#Transcript of How to Market a Product Idea That Nobody Has Heard Of
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The Gift of Beta Readers
The Gift of Alpha Readers
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The following is a transcript of this episode. For the complete transcript, please visit the show’s website.
[00:00:00] So you did it guys. You have written the next best thing and you are so eager to get this out into the world that you have revised it, you have combed through it, and you have all of these things ready, but nobody has read it yet. So what do you do next? Well, let's find out today on Writing and the Tiny House.
[00:00:26] Hello. Hello. Hello. And welcome back to the show. Welcome to Writing in the Tiny House. I am your host Devin Davis, and I am the guy in the tiny house who is here to show you, you busy adults working a nine to five like me, that it is completely possible for you to write that work of fiction that you have always wanted to do.
[00:01:06] And you should. I just recorded 20 minutes of audio and didn't actually record any of it. So we're starting over and it's fine. Because now I get to say the things that I didn't save very well the first time, and it's okay to start over. We're still learning some of this new recording equipment and that's okay too.
[00:01:26] But many of you know, because I announced in last week's episode that I have been working on some smaller things as a way to get my writing more available, to get my writing into the hands of people who are eager to read it and to do it faster than I could do if I were to just write a book just because the time to produce a book is much longer and there are a million different ways to share your writing with other people.
[00:01:57] So I have been working on some smaller things and I am working on them in conjunction with Krissy Barton from Little Syllables Editing. She is going to be the editor on call or whatever, the editor in this whole project of writing a collection of short stories or novelettes. And so with this, I am writing these smaller works, and I'm going to be releasing them on a schedule, provided all of this works out okay. Right now we are on track with this first thing. And so I expect everything to be okay. And I think that this is something that we can reproduce right now. All of this is tentative stuff though. Like this is not gospel truth yet, but in doing these shorter things, I still need to go through the different steps of writing and revising and cleaning up these smaller works of fiction as I would have to do with a book.
[00:03:07] But because the thing is shorter, all of those steps don't take as long to do, which is kind of cool. It's fun to blaze through some of these different steps a little faster, and to get that progress done faster, to arrive there more quickly. And with this, I also hope to have myself on a regular releasing schedule, which means that there is kind of a stopwatch going for each of these projects.
[00:03:35] And for this first one, I am hoping more than anything. And I am taking a leap announcing this on the podcast that this will be ready for sale by the end of October. I'm going to post it on amazon.com and it will be available to purchase there. It'll be affordable. Don't worry about that. But I wanted so badly to share my writing and I think that I'm going to do it.
[00:04:00] So what I'm doing is this collection of short stories ties into the larger books that I am also in the middle of that I have set aside for the moment. So the world that all those things take place in these smaller short stories will tie into that same world. And this collection is called Tales from Vlaydor, and this is Installment One, which is entitled Brigitte.
[00:04:29] And so, yeah, so we did it. We've written a manuscript. We've gotten, you know, a few revisions under our belts, but if you are like me, perhaps you don't outline things very well. I surely don't, I don't like to outline. I like to write and then make huge revisions to what I've written because I don't like to outline, but for this first installment, I did not get any feedback to begin with on the story itself. I wanted to sit down, I wanted to write the story, revise a couple of things just because I wanted to present it in a good way to a small group of people. So I sat down. I wrote the thing. I revised it a couple times. I sent it through Pro Writing Aid, which by the way, Pro Writing Aid is amazing.
[00:05:19] Especially if you are using Scrivener as your word processor, because it integrates into Scrivener. It was the easiest thing to do. I recommend sending anything you are working on through Pro Writing aid before you let anybody read it, just because the edits were easy to do. And because Pro Writing Aid made it easier to read.
[00:05:42] Everybody seemed to have a better time. Pro Writing Aid does not replace a professional editor, but it is a very good tool to use along the way. So I wrote the thing, I sent it through Pro Writing Aid, and then I gathered in a way, a group of people that I would want to get feedback on this first draft, I guess we can call it a first draft. On this first revision, I guess.
[00:06:09] And this is what we do, this is how we approach this. So I needed to get feedback because first of all, I needed to know if this was a story that anybody wanted to read. I wanted to know also if this was a story that people would be willing to buy, and I needed to know if after reading this, they would be interested in reading more.
[00:06:35] And if the results were such that, no, this story idea is not a good idea. You need to switch to something else. I didn't want to spend so much time and energy on something that nobody would want. And so I would sooner scrap the whole idea and start a fresh with a new story idea rather than try to simply make something work.
[00:07:04] And so, because I'm writing to market because I want this to be sold. And so I want there to be a certain audience appeal. I wanted to make sure that I was on track and on base with the very foundation of this story. So that's what I did first. And I recommend you doing the same thing with your shorter works of fiction also, or with your novels.
[00:07:29] So here's the deal. I'm sure that you have heard the term beta readers a million different times if you are engaged in the writer, community. Beta readers are basically the people who are doing product testing for your book. They get your book and you need to know that the book is working for them as books need to work for readers. Does it keep their attention? Is it easy to read? Is it entertaining? Can they keep track of characters? Can they keep track of places? Do they have a good experience? Are they surprised during the surprising parts? Are they scared during the scary parts, all those things.
[00:08:10] That is what beta reading is for, but there's a big step before that. Some people call it alpha readers. Some people call it, I don't know other stuff, but. I had this concept and I needed to make sure that the concept was okay. So I selected a few of my close friends and another person that I'll get into in order to share ideas.
[00:08:36] So I wrote this novelette called Brigitte. It is about 9,000 words long, and I included just some questions at the end as a prompt, as a way to help people give feedback. And I recommend that you do the same. In a novel I recommend actually that you include things like that in sections of the book, rather than just a big, long list at the end of the book, just as a way to get the gears moving so that people can be inspired or understand how to give feedback, just because, especially in this most recent round of feedback, I have found that so many people read just to be entertained and they don't read critically. And that is fine. And so the little bit of help for that is really good for them. And it's good. It's good to hear all sorts of feedback. I've also found that for many people. So with this story, the vast majority of the feedback was positive.
[00:09:45] People liked the story. It was pretty middle of the road, which is okay. But people liked the story. They thought that it was easy to read. It was easy to get to the end. They weren't confused by people or names or places. And so I took that as a good affirmation or confirmation that I was on the right track with this, and I should move forward.
[00:10:14] And that is great. With many of the people though, the feedback was simply, Hey, this is great. I like it. I would want to read more of things like this. And that feedback is valuable for a specific reason. If that is all they're saying, this is great. I want to read more. While that feedback is not going to help you iron out the kinks and dings and dents in your manuscript. And it's not necessarily going to help you with your craft. It can show you that producing work like this. There are people who want to support your craft. And that is very valuable. So even though the tools aren't there, even though the feedback isn't there to help you get better as a writer, it is really cool to know that people are there to support you as a writer.
[00:11:12] And like I said, that is valuable too. However, with a lot of people, they responded to the questions. And I liked that and I took notes and I paid attention. With those questions though, I found that with many of them, I didn't require seven people to answer each of those questions just because the same answers for many of those questions ended up showing up like seven different times.
[00:11:41] That's okay. We live and we learn. However, there were a couple peers a couple people that read it, took notes, re-read it. And then had a really long conversation with me about how it went about, what was working and what wasn't working. And I'll come back to that in just a second, just because people who are willing to put that type of attention and energy into my work, those are people that I hold near and dear. I mean, everybody who is supporting my work is held near and dear, but those are the people that I will go to with the first ideas, with the baby ideas that I need to grow from, the really underdeveloped things that need to grow that are still vulnerable and still scary and still underdeveloped. And working together we're able to come up with some cooler things for the next revision of this story.
[00:12:47] With this, and I recommend this thing until the day I die. It is important to send your work, especially if you are writing to market, it is important to send your work to someone you don't know, or to many people that you don't know.
[00:13:02] When you are ready for that, you will know. I sent this first revision. I will likely try to find another person that I don't know to read this after this next round of revisions, but here's the reason why. The feedback that a stranger gives you is really hard to take, but it is super honest and it's usually really direct and it's really easy to understand, and that matters my friends.
