Was starting a product business a mistake?

Summary

In this video, the creator reflects on the challenges and lessons learned from starting a product business, contrasting the initial optimism with the harsh realities of manufacturing. Despite setbacks and financial struggles, they express a deep passion for invention and the journey from building 'shitty robots' to developing meaningful self-improvement products. The creator shares insights into their brand 'Yore,' discusses the importance of cash flow, and candidly addresses the anxiety of uncertainty in entrepreneurship, while highlighting the rewarding nature of seeing their creations in the hands of users.

Takeaways

• 💡 The speaker emphasizes the difference between investing and losing money in a business, highlighting their ongoing commitment to their venture despite financial challenges.
• 🔧 The speaker's background includes engineering skills and access to free marketing through their YouTube channel, which they leveraged in their product business.
• 🚀 The speaker's initial internet fame came from creating 'shitty robots', which they monetized to pay for their house, showing the potential of unconventional ideas.
• 🔄 The speaker discusses the limitations of an influencer business, such as the stress and the challenge of scaling without compromising personal life or becoming excessively famous.
• 💡 The idea for a secondary business came after a health scare, leading to the creation of a calendar to track meditation habits, which was later turned into a product.
• 🎯 The speaker's brand, Yore, aims to be humorous without being silly and premium without being pretentious, reflecting a careful balance in brand identity.
• 💼 The speaker has not raised external capital for Yore, choosing to self-fund the business to maintain full ownership and avoid external pressures.
• 💰 The speaker discusses the financial realities of running a product business, including upfront costs for product development and the importance of cash flow management.
• 🛍️ The speaker mentions the strategy of using pre-orders to manage cash flow and reduce financial risk, acknowledging the need to adjust prices for profitability.
• 📈 Despite the challenges and financial investments, the speaker expresses a deep passion for creating and manufacturing products, viewing it as a fulfilling career.
• 🏆 The speaker's ultimate goal is to continue creating and selling products they are proud of, aiming for a sustainable business that aligns with their personal values and ambitions.

Q & A

What is the main difference between 'losing money' and 'investing money' in a business according to the speaker?

The speaker differentiates 'losing money' as giving up on a business, whereas 'investing money' implies a continued commitment and effort to make the business successful.

What was the speaker's initial optimism about starting a product business based on?

The speaker was optimistic due to their ambition, having homebrew engineering skills, and access to free marketing through their YouTube channel.

What is the name of the video series the speaker plans to create about their manufacturing lessons?

The video series is called 'Manufacturing Simone1 Sim11'.

How did the speaker gain internet fame in 2015?

The speaker gained internet fame for building 'shitty robots', which led to starting a YouTube channel and turning it into a career.

What was the longevity issue the speaker was concerned about in their influencer business?

The speaker was concerned about the sustainability of the 'shitty robots' joke and the potential for it to become stale over time.

What are the two ways the speaker identifies to grow an influencer business and why are they not interested in pursuing them?

The two ways are producing more content and becoming more famous. The speaker is not interested because they value a good life and do not want fame for its own sake.

What was the turning point for the speaker that led to the creation of a secondary business?

The turning point was the speaker's brain tumor, which made them realize the importance of not having everything hinge on their health and ability to be in front of a camera.

What is the name of the product the speaker created to help track meditation habits?

The speaker created a calendar with mechanical switches to track meditation habits.

How did the speaker's Kickstarter campaign for the calendar perform?

The Kickstarter campaign was successful, raising almost $600,000, although the speaker still lost money on the project.

What is the name of the speaker's product business and what does it represent?

The business is called 'Yore', representing a brand that is funny but not silly, and has a premium feel without being pretentious.

What is the main challenge the speaker faces in running their product business according to the script?

The main challenge is managing cash flow, especially the costs associated with developing new products and maintaining stock without sufficient sales to cover expenses.

What is the speaker's attitude towards the price of their products and why do they feel conflicted about it?

