Colin is Founder & CEO of Sheets & Giggles, a Denver-based, fast-growing brand in the $12B US bedding space. Launched on Indiegogo in 2018 with a $284,000 crowdfunding campaign. Colin brings an incredible amount of passion and knowledge to the discussion which covers what could be the foundations of a top-level business course including creating successful growth strategy, building a business founded on sustainability, and maintaining a sustainable and successful culture in the organization.
There is a bonus for anyone who is keen on the idea of crowdfunding as Colin shares his proven methods that led to Sheets & Giggles being one of the most successful crowdfunded campaigns on Indiegogo.
Thank you to Colin for this amazing conversation and so many great lessons!
Hey, everyone. This is Eric Wright and the host for the show. You’re going to be listening to a really cool conversation with Colin McIntosh. Colin is the founder of a company called Sheets & Giggles. Not only is it a really wicked cool pun, but this Denver-based company is in fact one of the coolest and fastest growing brands around US bedding.
I know. That’s crazy. You’re thinking, “What does this have to do with the DiscoPosse Podcast?”
It actually is an amazing founder story. It’s a story about growth, how to scale. We’re going to talk about crowdfunding and really what it takes to run a company that’s based and founded in sustainability. This is for people, for products, and the earth. Really, really cool. So, great story. Enjoy the show.
All right, and we’re live, or as live you can get, live to tape, live to video, live to whatever. No, not even live to anything. I say live to tape, but I don’t think tape exists anymore, at least not in this century.
So extremely happy. This is going to be a fun one. I’ve got Colin McIntosh here.
That’s right. We can only hope so.
Colin, you’ve done something really neat in a variety of ways. There’s so much that I’d love to explore. I could literally put aside seven hours, and I’m sure that I would still run out of time in the stuff that I’d love to share with my listeners.
But you are founder and CEO of Sheets & Giggles. We’re going to talk about what that is, how it got started. First of all, A++ for the best possible name. I always love a play on words.
Colin, quickly, how did you get started? Where did you come from before? What’s the elevator pitch on Sheets & Giggles?
Well, I guess those are three different questions, and thanks for having me by the way, Eric. I’m really appreciative of you spending the time talking to me.
First and foremost, Sheets & Giggles is not just a pun. It is admittedly good pun, but it is also the name of my bedding company. Basically, we sell bedsheets, duvet covers, pillowcases, comforters, made not out of cotton, out of bamboo or polyester, but rather out of eucalyptus trees.
So we sell eucalyptus the sheets. The technical name for the product is called lyocell, which is a form of cellulosic rayon, which means that it’s made from wood pulp that’s dried out and turned into a fiber, which is then turned into a yarn, which is then turned into the softest fabric you’ve ever felt in your life.
We started the company in October, 2017. We began shipping. It took us a whole year to get to the point where we were shipping in October, 2018. So we’ve only been shipping for about a year and a half. Since then we’ve shipped tens of thousands of units. We grew in 2019 three X from 2018. Four X almost.
We only sell on our website, sheetsgiggles.com, on Amazon, and we have over 2,000 reviews now, 4.8 stars. Really thrilled by the public perceptions of the brands and the company. It’s been a wild ride and it’s been a pretty fast upswing. I just kind of find myself holding on for dear life.
The beauty of the product itself, just to touch on that very briefly in the beginning, so people understand about the eucalyptus lyocell, is that not only is it softer and more breathable than cotton, so it’s the best fabric for hot sleepers, but it’s also going to be very sustainable.
Our sheets use up to 96% less water than cotton sheets, no insecticides, no pesticides, about 30% less energy. Each sheet set, estimated, saves about five years worth of the average person’s drinking water compared to cotton sheets. We’ve estimated that we’ve saved literally hundreds of thousands of years of drinking water in just such a short period of time. We’re really excited to turn that into millions of years and we’re excited to kind of show people that there’s a really sustainable, amazing, high-quality replacement to cotton bedsheets.
This is always the fun one. I’ve talked to a few different folks who’ve come from different backgrounds, far as how they chose their startup and the venture that they wanted to take on. Some of them almost happened like, “I was just solving this problem.”
Quite often, especially in software … That’s an easy one. It’s like, “I had a problem so I built a platform because I needed to solve that problem.”
Choosing a physical implementation of something is always interesting because there’s way more skin in the game in getting it started. I can build software. It’s immediately super high margin, pretty easy to kind of map costs to lifetime value of a customer.
You got it, yep.
But you started building a physical thing.
Yeah, You’re not going to Oberlo and drop-shipping stuff. You’re legitimately building it from ground up.
How did the idea come to you? I’m always curious on that one.
It’s funny. Truth be told, I did actually look at Oberlo in the very beginning, but it’s just all cheap. No offense to Oberlo. Interesting company. It’s just it’s a lot of cheap, packaged goods straight from China. That’s just not what you want to do if you want to actually build a brand and build a company.
We actually have partnerships with great contract manufacturers that bring everything to life for us, large volumes and minimum-order quantities. It’s really fantastic to build your own product and have it from the ground up be completely yours.
In terms of how we got started and the idea, I think you’re exactly right in the sense that, a lot of entrepreneurs, they’re like, “I have this problem. Let me build a solution,” and they spend years of their life and hundreds of thousands or millions of dollars building the solution that’s in their head.
They may find that, when they finally released it to the market, the market says, “No thanks,” or more insidiously the market says, “We’d love the pay for this product but we don’t want to pay that price. We want to pay a price that doesn’t allow you to make a profitable margin.”
