Building an Everyday Carry (EDC) Tools Business Focused on Design and Utility – Mike Scully of Lever Gear

INTERVIEW VIDEO (Length – 41:08)

PODCAST AUDIO

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Intro

Mike Scully of Lever Gear shares the story of utilizing his skills in design and engineering to build an Everyday Carry (EDC) Tools business with very well-designed tools that are versatile and useful.

People & Resources Mentioned in the Episode

Book: Rocket Fuel.

What You’ll Learn

Interview with Mike Scully of Lever Gear

00:00Introduction
01:07Business and Product
02:32Why EDC Tools?
07:00Market and Competition
09:43Patents
12:45Prototyping
16:36Kickstarter
20:34Relationship with Amazon
21:16Third party fulfillment
23:00Marketing
28:51Markets and Selling Internationally
34:21Selling Retail
38:25Mistakes, Failures
47:36Rapidfire Round

Rapid Fire

In this segment, the guest will answer a few questions quickly in one or two sentences.

Mike Scully of Lever Gear

  1. One book that you would recommend to entrepreneurs/business professionals in 2021 and why? (Response: Rocket Fuel)
  2. An innovative product or idea in the current eCommerce, retail, or tech landscape that you feel excited about (Response: WooCommerce and WordPress)
  3. A business or productivity tool or software that you would recommend (Response: G Suite and Dropbox)
  4. Best business advice you ever received (Response: Get your sales, and then the rest will follow)

Interview Transcript

Sushant Misra of TrepTalks  

Hey there entrepreneurs My name is Sushant and welcome to Trep talks. This is the show where I interview successful ecommerce entrepreneurs, business executives and thought leaders and ask them questions about their business story, and also dive deep into some of the strategies and tactics that they have used to start and grow their businesses. And today, I’m really excited to welcome Mike Scully to the show. Mike is the founder of lever gear, lever gear designs, everyday carry tools, and accessories that are easy to carry, and help people get things done. And today, I want to ask Mike a few questions about his entrepreneurial story, and some of the strategies and tactics that he has used to start grow his business. So thank you so much for joining me today. Trep talks, Mike,

Mike Scully  

thank you so much for having me.

Sushant Misra of TrepTalks  

So I know, Mike, that you had a design background in your life before you started the business? Can you share a little bit about yourself? And what really motivated you to start this business?

Mike Scully  

Sure, well, um, yeah, I had a design background in school. And I think, but even before that, as a kid, you know, I always kind of enjoyed designing things and building stuff, and, you know, was into just sort of engineering and creating. And so I started off actually in, went to school for mechanical engineering. And then, while I was in school, I did Co Op program at IBM. And the Division I was in, we worked pretty closely with the industrial designers. And that’s when I kind of found out about industrial design. And that sort of really excited me, because they got to kind of make all of the, all of the early decisions and sort of really guide the actual design of the project project from from the start. And so I kind of, I felt like that was the fun stuff. So I went back to school for industrial design. And now I kind of put those two things together to help, you know, just develop products and then go from there.

Sushant Misra of TrepTalks  

So, so why, why everyday carry? Did you what it really more of a divine thing, you you like, the design of, you know, everyday carry tooth was more of a business decision that, you know, you thought there was a business opportunity? Like, what why did you choose this product?

Mike Scully  

Sure, yeah, I wouldn’t say it was necessarily a conscious decision that I want to do in every gay carry business or whatever. But, you know, after after college, I was a product design consultant. So I worked for consulting firms, and I would help other companies design develop their products. So it was sort of a wide range of different products, kind of depending on who our clients were. But while I was consulting for other companies, you know, I always had this sort of itch to develop my own products, and, and, you know, kind of design and develop my own line of products and manufacture and go through the whole thing and start a company around that. I didn’t know it was going to be, you know, everyday carry tools. You know, I was just sort of always looking for ideas and thinking of stuff and, and trying to do some of my own designs. But I did, you know, I had an idea for our first product, which was the tool card, and I kind of one day, I was kind of doing a brainstorming thing, what can I What can I make, that’s just sort of the form factor of a credit card. Because that’s something that, you know, everybody carries around, it’s small, it’s, you know, it’s compact. And so it was just sort of a brainstorming exercise and came up with all kinds of ideas. A lot of them obviously turned out to be tools. And I didn’t just launch that right away, kind of it was just something I did and then forgot about it. And then a few years later, I saw a sort of a similar little product of what I was thinking of in, in like a gift shop. And it was just a little little card tool with little tools on it and stuff. But and I was going oh, that was that was sort of like the idea I had. But um, and then but I also felt like it was it was kind of neat, but like there was room for improvement. And so I kind of decided, alright, let’s let’s see what I can do. And so I felt it was a product where I could sort of add value, both as a designer and as an engineer. And also, you know, as someone that likes to build stuff, having tools and having that kind of stuff handy really appealed to me. So yeah, I started just doing some developing development work on it while I was doing my day job and then I got to the point and I was like, You know what, I think this is going to be a great product to start a company With and you know it, it sort of ticked a lot of the boxes for just something that I could I could develop myself because, you know, it’s it was one or two parts. It was, you know, pretty simple thing. It was something that I could bring to market myself, you know, realistically. And so then as soon as I did a little research, I kind of discovered this category called everyday carry, which was, which was kind of new to me. And it was a little bit newer, in general. This is around 2015 2014. But as I kind of dug into that, I was like, oh, yeah, this is cool stuff. And there’s, there’s all kinds of little tools and gadgets and things, and it’s all about being prepared. It’s all about having tools. It’s all about, you know, just being ready for different situations. And there’s some cool design, and it’s, it’s just seemed like a neat thing. So yeah, kind of happy souls. And I was ready to, I was like, alright, let’s, let’s start a brand around this. And so that’s kind of where it started. Yeah, I