The speaker feels conflicted about the price of their products because they believe in setting prices according to what they think customers should pay, rather than what is needed for the business to be profitable, leading to a sense of shame about asking for money for something they made.

What is the primary reason the speaker is still investing money into their business despite the challenges?

The speaker is still investing because they love the process of creating new ideas, manufacturing them, and seeing them used and loved by people, which represents the work life they want to live.

What is the speaker's ultimate goal with their product business?

The ultimate goal is to make enough money to continue doing what they love—creating and manufacturing products—forever.

Outlines

00:00

🚀 From Internet Fame to Product Entrepreneurship

Simone Giertz, known for her 'shitty robots' and YouTube fame, discusses her transition into product entrepreneurship. Initially optimistic about starting a product business, she acknowledges the challenges and lessons learned. Despite the financial investment and the struggle to maintain a balance between content creation and product development, Simone remains ambitious. She shares her journey from internet fame to launching a product line, including the creation of a unique calendar that helped her stay on track with meditation. Simone's narrative reflects her desire for a sustainable and fulfilling career beyond her influencer status, leading her to establish a product business that aligns with her values and skills.

05:01

🛠️ Building a Business with a Focus on Longevity and Cash Flow

In this paragraph, Simone delves into the intricacies of building a business with an emphasis on longevity and cash flow. She discusses the challenges of scaling an influencer business and her decision to create a secondary business to ensure financial stability. Simone shares her experience of self-funding her business, the risks involved, and the importance of hiring smart people who can learn on the job. She outlines the costs associated with starting her store and the monthly overheads, highlighting the financial strain of product development and inventory management. Simone's narrative underscores the importance of cash flow management and the careful balance between innovation and financial sustainability.

10:04

💼 Embracing the Journey of Product Development and Business Growth

Simone reflects on her journey in product development, from the initial idea to the launch of her store, Yore. She discusses the process of naming her business, the importance of branding, and the challenges of managing a global team through remote communication. Simone emphasizes the importance of self-funding and the freedom it provides, as well as the risks associated with product recalls and financial instability. She also touches on the strategy of launching pre-orders to manage cash flow and the necessity of adjusting product prices for profitability. Simone's narrative conveys her passion for invention, her commitment to customer satisfaction, and her determination to overcome the uncertainties and discomforts of entrepreneurship.

Keywords

💡Investment

Investment in the context of the video refers to the financial resources put into a business venture with the expectation of financial returns. It is central to the video's theme as the creator discusses the financial commitment made to the business, emphasizing the difference between losing money and investing it, and the ongoing financial support required to keep the business afloat.

💡Manufacturing

Manufacturing is the process of creating tangible goods from raw materials through manual labor or machinery. In the video, the creator shares their journey and lessons learned in manufacturing products, which is a key aspect of their business venture. The video aims to educate viewers on the complexities and challenges of bringing a product from concept to market.

💡Kickstarter

Kickstarter is a crowdfunding platform where creators can raise funds for their projects from the public. In the script, the creator mentions launching a product on Kickstarter, which is a significant step in their manufacturing journey. It illustrates the use of crowdfunding as a means to finance product development and gauge market interest.

💡Influencer

An influencer is an individual who has the power to affect the purchasing decisions of others because of their authority, knowledge, or relationship with their audience. The video discusses the creator's experience as an influencer and the challenges of scaling an influencer business, as well as the decision to diversify into product manufacturing to ensure longevity.

💡Product Development

Product development is the process of creating a new product or improving an existing one. The video's creator talks about the challenges and learning experiences in developing new products, such as a calendar with mechanical switches, and the importance of product development in establishing a sustainable business.

💡Cash Flow

Cash flow refers to the movement of money into and out of a business. The video emphasizes the importance of cash flow in the context of product manufacturing, explaining how upfront costs for development and stock purchases can affect the financial health of the business and the need for pre-orders to manage it.