It’s super, I think, difficult for a lot of people to do what I did, in the sense of I built a business model that I felt was extremely sustainable, profitable, scalable. I knew I wanted to do a sustainable good because sustainability is a really huge issue for me.
I kind of backed my way into what sustainable product … And truth be told, I said, “That doesn’t require software engineers, doesn’t require Bluetooth firmware, industrial design, tooling, plastics. What product can I build that,” and this is my exact business model, “is in a massive commodities market with zero brand differentiation or loyalty, that is a highly fragmented marketplace, that has no market leader that I have to chip away at their market share, low switching costs so I can steal customers, high repeat buy rates, so that way I have a new chance every year to steal other company’s customers, and that is largely attritionally physical retail play, so I can bring it online with a direct to consumer model?”
I wrote that down on a piece of paper, all these different things, and I learned kind of what I wanted that model to look like from my past experiences, and then I started doing research on different categories. This is the honest to God truth. I owned a bunch of domains. I’m a serial domain buyer.
I have that fault. I also … “Hello. My name is Eric and I’m a serial domain buyer as well.”
We need a support group to be honest.
So I own sheetsgiggles.com because I thought it’d be a funny name for a bedsheets company way back when. I thought, “Does betting fit my criteria?” and it fit it perfectly. A $12 billion market, highly fragmented, no market leader, no loyalty.
Every single brand in the space is like, “This is the best cotton you’ve ever felt,” and it’s the white sheets with the white walls, the white comforter. There’s always a French-pressed coffee place somewhere on the bed, which I think is a really bad place for a French-pressed coffee.
Their marketing materials are all the same. It bores me to tears, and I realized how unsustainable cotton was. Cotton, by itself, uses, per t-shirt, about 2,500 liters of water. Per bed sheet, about 4,000 liters of water. It uses, as a crop, about 16 to 24% of the world’s insecticides, just by itself, as a crop.
These are real issues with cotton as a crop, and we use so much of it in this world, so I was really excited to kind of find out about this new material. I was kind of off to the races after it kind of hit me that this was the perfect brand that I was looking for.
I’m going to immediately pull back on the thing that you said, of course, as serial domain buyer myself. The reason is usually because you’re swimming with ideas.
How long have you been …
Doodling on this one?
Yeah, is this something that happened early?
Actually, I was so viscerally attached to the idea of starting a company based off of this pun, Sheets & Giggles, that I actually bought the domain in, I think, June or May, 2017, and I incorporated the company in October, 2017. So it wasn’t a huge lag, but that’s why you buy them, right? I usually write a business plan for an idea when I have it.
I was watching … This is going to sound so lame. Have you ever seen War Dogs with Miles Teller and Jonah Hill?
Oh! No, I have not seen that movie.
It’s an okay movie. It’s fine.
But there’s a scene in it where Miles Teller’s character is … An opening scene. He’s selling bedsheets. He’s going door-to-door to these retirement communities. I got so frustrated because he couldn’t make any sales. I’m a sales guy by trade, partnerships and that sort of thing, and I was really upset with his strategy.
I told my now ex-girlfriend because who does this? I said, “This is ridiculous. He didn’t do a business plan. He doesn’t understand his core customer. He bought all his inventory, had no pricing research, doesn’t understand his consumer. You know what? Pause the movie,” and I wrote a business plan for a bedsheets company that night.
Whenever I write a business plan, I always buy a domain for it, and I usually gravitate towards funny names. I said, “What’s a funny name for bedsheets company? Sheets & Giggles. That’s a funny name,” so I bought the domain that night, sheetsgiggles.com. I just kind of kept it in my back pocket. I grabbed a few social handles. Finally, it just was the right time to do it about five or six months later.
The one thing I also want to go to the start of things, you actually launched, as well, through a crowdfunding. You used Indiegogo. Talk about that experience. Is that something that you immediately thought, “This is how I can launch as an MVP”? Did it come as you were developing the business plan? When did it come into play that Indiegogo would be a way that you would do your initial go to market?
It was interesting. There was basically a kind of diversion in terms of how you … I should say there’s a diverting path in terms of how you’re going to found a company. There’s different ways to fund it.
For me, I just knew right off the bat that I wasn’t going to raise venture capital, at least right away. My last company that I was a part of … I wasn’t the CEO. I was just on the founding team. We raised millions of dollars and were on that kind of boom or bust type of timeline and unfortunately ended up being a bust. We all got laid off at 1:00 PM on a Monday, which was very emotionally difficult.
I knew right away that I didn’t want to get on the VC treadmill again. I didn’t want to a have to commit years and years of my life, chasing a massive exit, in order to get somebody a large multiple on their money.
I also was acutely aware that I was starting a company based off a pun, and I didn’t think a lot of investors would take it very seriously, so I ended up deciding that the best way to do it was to really put my head down and do a crowdfund, sure that people would respond really positively to the sustainability of the lyocell and the brand voice itself.
I pushed really hard. I gathered about 11,000 emails, I think, in eight weeks, ahead of our Indiegogo crowdfund on May 1st, 2018. I did that very strategically. I can go into kind of goal setting for crowdfunding and why we chose the goals that we did and how we achieved them. I think we raised $284,000. Proudest achievement of my entire life is convincing thousands of people to wait five months for bedsheets on a crowdfunding platform.
We got a ton of interest from investors after that, and that was great. It’s not like that was the goal. The goal was to go to market completely revenue funded. But from the start, from day one, I knew I wanted this to be a revenue-funded venture and revenue-funded business, not a venture capital backed startup that just burns cash.
Especially because you’re getting into physical manufacturing. Being able to bootstrap, you still need that initial outlay.