Sushant Misra of TrepTalks  

mean, I know, you know, I watch a lot of YouTube videos. And I know, there’s almost like a subculture around, like, you know, this whole idea of being prepared for, you know, whatever, and having your everyday carry toolkit. But that also means that, you know, there’s a lot of people and I’ve seen, like, I mean, as a, as a male, as a person, I also got interested in this idea of getting the different tools on your person all the times. But that also means that there’s probably a lot of competition in the market, right? Like, if you go on Amazon, you can probably find similar products that are like, people made in China, and they’re selling on Amazon and things like that. Can you share a little bit about the market and the competition? And how do you really separate your everyday carry product when there’s like, a lot of other people also selling it?

Mike Scully  

Sure, yeah. I mean, there, there is a lot of competition. And but it wasn’t, it wasn’t always I mean, there’s, there’s gonna be competition in any market, I feel like that’s, that’s sort of viable. What I like about this market is it’s, it’s very, it’s kind of niche for the people that are really into everyday carry, and etc, you know, it’s, it’s almost like there’s a whole range from just one off custom products to, you know, products that everybody would know about, like a Leatherman tool or something. So there’s, there’s enough of a range of different tastes and different things. Where we try to fit in is, you know, I like to, to focus on the design and the engineering and, and sort of pick up a product or a problem, and really just dig down as much as I can on the design and try to just optimize it and make it like the best product on the market in that little category. Or sometimes just a brand new category, if it’s sort of like something like invention, but um, so yeah, there’s there’s definitely competition from China. And a lot of manufacturers who are, you know, set up to make this stuff anyway, they can, they can look on Amazon, they can see what’s working, and they can just copy it, you know, so like our tool cards already been that got knocked off after about a year. Our other products, I think, are a little more niche. And maybe we learned some lessons about protecting it a little bit. So that, to my knowledge, they haven’t been knocked off yet. And so I think they’re, they’re just sort of unique enough. And then so yeah, there’s there’s a, there’s a threat of manufacturers just going straight to market from Amazon. And but that’s happening in a lot of businesses, a lot of a lot of market segments. Yeah. And at least in our segments, it is niche enough and small enough that it’s unlikely that Amazon would create their own Amazon Basics tool car. But so yeah, so we try to keep our products unique. And we try to really add features and innovations that that aren’t on the market already. You know, so if we create a new product, it needs to be it needs to have some differentiators from a design standpoint.

Sushant Misra of TrepTalks  

And it’s probably not even worth like patenting some some of these things like, right, I guess this is it may be more expensive to to get this patented than to I don’t know what what do you think about like, do you would you Yeah,

Mike Scully  

so I’ve kind of thought about this, you know, from different ways. Yeah, we don’t have utility patents on any of our stuff. You know, you have to like I looked into patenting the tool card We first made it, but it’s, it’s to patent something, it has to be really like a Yep, you have to be patented, you can’t just patent an idea, it has to be a specific way of solving a problem. That’s not obvious and not already out there. So, you know, having something like the tool card, maybe we could have patent patented the way our, our money clip attaches to the tool card or some feature about it, and made some claims around there. But, you know, I don’t know if it’s worth it. I would rather focus on innovating and just going to keep moving forward and staying ahead of the competition. But I think there are a few little tricks you can do. My patent attorney, you know, he mentioned that another an alternative option to getting a full on utility patent one, you can get a design patent. But that’s still pretty expensive. But that will prevent. It doesn’t prevent knockoffs. All it does is it gives you the ability to take them to court and, you know, get them to stop selling the products. But you know, to me, that seems more like whack a mole, it seems like, Okay, once you have a patent, then you have to pay more money to defendant. So another strategy is using trademarks. So we trademark our brand name, or product names, just so no one else can use those names and say their, you know, pretend kind of pretend to be us or pretend to be the same product. And then also, there’s something called a layout trademark, where you can actually trademark the shape of something. So it’s sort of effectively it’s like a design pattern. But the kicker is, if you go to Amazon, and you say, hey, this, this product is infringing on us, you know, we have we have a patent on that. They’ll say, Okay, well take them to court and show us that you won the case. And we’ll take it down. Whereas if you have a trademark, it sort of flips where you just send Amazon your trademark. And they basically take down the infringer and then it’s the onus is on the infringer to be like, No, we weren’t violating that, because of this, this and this. So that’s sort of been our strategy is trademark our brands, stuff so that people can pretend to be us and build brand loyalty so that people would choose us even if we are knocked off. And and maybe try to get some of these layout trademarks. So if someone just copies the design, we can we can get them off.

