Podcast: Agility & Scrappiness from One of the Most Successful Product Guys in the Room
March 19, 2020
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Listen to the podcast
Here’s a glimpse of what you’ll learn:
- How Warren Osborn has managed to accomplish a lot in his businesses in short spans of time
- How Warren started Osborn Media, the role video played in 1987, the challenges he faced, and the mistakes he made
- Warren’s investment in ancestry.com and the huge potential he found in automating the tracking of ancestral files
- How Warren uses speed in business and how he fixes his mistakes quickly
- How Warren helped a company save $30 million
- What people interested in business should start learning right now
- Warren talks about his inventions and how patents helped grow sales into millions of dollars
- How Warren penetrated major retailers using their Blue Box gift cards
- The type of validations Warren’s team did for their products
- How Warren won a contract to do Warner Brothers’ exclusive all high definition packaging
- Did Warren Osborn ever feel like stopping?
- Warren’s advice to entrepreneurs for incremental innovation
- When should an entrepreneur call it quits and move on to something else?
- How Warren created a portable wireless speaker to solve a common battery dying problem
- What made Braven, the portable speaker brand, very successful
- Warren’s winning principles for business
- Warren talks about his Amyotrophic Lateral Sclerosis (ALS) diagnosis and the 44+ stem cell treatments he has received so far
- Where to learn more about Warren Osborn
In this episode…
Starting and managing 11 successful businesses is not easy for most entrepreneurs. In fact, very few people can boast of such an accomplishment. However, for Warren Osborn, having the right strategies can push you to great heights and make you very successful. He uses a couple of winning principles that he shares with other entrepreneurs looking to grow their business.
Warren also strongly believes that entrepreneurs can learn a lot by allowing themselves to go through tons of failure. It teaches them great lessons and how to pivot themselves out of such situations the next time they happen. His biggest attributes for starting & successfully managing 11 businesses are speed, passion, and a great desire for solving people’s problems.
In this episode of Buy Box Experts, Warren Osborn joins host Eric Stopper to share his great insights and advice for starting profitable businesses. He talks about how his inventions have seen him grow his businesses to millions of dollars, how he helped a company save $30 million, and how he is constantly looking for a cure for his Amyotrophic Lateral Sclerosis (ALS) diagnosis. Stay tuned.
Resources Mentioned on this episode
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The team works with marketplace technicians using a system of processes, proprietary software, and extensive channel experience to ensure your Amazon presence captures the opportunity on the marketplace, not only producing greater revenue and profits but also reducing or eliminating your business’ workload.
Buy Box Experts prides itself on being one of the few agencies with an SMB (small to medium-sized business) division and an Enterprise division. Buy Box does not commingle clients among divisions as each has unique needs and requirements for proper account management.
Episode Transcript
Intro 0:17
Welcome to the Buy Box Experts Podcast with your host, Joseph Hansen. We bring to light the unique opportunities brands face and today’s e-commerce world.
Eric Stopper 0:18
Hello and welcome to the Buy Box Experts podcast. This is Eric stopper. This episode is brought to you by Buy Box Experts. Buy Box Experts takes ambitious brands and makes them unbeatable. We have a team of consultants here that identify low hanging fruit for some of your best selling cases on Amazon. So if you’re an Amazon seller and you think there’s more market for you to you know, to squeeze out, go to BuyBoxExperts.com click on the free analysis button. It’s completely free, no strings attached, although me and my team are always busy, and so I don’t know how long we’re gonna offer it for free. But just go to Buy Box Experts.com and click on the free analysis button then we’d love to talk with you
Today, I am joined by Warren Osborn. Warren is I met him a while ago actually in my in my first semester of college. Warren is a is a husband, a father and a grandfather. One of his colleagues, friend of mine describes him as one of the industry’s biggest geniuses. He is an advisor and investor and an expert in developing manufacturing and marketing consumer products. He is an entrepreneur, a venture investor and a philanthropist. He’s invested in over 65 companies. on that list, we’ve got stance and omniture, school candy work front fusion IO, Jamba Juice, the list goes on and on. And as I was, as I was making this intro for Warren, he was sure to say that he is first and foremost, an entrepreneur. He was the recipient of the American Red Cross family award for eating an injured parachute is trapped On a dangerous cliff, he is one of the founding members of the Utah angels and investment team of experienced serial entrepreneurs who look for firms raising their series A. Warren, so glad to have you on the show. Welcome.
Warren Osborn 2:12
Great to be here. Thank you.
Eric Stopper 2:15
Now, Warren, I talked with a lot of business owners, but I haven’t brought somebody on as as puzzling as you. And the reason I say puzzling is I’m sure you’ve heard the old adage that things, especially in business take twice as long and twice as much money to get done. Yeah, and the reason I mentioned this is because when I looked at your dossier of of experience, you found it and sold a company in 11 months. You appear to have started a design company called pebble designs, specifically a service all the other companies that you have going, some people would see all of these as quick wins, but the story is never that easy. I’m sure there’s lots of Blood Sweat you can speak to Yeah.
But can you talk to me about how you have been able to do so much in such short Sprint’s of time?
Warren Osborn 3:11
Well, first of all, I think I have an instinctual passion for speed. Hmm, give a little example, the last few years I don’t do this as much, but in most of my life, if I go to a shopping mall, get out of the car, I see the four minute walk into the building as a waste of time. So I typically run in and that saves about three minutes time, and that allows for more productivity. So I’m a little bit addicted to productivity and efficiency and speed, which are very strong traits to have when you’re an entrepreneur. I’m a huge believer in speed. I actually have been asked this many times lecturing to different universities around the state, what is the biggest app asset and attribute that has made you successful in starting and 11 successful companies and exiting 10 of them. And I think speed, passion, and solving all the problems are at the root of it. Speed is incredibly important in developing products. When you’re developing a product, you’re competing with dozens, if not hundreds of other companies. So if you can create your product and bring it to market in a third of the time that your competition you’ve got a serious advantage. And that’s been one thing that’s really driven me and I think has been very, very key in making every one of the businesses that I found is successful, and we can start talking a little bit About Osborne video the second business I found it.
Eric Stopper 5:03
Yeah, I saw you had one before that doing some like water softening. Now this is 1987 right you’re 23 years old. Yeah in 1987 and you start, you start Osborne media and it lasts for doing this for 10 years it lasts 10 years and it’s basically pre internet right? Yeah. I want to know really what role video played in 1987 because this is a big year for media right we have the Legend of Zelda comes out Final Fantasy right the first of the Final Fantasy which was this huge just absolute smashing success. Senior you know, Wall Street came out with Michael Douglas and Charlie Sheen. So just amazing video culture. Can you can you just tell me about this this experience you had
Warren Osborn 6:00
Well, at that point in time VHS was the YouTube of the day. Now that sounds like we’re talking about ancient relics and Dinosaur Land, but VHS was the high tech for media of the day. What happened was I was going to school at Brigham Young University. And we had our first son Skyler. He was born six weeks premature, almost died. Emergency susteren and we had a $25,000 bill on our hands. Well, the insurance company refused to pay the bill because we had switched insurance, waited about 10 days got pregnant. And they called it a pre existing condition because he came before nine months came early. So they refuse to pay a $25,000 bill now put that in perspective. We’re broke poor students 25 thousand dollar bill 3033 years ago was Akin a similar to maybe $75,000. Today, and you’re studying Mandarin and to study Mandarin Chinese with with some business focus as well. Yeah, Asian Studies. Well, I had little choice but to go make money. Now I already had aspirations to start a business clear back in high school. But now the stimulus was there. So I took on two full time jobs worked out at Geneva still went to work doing the yard care for a rich guy up on the hill. And I started the business well, we assessed our assets we had two assets other than what’s inside the brain. One was a chair, a sofa that we got out of a dumpster when we were managing these apartment complexes. Okay, the other asset we had was a video camera that we purchased app. When we were coming home from China, we went over to China and studied to polish off my Mandarin Chinese. And that was the asset. And this is one of the points that I’ve really learned you build on your assets. Companies that are built on their assets have a much higher chance of success than building something on an asset that you don’t have. Now that might be an asset that you’ve learned or a physical asset. But I I’m a big believer in building on your assets. That’s the that’s the asset that we had. So I’m in the video business. Well, what to record what to do, yeah, high school graduations were coming up in a few weeks. So I thought, well, we’ll record the high school graduations. How can we ensure that we get this gigs? So I called on Almost every high school in the state of Utah or a few days time, and I offered to record it for free. So we’ll give the school a free copy. What do we get? at practice and at commencement, I get a pass out flyers to the students and to the parents. And that was the win win. And so I got 10 jobs. At one of these places. I sold 100 tapes.
