How the Founder of TarDisk Saved a Declining Company (While Doing His MBA)

How the Founder of TarDisk Saved a Declining Company (While Doing His MBA)

shopify masters tardisk

Sometimes you make bad decisions that have the potential to kill your business. But if you regain control of the wheel in time, you can correct these choices and steer your company back on course.

In this episode of Shopify Masters, you’ll learn from Pierce Schiller, founder of TarDisk: the first plug-and-play hybrid drive that doubles or even triples the onboard storage of your Macbook.

Pierce made $200,000 in 6 months, enough to finance his plans for graduate school. But when he hired a CEO to run TarDisk while he was away doing his MBA, his business took a turn for the worse.

This is the story of how he saved his company. 

On this podcast, you'll learn:

  • How to get the most out of an MBA program and how to run a business while pursuing an MBA.
  • How to run a hyper-targeted and successful YouTube advertising campaign.
  • The pros and cons of paying employees through equity versus commission.

    Listen to Shopify Masters below…

    Like this podcast? Leave a review on iTunes!

    Show notes:

    Transcript

    Felix: Today, I’m joined by Pierce Schiller from TarDisk.com, it’s T-A-R-D-I-S-K.com. TarDisk is the first plug and play hybrid drive that doubles or even triples the onboard storage of your MacBook and was started in 2014 and based out of Boston, Massachusetts. Welcome, Pierce.

    Pierce: Felix, thank you so much for having me.

    Felix: Yeah, excited to have you on. Tell us a bit more about the store and what is this product that you sell.

    Pierce: Sure. We are TarDisk. I think you summarized it pretty well. We call ourselves the first plug and play hybrid drive. What that means is we’re a chip company, we sell a little chip that you stick into the side of a MacBook computer which makes a otherwise non-upgradable machine up-gradable. For any MacBook user that was out there that probably purchased a baseline level computer, it came with a small hard drive. Apple makes it impossible or at least very difficult to upgrade these hard drives. Our chip solves that problem.

    Felix: Very cool. What was your background? Because hardware companies like this especially in technology space are very hard to start. Did you have any kind of competitive advantage coming to this? Did you have a background in this industry?

    Pierce: Oh, goodness, no. I am the classic example of a generalist. I’m an undergraduate degree in Bio-engineering. I went on to business. I’ve been involved mostly in bio-tech startups. Consumer electronic space is relatively new for me. It’s a story in how I got here but no, no formal education whatsoever other than a thorough enjoyment for dabbling with all things electronic.

    Felix: Very cool. This idea of you being generalist I think resonates with a lot of other entrepreneurs that are out there that are listening. Not necessary a specialist or anything but good at a bunch of different things, interested in a bunch of different things. How did you feel that kind of I guess model of yourself, did it help or hurt you or the company, hurt your process of starting a company? What was the process like for that?

    Pierce: If I look back I probably have had one goal since graduating from college, which at this point god, almost ten years ago and that was never to get a real job. With that degree that I spoke about before, I found myself going more often into the bio-tech space. I was involved in a number of bio-tech type startups. After being out of school for a couple of years I decided that I want to go back and try and get an MBA. After I was accepted into an MBA program, I woke up one day I said, “Oh no, if I have to go to school and take out all these debt to pay for this masters degree.”

    When I come out of school I’m going to have to get a real job and that’s exactly what I don’t want to do. I started a whole bunch of different ideas. I started juggling them around and I threw them at the wall. This happened to be, this is the second version but this is the evolution of the idea that hit. I was able to start a company with the specific goal of paying for my higher education before that education started and I was successful in doing that. What TarDisk is is it’s really the evolution of that space.

    Felix: Did you ever end up going back to school?

    Pierce: I did, I did. I graduated at this point about a year ago. I did get that MBA.

    Felix: You’re running a company while getting your MBA. What was that like?

    Pierce: Busy.

    Felix: I bet.

    Pierce: Coming into it, I had a very strict goal for myself. I referred to it, my goal was $200,000 in six months. That was the estimated cost of an MBA and I went into it with that goal. I didn’t quite achieve it but by the end of my first semester I did have school basically completely paid for and coming into school, my goal was not to continue to focus on these products that we were building but instead to bring someone in to run the company for me while I was full time student.

    That worked, it worked at least for the first couple of months, first three or four months or so and then we went to a landslide. Actually, all these happened when I was overseas on a winter study abroad type program in between semesters. When I got back to the states this is January after my full semester. All of a sudden this company was doing terrible and I got kind of back involved not to the level I am now by any means but certainly enough to set the company back on a path and to continue to maintain its success.

    Felix: Okay, a couple of interesting things there. Definitely I want to talk about your experience of hiring someone to run a business while you go off and do something else, in this case, pursue higher education. Also, the MBA I think this is a path that a lot of other listeners, other entrepreneurs consider pursuing especially ones that don’t have a quote unquote, “formal education in business.” What was the experience of getting an MBA? Any tips on how to make the most out of it for anyone that’s thinking about it or maybe going to be going into an MBA program anytime soon?

