乔Lamey和杰克爱泼斯坦是背后的创始人Rocketbook—an everlasting notebook and app that lets users capture and share ideas easily. In this episode of Shopify Masters, Joe shares their crowdfunding journey, how they overcame manufacturing challenges, and how the team collected over 3 million email addresses by building their app.
For the full transcript of this episode, click here.
Show Notes
- Store:Rocketbook
- Social Profiles:Facebook,Twitter,Instagram
- Recommendations:Klaviyo (Shopify app)
How a personal mistake lead to a truly original business idea
Felix:The idea behind the business came from an embarrassing meeting at work. Tell us more about where the genesis of the problem and the solution came from.
Joe:Sure. I was in technology as an engineer for a while, and then on the sales and business development side. I was working for a company called Salesforce.com in Boston. I was one of their first people selling commercial software licenses to local businesses. I'd attend meetings in boardrooms and conference rooms, meeting with people like CIOs and CEOs, who are buying software from Salesforce. In those meetings, I'd be really well-prepared and have ideas I'd be talking about, taking notes. We'd even use the whiteboard and take notes in notebooks. One meeting I went to–it was a really important meeting and I went in and I had prepared a lot. I went to grab my notebook out of my bag, put it on the table.
I’d prepared all these ideas to talk through in a structured way, and of course I had the wrong notebook with me. The meeting became a total disarray. It was a setback for me. That moment really stuck with me. I realized that I'd been struggling with the reality that I like to take notes with just a pen. Nothing electronic. That's how I get ideas out of my head. That, or on a whiteboard with just a marker, no batteries, nothing to boot up. That was important to me. I started to look at everything that I could find. I tried digital but they had all of these issues where it just didn't seem natural or even just a scanning app to scan in my notebook pages.
That almost did the trick, but then I'd have to play the share button shuffle and keep it organized. That didn't work for me. I got fed up with it and decided I could build something–or at least a proof of concept–for myself. The idea was to use just a regular notebook, but the notebook would have these markings on it. So as I’d take notes, I’d mark things on it. Then when I used the scanner app, it would be a proprietary scanning app and it would see those markings on the page and instantly organize it for me in one of a few go-to spots. That was the genesis of the first idea of Rocketbook. Then I started to think, how could it be cooler?
I realized, now that I'm scanning in my notes I really don't need this hard copy anymore. What if we could make a reusable book that then works with an app to make it easier to scan and organize your notes. You could keep them tidy on your device and sync it with the cloud services that you already use. That was the real genesis of Rocketbook. I found these pens that Pilot made that erase really well because the eraser creates a little heat and the ink turns clear instead of just mushing around. It's a pen that erases well. It turns clear at a certain temperature. So that put in my head, could I make a book that we could heat up? Like put it in the microwave and when it heats up, it would all erase.
That was the Rocketbook wave. I recruited my good old buddy Jake to become a co-founder. We thought it was a crazy idea. Who would ever use a book you put in the microwave to erase, but it also had this great usefulness to it with the app. We put it up on Indiegogo and the rest is history. We started with a video and an idea, and the idea that we thought we could build a product, it became a lot harder. The more success we had, the more challenges we ran into.
Using crowdfunding to validate your productandraise capital
Felix:You mentioned recognizing the need for a product like this, and proof of concept. How long did it take to bring the idea into reality?
Joe:It was really very fast. I had been mulling over the idea and another whiteboard related idea, just as a side project and building a little bit of proof of concept software and things like that. But it really went very fast. As soon as I had the idea for this notebook and an app that we could build with it, we worked on getting it up and running.
So once I had the idea and recruited Jake, it was fast. We went out and had beers at the Sligo Pub, which is this dive bar in Somerville, Mass. He jumped on the idea and the next day we got to work sort of building stuff, testing things out. Really what we needed to get started was a great compelling video. It was December 2014 to March 2015–so three or four months–from concept to having a six-figure business. We didn't have a product, but that's the magic of crowdfunding.
Felix:Did you do any market testing to see if there was a demand for the product, or was it all done on crowdfunding?
Joe:That essentially was our test. I threw some landing pages up and traffic at it, and got a reasonable response. We got like a 15% conversion rate on email addresses on a really lousy video that I did. That was good, it was validating, but it wasn't an obvious yes or an obvious no. I talked to some investors who were a very fast pass. I realized that this was just a crazy idea and that I'd have to go to crowdfunding. That was our test. We created a concept video and put it up on crowdfunding and luckily I had a few email addresses, but really what happened is it took off virally.