Eric Stopper 9:28
For how much are we talking? 1987 1495 Okay, see me about 1500 bucks. Yeah, we’ve got $23,500 to go right.
Warren Osborn 9:39
Yeah. And, and at one of these, nobody bought a single tape of so you can see that spreading it out over. Over 10 different schools actually gave me a higher chance of success. Well, one of the schools Roy High School, someone came up to me thinking that I was just a camel Man for a much bigger film videography company and said, Can you guys give us a bid? Do you guys do other kinds of video work? What do you think I said as an entrepreneur? Oh, yeah, we can produce whatever you want. What do you have in mind?
Eric Stopper 10:14
Yeah, let me look at my schedule.
Unknown Speaker 10:16
Yeah.
Warren Osborn 10:18
And, and they were, they were, he was in charge or part of the group that was orchestrating the National Junior Olympics. It was being held at BYU that year track and field event for all the high school champions. And so this free notion worked with me they were getting bids from several other recording studios. And so I gave a bid and I said, free. I’ll record this 14 hours a day for a week for free. But I get the loudspeaker every 30 minutes. per minute. And I get to have a booth down there right where all the people are to pre sell my tapes. Well, that turned out really good. I pre sold 500 VHS tapes of a highlight reel of that. Now, I didn’t know diddly squat about price elasticity. So I really screwed up. He should have been priced at 4995 in my opinion, if they would have been priced at 4995 I think I would have sold 400 to 450. Instead, I sold 500 at 1495. Dumb mistake but you don’t know squat until you’ve made mistakes and and charge through
Eric Stopper 11:40
- Did you have any any mentors walking you through this process? I mean, you’re at BYU and they I mean, I went to BYU, that’s my alma mater and they beat their chests about how good their mentorship programs are.
Warren Osborn 11:51
The mentoring programs at BYU pretty much developed and grew after I was there. So I really didn’t have any mentors. So I was making mistakes very frequently. So I recorded this whole thing got done. And fortunately, now my customers funded the start of this business, right? I had no capital raise that I had no capital myself, so I use the customers to fund it. Well, I had to get the editing equipment. So I spent maybe three quarters of all the money to buy the editing equipment. And I edited for seven plus weeks. Because back then this is, this isn’t like a word processor where you can just go in and just stick something in you. You had to lay down your track in sequential order. So you had to kind of pre edit it on paper, decide what you want, and then go put each of those pieces in track sequentially. What was no way to go insert something later.
Eric Stopper 12:53
What was the video editing software program tool of the day?
Warren Osborn 12:57
It was on a Commodore Amiga. I can’t really The name of the software. But it was it was ancient technology. Well, anyway, I got done with this. And then I went and got my bids to, to record this. It was about two and a half hour video. And my two low bids were $10 and $12 to copy it. And I was like, What the heck? I am hosed. Yeah, I didn’t have near enough money left. I had already spent most money on editing gear, so I had no choice. Well, Necessity is the mother of invention. I’m so glad that happened because I had to find a way to solve that problem. And solving the problem actually created the next generation of Osborne video. So to solve the problem, I went and found that I could buy these tapes for $2 each. I found a bunch of coupons where I could melamine and get like 30 to 50 cents off each one. And then I went down to Blockbuster Video, hollywood rental, and Cougar rental and rented VHS VCRs about 30 of them a night for about a buck apiece, wire them all together with Radio Shack cables and recorded these 500 videos myself. And I looked at this and I thought I just slaved for a week recording and seven weeks editing. And these guys who owned the VHS duplication facilities are going to make 90% of the money in just a few hours of work. When I just worked for eight weeks, I thought I’m in the wrong business. So I stayed in the video production business but it became more of a marketing lead gen tool or the production business, fad, the duplication. And so I launched I took all the profits Bought a VHS VCR? Then I would duplicate 10 tapes 50 tapes 100 tapes, buy another VCR the Donny Osmond fan club became one of my first key clients where I duplicated all the old Christmas specials they had and the fans would buy them and then and then I just started expanding from there. Few Years Later, I was 27 years old, I had 125 employees and a 34,000 square foot factory duplicating millions of VHS
Unknown Speaker 15:32
tapes digitally permission to do these.
Warren Osborn 15:36
No, they were mostly corporate training videos. Sure. And some entertainment videos someone had a you know, a wedding or something we make. We’re not like ripping off Disney we’re we’re taking all those basically homemade videos and got them and business videos business training videos, but as we got a little larger, we started to do more Media we started a little bit of you know, hollywood video and a few things like that. So it grew to also start. We started manufacturing the VHS tapes themselves. we imported the tape on big reels from like Korea and we and I’d go to China and buy the VHS shells, the plastic housing, and we bought these $400,000 machines, we had four of them. So that’s $1.2 million of high speed equipment where they could duplicate a two hour video and just like 20 seconds or so, and then we wind that into the cassettes after duplication. So we actually got into the manufacturing business. We stayed in video editing and production and film production and started doing a lot of infomercials and corporate training videos, things like that. But where the real money was, was mass duplication, but it gave me a huge entry into packaging because we had to put packaging on nearly all of these cassettes and that really helped lead into the next business after I sold Osborn video. Now the reason I sold is I didn’t love the manufacturing business, I loved learning. And I learned a ton about manufacturing but I didn’t actually like management, manufacturing business. I love more of the innovation side, the engineering side, the creative side. Sure. So I thought VHS is gonna die. I could see that DVD was coming. It was a no brainer to me that DVD was going to take over and I would have to pivot in the DVD, build a DVD plant to grow and I just didn’t want to do that for another decade. So I sold before the peak when there were still a big market share and I weigh under sold. I was too ignorant to hire an investment banker I didn’t have any advisors to coach me to buy an investment banker. So I I probably sold for half what it was really worth. But I still did extremely well. You know, I’m in my 20s and so had a really good exit
Eric Stopper 18:16
you you know you’re in this VHS space, you probably had done a couple of CDs DVDs at that point, right boy Yeah, right now. I do want to talk about see stone because that is something that I think everybody listening has has heard about, but I want to before I get to 2002, I want to get to 219 97 April. Okay, you’re now 33 and you get introduced to these guys at a startup called ancestry.com. Yep. I worked for this company. At one point I’ve talked to these guys have done business with these guys. Can you tell me what was going on? In 1997 because they were founded that same year weren’t. They are Maybe they just Yes.
Warren Osborn 19:01
What the hell at that point they weren’t even online. It was more research development. And I helped them a little bit help them a little bit of moving to China became a board member, one of the first investors invested a few hundred thousand dollars. And I saw a huge potential for the ability to automate the tracking of ancestral files. And this was long before DNA was ever concocted as a business model. But it was just the ancestry collection, development and monetization of it. So I was pretty impressed with that. And it was one of my earlier investments out of the 65 that I’ve done,
Unknown Speaker 19:49
and it was a good one.