    Pierce: I think it has to make sense for what stage it is in your career and I think that the program that you’re involving yourself in also needs to make sense for what it is you want out of it. For me specifically, and I’m not a representative case, I was interested in getting access to a larger network than I had access to previously. I was fascinated with this idea of being in a room with these hyper successful people and then at the end of the program be able to call those people my friends and call them up when I need favors. That was all very important to me.

    I think on the formal education side of it, I went into this with being weak in finance. It’s still just as weak. I think a lot of the things that you can learn in that setting you could probably learn in a similar setting online reading it, researching it, just trying to catch stuff up to speed for what it is you need to know. Although truly, the exposure to these broad business plans and broad ideas did shape the way that I’ve run the business up until now and will shape the way that I continue to run this business and the way that I’ll start my next business I’m sure.

    Felix: Yeah, I think it’s a common theme or trope that super successful entrepreneurs are sort of been butt heads with the MBA types, I guess. If you go in and go get the MBAs, MBA students, when you went to this MBA program, did you find that there were a lot of entrepreneurs in there or did you see more of the career I guess business people in these programs?

    Pierce: Yeah, not at all. It’s probably why I was able to sneak in pass the admissions boards. I was probably, out of 900 person class there’s probably handful of 20 people that had true experience with getting their hands dirty in building companies prior to the MBA program. Coming out of it though, I think that they did do a great job in shaping the excitement around what it means to build your own business. I think that a lot more people exiting the program went on to maybe not to necessarily start businesses but at least to be involve in very early stage [teams 00:08:51] doing some very cool things.

    I think that in any group of people that you find yourself in, you’ll find extremes. I was probably just at the far extreme of I was like a pit bull I just locked in on this idea that I’m going to start another company and that’s just what it’s going to be. I think that there’s a lot of people that wound up being I don’t know if the word is convinced but stirring themselves in this direction of starting a company after school. I was among friends, I’ll just say it that way.

    Felix: Very cool. Would you say the most valuable I guess aspect of this MBA program was the network and the friends and the connections you made coming out of it?

    Pierce: Yeah, without a doubt. Absolutely.

    Felix: Awesome. I want to talk now about this plan you had about finding someone to run the company while you’re going to school. Was this always in the back of your mind or did you come out of necessity as you started this program?

    Pierce: My goal was never to be a CEO of consumer electronics company ever. That’s never the goal. My goal was to earn $200,000 in a very short period of time before school started. When I started the search to try and bring someone in to run this company for me, it’s very easy to bring someone in to try run a company for you if you don’t value that company very much. Right? The idea there is that I already extracted the value that I want to extract out of this and anything else will just be icing on the cake.

    The way that I had initially structured the search and the way that I would recommend any hiring happens is through an extended network, friends of friends and just getting that word out there. Then the way that I had looked to structure this was through the equivalent of like an earn out. Vesting into an ownership stake over a period I think it was of a year. I think I gave up the majority of the company under that vesting agreement with a cliff of course. We’re talking about this, it’s interesting because it sounds very good from the 6,000 foot view, this failed, right?

    This worked great for a three or four months and it worked great at running the company but it didn’t work so good at growing the company and didn’t work when you’re dealing in this fast-paced consumer electronic space. You need to make sure that you’re constantly feeding things into this pipeline or things are going to run dry. That’s what happened here so the individual that I want to bring in to run the company did a spectacular job at running it but didn’t do such a hot job at growing it that’s when I wound up stepping back in and shuffling things up a bit.

    Felix: I see. The person you brought in was great at maintaining but in a fast-paced industry like tech and hardware you have to do more than that. You have to be actively growing the business and feeding that pipeline. When you did hire someone to come in, what kind of guidance did you give? How do you even begin to I guess transition the reigns over to someone else?

    Pierce: This was not such a short process. I can think back to this, it’s a couple of years ago now. I started the search probably in the month of June. Found someone by July. I had them up here in Boston by probably late July, early August and had the reigns fully handed over by late August early September. Just in time for me to start classes. The way that I structured this, I tried to document. I mean, documentation is the only way to win this things. It’s the only way you can ever scale any business, I’m probably preaching to the choir there but I started by just documenting what the process is that I had in place.

    This is everything from listing out our suppliers to talking about where the money flows and how to deal with different customer service issues. I mean, this was a very complicated operation. This is relatively straight forward especially we compare it to what it is that this company is today. The trick here was yes, documentation and then sending that documentation over and reviewing it together. Then, having a couple of week of transition where I was available almost all the time to answer whatever question needed to be answered to get us to the next step or to get the company moving to the next step.

    Felix: Did you have to meet frequently? How did you I guess stay in contact during this period of time especially when you’re going to school and you have someone running the business? How was the communication like?