[00:13:30] These people are not preserving a friendship. And so there is no holding back when it comes to what isn't working, what is confusing, what seems silly, but seems banale or stupid. I mean, what other words did this nice person include? But the points that this person brought to my attention were good points. It was clear that I had not conveyed so much of this story clearly.
[00:14:01] And like I said, because we weren't already friends, there was no reason to pretend like we were friends and try to sugarcoat anything. Most of the stuff that this person told me was really good and really valuable feedback. And so what I was able to do is take the key points from her feed back and talk about them with these other friends who were interested in helping me develop the story.
[00:14:29] So they didn't have to worry about stepping on eggshells. They didn't have to worry about offending. I got to say, oh, this other lady said this and this and this. And they're like, oh yeah, I guess that makes sense. And then we were able to discuss together ways to make it better. So with these conversations, some people tend to kind of freak out about it because they don't know how to have a critique conversation. So with these conversations, it is you and somebody else. And maybe a third person who are trying to improve a specific work. They're trying to make things better. If you or someone is coming to the table just in the attitude of saying this sucks. You need to leave it alone. You need to throw it away.
[00:15:16] Then you're not going to have this conversation with that person, but everybody has the common goal and the common understanding that this work is not finished and we are joining forces to make it better. The way that this conversation unfolds is much of the time the person will have notes. The person will have some ideas, but they don't really know how to get started about it just because Cohesion and hoping that everything links together and thoughts and different things like that.
[00:15:50] But this conversation is not going to be a dissertation. This conversation is not going to be like baring of souls. This conversation is largely brainstorming, which means a lot of the ideas and a lot of the topics don't have to mesh in the most beautiful way throughout the conversation. It's okay to jump from topic to topic.
[00:16:15] It's okay to say, oh, are we done with this? Because on the next page, this completely different problem is there. Let's talk about that now. And through those, I had two friends who were very interested in helping me improve this work of fiction. And that is exactly how the conversation went. They put aside an hour, we had a phone call and we talked about all the things that didn't work.
[00:16:42] And we talked about the things that this stranger critique partner brought to my attention, and we were able to iron out things and bring up some different ideas and some different approaches that I should try to incorporate into the next revision of this work. And that happened to me twice and it was beautiful and I felt enriched at the end and they were excited that they were included with this.
[00:17:11] And it was a really good thing. So I guess the takeaway here is when you are searching for feedback, it is important to help by supplying a list of questions. If it's a person who's already experienced with giving feedback, they likely won't pay much attention to those questions, but a lot of people don't read fiction critically.
[00:17:35] And so they they may need a little help with that. And that's great. Also, if you find those friends who are so engaged and so interested in helping you develop your craft, make sure to keep them near and dear. Take care of those friends. And lastly, If you have the people who say this is good, I want to read more, and then don't say much more than that. That means that you're on the right track and that what you have written is good. And while it may not improve your craft, it shows that there are people in the world who want to support your craft. So that's the quick take home for today.
[00:18:24] Thank you so much for tuning in and listening to this episode. If you wish to become a patron of this writing in the tiny house podcast, go topatreon.com/writinginthetinyhouse. And I will have links to that in the show notes of this episode. Go ahead and follow me on Instagram. My handle is @authordevindavis and on Twitter my handle is@authordevind. And have fun writing. We will see you next time guys. Bye.
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Transcript of How to Market a Product Idea That Nobody Has Heard Of
Transcript of How to Market a Product Idea That Nobody Has Heard Of
Transcript of How to Market a Product Idea That Nobody Has Heard Of written by John Jantsch read more at Duct Tape Marketing
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John Jantsch: Let’s say you have this idea for a product that nobody has ever heard of before. Nobody else has created. This innovation now has blue sky opportunity for you, but…
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Transcript of How to Market a Product Idea That Nobody Has Heard Of
Transcript of How to Market a Product Idea That Nobody Has Heard Of
Transcript of How to Market a Product Idea That Nobody Has Heard Of written by John Jantsch read more at Duct Tape Marketing
Back to Podcast
Transcript
John Jantsch: Let’s say you have this idea for a product that nobody has ever heard of before. Nobody else has created. This innovation now has blue sky opportunity for you, but at the same time, now you’ve got the immense job of educating people about an entire new category of business, both treacherous and intriguing, at the same time.
You’re going to hear from Jonah Lupton, who did just that. He created a company called SoundGuard, which is producing soundproof paint, something nobody else offers, and we talk about his journey.
This episode of the Duct Tape Marketing podcast is sponsored by Podcast Bookers, podcastbookers.com. Podcasts are really hot, right? But you know what’s also really hot? Appearing as a guest on one of the many, many podcasts out there. Think about it. Much easier than writing a guest blog post. You get some high-quality content. You get great backlinks. People want to share that content. Maybe you can even transcribe that content. Being a guest on podcasts, getting yourself booked on podcasts, is a really, really great SEO tactic, great brand-building tactic. Podcast Bookers can get you booked on two, to three, to four podcasts every single month on auto-pilot. Go check it out. PodcastBookers.com.
Hello, and welcome to another episode of the Duct Tape Marketing podcast. This is John Jantsch, and my guest today is Jonah Lupton. He is an entrepreneur, advisor, and also a podcaster, who has started numerous companies and he admits that some were a success and some were failures. He’s currently the founder of a company called SoundGuard.
So, Jonah. Thanks for joining me.
Jonah Lupton: Thank you, John. Appreciate it.
John Jantsch: Give me a little bit about your background. I’m always intrigued. This is from your bio. Started numerous companies. So, tell us I guess the two or three minute version of your entrepreneurial journey.
Jonah Lupton: Absolutely. I actually spend nine years after college working for the Wall Street investment banks, the Morgan Stanleys, the Smith Barneys, managing money for wealthy individuals and non-profits and foundations. Halfway through that, I realized that I wanted to be an entrepreneur, but I couldn’t give up my salary. So, I started figuring out how to launch some projects on the side. My first venture was back in 2007, failed miserably, and I did a couple more while I was still employed, all failed miserably. Then I realized, the only way I’m going to be able to be a successful entrepreneur is if I do it full-time. I can’t do nights and weekends.
So, in 2011, I walked away from the investment business, started another company, and over the last … I guess it’s six years, I started a few different companies. Some were successful. Some were not. Some were in the, let’s see, nutritional supplement space. I did a couple payment startups or fundraising startups like Crowdfunding. Then a couple years ago, when I was just trying to find a solution to my own problem, which was noisy neighbors in an apartment building, and I could not find anything out there that really solved my needs at an affordable price point, that’s when I came up with the idea for soundproof paint, hired some chemists, and for the last two and a half years, we … Well, spent about a year and a half doing product development and testing. Then, we filed all the patents, and now we’ve been live in the market for a few months.
John Jantsch: This is a silly question because it sounds like one of those things that seems obvious enough that someone would’ve tackled it before. Why has nobody tackled soundproof paint?
Jonah Lupton: It’s a good question, and it’s usually the first question I get when I tell someone what I’ve been doing. They all say, “Why isn’t Sherwin-Williams doing this? Or, why isn’t Benjamin Moore? Or PPG? These 30, 40, 50 billion dollar companies, why haven’t they done it?”
I don’t have a good answer. I’d like to think that they’ve tried, and maybe they couldn’t figure it out. Maybe it was just too difficult. I know a lot of those companies … The Silicon Valley … The saying is, “If you want to beat the big boys early on, do things that don’t scale.” I heard that five or six years ago, and that always stuck with me. I think there’s some truth to that ’cause these big paint companies, they want to develop a product, they want to put it on their shelf in their own retail-branded stores, or they want to put it on the shelf at Home Depot and Lowe’s, and they want you to come in and buy it and put it on yourself, so it’s all D.I.Y. That’s not our product. Our product will never be D.I.Y, ’cause it has to be sprayed on by a high-pressure sprayer.