The idea of a paper notebook that you could write in and then after you save your notes, you just put it in the microwave to erase it all. It was just such a powerful gimmick for people to write about, for people to get excited about. Turning that gimmick of a product into something actually useful was the big challenge that we had at first. We had an app that wasn't really rated in the app store. A product that worked some of the time, or maybe sometimes would burn in your microwave, but we kept grinding. Today we've got one of the highest rated products in terms of the notebook category on Amazon, and our apps in the app store are well into the 4.5 stars or so. It's a high quality product and we have true fans around.
The key to creating content for a product that doesn’t exist yet
Felix:You mentioned needing a video at the crowdfunding stage. What did you include in the video that you thought contributed to early success?
Joe:你可以see it. If you Google Rocketbook Wave Indiegogo, you can probably find our original Indiegogo campaign. It was really just me and Jake. We had rented an Airbnb that was pretty nice, so that we had a good backdrop, and it was just us and a nice SLR camera that I'd spent like $500 on. I found this guy Kyler to do a little bit of the editing for me on it and do the voiceover stuff. We just wrote a compelling script, had some good grabbers in it. It started off with "What if you could write in your notebook and make sure that all of your notes are saved securely in the cloud. What if, when you're done using your paper notebook, you could erase it all with the push of a button. Well you can, that's the Rocketbook way."
Then it shows it going into the microwave. It pulls you in with this grabber, but it was really just me, a tripod, Jake and another person helping us with the video. If you look at the video graphic quality, it is not a high quality video at all, but the script was really good. It worked, it showed what it was going to do. It got the concept across with what if questions and little zingers. The product itself was just made for crowdfunding, just getting an individual excited about a new product, or it was a gadget or something that anyone could use and maybe does use a notebook, but like bringing it to the next level.
I'll tell you, when we rented this Airbnb out in San Francisco, we were preparing for something called the launch festival, so that we could launch this on stage in front of a few hundred people. When we were on-stage, I raised my hand, I said, "Who here wants a Rocketbook," after giving a demo and people raised their hand. I said, "Well, that's great. You can back us now on Indiegogo." So people could go back at us. We got a few hundred backers. People pre-ordering the book and a promise that we'll deliver it later. The next day we made $5,000, and the next day $10,000.
Then we woke up. Indiegogo gives you a little notification when you get a new backer, you get a little ding on your phone. It's pretty cool. We woke up that Saturday morning and it was like, ding, ding, ding, ding, ding. It was like popcorn. It was popping off, or our iPhones were broken. It was crazy. Then Indiegogo put the project in their newsletter and we made over $99,000 in one day in pre-sales, which was so cool. We looked at each other. We were like, "I guess we have to really make this product work and work well." Then we were on another year long saga of making the product work well and getting it out to backers. We thought we had given ourselves plenty of time to deliver. We had projected a November 2015 delivery date to everyone who backed.
We said, "We think we'll get it out to you in November." It really wasn't until the next year, deep into February that we got everything out to people. It was some of the hardest months of my career. Just hearing from backers, wondering where the product is, if I was serious or was I scamming them and I took their money. Sometimes death threats. But we finally got a decent product. It wasn't perfect, but we got it out to people. They enjoyed it.
真正的成功来自下一个产品we launched the following year that is now called the Rocketbook Core. It’s really all of our sales today. It doesn't go in the microwave, but it is an extremely popular product on Amazon. In December, I got some metrics, roughly 18% of all paper notebooks sales on Amazon were Rocketbooks, if you can imagine that. We are owning and dominating the paper notebook category in a really important channel. Now we're getting it out to other channels like the Walmarts and the Targets and more and more strength in those channels.
Pepsi vs. Coca-Cola: Deciding on a crowdfunding platform
Felix:What was your crowdfunding strategy? How did you decide which platforms to go out on without a website?
Joe:When doing a crowdfunding campaign, we deliberated between Kickstarter and Indiegogo. Because those were the two popular choices. Kickstarter is like the Coca-Cola, Indiegogo being the Pepsi, in terms of size and things like that. Based on brand recognition, we decided to go with Indiegogo. They paid more attention to us, and they had some tools such as referral programs with links to give people incentive that you could track, which I thought was interesting. They were more creator friendly in helping you market your stuff with tools, with help and guarantees that maybe they'd put you in their newsletter to promote it.
Kickstarter from my experience is pretty hands-off, they don't really do much to help you market or anything like that. You're just on the platform. You either do well or you don't. The people there engage with you, but nothing like with Indiegogo. Now that I've done both platforms, it’s just Kickstarter is so much bigger. We still do crowdfunding. We're working on a new crowdfunding campaign as we speak. We'll probably launch that on Kickstarter just because it's larger. I don't at all regret starting on Indiegogo, they were amazing to us. I don't know if we would have had the same success. They treated us well and helped us a lot when we were just a small startup and it worked out really well.
