Inventing a three-wheeled stair-climbing foldable cart – Leonid Khodor of UpCart
INTERVIEW VIDEO (Length – 1:02:25)
Sponsors & Partners
Leonid Khodor of UpCart shares the story of using his background in engineering and patent development to invent and bring to market a novel three-wheeled stair climbing foldable cart that helps people move stuff and allows easy foldable storage of the cart. The product now has mass distribution across the US as well as international markets through retailers such as Home Depot, Lowe’s, Costco, Ace Hardware and many more. Leonid shares his advice on patent development and shares how he has overcome some of the challenges in manufacturing, supply, and distribution of the product.
Leonid Khodor is the inventor of UpCart, a three-wheeled foldable cart that can walk upstairs. He had a background in machinery and had already patented over 20 inventions before creating the UpCart. The idea for UpCart came unexpectedly from his granddaughter’s trust and belief in him, combined with his previous knowledge of devices that could aid in overcoming obstacles. The UpCart gained instant success when it was launched in 2015 and has won multiple awards for innovation. Khodor explains that the engineering problem behind the UpCart was relatively simple to solve, but the specific folding mechanism of his invention sets it apart from similar products on the market. He also discusses the challenges and successes he has faced in manufacturing, supply, and distribution, as well as his experience with patenting his invention. Overall, Khodor offers valuable insights and advice for entrepreneurs in terms of believing in their product, offering something unique, and protecting their ideas.
- 00:00:00 In this section, the host introduces Leonid Khodor, the inventor of UpCart, a three-wheeled foldable cart that can walk up stairs. The UpCart gained instant success when it was launched in 2015 and has won multiple awards for innovation. Leonid, who considers himself an engineer first and foremost, had already patented over 20 inventions before creating the UpCart. He had a background in machinery and had worked on various projects related to food preparation, vending machines, packaging, and more. The idea for UpCart came unexpectedly from his granddaughter’s trust and belief in him, combined with his previous knowledge of devices that could aid in overcoming obstacles.
- 00:05:00 In this section, Leonid Khodor discusses his invention of a folding device that solves the problem of limited space in apartments or houses. He explains that his invention is not the three-wheel concept, as that was already known, but rather the way the wheels fold against the plane. This engineering problem was relatively simple to solve, and Khodor recognized the commercial value of his product as it would benefit those with physical limitations or the elderly. He knew that people would need a device like this to maintain their independence and perform tasks that would otherwise be difficult. Khodor also mentions that there may be similar products on the market with a three-wheeled mechanism, but they lack the specific folding mechanism of his invention.
- 00:10:00 In this section, the speaker discusses the competition in the market for folding carts. While there are non-folding carts available, they are mostly used in industrial settings and are heavy. On the other hand, folding carts became popular in 2012 due to their convenience for everyday people. The speaker mentions that there have been attempts to copy their design, but no other competitor can fold the cart flat like their product. The conversation then shifts to the speaker’s experience as an engineer in the USSR compared to the US. In the USSR, engineers had more freedom in finding solutions and designing machinery, while in the US, there is more influence from non-engineers giving input on problem formulation. The speaker emphasizes the importance of listening to the needs and wants of customers in evaluating product design.
- 00:15:00 In this section, Leonid Khodor explains that in the past, the problem to be solved by engineers was presented to the consumer as a solution. If the consumer needed something different, they had to find another engineer. This allowed engineers in the USSR more freedom to operate and think outside of their narrow profession. Khodor emphasizes that his mechanical engineering education doesn’t limit his knowledge and ability to solve problems. He believes that education as an engineer continues throughout one’s life. However, he acknowledges that bringing a product to market requires more than just a good product. It also requires understanding marketing, distribution channels, and educating consumers about the product. Khodor considers himself fortunate that the UpCart product sells itself, as he designed it with the user’s perspective in mind.
- 00:20:00 In this section, Leonid Khodor explains how his product, the Cartop, gained popularity after being featured on QVC. The initial order of 15,000 cars prompted him to ramp up production and fulfill the order. Although he had to invest his own money initially, QVC’s order allowed him to borrow money to cover manufacturing costs. QVC’s payment terms were not ideal, with partial payment after three months and full payment in 180 days, but it provided a starting point for Khodor’s business. He also mentions that they saw success in retail sales, with three containers of the product being sold by the end of August.
- 00:25:00 In this section, Leonid Khodor discusses the challenges they faced with supply and distribution when they first started. They underestimated the demand and ran out of stock before Christmas, resulting in lost sales. Khodor also mentions the growth of their channels over the years, with sales reaching 3 million in 2016, almost 5 million in 2017, and 7.5 million in 2018. However, there was a decline in 2019 due to internal company problems. He explains how they moved production from China to Vietnam to avoid anti-dumping duties on their hand truck product, which led to additional costs and time. Unfortunately, Vietnam experienced temporary closures in 2021, causing further issues for their manufacturing operations.
- 00:30:00 In this section, the entrepreneur, Leonid Khodor, discusses his experience with patenting and when an entrepreneur should consider patenting their innovation. He explains that getting a patent can be expensive, especially in Europe, and it requires a significant investment of money. However, as a patent agent himself, he has the advantage of being able to handle the process on his own without spending a lot of money on lawyers. He advises entrepreneurs to consider patenting only if their invention is basic and broad enough to cover the field, and not if there are multiple solutions to the same problem, as someone else may find another solution after the patent is granted.
- 00:35:00 In this section, Leonid Khodor discusses the challenge of patenting his invention in different countries. While his initial patent went through successfully in Europe, he faced difficulties in China due to a lack of understanding from the examiner. Khodor explains that it is easier to argue with knowledgeable people who speak the same engineering language. He also mentions the issue of intellectual property infringement in China, where products similar to his are created but not functioning exactly the same. As for the supply chain and distribution process for his product, Khodor’s company works with manufacturers in China or Vietnam to develop it, using 3D software instead of physical samples to save costs.