    Pierce: I think my commitment was five to ten hours a week that I would be available. Up until then I was available whenever I was needed. Once I handed over the reigns honestly I was just too busy. Maybe that’s why it only lasted for three, four months but I was too busy to get involved and I think that, what is that saying? Necessity is the king of invention or the mother of invention or something. The fact that I wasn’t there to answer some of the questions that came up kind of forced new leadership to figure out their own answers. That worked.

    If I were to do things differently again, I would probably set the same thing up the way that I set it up but I would set it up with a structure of a support system. I would probably look to hire an additional help just someone that the new leadership could allocate more tasks to because I think what wound up sinking the ship was things just got too busy. Leadership fell behind and then they got to a level where they just couldn’t … They’re [inaudible 00:15:13] they couldn’t stay in front of upcoming innovations and it just didn’t work.

    Felix: You’re saying it worked well for three to four months and you started to slowly see I guess the future. You started to slowly see that this company was heading in a direction that was not going to be good. How did you step back in? I’m imagining that you’re still in the MBA program because this last more than just three to four months. How did you I guess step your foot back in into the business?

    Pierce: Very simply, I was gauging revenue. When I took the business back over, revenue I think was one fifth what it was when I handed the business over. I said, “What the hell is going on?” I just stepped back in there and like I said, shuffled things up. Let go of old leadership, hired in new individuals. This time when I hired in luckily old leadership hadn’t vested yet. When I got the new individual involved in the company, this time I made sure not to give out equity. Instead I did a commission based structure that was based on the profit that was coming into the company.

    Again, still at this point although any income coming in from this, from my perspective is just icing on the cake. I had already extracted the value that I needed to extract from this business. At this point, I was just keeping the thing afloat because it just felt like a shame to let it die but this wasn’t my be all end all business by any means. It’s just an opportunity to continue to have this income rolling in which was nice. When I stepped back in, I was very clear with what it was that I wanted to have happen and I was very clear with what my expectations were for the new individuals I was bringing in which is basically you run this thing and I’ll bringing you guys ideas and then execute on them, that kind of works.

    Felix: I’m sure that’s not as rosy as you describing it but for me it sounds like the ultimate entrepreneur dream where you come with ideas and other people will execute it and you just keep on coming up with ideas. The people do the I guess more of the dirty work, the stuff that’s really can kind of grind people down. It’s just funny the way that you describe it because I think a lot of people can imagine that that would be the perfect set up for them if they wanted to start a company.

    You mentioned that you instead of giving equity like you did the first time, you learned from that mistake you learned that that didn’t work out as well. You focused instead on compensating the new hires through commission. Talk to us about I guess the pros and cons of that. Would you ever give equity again? When does it work? When does equity work and when does commission work?

    Pierce: I mean, equity is like marriage. You give equity to the people that you want to be married to. The problem with equity especially equity at vesting is a lot of times once it’s vested, this top talent that you brought in with equity will probably want to leave. That doesn’t apply so much to what my experience was in the fall but you can imagine how that experience worked out a little bit differently than it had had I not been able to shuffle things up before the cliff on that vesting. I would have been stuck carrying or the company would have been stuck carrying baggage for someone that wasn’t contributing any value to the company.

    I didn’t ever want to find myself in that position where we were carrying baggage like that. The trade off here is how do you not do that? Right? McKinsey, the consulting firm was founded by Mr. McKinsey and he had this vision when he retired because he was the sole owner of that consulting firm. When he retired he said, I think he renounced … I might be totally butchering the story but he renounced all of his equity and set it up in some similar profit sharing agreement because the idea was he wanted to maintain the value within the company because he wanted to build institution.

    My company was not built an institution by any means but I want to make sure that I was able to provide maximum compensation to the people that were actively involved in the company while at the same time maintaining my maximum ability to extract value from the company. This is the way that I was able to do that, this idea of profit sharing or commission, whatever name you want to call it by. As long as you’re very upfront with all the people involve that this is what it is I think it’s a very good position to put all the parties involved.

    That’s because you’re able to very quickly get someone earning a lot of money cash money, right? Right from the beginning and the start and where as if you’re vesting someone with equity, I mean of course all agreements are different but you might not be sharing profit with them in such a generous way. Certainly not in the beginning.

    Felix: When you brought in these new employees and these are commission based, a lot of times you hear that for sales people but were you bringing more than just sales people? If so, how did you structure the pay out on how they were going to get paid through commissions?

    Pierce: No, as a generalist. The way that this was put together we would have a monthly revenue number and then we basically calculate profit off of that. Then, commissions or profit sharing would be based on that number. The amount that was paid out to each individual was based on that number. I don’t know, I think it kept everybody happy.

    Felix: Yeah, is this the way that the company structure is still today?