Warren Osborn 19:50
It turned out really good. It was up about 18 x before the 2001 tech crisis that crashed In 2001, there was a big cram down of about 18 to 19 to one, so I didn’t really make much on my ancestry investment because of that crammed down. A lot of sold a year earlier, I’d killed it. Right sounds at it. If I’d have sold three or four years later, I’d have killed it too. But I made a little bit but not huge.
Eric Stopper 20:22
Did they? Did they have their eyes on DNA? Was that even a thing that they were considering? Did anybody see it coming now at that point in time, because even the FBI didn’t start using DNA until 1998. So it was very, very, very
Warren Osborn 20:36
early. It was it was way early. That’s this is a really great example of the best ideas of businesses are almost never the first idea. If you’re stuck on your first idea and not malleable and willing to pivot, you’re usually going to die. Sure, you’ve got to be able to willing to be willing and able to pivot
Eric Stopper 21:00
Well, it seems like you took a pretty big stutter step right? This this pivot because 2001 2002, right, like, you end your time as an advisor and ancestry yourself your shares. And then you go back and you you get an MBA from Duke, what was kind of the thinking there?
Warren Osborn 21:18
I kind of always thought I wanted to get an MBA and Duke had a global executive program and I was very much global because I was importing stuff from Asia. I speak Chinese fluently. doing a lot of business internationally. And I wanted to expand that and become more astute in international business. And I wanted to move more international on my next business. A couple learnings from Osborne video and other businesses. For me, speed, persistence, pivoting and solving all the problems. One thing I would mention you’re only as strong as your weakest link. If you do 99 things near perfect and just nail them, but one in critical ingredient is broken or fails, the business fails. Well, you have to fix all the problem that that
Eric Stopper 22:19
begs the question then because I think I view speed and agility as as two mutually exclusive concepts. If you’re moving really fast. I feel like there’s there’s a tendency to make a lot of mistakes and to sometimes forget about those things. Whereas if you’re agile, it’s more of that like failing really quick, is it just semantics you kind of view those as the same? How are you able to avoid making lots of mistakes at the speed?
Warren Osborn 22:46
Well, I make lots of mistakes, but I also fix mistakes fast.
Eric Stopper 22:51
So like and on cord kind of thing. Like Yeah, like the Japanese manufacturing like, okay, something’s wrong. Let’s just shut it down and get it fixed. And then let’s let’s keep going. Yeah,
Warren Osborn 23:02
I, I am a huge believer in speed, I operate very fast. And I make a lot of mistakes when I make a mistake, I see the mistake and I fix the mistake very, very quickly. This kind of leads us to C stone. Another core principle is build on your assets. Well, I had experience with media and packaging. So C stone was first founded on selling accessories, like CD cases, jewel cases, DVD cases to my old competitors, because I was very efficient in that
Eric Stopper 23:38
Yeah, and you know them all you got all their everybody’s in your Rolodex.
Warren Osborn 23:41
Then I heard about AOL. And I heard that AOL was doing many hundreds of millions of CDs a year. And they were doing packaging for those CDs, putting in a tin box and mailing them to almost every American every month. And so I cold called them and I say said, Guys, I just sold a VHS manufacturing business. I know media manufacturing inside and out, I think I can save you a lot of money and I know China extremely well. And I speak Chinese fluently. So they hired me, as a consultant. Pay me a few thousand dollars a day. And I made a huge mistake. I should have negotiated a percentage of the savings. I saved him $30 million
Unknown Speaker 24:33
in a 10 day engagement. Did you
Eric Stopper 24:36
have any idea that you were going to make that kind of impact you probably saw the business and notice it’s in efficiencies but $30 million. That’s you got a crystal ball to figure that kind of i know
Warren Osborn 24:47
i i didn’t realize going into it that there was that much savings to never
Eric Stopper 24:52
make that mistake again.
Warren Osborn 24:54
But I’m a significant I’m a good negotiator. I know how to negotiate with the Chinese and I showed them pricing at other vendors that was dramatically lower. And I went with them over to China and met with most of their vendors and just help them negotiate pricing down, kind of there was a little bit of a threat to those vendors that that they would be taken to other suppliers fair. And so the vendors came in match those pricings and they save $30 million. Well, while I was there, I was See, I saw the opportunity to make 10 boxes for them, because they were using 10 as their primary medium. And I said to them, I’m not gonna, I’m not going to make the same mistake again. I said, I think I can save you another $30 million, maybe 50 million on the boxes. But I don’t want to be the consultant I want to be your supplier and I’ll save you that much. Well, then I went and found about 40 different factories that were related to 10. narrowed it down to the top 10 flew over to China. Again, met with all of them help help the top three install automated assembly lines because they were doing it to manual, they need to put it on a conveyor belt and have it speed up. So I said you got to put an assembly line in here, you got to have a conveyor belt in here and, and I helped them this is where my experience of manufacturing for the prior 10 years really helped out to polish to polish off some of these factories. And we built we built up these factories to appoint the first bid. They only could do one to 200,000 units a month, I had a goal to get to 8 million boxes a month.
Eric Stopper 26:36
So they had to really expand. Well, within six months. We were up to a capacity of 8 million a month. You You mentioned that the manufacturing side was was not your favorite. No Yeah, you find yourself back in China full circle, right. This is we’re talking 20 years ago. And you’re looking at these production lines speaking speaking Chinese just hustle Let your your heart out for manufacturing is it just because you see this big payout this $50 million, you know thing that you’re going to get a cut of your will a lot,
Warren Osborn 27:09
right? I’m not running the manufacturing plan. I’m just I’m just giving good advice, high level advice and learnings from what I learned the prior years. And I’m more on the creative side and the support. Well, I’m just managing the entire business just before
Eric Stopper 27:28
before I forget to ask because people in 2019 2020, Millennials Gen Z, whatever, you know, these these people who are interested in business, they wonder right now, what is the thing that is going to help them in their career the most that they should start learning right now? Because back in 1987, you could have you would have had no idea that the manufacturing would have been that valuable and so you know, if you could give some advice to people listening, what should they start learning now for 20 years from now,
Warren Osborn 28:01
this leads to a perfect story which will answer that question. So pointedly. So at that point in time, we were just manufacturing what they wanted. Okay? And we grew that business. Two and a half years into it. We did 30 million in sales with 10 million EBIT, da free cash flow. So, very successful bat young to be up to 30 million cells with 10 million profit still
Eric Stopper 28:33
still 10 right, like they’re still using the 10 products. 10 boxes. Yeah, this is where you’re looking into the crystal ball,
Warren Osborn 28:40
but we were just replicating what they had already been doing. And we were about at ficient see supply chain management. And we could make five to 8,000,010 boxes in three and a half weeks. This is new artwork, everything. Nice. Well, a well hats Management shifts, some management changes and they came to all other vendors. They had vendors that were doing plastic paper. We were doing 10 there were several others doing 10. They went to all their vendors. And they said we’re going to award all the business for each material to two vendors. So give us your bad bested they were basically leveraging us to get their pricing down. Sure. Well, we did our homework, there’s probably seven or eight different 10 suppliers, we’re probably first or second place in quantity. And we did our homework and we put in our bid and we lost the bid by one third of a cent. Well, not only that, AOL said we changed our mind. We’re gonna award it all to one. Oh, so we were second place, but they said we’re going to award all the one and so we’re effectively out of business because 99% of our business a $30 million business make a 10 million profit. is gone. So we had a little bit of sadness around the office to say the least depression maybe. So I called everybody in I met with everybody. And I said, What does f What does AOL really want? Do you think they release their core? Need a cheaper tin box? No. They want more cells. The tin box and the CD are just a means of marketing to increase cells. How can we help them with their core true objective, increase cell rate. I said we haven’t done anything in innovation. All we are is efficiency and mass production and chopping out every fraction of a penny we can, but we aren’t making better boxes. So we’re now going to deploy vision to make better boxes. And then the next 90 days, we invented over 60 different boxes. We had every one of our factories, we’re working, we’re working with a dozen plus factories, and we had every one of them show us new innovations. Where our whole design team, we hired a whole bunch more designers were just about new innovations. We created a box that had a window in it, where you could actually have this little bubble where you could see into it. Another one, you push a button and the CD would spring out. And we just added massive innovation. And that’s all we did 24 seven for several weeks. And we started showing them these new boxes and they started testing them they do they do like a 50,000 tests against their status quo. And in most of the tests, our new innovation boxes blew away the old status quo.