- 00:40:00 In this section, Leonid Khodor discusses the different methods of getting products from manufacturers to retailers, including distribution through Amazon and international partnerships. He emphasizes the importance of his extensive experience in design and manufacturing, which allows him to effectively manage the entire process. He also mentions that there have been challenges and mistakes along the way, such as difficulties in working with Chinese manufacturers. However, he has learned from these experiences and now insists on clear agreements with manufacturers. Overall, Khodor believes that entrepreneurs can learn from his mistakes and stresses the importance of being firm with suppliers.
- 00:45:00 In this section, Leonid Khodor explains that dealing with the various problems that arise in business, such as product quality and logistics, is a necessary part of the trade-off for cost savings when working with Chinese manufacturers. He mentions that businesses often encounter issues related to language barriers, cultural differences, and the tendency for manufacturers to cut corners to reduce costs. Despite these challenges, Khodor believes that utilizing Chinese manufacturers is still a necessary evil in order to keep product costs low.
- 00:50:00 In this section, Khodor discusses the challenges of manufacturing his products and the decision to produce in Vietnam due to lower costs. However, he mentions that working with Vietnamese manufacturers requires educating them on certain aspects as they may not have formal education or understand the reasoning behind certain processes. Despite this challenge, Khodor plans to continue working on new products and is now more involved in strategic aspects of the business, including marketing and sales. He emphasizes the uniqueness of their products and the need to differentiate themselves from competitors who solely focus on price and discounts.
- 00:55:00 In this section of the interview, Leonid Khodor advises entrepreneurs to believe in their product and to offer something unique in order to stand out in the market. He emphasizes the importance of having a good product as the foundation of successful marketing, and warns against trying to sell a product that one does not believe in. Khodor gives an example of a company that initially had a unique product, but when imitators entered the market, they were unable to compete on price and eventually had to sell their business to a larger manufacturer. He concludes by highlighting the significance of having a competitive advantage or protection, such as patents, to prevent quick replication of ideas.
- 01:00:00 In this section, the speaker discusses the importance of having a unique selling point for a product or brand. They explain that uniqueness does not necessarily mean inventing something completely new, but rather finding a way to differentiate yourself from competitors. The example of Burger King is given, where although they are unique in their own right, other burger shops have imitated them enough to become competitors. The speaker emphasizes the need to create a brand that stands out and appeals to consumers, using McDonald’s as another example whose slogan is unique. They conclude by thanking the speaker for sharing their story and offering well wishes for their future invention journey and business endeavors.
People & Resources Mentioned in the Episode
What You’ll Learn
Interview with Leonid Khodor of UpCart
|[00:00:08] Introduction to Trep Talks and guest Leonid Khodor|
|[00:00:59] Success and awards for UpCart|
|[00:01:20] Discussing Leonid’s entrepreneurial journey|
|[00:02:05] Origin of the UpCart idea and initial development|
|[00:05:00] The engineering behind the folding mechanism|
|[00:07:00] Commercial aspect and competition of UpCart|
|[00:10:00] Solving the problem of moving loads over stairs|
|[00:12:00] The growth of folding carts in the market|
|[00:14:00] Differences in engineering between USSR and the US|
|[00:18:00] Transition from engineer to product entrepreneur|
|[00:19:49] Introduction and Design Perspective|
|[00:20:25] First National Hardware Show in 2015 and Initial Recognition|
|[00:21:42] Partnership with QVC and Rapid Product Demand|
|[00:23:05] Initial Investment and Financial Challenges|
|[00:23:29] Expanding Distribution Channels and Challenges|
|[00:25:00] Managing Supply and Demand, Sales Loss|
|[00:26:05] Entrepreneurial Challenges and Learning from Mistakes|
|[00:27:16] Company Growth and Setbacks, Impact of COVID-19|
|[00:38:54] Designing and Manufacturing Process|
|[00:43:38] Challenges of Dealing with Chinese Manufacturers|
|[00:45:29] Lessons Learned in Business Building|
|[00:47:13] The Complexities of Supply Chain and Distribution|
|[00:49:58] The Necessary Challenges of Outsourcing to China|
|[00:53:05] Involvement in Business Operations and New Product Development|
|[00:55:39] The Importance of Believing in Your Product|
|[00:57:22] The Downside of Competing Solely on Price|
|[00:57:58] Competing with Imitators and Price|
|[01:00:13] Entrepreneur vs. Business Person: Creating Unique Solutions|
|[01:01:00] Importance of Protecting and Defining Uniqueness|
|[01:01:42] Creating a Unique Selling Proposition|
|[01:02:00] Wrapping Up the Interview|
In this segment, the guest will answer a few questions quickly in one or two sentences.
Leonid Khodor of UpCart
- Book recommendation that you would make to entrepreneurs or business professionals (Response:)
- An innovative product or idea in the current e-commerce retail or tech landscape that you feel excited about (Response:)
- A business or productivity tool or software that you would recommend/Productivity Tip. (Response:)
- A startup or business (in ecommerce, retail, or tech) that you think is currently doing great things. (Response🙂
- A peer entrepreneur or businessperson whom you look up to or someone who inspires you (Response:)
- One networking tip or building and sustaining valuable professional relationships.
- Best business advice you ever received (Response: Only sell a product if you truly believe in its value and necessity. If you don’t see the product as necessary, you shouldn’t attempt to sell it. Selling a product you don’t believe in can lead to poor results and lack of satisfaction)
Sushant Misra of TrepTalks: Hey there, entrepreneurs. My name is Sushant and welcome to Trep Talks. This is the show where I interview successful e-commerce entrepreneurs, business executives, and thought leaders, and ask them questions about their business story, and also dive deep into some of those strategies and tactics that they have used to start to grow their businesses.