💡Entrepreneurship

Entrepreneurship is the process of designing, launching, and running a new business. The video's theme revolves around the creator's entrepreneurial journey, from starting with a YouTube channel to building a product business, highlighting the ambition, risks, and rewards associated with entrepreneurship.

💡Branding

Branding is the process of creating a unique name, symbol, or design that identifies and differentiates a product or service. The script discusses the creator's efforts to establish a brand with a premium feel that is both funny and serious, as seen in the naming and packaging of their products.

💡Marketing

Marketing is the activity of promoting and selling products or services, including market research and advertising. The video mentions the creator's access to free marketing through their YouTube channel, which is a significant advantage in promoting their products and building a customer base.

💡Risk Management

Risk management is the process of identifying, assessing, and controlling risks involved in an organization's activities. The creator discusses the financial risks of product recalls and the personal implications of self-funding the business, which are essential aspects of risk management in entrepreneurship.

💡Product Launch

A product launch is the introduction of a new product to the market. The video script describes the process and strategy behind launching products, such as the coat hangers, and the importance of pre-orders in managing cash flow and product demand.

💡Customer Service

Customer service is the provision of assistance to customers before, during, and after a purchase. The video mentions the creator's commitment to excellent customer service as a way to manage customer expectations and satisfaction, which is crucial for building a positive brand reputation.

Highlights

The speaker emphasizes the difference between investing and losing money in a business venture, highlighting the importance of perseverance.

Ambition and engineering skills are key drivers for starting a product business, as well as the ability to leverage free marketing through platforms like YouTube.

The speaker shares lessons learned from manufacturing products and plans to create a video series on the topic.

Internet fame from building robots led to a YouTube career, providing financial stability but raising concerns about longevity and scaling.

The desire for a fulfilling career beyond influencer status led to the exploration of product creation.

A personal health scare prompted the realization of the need for a secondary business to reduce dependency on personal well-being for income.

The creation of a calendar to track meditation habits led to the idea of turning it into a product, demonstrating the value of personal projects.

The challenge of balancing the cost of mechanical parts in product design with the desire for a premium feel.

The Kickstarter launch of the calendar product, illustrating the intersection of personal passion and business opportunity.

The importance of product pricing in ensuring profitability and the struggle with setting prices that reflect both cost and customer value.

The speaker's journey from building 'shitty robots' to creating self-improvement products, showcasing a significant career pivot.

The launch of the Yore brand and the strategic approach to naming and branding to convey a premium yet approachable image.

The operational structure of the Yore business, including the team composition and the challenges of managing a global team.

The financial considerations of starting a product business, including the costs of development, stock, and the importance of cash flow.

The decision to self-fund the Yore business to maintain full ownership and the associated risks and rewards.

The speaker's personal emotional journey with product creation, including the fear of failure and the drive for success.

The announcement of a new product, the foldable coat hangers, and the strategy behind pre-orders to manage cash flow.

The speaker's commitment to the Yore brand as a lifelong endeavor and the desire to continue innovating and creating.

Transcripts

I've lost so much money on this business

no I've invested so much money into this

business there's a difference and I

haven't lost it until I've given up I'm

doing boy

[Music]

math I knew that starting a product

business was going to be hard but I was

still really optimistic because I'm

ambitious I have some home brw

engineering skills and I also have

access to a lot of free marketing

because I mean you're watching this

video aren't you but holy humbling hell

the positive way of phrasing it is that

I've learned some lessons and I know

that a lot of you are curious about

manufacturing products so I'm turning

those lessons into a video series

manufacturing

simone1 sim11 you get it

in 2015 I was thrown into internet Fame

for building shitty robots

then and I started a YouTube channel and

managed to turn it into a career I

wasn't making a huge amount of money but

like shitty robots paid for my

house who else can say that Simone yes

[Music]