    Pierce: Absolutely not. The way that things are today, what TarDisk is is the evolution of all these learnings that I had with all these smaller companies that I’ve done. The way TarDisk is structured today I have the equivalent of a C level suite, that’s probably not the way to describe this but I have the equivalent of managers that I rely on and then we have another level underneath that make sure that I mean that’s where the magic happens, right?

    All the people at that second tier level, the ones that allow us to function as we function and to develop and deliver the products we’re able to deliver. The way that I try and disseminate information is again through this, the equivalent of this pyramid structure where here’s myself I guess at the top. I have three underneath me although it’s probably more like I’m in line with those three underneath me. Then we have all of the awesome people that are helping us build what it is that TarDisk is right now.

    Felix: Very cool. How do you even set up a company like this because it sounds much more organized than you had it originally? A very clear hierarchy, very clear almost chain of commands on how everything gets delegated. I’m assuming that this wasn’t just something that you laid out from the start and all of a sudden hired all these people and place them all in together. How do you even begin to build a company like this?

    Pierce: Let me back up a little bit because there’s different ways to build a structured company. I might be making this sound much prettier than it is because it’s probably more messier inside, don’t tell anyone.

    Felix: No one is listening. Don’t worry.

    Pierce: TarDisk was constructed to be a lifestyle business. By design, I specifically chose not to raise money on this company because that’s not what I wanted to do. I had this vision at the back of my mind that I’d be able to build this self-sustaining business that would be able … I call it the machine that oils itself, that we’ll be able to make this amazing products and I’d be able to leverage this to continue to build cool things because at the end of the day that’s really what I like to do, I like to build things.

    When I built TarDisk, again, trying not to take any external funding. The way that I did this was through a lot of organic growth. The very first thing that you could point to in TarDisk’s history that’s a milestone is we ran a Kickstarter campaign and it was tremendously successful. We did really well and that was enough to build out this hardware platform that we sell which is the TarDisk hardware platform, get some money in the bank, prove that this isn’t just this crackpot idea, that what we’re selling is meeting a demand that people actually have, these chip work.

    Then, with the money that we earned from the campaign I then used that to develop out the whole software suite that was on top of the hardware that we sell. That’s the magic of what makes TarDisk this hybrid drive, right? Instead of being this external drive, you stick this thing in and all of a sudden it actually expands the size of your Macintosh HD. Put that into Windows terms, your C drive gets bigger. You don’t get a D drive, your C drive gets bigger. That’s pretty cool. In the early days, the way that this was structured was myself, a couple of other people and a whole bunch of poorly paid interns to say …

    I don’t know how else to say it, these guys they are awesome but that’s the way we were able to build the company. Through having interns that were only with us for three months at a time, four months at a time, every time that a class of interns would leave it would almost provide time for a reboot. Every time that interns left then I brought, I call them a class of interns but that might not be the best way to describe it but every time I brought in this new kind of crop or class or whatever you want to call it, interns, I got to step back and say, “Okay, what worked last time, what needs to work this time.”

    If I’m going to bring in this many people I can’t be dealing with ten people with Facetime everyday. We need some form of delegation structure. By doing it that way we’re able to organically put structures in place that allowed us to scale. Again, this was with the intent of not raising external money. Had I gone the route of raising through investors? I had a lot more flexibility here to put together a more formal of how I want to structure the company and who to hire when.

    I could probably bring the whole team very quickly and ramp up to speed much more quickly than it took us to do because it really took us a year to get to the point where we are now. Keeping that in mind, this is the one I built it. Taking investment, you give up control. I wanted to maintain that control. Through interns and through a lot of awesome people that I’ve been privileged enough to work with we’ve been able to get this far.

    Felix: Very cool. It sounds like the structure that was built out, it came out of necessity. You have a team of people working on this, interns at that stage and you realized that there need to be some organization to all this and that’s how you essentially built the team out organically. You mentioned a couple of times now that you’ve hired generalist, you’re a generalist yourself but when you build a company like this again, the technology space and the hardware space specifically. Of course you mentioned the software that’s built on top of all these it requires deep knowledge of the technology.

    I think a lot of entrepreneurs, they look at industries that they want to get into but shy away from it because they don’t have the deep knowledge. They might be interested in it conceptually or like the idea of being in the industry like yours but they just don’t have the expertise. They don’t even know what they don’t know. They don’t even know what people that they might be hiring if they are even knowledgeable about it because they don’t know what if they are kind of telling the truth about it I guess. How do you control for all that? How do you manage all that when you are a generalist and you work in industry that has a requirement for deep knowledge of the technology?

    Pierce: This might not be the answer that you want to hear but if you don’t have a solid grasp of what it is especially at the early stage of what it is that you’re trying to build, of the technical requirements that you’re going to need to get you to level of a product that you can sell for real dollars then you shouldn’t be the one leading that company. I might sound like very harsh and cold truth but I truly believe that I would not … The guys who work for me would not respect what it is I had to say if I didn’t have valuable things to contribute.

