anyone bought her product, you would give her … You don’t have to go into the details of her deal, but the idea is that for anyone that bought a product from that collection, they would get royalty from that purchase?

David: Yes. Or, that came from her website. We use Google Analytics to track … We would give links, and could at least track the source of the traffic. Then, attribute those sales to Jenna.

Felix: Got it. Now, you’re speaking of tools and everything on your site. One that I saw that was really cool that … it goes in line with creating these custom collections is the ability to design your own and create your own PopSocket. Is this like an in-house application that you have on your site that allows people to upload their own images for the PopSocket? How does it work?

David: That’s actually a custom application. So … a developer called [Diff 00:34:32] in Canada that works really closely with Shopify, and they do a lot of Shopify apps. They helped us develop both our current theme, which is a Shopify … a custom Shopify theme, but they also helped us develop our most recent custom uploader, which sits on a separate server. It’s not … coded in Shopify’s [inaudible 00:34:57] CSS. It’s not … a native Shopify app. When somebody gets to that uploader page, what’s actually going on is they’re getting kicked out of Shopify briefly onto another server.

Felix: I see.

David: Then, kicked back to Shopify, because … Well, it’s just easier for the functionality of that customization.

Felix: I really like the design of the website. What goes into the way that you have the website structured or the other kind of content that shows up on the pages?

David: Sure. We want the user to have an excellent experience. We have two very different types of users. We’ve got our alpha followers, who are going to our website weekly, looking for the latest PopSocket, seeing what’s new. That person loves PopSockets. They know what a PopSocket is. They know exactly where to find the new PopSockets. Then, we have people coming to our website who don’t know what a PopSocket is. Very different visitors. We want it to be a great experience for both of these visitors. It’s sort of a balance in educating somebody who has no idea what a PopSocket is, as quickly as we can without … making it more arduous for one of our alpha fans to just find what they want and check out.

Felix: Now how do you do that? That’s a really important balance, right? For repeat kind of power users, power customers that are coming about over and over again; and then also trying to get those new visitors to be educated for the first time. I think it’s a balance that pretty much any entrepreneur has to face at some point. What’s your approach to making sure that you’re serving both needs?

David: It’s a tough balance. Right now, on our home page, it’s not until the very bottom of the home page that you’ll see a video that explains what a PopSocket is. We used to have a video right from the start. We’ve done this because we find the majority of people coming to our site, and more and more today, are educated on what a PopSocket is. We are catering a little bit more toward the educated visitor.

On our first homepage slider, … so when you arrive on our webpage, the first image that you see, you’ll see PopSockets attached to phones. You’ll see them expanded; but right next to them, you see PopSockets that are collapsed. That … These images here … an alpha fan might not realize what’s going on here, that we’re actually explaining what a PopSocket is to someone who’s never seen one. We’re showing one expanded, one collapsed right next to it. All the while, we’re showing new graphics on all of these. That picture is … It’s targeting both of our audiences at the same time.

Then, we have a trending bar right after that. That’s also for the … alpha … customer who’s just looking for their new candy, basically. They go to this trending bar to see some updates; to make it easy for these people to see what’s new. Then, we have a new rollout menu that allows people to get to the collection of their choice as quickly as they can.

Felix: Speaking of the trending, so I’m seeing some popular brands here; you know, Harry Potter. I see the one for the Flash. I see Golden State Warriors PopSockets, so obviously licensing involved in this. What’s that … like? How do you manage the licensing portion of your business?

David: It’s a lot of work.

Felix: Yeah.

David: We have … two or three … I’d say two and a half … I was about to say ‘people,’ but it’s not really two and a half people. Two and a half roles devoted to licensing, so these people spend all of their days talking to our licensing partners, talking to new potential licensing partners, working on applications. Then, in addition to those people, we have two graphic designers whose full time jobs are to develop the actual designs for each of our licensing partners.

Then, we have another person who works with our retail partners on merchandising plans; so what we’re going to sell in each channel, including our PopSockets.com. They would work with our eComm team, Amazon, Best Buy, Target, … Tillys, Walmart. All of our partners to see what they want, and how to collaborate with a licenser on some kind of splash. If it’s Harry Potter, how we can work with Harry Potter on a target program that they already have so we can incorporate PopSockets into their program. It’s a big … big job, all these licenses.

Felix: Right. So obviously a very fast growing business, a very large growing business. We’re talking about this, doing some of the math before we hit record here. Can you give us an idea of how large the business has grown, or how fast it’s grown since you started this?

David: Sure. I launched out of my garage in Boulder in 2014. We’re just completing our fourth year of business. Today, we are in our … one, two, three, fourth office here in Boulder; a brand new building. Two weeks ago, we put up our PopSockets sign. That same day, we were out looking for new office space because we’ve grown out of this office. In terms of sales, this year, we will sell roughly 35 million PopSockets in our fourth year of business. The first year, when I started it in my garage, I think I sold … thousand … about 30 to 40,000 PopSockets; so let’s say 30,000. That’s a … thousand times …

Felix: Yeah, that’s crazy.

David: [crosstalk 00:41:07] … right?

Felix: Yeah, I mean it’s something. Well first of all, 30,000 your first year is already pretty amazing. Of course, the point that you’re at now with 35 million is even more amazing. This is pretty much, you mentioned off the back of word of mouth and influencers, for the most part.

David: Yup. Yeah, we’ve done very little marketing. This year, we started doing, just in the last few months, some Facebook ads and some Google ads. But before that, we had almost no advertising or marketing budget. Other than through these influencer programs that we would do partnerships.

Felix: Very cool. PopSockets.com, P-O-P-S-O-C-K-E-T-S dot com is the website. Where do you want to see the business go next?

David: I want to see it go global. Next year, 2018, we’ll be focusing quite a bit on international business; so we’re starting to see quite a bit of growth in Asia and Europe already. We’d like to get PopSockets in the hands of people around the world, Africa, India, just about everywhere. Then, we’d like to get new products in people’s hands, too. We have a new team in San Francisco, a product development and design team. They are up to about 14 people, engineers, and industrial designers, who are working on a pipeline of new products.

Felix: Awesome. Thank you so much again for your time, David.

David: Sure. Thanks very much for having me, Felix.

Felix: Here’s a sneak peek for what’s in store the next Shopify Masters episode.

Speaker 3: They make parts and pieces all across the country, and then they ship individuals [inaudible 00:42:36] assemblies to our [fab 00:42:37] shop in North Carolina, and we assemble everything there.

Felix: Thanks for listening for Shopify Masters, the eCommerce marketing podcast for ambitious entrepreneurs. To start your store today, visit Shopify.com/Masters to claim your extended 30 day free trial. Also, for this episode’s show notes, head over to Shopify.com/Blog.