Sushant Misra of TrepTalks  

So you start the business with just one product, right? So you create a like a prototype of this product. And you basically went the crowdfunding route, is that correct?

Mike Scully  

Yeah. So yeah, so, um, you know, I designed it and developed it, and I made a series of prototypes, which was sort of which is in my sort of, wheelhouse, because that’s what I was doing for, for clients before, but um, then you have to bring it to get it actually manufactured, where you have to buy, you know, production tooling, and you have got a minimum order quantities, it gets pretty expensive. And so, you know, the good news is, you know, crowdfunding, you know, like Kickstarter and Indiegogo, they were kind of, when we started, they were just sort of becoming more mainstream. And so it was a lot smaller than than it is now. So it was less competitive from a creator standpoint. I mean, there were less people on it. But it was easier to gain traction, I would say, Now, you have to do a full on like marketing campaign, I think unless you already have like, a warmed up list ready to go. So but yeah, so crowdfunding was great for us, because we were able to just kind of we, you know, we sort of tapped into all our friends and everyone we knew, and just sort of like, Hey, we’re launching a brand new product. And we kind of built up some excitement around that. And so we got a lot of support from our friends. And, you know, we emailed everyone on our email lists, and just sort of took advantage of just our connections and just said, Hey, you know, here’s what we’re doing, you know, if you want to support us, and whatever, so we had people ready to go and then. So when it launches on Kickstarter, you know, you have to hit the ground running. And if you have, if you have a really good start, then the algorithm on Kickstarter takes over. And that’s when you, that’s when you that’s when you end up with a good campaign. So

Sushant Misra of TrepTalks  

I’m assuming at that time, when you launched, you still had heard your job and you were working full time. And this was kind of a part time thing. Have you now like, transition completely? No, you’re full time in your business and it’s profitable enough for you that it’s a full time living and everything.

Mike Scully  

Yeah, so it’s, um, yeah, when we started, I was still doing consulting and but I had my own little consulting business at that point. So I kind of control my time and my hours so it worked out well. Because I could, you know, I could do the consulting hours. And then if I had some, you know, some extra time I could do I couldn’t work on this project. But yeah, now I’m full time with lever gear. And, you know, we’ve we’ve ranged from having like, one employee to a few employees and, and so yeah, it’s full time, we’re making a go at it. And, yeah, we’re right now we’re at the point where, you know, I can I can make a living with it, it’s nothing, nothing huge, but the foundation is there for for growth, I feel like so. And we’re going on six years now. So it’s, well, it’s been a long, you know, journey. And it’s, it’s, it hasn’t been easy. But I’m kind of, I’m viewing this as a long term project. So trying to, like I said, build the foundation, and then and then really kind of try to scale it.

Sushant Misra of TrepTalks  

So when you started with Kickstarter, I mean, the benefit of Kickstarter is that, you know, it gives you the initial traction, it’ll give you like, if your idea is, has a demand in the market, or the you know, people like it, you get those initial set of customers to work with, how do you go from from that, you know, list of customers to really going, you know, acquiring new customers from there, how do you share the value proposition of your product, so that other people that are outside of Kickstarter, come to know about your product and start buying it? Can you share a little bit about about that, how you did that at the beginning?

Mike Scully  

Sure. At the beginning, so this was we launched that in the spring of 2016. And, yeah, we had a good a good Kickstarter run, I think, between Kickstarter and Indiegogo, we raised about $100,000. In presale, so that got us going that enabled us to buy the tooling and our first orders. At the time, there was, you know, it was it was a little newer, and there were a lot of creators on like YouTube, who would kind of like, you know, scout out Kickstarter, and find cool new inventions, they would make these mashups. And so like, we’re, we’re getting a bunch of just random creators making videos about our product, you know, adding it to cool new gadgets, projects, their, you know, videos, and that kind of stuff. We also, sort of influencer marketing was pretty new then as well. So it was more like, you know, if an influencer kind of discovered your product and liked it, they might post something. And so he got some sales that way, just randomly, we had some, you know, where we would send products influencers, and they would just do a, do a post about it. So when we started, you know, it was a little bit easier, I would say. Whereas, you know, now, it’s, if you want to get influencers involved, you got to pay him either upfront or pay them a commission. And if, like I said, if you want to launch a Kickstarter campaign cold, and you don’t have an audience already, you have to put marketing behind it, and do all that. So, you know, I, every year, ecommerce gets a little more and more competitive. And so I think the key is to try to adapt and do what’s what’s what is sort of becoming the new thing that people haven’t, aren’t like flocking into yet. So, I’m not sure what that is right now. For us, you know, since we already have a customer list and an email list and an audience and some relationships with influencers, you know, we can, we can kind of get that, get that when we launch a new product, we have sort of an existing customer base, so it makes it easier. Another thing though, you know, for people trying to launch a product, you know, we use both our website, and we sell on Amazon. And the nice thing is with Amazon is it brings you the customers, you know, you give up margin and you give up you know, sort of their their Amazon considers those people their customers, but they get eyeballs to your product and they get you know, you can you can advertise profitably and you can get a lot of just sales that way organically and you know, through advertising. So, you know, even if you don’t have an audience Amazon has the audience has the buyers and so you know, people are searching for stuff. If they’re searching for your product they can find it.