    This isn’t like a corporate job where you’re a professional manager. I mean, I guess you’re an entrepreneur, right? You’re wearing all hats at once. When something breaks it’s my responsibility to fix it and I can augment that responsibility by working with extremely smart people and collectively collaborating to get a solution in place but if those people aren’t available, it’s on me to figure out what the hell is going on. Sorry, I don’t know if that’s cursing or not.

    Felix: That’s okay.

    Pierce: [Inaudible 00:29:25] it’s all private. What I would caution anybody going into an industry that they are getting involved in, what I would caution them about is you need to read up and become very knowledgeable very quickly about what it is that you’re trying to build. The way that you do that is by having conversations with people that are most likely smarter than you. Most people that I meet are way smarter than I am but it’s very important that you can learn from these smart people around you and you know what it is you’re getting yourself involved in. All right. That’s my rant.

    Felix: No, no, that makes sense. I think that you said that it’s not the answer that people want to hear but I think it is the right answer which is that even if you’re a generalist, even if you don’t know much about it you have to surround yourself with experts. I think, as long as you immerse yourself in that community and you ask a lot of questions, it’s very hard not to become an expert at least much, much more than you were when you first started out. You mentioned earlier that you initially started TarDisk as a lifestyle business.

    Even before that it was even not as big of a goal because you just wanted money to go to school and then eventually it became successful and then you realized that this could just be generating income for you without you having to be involved in it I guess as heavily as … Without having to get a day job or having to be involved in it as heavily as a much larger company but one thing that’s different about your I guess vision of a lifestyle business than ones I’ve seen is that you wanted to build out a decent size team. You wanted to build a hierarchy. Did you ever consider building company or maybe downsizing a company so that it had lower overhead that maybe it was only you and another person or two other people involved?

    Pierce: You can do that. When you downsize to a level like that, you’re putting a constrained amount of time in my opinion that company will continue to be viable for. Right? It’s extremely important to continue to roll out new products. It’s extremely important to make sure that you are offering premium content that’s going to attract individuals come to your website to even buy other things.

    It’s super important that you understand what the compensation is doing and learn from that because either they are doing things right or they are doing things wrong. Either way you should know what it is that they are doing and you should be better than that. Yeah, I could bring the team smaller in size, doing that would probably put more money in my pocket but I don’t think that that would be as interesting and frankly I don’t think it would be as much fun.

    Felix: Then you also mentioned that the longevity of a business like that is also shorter.

    Pierce: Absolutely. This is the space that we’re in. Right? If you’re doing things that are more commodity space or even then I think a lot of what I said still applies but specifically with consumer electronics, I mean, these things are moving pretty damn quick. Just think back a couple of years ago how slow your smart phone was compared to what you have now. That’s the space we’re operating in.

    Felix: Makes sense. Cool. Then we’ll talk a little bit about the growth and the marketing that went behind building a business like this and you mentioned earlier that one of the key milestones that kick off the success for you guys was the Kickstarter campaign. The one that you’re talking about I think is the one for the MacBook because you also had another one earlier that was not as successful but this one had a goal of $32,500 ended up breaking through that goal and raising a $128,000 from 977 backers. When you initially set out this goal, when you initially put together this campaign what did you want that $32,000 for?

    Pierce: I do need to say, before we launch the campaign and this was the first campaign we launched. That’s a side note. We’ll touch back around on that why you saw two campaigns. When we’re first launching the campaign, I reached out to some people that were friends of friends that work for Kickstarter. I asked them for advice because that’s my mantra, right? Talk to people that are smarter than you and learn from them. Some of the advice I was given which I think was very valuable was Kickstarter campaigns never fail because the funding goal was too low. People like to contribute dollars to winners, right?

    To things that they know are going to pay off so they could say that, “Yeah, I stood behind them when they were early.” The original dollar amount that we had put up on Kickstarter I think was largely trivial. Now, let’s talk a little bit about what kick starter has evolved into. At least at the time that we launched and probably further so now. When Kickstarter was first launched this was number of years ago, how many? Ten years ago, maybe, maybe. It was truly a product development platform where you could come there with an idea and you could get some dollars and cents in your pocket to go out and try that idea.

    Now, what happen was you got a lot of people probably very similar to the entrepreneurs that you’re talking to me about earlier in the podcast where people had this grand visions for these products that they wanted to build with no technical idea of how to build them. What happen was you had a lot of failed campaigns. These were campaigns that raise [inaudible 00:35:06] money that weren’t ever able to deliver out the products. The Kickstarter I’ve been involved to was this idea of you needed to show this functional prototype and I think that was a step in the right direction.