Again, if you talk about startups or small apps or something like that, you can literally go on Upwork and you can get it built by a team somewhere for a handful of dollars, relative to the cost of … This is the two things that really jump out at me. Number one, I’m going to pull apart your successful crowdfunding checklist, because I’d love to hear that. I’ve had a couple of other folks on as well and they talked about the winds and challenges of going through crowdfunding.
But I want to talk about the moment, 1:01 on that Monday, you get laid off. Is your mindset, “I’ve got to go do this again but do it differently”? Did you think, “I never want to do this again. I want to go work for a company and get a paycheck”?
You’d been through a failing startup, which is normal, sadly. You’re literally part of 90% of companies that don’t make it, especially venture funded, because there’s an incredible requirement to do this hockey-stick growth.
Most of the times the revenues are way upside down to the injection of input and the valuations don’t line up. If you don’t continue to hockey-stick, your next round of funding suddenly isn’t there. You’re like, “But wait! We’re sustainable!”
“I don’t want sustainable. I want hockey stick.”
It’s a great question. I think the baseline question is that I knew I wanted to do this again right away or what was I thinking when I got laid off.
When I got laid off at 1:00 PM on a Monday from a company that I had … I had written the original business plan for that company in 2013. I had watched it kind of incubate and go from my friend’s idea to a Denver Startup Week winner to a Techstars company to then joining it and raising millions of dollars, going nationwide retail.
I was really proud of that company, so getting laid off at 1:00 PM on a Monday was extremely emotionally draining. The first thing we did, to be completely honest, I had to wrap up three years worth of partnerships in three hours, which sucked. But then, at 4:00 PM, we all left the office and we went next door to the bar and got pretty tanked to be totally honest. That was kind of the first thing that we did.
That night the Marlins were in town. I’m from South Florida. I’m a Marlins fan, unfortunately, and they were in town to play the Rockies. Me and a few of my ex-coworkers went to the game. I was sitting there. We were drinking beers. There was probably about 10 of us, and I just kept telling them, “I got this idea that I’ve had for a few months about this bedding company. It’s called Sheets & Giggles.”
I kept telling them about it and they thought I was nuts. I probably lost my mind a little bit, to be honest, when I started this company. The considerations were I’m going to do one of two things.
I moved to Denver, from Seattle, for my last company. I had a great life in Seattle. I loved living out there. I loved my friends out there. I thought, “I’m going to move back to Seattle. I’m going to go work for Amazon. I’m going to get a very stable job, with good healthcare, with a good salary. I’m going to put some money away. I’m going to forget this startup dream and the startup lifestyle. I’m just going to do the normal career trajectory thing and maybe I’ll start a company in 10 years.”
The other option was all the way on the polar opposite, which is start my own company that I owned 100% of. I decided that there was never going to be a middle ground for me ever after that. There was never going to be a work for somebody else’s startup type middle ground because you don’t really get meaningful equity. You don’t control the outcomes. You don’t control the exit. You don’t control the negotiations, the investing. You may not control the strategy.
You’re being asked, generally speaking, at a start up, to take a lower than market salary with lower than market benefits for the potential equity upside, but it’s all a crapshoot. I don’t like the founders that dangle the equity options in front of people as this big, big potential hook. I like founders that are a little more honest about it.
I tell my employees, “Your options in this company” … Everybody has equity in S&G, but I tell them, “You may or may not see a return on this. Here’s how your options work and here’s what you should expect,” and I make sure that everybody’s paid market rate and that we have good benefits.
For me it was going to be one or the other. I just decided that, at this point in my life, I had a really good mentor network, really good investor network. I knew people in Colorado. That’s where my most of my professional network was at that point. I had a really good cabal of retail partners that, if I wanted to end up branching out into physical retail, I could always approach them. I had consultants that I had worked with at my last company on product and marketing and PR side.
I kind of put all the pieces together from my last company, where I wasn’t the CEO and I was just head of biz dev, to now being my own CEO. The question that I just had was if, “I could do it all over again, what would I do differently?”
The number one thing was start with a business plan that you felt very, very, very strongly about, build a financial model that showed profitable, scalable margins, and then go from there and build the product and sell it before you ever end up building.
Did the fact that you were watching the Rockies decide where you’re going to plant this company? It was funny when you pick the team. I’m like, “That’s purely a coincidence, I’m sure, but …”
I don’t know. I think that it was just one of those serendipitous things where it all kind of came together to be a Colorado company. We love it out here. We’re a Pledge 1% company. I would encourage anybody listening, who has their own company, to be a Pledge 1% company. We Pledge 1% of our equity, our profits, our time, and our products, to local Colorado charities that we choose. If we get an exit, then Colorado charities get 1% of that exit, which is awesome.
Also, we donate sheets to homeless shelters in the Denver area. We try to employ mostly folks that are in Colorado and in the Denver area, local people. We buy local. We warehoused locally for most of our beginning.
It’s been a lot of fun to be a Colorado company. This community out here is just so damn supportive. Everybody out here is so helpful. It’s not a cutthroat startup community like a New York or a San Francisco or a Seattle. Very, very collaborative out here.
They’re sort of very stylistic. Not that every business that starts in each region is like that, but it’s funny. We’ve got this vision of the Silicon Valley. It’s all monstrously venture back, aiming to be unicorns.
My company is a Boston-based startup, built for profitability from day one. The east coast startups tend to be much more around stability and building a sustainable company. Colorado, same thing. I know a few companies that are based in Denver and in the area. They are very much focused on that beauty of this west coast, relaxed lifestyle, but aim for sustainability and running a good business. You’re close enough to the Seattle crowd that you can pick up some really smart people and developers and stuff.
