Monday, May 11, 2015

The Reading Pet Expo

The Reading Pet Expo was, it turned out, a fantastic place to first test the waters with Kronch.  This Expo visit, the first one, started out the day as this:

One of the most key skills to business that I have developed is an intense level of organization.  Also I wanted to go into this with a clear motivation/objective, which was mainly to get sign-ups for the mailing list for Kronch U.S.A.  Once the product arrives from Denmark and the online store goes live I wanted to have a fairly large, targeted mailing list to send a reminder to.  Therefore it was my mission to ask people about the concept of the product and gauge their feelings about potentially feeding salmon oil to their dogs or cats via supplement.  If it was something they would never consider I knew the product was not an interesting one, not to American consumers at least.  But if I could generate some interest at the expo and get people to sign up for a mailing list, then I knew something could be there.

Rather than develop a product or even ship a bunch of product here, I wanted to make sure the demand was there.  That was key.   So my advice to you, at the kernel of the inception of your business:  don't put out any cash yet!  Test the waters, get some advertising brochures perhaps, or go in like I did:  learn about the product and ask people what they think!

I arrived at the Family Pet Expo, a little bit nervous but pretty excited.  After all I knew I'd know something after talking about salmon oil long enough at the expo, but I had no idea really what to expect.  It turned out to be a pretty cool little exhibit!  Any nervousness I had subsided as soon as I realized how relaxed and pleasant the affair was going to be.  There were a lot of animal lovers and everyone was friendly and smiling-- I think the nice weather lent to a generally happy mood.  I walked up and down the aisles of the expo for a moment, hesitant on how to proceed-- for all my business development experience, I never cold approached people much in my day-to-day life.  I went up to the first stall and said "Hi!  What are you doing here?"  After we talked a little about her business, I told her what I was hoping to do and she was pretty receptive but not super interested.  I shrugged and continued on my way-- oh well, no interest yet but no rude cold shoulder.  So I tried again.  This time I was approached by some people who were raffling off a car.  I decided "what the heck" and filled out the raffle, and then I said "Actually, I was wondering if you mind if I asked you a question... I came here because I want to see if anyone would be interested in a salmon oil health supplement for dogs?"  She asked what it did.  I told her that it's good for dogs with allergies, good for dogs with joint pain, and gives energy to old dogs while giving a shiny coat to all dogs, young and old... generally pitching the product features, and she seemed interested, so I asked "Well, would you like to sign up for the mailing list?  I won't spam you or anything... I'll just let you know with one e-mail when the product gets to the country?"  She said "sure" and there I had it, my first e-mail for the mailing list.

That was a pretty cool feeling as I walked on to the next stand.  It was a shelter for Galgo Espanol, and I talked to them a bit about what they were doing.  Apparently the Galgo Espanol is a dog that is often abused in Spain and they find them nice homes in this country.  It was a worthy cause I thought so I donated a couple bucks and then I asked them what they thought of salmon oil.  One, a vet, had heard of it before, and said that sometimes he would recommend his patients use generic fish oil, which is available in the grocery store.  Another mentioned coconut oil, which is an alternative product that has health benefits for dogs as well.  The third hadn't heard of it.

Actually this group I found to be the most informed of the product.  As I continued onward, I sat and watched the dog show for a bit and got back to it.  I wandered from stand to stand, talking to a bunch of people about what they were doing and then discussing what I was doing.  I would say from a sales perspective this is a good one-- I imagine if you cold-approach people and start in on a sales spiel they would probably not be that into it, but a little back and forth to establish a rapport did work wonders.  People want to talk about what they're interested in talking about.  If you express a genuine interest in it then they are often more than happy to talk about what you're interested in.

It was at the Reading Pet Expo that I discovered the following essential data:

About 50% of people have not heard of the health benefits of salmon oil, fish oil, or any of that.
About 25% of people had heard of fish oil's benefits, and used a generic fish oil from the super market
About 18% of people had heard of coconut oil and its benefits, whether they used it or not
About 7% of people had actually heard of salmon oil for pets as a health supplement.

To me this data spoke of an advantage.  If there was a major adoption of salmon oil then we might have been too late to the market, or at the very least would have to change our marketing strategy to be more along the lines of highlighting our benefits vs. competition.  A large quantity of consumers unaware of a product with a general interest in the product when it was mentioned, however, seemed to present to me a large opportunity.  I was able to obtain a reasonable quantity of e-mails from people who were interested along with a lot of contact details of people related in the industry.