So, maybe that’s one reason, is that they just saw too many headwinds going into this market, but to be honest, I just don’t know. I mean, it was very difficult coming up with a formulation. My guess is we probably tried 20 or 25 different formulations with all types of different pigments and resins and fillers. I don’t come from an engineering background or a chemistry background, so I barely understand half of this stuff. I can’t even pronounce half the things that are in the product. Luckily, I partnered with some really good chemists early on. We figured out after these 20 or 25 formulations that there was a combination of three or four ingredients that, when put together, blocked out the most sound. We put all of those ingredients into this product, of course, meaning I don’t think any other company out there could come up with a product that was as effective as ours without using one of those ingredients and impeding on our patent.
John Jantsch: Well, yeah. When you go out and tell somebody in more of a sales conversation rather than a chemistry conversation, how does this work?
Jonah Lupton: We are blocking or deflecting sound. We are absorbing a little bit of sound. It’s hard to know exactly how much sound is being absorbed, but the majority is certainly being blocked or deflected. Where we see the best use cases for our product are on walls that are separating two spaces. So, you’re blocking the sound from passing through the wall. So, hotel rooms, apartments, condos, town houses, offices, dorms and student housing, those are all the markets that we’re starting off with. So, we’re starting off B2B. We’re selling through our sales reps, through distributors, going directly to the end customer. So, the ownership group of the hotel, the ownership group of the apartment complex. We’re going right to the facilities managers at the universities. I’m talking to two or three very, very large universities about doing all of their dorms in student housing when summer comes along.
John Jantsch: Right now, you are doing … do we call this installing? Or, the application of the … You’re actually doing it with your own people?
Jonah Lupton: No. Right now, and I don’t know if this will be the case in three or four years. It’s hard to know, but at least for now, we are only selling the products. We’re manufacturing and selling the product, and then we partner with contractors to actually install it. We have a training process. Any painting contractor in the country right now that handles commercial projects can fill out our application. We have to do a little bit of due diligence on them. I want to know who are the employees, they all have to go through background checks. I refuse to let some painter go into a hotel with key cards and cause a problem that we could have found if we had just done the appropriate background check. They have to have the right equipment. They have to have the right insurance coverage, and they just have to watch some videos, so they know how this is sprayed and, most importantly, how it’s measured. It’s very important that we get 90 wet mils of product onto the wall.
John Jantsch: I’m just going to ask you, what’s your measurement of success? So, when you go up to somebody and you say, “We’re going to make it soundproof.” Clearly, the wall’s so thick, it’s got so much on it today, it’s got a sound rating of some sort today, so what’s the measure of success for how you make it soundproof?
Jonah Lupton: We do a sound test up-front. That’s part of our … We have a two or three step process before we can even sell them any product. Obviously, we have a lot of leads that come into our website. Sales reps are out there generating leads. We’re going into a lot of different marketing channels to all generate leads. Once we get interest from the property, then we have to diagnose the problem. Is it something that we can help with? Is it a wall problem? Is it room-to-room? If there’s noise … If they’re on a busy intersection in downtown Boston and there’s street noise, that’s a window problem. That’s nothing that we can really help them with. Same thing if people are running up and down the hallways or slamming doors. We can help a little bit with that, but that’s more of a door problem.
So, as long as we diagnose that it’s a wall problem, we need them to send us some pictures. If we think that it’s an appropriate wall, meaning there’s no weird vents or something going from one room to the next, which you see once in a while, but assuming that it’s a project that we want to take on, I would say to one of my sales reps … I have 65 sales reps around the country in every major market. They’d go to the property, take some pictures, make a video, shakes some hands, et cetera, and then they’re going to run their own little amateurish sound test. Each sales rep has a portable speaker system with a built-in amp and Bluetooth and all that. Then they have a class 1 sound level meter, so they can essentially run their own sound test from room to room to determine, at least, how much sound we think is coming through the wall.
From that, I can sort of predict, if we put our product on the wall, how much sound we can essentially take out. In most cases … Well, I should say in all cases, it’s somewhere between 80 and 100%. It averages out around 90% just depending on the loudness of the noise, of course, and then the frequency range. Mid-frequency, we’re the best. We obviously do a great job on the high-end and the low-end, but the higher the frequency, the better we do. The lower stuff is a little bit harder to work with, but we still do.
So, I’d say we’re blocking out 60 to 70% on the low end, and 80, 90, 100% on the high-end.
John Jantsch: Many of the listeners of my show are small business owners and marketers. I know that one of the things that I’m guessing some of them might be thinking is, are their extra challenges in essentially creating a category? I mean, you would think, okay, this is blue sky opportunity out there, but there’s also challenges because nobody’s ever bought soundproof paint before.
Jonah Lupton: Exactly. That is one of the challenges, and that’s why we’re spending a lot of money on PR and brand-awareness and educating the market, and a lot of cold email outreach. I know a lot of people want to call it spam, but at the end of the day, I mean, we really did create a product that solves a problem for the hotels and the apartment buildings. I do believe that some of them want to hear from us, and we can’t get to all of them through conventional Facebook ads and PR and SEO and all that stuff. So, sometimes, we do have to buy some lists of general managers and blast out a cold email, and we actually get some really good response rates. We get great open rates. We get good click-through rates because I think people in these markets are genuinely intrigued by what we can offer them.
Now, and then the challenge is, of course, no one’s ever heard of soundproof paint. No one’s ever used it. There’s very few searches every month for soundproof paint. So, I can’t just create a bunch of content and have a nice website and put it out there and expect people to find us because it’ll take too long. We really have to be aggressive and proactive and go find them, bring them to the website, educate them, engage with them. It is a learning process, especially as we start going into the architect and the interior designers. I mean, we can’t drop them an email and expect to see us spec’d into a project two weeks later. We really have to nurture those relationships for a while, build up their confidence before they feel they can use us on a job, and it’s not going to come back and bite them.
John Jantsch: How much skepticism do you encounter? In other words, somebody saying, “Oh, yeah. Great. No way that works.”
Jonah Lupton: I think there was definitely a lot of skepticism in the last couple years as i was developing the product before I knew or anyone knew if I could actually pull this off. Once we did a project in Connecticut this past summer, and we hired independent acoustical engineers to come on site and do all the testing before and after the treatment, as well as having employees from the hotel in there before and after, it was like … The quote that I actually … I don’t think I put it on the website, but one of the housekeepers actually said to me, “When you start selling this and you start making your millions and you buy your mansion on the beach, can I come be your housekeeper?”
I was blown away. I really was speechless because that was our first real, real-world test. I had no idea how good it was going to do, how good is perform, and the way the acoustical engineer performs the test is similar to what my sales reps do. They bring in their portable amps and speakers. They hook it up. They play white noise at 95 to 100 decibels in one room. Then they go into the next room and they take readings, and this is before we put any product on the wall. So, 95 to 100 decibels in one room was translating to about 75 decibels in the next room. 75 decibels is still very obnoxious. So, if someone was in that room trying to sleep, they would have been very, very annoyed.
Then, we put our product on the wall, three coats, 30 wet mils each, let it dry. We do all that in less than a day. Then the next day, the acoustical engineer came back, and did the same test. We had dropped the decibels from 75 down to 55. At 55 decibels, you almost can’t hear anything unless you get really, really, really close to the wall.
That’s where you do have the perceptions of a soundproofed room.
John Jantsch: What did some of your previous businesses, and you may have not thought about this, but you may have an opinion. What have some of your previous business successes and failures been able to inform you on this venture?
Jonah Lupton: I actually posted about this a couple days ago. I guess it was last week on LinkedIn. I talked about my first failure, which was a company called Social Track back in 2007, when I … I mean, this is the early days of the internet, I guess, for guys like me that are non-technical, and in 2007, I was trying to find a couple co-founders. I knew I had this idea of … I wanted to create a dashboard that aggregated all of your social media feeds into one place. So, you’re Facebook feed, your LinkedIn, your Twitter, your YouTube, all in one pretty, nice-to-read dashboard. You could see all your activity, your connections, and messages, et cetera.