Eric Stopper 31:54
So So just as a as as a pause for those who might have no idea Do what we’re talking about because some of you have never even really seen a DVD box. You just you know, Netflix, Disney. patent number us 200 601-244-7981. If I’m reading that correctly, right? Like, you and Brian Dunford are the two names on that patent. You are the original inventors of this CD cases that allow you to slide the decorative packaging into the outside like sleeve of the CD cases.
Warren Osborn 32:27
Yeah, we got a lot of patents on different different innovations. Yeah. Also through the
Eric Stopper 32:32
you move to gift cards.
Warren Osborn 32:35
Yeah. So that that comes to the next story. So actually, I misspoke earlier. I said we did 30 million in sales. No, we did 20 million million in sales, when we hit 30 million was after the pivot to innovation. So after getting fired by AOL, and then inventing all these new boxes, we had, we did grew from 20 million to 30 million That’s when we made the 10 million Sorry, I misspoke earlier. And so they interesting. So those new boxes, got them more business like way more get more business and you got a big cut of that they got they made a dramatically higher close rate because the boxes were more sexy. They’re more innovative, the more appealing and people would open them. The old boxes became generic, almost generic and boring.
Eric Stopper 33:29
This This might be kind of a distraction. But I’m curious because I come from a design background. Did the industry the filmmaking industry have to make adjustments then in their marketing because then they have this tool where they can they can advertise to people on the outside of their DVD boxes? Did you know that they start taking these really awesome steel pictures to promote their stuff and start experimenting with different colors and stuff like that? There’s always
Warren Osborn 33:53
whenever you innovate anything, there’s always a huge ripple effect of knock offs. artists and pivoting off of your new innovations in many different industries. So yes, we saw a lot of a lot of knockoffs and a lot of variety. But we hadn’t yet gone into the film industry. So what happened is within a year after going to 30 million in sales with AOL, we saw that AOL was on a death spiral. And we thought if we don’t pivot again, into some other customers, we’re going to go down with AOL. So we said, we are now not only good at making five to 8 million boxes a month, but we’re now have the innovation and design expertise around packaging. Where can we apply this best and we came up with three markets, cosmetics, motion picture film, and the gift card industry. The gift card Mark It was 77 billion that prior year, with 1.5 billion gift cards sold, and there was no dedicated packaging accessory for gift cards. Everyone was just going over to the Hallmark aisle and buying a greeting card. Sure to throw the gift card in. Right well that’s not a dedicated accessory. So we saw a big opportunity there. So it was all flat paper envelopes prior. And you may want to add a couple pictures in there from the deck I sent you of some of these 10 boxes. So we just pivoted all these AOL tin boxes and wood boxes. Were doing plastic boxes and wood boxes and paper boxes for a while too. We just pivoted over and started making them pretty and fancy and sexy and putting Santa Claus and Rudolph the Red Nosed Reindeer on it and other things for holidays. And we pioneered the gift card accessory industry and and that thing exploded into hundreds of millions boxes.
Eric Stopper 36:01
Do you know that that story that you just told me was incredibly smart people putting their their axe to the grindstone and just figuring all this out? But do you feel lucky at all, that you were able to stumble into any of these huge opportunities?
Warren Osborn 36:18
Yeah, there’s definitely luck with every business. There’s nobody that successful doesn’t have some luck. But I would attribute more of it to building on the assets. If we would have tried to enter a new industry that wasn’t about packaging, we probably would have failed. But we were packaging experts and design experts. So we built on our assets just like VHS I build on the asset of having a camera and then starting c stone to build on the asset of having already done media. A build on something I knew and that gave us a definitely strong advantage. Well, we made all kinds of accessories stuffed animals. Little slays little wood, little toys at these cards, just tall cards
Eric Stopper 37:06
customer experience. That’s really what you’re doing for these companies.
Warren Osborn 37:09
Exactly. And then here’s another great learning. And that is marketing exposure. I call it the blue box. So this is how we penetrated almost all major retailers. Were using our packages, the big ones we created, we built a big blue box about this big and we would load it with 50 to 60 of our gift card boxes, put it inside put in a catalog and a cover letter, and we’d find out who the buyer was for the gift card category and who that buyers boss was. And we send them each a big blue box of 50 to 60 gift card accessories and then the sales team which Call them within one to five days after that box arrived. And that was probably one of the best innovations that I’ve ever done.
Unknown Speaker 38:09
And then because
Unknown Speaker 38:11
you’re not saying yes
Eric Stopper 38:12
to right like, and why why blue box to that matter.
Warren Osborn 38:17
It just, it just happened to be a blue, blue color didn’t really matter. Then we pivoted again into program management. So we saw that these retailers needed more they needed the displays. For the gift cards. They needed a they needed a whole bunch of program management, we pivoted into that we ended up becoming just dominating in that category. We made the displays populate the displays with our boxes and then they put their gift cards into them. And we were doing that for Walmart and all kinds of companies and other little anecdotal story we went into, I flew back with our sales managers To meet with Walmart, we went after the juggler. Walmart is one of our first customers and went to meet with them. We’ve already applied for a patent for gift card 10 boxes Sure, hadn’t been awarded yet. Went into Walmart, Walmart said, these are beautiful. These are great. They’re awesome. But we already have a dozen 10 vendors. They said we probably have a whole pile of 10 in the in the back warehouse that we could just convert into these things. Why should we go with you when we can just go with our existing 10 vendors, we already have relationships there. We’re already doing huge volume, I already get good pricing. And I said well, we’ve got 10, nine patent claims. And one of the patent claims which was the core patent claim was this, the 10 and the dielectric coating on the 10 protected the gift card from being demagnetized. That was the claim. So you’ve put a magnet over over a car It will erase that information, the cards dead. But when the tin box was there, you put it in it and it wouldn’t erase it. And I and I told them about that patent. And they said, Well, we could just go make these ourselves. And I said, Well, if you do, we were gonna have to enforce that patent. Because if we let Walmart do it, everyone is going to do it. So there’ll be treble damages, and we’ll have to come after you guys. We got appeal the next week.
Eric Stopper 40:26
So Walmart, and Amazon and eBay, they’re bullies. Can we just be honest about that? Right? They’re typically bullies and all their buying processes. Yeah. You warm the bully.
Warren Osborn 40:40
Yeah, I did strong on the ball. He was kind of a gutsy move.
Eric Stopper 40:44
And you’re how old at this point like 40 not even something like that.
Warren Osborn 40:47
No, I think I’m
Unknown Speaker 40:50
30 something.
Eric Stopper 40:52
And and what and you just have you had you ever enforced a patent up to that point?
Unknown Speaker 40:57
No.
Eric Stopper 40:58
So you I didn’t even know it enforced to get that and actually, like looked like either. And no, wait for it right for the jugular.
Warren Osborn 41:06
I just said, Yeah, we’re, we’re gonna have to enforce this. And I said, our patent attorney thinks we’re going to get seven of the nine. Well, this buyer didn’t want to have be responsible for a lawsuit on Walmart. So right Ava scipio. And we did hundreds of millions of boxes with it with Walmart over the next few years.