I love the freedom of that west coast thinking, but the sustainable approach of the east coast mentality. It’s funny that Colorado tends to just have that perfect landing. Maybe it’s the altitude. Something really cool there. I love the lifestyle.
It all comes together, and the lifestyle part of it’s good.
I will say people in Denver … And this is no knock on my team at all, because my team is definitely the hardest working team in Colorado, but I had other companies I’ve met and looked at. I will say a lot of people do move here for that lifestyle. You’re close to the mountains, ski weekends. They want to shove off at 4:00 on a Friday and work from home a couple of days a week.
We have a totally free, remote, work-from-home policy at Sheets & Giggles. We let people work from home any day of the week they want, and it’s unlimited. You can travel and work from Rome if you want. We say, “Why I work from home and you can work from Rome?”
There you go.
I think it’s just a really progressive place. With the younger employees and audience as well, people just kind of have this expectation for a certain work life balance. Hell, as long as everybody’s doing their job, I really could care less, but it’s definitely a more laid back place.
You’re obviously driving the outcomes and you wanted to make sure that you were sort of leading the ship. Clearly you wanted to have the most sort of equity, value, and also the equity responsibility in what you were doing, which is good. It’s a beautiful pairing, and a lot of people don’t get that. They’re like, “Oh wow. So you get the biggest buyout.”
They think that everybody’s like Zuckerberg. They want to own it for control. Well, they also own the responsibility. A lot of people don’t get that. This is a very challenging responsibility. You’re building a company to sustain other people and their lifestyle and their healthcare and their things. Based on the fact that you had this founding team at your previous startup, and now here you are, how important was how you create the team environment for new people when you-
That’s a great question. It’s actually interesting because, at my last company, I was, like I said, not president and not CEO. I wasn’t responsible for any of the culture pieces or anything like that, so I learned a little bit about what I liked and what I didn’t like about what the culture was at that company.
I will say that one of my weaknesses as a CEO, I think, is that organizational piece around … Now that I’m responsible for other human beings, working 40 or 50 hours a week on my idea and my company, I haven’t done a very good job, I think, of transitioning into that more managerial, deliberator, assigner, type of CEO. I’m still much more of a hands-on CEO. I drive a lot of value, at least I try to. I do all of our brand work, a lot of our marketing work around the brand voice, around the creative and the content.
We just hired a full-time content manager, so I’m working with him on making sure that our brand voice evolves and moves in the right direction from where I started it. I think that’s the piece that is the most challenging for me.
I will say that the biggest things that I’ve taken from my last company are reward people for doing good work without them asking. We give raises and bonuses to people without them ever having to lift a voice for that. I think that people feel extremely validated in their work when they’re financially rewarded without having to ask for it.
We have a very transparent culture. Everybody knows our revenues. Everybody knows our costs. Everybody knows our profitability, or lack thereof, from month to month. They know the money that we have in the bank and the runway in front of us and why our goals are what they are, in order to make sure that the company continues to succeed and grow and grow profitably. That transparency, that openness, is really important to me.
I’d say the last piece that I really took from my last company is … There was a story that I tell that I’ll never forget.
I was working probably about 16 hours a day at my last company. I would get in at about 10:00 AM, and I would just work until probably 2:00 or 3:00 in the morning in the office. I lived right across the street, so I would walk across the street and I’d just pass out for seven or six hours, and then I would wake up at 9:00 AM, shower, get dressed, come in at 10:00, do it again. I’m not a morning person. I’m a night owl.
My CEO sat down with me. She was my manager and she said, “Some of the people on the team are complaining that it seems you have a special privilege where you’re getting in later than they are.”
I said, “Did you tell them to shove it up your ass?
She said, “No. I told them I understood the complaint, because we require everybody to get in at 8:30 and you’re getting in at 10:00. We need you to come in at 8:30.”
I said, “I’m not a big morning person. I’m working till 2:00 AM every night.”
I said, “Why don’t you invite them to come join me in the office after 5:00 PM? Because they sure as shit are leaving at 5:15 every single day.”
We got into a big fight. Finally, I said, “Okay. I’ll be in at 8:30,” and from then on I was in at 8:30 and I was out at 5:00 PM on the dot, every single day, so they lost about seven hours of productivity from me every single day.
I’m one of those people that can work 12 to 16 hours without losing much productivity. That was really frustrating and emotional for me, but I followed my orders and it cost the company, I think, a lot in productivity.
I think that that type of narrow focus, where you’re more concerned about perception than reality, and you’re more concerned about having the appearance that people are equal or on the same footing or whatever it is in the company, instead of being more direct with people and telling them, “Look. He can come in whenever the hell he wants because he’s literally doing work until midnight at the office, every single night” … So I try to do that with my own employees.
I’ll never chide anybody for coming in late. I’ll never chide anybody for leaving early. If they got to go take their dog to the vet or fly home to see their family or take a vacation or whatever it is, totally good, as long as the work is getting done and they’re being productive.
It’s interesting. I had a really good friend, Phil, that I worked with. We were roommates for years, and then I got a corporate gig. I finally got a real job. I think I may have sort of connected him for an interview. He definitely earned his gig, got in there.
I watched him work at this other small startup, and he had the sort of same thing. He would roll in at like 11:00, but he would work and he would stay there really late.
Yeah, work on the weekends. You’re killing yourself.