And today I’m really excited to welcome Leonid Khodor to the show. Leonid is an engineer and inventor of UpCart. UpCart is a three-wheeled foldable cart, which makes it possible for a cart to walk up the stair. UpCart came to market in 2015 at the National Hardware Show in Las Vegas to instant success.
The [00:01:00] UpCart has won multiple awards, including the most innovative concept award from the National Invent Association of America, as well as Retailers Choice Award, four times by North American Hardware and Association. And today I’m going ask Leonard a few questions about his entrepreneurial journey and some of the ways he has started and grow his business.
So Leonid thank you so much for joining me today at Trep Talks. Really, really appreciate your time. Thank you. So I know we were just chatting a little bit about your background and you said that you consider yourself, uh, an engineer first and foremost. Yes. So can you share a little bit about, you know, you know, even before you created this product called UpCart you know, you were already an engineer.
You, you had a. You know, full background. You, you had already patented quite a different products. Can you share a little bit about what you were doing [00:02:00] before creating, uh, creating UpCart and how did you get the idea for creating this, uh,
Leonid Khodor of UpCart: this product? Uh, before, and we came to us when I was, I believe, 42 years old.
And, uh, at that time I already had, uh, more than 20 inventions patented in ussr. And, uh, I worked with the worst, where the worst field of, uh, of machinery from, uh, good preparation machinery for, for, uh, for commercial enterprises to. Vening machines, uh, packaging machinery for, for, uh, food, uh, food basis, store stores of food, [00:03:00] uh, and some, uh, some packaging machinery for, for medicine and, and, uh, uh, uh, semiconductors and so on and so on.
So, uh, in, uh, in the US when we came, I initially, uh, found work in, uh, special, uh, machinery, which is, uh, basically production machinery for certain things. Uh, like, uh, uh, writing bulbs in, in g uh, and later I become patent legend. I help, uh, with, with, uh, this execution of patents to, to inventors. And, uh, beside that, I work on, uh, [00:04:00] something that, uh, I got patented.
Patented as well. Not, not everything, cause not everything makes economic sense to, to go to patent, especially with special machinery. But, uh, some things and, um, now it’s about 35 or more patents. I don’t know. Uh, uh, that’s kind background. My wife is electrical engineer, so we, we kind a team and she much better than me in.
And, uh, the, the up cart, uh, came, uh, kind of unexpectedly from, from, uh, from my granddaughter at that time, from five years old for, uh, for trust in me, for belief [00:05:00] in me that I can do anything. And, uh, some previous knowledge that, uh, what, what devices could be used to, to go over, uh, a rough ground, uh, including steps or carbs or whatever.
And, uh, uh, that that was done. My, my part is it, uh, in it was to, uh, to devise the way to make it disappear. Because if it’s not folded, it takes too much space for, for average citizen to, to have this device. It takes too much space in apartment or, or even small house. So, uh, and people, uh, mistakenly think that, uh, my invention in that is three wheel cab.
No way. It was, no, probably before I came to [00:06:00] this world. But, uh, nobody thought about how to, how to fold those wheels. They would flat. Hmm. And it’s not, it’s not actually, uh, that difficult, it’s an engineering, uh, problem, problem that, uh, when you think about it, it is kind of, uh, asking for to be solved a very simple way.
So, uh, that, that’s entire invention. Just to put axel of rotation of the. Uh, wheels arm, the way that arms would fold, uh, 90 degrees or about 90 degrees visually. Cause in reality, they, they move, uh, about hundred 20 degrees, but we see 90 degrees. Okay? So that, that’s, that’s an [00:07:00] all in range after that just work and, uh, um, and, uh, kind of with customers help to find better way to, to do this.
Okay? A second generation, or it’s a third generation of, of, uh, the device with different concept of, uh, folding, but, but, uh, different folding mechanism, but the same, uh, the same idea how to fold. Okay.
Sushant Misra of TrepTalks: When you started, or when you created this, uh, this product or the, you know, the folding invention of it, right, the folding innovation of it.
Did you think at that time that this, did you have a commercial aspect of it in mind? Like did you think that this, this would become a product that could be [00:08:00] sold, uh, in a mass market commercially? Or was it really just about that you were trying to solve a problem for yourself and you thought maybe this will help some other
Leonid Khodor of UpCart: people also?
No, I, I clearly understood commercial value or whatever of, of the product because, uh, basically everyone at some point, uh, in life would need it. Uh, people who, uh, uh, who, who. Uh, in, well, in some way physically or, or, uh, age wise or, or, uh, or health wise. And they need, uh, they need this to be, uh, independent, to be able to do things that, that they, uh, would not be able do.
Another way, it’s difficult for, for [00:09:00] people to, to move, uh, three or four boxes at once or, uh, on the stairs or even, uh, or if you don’t have the, uh, ramp to go, you need to go over the steps. And, and, uh, that’s a problem for, for, for people. They, they need to, uh, use more force than, than, uh, that, uh, weight, uh, of the, uh, load the daycare.
So I clearly, uh, knew that it would be, uh, thing that, that people need and that what kinda the basis for, for doing it.
Sushant Misra of TrepTalks: Um, are there products in the market available, similar products that have the three-wheeled [00:10:00] mechanism to solve the problem of, you know, bringing this cart up the stairs or, you know, something like that, but they don’t have the, the specific invention that your product has. And what is the, uh, you know, do you know from like a business sense, um, from a pricing perspective, is there, you know, how, how does this product compete with kind of like the generic model where there is no sort of a folding mechanism?
Do you have any insight on that?
Leonid Khodor of UpCart: Uh, there are, there are aware and are the cars, um, that, that, uh, are not fold, but those are mostly in the, um, industrial shops and, uh, uh, they’re heavy. So they, uh, have different devices to let them [00:11:00] go, uh, over the stairs. And they’re, uh, not really, uh, for that because when, when you go up or down the stairs, you carry along with the load, the cart itself, which is, uh, totally different story from low on the even level floor was on the level floor.