"I don't at all regret starting on Indiegogo, they were amazing to us. I don't know if we would have had the same success. They treated us well and helped us a lot when we were just a small startup."
Felix:You mentioned going viral, and that part of the appeal of the product was the gimmicky nature of it. Are there any elements of creating a crowdfunding campaign that you think are essential regardless of the virility of the product?
Joe:Yeah. I would say that this might apply to even just building a brand from scratch in general. We were playing in the notebook, like the paper notebook space. There were companies–let's say Moleskin, who have this European, high design sort of brand attitude–that took themselves quite seriously. Their pitch was that they were the type of notebook that Hemingway wrote in. It hearkened to the past. Looking at that, we were like, all right, let's be the opposite of what's out in the market. They're not innovative, they're like Hemingway. What does Elon Musk want to write in? We were also not precious about our brand, out of necessity, but also because it worked. We put on orange space suits, we cracked jokes, we were irreverent. We rubbed it in. At one point we had a video where we went down the aisle of Staples and threw notebooks around and made fun of them and said, "What's this? The notebook that Hemingway wrote in. That's cool, I guess." We got kicked out of Staples.
We were able to get a bunch of shots in. Maybe 12 shots before the manager kicked us out. Today the Staples corporate people told us to take it down because they're a major customer of ours. We got a lot of mileage out of that. Two guys in astronaut suits, walking down the aisles of Staples and throwing notebooks around. We came at it with an in your face, don’t take ourselves too seriously brand. We still stick with that. Even though we have more resources today, we do things in a low budget way. We still wear the same astronaut outfits. We've got the same sense of humor. We've got fans where we could do a high production thing, but we focus on having a great script and a great message and having energy and making a great product. Our fans love us for the authenticity of it all and the excitement we bring to the whole category, in addition to having a pretty good product that people love using as well.
From idea to 30,000 units in less than a year
Felix:Tell us about the product development and manufacturing process that followed the crowdfunding stage.
Joe:I'll talk about some of the challenges in that stage. We had pre-sold over 30,000 units. People took out their credit card, paid us on Indiegogo with the understanding that we hadn't made the product yet, and that there would be some risks. We estimated that we would get it to them on a certain date, and they paid $27. It amounted to over a million dollars of presales. The pressure was on for us to build it. We had done some testing before we launched the campaign and we thought we had tested certain elements enough. We got a notebook to do pretty well in one microwave. It turns out people have different microwaves and every microwave is different. If you put a paper notebook in one microwave for a minute, the ink might not get warm enough to erase, but put the same notebook and another one for a minute, not only will it get hot enough to erase, it'll burst into flames.
We realized that we had a lot of work to do. We spent some of those funds on product development firms to help us try different concepts, to make it safe and consistent. They tried really hard and they just weren't able to be helpful. They came up with a lot of concepts, some were way too expensive. We would have to go bankrupt before delivering it. It was many, many thousands of hours in the garage with a bunch of microwaves, trying to figure out different systems. We ultimately came up with a design that worked, and the way it worked was there's a little logo on the front of the book. You have to look through the microwave. And when it turns from blue to clear, then you know it's gotten warm enough and you turn the microwave off and you take it out.
With that concept it might take 30 seconds in one microwave or three minutes at another but that was a universal thing there. Some microwaves have hotspots, so that was the other challenge we needed to overcome. One part of the book would get really hot and burn while the other part of the book still wasn’t hot. We had to figure out a way to equalize the microwaves in the microwave. We figured it out. You take a mug of water, fill it and put it in there. It starts to absorb a lot of the microwaves and disperse it in a way so that the book gets pretty consistently warm or consistently warm enough. With those two little things that we figured out, we had unlocked the universal way to safely erase your notebook in the microwave with heat.
Felix:How long did you persist with solving problem after problem?
Joe:It was a good six months of R&D work. We tried all of these different synthetic papers. We tried different types of covers. We also had to test everything to make sure that if it did get warm or catch on fire in your microwave, that it didn't release anything that you wouldn't want your children eating, because they're putting their mac and cheese in there. We hired a firm to make sure we used material that no matter what temperature it heated to, it was safe. They've got synthetic things, organic things. They're not good. It took us a while to figure out that safety component. There were a lot of dark days where I thought that we had a million dollars of presales and we were going to run out of money and not be able to deliver to people.