Sushant Misra of TrepTalks  

And I mean ever gone by a lot of the times people have like this love hate relationship with Amazon. Right. So, you know. Yeah, I think I think most most businesses have that because, you know, on the one hand, of course, you know, you get builds from there. But then there’s also a lot of negative things, you know that they take your profit margins, they, you know, they may create a duplicate product. There’s like seller from China who can easily copy your product, all these different things. But I think one one good thing about your product is that in terms of size, it’s kind of small. So I think, do you really think that that that kind of positive for you, where it helps you in terms of your, you know, warehousing and fulfillment and shipping out of things?

Mike Scully  

That was, yeah, well, that was one of the criteria when I was like, going to try and find a product that I wanted to start my business with, I had several criteria. And I want I wanted something that was going to be small and easy to warehouse and easy to ship, because I knew it was probably going to be ecommerce, so there’d be a lot of shipping involved. And, and I wanted something that you know, wasn’t going to expire. So that’s kind of, you know, that was sort of intentional in that regard. So that’s, it’s nice that our, our niche, or market everyday carry is, is pretty small stuff generally. So what

Sushant Misra of TrepTalks  

do you do over half of you will fall Do you have like a third, do you work with a third party, if we were

Mike Scully  

we warehouse it ourselves. And we also use FBA, which is filmed by Amazon. So they’re, I mean, they’re warehousing and their fulfillment is, is great. It’s inexpensive. And

Sushant Misra of TrepTalks  

if it less expensive than you were hoping yourself, or,

Mike Scully  

well, the warehousing part of it as maybe because our products are so small, is negligible part of our Amazon business, they’re fulfillments. By Amazon, you know, like, it’s, it’s about the same as if we were to ship it ourselves, you know, and they handle warehousing, shipping returns, you know, some customer service, that kind of stuff. So, you know, that part of it, the pricing is very reasonable for that. So it’s easier to because we can just, you know, ship one big box to Amazon, and then they can handle, you know, lots of customers each day, whereas from our website, we don’t, you know, our traffic isn’t as much than we thought we can handle shipping, you know, shipping orders from our website and some other dropship partnerships that we have. But for Amazon, which probably has the most volume, you know, it’s it makes it easier for us to just ship them a big box and let them handle it.

Sushant Misra of TrepTalks  

Can you can you share a little bit about or talk about your approach of marketing this kind of a product? Are you? Is it really a paid advertising play for you? Or are you know, are you getting more traffic from a different channel? Organic social media? Yeah,

Mike Scully  

I would say it’s, it’s not a paid advertising thing for us. We’ve tried, we’ve been trying to do it for for five years, and five years ago, it was a lot easier to do, you know, we threw up some ads on Pinterest, and we were getting, you know, just just rent, you know, just throwing some stuff up there. And we would get 10 times ROI. Nowadays, you know, you really got to do everything, right, and have it really finely tuned to to, you know, get a break even positive ROI. So, I haven’t focused on that, because you can end up throwing a lot of money into advertising and whatever. You know, we, right now we’re pretty, a little bit scaled back and streamlined where I let Amazon do a lot of our marketing and I can advertise easily and effectively on Amazon. So that’s a big part of it. But we also have an influencer program where we, it’s commission based, so we use a platform on our website. And, you know, basically we you know, if we sign on with an influencer, that we find on YouTube or Pinterest or whatever it might be or Instagram. You know, we kind of send them some products and we say, you know, do what do whatever you want, do what you think your audience will like. And any customers you bring us will give you a cut and it all happens automatically. And if that customer turns into a repeat buyer, they keep getting their commission, you know, whatever. So we like that approach because we’re only spending money if we’re making money. And also if an influencer is very effective for us, we want them to get paid as well. So

Sushant Misra of TrepTalks  

yeah, it’s been Yeah, a lot of YouTube channels that focus on On this kind of niche, this kind of market, I mean, they have huge audiences that very engaged audiences, at least what I find. And some of these YouTubers, I also see that they have their own, like they’ve created their own brands, and I assume they’re very successful, because, you know, they have an engaged audience, and they can easily sell to them. Yeah. Have you ever tried, like, you know, going that approach where you become kind of the face and you write, it’s almost like you’re selling the lifestyle? For? Yeah, yeah, no,