    By the time that we had launched and this was in 2015, by the time that we had done our Kickstarter campaign up there I feel like the culture on Kickstarter are involved in such a level that people expected this finished polished products ready to be shipped out the door two weeks after the campaign ended. Let me just tell you as a hardware manufacturer, that’s not possible. It’s just not possible. I mean, there’s tooling cost that you need to have in place. There’s engineering cost. You need to have all these cash lined up and ready to go out the door for materials and all these kind of unforeseen things that you’re just starting to think about.

    It’s so important that again you’re delivering this kind of extremely short timelines that it’s not realistic. By the time that our Kickstarter campaign had launched I had learned all these and I realized that we’re going to have to have this thing pretty damn close to going out the door by the time the campaign launched that initial funding goal is completely arbitrary. It just sounded like a weird number that somebody would question and if needed I could probably put some logic to it. I think it might even be nice if you put the numbers.

    Felix: You’re even saying that you wanted to. I think what you’re saying earlier about Kickstarter campaigns never fail because the funding goal is too low. What you’re getting at it is that the lower the better so that you could reach that goal?

    Pierce: Within reason, right? You want to keep this thing realistic. You want to keep up the dream of what Kickstarter is because if people are backing Kickstarter campaigns they do fundamentally believe that they’re contributing to the success of this product and they are. By the time that the product is ready to go up in Kickstarter, especially all the products you see they claim that they are going to ship eight weeks after the campaign ends, those products have been engineered months before the campaign went up. That funny goal that they have up there again I might be making this up but in my humblest opinion those goals that they put up are truly arbitrary.

    Felix: They are probably just for pre-orders at that point not so much for funding the development of a product.

    Pierce: Probably for the material cost at that point.

    Felix: Got you, makes sense. Cool. After this campaign had ended, $128,000, did you expect to raise that kind of money? Even though like you’re saying the goal was relatively arbitrary. I guess was the $128,000 what you’re hoping for? More or less than what you’re hoping for?

    Pierce: Yes, I think that our realistic target was probably about a 100k so we came in over that and then as soon as the campaign ends of course there’s tools now that make it much easier but then you can leverage some of the pre-order tools to help you collect other pre-order then we had a whole bunch of other pre-orders which is great. That added to that number so by the time we actually started shipping products we had a decent amount of cash in the bank to cover the cost of our chips and getting everything in a position where we could mail the thing out and we had a little bit of money left over. I should be able to pay people that were stuffing the envelopes and send the thing out.

    Felix: Very cool. This campaign was it organically successful or did you guys do a lot of promotion? Did you guys do a lot of preparation beforehand? What was the plan for marketing of the Kickstarter campaign?

    Pierce: God, I wish we had done more PR. I was naïve when we went into this about how Kickstarter campaigns work and especially today because I think it’s evolved even more to a point where you need to do external PR. Kickstarter internally has this interesting metric where they show you where your funding sources are coming from and they show you or at least they used to show you how much of your funding came internally versus how much came externally. That’s internal to the Kickstarter, what I’m saying, versus external to the Kickstarter website. We didn’t do too much external advertising.

    What we’re able to achieve in our Kickstarter which is miraculous given the amount of money we raised, I think we had close to 80% of our backers coming from the Kickstarter platform alone which is almost unheard of. A lot of times you’re driving the traffic externally. Had we been more knowledgeable and had I been less naïve about what’s required to market one of these things externally I think the campaign you could have easily done better, perhaps even order of magnitude. What you’re seeing there was again the majority 80% of that came from the Kickstarter platform itself. There was enough to get us where we are today so it was successful in that respect.

    Felix: Yeah, just to be clear when you say inside the Kickstarter campaign versus outside you mean traffic that’s just clicking through to a campaign, campaign, landing page versus people browsing around Kickstarter and finding your campaign organically. There must be something then that you guys definitely nailed with the campaign whether it be the title of the campaign, the campaign page itself. What do you think lead to the success of getting so many people attracted to your campaign organically from within the Kickstarter platform?

    Pierce: Yeah, of course TarDisk service is awesome little niche, right? We offer a product that solves a real problem. Okay, there’s that and then on the Kickstarter campaign itself, don’t be so foolish as to think that the video that you put together won’t directly correlate the amount of money that you raise. You need a cute video to go along with the product that you’re selling. For us, we had a really cute little video that talked about storage space and how what we were doing was different. We made sure to intertwine in those witty jokes and the puns just enough to keep people watching.

    Another metric that Kickstarter provides to the people running campaign is how long do people generally engage with your video for. People watch the first five seconds, do they click off after 30 seconds, do they watch the whole thing to completion? We had a very large percentage of our videos were watched in completion and that’s because of the way that we structured it. By design we did what any commercial does and the first five seconds we try to catch you with a hook.