Sadly, I even kind of had a go at him a couple of times. I’m like, “Dude, you got to you got to be careful because, when I get you into this corporate gig, they’re a 9:00 to 5:00 type of shop.”
I said, “They won’t get it.”
He was able to do it very well. I, mistakenly, really kind of set him up as, “This is not good, what you’re doing.”
It’s funny. Years later, now he has his own company. He’s got like 20 employees. They just hired their first CEO, doing amazing. Inevitably, he’s probably working way more hours than he ever did in any single day at any other gig.
I failed to recognize and support what he was doing because I was kind of wrapped into the, “I’ve been told this is how I kind of need to be when I’m at this joint,” and then realizing, “No.”
From that point on, when I sort of listened more to what was being successful with other companies and other people that were changing the roles inside organizations, I became much more like that. I was still there at 8:00, but I would work in the evenings differently and I started to change my approach, learning from him. I hope I ever thanked him for teaching me that the hours that you’re in the office are the hours that you’re working.
As a result of me choosing a very startup and entrepreneurial mentality, my job changed incredibly. My teamwork can change it. I changed roles and got upgraded and raises. It was phenomenal. From that point on it changed the way that I approached everything. It was a good lesson, but, sadly, if I had stuck to that, “Sorry. You should be working. Other people are noticing you’re not here till 11:00. His stuff is getting done,” and whatever … It’s a tough balance.
The corollary of that is that you give people as much work as you can give them and you watch how they respond to it. When I was 23 years old, I was a tech recruiter. Actually, I started my career at a company called Bridgewater Associates, which is the world’s largest hedge fund.
Oh my goodness. Going to say I know it very, very well. As a 12-time reader of principles, I studied Dalio’s methods for a long time.
He’s an interesting guy. That’s a whole nother podcast. I could talk to you about Bridgewater.
I got fired from there in like six months because I was terrible at my job and the culture was just not for me, at least in the practice of it. In theory it sounds great.
I was kind of up a creek without a paddle. First job out of school. I thought I had made it, the world’s largest hedge fund. I ended up becoming a recruiter at the company that hired me there, ironically.
Within my first year as a recruiter, I had 15 accounts. Some of them were the biggest banks in the world, that you’d recognize. Can’t say who they are. Some of them were venture capital backed startups that are now doing great. Others of them were small businesses.
I was mostly hiring software engineers. I knew nothing about software, nothing about banking software or why they would need a C# candidate versus a C++ candidate, or anything like that. I basically had to teach myself all the background information about the different tools and why they were powerful for this and not so much for that and understand how to talk in different styles to talk to different types of engineers.
My boss at the time, a guy named Michael … Who I love. He’s one of my good mentors. He didn’t see a 23-year-old kid who had never done recruiting and who had gotten fired from his first job in six months. He saw someone who was really hungry to prove themselves and who was upset at how their first job went and had, at least, the ability and the work ethic to apply himself and become a good recruiter.
Within six months I was managing five other people at the recruiting firm. I had 15 clients that I was all the direct account manager for. I was hiring multiple software engineers every single month. It was not because I was blanket emailing a thousand people at a time on LinkedIn, but because I was taking calls from candidates at midnight and because I was sourcing people on LinkedIn at 2:00 AM and I was sending them messages at 4:00 AM, knowing that it would be the first thing in their inbox when they woke up in the morning.
I was doing all these things that were just insane. My colleagues would call me the recruiting vampire. They’d have so many emails in their inbox when they woke up from me.
I wasn’t doing it to impress anybody. I was doing it to make sure I was successful at my second job. I ended up catching the eye of one of my clients, and that was the first startup that ever hired me. They said, “We’ve got this biz dev role. We love working with you, and we think you’d be great in the biz dev role. Do you want to leave recruiting and come work for us in Seattle?”
I moved from Connecticut to Seattle in 2014 for that position. I think a big, momentous change in my career and life trajectory was applying myself in a role that is now no longer super relevant for what I do. Although, as a CEO, the fact that I’ve got hiring experience and recruiting experience is super crucial.
It’s also the fact of the amount of work that was given to me as a 23-year-old with no discernible skills and was told to me to just figure it out. People will respond in different ways to that. Some people will shut down, and they’ll say, “I don’t know what I’m doing and I need help.”
That’s just fine. It’s not a bad thing, and then other people will just respond and go into a different mode. That’s what I love to see from my coworkers and my employees. Who’s actually responding positively to being overworked and who is actively complaining about being overworked. Luckily, it’s mostly the former.
You have a choice. You can avoid the situation or … It’s how you deal with it. You can’t avoid conflict. You can choose the way in which you deal with it.
It’s funny. I had a recent situation where somebody had difficulty at an organization I was at and I said, “I can understand why.”
Really got sort of a tough bit of a browbeating in front of like 10 people in the room. It was a tough thing to watch. As it’s going on I’m thinking of a thousand ways it could have been dealt with better and why it shouldn’t happen in that way, but it did.
It was funny. Talking with somebody and I said, “I can understand. I haven’t been in that position.”
The fellow that I worked with, he’s like, “Dude, you have been. It’s a matter of how you chose to deal with it that changed your outlook.”
I was like, “Oh,” and then you look back in your mind. You’re like, “Oh boy. I do remember having difficult situations, was given complete freedom, and thus complete responsibility, and I made a choice in how I dealt with it.”
It’s good that, at 23, people just drop it on you. In a way it’s a lot of a test. Building your team as well, as you build S&G, it’s about, “Look. I’m going to give you a lot of responsibility.”
I’m assuming that you effectively treat them like you would want to be treated, and then you watch how they react. You support them in how they need to.