Eric Stopper 41:25
So those display boxes that I see in Walmart right now that are made out of cardboard or whatever, some of them are wood, I think, are those those are see stone we were
Warren Osborn 41:33
we were doing similar displays early on the PowerPoint presentation that I sent you has a whole bunch of the examples of the displays. And I
Eric Stopper 41:42
mean, I feel like I see these now. Like, this is very much the design that I see in these and they just bring it in right on a pallet and it looks really nice.
Warren Osborn 41:50
Yeah, there’s and they’re still selling the similar 10 boxes just with changing up the artwork each year. So one thing you learn is everything you remix. Nobody invents anything completely raw, pure on their own. The plane wasn’t invented by any one company. Google didn’t invent search. Apple didn’t invent the iPhone or the computer. We take the best of the status quo and you improve upon that foundational core. That’s what we did with 10 boxes. We applied it into a new category and provide iterative improvements. So everything is a remix.
Eric Stopper 42:36
So I had john Richards on a few weeks ago, and he’s all about the lean startup, right? That’s his whole chant. Did your team were you walking into hallmarks and Walmart’s and asking people, hey, how do you like this design? How much would you pay for it? were you doing that type of validation?
Warren Osborn 42:53
Oh, yeah, we did a lot of validation where we take it to customers, to friends to families to stores, and we would we’d send these boxes out with the 60 designs, we’d also ask their input, what else would they like to see? into? So yeah, we’re getting there. We’re constantly gathering data this, this leads to another pivot extension. pivoting is critical in entrepreneur ism. Had I never pivoted every one of my businesses would have failed instead of succeeded. So you have to drive but you have to pivot and you have to adapt and times are always changing. So the other market we saw was the motion picture film market. So we went into that we were really good 10 boxes. So we went in and we we made the King Kong tape, but the king tongue 10 for a VHS tape. Sure. Show that we did the friends case a collection of the whole friends serums what we did, we did we did the last we did mash. We did The Incredibles. We did Neil where we put it statue of Neil inside a clear, a clear box with all the series of the matrix inside. And so we became the go to supplier for the collector series Motion Picture films. We did.
Eric Stopper 44:18
Did they still sell these types of collectible items? I could go find one of these Warren Osborn see stone originals? Probably.
Warren Osborn 44:27
Yep. So, I mean, most of these have a shelf life of probably three to six years. But, but their ghost lives on because everything is a remake they pivot off of and they they tweak off of them. Well, one day after we were doing most of the collectible packages for Warner Brothers, Warner Brothers at the time, commanded 33% of the world’s DVD motion picture film, business man and They came to us and they said they were they were just super happy. We had a super great relationship and they said, Ah DVD and or Blu ray is coming. Would you guys please throw your hat in the ring and design a package for that? Wow. All we said sure course and there were dozens of other design firms doing it. We did something different than the other design firms. There’s other design firms were showing PowerPoint presentations, putting up on a computer screen, and so forth. Just illustrations. We went out and made 810 different designs.
Unknown Speaker 45:43
And
Warren Osborn 45:45
we presented Warner Brothers with all of these designs, actual physical samples, so they could choose what they liked and when the difference between being able to open and close and touch and feel our package is why we won that award. We got a five year contract to do exclusive all high definition packaging for Warner Brothers.
Eric Stopper 46:15
A side question that I that I hate to ask but I have to ask. Your family’s grown by this point. Yeah. And you are just still hustling, right? Like making probably hundreds of millions of dollars is as a company and probably as an individual. Did you ever see a stopping point? Did you ever see like, Oh, you know what, like, once I get to here, I’m probably gonna like stop pushing really hard.
Warren Osborn 46:45
I never set I never set that mark, but I wasn’t making a profit of hundreds of millions of dollars. That one’s a little bit high. But we were doing pretty well. I never really found a place at that young age where I do Said I’m ready to stop. Now those thoughts come to mind now as I’m 55 years old, you know what I’m going to open the door can I pause for a moment I’m going to another important thing, innovation within constraints. You have to realize the constraints that you have when you’re innovating. The blu ray disc package was a great example. First of all, it was the blu ray disc package or HD DVD and we didn’t know which one was going to win at the time warner brothers was endorsing HD DVD. So we actually made the package blue for HD DVD maroonish and blue for those who are going after blu ray and then the market was split about 5050 and we didn’t know which one would win. We made all of our moles without the logo. In impressed in it, and then we silkscreen, the logo, a blu ray or HD On top of that, that way, we could use one package for either either channel, but we had some constraints. The retailer’s wanted a dramatically smaller box, particularly Walmart, so they could fit more on the shelf. They wanted like a 33% size reduction in the box. The film studios wanted the package to look more expensive and more valuable, small usually looks cheaper. So those are competing constraints. The studios wanted a lower cost than the prior one. And the assembly houses one of the package that would work on all their billions of dollars of automated equipment. Sure. So we had that we had to do innovation within those four major constraints. And so we made each of these packages work with it. And the ultimate package one on a few things. We put a little bar window at the top that was see through and you could we could it was transparent And you could have blu ray or HD DVD on the top, and there was a little bar window there, we had a theft protection where two little bars inside criss cross each over like this, because Walmart and other retailers, people would squeeze the tape, squeeze the box, pull out, pull out the disk and steal it and put the package back on the cake on the shelf. So we put a theft protection mechanism, we put scratched protection in it, we rounded the edges. So if you look at an old DVD case versus the blu ray case, ours are rounded edges, so it’s much smaller, but it looks way more valuable. We added a locking mechanism, we put a little feature inside where you could put in a little a little pivoting arm, which would hold two other CDs. She could put in three to five DVDs in a box. So
Eric Stopper 49:52
that was that was your company’s innovation as well. The stacks of CDs inside of a single case. Oh yeah. Every everyone has seen those now. Yeah, this the audience that listens to this podcast, they’re very much the product companies, right? These are CEOs, CMOS account managers, people who are interested in doing a better job at what they do. So, I want to I want to take all these lessons, and I want to distill it down for the people who are listening who are thinking, Okay, Warren, you are this like incredible super entrepreneur. I’m some punk kid. I’m 23. I’m going to school right now. I have no idea what to do. You took incremental innovation. And typically what a lot of people will do in this market is they’ll say, okay, what’s the most trending thing on Amazon? Let me go find a manufacturer. Let me go look on Alibaba. And I will just get another one of these and hostel it and I’ll copy it. But from what it sounds like, you would probably encourage people to choose Go and find a trending product, go and find a manufacturer, but then have them add something just a little bit extra, right some incremental innovation that did very,
Warren Osborn 51:09
very well said, at the core, my foundational success and theory comes back exactly to that take something that is really growing something that’s going to be big something that’s got a double digit growth rate, and add one, two or three innovations to it. I actually caution entrepreneurs not to add eight or 10 things at one time. Because if you add 10 things and I add two things, you’re going to take probably five times the time to get your product to market. And I’ll beat you to market and then add more innovation later. So I actually think you’re better off putting all of your resources on one, two or three things For phase one, and then do a 2.0 later and add a few more features then do a 3.0 rather than trying to do too much too early. Sure. That leads us to selling I sold c stone twice I sold the DVD, Blu H, the HD DVD, blu ray packaging contract, and I sold that way too cheap and way too early. This was the third business that I sold, realizing I screwed up Warren, you really blew it. I should have got an investment banker taking it to a worldwide auction. I think I would have got 10 to 25 times more money for the blu ray case. There’s been 2 billion of these made now. Wow, I sold I sold it premature and just because you’re good at packaging doesn’t mean you know diddly squat about selling a business. So get the right counsel or learn A lot when you screw up, which, that’s what I did. So that leads us to the next story. So the gift card packaging business, I was getting offers almost weekly to invest in the business or buy the business in the 90 plus million dollar range. 96 million was typical. This is, you know, just a few year old, less than three years into the gift card packaging business. And I decided I’m not going to do the same mistake I did before. So I went to the top world leading investment bankers, Goldman Sachs, Merrill Lynch, Houlihan, Lokey and all of them wanted to take us to market and we ended up going with houlahan because they had a little bit more consumer product experience. And all of the bankers thought if we went that year and ran a full auction instead of getting 9596 million for the business, they thought we’d get 130 200 40 million for the business by getting running the auction. So I was committed not to make the same mistake. So what happened that year? 2008. Who?