There are a lot of what I would call (but probably isn't a word) non-quantifiables, which were feelings related to the product.  It became clear that it was easily sellable because of peoples familiarity with omega-3 fatty acids.  While they may not have been aware that they were good for their animals, they did know the health benefits of having fish oil in their own diets and were easily convinced that, too, it would be good for their dog.  This first expo, while it did help start develop the current incarnation of my mailing list, which I thought was a convincing factor more for the Danish Kronch parent company than anything else, ended up being a convincing factor for me.

One of the difficult considerations with an overseas import product is shipping.  If the product is sent over by airplane, it can arrive quickly, within the week, but all possible profit from selling the product is essentially gone from shipping costs -- if it is sent by ship, it can arrive much cheaper but takes a month or multiple months to arrive.  This presents a challenge so I needed to be quite sure that the product was one worth pursuing before I placed an order by ship.  Thus the Reading Pet Expo convinced me as much as I convinced it of the place that a salmon oil dog supplement should take among their ranks.

As I have mentioned, the idea is to scale into this such that expenses are kept low from inception.  The cost of attending this expo and generating a bit of buzz on the product while doing some exploratory market research was pretty minimal.  I already had my neat little black organizer that I bought from Rite-Aid for all of $6 - $10, something which with its ability to carry documents in one side and hold a pad of paper on the other side (Advanced technology I know!) has stuck with me far longer than any other piece of organizational kit I have on the go.  (Honestly a tablet PC has just been too unwieldy for me for data entry and the fact that you have to be careful with it and can't leave it anywhere for a second without keeping your eyes on it).  

Otherwise I made a mailing list in Microsoft Word and printed it out on my home printer.  The cost was negligible for that, but I knew then and still know that sort of ameteurishness will only take you so far at one of these things.  The upcoming D.C. expo will be one better equipped to get e-mails for the list and Facebook subscribers.  While it's possible for you, as a person and as a salesman, to pitch your product and get people excited about it, what's going to get them to buy it later or remember it later is the pamphlet or business card you hand them.  So make sure it's a nice one!

The cost of travel was probably the most expensive thing to take into account -- 120 miles and two hours of travel each way equates to about, let's say is at the most 15 cents per mile in gas and wear and tear on the vehicle, about $18.  Oh, and a hot dog and a big glass of lemonaid that I had while watching the dog show which was about $7.

All-in-all the event was illuminating as to the future prospects of Kronch and cost very little, along with netting me a few very useful contact details to people involved in the business.  If 1 out of the 12 people on the mailing list ends up buying one order of Kronch products in the future, the expo has paid for itself.  Not to mention the other value in terms of market research and networking that is available there.

And it was fun!  Expos tend to be a lot more lighthearted affairs than you may be thinking, if you've never attended one before.  It's a chance for you to really get in touch with your target market and understand what they want.  And don't be depressed if you find out that your idea isn't interesting to them.  By the end of the day you might have a new idea!  Feed off the energy of the crowd and get in tune with them.  The owners of the expo themselves were very helpful in directing me as well to different distributors and other expos I could attend.

Being that I now felt I understood pretty well the rewards available, the risks to ordering a pallet of the stuff shipped from Denmark seemed less and less daunting.  But I wanted to know for sure, and so it was time to test out another expo.  This time I am going to go in fully equipped with advertising materials and my best friend from high school who has gotten swept up in the idea as well.  Together we're going to go see for ourselves what we can get going at the Capitol Pet Expo to further develop the business.

Stay tuned!  It's happening on the 16th and I'll take lots of photos and tell you guys about it.   And I might update before then too.

Friday, May 8, 2015

Let's lay some groundwork

The product which I am introducing to the country, Kronch brand dog and cat supplements, is already an existing one.   This is something I highly recommend to entrepreneurs from the get-go.  You may be scratching your head and saying to yourself "Wait a second, that's not being an entrepreneur," to which I would answer "Hey... shut up!"