Mike Scully  

it’s a good strategy. We, I haven’t really done that, you know, coming from a design background and engineering background, I’m very, I like to be heads down and designing stuff. And so the marketing stuff and the sales stuff. I, you know, it’s not, it doesn’t come naturally to me, and I, you know, I, I don’t, I haven’t made that as much of a focus as I should have and need to. And so that’s something I’m working on personally. But for a while, we did, actually, we had a YouTube channel, or we have a YouTube channel. But we were, we were putting out a video maybe once every three or four weeks, me and another guy who was working with me. And so people go to lever gear on search, just search for lever gear on YouTube and find our channel, where we, you know, we would do reviews of EDC products, and, you know, some in there kind of funny and light hearted and, you know, we just sort of, we’re always sort of looking at it from a design perspective, you know, what it’s, you know, kind of what my perspective might be as a designer. And so we and we got some good traction with that, and, but, you know, he left the company, and then so it kind of fizzled out. But at some point, maybe I’ll try to re, you know, start that back up again, because it was, you know, the things the thing with YouTube, and which I really like, and maybe Pinterest, or, you know, this, these, these channels, where you built, you’re building content, and then you it becomes an asset, because it’s, it sort of builds on itself. And the growth, you know, is sort of exponential. So it starts out really slow. But if you stick with it, you know, and you keep putting out content, you’re consistent, and it’s good, then you get more and more followers, and then and then it starts to get exponential, and that was starting to happen to us. And unfortunately, like I said, it fizzled out. But we still have, you know, we still get a decent number of views. And I mean, even, you know, I get like 100 bucks from Google every Oh, really a couple months? Well, just for, you know, from our old videos, so. But yeah, I think that’s, that’s a, that’s another marketing channel, where, especially if for small businesses, if you don’t have a lot of money to start out, you know, create content. And for me, like, you know, I’m, I’m an introvert. I’ve always been kind of camera shy, but you know, I sort of forced myself to get used to it, and now I’m comfortable doing it. So it’s just a matter of just working at it. And being consistent. And, like I said, if you don’t have if you’ve got more time than money, and you can create, you know, some compelling or interesting or funny or whatever kind of videos, people will watch the content and you’ll you’ll build your audience that that you can then sell to in the future.

Sushant Misra of TrepTalks  

Yeah. So if the EDC really a North America thing, like the whole idea of everyday carry, like is, are you selling just in us? Are you selling?

Mike Scully  

We’re selling all over the place? Okay.

Sushant Misra of TrepTalks  

Is there a demand?

Mike Scully  

I think we’ve sold to like 100 different countries.

Sushant Misra of TrepTalks  

And there are there is demand, like, there’s big demand and other countries in Europe. Yeah,

Mike Scully  

there’s a lot of men out, you know, like, I’ll have to hit the check. But, you know, with Kickstarter helps, too, because Kickstarter is in some of the other countries. But, you know, even on our website, um, you know, we get orders from all over the place. And we’re on Amazon, Europe, and UK and Japan and Australia. Singapore, so, you know, there’s, there’s, I mean, obviously, those are smaller, but there’s still some demand from from all over the place.

Sushant Misra of TrepTalks  

What, what are the biggest challenge challenges of selling internationally like is it for you? Is it really just the shipping aspect of it that if you’re, if you’re shipping to Singapore, the customer is just going to get the package in you know, it’s going to take more time for the for the package to get to them? Is that really the big issue? Or is it that the There may be duties and taxes taxes that they may have to pay.

Mike Scully  

Yeah, I think it’s, it’s more that like, you know, with we, like I said, we’ve shipped to probably 100 different countries, and it’s not a big deal. You know, if we use USPS, they’ll transfer it to their local postal service. And generally, it’s not that expensive, but it can take like, depending on where you are, if it’s somewhere in Europe, it might be two weeks, if it’s somewhere, you know, in a less developed country, it might be four or five weeks, so then you have to deal with, okay, the customers like when am I gonna get my thing, but, but we also use FedEx International, and that’s, that’s, you know, it’s, it’s more expensive than shipping in the US, but it’s not unreasonable for a customer to do it, and then they just fly it over there. So it doesn’t, you know, it takes a week, maybe. So, but the thing, but yeah, with the duties, the thing for me is, it’s always kind of changing. And, you know, we’re at small business, I hate having to keep track of all that and keep up with it. And, you know, and like to sell on Amazon, even in Europe, we, you know, we just had, we had to get VAT numbers for every country. And so you have to, which is their value added tax, so you have to have an account in every country. And then we have to have an accountant over there that manages all this and signed us up for it. And it just takes time. And it just takes a lot of effort. And then you got to build that into your pricing. So your copier prices are higher. So there’s a lot of I don’t know, sand in the gears, when you when you when you start going international. So many other countries, some countries, you just ship it and they don’t care.

Sushant Misra of TrepTalks  

Okay, but you haven’t ever thought about like selling on Amazon, in like a different country, like, you know, having your products in Amazon UK or something like that. Where do they

Mike Scully  

are? They are? Okay, yeah, we’ve and we manage all that right now. Which is why, you know, which is why we had to get all the VAT numbers. So and you know, Amazon has a program called Pan European where you can send it to one warehouse, and they’ll sort of distributed throughout Europe, okay. So they do a lot of that for you. But it’s still kind of a pain in the butt. For the amount of sales we get, but it’s, you know, it’s like, you kind of have to do it. But one thing I’ve been thinking about lately is I’ve been looking into finding like an Amazon seller expert in Europe, who can, you know, translate the listings when they’re sort of local, you know, language but local, you know, local like voice right. And, and just like what I would ideally what I would like to do is, you know, have a distributor, Amazon distributor in Europe that we send them a package once a month or once every couple of weeks. And then they they sell it on Amazon we don’t

Sushant Misra of TrepTalks  

know we don’t touch it. But we’re basically you’re selling them wholesale and

Mike Scully  

wholesale. Yeah. Okay, yeah.