Eric Stopper 54:12
financial crisis? Yeah, Merrill Lynch.
Warren Osborn 54:15
Banks are down 50% 50 Real Estate’s down 50 plus percent. Guess what the gift industry is down 80 to 85%.
Unknown Speaker 54:27
People are feeling it.
Warren Osborn 54:28
I’m selling an accessory for a gift. So instead of you buying 10 gift cards for employees and family you buy to and instead of going over and buying a $3 gift card box for it, you decide, just give them in a one, two Penny envelope.
Eric Stopper 54:46
So back in the back in the gift cards, they go.
Warren Osborn 54:49
Yeah, so we still did 20 million in giftcard cells that year still did 5 million in profit, but we had three Hundred interested parties and over 100 ello eyes in q1. Not one of them could raise $1 in November December to buy that’s
Eric Stopper 55:11
that’s letter of intent for people who don’t know what a ello is.
Warren Osborn 55:14
Yeah. And so it was crazy. So I watched 100 million dollars vaporize, so I’m really good at losing 100 billion dollars in one year because I did it in 2008. Oh,
Eric Stopper 55:26
I hope I never have to say that sentence. I’m really good at losing 100 million dollars in a single year.
Warren Osborn 55:32
Yeah, that there’s not much you could do about it. But, uh, but you’ll learn the thing about failure is you’ll learn I think 10 times more going through a failure and fighting through it, and pivoting out of it and innovating out of it than you do. studying it. At bobsledding. Go ahead.
Eric Stopper 55:53
Well, I had a see, you know, Tom Peterson at BYU. So when I was running my company, Ruby He assessed it right. He looked at it as an investor would. And you know, he told me, Eric, I think you should, I think you should take this business behind the barn. And I think you should put a bullet in its head and move on. And I did not listen. And that company is great. And I think they have a great product now. But at the time, I should have I should have gone for something much easier. We’re talking like an $875,000 investment in the NIH trying to get this like medical device funded. But I didn’t listen. So at what point do you do you put a bullet in the business’s head and move on to the next thing?
Warren Osborn 56:40
Well, there’s a third alternative and that is pivoting out of the business. You see, see stone we pivoted from one to another to another, and each time we got better and stronger and more nimble and faster. And so if we didn’t pivot on each one of these, we would have failed in all Have them
Unknown Speaker 57:00
so pick a good mention and just be open and flexible to pivoting being
Warren Osborn 57:04
open and flexible and pivot fast. So that leads us to the next one we want to talk about. I started a company called soul juice. We didn’t pick the name for it yet. But there’s two. There’s two types of things you can do in business you can solve pain, or you can provide pleasure. It’s easier actually to sell something when you remove pain. Providing pleasure is also a great way to run a to build a business. If you can do both. Your chances of success are dramatically higher. This is a very important learning for a young entrepreneur. I wish I someone would have this talk with me when I was first getting started. Well I saw this is after sea stone. I sold it during the low market week to In March of 2019, the lowest the stock market hit, that’s when I sold c stone. And I won’t say what I sold it for, but it was a tiny fraction of what it would have sold for about a sold at one year earlier. So I saw that most people were running out of battery life on their cell phone, mid day to mid afternoon. And I’m talking super majority, probably 60 75% of
Eric Stopper 58:32
people running I fit that majority.
Warren Osborn 58:34
Yeah, today, they last much longer than they did back then. I saw I saw that the tablet and the cell phone market smartphone market were growing so fast, and they were incredible. Let’s rate them between 95 and 100 on visual quality, on technical quality, but let’s rate them up between them. Five and a 10 on acoustic quality. So I saw pain in two ways battery’s dying, and the sound not even be remotely close to the visual quality. Then tablets were growing like crazy they went from in 2011 50,002,012 122,002,000 1300 and 72,002,016 282 million as the demand. I looked at Apple and I saw they’re really killer sexy aluminum and packaging. People buy on impression more than they buy on fact.
Eric Stopper 59:42
On impression more than they buy on fact so all about customer experience from the beginning to the end, it’s all about
Warren Osborn 59:48
what they perceive your company is so packaging is powerful. Your visual video marketing is powerful. Apple did a genius Move by making their laptops, their phones, their tablets out of anodized aluminum, it just looks twice as valuable is their competition. So I’m sitting one day next to my apple monitor on the screen and it has these beautiful rounded edges over the top and a flat side on the on it and I thought that would be a great design for a speaker. So I cut out a little corner of that of that monitor in my brain. And that’s where I got the idea to launch what ultimately became brave and the portable speaker company. But what was I going to do? I was going to solve the battery dying problem and improve the acoustic quality Those are my two foundational thesis
Eric Stopper 1:00:54
solving the the battery dying for the phone for the fall. Yes create a just a giant Speaker, a giant one like a portable one that’s portable, their phone into
Warren Osborn 1:01:04
correct and we put a USB port in there and file for patents all around the world. We’re awarded worldwide patents for a portable speaker to recharge your cell phone or smartphone device and
Eric Stopper 1:01:17
everybody rips that off now.
Warren Osborn 1:01:19
Now if it’s all ripped off,
Eric Stopper 1:01:20
I’ve seen like, I mean, is there any way to protect it nowadays?
Warren Osborn 1:01:24
it if we were there we would be sending letters and going after the competition because we have unequivocal patents on that. Wow. But we were the first to put a to make a portable speaker a charging device. The name of the company, though was spar and our goal was to sound better than Bose at the same price point, and better than all the competition because my theory was, if we went into mass retailers, my experience was mostly with physical retailers more so than with the Amazon. My Amazon experiences is much Less than brick and mortar stores. My theory was though they test side by side, why would they bring in a new brand that they didn’t even know the name of if it didn’t sound superior? So we said we’re gonna sound better than Bose at each price point. And we got on The Ellen DeGeneres Show and we have Elena generous being recorded. You can even cut this into this audio if you want saying something defective. This is the hottest speaker on the market from spar and we we we were able to get on The Ellen DeGeneres Show we bought Apple iPods, and we gave away a spar speaker together with the Apple iPod to everyone in the studio audience I think that helped us get us on and it looked like a partnership between spar and apple. And Alan saying this the hottest speaker on the market, but it hadn’t even been released yet. Well, the speakers came in right before and the acoustic quality the factory failed to meet our specifications. Bummer. So it still sounded fine, but it didn’t blow you away. So we’ve pre sold 2000 of them to consumers to friends and family. We send them all an email saying we’ll refund your money now or we can send you this and when the new ones come out in four months, we’ll give you a free one.
Unknown Speaker 1:03:29
As easy
Warren Osborn 1:03:30
everyone everyone but one one person one of the refund everyone else
Eric Stopper 1:03:35
1999 people on one Yoker didn’t take the free deal.