You only with, uh, Resistance of the friction and, uh, inertia with, uh, going over the stairs. You deal with, uh, with weight of the load and iner, especially when you go down, inertia of going down. And in addition to friction, friction is very small, uh, part of it. So, uh, what you see around in folding cards [00:12:00] that was explosion o of the market in 2012, and after that, when, uh, a lot of people in China and later everywhere realize, uh, a potential of, uh, a tri wheel hub or of volume, it, uh, creates, uh, value for, for, uh, for everyday people.
They, they could, I could make disappear this. Uh, big device. Uh, so we, we got a lot of, uh, people who tried to, to copy one way or another. But, uh, I don’t say, I wouldn’t say that we have real competition cause nobody but us can, uh, fold it flat. Ok. Now
Sushant Misra of TrepTalks: you mentioned that, you know, of course, uh, one [00:13:00] part of your life or early part of your life you spent as an engineer in US S r Yes.
And then, and then you came to the us. Um, I’m very, very curious to know what was it like being an engineer in, uh, in U ssr and how was, how is it different now in the us Did you, like from an engineer’s perspective, did you. Um, did you feel anything different in terms of, you know, working in the US versus U ssr?
Leonid Khodor of UpCart: I would not say that I know, um, kind of engineering community. I think that there are some brilliant engineers who can deal with, uh, uh, different, uh, spheres with, with of engineering and so on. In ussr, some of us [00:14:00] had much wider knowledge and much broader applications. And, uh, in, in design of the machinery, I was actually, uh, more free with, uh, solution and, uh, how to deal with, with it, uh, comparing to.
Uh, to us where, uh, people who don’t understand engineering, uh, give, give the, uh, kinda, uh, the, the, the problem. And engineers don’t, uh, don’t argue with them. They tried to, to do what they told, and that, uh, consumer everywhere always arrived. It’s not, it’s not proper, uh, kind of slogan. The proper would be you have to, uh, [00:15:00] uh, listen very carefully so the needs and, uh, uh, kind of wants of the customer, evaluate it, explain to the customer why, why it is wrong, and make the best that customers need.
So sorry. It was, uh, simpler. Cause uh, uh, we, God, that we need the machine. We, that machine needs to do that. And, and this, and please tell us, is it possible, and if it’s possible, how it would sound, what, what would be, uh, kind of, uh, cost, what would be the solution and, and, uh, uh, kinda production capacity and that’s all.
So, uh, nobody, uh, but, uh, designer engineer was the [00:16:00] problem to be solved. That, uh, that, uh, technical, uh, technical, uh, position, technical, uh, problem was presented to consumer. As the solution consumer could, could reject it and say, no, I need something else. It’s a, it’s a different story. But, but, uh, that was like, uh, okay, if you need something else, you, you need to find different, different engineer to do.
So in this, uh, in it was, uh, easier in SSR and, uh, and engineers, uh, had more freedom to operate in us. Uh, uh, much, much narrow [00:17:00] function of engineers. And it probably, uh, limits the engineering, not j just capacities, but their thinking. They don’t think outside of their, uh, uh, kind narrow profession. I, I, I, I got, uh, um,
mechanical engineering, uh, education, formal education. It doesn’t mean that I dunno, electricity or, or, uh, uh, has a dynamics or, or something else. Uh, my, uh, area of, uh, knowledge, which I can, uh, invest in, in, uh, prob problem to be solved much wider than formal education because education of engineer continues entire life.
Every, [00:18:00] every next job, education something. Yeah. So,
Sushant Misra of TrepTalks: you know, going from being an engineer to bringing a product to market, of course, you know, you, you need. Um, you know, you need, you need the business side of things and there’s a, you know, there’s a very common saying here, um, in North America now, I think in the, in the product community, right?
Uh, the saying is, if you build it, they won’t come. Right? So it’s, it’s not just sufficient to have a really good product. Even if you have a really good product, you still need to find, you know, a way to distribute it in the market. You need, you need the right marketing, you need the right channels. Um, you need the right education to the consumer so that they can, you know, understand the product and, and then create demand for it, right?[00:19:00]
It doesn’t matter like how good the product, if the product could be like the, the most wonderful thing, but if the consumer doesn’t understand it, or, you know, they don’t, you don’t have the right distribution and marketing and channels, you know, they would never figure it out. So in your instance with up Cartt, you know, so you, you had this product, you created this innovation.
What were some of the next steps in terms of, for you, you know, you realized that there is going to be, there is a commercial, you know, viability of this item. What did you do next in order to bring this product to the
Leonid Khodor of UpCart: market? In this, we were very lucky because the product sells itself. Uh, it’s, uh, I, I believe in that, uh, at the very beginning.
And when I do something like that, I put myself in the shoes of the, uh, user. So I, I designed from, from the, from the [00:20:00] viewpoint of the user, uh, but decide that when we, uh, came to the, uh, first, uh, national Hardware show in 2015, We had just a few samples of the program and, uh, uh, we, we created, we, we stopped the show.
That PE people, uh, I, I heard that, uh, said to, to one another. Didn’t you see this stuff in that room? No, you should. Everyone there. So that’s, that’s nice to hear. But, uh, and in that, at the show in 2015, uh, the, the product was picked up by, uh, Q vvc. Okay. That, that’s what actually, uh, give us the, the push, [00:21:00] 15,000 cars ordered by QVC right away.
And Wow. Right away it meant that I, I need to, uh, to get the production right away. So I ended, uh, my wife and I ended, uh, kind of running around, uh, Las Vegas knowing that, uh, Las Vegas, uh, manager of their, uh, Chinese shop where, uh, a Carpo should be produced. And we, we were looking for them everywhere, finally found, and I said, you know what?