[Applause]

and as much as it was a really stressful

time I was also having so much fun with

it nice

[Music]

but I knew that I was going to get tired

of the shitty robots joke eventually and

I never want to beat a dead horse or

even beat a live horse so much that it

dies so there was a longevity issue that

I was concerned about and then on top of

that there's also a scaling issue

because there are only really two ways

to grow an influencer business one is by

putting out more content which I don't

want to do because I want to have a good

life life or number two by becoming more

famous which I don't want either I just

really like being able to go to the gym

looking like Fame to me just like

money I I like to call it life Lube

because it makes everything go easier

and it can also give you access to

places you wouldn't otherwise be able to

go but to me it's just a tool like it's

not an end goal so then the question is

what's the end goal I started thinking

about making making products really

early on I remember wanting to make

miniature versions of some of my

machines we also had some conversations

about making a shitty robot's card game

or different maker kits but it just

didn't feel right like it wasn't very

original and it felt like I was doing

something just for the sake of doing it

which I reserve for things like my pasta

maker but then I made something that

changed everything and that was is a

brain tumor hands down the worst thing

to ever come out of my head Jokes Aside

I'm fine but it made me realize that I

really needed a secondary business

because I can have everything hinge on

me being well enough to be in front of a

camera I wonder if this still

works no I cut the power

cable thanks past Simone I I built this

calendar because I wanted to track how

often I meditated so every day that I

meditated I got to flip a switch and I

was so surprised by how much this

calendar helped me stay on track like I

meditated every day for years and I

wanted to see if I could turn it into a

product I love the mechanical switches

but when you have 365 of something the

cost really adds up so I put together a

team of Engineers and we made a version

of this calendar with without any

mechanical parts and then we released it

on Kickstarter my name is Simone and I'm

mostly known for building things that

don't

work I realize that might be the worst

Kickstarter intro of all time but the

thing is besides making useless machines

I buil a lot of other things I love

seeing how I was like trying to bridge

the gap going from shitty robots to like

really lofty products for

self-improvement I think I managed

pretty well I mean I raised almost

$600,000 still lost money on the project

though but um yeah how is that possible

I'm going to do a more detailed

breakdown of the everyday calendar in a

future video so to find

out please subscribe and while you hit

subscribe let's take a quick

break so I am currently in Sweden to see

family and do you recognize the spot

this is where I shot the wake up machine

and 2016 but before I started Living

that whole weird internet miracle I had

no idea what I wanted to do in life it

can be really hard to figure out how to

build a career and even harder to figure

out how to build a fulfilling career

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Simoni okay now back to my

career I found a list of all the

rejected name ideas in my notes app

where things are sold the things store

from here like I remember wanting a name

that was funny as a response so when

somebody would ask like where did you

get that from you could just respond I

got it from

here only catch is that a generic name

like that is really bad for search

engine optimization heard of

it idea Rehabilitation Center is pretty

funny but also making fun of myself in

that way is something that works when

you're building shitty robots but when

you're trying to convince someone

someone to buy your product you really

have to like stand proud shooting myself

down is a reflex that I've had to like

actively work on getting rid of so I

ended up naming it

yor which is still making fun of myself

I guess but like in a different way

because the joke is that y is how you

pronounce my last name because um nobody

knows I wanted the brand to be funny but

not silly and for it to have a premium

feel but not be pretentious

so we have the build dice our

screwdriver and screw ring a white

incomplete puzzle that weirdly enough is

our bestselling product and some sawdust

socks I actually designed the Yore logo

when I was working on the packaging for

the screwdriver ring because I wanted to

have a laser cut hole that you could try

the screwdriver with and I couldn't

figure out how to fit that and the name

of the brand in one spot until I was

like like

oh only downside is that it reads like y

when it's monochrome which all of our

packaging

is it's on my to-do list to

fix I launched the edge store may 2022

with two and two half employees so we

have an engineer a head of manufacturing

and my producer and I who both split our

time between the media and the product

business on top of that my talent