Right. I’m not trying to kill anybody with overwork. I think that there is no risk to giving people more work than they can handle. The only risk is that you have to hire somebody else.
The the downside of idle time much, much, much outweighs the downside of somebody feeling a little bit stretched too thin. You tell people, “When you feel like you’re stretched way too thin, you got to let me know and we’ll hire somebody else,” ut I love people that just will be so comfortable with a to-do list of a thousand things and have the autonomy and the gumption to really take it on themselves. Those are the type of people that I want to work with and people that are comfortable with ambiguity, people that are goal oriented.
To pivot into one of Bridgewater’s core principles of task orientation versus goal orientation, so many people have goal-task confusion. I think that that’s the thing that killed me the most about my last company. Again, not to speak ill of anybody I worked with. I loved all my coworkers, but we had such task-goal confusion sometimes, where people would get so attached to a certain way of doing things or a certain feature or a certain strategy or whatever it was.
My whole thing was the goal is to make X million dollars of revenue this year. It’s completely irrelevant how we achieve that goal. Those are all just tasks.
If you want to tell me halfway through training 100 stores that, actually, my time is better spent hiring 10 interns and then training them and having them go out and train 10 stores, I’m not going to get emotionally attached to the fact that I’ve got this sunk cost in the 50 stores that I’ve already trained and I’m going to need to spend the time on this new version of it. I’m not just going to keep chugging along. I’m going to say, “That makes sense. Let me go do that.”
If one feature doesn’t make sense for our audience and another feature ends up building us into a new channel, into a new audience, and opening up a new line of business, then maybe we should build that feature even though it’s not part of our core feature set, or whatever it is, and it’s something slightly different.
I think that that’s also a thing that really drives me crazy with people, is task-goal confusion, so I’ve really tried to really beat it in to my coworkers at S&G that the goal is to build a successful, longterm company that lasts a long time, that makes many, many thousands of people happy, and however we do that is completely irrelevant.
We can pivot into a new category tomorrow and I’d be happy with it if it achieved our goal better. There’s obviously limits to that. There’s realistic limits to that.
We were going to move forward with some new product lines this year, for example, and we had spun up a few different manufacturing partners around those lines. About a month ago I decided, “You know what? It’s actually not the best decision for us to pivot into these new product lines as quickly because we’ve got too small of a team. We’re going to split focus too much. Let’s go ahead and bring it back and really focus on our core products and make sure that we’re really excelling in this specific space.”
What I loved about it is that I didn’t get one peep from my team about the work that they had already done in that other direction, about the content and the manufacturing relationships and customer service prep, and all the other things that we had done. Instead, they said, “You know what? That actually makes sense. We like the focus. Let’s pull back and do this.”
I love that because it was completely unemotional, even though it could have been really ugly, in terms of, “You wasted all this time going in this other direction.” That’s not a productive conversation.
It’s the interesting challenge of choosing it as sort of a stoic approach to it. It’s like don’t get attached to the task, but to the goal, and the goal is the company goal, and the company goal is to create a sustainable business using sustainable products and sustainable approaches. Spreading yourself too thin, not sustainable.
If you go back to the core vision, it plays out that way.
Speaking of tasks, I don’t mean to pull you into a task. I don’t mean to give an immediate Indiegogo lesson, but I’d love to hear … You talked about the email list. People who are about to start up and they say, “I’ve got an idea for a product. I’m firing up my Kickstarter tonight.”
It’s like, “No, no, no, no, no. Before you’re ready to launch, you have this huge runway.”
What were some of the steps that you had that made it so that, when you launched, you were actually ready to go?
I think you’re going to want to bookmark this minute and tell people to skip all the other fluff and nonsense because this is my favorite thing to talk about.
Basically, you’re exactly right. Everybody and their mother thinks that they’re going to do a Kickstarter. They’re going to put it online. “This is such a great idea. It’s so obvious. Why has nobody done this before? We’re going to make a million dollars. I’ve seen people make a million dollars on Kickstarter. Let’s go do this.”
8,000 other projects launched that day. Nobody ever sees your project. You make $35. Your friends and family didn’t buy it. Even if they did, what are you going to have? 50 friends and family, maximum, spend $100 each for $5,000? You can’t start a company like that. People don’t understand the mechanics of a crowdfunding campaign.
Thankfully, I had crowdfunding experience at my last job. That was my first time, at my last job, with my coworkers at that place, and that was kind of a disaster. We had like 30 people working on the crowdfund, and we ended up doing like $150,000 in a crowdfunding campaign. We ended up doubling that with a team of two for Sheets & Giggles.
What we learned was a number of things. First and foremost, working backwards from goal setting. Let’s say that you want to do a $100,000 Kickstarter or Indiegogo. That is literally just a function of the price per perk multiplied by the amount of people that ended up buying it.
If you want to do $100,000 and your average unit price is $70, which was what our average unit price was at the time, and you assume that people are going to buy 1.5 units on average, that means the average order value is going to be $100, give or take.
If you want a $100,000 goal … And generally speaking, with crowdfunding math, you need to get 30% of your entire goal in the first 24 hours. That’s how the math works. Huge boost in the first 24 hours, discoverability, homepage, that sort of thing, and then it tails off, and then you have a little bit of a boost at the end.
If we want to do $100,000, and we want $30,000 in the first day to get 30% of that, and we know our average unit price or average order value is going to be about 100 bucks, then that means that, on the first day, we need 300 customers. We know that, for a crowdfunding campaign, almost all of your day-one customers are going to come from your email list and then people discovering you organically on kickstarter.com or indiegogo.com.