We need to ramp up, uh, this production. We, because we, we’ve got the order, we need 10 containers of the product contain in, in three months, less than three months actually. So that, that’s, uh, how it started. [00:22:00] And it continued practically the same way. So the product speaks for itself. Okay? The marketing needs that, uh, for, for.
To, to, to save people. Do you know that that thing is, is exist? Okay. Or, uh, say, you know what? Accuracy sold, uh, 15,000 cards in, in, uh, with the velocity. Uh, $1,500 a minute and more. Okay. Yeah. So that’s, that’s all the market unit needs. You don’t have to, uh, say, you know what your underwear, uh, you our, uh, competition sales, right?
Underwear, we can offer you different colors, different pictures. We don’t need that cause we don’t have real [00:23:00] competition, which is kinda fortunately for me. Yeah,
Sushant Misra of TrepTalks: yeah, for sure. Um, so, so that, did that kind solve. Solve the problem for you for not making your own huge investment. So if, when, when QVC gave you the order, did that pay upfront, so that kinda covered the cost of like, manufacturing.
Did that help you or that that’s not how it went?
Leonid Khodor of UpCart: I put my, uh, own $50,000 at the beginning. Okay. To make those, those samples. And, uh, additional few thousand to get to the show. And that was it. I had no more money because of, uh, that order from qvc we were able to, to borrow money or for initial production and after that it kinda [00:24:00] all, okay.
Sushant Misra of TrepTalks: Um, so QC did not pay you upfront, like you had to borrow money against the order?
Leonid Khodor of UpCart: The receive has, uh, kind of terrible, uh, terrible conditions. They, they, they pay, uh, uh, if I remember correctly, they pay, uh, certain amount, uh, after three months, and they pay full amount in 80 days. So it’s, it’s kinda, you, you have to leave those three or six months somehow. Mm-hmm. But, uh, a start, and we, we sold tales as well.
Uh, ok, not, not that much. May maybe, uh, three containers in, in, because the, the, uh, the show was in [00:25:00] May, 2015 and, uh, the card went, uh, on sale of the end of the August. See, and, uh, we’ve had, we, we’ve had problem with, with, uh, uh, with supply. Cause we, we didn’t know, uh, what would be, uh, distribution of these.
And we went, uh, we ordered, uh, three containers and we had two containers before, uh, before the Christmas. And we said that we are okay, but we, we went completely empty, uh, before Christmas. So it was a problem. Lost sales.
Sushant Misra of TrepTalks: Okay. Yeah. Yeah. That, that, that’s definitely, uh, a complicated problem, right? It’s like when you kind of underestimate [00:26:00] the sales and, you know, and there’s a bigger
Leonid Khodor of UpCart: demand.
You always have a problem when you start something the second time is, uh, is somewhat easier, uh, but first always, always difficult, always mistakes, nothing without mistakes.
Sushant Misra of TrepTalks: So in terms of channels right now, of course, you know, when, if you launch 2015 now, I think it would be like eight here or something for this.
Um, how has your channels expanded? I know you have a website, uh, I believe you sell on Amazon, you sell on with retailers, hardware stores and so forth. Can you share a little bit about, you know, what the distribution is in terms of which channel does the best versus, you know,
Leonid Khodor of UpCart: we kinda, we, we grew very quickly.
We had, uh, about about 3 [00:27:00] million in 2016. Almost 5 million, uh, in, uh, 2017. And, uh, uh, seven and a half million 2018. Uh,
19, uh, kind of went, uh, lower because, uh, there was internal problem in the company. And after that, uh, was covid and everything went down. Hmm. Uh, Vietnam was closed. Uh, at that time. I moved from China to Vietnam in, at the end of 2016 for, for, uh, uh, at the times. The reason was that, uh, the hand track from China, uh, uh, have, uh, uh, uh, custom duty, [00:28:00] uh, anti dumping.
So the, the custom duty were, were, were, were terrible in some, in some cases, uh, uh, three times, uh, of the cost of their product. So I knew about this and I would, I research about this and, uh, because I, uh, we started with the cart and the next my product was, uh, he Hera the difference between cart and Hera.
That cart has platform, uh, over the ground and support, keep platform over the ground. Cause it’s used, used outside. So you have to keep load, uh, over, over the ground. The hand track is, has platform on the ground and you can push it under the product and it’s used mostly inside of the warehouses and, uh, wherever you [00:29:00] need.
Uh, and if you don’t afraid to, to, to get something dirty, you can use, uh, hand truck. Uh, so, uh, but hand trucks, uh, involved, uh, anti dumping duty and cart not So, when, when I, uh, designed a hand truck, I knew I need to, to move somewhere, and I moved to Vietnam. I could argue that my product do does not involve anti dampen duty, but it would cost me probably at least a year, a time of the time and about a hundred thousand dollars in 2016, let’s say it would be $200 now.
So, uh, we moved to Vietnam and, uh, Vietnam was closed from 2021 to May of this year. Which created huge [00:30:00] problem for us. Uh, it went down. We, we, we lost a manufacturer, initial manufacturer in Vietnam. On top of that, I, uh, I redesigned and started new line of the product. We had trouble, uh, looking for another manufacture and, uh, basically we, during the covid, we, we lost everything based.
Mm-hmm. Without the product, you cannot do anything. So now we kind of, uh, starting over and, and, uh,
Sushant Misra of TrepTalks: okay. Can you talk a little bit, I mean, I know you mentioned that you are a patent, um, patent engineer or patent patent. Okay. Yes. So you probably know [00:31:00] a lot about the process of patenting and so forth. I’m really curious to know your thoughts on when should an entrepreneur that is coming up with a new in kind of innovation or, you know, new idea should consider patenting versus not consider patenting?
Because some entrepreneurs maybe it’s quicker for them to go to market rather than, you know, get involved in the whole process of getting a patent and so forth. And of course, the protection that a patent offers sometimes, you know, copycat and so forth can, can work around it. Right. So the investment that goes into creating a patent, um, what are your thoughts on, you know, when should an entrepreneur consider a patent and happens?
