Do You Have What It Takes?
There are a lot of people who dream of leaving corporate America and becoming an entrepreneur, but most never take the leap. And of those who do take the leap, a lot of them fail. Owning your own business is no easy feat and it takes a certain type of person to do it and do it well.
Recently, our CEO sat down with someone who left their secure corporate job to start their own company. That was years ago and now he has several successful start-ups under his belt. In this blog, Hollywood Branded learns what it takes to become a successful entrepreneur from Mike Watts, CEO of LoveHandle.
A Little More About Mike
Mike Watts is an experienced entrepreneur who has 6 startup companies under his belt. He’s founded three consecutive multi-million dollar companies in the last 10 years. Mike has successful exits from three companies including one for over $6 million. He even struck a deal with Daymond John from Shark Tank.
Mike currently serves as CEO of LoveHandle, a fast-growing American manufacturer of patented custom smartphone grips and accessories where he leads a team of 30 full-time employees. Mike is a keynote speaker for entrepreneur and inventor groups as well a guest professor at Texas A&M University's entrepreneur program. Mike is a 2-time winner of the Aggie 100 Award for fastest growing companies and has been listed on the Fortune 5000.
Interview Transcript Highlights
Question: I'm so happy to have you here today with us. I would love to have you start off by telling our listeners a little bit about your background and what got you to where you are today.
Answer: Well, thank you. And I'm so excited to share my story. I've been a full-time entrepreneur now for 14 years but started in the corporate world, did the traditional, and I went to college and got my good job in corporate America. They gave me my beautiful cubicle and I thought that I would be there forever and eventually maybe on the top floor of the skyscraper, but fate had a different plan for me and I started a side hustle kind of halfway through my career doing home and garden shows, trade shows, just trying to make some supplemental income. Eventually that grew and got to the point where I was able to identify a patented product that I wanted to take to market. I left my corporate security blanket with three small children at home and walked away from health insurance and everything else that goes with that security and went out there and invested everything I had into this idea.
It was an aftermarket trimmer head. So anybody that's ever cut their own grass knows the struggle that you have with winding the line on and feeding it out and breaking the line off and that. We solved that problem with this invention. And we grew that company. I partnered up with my dad and we grew up from just a sketch drawing of a product to the number one selling after market trimmer head in the world along with full very successful TV campaign back in the infomercial days and their heyday. We sold that company in 2012 for six million dollars and was able to pay back all the investors, which fortunately was my grandparents and my aunts and uncles and good friends. And so, it was either going to be a really great Thanksgiving or a really terrible Thanksgiving. We weren't really sure through the middle of it all, but we learned a lot about manufacturing and marketing and we made a ton of mistakes, we did a few things right and enough right that it worked out for us.
Since then I've licensed two additional patents and taken those to market. One's an underground tree steak for planting trees with no poles and wires to hurt people or for aesthetics, better for the tree. And my baby is the love handle. It's a low profile comfortable smartphone grip that you put on the back of any phone and lets you hold your phone with just one finger. And we've invested in automation equipment to be able to manufacture this in the USA 100% and that's where our 30 employees work here, and it's a labor of love for me at this point.
Question: So, what is some of the advice you would give other entrepreneurs who are either already on the path and they're headed out and they are making their way or they're still sitting in their office and they're trying to decide if this is the future path that they should take as well?
Answer: Obviously, entrepreneurship is not for everyone. Right? But I think you need to each take a self assessment as deep down. I think you already know whether you are cut out to be an entrepreneur, to be your own boss or not. And whether you feel like you have that drive and that ability to take risks and still be able to sleep at night, because that's essentially what it takes. I talk about entrepreneurship as not necessarily a career path, more of an attitude about things. And you can apply on entrepreneurship across all sorts of platforms, whether it's the way you run your home or even within a corporate environment, you can be entrepreneurial. And what we're talking about here, it takes the attitude of being willing to take a risk, being willing to fail and being willing to learn from your failures.
Most of my success has come in ways that I didn't really originally think. For example, I thought that the Love Handle product was going to be a slam dunk on TV because we had sold products on TV before and we spent around half a million dollars building a TV campaign and inventory and putting it on TV and it was a big fat flop. But as it turns out, what people love about it is being able to put their brand name on it, being able to logo it.
So, we had to attack along the way and then now we're one of the hottest, if not the hottest, promotional products in the world. And so, don't be so set on the fact that you, how this is going to work out. Just know it's a journey and that it's going to require persistence, it's going to require an immense amount of work and consistency. And then eventually you will find success if you're willing to be adaptable.
Question: That makes sense. And so, if you had to do it all over again or at your next company, what's a different path that you would take? Or how would you approach entrepreneurship or launching a company a little differently? Or what would you do exactly the same?
Answer: Well, I think that what I would do, I'd probably do things a little bit differently. If I was taking a product to market, I think there's some platforms out there, some tools for entrepreneurs that didn't exist before. In fact, I feel like we're sort of taking a step back right now, we're building a kickstarter campaign. Even though our company is up and running and we have 30 employees, we'll do four million dollars in sales this year. But we're going back and doing a kickstarter campaign because it's such a useful tool to be able to get proof of concept, to build a fan base, to prove out your idea to the world, to refine your idea what their feedback, and get pre-sales all without giving up any equity of your company. It's really a no brainer and it's something that I think is probably still under utilized.