I didn’t want to leave anything to chance. I said, “I’m going to assume that nobody discovers us on those websites.”
If we want 300 customers on day-one, an email list reasonably converts at about 3%. 2% if you’re doing a bad job, 4% if you’re doing a good job, and then 1% if your terrible, 5% if your amazing.
I said, “If we want 300 customers day one, that means we need 10,000 emails of interested, qualified leads, period. End of story. Blinders on. That’s what we’re going to go get.”
Starting in February, 2018 … January, we spend a lot of time building the site and the logos and the visuals and that sort of thing. February, we did our photo shoot, and then ,starting in late February, we put up a really simple landing page with a company called KickoffLabs. Super cheap.
We had a Shopify store set up, linked to it, Google analytics, so we could track everything, and we literally ran a few hundred dollars for the Facebook ads to see how many emails we could gather out out of a thousand visitors and what type of percentage email capture would get, what our cost per lead was.
Once you got your cost per lead, you can work backwards to your cost of acquisition at a 3% conversion rate. We ended up capturing emails in that first week at a 38% clip, which is absolutely crazy for a consumer company. Anything over 10% is good. Anything over 20% is kind of unheard of.
We ended up, over the course of eight weeks, captured 11,000 emails at like a 46% conversion rate. Optimize all of our landing pages, did a bunch of A/B testing and improvements. We ended up spending less than $10,000 to get those leads, which was great.
Day one, sure enough … Our email lists, we had prepped them a couple of weeks ahead of time, given them a couple of teasers. Day one, we pushed it live. We got our first orders before we ever sent it live because we had people refreshing the page, waiting on it.
It was great. It was amazing. We ended up converting our email list, day one. Sure enough, at about 4%, we got 450 backers day won. It was like clockwork. It was incredible. We ended up getting $45,000 day one, and then $284,000 over the course of the campaign, so a slightly higher multiple than that 30% type of take, because we had some press boosts. But, overall, it was exactly the way we wanted day one to go.
The funny thing is the percentages work out and the numbers are there. These are core lessons. The more you go through this with people who’ve started these ideas and companies and do email lists and everything, I just want to tell them, “These numbers work, fundamentally.”
Like you said, if you do 5% on an email conversion, it’s like, “Holy heck! What did you do? That’s awesome!”
Most people will look at you. “Wait, what? You mean 95 people didn’t even open it?” or whatever.
You’re like, “No, no, no. You get 30% open rate, you get 5% conversion, and you’ve done something amazing.”
If you do 3%, you’re on the money. That’s average. If you do 1%, something’s wrong. Maybe change your opener, do some A/B testing.
It’s funny that you … Sorry. Interesting. Funny, peculiar. Not funny, ha ha. It’s funny.
How am I funny to you, like a clown? What am I?
To have approached it with the science and the business behind it, instead of, like you said, “I’ve got this amazing idea. I’m going to fire up a logo and people are going to sign up. All I got to do is get my first hundred backers and life is good.”
First of all, when you ask people, “How many backers do you plan to get?”
“Well, I’m going to put it at 12,000.”
“What are your perk layouts? Okay, good.”
Like you said, what’s your cost per person, per perk? Work the averages. Know what your first day-
We could do multiple podcasts on … There’s perks strategy. There’s pricing strategy. There’s content strategy, site layout, mobile optimization. There are a couple of different things around brand validity and borrower validity and how you’re going to make sure people think that you’re a real company and not some charlatan. There are different strategies and theories around shipping and around international orders versus domestic.
A crowdfunding campaign is a huge endeavor. I think that people need, minimum, eight weeks of prep, and probably 10 to 12 is the sweet spot. Most people don’t give it that amount of time. There’s entire blog posts you can read around which day of the week to launch it, which day of the month, which month of the year. When are you going to be shipping? People are going to be willing to wait in this category six months, but in this category 12 months, or in this category three months.
There’s so much that goes into a crowdfunding campaign. I think that there’s people that really excel at it.
One of my good buddies, I’ll give him a shout out. His name is Tommy. He’s the CEO of a company called Secret Hitler. I’m not sure if you’ve ever played that board game, but they did a million dollar plus Kickstarter. He does board games on Kickstarter for a living. He loves it, and he makes new board games all the time. Secret Hitler is probably the most famous one.
He and I, we collaborated a little bit on this, in the sense of he gave me some feedback, a couple of nights before we went live, about our page structure and layout and that sort of thing.
Everything is so, so crucial when it comes to that conversion rate. We ended up converting on Indiegogo about three times the average Indiegogo campaign, in terms of the conversion rate. I was really, really proud to see that. I think that that was one of the reasons we knew we were on to something.
I always love to do is for the closing. I would ask you top books you read, all sorts of lightning-round things.
One of the things I like to ask, totally stolen, it’s like a Tim Ferriss question or something, is what’s the worst thing that’s happened to you that you’re most thankful for? I was going to say 1:00 on that Monday was probably pretty close on the list, but what else prepared you for what you knew to be your future successes, whether you felt it at that time or not?
Oh man. Worse things happened to me, not in the context of the business, that I’m thankful for, is, I think, when I was 24, 25, living in Seattle, I had a four-year, five-year relationship end. At the time it was fairly devastating.
I flew to Florida for, I think, holidays that year. I met up with my ex. We had only been broken up for a couple of months. I basically told her that I wanted to get back together and I wanted to move to Florida and be with my family and get a job at … My big plan was he had a job at Citrix and Fort Lauderdale.
