ZappBug. A hardware startup.
Ok, let me get started by assuring you that I don’t have bed bugs. In fact, I spend most of my waking hours finding ways to kill them. Really, I just talked to a customer who was crying non-stop and sleeping in her bathtub.
Looking back, I never saw myself as the leader of a startup with the sole purpose of killing bed bugs. In 2009 I graduated with a degree in mechanical engineering and entered the big world. My definition of failure at that time included “working for a large, impersonal behemoth.” Come on, Richard Branson would have never done that! And Tim Ferris wrote about how easy it was to live your own life. That conviction, topped with youthful ambition and a little “Eat People” from Andy Kessler pushed me into the startup scene.
Ecowell was the first major startup. We made environmentally friendly, extremely expensive, vending machines. Yes, that’s right, we made a physical sheet metal box with an electromechanical mess of PLCs, solenoids, pumps, valves, filters, and syrups (video of the ecowell prototype). But, of course, we ran out of cash in 2010. I learned a lot from this including the fact that cash really is king (or more important than your mother).
Physical Products vs. Software
It can be very expensive to start a company that makes physical products. Testing and manufacturing alone can require more time/money than software products. And there is the fact that each unit costs money. You need working capital up front to buy inventory. Also, you need to make enough units in each production run to meet the minimum order quantities required by factories producing your product. There is no AWS for the physical, just Chinese factories…which are a far cry.
But there are advantages! The biggest being that people actually pay money for physical products.I don’t know about you but I spend about $20 a week on coffee and $20 a year on apps (excluding Uber, rock on).
So, the question becomes: Is there a way to apply Lean Startup principles to physical products? To make a physical product without a huge amount of capital and actually make a profit? Turns out…there is. And this is exactly what we are doing at ZappBug.
Bed bugs are a real problem and many of us know someone who has encountered them (your friends might not tell you though). One of our co-founders, Andrew, got bed bugs in his nice downtown apartment. In fact, he wasn’t even the source of the infestation. A neighbor down the hall had bed bugs and they spread through the electrical outlets into units across the building. Andrew did a ton of research and found out how to get rid of bed bugs. During this process he learned that there was a real need for better solutions and more information.
Andrew and I talked about his experience. It sounded intriguing and some quick research revealed that there were 110,000 uniques a month on Google for “how to get rid of bed bugs.”
The market is huge but fragmented. Pest control companies want to come to your home and sell. Bloggers spew tons of words with little actionable advice and sellers want to throw products at you. Thus, ZappBug was born.
Our goal at ZappBug is to be a one-stop resource for how to get rid of bed bugs. To fund the creation of this resource, we decided to develop a physical product and sell it directly to customers. After some research, we decided to develop a bed bug oven that could use heat to kill bed bugs in luggage and other personal belongings. We chose to begin with this product because: We had the technical competency to do it. Heat treatment is a proven way to kill bed bugs. The product could be used for both prevention and extermination.
So I went to home depot and got a heater, some insulation and a storage container. Then I brought all of my nerd tools home and pulled out my Arduino. By the end of the day, I had a working prototype. The goal of a bed bug oven is to heat items and hold them lethal temperatures for a period of time. Adult bed bugs die in about 60 seconds at 120F but since you can’t know the temperature everywhere, the industry standard is to hold at 120F for 60 minutes. I wanted to make the bed bug oven as large as possible but the limiting factor to size is the amount of power you can pull out of a 15 amp residential outlet. After a few days of testing I had a really good idea of our max size and how the product was going to operate.
The “Lean Startup” wasn’t out yet but I understood the basic concepts of product validation and cash flow. In fact, these lessons were burned on my mind from previous failed startups. The difficulty now was developing an MVP with little to no money. This was really the hard part because manufacturing requires minimum orders and time. But first, we needed a full prototype that was ready to manufacture (albeit at a low volume).
Early prototype of the ZappBug Oven.
We found a guy on craigslist who used to design clothes for Nordstrom and was willing to sew up some samples for us. After a couple of revisions and a lot of testing, we had a design that was ready to manufacture. Manufacturing textiles like our “insulated folding box” (aka bed bug oven) is not feasible in the U.S. because of labor costs and minimum order sizes. Also, most of the heaters we were able to find were already made in China. Luckily, I was heading over to China in a month for my job as a product manager. I used the time before the trip to find several factories on alibaba.com. If you have never used alibaba, check it out! The world really is flat! On alibaba.com, you can find everything that is made and just about everybody that makes stuff. So we started looking for a small factory to make our “stuff.”
Most of the people that I talk to get the idea of making a prototype and understand that finished products come out of factories. However, they have a difficult time comprehending the connection between the two. How do you go from a prototype in your garage to a factory sample and then a production run? Take some pictures of the prototype and send an email! We sent out hundreds of emails to manufacturers across China and got replies from most. I was able to select a few factories and was ready to meet them in China. Hint here…when talking to Chinese manufacturers; take a lot of pictures and repeat yourself at least three times and phrase the statement in three different ways. They actually use Google translate.
Now I was off to China!
I met Ben in Ningbo (2 hours south of Shanghai) and he took me to a few factories. Ben and I had met a few weeks before on alibaba.com and we were in constant communication. Ben hooked me up with samples and helped me negotiate a low minimum order quantity (MOQ) production run. Ben showed me that everything was negotiable in a Chinese factory. When you look into making your own product don’t be scared off by the initial high minimum order demands. The factory will probably do whatever they can to accommodate you. Ben and I are in frequent communication to this day. In fact, he just sent me a picture of his 2 year old daughter playing with nunchucks. A mini Bruce Lee!
Cosco Seattle in the Port of Seattle with our first production run!
Now that things in China were in the works, we spent some time developing our site. By June of 2012, everything was done. Our product was loaded into a shipping container bound for Seattle. Before the container arrived, we rented out two storage units near the port. Everything was ready! The Cosco Seattle arrived (see pics below) with the goods on June 28. I borrowed my friend’s truck and headed down to grab our first production run! We started selling the product on Amazon.com immediately. Sales went well and we landed our first full shipping container of product (see pic below) in December of 2012.
Picking up our first production run of heaters at terminal transfer.
There is still a room to improve the product. The most significant area being that none of the electronics, either the timer or the thermometer, are integrated into the heater. Steve Jobs would kill us. But three normal guys were able to come up with the money to get this company rolling. Now we have a validated product and the cash to design a much more sophisticated product.
First 20′ shipping container.
I highly encourage you to make a physical product of your own. It’s extremely rewarding to make something that you can touch! The ZappBug Oven is helping people save priceless belongings from bed bugs every day!
Please feel free to contact me with any questions. I’d love to help if I can.
cwheeler [at] zappbug [dot] com