    Then by the end of the first 30 seconds we’ve completely explained to you about what this thing is and why you should be excited about it. Just the way that a commercial in TV would do. Now that could be its own stand alone little thing. Then I think the entire video was maybe three minutes long and then for the rest of the video we intertwined in touching on things that we spoke about in the first five seconds, the first 30 seconds and peppering in more detail and jokes and just things to engage with the audience and make them understand that we’re real people and that we like to have a good time so you should back us.

    Felix: That sounds like a really great anatomy of a successful Kickstarter campaign. Five seconds, hook them in. Within 30 seconds that could be the I guess viewer should know what the problem that the product is solving, what is the product itself. Did you create this video? How also did you hire out for it?

    Pierce: Absolutely. As the scrappy entrepreneur that I am, everything that we did we did in house. Again, generalist, right? We edited it in iMovie. All the filming was shot in combination of we had this awesome rock star intern that helped to shoot the video and then we did all again, editing in house. It came together very well.

    Felix: Cool. Speaking of other ways to promote the campaign that you wish you focus more, you mentioned PR, that thank you list that’s one of the keys to your success today outside of Kickstarter which is a targeted PR campaign or targeted PR campaigns rich with free product samples. Tell us a big more about this. What do you mean by a targeted PR campaign? How is it different than I guess a typical PR campaign?

    Pierce: If we just rewind to this Kickstarter campaign that we ran, that campaign could have been so much more successful if we had demo units that we could have sent out because when you’re trying to raise awareness for Kickstarter campaign, nobody cares. It’s big news to you but so many of these campaigns come out and they fail and so many times people promise products that you just have no clue of what it is going to take to actually deliver on this product. If we had, one, the budget and two, the actual access to TarDisk products that we could have sent out to reviewers, to reporters, that would make it so much more successful.

    Fast forward a year, we wound up engaging with this really awesome firm, BIGfish PR and they stepped in and I mean they recognized the value that we had probably even before we recognized the value that we had. We’re able to set up a campaign where we targeted a specific set of journalist with basically samples just saying, “Hey, guys. Try this out. See how awesome it is and let the product speak for itself.” Then we did a targeted coordinated launch date for when we’re rolling out the TarDisk Pear Software Package and that was just spectacular.

    I remember getting a call from Dave who runs BIGfish PR and he’s like, “I’m about to make it rain on your website.” I’m like, “What? Make it rain, what does that mean?” Of course were running on the Shopify platform and the minute we had this counter on the website counting down to when the website is going to go live, the minute it went live I mean the traffic just started flowing. We’re watching that, those revenue numbers go up like the numbers flipping on one of those old style clocks. It’s really awesome.

    Felix: Yeah, when you say this targeted PR campaign you’re also talking about the timing involved, right? Rather than tripping in and out slowly over time, you focus all the PR efforts around one launch day so that all of the PR hit the public I guess all at one time. Is that what you mean as well?

    Pierce: Absolutely. There’s nothing that we do that’s not coordinated with other things that we’re doing. Everything that we touch you need to be cognizant of what that thing means to all the other things that it touches. Was that too [inaudible 00:46:34]?

    Felix: No, I think it’s great that you’re able to do that to coordinate everything together but with today, when you do do PR is it as targeted in terms of around specific dates or how is it different now that you have launched?

    Pierce: If we look at every time that a new product is launched, TarDisk is great because it invented a new product category and that garnered a whole bunch of press but every time that we launch something new, we try and make sure that we are contacting people and letting them all know that this is happening on this particular day and you should look to have all of your articles sequestered in till that day. That I think I didn’t believe it was a good PR strategy until I experienced it myself first hand. I think that’s the best way to do these things. Now, these PR campaigns only work again when you’re first launching something so what we’ve done since then to garner PR and totally different.

    Felix: When you do run these PR campaigns and you are asking them to like you’re saying, sequestered these articles onto a specific day, is that usually I guess a demand that’s easy to make? If you’re just a new brand that doesn’t have product yet and you’re trying to work with these PR outlets, you might just try get anything that they’ll be able to bite onto. Did you find those easy to get people to a PR outlet to agree not to release something until specific date?

    Pierce: For a PR firm it’s easy for them to do because the individuals don’t want to cut off their supply to free demos. At least that’s my interpretation. I don’t know, I don’t know. I mean, there’s that and there’s also the fact that they have a good relationships, the PR firms have good relationships with the reporters. If we were doing this on our own, I think we’d have a very difficult time.

    Felix: Yeah, it makes sense. I think that that’s probably one of the best value or the best I guess contributions of a PR agency, that power I guess and the negotiations when it comes to how the PR is done. Another method that you I guess told us about in the pre-interviews on how you are able to market the business is through laser focused YouTube advertising. Tell us a bit more about this. What is the strategy behind the YouTube advertising?

    Pierce: YouTube allows you to do advertising at the video level. For us, I’m going to drill this in one more time in case your audience doesn’t know what we do. We sell a product that solves a very simple problem. Your MacBook runs out of storage space. You get this little annoying thing says, “Your start up disk is almost full.” Our product it solves that problem. Right? Stick a little chip inside of your computer and it add storage space. There are a tremendous number of videos out there on the net that talk about this problem, right?