That we'd be like one of those other crowdfunding campaigns who raised millions of dollars and didn't deliver. I was the most stressed I had ever been in my life. Once we got that to work, that was a tremendous breakthrough. Now we had to find someone to help us manufacture it. We work with printers and binders to do that. We did run out of money. If we were to get it all done and ship it out to people, we would have been over $300,000 in the hole. On paper we were bankrupt to the tune of more than $300,000.
A couple of things came together. After we had shipped a lot of books to people, our printer had made a big mistake. We realized there was a problem with the logo on the book. We were able to negotiate some of the payments down, because of that quality problem.
Another thing we realized that we shouldn’t have done is we took the same product and we put it up on Kickstarter with a few more promises that we'd build some more software integrations with Slack, for example. We raised another half a million dollars. That got us out of the hole, but you're not supposed to do that. Kickstarter hates that. They almost took our project down, but since we had a few more promises for the project, like those software integrations, we got around it. But we were in the doghouse with Kickstarter for many years after that. They wouldn't make us projects that we loved. They wouldn't do anything to promote us. They would ignore us. It took five years to get out of the doghouse with them. But that got us out of a bankruptcy situation, just a little bit of creativity and luck and things like that.
Felix:What happens after these campaigns? Do you focus your efforts on other marketing channels?
Joe:We got our product onto the Amazon Launchpad. That was the next really important thing for us. Amazon Launchpad– I think it still exists today. What they were doing was basically creating a space for people who were coming off of crowdfunding to put their products on Amazon and promote them to Amazon users. That helped us a lot. We also immediately got up on Shopify. One of the cool things about Rocketbook is whether you buy a Rocketbook from Amazon, from Target, or from our website, so long as you opt in, if you use our app, we have your email address. You have some brand connection there.
When we launch a new product, we have a really good, big audience. We have almost 3 million email addresses now that we can email when we have product launches. In 2020 we came up with a planner, a reusable planner. This is built on our new technology that doesn't go in the microwave. You just use a little water to erase it. It erases perfectly, but we hadn't had a planner before. So we launched a planner–a new product in a new category–and quickly shot up to be one of the top three products on Amazon in the planner category. We were able to do that because we had a great fan base.
We'd been building a relationship with them, continuously showing new products. Each with its own funny, humorous, and entertaining launch and video. Then when we launched the planner a product in the middle of a pandemic, boom, we were able to dominate the planner category, really quickly. You can imagine how impossible that'd be if you didn't have that direct to consumer communication channel and relationship. If you wanted to just launch a new planner through retail or any new consumer product–like a pen–it would take years to really dominate that category. We were able to do it in months.
We’re thankful as well to the investments we've made in email marketing and ecommerce on Shopify. Today about 10% of our sales are done through ecommerce with Shopify, but they're extremely strategic. They're a way that even if people buy off of Amazon, they're often coming to our site and looking at our site for more information as well. Those 10% who do shop on Shopify, we definitely have most of their email addresses and build a relationship with them as well, but we can leverage those relationships to help promote other channels to make sure we're dominating them too.
Creating a nearly 5 star app
Felix:You now have over 25,000 almost perfect reviews of your app. Tell us about the process you went through to create it.
Joe:It's an app where it uses the camera to look at the notebook, then it scans it in as you might imagine, but then it does a little bit more. It's really built for handwritten notes. As you point it at the page, it auto props and color pops to make the image really vibrant before it stores it on your device, or syncs it with the cloud services you already use, like Google Drive and Dropbox. It also does a really decent job at handwriting recognition. With handwritten texts, it'll transcribe it for you. If you type in the top like "hashtag hashtag meeting with Joe," it'll turn the document into a meeting with Joe dot PDF for you and create smart lists as you do little checkboxes, and you write your little to-do lists.
We're enriching note taking with smart things to help you with your handwritten notes. It's really from that handwriting intelligence layer and amazing scan quality that we've built over the years. That’s why it went from a three-star product on the app store to what it is today, which is a 4.8 star product on the iOS app store. That's great because the more people that use the app, the more likely they are to be interested in the next product that could work with that app as well. People have various sizes of notebooks. We have a whiteboard product as well, so anyone using a whiteboard can throw beacons on their whiteboard to turn it into one that works with our app.
你可以scan and store and organize it digitally, even stream it in real-time if you want to share what you're doing on the whiteboard with someone live through our snap cast technology. Then we use Klaviyo as a tool to manage all of our email marketing. You sign up for the app, we want to give you information on how to utilize it, know about all of the features. That's super important. After your first scan, the first time you really use it, you get a Typeform survey from us and we ask you a net promoter score,–on a scale of 1-10, would you recommend this to a friend? Then we get some feedback and we get tens of thousands of survey results every year. In real time our customer service team now goes through all of them and applies tags and then gives a report to our product team.