Warren Osborn 1:03:40
Yeah, but those people became huge advocates because they got two free speakers for the price to one. Well, not only did the speakers not come in with acoustic quality that met our standards, so we took to the dump, I we could have sold those. They were all pre sold. We could have sold those five times over. But I didn’t think we’d be able to get back into those retailers. So I said, we’re going to take them to the dump and we’re going to retool, go to a new factory and make a better speaker. So we took $700,000 of speakers to the dump. And painful during the same period of time, our sales team went to Europe. And they had over 50 distributors that were interested in carrying spar. But almost all of them said, you got to change the name, because spar means discount budget in Germany. And there’s like 12,000 spar stores over there. And it’s kind of like $1 General 711 store. So we’re gonna launch this highest end aluminum speaker that has extra features that no one else in the world has, and we’re going to call it Dollar General 711 Match really what it was. So nobody in Europe wanted to carry us unless we change the name. So we spent the next month and brainstormed and finally came up with a name bravin we’d already invested $80,000 to buy the name spar I think spar in the US would have been phenomenal. would have gone great in Asia but not in Europe. spar sounds like a friendly wrestle. It’s a four letter word, I think is a great brand. But bravin was phenomenal. And so we relaunched, went to a new factory, and now every speaker that we launched from then on out, sounded better than all competition that we could find to a late year you could look at them and play them side by side and it was it was a clear no brainer. We only launched with three features aluminum, the USB port, and then better sound. We also added a Little bit of durability where we put a silicon shell around one of them. So we’ll be durable. So if you dropped on the floor wouldn’t break. And with those three features bravin took off like a rocket ship.
Eric Stopper 1:06:12
And then and then fast forward right to 2013 I think is when the when the sale of Raven happened. Yeah. And it was which one because it was called the best m&a
Warren Osborn 1:06:26
transaction of the Year for small markets. Yeah.
Eric Stopper 1:06:29
The thing that I think a lot of people are wondering from from you, Warren is how do I become the bravin? Right. And I think you’ve spoken to a lot of those points, right, like fail fast pick niches, incremental innovation, you serendipitously thought of the speaker just looking at your, your Mac. This is an iMac I’m assuming with the nice aluminum front on Yeah, yeah. What else? What’s the other people piece of the recipe that gets somebody to get the best m&a transaction of the year.
Warren Osborn 1:07:04
Well, I found pain and we solved the pain and then we added pleasure. But there was a pivot inside a bravin. We saw that rugged durability side, and that was taking off incrementally stronger than the aluminum office side. And the competition in outdoor speakers was not as intense Bose Bowers and Wilkins they were dominating the office. And so we saw that need and we pivoted into waterproof and shock resistance. So we’re just doing a few million in sales with the original launch. Then we added waterproof in shock resistance. We did YouTube videos around that where we throw a speaker from a four story building, have it bounce on the tar and roll all over and play fine. So we run were run over it with a car and it would play fine. You could drag the speaker down, Provo river or down a canal, throw it into water swimming pool and it would work. That is when it took off and went into the 10s of millions annual run rate. And this is in the first full year business. little example we were the sixth best selling speaker in 2012 in the country might have been the world with only seven months of cells. The first five months we weren’t selling. So we had seven months of cells. And we sold more than the Bose soundlink she because we added incremental innovation to the status quo. So this is something really important on sourcing. I tell almost every entrepreneur that I mentoring this, go in the next 24 hours go and find 50 suppliers communicate with a 50 those suppliers, ask him each 20 to 50 questions, send them a profile of their factory to fill out, ask them where they shipped to what what’s their specialty, how many staff they have, qualify those 50 down to the top 10. Then get on a plane and go visit the top 10 and narrow it down to the top three and then choose people so frequently bumped into one factory think they’re lucky. And they start with that one factory. If I would have done that I’d be dead today.
Eric Stopper 1:09:32
I’m getting broken right now. Thank you. Because of that I picked somebody off of Alibaba to make a phone case plan for me. And it’s funny, I brought a blacksmith international Lance challenger came on and he told me that I was wrong. He said, Just trust her. Get your first round and see how it goes. I’m not that hopeful. And so I think this next time around, I’m gonna be a little bit more careful and go to China. Yeah,
Warren Osborn 1:09:57
yeah, at least even if you don’t go there. At least do two or three phone calls with management. Ask them 50 questions and have a dialogue for a while you can qualify so much through a dialogue.
Eric Stopper 1:10:11
You don’t have to speak Mandarin
Warren Osborn 1:10:13
to go You don’t? Yeah, not at all. Almost all of their sales reps will speak English. So we pivoted a couple other times we added a product called True wireless to our higher end speakers. And we were awarded the MA 2013. Gil the year in 2013. from idea to exit that was 25 months Raven was and that was with a failure of the first launch under the name of spar, right. So most of my competition, most of my competition would develop a speaker from design idea to production would be 16 to 18 months, we would do it in four to five months and then sell the company and just just a little a little under
Eric Stopper 1:10:57
half of the time that it takes them to earn a little little Less than double the time it takes them to actually make the product.
Warren Osborn 1:11:02
So let me answer a question that you were just asking a moment ago about winning principles. Yeah, one, focus, don’t do too much too early and set out to be the best in the world at 123 things. If you’re the best in the world at one thing on Amazon, that everybody else doesn’t have. Everyone who wants that one feature is going to gravitate to your product and you can separate yourself from the pack. Next, passion and speed. I won’t invest in a company if the guys or girl is going to school full time, or if they’re trying to do two businesses at the same time. You’ve got to be in 110%. I don’t say 100% because it takes more than everything you got. It’s everything you got during all the business hours plus the weekend, plus the call to China at 2am
Eric Stopper 1:12:01
Well, sweet speak to those of us who are married, right? Like, Trisha has got to be a trooper, right? She’s,
Warren Osborn 1:12:09
well, what I did is I would come home at 530 or six, and I spent a couple hours with the family. And then I’d go back to work at 830 whenever we went to bed, and I work till 12, one two in the morning, that was typical. So next thing, iterative innovation and evolutionary innovation. Don’t try to build from a white canvas. Now there are some business experts who actually preach the opposite that I very much disagree. If you take something that’s already phenomenal, that has huge market demand, and then you add one or two or three things on top of it to improve it. You can differentiate and stand out and grow like nobody else. Trying to innovate in a white canvas. You’re gonna be like the Wright brothers jumping off a cliff with little flaps on your hands saying I invented the airplane.
Eric Stopper 1:13:09
Yeah I’m I’m of the impression that new ideas died with the internet and that you just you just got to borrow you said remix or what’s already out there. I agree. It’s, it’s a difference between being a Picasso and a savant. Right, savant is this incremental guy. Picasso is just genius on the canvas starting from scratch.
Warren Osborn 1:13:28
Another thing you mentioned on the winning principle is identify and market to your specific customer. We would actually give our customer a name, dress him or her Yeah. and say, This is the person who buys our bravin product and our marketing, our packaging, our innovation, everything was targeting that person.
Eric Stopper 1:13:54
And, and I would in the context of Amazon as well, specifically Let’s say okay, when is that person shopping? Identify the customer and say when do they open their Amazon app? Yeah, what’s going on? Or is it? What kind of colors like do they want to see? What kind of pain are they experiencing, figure that out, and build that into your listing.
Warren Osborn 1:14:16
build that into all your marketing. So wise, I couldn’t agree more. Another one, packaging and marketing, sells and builds a brand. So it’s not just the core engineering inside the product, but it’s also the packaging and the marketing. If those two sound awesome, you will get the customers. If, if the product inside is awesome, you will keep the customer and they’ll buy your 2.0.
Eric Stopper 1:14:41
And they might leave a review. Yeah, exactly. lives and dies by and
Warren Osborn 1:14:46
ugly. Yeah, you’re only Next one. You’re only as strong as your weakest link. So if you build the best product in the world, and it ships from China to the US and the end, the boat sinks in the water, you’re dead. If you have one feature that breaks on most consumer products,
Unknown Speaker 1:15:06
it’s a negative value.
Warren Osborn 1:15:07
It’s a negative review and they return it. Now
another one, target major macro economic and human behavior shifts. You can assess the market and you can see major macroeconomic shifts. So I shifted away from VHS, because I knew that it was going to die.