Sushant Misra of TrepTalks  

What about one more? Good No, go ahead. What about payment side of things because if you’re selling in other countries I’m assuming you’re you’re accepting it’s a different currency you’re receiving right and then you have to probably have to convert that to us we

Mike Scully  

don’t we don’t you know, we just on our website we have a Stripe account for credit cards and we have PayPal and we have one Yeah, we had Amazon pay I think we still have it, but I haven’t haven’t seen as much activity from that. But um, yeah, whoever your processor is they convert all the currency and just okay. I don’t really look at it. I don’t get that granular with it.

Sushant Misra of TrepTalks  

But But you probably do lose some some money in the conversion process

Mike Scully  

right? Yeah, probably. Definitely. I don’t know where to

Sushant Misra of TrepTalks  

what have you ever tried going retail is that I guess that could be a risky proposition also have but have you ever tried going like selling in retail?

Mike Scully  

Yeah, we do. That has not really been a focus of ours. But more recently, we started getting into it in both there’s online retailers so you can just sell like wholesale to someone that has their own website or or even just a drop shipper. So there’s there’s ways to do that. But also now we’re getting into some brick and mortar stores and which for a while I was you know, I didn’t really want to focus on it because the margins aren’t as good and you know, I don’t I don’t want to just be cranking out volume just to get more Sales for a little bit of margin. That’s not kind of the business I want. But, you know, when you factor in all the other things, advertising and managing it all, it’s kind of nice to have a wholesale partner, you just that just orders once every couple of months, and you ship them a box, and then, you know, you get your money and they, they sell your product. So we’re starting to do more of that. And I’d like to do more of that. So cool. Yeah, it’s all part of it. I feel like nowadays, you kind of have to get into all of these different. I would say, you know, when you’re starting focus on one area, but one way to grow is to get into a new channel. And

Sushant Misra of TrepTalks  

yeah, I think it’s a it’s definitely a challenge right now to grow internationally. You know, just as you’re saying, you would much rather want to find a distributor somewhere, you just ship it to them. And you know, they take care of the rest. Yeah. And I don’t think there’s like, there’s a simple way for, you know, not just one business, but any business to do something like that. I think there’s a lot of challenges in growing internationally going going into into international markets. Where do you manufacture your product is manufactured in China.

Mike Scully  

It’s mixed, our tool card is made in America. And it’s actually made locally. So there’s several manufacturers that we use kind of around where we live and get that done. The bid vol. and the cable kit are both made in China. And so and we’ve got a good a good partner in China. But you know, that the tariffs that you know, like last year, Trump had instituted those tariffs, and they kind of took a while to go into effect. So when we first started selling, you know, we weren’t paying the tariffs, and then you know, more recent orders, you know, I get shipping, and it’s like, whole 25% on top of our costs. So that was a real, you know, that obviously changes our cost structure completely. So, you know, now it’s, and it was always kind of, you know, it’s, it’s a question mark, will it? Is it going to stick around? Will it go away? You know, what’s, you know, what’s it, there’s uncertainty around it, so it’s hard to tell, but you have to build that in and now you know, the shipping costs are higher. So it’s definitely again, gotten much more expensive to manufacture in China, in particular, because I think the tariffs mainly applied to them. But, but just in general, with shipping times and costs, those are going up. So it’s something that you really have to factor in. When you’re kind of deciding where to manufacture stuff.

Sushant Misra of TrepTalks  

Now, in every entrepreneur journey, there’s always you know, mistakes, made failures, lessons learned, would you be able to, you know, look at the last five years, six years since you started your business, you know, what are one or two big mistakes that really, you know, come up for you? And what can other entrepreneurs learn from those mistakes?