I kid, I kid, but from two perspectives I want to impress upon you how nice this route is.  First and foremost, people that might consider starting their own business, the number one reason I've come across for why they choose not to do is probably something you've grappled with in the past.  "Oh, I would start this business if only I had the money.  You know, it takes money to make money, and you can't start a business with nothing."  I won't deny that starting a business without a cent to your name is a tricky endeavor (but not an impossible one, read on friend!)  But I will tell you that product development is going to be the most expensive part of your business, hands down.  If you can start a business without having to develop a product, which is in essence what I will be doing with Kronch, all the better!  Also, for someone like me (you may very well not be like me), putting together the business network is both enjoyable and the process less laborious than tedious product creation/testing/the whole nine yards.  If you are an engineer by trade or perhaps an inventor, it may behoove you to focus on product development and outsource the distribution of the product once completed.

Unfortunately you're going to find little help with that sort of thing on this blog.  I'm not an inventor nor have I invested heavily in product development before.  I would love to help you but it would be the blind leading the blind, I'm afraid!

Still, if you have thought up until this point that being an entrepreneur and being a product developer are one and the same, this brings me to my second perspective.  What is an entrepreneur?  Some people get really pissed when you call yourself that.  "Oh, a real entrepreneur doesn't call himself an entrepreneur, it's something that only other people can call you."  I've heard that one before!  And it's sort of wrong and snobby in a weird way- my former boss, Stelios Haji-Ioannou, has the job title of "Serial Entrepreneur" written on his business cards.  But that doesn't really help us define what an entrepreneur is.

We could say that an entrepreneur is simply someone involved in the creating of new enterprises.  By this definition, a product creator can be an entrepreneur, but it does not necessitate vice-versa.   I have also heard that an entrepreneur is one that takes lower yielding resources and translates them into higher yielding resources by a redefinition of the accompanying system.  This one I like because it lends a primary goal to the profession along with offering somewhat of a definition, but ultimately the first take on it suffices for me.  If you introduce a company, you're an entrepreneur.  

It doesn't mean you're a successful entrepreneur, however, and you may never make a single sale--especially if you spend years developing a product to bring to market, and then nobody wants it!  And that's even imagining that you can barrel your way through that much product development phase without seeing a penny for your efforts and not give-up halfway through, or be thwarted halfway through by any number of external circumstances, such as regulatory issues, manufacturing issues, oh boy... the list goes on!  

So maybe the first lesson should be thusly:

Imagine the simplest business you can possibly imagine.  Now, imagine that your job is to simplify that business even further.

What does this mean practically? 

Imagine all the functioning parts of your future business.  Break it down into component pieces, and outsource everything you can.  A business should never be entered into as a complex affair, but as a network of interconnected contracts and agreements that put wheels into motion.  After the wheels are in motion and the cash begins to flow, you can begin to assess what activities would make sense to bring "in-house" and do yourself or hire someone to do.  But the sooner you can get things going, the sooner you can lead yourself to profitability, and the sooner you can arrive at profitability, the sooner you can quit your day job and really bring it alive.

The type of business that will arrive at profitability the quickest is one that does not need to engage in product development.

So let's take a look at Kronch and see what's going on there.

Kronch is a Danish brand introduced by The Henne Pet Foods company more than 10 years ago.  It has become a Danish staple that sells a Norwegian Salmon Oil supplement for dogs and cats.  I will be acting as importer in the U.S.  Salmon oil is well known to have great positive health effects for animals.  The product sells itself well because it's a good product.  

The second lesson is thusly:

You can choose to act deceptively and guile people in business or you can act honorably.  You will find that, in this day and age with your digital fingerprint all over everything you do, the former form of business will get you nowhere fast.  Best to sell a product that does a good thing and people want.  Identifying what people want is a process I'm going to outline in another entry, but identifying a good product to fill that want is separate process entirely.  As in all things, the long term dividends are paid to the man who keeps his word and reputation in business intact.

In the groundwork stage I had identified Kronch as a potential product due to having known the family running the company.  It is a well selling product in another country so it stands to reason it might be a well selling product here.  Furthermore the family was not uninterested in the prospect of expanding to the U.S. and so we began to discuss it a bit more seriously.  Thus the amalgamation of data grab began as follows:

Number One :  Market Research.    
Pet Foods are a $9.2 billion per year industry in the United States.
Health Food Trends - Since 2005, people in the United States have shifted in eating habits to, on aggregate, healthier lifestyles.
A study showed that people tend to reflect their eating habits on their dogs.

Therefore this initial assertion points to a growing market:  The health food market for pets.  People love their dogs and love their cats and want them to be healthy and live long lives.  Products that can deliver on that, it stands to reason, should be increasing in demand.