I was bootstrapping it because I was working full-time in the investment business, so I was making 100 grand, 120 grand a year and paying for rent and everything else. At the end of the month, whatever I had left over, I tried to put into Social Track. I found two co-founders literally off of Craigslist. We split up the equity one-third each. I had no idea what a vesting schedule was, so we didn’t do one of those, and quickly realized that neither one of these guys was going to be a good co-founder. They were both working full-time jobs. They were both married. They both had kids. One was getting read to move from Boston to New York, so he wouldn’t be very involved. He still owned a third of the company, and I had no way to really get it back.
I learned a lot of hard, hard lessons, where if you have a great idea and you realize it’s going to take a lot of capital to take that idea to the market and grow it, you have to go out and fundraise. I mean, as much as it sucks giving up equity and the company, that was not the kind of company that I should’ve been trying to bootstrap from the beginning.
Basically, a year after I shut the company down, Hootsuite launched, with essentially the same setup, the same idea, and they’re now a billion and a half dollar company. Not that I necessarily could have grown a Hootsuite. I mean, they’ve executed incredibly well. They have great investors, great employees and everything, but it was just a lesson that, I mean, if you don’t have the right co-founders and you’re not well capitalized, it is very, very, very difficult to scale a company in the technology space.
John Jantsch: I suspect that SoundGuard has been a bit capital intensive.
Jonah Lupton: It was. Yeah. Certainly developing the formula, all the testing. I did not appreciate how expensive all the testing would be, from lab testing to field testing, hiring acoustical engineers, doing fire testing, testing on the ingredients to make sure that we could pass all the EPA standards. We’re considered an environmentally friendly and low VOC product. We’re about 105 grams of hazardous material per liter, and the EPA says you have to be below 250. So, we are well, well below the EPA standards for eco-friendliness, which is good. I mean, that was obviously one of my goals from the beginning. It’s a water-based product.
So, coming up with a environmentally-friendly, water-based product that could block sound that didn’t infringe on any other patents out there, that could be sprayed onto a wall, could dry within two hours, that didn’t sag, that didn’t bubble … I mean, it was not easy, and it was expensive. I mean, in the last year and a half, I’ve probably spent 50 or 60,000 dollars just on legal work. Filing all the patents, having a manufacturing agreement set up and sales rep agreement and warrantees and all that stuff. Probably 50, 60,000 in legal work, 50, 60,000 on testing, 50, 60,000 on product development, maybe more than that, probably more than a 100. It has been expensive. I bootstrapped it with just my personal capital and business loans, more business loans than personal capital. My last couple starters basically wiped out my personal capital.
I went to a couple friends that are not even high net worth, but they just believed in what I was doing and they were willing to take a chance on this before we even had the product. I just did the classic Kevin O’Leary from Shark Tank, like, “Hey, give me $50,000. If this thing actually works and we start producing revenue, I’ll pay you back double your money.” Because a banker’s not going to give me any money. That was my only option. Then once we had the product, we did the test in Connecticut, we knew this stuff actually worked, I went back to them and I said, “Give me another $50,000, but now I’ll pay you 75% return on your money.” Then the last chunk of $50,000 was, “I’ll pay you 50% return on your money.”
Because as we took risk out of the company, obviously I was not willing to pay him the same terms that I was up front.
John Jantsch: What do you ultimately see your team looking like?
Jonah Lupton: I’m in the process of hiring right now. I would say of all the things that we are trying to tackle, hiring is the one that scares me the most. From running my own podcast for a couple years and doing 200 interviews, almost across the board, when I asked the founder, “What’s been the most critical aspect to your success in growth?” And it’s always the people. First, it’s people. Second is focus. So, those are the two things that I’m really, really honing in on is one, don’t get distracted by other meaningless ventures and projects that are going to come my way and two, I have to get the right people in place. I’ve never had to hire at scale before, and that’s what really scares me.
So, I don’t know if I should be trying to do it all myself or if I should try to bring in a part-time recruiter. There’s a couple companies out there that are trying to invest in us or form strategic partnerships. If I did something like that, one of the reasons would be so I could plug in to their HR staff and have their HR team help me hire the right people. We have 65 sales reps across the country, commission only guys, great people, but it’s very hard to get production from them unless you’re right in their face all the time. You’ve got to stay top of mind. I can’t manage 65 sales reps and then we’re probably bringing on another 50 distributors. That’s too many people and relationships for me to manage by myself. I need to hire at least a couple sales manager. I need to hire an operations manager, at least one or two, to help me go around the country and act as a project manager once things are up and running.
Right now, I’m outsourcing everything else. So, bookkeeping’s outsourced, obviously the legal work. I’m currently working with a digital marketing agency. Although, I’m getting ready to hire someone a little bit bigger and better. I’m quarter-backing a lot of things. I’m trying not … I can’t micromanage every little aspect of the company, so I really need to get the right people in place and then act as a manager of managers.
John Jantsch: Do you have, and again, maybe premature to be asking this question, but do you have an end-game in mind, or do you just want to see where this can go?
Jonah Lupton: Yeah. I mean, a little bit of both. I mean, I’ve certainly thought about it. I mean, I’ve put together spreadsheets of projects and everything else that may or may not come to fruition. Right now, with B2B market, like I said, so the hotels, the apartments, et cetera. In five months, we go B2C, so the homeowners, the small business owners, et cetera. I think this year, we can do at least 15 million in revenue, two-thirds of that coming B2B, one-third of that B2C. I think 15 is actually a little bit conservative, and we bring on the right distributors. Right now, I have a couple $250 million companies from Canada, Europe, and Australia asking to be the exclusive distributors in those areas. There’s so many good things that can happen over the next few months that could take that $15 million number up to 20 or 30 million.
I’ll say right now, I mean, I’ve already declined offers for $10 million for the company. It took me all of three seconds to say, “No thanks,” but each of those companies that wants to buy us would also be a great partner for us. Whether they make a strategic investment or whether we put together some sort of a joint venture partnership … I mean, all that stuff’s on the table. I’ll be in Boston all week meeting with a couple companies to discuss those things. VC firms are starting to call me, but right now, I’m just not ready to go down that VC channel. I don’t think it’s every going to make sense for us. I’d rather focus on strategic partnerships and strategic investments from big,..
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John Jantsch: Let’s say you have this idea for a product that nobody has ever heard of before. Nobody else has created. This innovation now has blue sky opportunity for you, but…
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John Jantsch: Let’s say you have this idea for a product that nobody has ever heard of before. Nobody else has created. This innovation now has blue sky opportunity for you, but…
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John Jantsch: Let’s say you have this idea for a product that nobody has ever heard of before. Nobody else has created. This innovation now has blue sky opportunity for you, but at the same time, now you’ve got the immense job of educating people about an entire new category of business, both treacherous and intriguing, at the same time.
You’re going to hear from Jonah Lupton, who did just that. He created a company called SoundGuard, which is producing soundproof paint, something nobody else offers, and we talk about his journey.
This episode of the Duct Tape Marketing podcast is sponsored by Podcast Bookers, podcastbookers.com. Podcasts are really hot, right? But you know what’s also really hot? Appearing as a guest on one of the many, many podcasts out there. Think about it. Much easier than writing a guest blog post. You get some high-quality content. You get great backlinks. People want to share that content. Maybe you can even transcribe that content. Being a guest on podcasts, getting yourself booked on podcasts, is a really, really great SEO tactic, great brand-building tactic. Podcast Bookers can get you booked on two, to three, to four podcasts every single month on auto-pilot. Go check it out. PodcastBookers.com.
Hello, and welcome to another episode of the Duct Tape Marketing podcast. This is John Jantsch, and my guest today is Jonah Lupton. He is an entrepreneur, advisor, and also a podcaster, who has started numerous companies and he admits that some were a success and some were failures. He’s currently the founder of a company called SoundGuard.
So, Jonah. Thanks for joining me.