Is there, what is the. What is the expiration date of a patent, like even your product? Is it that after [00:32:00] 20 years, the patent is gonna run out and then at that time, you know, anybody can utilize your innovation and, and so your product will be just one of many,
Leonid Khodor of UpCart: uh, theoretically, yes. Uh, practically it looks like that, uh, you think that you invent sumption.
It’s, it’s not a reason to, to, to go for a patent. Patent is very expensive and, and, uh, European patent was as expensive as, uh, American patent. Uh, so if you consider, uh, the product would have wide distribution around the world, uh, you, you have to have a lot of money. To, to deal with it. Uh, I’m lucky in this, uh, kinda situation [00:33:00] because I’m patent agent, so I, first of all, I can do it myself.
Second, I don’t, uh, spend any money in the United States. Uh, just the fee, uh, to, to fill the application and, and, uh, after that fee to, to, uh, to issue the patent, which is altogether about $3,000. And, uh, after that, uh, in 300 half, five and a half, and seven and a half, no, three and a half, seven and a half, and 11 and a half years, you have to pay, uh, uh, fee, uh, for continuing the patent.
So, uh, but if you pay lawyers to do it, We are talking about 10 to $50,000 patent in years. [00:34:00] Um, 35 to $50,000 patent in Europe. Considering, uh, all the countries you need to, to have grants after you get the patent. And you have to pay annual fees during the application prosecuting. So if you don’t expect to get that kind of money, uh, from distribution of your product, don’t go for present.
does it make sense to, to paint to only if your invention, uh, Basic enough and broad enough to cover the field. I would not go for something that, uh, have [00:35:00] multiple solutions because after I show that I can solve this problem, somebody else will find another solution. Cause penetrates, it’s in, uh, science and engineering everywhere.
Everybody know that this problem could not be solved. And after that you find one, one person show that it’s solvable and then turn, uh, it turns mind when people realize that it’s solvable, they found a bunch of ways to, to, to do it. Mm. It’s a normal thing. So if, uh, if you invent something that is broad enough to cover, All the possible, uh, ways to, to solve it that would be strong.
Uh, my initial patent went through, uh, sort [00:36:00] opposition in Europe recently, and, uh, uh, withstood that, uh, challenge and now it’s up as a strong patent. But the same practical pattern in China was, uh, trying a little bit because China’s different world and, and difficult to argue with, uh, uh, examiner who doesn’t know what’s supposed to know.
So it, it’s easier to argue with, uh, knowledgeable people because it’s the same land that she use. Doesn’t mean Chinese English, it means engineering language. And we, with people with limited knowledge, very difficult to argue, especially if they have, uh, certain powers. So that, that’s, that’s another problem.
But that’s, well, [00:37:00] that’s a life. So that’s why you have so many capital from China.
Sushant Misra of TrepTalks: Yeah, yeah, for sure. Um, I’m sure you know, in China there’s, there’s more going on there, you know, um, you know, I’m sure there’s probably people are, you know, bought and sold, uh, under the table.
Leonid Khodor of UpCart: But even, even in China, they don’t risk to copy, uh, up cart.
Ok. What they do, they, they, uh, they create something looking like it. Okay. Not, not functioning like that. Just, and use it and use the brand and organ to describe it from up cart. So again, that’s life.
Sushant Misra of TrepTalks: So up Cartt is [00:38:00] available in a lot of retail stores, I’m assuming. Can you share a little bit about how, what the supply chain and distribution process looks like for you?
So this item comes from, you said, from, uh, from Vietnam Now, and do you, do you warehouse it or do you, like, is it shipped directly to retailers? How does that process work?
Leonid Khodor of UpCart: It’s, it’s all kinds of things. Okay. Uh, the, the company, company is not, is a brand. Okay. Which, uh, again, I, I get a trademark up card, uh, uh, for, for the product, a company right now, vector Up product.
So, so the company is designing the product, [00:39:00] company works with manufacturer in China or Vietnam to make it, to develop it and make it, because, uh, I, I don’t make samples like you, you, you, you see, uh, uh, uh, industrial samples or something like that. And it means you don’t, you think that that would be the product?
No. Most of the companies make those samples, looks like product, and after that they go to manufacture. And it’s completely changed. Cause real life is not, is not what could be printed on the printer. So I, I don’t make samples. I make, uh, uh, product using, uh, 3D software. So I, uh, models, uh, I communicate models to manufacture and work with manufacturer to develop the [00:40:00] product from, from samples to production, which, uh, kind of less costly and, uh, more, uh, more effective, uh, effective.
Uh, not everybody can do this. I can do it because of, have extensive experience in, uh, not just in designing, but in all kinds of manufacturing. So that, that, that’s, that’s a plus. After that, uh, we, we’ve got the product to, to our house for retail, uh, distribution through Amazon or through our website, through some other, uh, venues.
And at the same time we work with, uh, different retailers as a wholesaler. So, and those are [00:41:00] conditions, uh, very greatly in, uh, in Japan, uh, South Korea, Europe, uh, it was like, uh, we ordered the product and it goes into con uh, uh, uh, uh, our customer based for, uh, container to, to be delivered and, uh, based for, for the product.
So we, we just kind of intermediate. Uh, a link in this chain. Not, not intermediately, because it’s our product. We, we design it, we build it even with, uh, changes or Vietnamese hands. Uh, they could not make it well without us. Uh, but, but that, uh, those, uh, last steps from the manufacturer to the distribution.
[00:42:00] Um, our international partners get product, uh, with in containers, quantities. And, uh, again, there are certain conditions, uh, uh, how many could be defective, what would be arrangement if we have some defective product and so on in, uh, In, uh, United States, it’s a little bit different to, to, to some customers.