Mike Scully  

Right? Well, yes, we’ve had, I’ve had my share of mistakes, and it’s definitely been growing pains and a lot of learning experience that I’m to me with the, as you said, the mistakes are inevitable. And no matter you no matter how smart you think you are, you’re gonna make mistakes, there’s, you know, things are going to happen. The most important thing is that you learn from them, and you don’t do them again. And ideally, you want to learn from other people’s mistakes. So if you hear other people telling their stories, listen up, so you don’t make the same mistakes. But in general, I think, you know, my mistake was not focusing on sales and marketing, and really trying to grow that before growing the company. And so I, you know, like I said, with my design and engineering background, I’m focused on the design, I want to make cool products, I want to get, you know, a team in place, I want to, you know, I want to, like build this foundation, but I wasn’t focusing on growing, you know, the most important part of the business which is growing your sales. Because if you don’t have sales, you know, you can’t do anything, you know, so, in general that would, that’s sort of something that was and also and also just not being fully aware of my numbers and the implications of all the numbers. So like I said, when before this, I was a product As a consultant, and I was working for myself, and if, you know, if I had a design project, and I build the client $10,000, I would basically get $10,000 in my bank account. Whereas, you know, the structure of a product business, it’s completely different, you know, you get $10,000 in sales, you’re like, Alright, great. And then maybe, you know, maybe you’ve made a profit in your bank account. Yeah. So it’s getting, you know, really understanding those numbers. And I think it just took me, like I, you know, I understood the numbers, I kind of knew sort of what it was, but I never really understood, you know, the situation that our company was in. So I kind of dug myself a pretty big hole. And the specific mistake, that was our biggest mistake was basically biting off more than we could chew, which is what got me in that hole. But we’ve, so far our tool card, you know, we launched on Kickstarter, we had good success, it was, it was going well, you know, we were growing, I hired some employees, you know, to help kind of manage that growth and grow it even more, I probably hired a little faster than I should. And so we’re growing, but not as fast as we needed to grow with the employees. But then for our second product, you know, we came out with something called the bid vault. And, you know, I, I, we were doing a Kickstarter for that. And since now, we had a marketing list market to we had, you know, we’ve already done Kickstarter, before we knew we’re doing the platform was growing, I was sort of anticipating a little more of a, you know, an improvement from our first campaign. And we actually launched two products at the same time. One was the bid Vault, which on it, which is a little, it’s a waterproof carry case, that can also, you know, can hold hex bits in it, and you can turn it into a screwdriver. So it’s a little EDC, sort of portable screwdriver, that can also hold any, any kind of small items. But it was a pretty complicated product, because there was, you know, there’s maybe 10 or 12 parts, the different kinds of parts that go into it between, you know, aluminum and plastic and diecast, metal and silicone, rubber gaskets and spring, spring metal clips, and, you know, all these things, and then the whole manufacturing. So that was a pretty complex product with a lot of tooling. But at the same time, I was trying to create a similar product called a bit light, which was the same thing, but it also included a flashlight in it. So I’m sitting here trying to develop these two products, because I wanted to, I was specifically kind of thinking about our Kickstarter launch and, and giving our customers you know, two options, and there was some overlap in the tooling. So I could save money that way. So but to develop the, the bid light, you know, it was, I had to hire an electrical engineer, and there’s all this certification with, like, you know, UL testing and that kind of stuff. It’s a very complex and expensive and time consuming development process, that really just took up a lot of my time. And then as we were developing it, that the LED technology for these flashlights kept, you know, sort of bumping up and bumping up and then there was a lot of these little, little EDC, everyday carry flashlights that were coming out at the time, which were just much better. And what we’re going to be coming out with this, I was gonna, we’re gonna be launching an inferior product, and we actually had to, because of the development costs, and what it was going to cost to bring it to market, and the fact that I was gonna have to redesign it to at least be competitive with these other products. We could, we couldn’t do it. So I had to, like, I had to basically email all our Kickstarter backers who had backed this project and say, you know, hey, we can’t launch this product. So you know, I gave people the option that they could either switch and get a bid vault, or we’d give them a refund. So we ended up having to refund a lot of money. And we spent a ton of money and time trying to develop this product that never materialized. That’s what really dug me into a hole. And, you know, we’re just now we’ve kind of clawed our way out of it. But that was a learning that was definitely the biggest lesson is just, you know, you got to you got to sort of stay within yourself and grow within your means.

Sushant Misra of TrepTalks  

I mean, that’s what I’m interested in. So if other people are coming up with more superior products, is it that I mean, it’s a better approach to just, you know, as an entrepreneur, you focus on the business and maybe hire a designer who can, you know, give you give them the big specifications and they, they come up, they come up with the design of the product, like how do these other people come up with better design products?

Mike Scully  

Yeah, well, that is So, yeah, I mean, that’s it depends on your, you know, your your skill set, or what you want to do like, so my, my core competency is design and engineering, so. But if someone was more of a business person, and you know, you can, yeah, you can hire a designer, you can hire a consulting firm, you can bring someone in house to do it. In many cases, the manufacturers themselves have their own design team, so you just work with the manufacturer. Because depending on the product, if it’s a complicated part or something specific, you know, that and, you know, your, say, it’s like a diecast part, that’s pretty tricky. That die casting manufacturer is going to know more about the intricacies of die casting than any designer would. So you have to work closely with them. And, and in many cases, depending on the manufacturer, they may even just help kind of help you design it for free. So that they can get the business. But now in terms of in terms of that particular product, it was a question of, you know, the technology was just changing fast. And sort of the way the form factor of a product was I was using these sort of bulb, LEDs, you know, the old old school LEDs, and there are some very bright ones. So we could get a good flashlight. But literally like, right at that time, all these, these little surface mount, really powerful bright LEDs came out. And it was just like, you know, I was I had, I would have had to redesign the whole thing to use one of those. But the way the way the shape of the product was, it would have been very hard to retrofit it. So that that was kind of I don’t know, it was.

Sushant Misra of TrepTalks  

But I mean, it was

Mike Scully  

bad timing, you know, maybe I probably could have seen it coming. But you know, I didn’t know how fast things were evolving. And that’s the other thing when you’re trying to when you’re trying to, when you’re doing a small business, there’s so many aspects of the business that you have to try to manage, you have to decide what you what you need to outsource and what you know, what you can focus on and just tracking it all gets gets very complicated.

Sushant Misra of TrepTalks  

So now we’re going to move on to our rapid fire round. And in this round, I’m going to ask you a few quick questions, and you have to answer them in one word or two words. So the first one is one book that you would recommend to entrepreneurs or business professionals in 2022, and why

Mike Scully  

you mentioned that you’re gonna you’re gonna ask me about this.