manager he came on as a business partner

so he's not salaried but he has a share

in the business and we are all over the

world it is all slack and Google

Hangouts key learning for me is that

it's a lot better to hire smart people

to learn than to hire stupid people to

do something that they already know how

to

do hey so I have not raced any outside

capital for the Y door it's all

self-funded which is great because I own

it fully and I don't have to answer to

anyone the part that's not so great is

that if we ever had to do like a product

recall then I would probably have to

take out a second mortgage on my house

I'm not going to share numbers in the

nude because that feels too personal but

here's a rough overview of all the costs

to start the yet store and for our

current monthly overhead cost this is

out split it is all about cash flow like

developing a new product costs a bunch

of money up front and then you have to

find even more money to buy stock from

your factory that you then hope to sell

to slowly earn back that money plus

profit and if you don't sell it then you

have to pay a storage fee at your

fulfillment center so we're currently

moving it like a semi snail pace and

launching maybe one and a half new

products a year because that is what I

can afford

speaking of which this video is brought

to you by the yat door you might have

seen our foldable coat hangers that can

turn any Nook into a functional closet

and I am excited to announce that we are

launching pre-orders for the coat

hinders today so if you miss the

kickstarter campaign we are opening up

sales for our second batch for a limited

time only and why do we do pre-orders

because of cash flow so if you have a

hallway or a closet that can't fit a

standard coat hanger the coat hinger is

going to be a game changer for you and

if you notice that they're a bit more

expensive than during the kickstarter

campaign it's because I've realized that

I need to raise my

prices I really hate it like I hate

hearing people say that my products are

expensive because I think I just have a

lot of Shame around asking people to pay

for something that I made but the thing

is when you hear about a product having

like a 4X markup so your selling price

is four times the manufactur cost it can

sound really greedy but it is what you

need for it to be profitable and I'm not

even selling most of my products at a 2X

markup because I've just set prices

according to what I think they should

cost for the customer and not as to what

they have to cost for my business to

make sense so I am still losing money

every month running the Y door no I'm

still investing money every month and

honestly I'm just waiting for the moment

that we hit break even like that is

going to be such a joyous day and I'm

just going to let out a leld fart of

anxiety I've been developing in

manufacturing products for almost 6

years now and I'm not going to lie it's

been tough like sometimes I wake up in

the middle of the night and I just feel

like throwing up I'm just terrified of

disappointing people and selling people

products where so many things can go

wrong it's just really scary for me and

whenever I see someone upset even though

we have like amazing customer service

and we try our absolute best to make

everyone happy I just want to close-up

shop and go hide under my couch and what

I keep telling myself is that handling

uncertainty and discomfort is a skill

that I can grow and it's a skill that

makes me better at this job and honestly

I think I also just really want to prove

myself like I'm really proud of the

shitty robot chapter of my life like I

have no regrets about it but that can't

be

it like I want to be an inventor in a

true sense not just in a joking way

and honestly I think I just really

really really want to be

smart and

hot but mostly smart

so with all of that in mind do I regret

starting the atge

door no not at all because weirdly

enough I love it I love coming up with

new ideas I love working with my

engineer to figure out how to

manufacture them I love writing the

story of the product and making it

planed for how to Market it and nothing

makes me as proud as seeing something

that I made be out in the world and

people using them and ideally loving

them the Yore isn't just a business to

me like it is the work life that I want

to live I got to spend 3 years

developing the coat hinger and then

release it and it getting such a great

response except for the people that kept

on doing

[Music]

this it's not the same thing but thank

you for your engagement so it's tough

but it's also so r rewarding and

honestly I just want to make enough

money so that I can keep on doing this

forever this is a horse I will gladly

beat until it dies thank you so much for

watching this video if you have any

questions about manufacturing or about

starting a product business that you

want me to answer in future videos you

can leave them down below and if you

want to buy any of our products you can

do that at y. store and if you don't

want to buy any of our products you can

still follow us on Instagram okay okay

bye

[Music]