We can see the big and the small things that people are complaining about that might be preventing them from advocating for the product. Every month we look at that feedback and decide what we’re going to work on nextk to make the product a little bit better. We were able to do that and turn products from 3.9 star products into 4.3 star products on Amazon, for example. Through the course of hard work over time, and just listening to our customers to improve it. It's been a super powerful way for us to use a feedback loop in our product development cycle as well.
Developing and launching products as a fifty-person company
Felix:How do you prepare to roll out a new product? What does the product development process look like?
Joe:We're about to launch our next product, which is going to be our most ambitious product ever. Similar to our more recent Rocketbook Core products, it has synthetic paper. It comes with ballpoint pens by Pilot that you can get replacements for like a buck or two anywhere. It's just a regular paper and pen, but it's synthetic paper and you can erase it with a little bit of water. It's endlessly reusable. But that's not new. What is new is that it comes with a beautiful folio. It’s more high design and well-designed than any journal you've seen out there– it’s more futuristic. The way it works is, it's modular. You can buy different page packs. Instead of a regular binding it has these three little metal rings that bind a page pack together. You can have one page pack that's lined, another one that's graph paper, another one that is a planner with some combination.
你可以pop your page pack in and out of the folio, in and out of your notebook and change up what page pack you're going to use for the day. It all comes together with the most powerful force in the universe–magnetism. They click in and out, and these page packs come in and out of this beautiful folio in this magical way that feels really high design. We've been working on this concept for well over a year. Now a ton of industrial design has gone into it. Before you launch a crowdfunding campaign the bare minimum of what you need is you need a product that looks like a product that you would deliver.
“你之前推出一个坎集资”ign the bare minimum of what you need is you need a product that looks like a product that you would deliver."
It doesn't need to look like the end product that you deliver. The products that we had in the videos of our early campaigns didn't look anything like the products that we actually delivered. It just needs to look representative of the product that you deliver. These days, we're a more mature company. What we deliver will actually look very much like what's in the video. The other thing you really need to know is that you can build the product. You have to have all of the vendors, the manufacturers in the fulfillment. That's hard too. Find someone who really does fulfillment–meaning pick and pack, shipping, and tracking numbers–if you're going to be shipping tens of thousands of units. You need your vendors lined up, you need to really have confidence that you know your fulfillment costs.
If this product costs $10, am I pricing it right? It's got to be about four to one minimum for you and potential retail partners down the line to make money. Can you make it for $10 and sell it for $40 or some multiple like that? If so, you might have a sustainable business on your hands. Delivery timeframe. You really need to know, "Hey, I'm going to tell everybody that I'm going to deliver this in October." Do I have confidence that I have a plan, everyone's ready, all the manufacturers are all lined up and you can actually do that according to plan. We hit that pretty well, but even these days our last crowdfunding campaign was a few months late. Partly because we were in a pandemic and we hit a few road bumps there, but things just come up that you wouldn't expect when you're making a product–a physical product from scratch–things come up that you can never predict.
There's always a risk. You can never take all the risk out in the first build. You really need to be able to make a great video and have a product that looks good, so you can make that video. Some good marketing copy. Make sure you know your bomb costs, make sure you've got all your vendors lined up, and make sure you can deliver reasonably on time. If you've got the unit economics right, you might have a good crowdfunding campaign and a good business on your hands.
Felix:Where are you focusing your attention in the business these days?
Joe:We were recently bought by the BIC Company. They are the biggest supplier of pens, lighters. and razors in the world. They purchased us for over $40 million, which has been a great milestone for us. I'm still heavily engaged in running the company. My title is still CEO and I'm spending a lot of my time on making sure that we have the right initiatives in place to drive growth, making sure that we have the right teammates in the right spots. We're building the right culture to continue to grow at an amazing clip and build this into what we think could be a billion dollar brand someday.
Felix:What has been the biggest lesson that you've learned from the past year that you want to apply moving forward?
Joe:The biggest lesson that I've learned over the last year is now that our company is becoming a somewhat mature 50 person company, culture is so important. I used to be the leader who did a lot of stuff, at least a lot of the stuff going on in the company. Today I can't possibly even be aware of all the stuff going on, but I can make sure that we have the right processes in terms of cultural dynamics. Making sure that we're giving feedback to each other so we can make each other better and better. Making sure we have A-players in every spot. So that the A-players we do have are excited to perform at their best, because they know when they hand the ball over to someone else, they're handing it over to an A-player as well. Having a workplace and a culture that is high performance, and then working toward a vision that everyone believes in and is motivated by. That helps us really seize the opportunity that we have, and build an amazing company.