Jonah Lupton: Thank you, John. Appreciate it.
John Jantsch: Give me a little bit about your background. I’m always intrigued. This is from your bio. Started numerous companies. So, tell us I guess the two or three minute version of your entrepreneurial journey.
Jonah Lupton: Absolutely. I actually spend nine years after college working for the Wall Street investment banks, the Morgan Stanleys, the Smith Barneys, managing money for wealthy individuals and non-profits and foundations. Halfway through that, I realized that I wanted to be an entrepreneur, but I couldn’t give up my salary. So, I started figuring out how to launch some projects on the side. My first venture was back in 2007, failed miserably, and I did a couple more while I was still employed, all failed miserably. Then I realized, the only way I’m going to be able to be a successful entrepreneur is if I do it full-time. I can’t do nights and weekends.
So, in 2011, I walked away from the investment business, started another company, and over the last … I guess it’s six years, I started a few different companies. Some were successful. Some were not. Some were in the, let’s see, nutritional supplement space. I did a couple payment startups or fundraising startups like Crowdfunding. Then a couple years ago, when I was just trying to find a solution to my own problem, which was noisy neighbors in an apartment building, and I could not find anything out there that really solved my needs at an affordable price point, that’s when I came up with the idea for soundproof paint, hired some chemists, and for the last two and a half years, we … Well, spent about a year and a half doing product development and testing. Then, we filed all the patents, and now we’ve been live in the market for a few months.
John Jantsch: This is a silly question because it sounds like one of those things that seems obvious enough that someone would’ve tackled it before. Why has nobody tackled soundproof paint?
Jonah Lupton: It’s a good question, and it’s usually the first question I get when I tell someone what I’ve been doing. They all say, “Why isn’t Sherwin-Williams doing this? Or, why isn’t Benjamin Moore? Or PPG? These 30, 40, 50 billion dollar companies, why haven’t they done it?”
I don’t have a good answer. I’d like to think that they’ve tried, and maybe they couldn’t figure it out. Maybe it was just too difficult. I know a lot of those companies … The Silicon Valley … The saying is, “If you want to beat the big boys early on, do things that don’t scale.” I heard that five or six years ago, and that always stuck with me. I think there’s some truth to that ’cause these big paint companies, they want to develop a product, they want to put it on their shelf in their own retail-branded stores, or they want to put it on the shelf at Home Depot and Lowe’s, and they want you to come in and buy it and put it on yourself, so it’s all D.I.Y. That’s not our product. Our product will never be D.I.Y, ’cause it has to be sprayed on by a high-pressure sprayer.
So, maybe that’s one reason, is that they just saw too many headwinds going into this market, but to be honest, I just don’t know. I mean, it was very difficult coming up with a formulation. My guess is we probably tried 20 or 25 different formulations with all types of different pigments and resins and fillers. I don’t come from an engineering background or a chemistry background, so I barely understand half of this stuff. I can’t even pronounce half the things that are in the product. Luckily, I partnered with some really good chemists early on. We figured out after these 20 or 25 formulations that there was a combination of three or four ingredients that, when put together, blocked out the most sound. We put all of those ingredients into this product, of course, meaning I don’t think any other company out there could come up with a product that was as effective as ours without using one of those ingredients and impeding on our patent.
John Jantsch: Well, yeah. When you go out and tell somebody in more of a sales conversation rather than a chemistry conversation, how does this work?
Jonah Lupton: We are blocking or deflecting sound. We are absorbing a little bit of sound. It’s hard to know exactly how much sound is being absorbed, but the majority is certainly being blocked or deflected. Where we see the best use cases for our product are on walls that are separating two spaces. So, you’re blocking the sound from passing through the wall. So, hotel rooms, apartments, condos, town houses, offices, dorms and student housing, those are all the markets that we’re starting off with. So, we’re starting off B2B. We’re selling through our sales reps, through distributors, going directly to the end customer. So, the ownership group of the hotel, the ownership group of the apartment complex. We’re going right to the facilities managers at the universities. I’m talking to two or three very, very large universities about doing all of their dorms in student housing when summer comes along.
John Jantsch: Right now, you are doing … do we call this installing? Or, the application of the … You’re actually doing it with your own people?
Jonah Lupton: No. Right now, and I don’t know if this will be the case in three or four years. It’s hard to know, but at least for now, we are only selling the products. We’re manufacturing and selling the product, and then we partner with contractors to actually install it. We have a training process. Any painting contractor in the country right now that handles commercial projects can fill out our application. We have to do a little bit of due diligence on them. I want to know who are the employees, they all have to go through background checks. I refuse to let some painter go into a hotel with key cards and cause a problem that we could have found if we had just done the appropriate background check. They have to have the right equipment. They have to have the right insurance coverage, and they just have to watch some videos, so they know how this is sprayed and, most importantly, how it’s measured. It’s very important that we get 90 wet mils of product onto the wall.
John Jantsch: I’m just going to ask you, what’s your measurement of success? So, when you go up to somebody and you say, “We’re going to make it soundproof.” Clearly, the wall’s so thick, it’s got so much on it today, it’s got a sound rating of some sort today, so what’s the measure of success for how you make it soundproof?
Jonah Lupton: We do a sound test up-front. That’s part of our … We have a two or three step process before we can even sell them any product. Obviously, we have a lot of leads that come into our website. Sales reps are out there generating leads. We’re going into a lot of different marketing channels to all generate leads. Once we get interest from the property, then we have to diagnose the problem. Is it something that we can help with? Is it a wall problem? Is it room-to-room? If there’s noise … If they’re on a busy intersection in downtown Boston and there’s street noise, that’s a window problem. That’s nothing that we can really help them with. Same thing if people are running up and down the hallways or slamming doors. We can help a little bit with that, but that’s more of a door problem.
So, as long as we diagnose that it’s a wall problem, we need them to send us some pictures. If we think that it’s an appropriate wall, meaning there’s no weird vents or something going from one room to the next, which you see once in a while, but assuming that it’s a project that we want to take on, I would say to one of my sales reps … I have 65 sales reps around the country in every major market. They’d go to the property, take some pictures, make a video, shakes some hands, et cetera, and then they’re going to run their own little amateurish sound test. Each sales rep has a portable speaker system with a built-in amp and Bluetooth and all that. Then they have a class 1 sound level meter, so they can essentially run their own sound test from room to room to determine, at least, how much sound we think is coming through the wall.
From that, I can sort of predict, if we put our product on the wall, how much sound we can essentially take out. In most cases … Well, I should say in all cases, it’s somewhere between 80 and 100%. It averages out around 90% just depending on the loudness of the noise, of course, and then the frequency range. Mid-frequency, we’re the best. We obviously do a great job on the high-end and the low-end, but the higher the frequency, the better we do. The lower stuff is a little bit harder to work with, but we still do.
So, I’d say we’re blocking out 60 to 70% on the low end, and 80, 90, 100% on the high-end.
John Jantsch: Many of the listeners of my show are small business owners and marketers. I know that one of the things that I’m guessing some of them might be thinking is, are their extra challenges in essentially creating a category? I mean, you would think, okay, this is blue sky opportunity out there, but there’s also challenges because nobody’s ever bought soundproof paint before.
Jonah Lupton: Exactly. That is one of the challenges, and that’s why we’re spending a lot of money on PR and brand-awareness and educating the market, and a lot of cold email outreach. I know a lot of people want to call it spam, but at the end of the day, I mean, we really did create a product that solves a problem for the hotels and the apartment buildings. I do believe that some of them want to hear from us, and we can’t get to all of them through conventional Facebook ads and PR and SEO and all that stuff. So, sometimes, we do have to buy some lists of general managers and blast out a cold email, and we actually get some really good response rates. We get great open rates. We get good click-through rates because I think people in these markets are genuinely intrigued by what we can offer them.