Sushant Misra of TrepTalks  

Any book that comes to mind, it doesn’t have to be a bit of a book, I don’t

Mike Scully  

know, we read start with y, which I think is a good, just a broad book about, you know, what’s the purpose behind your company. And then if you build around a purpose, and you and you build in, you have an audience that believes in that, then that’s where you can really kind of shine a book I’m reading or planning to read, I haven’t started it yet, but I ordered it is called. It’s called rocket fuel. Okay, and it talks about the partnership between sort of the visionary and the implementer. And how a lot of the most successful companies in the world, you know, started having both a visionary and an implementer as a as a team, because they’re two very different skill sets. But if you combine those, you know, that really, that’s, that’s why they call it rocket fuel, it really helps your business take off. So I know for me, I’m I’m very high on the visionary side. And, you know, as a single business owner with a couple employees, I’m reluctant implementer so at some point, I want to get to the point where you know, I can have have someone that I trust to really implement all of our all my crazy ideas. And as that for one word answer,

Sushant Misra of TrepTalks  

that’s totally fine, totally fine. An innovative product or idea in the current ecommerce retail or tech landscape that you feel excited about? product or idea?

Mike Scully  

Yeah, there’s there’s two, I like the trend, or I don’t know if it’s a trend, but I like using platforms instead of necessarily specific software or whatever. So I’ve been looking our tech stack has kind of been a pain point for me, like trying to find the right combination of software’s and things that interact together and you got one software that talks with this one, but not this one. And how do you know how do you stack them all up? And I’ve been looking for some funnels from our website. But I think we’re at a good point. Now we’re, I like where we’re at where We have, we use WooCommerce and work through WordPress. And we have a new thing called mu funnels, which allows us to build funnels for our store, which I think is something that we’ve been missing. I mentioned our influencer program, all that is, is a plugin on our website, where we can, you know, the influencers become users. And then you know, they get credit when they send people with their link, and it’s just a plugin that tracks at all. I’m having a call tomorrow with an ADS company, they’re not a like, you know, like I said, I’ve been frustrated with paid ads, whether it’s Facebook, or Google or any of that. Just because there’s so much to learn, it’s expensive, you can throw a lot of money at it without being profitable. But the call I’m having tomorrow is a company and they they have a platform, basically, which it simplifies the ad creation process. And then it automatically sends it out to all kinds of different channels, whether it’s Facebook, or Instagram, or Google. And so it’s like a platform where you sort of, you know, you kind of build your creative in there, and they simplify it and streamline it, and then they kind of their AI system takes care of the rest. So that’s a big one. For me, I’m trying to simplify things. And you know, and the nice thing I like about the platforms, and even Amazon itself is a platform, right? So, but the things that I like about it is that, you know, I’ve looked into it, we’ve tried to do Facebook ads, for example. And it’s been too, you know, we haven’t been able to do it profitably, partly because we’re not experts, but then I look into hiring experts. And, you know, by the time they get their commission, yeah, it makes it even harder to be profitable, right? Because it’s like, Okay, now that the consulting firms getting paid, but you know, We’re the last ones to get paid. So anyway, we’ll see what this is about. But that’s, that’s kind of the trend, we’re we’re going

Sushant Misra of TrepTalks  

we’re interested in a business or product productivity tool, or software that you would recommend, or a productivity tip.

Mike Scully  

Right, um I don’t know, we use G Suite, you know, and I really liked that just because the simplicity of it, but you know, their spreadsheets, their their word processor, the email, it just sort of integrates, I like to kind of keep it simple. Um, you know, they have storage, we also use Dropbox for storage, and file sharing. So I know those are two that popped into my head.

Sushant Misra of TrepTalks  

Cool. Final question, best bit of advice you have ever received, or you would give to other entrepreneurs?

Mike Scully  

I would, for me, it’s it’s focus on sales first, you know, get your get your sales, and then the rest will follow. And that may, maybe that’s specific to me, because it’s not a natural thing for me. But another another just rule of thumb is everything’s going to take twice as long and be twice as expensive. As you think so budget that in? Definitely. all goes well.

Sushant Misra of TrepTalks  

Well, thank you so much, Mike, for joining us today. If people want to buy your products, how can they do that? If anyone wants to get in touch? How can they do that? This is your time. Your product?

Mike Scully  

Yeah, they I mean, they can go to lever gear.com. And they can see our you know, we have three main products. As I mentioned, there’s the tool card, there’s the cable kit, which is just a little portable USB charging cable, we’ve got one for the iPhone and for USBC devices. And they come with little adapters. Then there’s the bit vault that I mentioned, which is waterproof, carry case and screwdriver. So you know, cool little unique products that are that are good gifts, and we can personalize them as well. So yeah, check out lever gear.com. And if they you know if they want to get a hold of me just they can send an email to support at levered gear.com. And it’ll get to me, or we’ve got a contact page on our website. So

Sushant Misra of TrepTalks  

perfect. Thank you so much Mike really appreciated. Learning about your startup story. Thank you for sharing all your lessons and learnings and challenges that you went through in starting and growing your business and all the strategies and tactics that you use to grow your business. So really appreciate your time today and thank you for joining us today triple zero Thank you for having me I enjoyed it thanks I will stop recording.

Also, get inspired to Create a Profitable Online Business with David Rubie-Todd – Building a Tech Focused Sticker Printing E-commerce Business


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