PART II: Journal Entry MARCH 7, 2002
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Here we are now only a few days away from our "soft" launch. So far we have managed the following:
- We officially incorporated the business in preparation to raise capital.
- Finished prototyping.
- Lined up a very well-respected manufacturer that believes wholeheartedly in the product.
- Filed the patent.
- Solicited orders from a group of retailers.
- Mapped out each potential market and who the players are.
- Figured out the supply chain management thing.
- Learned way too much about packaging and bar coding.
- Built a respectable web site to take orders.
- Reserved our spot at the National Stationary Show in New York.
Sounds like a lot when you spell it out like that, but, in reality, those are just small steps in a bigger game we're playing, the evolution of a company. Now that the wheels of motion are underway and the first official PenAgain™ is near delivery, we can focus some of our efforts on what is maybe the most important part of a business: MONEY.
Our plan is simple: launch on April 1, make some noise about the product, listen to what our customers say, raise some funds, grow the company. Then turn an industry on its head and proceed to change the world. That doesn't sound difficult, does it?
Well, it's actually a funny situation to be in. In order to raise money, we must have a viable, functioning business. Just getting a product out the door is proving to be a good challenge, let alone improving the world... or even just getting a cash infusion.
How is the fundraising process coming along, you ask? Given the current status of the VC market we have met some pretty glum characters. Some of these guys pretend to have more money than they do. Some have so much money that they don't bother to invest in any venture asking less than $3 million. I'd love to ask for $3 million, but we want people to take us serisouly.
Everyone we talk to gets excited about the PenAgain™. The key element in raising cashola, however, is to find the right audience. Sometimes we find ourselves sitting across the table from some guy with a ton of dough in his pocket who really likes what we're talking about. You know he can make your dream come true, but then you realize that he's not your angel for one reason or another.
One good example... the other night we had a meeting with a potential partner in one of the more famous Silicon Valley office buildings. It seemed like kind of a funny place to meet a financial partner, but we figured it would be neat seeing the inside of the place anyhow. As we pulled into the parking lot, we quickly realized what was going on. The parking lot was filled with classic Porsches and convertible Mercedes and personalized license plates. Turns out we were arriving at the tail end of a VC networking event held once a month in this building. We were scheduled to meet this guy after the event ended.
We parked the truck in a lot down the street, took our files out of our backpacks and silently thanked our wives for ironing our shirts. There we sat in the lobby like poor unwanted step-children as the fancy power brokers with their shiney cufflinks filed by at 9:00pm.
Finally, a polished-looking man walked up to us and said, "You must be the PenAgain™ Boys?"
We walked to the dimly lit and empty cafeteria with him to pitch our pen. This guy was sharp, and we both liked him immediately. He was Stanford-educated and had a fat rolodex. We soon learned, however, that he wasn't our angel. While he really liked the pen and pumped us up about what a good job we've done, we discovered 2 hours later that he didn't fund retail ventures. He only worked with software companies. We got a few things out of the meeting, regardless, including his expertise on how to grow a real company, build the "Management team" and the importance of "Branding". But what we really wanted was access to his bank account.
Note to self: check that your VC's invest in consumer products before meeting with them.
What we're really focused on at the moment is the launch. Why is the April launch so important? In order to be in stores and such by next Christmas, we have to start selling now. This is because the National Stationary Show is in May, a must for our marketing efforts. If we start selling in April we will have learned the ropes and have some sales figures to share with the many buyers who travel from around the world to attend this show. They will want to place orders for the coming holiday season. And we will be there showing the PenAgain™.
On a side note, we've discovered some good news about the real long term prospects for our business. It turns out we have 5 big markets that the PenAgain™ could fit into.
- College Bookstores
- Retail/Gift
- Promotional Products
- Arthritis/Occupational therapy
- Internet
The numbers for pen sales into each of these markets can reach into the billions of dollars. That's a pretty big pie to be a part of. If only we could squeeze out just a measely little slice of "billions of dollars"...The size of our potential markets, by the way, was an afterthought to the PenAgain™. We thought it would be great just to produce it, but we had no idea the size of the markets.
Each day we face new challenges in this story. But we know it's up to us to keep pushing forward and to stay on top of this wave of momentum. If we keep focused on execution and delivery of the PenAgain™ things will all fall into place.
That's it for now. We'll try write again before the launch to let you know the latest. Oh, also, keep an eye out for articles about us in places like the Palo Alto Daily. We're starting to make a media push, and they are liking our story.
Colin and Bobby
P.S. - Clancy (Colin's dog, for those of you who don't know him) took the liberty of chewing one of our good prototypes the other night. It still works well enough, but it's now scarred with deep teeth marks. We think he is telling us he wants to learn to write. This whole thing could be bigger than we first thought.