Now, and then the challenge is, of course, no one’s ever heard of soundproof paint. No one’s ever used it. There’s very few searches every month for soundproof paint. So, I can’t just create a bunch of content and have a nice website and put it out there and expect people to find us because it’ll take too long. We really have to be aggressive and proactive and go find them, bring them to the website, educate them, engage with them. It is a learning process, especially as we start going into the architect and the interior designers. I mean, we can’t drop them an email and expect to see us spec’d into a project two weeks later. We really have to nurture those relationships for a while, build up their confidence before they feel they can use us on a job, and it’s not going to come back and bite them.
John Jantsch: How much skepticism do you encounter? In other words, somebody saying, “Oh, yeah. Great. No way that works.”
Jonah Lupton: I think there was definitely a lot of skepticism in the last couple years as i was developing the product before I knew or anyone knew if I could actually pull this off. Once we did a project in Connecticut this past summer, and we hired independent acoustical engineers to come on site and do all the testing before and after the treatment, as well as having employees from the hotel in there before and after, it was like … The quote that I actually … I don’t think I put it on the website, but one of the housekeepers actually said to me, “When you start selling this and you start making your millions and you buy your mansion on the beach, can I come be your housekeeper?”
I was blown away. I really was speechless because that was our first real, real-world test. I had no idea how good it was going to do, how good is perform, and the way the acoustical engineer performs the test is similar to what my sales reps do. They bring in their portable amps and speakers. They hook it up. They play white noise at 95 to 100 decibels in one room. Then they go into the next room and they take readings, and this is before we put any product on the wall. So, 95 to 100 decibels in one room was translating to about 75 decibels in the next room. 75 decibels is still very obnoxious. So, if someone was in that room trying to sleep, they would have been very, very annoyed.
Then, we put our product on the wall, three coats, 30 wet mils each, let it dry. We do all that in less than a day. Then the next day, the acoustical engineer came back, and did the same test. We had dropped the decibels from 75 down to 55. At 55 decibels, you almost can’t hear anything unless you get really, really, really close to the wall.
That’s where you do have the perceptions of a soundproofed room.
John Jantsch: What did some of your previous businesses, and you may have not thought about this, but you may have an opinion. What have some of your previous business successes and failures been able to inform you on this venture?
Jonah Lupton: I actually posted about this a couple days ago. I guess it was last week on LinkedIn. I talked about my first failure, which was a company called Social Track back in 2007, when I … I mean, this is the early days of the internet, I guess, for guys like me that are non-technical, and in 2007, I was trying to find a couple co-founders. I knew I had this idea of … I wanted to create a dashboard that aggregated all of your social media feeds into one place. So, you’re Facebook feed, your LinkedIn, your Twitter, your YouTube, all in one pretty, nice-to-read dashboard. You could see all your activity, your connections, and messages, et cetera.
I was bootstrapping it because I was working full-time in the investment business, so I was making 100 grand, 120 grand a year and paying for rent and everything else. At the end of the month, whatever I had left over, I tried to put into Social Track. I found two co-founders literally off of Craigslist. We split up the equity one-third each. I had no idea what a vesting schedule was, so we didn’t do one of those, and quickly realized that neither one of these guys was going to be a good co-founder. They were both working full-time jobs. They were both married. They both had kids. One was getting read to move from Boston to New York, so he wouldn’t be very involved. He still owned a third of the company, and I had no way to really get it back.
I learned a lot of hard, hard lessons, where if you have a great idea and you realize it’s going to take a lot of capital to take that idea to the market and grow it, you have to go out and fundraise. I mean, as much as it sucks giving up equity and the company, that was not the kind of company that I should’ve been trying to bootstrap from the beginning.
Basically, a year after I shut the company down, Hootsuite launched, with essentially the same setup, the same idea, and they’re now a billion and a half dollar company. Not that I necessarily could have grown a Hootsuite. I mean, they’ve executed incredibly well. They have great investors, great employees and everything, but it was just a lesson that, I mean, if you don’t have the right co-founders and you’re not well capitalized, it is very, very, very difficult to scale a company in the technology space.
John Jantsch: I suspect that SoundGuard has been a bit capital intensive.
Jonah Lupton: It was. Yeah. Certainly developing the formula, all the testing. I did not appreciate how expensive all the testing would be, from lab testing to field testing, hiring acoustical engineers, doing fire testing, testing on the ingredients to make sure that we could pass all the EPA standards. We’re considered an environmentally friendly and low VOC product. We’re about 105 grams of hazardous material per liter, and the EPA says you have to be below 250. So, we are well, well below the EPA standards for eco-friendliness, which is good. I mean, that was obviously one of my goals from the beginning. It’s a water-based product.
So, coming up with a environmentally-friendly, water-based product that could block sound that didn’t infringe on any other patents out there, that could be sprayed onto a wall, could dry within two hours, that didn’t sag, that didn’t bubble … I mean, it was not easy, and it was expensive. I mean, in the last year and a half, I’ve probably spent 50 or 60,000 dollars just on legal work. Filing all the patents, having a manufacturing agreement set up and sales rep agreement and warrantees and all that stuff. Probably 50, 60,000 in legal work, 50, 60,000 on testing, 50, 60,000 on product development, maybe more than that, probably more than a 100. It has been expensive. I bootstrapped it with just my personal capital and business loans, more business loans than personal capital. My last couple starters basically wiped out my personal capital.
I went to a couple friends that are not even high net worth, but they just believed in what I was doing and they were willing to take a chance on this before we even had the product. I just did the classic Kevin O’Leary from Shark Tank, like, “Hey, give me $50,000. If this thing actually works and we start producing revenue, I’ll pay you back double your money.” Because a banker’s not going to give me any money. That was my only option. Then once we had the product, we did the test in Connecticut, we knew this stuff actually worked, I went back to them and I said, “Give me another $50,000, but now I’ll pay you 75% return on your money.” Then the last chunk of $50,000 was, “I’ll pay you 50% return on your money.”
Because as we took risk out of the company, obviously I was not willing to pay him the same terms that I was up front.
John Jantsch: What do you ultimately see your team looking like?
Jonah Lupton: I’m in the process of hiring right now. I would say of all the things that we are trying to tackle, hiring is the one that scares me the most. From running my own podcast for a couple years and doing 200 interviews, almost across the board, when I asked the founder, “What’s been the most critical aspect to your success in growth?” And it’s always the people. First, it’s people. Second is focus. So, those are the two things that I’m really, really honing in on is one, don’t get distracted by other meaningless ventures and projects that are going to come my way and two, I have to get the right people in place. I’ve never had to hire at scale before, and that’s what really scares me.
So, I don’t know if I should be trying to do it all myself or if I should try to bring in a part-time recruiter. There’s a couple companies out there that are trying to invest in us or form strategic partnerships. If I did something like that, one of the reasons would be so I could plug in to their HR staff and have their HR team help me hire the right people. We have 65 sales reps across the country, commission only guys, great people, but it’s very hard to get production from them unless you’re right in their face all the time. You’ve got to stay top of mind. I can’t manage 65 sales reps and then we’re probably bringing on another 50 distributors. That’s too many people and relationships for me to manage by myself. I need to hire at least a couple sales manager. I need to hire an operations manager, at least one or two, to help me go around the country and act as a project manager once things are up and running.
Right now, I’m outsourcing everything else. So, bookkeeping’s outsourced, obviously the legal work. I’m currently working with a digital marketing agency. Although, I’m getting ready to hire someone a little bit bigger and better. I’m quarter-backing a lot of things. I’m trying not … I can’t micromanage every little aspect of the company, so I really need to get the right people in place and then act as a manager of managers.
John Jantsch: Do you have, and again, maybe premature to be asking this question, but do you have an end-game in mind, or do you just want to see where this can go?
Jonah Lupton: Yeah. I mean, a little bit of both. I mean, I’ve certainly thought about it. I mean, I’ve put together spreadsheets of projects and everything else that may or may not come to fruition. Right now, with B2B market, like I said, so the hotels, the apartments, et cetera. In five months, we go B2C, so the homeowners, the small business owners, et cetera. I think this year, we can do at least 15 million in revenue, two-thirds of that coming B2B, one-third of that B2C. I think 15 is actually a little bit conservative, and we bring on the right distributors. Right now, I have a couple $250 million companies from Canada, Europe, and Australia asking to be the exclusive distributors in those areas. There’s so many good things that can happen over the next few months that could take that $15 million number up to 20 or 30 million.