    You have all these people that run out of storage space on their Macs and people put up tutorials and how tos on how to fix that problem. What we do is we target those videos and we say, “Hey, you’re looking at this, we sell a solution. It’s relatively cheap for a 150 bucks we could probably double your storage. Just click this link to sign in and you’re good to go.” That’s been tremendously successful for us. Understanding where it is that our audience is looking for the answers for how to solve this problems that they are running into.

    Then serving ads in those places. You have the equivalent of forums, right? If all these Mac based forums and every time a question pops up on how do you, “My MacBook, my start up disk is almost full. My MacBook, what do I do? Help.” You better believe it that we have one of our support guys following up with a forum response saying, “There’s this option but you can also buy TarDisk and that will solve your problem probably way quicker and way easier.” That’s been very valuable to us and that’s good because we’re not paying per click on that. Right, once you post that forum thing up it’s up there for a while.

    Felix: Yeah, I love this approach, the way you describe it is so clear too which is that you find where people are already talking about, people are already collecting around a particular problem that your product solves and then put you product in front of them at that moment. Whether it will be tutorials on YouTube or people asking questions in forums, you want to be present and I guess when it comes to the forums, you can’t be as advertise-y or salesy I guess as you would on YouTube when you’re buying ad.

    You probably have to contribute first which is why you suggest that delivering the value, giving them an option and then also giving them an easier option by just buying your product. When it comes to the YouTube advertising, and they are hurting when doing it this way before but it makes a lot of sense where you look for videos that talk about the problem that your product solves. When you say that you’re able to target specifically, I don’t have any experience at all with YouTube advertising but are you able to say this is the video that I want? How laser focused can you get this targeting?

    Pierce: Yeah, you can serve on a specific video.

    Felix: Wow, that’s very cool. How do you manage all that? how do you find all these videos and how do you manage which videos you’re going to be serving on?

    Pierce: It’s a beautiful question because the answer is simple. We just type in, “Start up disk was full, MacBook.”

    Felix: Nice.

    Pierce: I mean, it’s equivalent for whatever business it is that you’re involved in, right? If you’re selling diapers that help with diaper rash, search on YouTube for, “My baby has diaper rash. What do I do?” Serve the videos there. I think it’s very straight forward. It takes a little bit of legwork and you could argue how scalable it ultimately is but for us at least in a short time it’s been great.

    Felix: How expensive can this get compared to other forms of advertising like on Facebook ads or through AdWords?

    Pierce: We definitely have a high click through rates not necessarily always conversion rates so that can be a little challenging to walk that line. The net profitable advertising we do is on YouTube. We do advertising all over the web. I don’t really know how to answer that question.

    Felix: Yeah, no worries. I think that makes sense though that with video, videos tend to be I think more expensive when you’re buying but if you’re able to get as targeted as you’re talking about, I think it can pay off even at the more expensive price point. Thanks so much. I think you gave a lot of great advice on how to get started. I think this YouTube stuff is going to be really interesting too for a lot of people that haven’t considered going on YouTube and buying ads that way. Now, for you and your brand, where do you see the company going? Where do you want the company to be in the next year?

    Pierce: We are teaming to grow [inaudible 00:54:00] which is awesome. [Inaudible 00:54:02], we have a couple of very interesting products [varsities 00:54:05] that we’re rolling out right around the time, hopefully [inaudible 00:54:10]. It would be a lot of fun. The whole idea of what it is that we offer right now is in Mac space that’s expanding a little bit, [inaudible 00:54:23] but right now our position [inaudible 00:54:27] already on all things storage space Mac in addition to our TarDisk.com website which is Shopify based store, we have a sister website which is macauthority.org. It’s essentially a content creating [mean 00:54:46] that tracks clicks. That’s been great. We’re going to be teaming to build up that space.

    Felix: Very cool. I think that’s an amazing strategy. Great way to solidify your brand and you provide a lot of value and become an expert in this space without just shoving your product down people’s throats. I think that’s a great way to put yourself out there. Again, thanks so much for your time, Pierce. TarDisk.com is the website, macauthority.org again is the blog, the content inside of the business. Anywhere else you recommend our listeners to check out, they want to follow along with what you guys are up to?

    Pierce: Yeah, check out sparksales.io it’s a sales version for our website so definitely worth taking a look at.

    Felix: Very cool. Thanks again so much for your time, Pierce.

    Pierce: Thanks so much, Felix. I really appreciate it.

    Felix: Thanks for listening to 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.


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    About the Author

    Felix Thea is the host of the Shopify Masters podcast, the ecommerce marketing podcast for ambitious entrepreneurs, and founder of TrafficAndSales.com where you can get actionable tips to grow your store’s traffic and sales.

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