We need to, to deliver a contains or less than full container load, so close to our warehouse and, uh, we full form the load and, and send to customers. So that’s all, all kinds. You, you can, uh, list all kinds of, uh, uh, ways for, from product to get from manufacturer [00:43:00] to retail and, uh, I’m sure that we use all of them.
Sushant Misra of TrepTalks: Um, so in every entrepreneur’s journey there’s always mistakes made, lessons learned, you know, during the business building process, um, what have been some of your big lessons? You know, as, as an inventor, as a someone bringing their idea to, to the market. And what can other entrepreneurs learn from your, your mistakes or lessons?
Leonid Khodor of UpCart: know what they can learn. And the question is, uh, how big of the list of the, uh, kinda, uh, mistakes and problem they had starting with, uh, the, the production, let’s say initially I didn’t have the experience [00:44:00] to work with, uh, Chinese manufacturer, Vietnamese manufacturer. So when, when they said that, know we, we cannot do this, right?
I tried to accommodate the, their, uh, wants and, and change the product and so on and so on. And after, after this certain, uh, time and, and dealing with them, And it was painful. It was half a year to, to get the contract with them. And after the after contract was signed, they started to try to change the product again.
Mm. So, uh, we, we started to produce it and, and, uh, in a half a year I came back and said, okay guys, I’ve got enough of of that e e e even either you do what I say or I kind of take my toys and go somewhere. Yeah, that worked. [00:45:00] Uh, but those are technical things, not, not, uh, business as well, but, but, uh, it’s not, it’s not that, uh, every entrepreneur would, would deal with that or deal with that, uh, himself or up.
They, they would have, uh, experts in the field to, to deal with that.
All, all, all kinds of, the problem that, that, uh, uh, every business has, or, or, let me put this way, because we have, uh, full line from the concept to retail. We encounter all the pro, all the problems from, uh, concept to retail. Mm. And, uh, you can ask, uh, uh, salesman, [00:46:00] uh, who, who works from wholesale to retail or, uh, a retail businessman who, who get the product in, in warehouse and sees that it’s not what he wants.
And, and all, all these kinds of problems. To, to choose one of them makes No, no, no. Real sense. Another problem that manufacturer with the time lower the quality initially you, you demand certain things and the time they, uh, they think that they, uh, can make it simpler or better. Mm. Cause they don’t know all the function and all the conditions.
They make simpler. They make simpler for themselves. Mm. Difficult for, for everybody, uh, behind them. So that, that’s another problem to deal with. But [00:47:00] that’s not for, for retail businessmen. Not, not, not even for wholesale. It’s a problem for, uh, for getting the product
for. Also probably the easiest part of that, because you deal with, uh, uh, with experts on one side and another side, you don’t deal with, with all the steps that, that involved in, uh, in getting the load from, uh, min city to, to Cleveland. Mm. And when, when you deal with it yourself, you have, you have, uh, at least three companies that involve in transferring this load.
You don’t work with, with single broker or you think you, you deal with single, single broker, but on the [00:48:00] way in you, you encounter three people and, and they three organizations. And they say, oh, they don’t know about that. Oh, we, we, we will, uh, ask those guys who, uh, should transfer product to us, and we we’ll tell, they’ll tell you.
And it’s, uh, it’s frustrating because, uh, it goes, uh, like, uh, uh, best way scenario goes in two weeks from Washington City to California or, or, uh, Washington or, or Canada. And after that, on rail, it goes, uh, to Chicago, from Chicago to, to, and, uh, ev every Lincoln this way kind of, uh, goes with certain delays.
Those delays could be, you can get containers in a month or in 50 days. [00:49:00] That’s, that is also problem. So, no.
Sushant Misra of TrepTalks: Do you, um, Do you, I mean, talking about Chinese manufacturer, is it, I mean, to me it sounds like, and I’ve heard so many stories, to me, it sounds like it’s almost unnecessary evil, you know, businesses go to China because, you know, they think they can save cost, but then they run into so many issues.
You know, there’s the language issue, there’s the culture issue, there’s the, you know, uh, regulation issue. There is the quality issue. And then it’s like you’re, you’re trying to, you know, you want, you give them a certain specification and they, you know, they try to cut corners or they, you know, it’s not the quality that you want.
Um, is it, like, is that the cost that you pay in order to really cut down the cost of your
Leonid Khodor of UpCart: product? [00:50:00] Unfortunately, it, it’s a necessary issue because, uh, If I, if I, uh, make this product in the United States, I would not be able to sell it. Mm-hmm. I sell it for, for the cost of production in the United States.
And that’s, that’s problem and challenge for me. I don’t know how to deal with it. It, it would be much higher quality, would be much better product, but it would cost four times as much as, uh, built it in, uh, Vietnam. Mm. I, I would correctly build it somewhere closer in Mexico or, or, uh, I tried, uh, some countries in Europe, it’s not, it’s not possible.
Chinese, uh, China has, uh, certain, [00:51:00] uh, historical and, uh, Contemporary inclination to build things. And, uh, now we are talking about, uh, 30 or 40 years of, uh, work in United States where with trainings, so certain knowledge, certain skills were developed and because of the China becomes expensive as well.
Mm-hmm. So the next steps, Vietnam and mm-hmm. Work with Vietnam. You need to educate them on, on certain things because they, they don’t know, basically. They don’t know why they do the things. They don’t have, uh, formal education to, to understand what they’re doing. Sometimes you look at like, uh, uh, I don’t know, monthly where, uh, new, newest electronic [00:52:00] stuff.
Mm. Not, not, uh, not disparaging Vietnamese worker. I’m trying to invade the distance. Mm.
So to work with them, you, you need to explain them, uh, why they are doing this, to be sure that they would not do it, but they would do it anyway. Hmm. Yeah. So that’s, that’s a challenge that, uh, everybody who will tell you the same thing. Yeah. Yeah. For sure.