I’ll say right now, I mean, I’ve already declined offers for $10 million for the company. It took me all of three seconds to say, “No thanks,” but each of those companies that wants to buy us would also be a great partner for us. Whether they make a strategic investment or whether we put together some sort of a joint venture partnership … I mean, all that stuff’s on the table. I’ll be in Boston all week meeting with a couple companies to discuss those things. VC firms are starting to call me, but right now, I’m just not ready to go down that VC channel. I don’t think it’s every going to make sense for us. I’d rather focus on strategic partnerships and strategic investments from big,..
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John Jantsch: Let’s say you have this idea for a product that nobody has ever heard of before. Nobody else has created. This innovation now has blue sky opportunity for you, but at the same time, now you’ve got the immense job of educating people about an entire new category of business, both treacherous and intriguing, at the same time.
You’re going to hear from Jonah Lupton, who did just that. He created a company called SoundGuard, which is producing soundproof paint, something nobody else offers, and we talk about his journey.
This episode of the Duct Tape Marketing podcast is sponsored by Podcast Bookers, podcastbookers.com. Podcasts are really hot, right? But you know what’s also really hot? Appearing as a guest on one of the many, many podcasts out there. Think about it. Much easier than writing a guest blog post. You get some high-quality content. You get great backlinks. People want to share that content. Maybe you can even transcribe that content. Being a guest on podcasts, getting yourself booked on podcasts, is a really, really great SEO tactic, great brand-building tactic. Podcast Bookers can get you booked on two, to three, to four podcasts every single month on auto-pilot. Go check it out. PodcastBookers.com.
Hello, and welcome to another episode of the Duct Tape Marketing podcast. This is John Jantsch, and my guest today is Jonah Lupton. He is an entrepreneur, advisor, and also a podcaster, who has started numerous companies and he admits that some were a success and some were failures. He’s currently the founder of a company called SoundGuard.
So, Jonah. Thanks for joining me.
Jonah Lupton: Thank you, John. Appreciate it.
John Jantsch: Give me a little bit about your background. I’m always intrigued. This is from your bio. Started numerous companies. So, tell us I guess the two or three minute version of your entrepreneurial journey.
Jonah Lupton: Absolutely. I actually spend nine years after college working for the Wall Street investment banks, the Morgan Stanleys, the Smith Barneys, managing money for wealthy individuals and non-profits and foundations. Halfway through that, I realized that I wanted to be an entrepreneur, but I couldn’t give up my salary. So, I started figuring out how to launch some projects on the side. My first venture was back in 2007, failed miserably, and I did a couple more while I was still employed, all failed miserably. Then I realized, the only way I’m going to be able to be a successful entrepreneur is if I do it full-time. I can’t do nights and weekends.
So, in 2011, I walked away from the investment business, started another company, and over the last … I guess it’s six years, I started a few different companies. Some were successful. Some were not. Some were in the, let’s see, nutritional supplement space. I did a couple payment startups or fundraising startups like Crowdfunding. Then a couple years ago, when I was just trying to find a solution to my own problem, which was noisy neighbors in an apartment building, and I could not find anything out there that really solved my needs at an affordable price point, that’s when I came up with the idea for soundproof paint, hired some chemists, and for the last two and a half years, we … Well, spent about a year and a half doing product development and testing. Then, we filed all the patents, and now we’ve been live in the market for a few months.
John Jantsch: This is a silly question because it sounds like one of those things that seems obvious enough that someone would’ve tackled it before. Why has nobody tackled soundproof paint?
Jonah Lupton: It’s a good question, and it’s usually the first question I get when I tell someone what I’ve been doing. They all say, “Why isn’t Sherwin-Williams doing this? Or, why isn’t Benjamin Moore? Or PPG? These 30, 40, 50 billion dollar companies, why haven’t they done it?”
I don’t have a good answer. I’d like to think that they’ve tried, and maybe they couldn’t figure it out. Maybe it was just too difficult. I know a lot of those companies … The Silicon Valley … The saying is, “If you want to beat the big boys early on, do things that don’t scale.” I heard that five or six years ago, and that always stuck with me. I think there’s some truth to that ’cause these big paint companies, they want to develop a product, they want to put it on their shelf in their own retail-branded stores, or they want to put it on the shelf at Home Depot and Lowe’s, and they want you to come in and buy it and put it on yourself, so it’s all D.I.Y. That’s not our product. Our product will never be D.I.Y, ’cause it has to be sprayed on by a high-pressure sprayer.
So, maybe that’s one reason, is that they just saw too many headwinds going into this market, but to be honest, I just don’t know. I mean, it was very difficult coming up with a formulation. My guess is we probably tried 20 or 25 different formulations with all types of different pigments and resins and fillers. I don’t come from an engineering background or a chemistry background, so I barely understand half of this stuff. I can’t even pronounce half the things that are in the product. Luckily, I partnered with some really good chemists early on. We figured out after these 20 or 25 formulations that there was a combination of three or four ingredients that, when put together, blocked out the most sound. We put all of those ingredients into this product, of course, meaning I don’t think any other company out there could come up with a product that was as effective as ours without using one of those ingredients and impeding on our patent.
John Jantsch: Well, yeah. When you go out and tell somebody in more of a sales conversation rather than a chemistry conversation, how does this work?
Jonah Lupton: We are blocking or deflecting sound. We are absorbing a little bit of sound. It’s hard to know exactly how much sound is being absorbed, but the majority is certainly being blocked or deflected. Where we see the best use cases for our product are on walls that are separating two spaces. So, you’re blocking the sound from passing through the wall. So, hotel rooms, apartments, condos, town houses, offices, dorms and student housing, those are all the markets that we’re starting off with. So, we’re starting off B2B. We’re selling through our sales reps, through distributors, going directly to the end customer. So, the ownership group of the hotel, the ownership group of the apartment complex. We’re going right to the facilities managers at the universities. I’m talking to two or three very, very large universities about doing all of their dorms in student housing when summer comes along.
John Jantsch: Right now, you are doing … do we call this installing? Or, the application of the … You’re actually doing it with your own people?
Jonah Lupton: No. Right now, and I don’t know if this will be the case in three or four years. It’s hard to know, but at least for now, we are only selling the products. We’re manufacturing and selling the product, and then we partner with contractors to actually install it. We have a training process. Any painting contractor in the country right now that handles commercial projects can fill out our application. We have to do a little bit of due diligence on them. I want to know who are the employees, they all have to go through background checks. I refuse to let some painter go into a hotel with key cards and cause a problem that we could have found if we had just done the appropriate background check. They have to have the right equipment. They have to have the right insurance coverage, and they just have to watch some videos, so they know how this is sprayed and, most importantly, how it’s measured. It’s very important that we get 90 wet mils of product onto the wall.
John Jantsch: I’m just going to ask you, what’s your measurement of success? So, when you go up to somebody and you say, “We’re going to make it soundproof.” Clearly, the wall’s so thick, it’s got so much on it today, it’s got a sound rating of some sort today, so what’s the measure of success for how you make it soundproof?
Jonah Lupton: We do a sound test up-front. That’s part of our … We have a two or three step process before we can even sell them any product. Obviously, we have a lot of leads that come into our website. Sales reps are out there generating leads. We’re going into a lot of different marketing channels to all generate leads. Once we get interest from the property, then we have to diagnose the problem. Is it something that we can help with? Is it a wall problem? Is it room-to-room? If there’s noise … If they’re on a busy intersection in downtown Boston and there’s street noise, that’s a window problem. That’s nothing that we can really help them with. Same thing if people are running up and down the hallways or slamming doors. We can help a little bit with that, but that’s more of a door problem.