She said no. We’re still good friends to this day. We stay in touch. I am so freaking glad she said no. I was devastated at the time. I was just beside myself. But now, looking back, that was such a formative, important moment for me because it forced me to stay in Seattle, finish some unfinished business, put a chip on my shoulder. I said, “Okay. If I’m going to go through this heartbreak, then I’m going to make it worthwhile.”
The original breakup was so that way we could focus on our career goals. She got into dental school. I had my startup career. I ended up taking the chance, moving to Denver for this other company, going through Techstars. My salary was like $1,600 a month when I started, learning a huge, huge amount.
Eventually, directly led into me founding my own company and being where I am now, which is still far away from what I would consider a “success,” but it’s definitely a dramatically different path than I would have taken if she had simply said, “You know what? Yeah. Let’s get back together.”
It was a very, I think, close coin flip between one of those two directions. Definitely one of those things, super life-changing in retrospect.
I love the $1,600 a month. I always thought, when you tell people, “I work for a startup,” they’re like, “Wow. It must be-
That was before taxes.
I know. “He must be living the dream.”
“Oh yeah. Living the dream.”
You don’t understand. Equity is worthless, until you’re on the other side of an exit.
I worked on S&G without a paycheck for 15 months. I started in October, 2017, and I was on COBRA for 18 months. COBRA sucks by the way. I can go on a tirade about the healthcare system in this country.
But I was on COBRA for 18 months. I didn’t take a paycheck 15 months. I started paying myself in February, 2018. That was really special, when I finally got to do that.
There’s a persistence that you’ve taught yourself that most people could take lessons on. Truthfully, like I said, at the start of the call, I could literally talk all day to you, as somebody who’s dabbled with the, “I’m preparing for a Kickstarter campaign and I’m taking the advice you gave, amongst others that I’ve gotten, which is I’m ready to go now, which means I’m actually going to launch in six to seven months because there’s a lot to do.”
I hope that people listen to what we just said and literally could have a notepad beside them, whether it’s in the startup, whether it’s in the relationship, whatever they want to do next. [crosstalk 00:55:12] lessons.
Funny enough, I’m actually writing a white paper. Not a white paper. It’s probably like going to be five pages about the front-to-back crowdfunding strategy and all the common mistakes and different kind of strategies that we discussed about, everything from how do you set your original goal to pricing strategy, to content, to a customer engagement, and preparation and execution, and then delivery.
I’m about to start that, so I’d love to share it with you and get your feedback on it when it’s done, in probably a few weeks or a month.
Nice. We should start a crowdfunding campaign to fund that.
I don’t know when I’m going to find the time to do it, but it’s one of my New Year’s resolutions, because I keep getting people asking me for crowdfunding advice. I give it to them freely, but it’s not scalable to have the one-on-one conversation, so I wanted to just get it all out on paper and share it with the world.
Well, you’ve got a lot of profound lessons that you’ve sunken into a young soul. You’ve done a lot. Colin, for that, thank you for sharing the time with me today.
For folks that want to get ahold of you, want to learn more about you, with Sheets & Giggles and the rest of your story, what’s the best place to send people if they wanted to get out and get in touch with you?
I’m easy to find. I chose a brand name, in Sheets & Giggles, that is the easiest thing possible for SEO. If you look for Colin Sheets & Giggles, you’ll find me, Colin McIntosh. I’m on LinkedIn.
I can’t promise I’ll answer emails. I’ve got 2,500 unread right now, but I’m happy to lend advice whenever I have free time. Sheetsgiggles.com is the website. We’re on Amazon as well. I think we’ve got 300 plus reviews on Amazon now, four and a half stars.
If anybody’s looking for some bedsheets Sheets & Giggles Eucalyptus Bedsheets would love for you to try them out yourself. If I can ever be helpful to anybody in the audience, feel free to reach out on LinkedIn or via email.
Hopefully, you’ll be among my first set of sponsors. I’d be happy to evangelize the brand, man.
That’d be great.
Again, I appreciate what you’re doing. Sustainability is obviously … It’s a profound benefit, the fact that you’re giving back. We didn’t even get into Good Business Colorado. There’s a ton more-
Quick plug, if you don’t mind. The Australian wildfires, really, really bad for koalas. We donated about 20 grand to the World Wildlife Fund. There’s a lot of really great organizations in Australia. We don’t harvest our eucalyptus trees from Australia. We have them on bio-diverse farms in India and South Africa and a few other countries.
In terms of what’s actually happening in Australia right now, definitely near and dear to our hearts, just from an environmental perspective and from a ecological impact perspective. A lot of animals. I think last check was something like half a billion animals have died in the fires.
World Wildlife Fund, really awesome charity. We’ve donated like $17,000 at the final tally through our community. We’d love if anybody else in the audience was to contribute. Definitely consider throwing in 20 bucks or 50 bucks or something. I think 50 bucks is the cost that it takes to save a koala, so you can make a really tangible difference.
Nice. Definitely. For folks that are out there, that want to catch up on this, we’ll stay connected on a bunch of things. We’ll do a follow-up because I want to dive a bit more into some of these sort of … We had some good tangents I would love to have pulled another hour out of. We’ll do that in future.
For the folks, of course, if you want to hear this and more, please do go to iTunes, give us a rating. Stars are always welcome, especially if they’re five at a time. If you love it, great. You don’t, send us an email. You can always reach me. I’m @discoposse on Twitter. My DMS are open. Always good to get feedback.
For folks, again, follow the story of Colin, Sheets & Giggles. We’ll have lots of links in the show notes and look forward to getting a chance to chat again soon.
Awesome. Thanks so much for having me. This was really fun.