Crowd funding is something I would lean on more and taking smaller, affordable steps. I think that's really important. I've overstepped a few times with the confidence, over confidence, that I needed to buy a lot of product because this thing's going to blow up instantly, and I know already exactly the version that's going to work. So I need to order a ton of them from China or whatever, bring in big quantities of them. And then something happens, whether it's a low quality product or you need to change the design or something along those lines. So take affordable steps and prove to yourself that the market wants it and that they're willing to pay for it and then worry about the profitability later once you've proven that there is demand.
Question: Can you tell our listeners a little bit more about Shark Ttank? Because I will say, we get so many companies who talk to us at our agency, and they're like, "I want to be on Shark Tank. If I'm on Shark Tank, it will make me, I will be a success. This is how I'm going to make my millions." Can you give a little bit of insight on how it all really works?
Answer: I was so convinced that I was going, that that was my destiny, and that I was going to be on Shark Tank, and I had already picked out the shark that I wanted, I knew which way I was going to stand and face him and I had the whole script written out for my pitch and what I was going to wear and everything down to the final. I knew that that was my destiny.
So we went and we were at the consumer electronics show and we auditioned, they had an open call and we auditioned for Shark Tank and we went and pitched the producers. They loved it. We gave them samples, it was a big win. They're like, "Oh yeah, you're definitely made for this. This is great." And they sent us an email shortly after, "Congratulations, you've made it through to the second round of Shark Tank auditions." It was like, "Here we go." This was me and my father, side by side. What a cool thing to get to do together.
We take it and we fill out the form, and it's like 100 pages long, literally. And you have to fill it out with blue ink and it's everything about your company and your competitors and your intellectual property and where's your market and how big is your market and have you ever met a shark? And if you have, who have you met? And they want to... They're looking for all the reasons to disqualify you, I figured out later. Like all the reasons why they won't pick you. And then we had to make a 10 minute video.
We worked so hard making this video, and we sent it all in and we were praying over the package before it left. And then we're waiting and waiting. It was about three weeks later, and finally we got our answer that came back, like, "Sorry, you guys were not selected to be on air on Shark Tank." Boy, we were just crushed. Absolutely crushed. But, persistence, you know, right? That's the winner.
We went back again the next year and we redid it and the same result, got to the second round, filled out our... Made a even better video. Same result. "Sorry, you're just not right for the show." And I was so distraught, I was like, "I knew that this is how it's supposed to go. I knew. Yes, I understand there's tens of thousands, hundreds of thousands of applications, but our product's so perfect, and it's... I want this so bad."
But as it turns out, just a few days later, I'm checking the website orders on our website and I see an order from the Shark Group, and I'm like, "What's that?" And I looked it up and I was like, "That's Daymond John's company and that's the shark I wanted to get. Oh, my goodness." And so, I immediately got on the phone and called the number on the order and I got this young lady named Simone and she answered and she was so nice and I was like, "Oh, I'm such a big fan of Daymond and, oh, I'm so excited that he... " Like, "Oh yeah, he loves your product. He got some, I guess he got them on set or something and he loves them. And he wants to order them from the office here."
So, I made a bunch of samples and kept sending them to his office and got all his team falling in love with the product, and just kept doing that and built relationships with them. Didn't ask or anything else. And then a few months later the phone rings and it's Daymond's president of the Shark Group, and he says, "Hey, Daymond doesn't do this, but he wants to work with you guys. He thinks you have a great product. He's watching you from a distance. He looks like he thinks you're a good operator of your business and he'd like to work with you." I'm like, "Okay." Well now I'm in Shark Tank pitch mode, and like, "Okay, well my valuation is going to be two million dollars and we're going to offer... " And they're like, "No, no, no, no, no. That's not what we're talking about really. You don't understand the power of a shark. You don't understand how much that I can bring to the table with my Rolodex and my contacts and my brand knowhow and my branding agency and all my team that it can be a resource for you. This is going to be huge for you guys." I'm like, "Okay, I get it, I get it. But, you know, I've invested all this money already."
I actually walked away from the deal the first time because it was going to be a non-cash deal and I just didn't see enough value there to give up a piece of my company for no money. And as it turns out, a couple months went by and I think I maybe earned a little respect that way too. And the phone rings again and he's like, "Hey, he really still wants to work with you and hope you see the value in it. So, what can we do to make a deal?" I said, "Well, I'll tell you what, you say that you can blow my sales up. Right? How about I give you a chance to do that? You double my sales, things that I can point to that you do and you double my sales in 24 months. Give you 24 months to do it. And if you do that, you're going to earn a piece of the company, small piece of the company." And he's like, "You got a deal. Let me show you what I got."
It took him six months to double my sales, and put us on Good Morning America, we got on The Home Shopping Network. Instantly, he starts flipping that Rolodex out and turning it out. And the best thing about the whole deal is, because of the way that we built a relationship, Daymond is a personal friend of mine, which is an absolutely dream come true. And he's just the most amazing mentor I could ever dream of. So I just walked into this dreamland. Just last night I sent him a text and we're going to be going to meet with Walmart in about two weeks. They invited us because we're made in America and super excited about that.
I was able to text him and be like, "Hey, Daymond, you think you could help make a video for me to show to the buyer when we go?" He'd be like, "Hey, I wish I could be here, but I can't." And he's like, "Yeah, no problem." So, I expect that later this afternoon he's going to send me a video clip I'm going to get to use. And I have accessed to his team, anything I need he's there for us. And he's really a genuinely close personal friend at this point. So it's an amazing way that it all turned out. But it wasn't, again, it wasn't exactly the way I thought. And I think that's sort of entrepreneurship in a candid kind of way.
Check Out The Podcast!
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