Sushant Misra of TrepTalks: So, last question. Um, what is, what is next for you?
How involved are you personally in the business and running of the business? What do you focus on on this business? And are you still, are you working on [00:53:00] any new products? Are you still. Owning your engineering craft? Are you coming up with anything
Leonid Khodor of UpCart: new? I’m working on new products, uh, right now. Uh, right now we have this new line of products.
I’m certainly now involved much more with business and at the beginning, cause at the beginning I was new B completely and I, I, I look for, for people to, to learn from, which was, uh, kind of full of mistakes and expensive. Uh, but now I kind of understand enough to, to be involved strategically. I was involved from the beginning because again, as well as, uh, work with manufacturing to explain them what to do, I need to work with marketers and, uh, [00:54:00] Uh, uh, and sales staff and everybody else to explain them that we have unique product.
We don’t need to compete on price. We don’t need to offer, uh, bonuses or, or, or discounts or any emails because we are the entire market and people want cheap, staff free to go and try it, and they would come to us after them. It, it’s difficult, not, not everybody accepted and understand it, especially with salespeople.
They used to work with discounts and, and, uh, all this kind of, uh, uh, lubricating materials to, to get through. Yeah. So, uh, that’s another challenge. Now, now I’m more involved with, with, uh, marketing [00:55:00] and, and, uh, somewhat sales after quality. Cause we, we had to get, get, uh, people off. We couldn’t pay them. Uh, and, and we, let’s hope that I would, uh, let people have peace of my load, um, later.
Um, uh, that’s all. But, but, uh, I work on new product, uh, most of the time, I would say. Okay.
Sushant Misra of TrepTalks: Final, final question. I mean, I know I, I’ve had final questions before, but this is the final question. Any last advice, any best advice that you received as an entrepreneur or you would give to other entrepreneurs?
What is your best advice?[00:56:00]
Leonid Khodor of UpCart: My best advice, if you don’t believe in the product, if you don’t do it, that, uh, product is needed, uh, don’t try to to sell it because, uh, you end up with, uh, selling a chip and would not get, uh, profit or, or satisfaction from it. So the, the, the best, the best salesman, best entrepreneurs, uh, that the person who believe in their product and the good product is a base of, of marketing.
If, if you don’t have, uh, somewhat outstanding or unique product, you have to compete on price. Go down, down, down. For example, when first, uh, folding [00:57:00] cards, uh, become available, and it was in, uh, end of the nineties, I believe, uh, that, uh, company in China or that I use, they, they, prior to that and after that they, they make this magna cart.
The cart where was spoken wheel, single meals. Uh, they, uh, started, uh, where let’s say normal pricing, but because it’s not unique now, the same way they started, they were new, but next year there was bunch of Chinese cards imitators, and they have nothing to. To contradict those imitators. They, they don’t have patents, they don’t have, uh, trade secrets, nothing.
So [00:58:00] they started to compete with their imitators by going down. Mm. You can down, you can go down in price to, to certain ways. They got to the point that then will, will sell, uh, the, the card for $20. Hmm. For, for one year. One year. And after that they stopped. They, they went little bit up because they, they lose money on that.
But again, you, you don’t see, uh, you don’t see those, uh, magna cars around because they, uh, sold their business. So the bigger, uh, car manufacturer, cause they, they could not compete on price. So that’s, that’s probably the, the, the lesson you, you cannot get into the business selling the same stuff that everybody else said.
You have to send Yes. Have something that only you can [00:59:00] offer.
Sushant Misra of TrepTalks: Yeah. That’s, I think that’s the great advice. And I think the, recently I was talking to someone and, you know, they kind of shared the difference between an entrepreneur versus a business person. And I think that’s kind of the, the difference. An entrepreneur basically looks at a problem and, and comes up with a unique solution that’s not available in the market.
And, uh, whereas a business person is kind of creating some sort of a business, which is, you know, which is, which is more of a commodity, which is kinda competing with other businesses and so forth. And, and I think it’s to be said that, you know, When you’re creating a new idea or you know, something, there has to be some sort of a protection, which I think, you know, uh, Warren Buffet calls it a moat.
You know, there has to be some sort of a competitive advantage that others cannot quickly copy. There has to [01:00:00] be some protection, like a patent or something, which gives you a little bit of a protection because once you come up with an idea, it’s like, it’s very, I I think it’s prone to getting copied or, you know, people coming up with similar ideas and so forth.
Leonid Khodor of UpCart: So yeah, you, you, you see it everywhere that, uh, when they say something, uh, something unique, it doesn’t mean that you have to invent things like, okay, the Burger King is unique and they, uh, brand itself unique, but bunch of other burger uh, shops, imitated not completely but good enough to, to be competitors.
The same as, uh, as McDonald’s, the same with, uh, uh, every, every restaurant. They, they try to, you, you can go, uh, you can jump ahead for [01:01:00] half a year, for two months. And if you create a brand in that time that you can, uh, have, have somehow sell, like, uh, McDonald’s, their, uh, their slogan is unique. Uh, the same goes for, for everywhere.
You, you need to, to some kind of torn to, to, to sell your product That different from others. Some, some step that would, uh, kind of allure, uh, consumer to you.
Sushant Misra of TrepTalks: Yeah. Yeah. A differentiating factor, for sure. Yeah. Well, well, Leonid, uh, those were all the questions I had. I know we went, uh, a little bit over, uh, today, but, uh, I want to thank you so much again for joining me, uh, on the PO podcast for [01:02:00] sharing your story.
Um, definitely a different perspective. You know, um, I think you’re the first, first entrepreneur who is a pure engineer inventor, uh, that I’ve, uh, had the opportunity to talk to. So definitely a different perspective and, and a pleasure to speak with you. Uh, thank you so much again for joining me today, and I wish you all the very best in your future invention journey and also business journey.
So thank you again for joining me today at Trep Talks.
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