Interviewees:
Josh Downes, Founder & Chief Product Designer
David Cooper, President
1. How would you describe a one-minute history of Keyport and your journey?
Keyport is redefining the way in which we customize, carry, and interact with our most frequently used personal items typically crammed onto a key-chain or stuffed uncomfortably into a pocket or purse. We do that by creating customizable universal access solutions that consolidate your most essential personal items – keys, pocket tools, and smart tech – into a single indispensable device that you will use every day, multiple times a day.
Neither of us come from hardware backgrounds, so the initial learning curve was steep. We have had some exciting successes along the way, and we have also made our share of mistakes. We are still learning every day which is something that continues to makes the work exciting and challenging for us.
2. There’s always a chicken-or-egg scenario – sales to pay for marketing, yet marketing to pay for sales. How do you handle this?
This is a critical question that we struggle with every day. While we would certainly like to scale by simply spending additional marketing dollars to grow sales, the relationship between marketing and sales is most often not a predictable straight line. The last thing we want to do is to find ourselves in the death spin of paying $1.25 for every $1 in sales.
So, what we look for is the highest ROI on our available marketing dollars, and we try very hard not to overspend by compensating on lower ROI results. Whatever sales we get out of those budgeted dollars is it. Our goal is to search high and low to find ways to improve the ROI of our marketing spend.
3. How did you build your team as you sought to expand product sales? How did you decide on hiring Retailbound, and what have they contributed?
We are very proud of the team we have built at Keyport with most of the team being with us now over two years.
Like we do with any of our initiatives, we consider ROI on each prospective new hire. It costs a lot to recruit, train, and manage new team members. As an early stage company with limited financial resources, we only hire when the need is great and the culture fit is perfect as we are not interested in hiring now only to let someone in a few months. We have implemented a pre-employment test (like the ones found at https://www.berkeassessment.com/solutions) in order to make sure we are hiring the best people we can be hiring! Not only does that include sales and marketing, but it includes fulfilment and customer support as well as the necessary admin support.
Hiring Retailbound was one of the smartest decisions we have made. Retail sales is very different from direct sales, and we didn’t have the knowledge and experience to do a great job out of the gate while minimizing the mistakes that could cripple, if not kill the company.
We looked into hiring a full time VP of Sales, but most did not have the skills to tackle both direct sales and retail distribution. Those who had experience in both were extremely expensive.
Yohan and the team had a wealth of knowledge and experience that would could harness without the need to make a lifetime’s worth of mistakes to gain that knowledge. They were able to do so at a price we could afford, and we have the option of increasing their participation as we grow . Retailbound has guided us through each stage in the retail distribution process, from initial product development and setup through sell-in and more importantly, sell-thru.
4. Many startups are unsure or nervous of the “unknown” variables expanding sales outside of Amazon and their websites. Did you have a similar sentiment before launching the product in retail? How did you decide the timing was right?
Actually, Retailbound had an important role in that. Selling into retail can be daunting, and they helped us to break down and prioritize the necessary steps, which eliminated a lot of the unknowns for us.
Prior to jumping into retail distribution, we were in the middle of a Kickstarter campaign with our second gen products. We worked with the Retailbound team during this stage to develop a retail prep program to ensure that we had all of our major ducks in a row like pricing, packaging, marketing materials, presentation materials, interview skills, etc. That allowed us to hit the ground running, to eliminate big mistakes that would have cost us down the line, and to let us focus on what we do best instead of guessing how best to test various distribution channels.
5. Are there any specific traps to point out for a consumer product startup who is now looking to launch in retail?
Rather than focus on potential traps, of which there are countless, I prefer to focus on the things we can control:
- Do we have the margins for retail and for distribution along with the integration of manufacturer’s reps?
- Have we ironed out all of the kinks in our product? Do we have a quality, dependable, and repeatable manufacturing process?
- Do we have enough working capital to manage predictable growth?
- Are we able to facilitate drop shipping, or do we need to work with a 3PL?
- Do we know exactly what distribution channels you are trying to get into, and are they reasonable? (i.e. starting with Walmart stores… not reasonable)
- Do we have retail expertise on our team to help us to access the right buyers, to negotiate profitable deals, and to ensure that we are able to keep your product moving off of the shelves?
- Are we prepared for the fact that sell-in is just the start? Sell-thru is really when the hard work begins.
6. What excites you the most regarding the future of Keyport?
In addition to a full slate of exciting new products on the horizon, we are building a team who are on board with our vision of replacing the bulky key-chain and of putting a Keyport in every person’s pocket. We are dedicated to building awesome products that are a combination of utility, convenience, and style… and we have a lot of pockets to clean up…
Any final words of wisdom for other product entrepreneurs out there trying to grow their business in retail?
First and foremost, on behalf of the entire Keyport team, Josh and I would like to wish each and every one of you the best of luck because building a great company with great products is not easy. There will be good days and not so good days. Please do not hesitate to reach out if we can ever be of assistance.
With that said, we have two (really three) pieces of advice… for whatever they’re worth…
1. Pick your team (full-time, part-time, consultants, interns, vendors, etc.) very carefully. These are the people who represent your company and your products to the world. All of them contribute to your company’s culture, from part-time interns to the executive team.
2. Maintain a singular focus on your customer. Who is it? Why do they like your product? What don’t they like? How can you make their experience an exceptional one? How can you make each of them a fan of your products and of your company for building and supporting those products?
3. Retailbound will help you bridge the gap between a great product and your target customer base. Sure, their team is very knowledgeable, and they have deep retail experience, but they are so much more. They pick up the phone day or night, weekday or weekend. They always do what they promise, and they are true Keyporters in every sense of the word… showcasing our brand as if it were their own.
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You can get in touch with David or Josh at Keyport via email — dc@mykeyport.com or jd@mykeyport.com respectively.
You can get in touch with Yohan at yjacob@retailbound.com.