Eric Stopper 1:15:30
What do you listen to? What do you watch? How do you keep your pulse on the market?
Warren Osborn 1:15:34
Just read a lot, Google a lot back then I was just read a lot. Just find out everything’s going on in the industries that you’re targeting, and just stay up on it. But always be looking for human behavioral shifts, as well as major market economic shifts, and move to align with those shifts. And then be willing to pivot Don’t get so in love with your own idea. Think I’m a genius, I thought of this idea that you just stick with your idea. Because almost nobody has their best idea on 1.0.
Unknown Speaker 1:16:10
I totally agree with that.
Warren Osborn 1:16:12
If I would have stayed with by 1.0, I would have been dead doing high school graduation. That’s like the worst business idea I’ve could ever come up with.
Eric Stopper 1:16:23
But it led you to here. It led me and, Warren, thank you. Thank you so much for everything we’re coming. We’re coming to the end of our time here. There’s a lot that you could still talk about recent investment in the Sikh guys. We’re going to bring them on and have them talk about their augmented reality. I wanted to talk about your, your ALS. So this is this has been. I followed it from the very beginning. And I see you’ve sent me over a deck that had your thesis of ALS and the treatments and percentages. Statistics and all kinds of really robust information that I think anybody in your situation you know, is probably going to be looking for and trying to find a solution and a cure. This it’s it’s life or death obsession. It is. And I have seen that reflected in the stories that you’ve told it like talk about focus, it’s not focus. This is obsessive, wonderfully benevolent, obsessive behavior. Do you tend to do these kind of deep dives and statistics when you’re running a business the same way that you’ve kind of done with ALS and then just kind of, kind of give us some of the background and details of your of your story so far?
Warren Osborn 1:17:40
Very, very similar. I’ve treating my als journey, kind of like I treated my businesses. Failure is not an option. My neurologist told me in May of 2018, after diagnosing me officially with ALS, I pre diagnosed myself as life Having als in January, several months before the neurologists diagnosed me, because all the symptoms pointed to it at the simulations on my arms, my legs, my upper body, muscle twitching all over the place, cramping, muscle spasticity, I had all the symptoms of lower motor neuron death from ALS. So I thought I had als but I wasn’t sure when the neurologist diagnosed me with ALS, asked him how long I had to live and he said 90% of people that have als will die within. You’ve got 18 months to three and a half years to live. Statistically with most of that in a wheelchair, probably not being able to talk not being able to use your arms. And I turned to him because I had been researching like crazy. And stem cells look like a major potential ability. to at least slow the progression of the disease, right? The handheld in many ways,
Eric Stopper 1:19:04
it like reduces the inflammation of those motor neurons. And so they’re they’re one of the
Warren Osborn 1:19:09
Yeah, that’s one of the major benefits. There’s many other benefits. I did a podcast on on these as well, you could reference if you’d like. But I turned to him and I said, I’m really bullish on stem cells, what do you think? And he turned to me and said, quote, there’s not a shred of evidence that stem cells or any alternative treatment works for ALS. Don’t waste your precious time on money on stem cells or any alternative treatment, unquote.
Unknown Speaker 1:19:42
Well, it seems bleak.
Warren Osborn 1:19:44
I was just like, I’m going to be my own doctor. This is what I get.
Unknown Speaker 1:19:50
From one of the times I’m telling Walmart that I’m going to enforce this patent.
Warren Osborn 1:19:54
Exactly. So I decided I’m just gonna do my own research and I’m going to do stem cells. Next day, I booked my first flight to Florida to do stem cell treatments. And I don’t think I got a huge benefit from that because it was umbilical cord stem cells. Since then I’ve, I’ve had 44 stem cell treatments in the last 14 months, probably more than anyone in the world for ALS. And I’ve gone at this crazy in the first six months, I read 30,000 pages I read probably more than 55,000 pages of research now, that’s more than I read from grade school through my MBA combined. So So I’m looking at this thing big.
Eric Stopper 1:20:34
You’re the you’re the foremost
Unknown Speaker 1:20:37
paid any pays per right? Yeah, guinea pig
Eric Stopper 1:20:40
Where Where are we going? It’s it’s 2019 a few days before Christmas as of this recording. I mean, how far are we from from figuring out a solution?
Warren Osborn 1:20:51
I think we’re gonna see a cure for many forms of ALS within the next
Eric Stopper 1:20:58
five years, five years. Where there’s like 100 genes that it affects
Warren Osborn 1:21:02
all there’s so many genes. Als is not one disease. Als is a catchphrase for dying motor neurons. Als is dozens of different diseases, and there’s so many different genes and the genes and the diseases and the triggers all mixed together, the official word and allopathic medicine and we don’t know the cause. We don’t know the reason we have no cure. But a cure is coming. There’s a lot of technology and innovation coming stem cells has been one big thing that I think has dramatically slowed things down. I invested in a company in Salt Lake called clean CLE and he and they have a gold nanoparticle. I’ve been on that now for approaching two months, month, little over a month and a half. And a gold nanoparticle. I’m bullish on that. I’m on another couple other clinical trials. So I’m kind of doing all kinds of stuff and I’m doing phenomenally well, I’ve lost. I’ve atrophied a loss and lost a lot of strength. I have a lot of atrophy in my back, my shoulders, particularly my left arm, my left arm and my triceps the worst. But, but I’m doing so I’m doing super well. Last year in February, I went hell asking for five days. And I’m going again in February this year. Yeah, I see.
Eric Stopper 1:22:26
I see you golfing and playing pickleball with with john Stannah and john Richards all the time. So keep an eye out.
Warren Osborn 1:22:33
Um, yep. So so I’m in a fortunate situation that I can afford the treatments, but also that I have the speed and energy to go at it. I actually believe my passion for speed was the greatest thing that helped me because I treated and slowed things down before I had functional loss. Sure, I think the treatments have kept it from spreading to the brain. motor neurons and other motor neurons and other parts of my body. And so it’s way easier to stop progression than it is to regrow motor neurons or regrow muscle this loss.
Eric Stopper 1:23:11
Same same kind of deal with Alzheimer’s, my grandpa struggling with that right now but man what a what a journey where where do I direct people? I think first first and foremost if you are a consumer product company or software company as well you’re getting into that space in your investments. You, Osborne co.com
Warren Osborn 1:23:33
Osborne co.com and there they can send sending queries in note though the after I got als I believe in focus. So when I’m running a company, I’m not investing in other businesses after I sell a business then I’d typically invest in six to 10 companies a year. Once I got als I stopped investing in new ventures unless it’s aligned with going after a cure for ALS. Oh, interesting. So right now, I’m not looking new deals, okay, do I do coach a few entrepreneurs and mentor a few. And I’m still on the board of multiple different companies and advise multiple companies. But I probably spend about 10 hours a week on my business affairs and I spent about 50 to 60 hours a week, learning about ALS, and seeking to find the cure. And right now, the pace that I’m moving and progressing. I lost a lot last year, from January July last 20 to 30% of my upper body strength. And after doing my protocol, I’ve swallowed over 57,000 doses of supplements. She’s done detoxing and 40 plus stem cell treatments. I started to regain that strength and I regained all that lost strength. Wow, it didn’t last. Earlier this year. In the first nine months, I lost about 20% back in my left arm straight. So the stem cells weren’t active. But they definitely revived, I think, sick dying motor neurons and made them functional again. But I don’t think it actually cured things. So I’m still fighting and but at the pace that I’m progressing right now, I’ve got 10 to 20 years to live. And I think we’re gonna get to a cure in the next five years. Awesome.
Eric Stopper 1:25:21
Warren, thank you so much for coming on the show. It was a delight to have you
Warren Osborn 1:25:26
happy to Thank you. Very, very good chatting with you. Thanks.