With the preliminary market research accomplished, this led to the next very important step:

Number Two:  Financial Budgeting
The budgeting of the company sounds like a rote exercise in imaginary play land but in reality your financial budgeting is going to lead you to a lot of conclusions that you wouldn't have reached if you don't do it.  The financial budgeting is not to predict with any degree of accuracy what your revenues will look like (who the hell knows how much product you'll sell, really?)  but to get a full grasp on what your expenses are going to be as the company unfolds "as it should."  Also this is your chance to get in touch with your business model's revenue model.  How does it make money exactly?  You can't predict how many users will use it, but you can predict how much it will sell for -- and by making your financial budget you're figuring out all this good stuff.  What's the price of the product, what's the cost of the product, what's the cost of your inventory space, what are the travel costs associated with each expo visit.  I factored these in and did so in a way that I compartmentalized each expense as it related to the aspect of the business.  This came in really useful in early stage planning and I recommend it.  To explain it more concretely, my initial Kronch financial projections has expenses and incomes related to conventions/expos, sales through website/retail outlets, costs of goods sold (a full inventory list with costs associated),  Advertising Expenses and Order Processing Expenses.  By delving into each one of these subcategories and contacting vendors in the arena of those services to get an accurate quote, it began to form a bread-crumb trail that led me elsewhere.  Once you start the wheels in motion it becomes easier to follow them!  Ergo I can't stress enough the importance of developing a financial model and budget for your business.

Number Three:  Pet Expo List
The third thing I did was develop a list of every Pet Expo on the East Coast of the United States and put that data into an excel sheet and make a calendar from it.  Expos are one of the best places to meet people in your related industry as well as feature your product to people that are already really interested in that kind of product.  Do your homework and find out what kind of expos are the ones you should be visiting.

After I completed those three things and had a meeting with the owner of the company we both felt more comfortable moving forward.  And that led on to attending the first expo, a process I will outline in the next entry!


There's a lot of articles out there about entrepreneurial endeavors from a theoretical level.  That's not what I want to do with this blog.  This blog is going to be something freakin' cool.  For you to understand why, I need to introduce myself a bit and explain what I'm going to do.

You're going to join me as I introduce a successful new company into the United States.  I'm going to explain every detail of what I'm doing along the way and how I'm doing it.  I am going to introduce this company to the U.S. with a minimum of my own personal resources and it's going to make millions of dollars.

Sure, you might be saying, what makes you so confident that this is going to work?

Well, first off, it already works in other countries, the market has been tested.  Secondly, it's part of a burgeoning growth market.  Third, my background and experience make me more competent than most at developing an enterprise.  And fourth, I'm not sure, are you kidding me?  Is it possible to be that sure about anything in life?

But whether it goes or it doesn't, you're gonna learn a shit ton by learning from what I do, what successes I have, and what mistakes I make.

So if you want to entre- a preneur, you're gonna love this.

A little bit about me.  I am the former financial and business analyst for Sir Stelios Haji-Ioannou, the serial entrepreneur and founder of easyJet, easyGym, easyBus, easyCar, fastJet, and approximately 20+ other companies... Stelios is a master entrepreneur and has founded a number of very successful ventures making him a multi-billionaire and one of the richest men in the world, and I worked directly with him in his offices overlooking the Port Hercule in Monaco.  I worked with Stelios during the period he was involved in founding easyGym and FastJet, his African airline which is now floated on the London exchange.  If there were such a thing as having a career path as an entrepreneur, I have been on it.  I learned from Stelios a huge amount of things that led to his success which I will also share with you on this blog.

Since parting ways with Stelios to start my own companies I have met initially with brutal failure at first and moderate success which followed.  I currently operate both as a financial advisor and real estate developer, two business models which I have discovered can be lucrative but are service and skill based, thus limiting and frustrating me in their inability to grow exponentially in scale.  The first lesson we can learn on this blog are the failings of a service business, especially one attached to your services.  This blog may have past wisdom that I have accrued from what has, in essence been a freelancing of my skills, but it isn't about just working for yourself -- it's about introducing a business and doing so in a prudent and clever way as to maximize the possibility for its success.

My accumulated investment holdings at this point are sufficient to allow me the time necessary to endeavor on a journey like this.  And so I will.  And I will write about it.  :-)  If you're interested, cool, if not, well, you probably haven't even read this far anyways!

Strap yourself in and get ready.  I'm introducing Kronch Salmon Oil for Pets to the U.S. and getting it in every pet store in the country.