So, as long as we diagnose that it’s a wall problem, we need them to send us some pictures. If we think that it’s an appropriate wall, meaning there’s no weird vents or something going from one room to the next, which you see once in a while, but assuming that it’s a project that we want to take on, I would say to one of my sales reps … I have 65 sales reps around the country in every major market. They’d go to the property, take some pictures, make a video, shakes some hands, et cetera, and then they’re going to run their own little amateurish sound test. Each sales rep has a portable speaker system with a built-in amp and Bluetooth and all that. Then they have a class 1 sound level meter, so they can essentially run their own sound test from room to room to determine, at least, how much sound we think is coming through the wall.
From that, I can sort of predict, if we put our product on the wall, how much sound we can essentially take out. In most cases … Well, I should say in all cases, it’s somewhere between 80 and 100%. It averages out around 90% just depending on the loudness of the noise, of course, and then the frequency range. Mid-frequency, we’re the best. We obviously do a great job on the high-end and the low-end, but the higher the frequency, the better we do. The lower stuff is a little bit harder to work with, but we still do.
So, I’d say we’re blocking out 60 to 70% on the low end, and 80, 90, 100% on the high-end.
John Jantsch: Many of the listeners of my show are small business owners and marketers. I know that one of the things that I’m guessing some of them might be thinking is, are their extra challenges in essentially creating a category? I mean, you would think, okay, this is blue sky opportunity out there, but there’s also challenges because nobody’s ever bought soundproof paint before.
Jonah Lupton: Exactly. That is one of the challenges, and that’s why we’re spending a lot of money on PR and brand-awareness and educating the market, and a lot of cold email outreach. I know a lot of people want to call it spam, but at the end of the day, I mean, we really did create a product that solves a problem for the hotels and the apartment buildings. I do believe that some of them want to hear from us, and we can’t get to all of them through conventional Facebook ads and PR and SEO and all that stuff. So, sometimes, we do have to buy some lists of general managers and blast out a cold email, and we actually get some really good response rates. We get great open rates. We get good click-through rates because I think people in these markets are genuinely intrigued by what we can offer them.
Now, and then the challenge is, of course, no one’s ever heard of soundproof paint. No one’s ever used it. There’s very few searches every month for soundproof paint. So, I can’t just create a bunch of content and have a nice website and put it out there and expect people to find us because it’ll take too long. We really have to be aggressive and proactive and go find them, bring them to the website, educate them, engage with them. It is a learning process, especially as we start going into the architect and the interior designers. I mean, we can’t drop them an email and expect to see us spec’d into a project two weeks later. We really have to nurture those relationships for a while, build up their confidence before they feel they can use us on a job, and it’s not going to come back and bite them.
John Jantsch: How much skepticism do you encounter? In other words, somebody saying, “Oh, yeah. Great. No way that works.”
Jonah Lupton: I think there was definitely a lot of skepticism in the last couple years as i was developing the product before I knew or anyone knew if I could actually pull this off. Once we did a project in Connecticut this past summer, and we hired independent acoustical engineers to come on site and do all the testing before and after the treatment, as well as having employees from the hotel in there before and after, it was like … The quote that I actually … I don’t think I put it on the website, but one of the housekeepers actually said to me, “When you start selling this and you start making your millions and you buy your mansion on the beach, can I come be your housekeeper?”
I was blown away. I really was speechless because that was our first real, real-world test. I had no idea how good it was going to do, how good is perform, and the way the acoustical engineer performs the test is similar to what my sales reps do. They bring in their portable amps and speakers. They hook it up. They play white noise at 95 to 100 decibels in one room. Then they go into the next room and they take readings, and this is before we put any product on the wall. So, 95 to 100 decibels in one room was translating to about 75 decibels in the next room. 75 decibels is still very obnoxious. So, if someone was in that room trying to sleep, they would have been very, very annoyed.
Then, we put our product on the wall, three coats, 30 wet mils each, let it dry. We do all that in less than a day. Then the next day, the acoustical engineer came back, and did the same test. We had dropped the decibels from 75 down to 55. At 55 decibels, you almost can’t hear anything unless you get really, really, really close to the wall.
That’s where you do have the perceptions of a soundproofed room.
John Jantsch: What did some of your previous businesses, and you may have not thought about this, but you may have an opinion. What have some of your previous business successes and failures been able to inform you on this venture?
Jonah Lupton: I actually posted about this a couple days ago. I guess it was last week on LinkedIn. I talked about my first failure, which was a company called Social Track back in 2007, when I … I mean, this is the early days of the internet, I guess, for guys like me that are non-technical, and in 2007, I was trying to find a couple co-founders. I knew I had this idea of … I wanted to create a dashboard that aggregated all of your social media feeds into one place. So, you’re Facebook feed, your LinkedIn, your Twitter, your YouTube, all in one pretty, nice-to-read dashboard. You could see all your activity, your connections, and messages, et cetera.
I was bootstrapping it because I was working full-time in the investment business, so I was making 100 grand, 120 grand a year and paying for rent and everything else. At the end of the month, whatever I had left over, I tried to put into Social Track. I found two co-founders literally off of Craigslist. We split up the equity one-third each. I had no idea what a vesting schedule was, so we didn’t do one of those, and quickly realized that neither one of these guys was going to be a good co-founder. They were both working full-time jobs. They were both married. They both had kids. One was getting read to move from Boston to New York, so he wouldn’t be very involved. He still owned a third of the company, and I had no way to really get it back.
I learned a lot of hard, hard lessons, where if you have a great idea and you realize it’s going to take a lot of capital to take that idea to the market and grow it, you have to go out and fundraise. I mean, as much as it sucks giving up equity and the company, that was not the kind of company that I should’ve been trying to bootstrap from the beginning.
Basically, a year after I shut the company down, Hootsuite launched, with essentially the same setup, the same idea, and they’re now a billion and a half dollar company. Not that I necessarily could have grown a Hootsuite. I mean, they’ve executed incredibly well. They have great investors, great employees and everything, but it was just a lesson that, I mean, if you don’t have the right co-founders and you’re not well capitalized, it is very, very, very difficult to scale a company in the technology space.
John Jantsch: I suspect that SoundGuard has been a bit capital intensive.
Jonah Lupton: It was. Yeah. Certainly developing the formula, all the testing. I did not appreciate how expensive all the testing would be, from lab testing to field testing, hiring acoustical engineers, doing fire testing, testing on the ingredients to make sure that we could pass all the EPA standards. We’re considered an environmentally friendly and low VOC product. We’re about 105 grams of hazardous material per liter, and the EPA says you have to be below 250. So, we are well, well below the EPA standards for eco-friendliness, which is good. I mean, that was obviously one of my goals from the beginning. It’s a water-based product.
So, coming up with a environmentally-friendly, water-based product that could block sound that didn’t infringe on any other patents out there, that could be sprayed onto a wall, could dry within two hours, that didn’t sag, that didn’t bubble … I mean, it was not easy, and it was expensive. I mean, in the last year and a half, I’ve probably spent 50 or 60,000 dollars just on legal work. Filing all the patents, having a manufacturing agreement set up and sales rep agreement and warrantees and all that stuff. Probably 50, 60,000 in legal work, 50, 60,000 on testing, 50, 60,000 on product development, maybe more than that, probably more than a 100. It has been expensive. I bootstrapped it with just my personal capital and business loans, more business loans than personal capital. My last couple starters basically wiped out my personal capital.
I went to a couple friends that are not even high net worth, but they just believed in what I was doing and they were willing to take a chance on this before we even had the product. I just did the classic Kevin O’Leary from Shark Tank, like, “Hey, give me $50,000. If this thing actually works and we start producing revenue, I’ll pay you back double your money.” Because a banker’s not going to give me any money. That was my only option. Then once we had the product, we did the test in Connecticut, we knew this stuff actually worked, I went back to them and I said, “Give me another $50,000, but now I’ll pay you 75% return on your money.” Then the last chunk of $50,000 was, “I’ll pay you 50% return on your money.”
Because as we took risk out of the company, obviously I was not willing to pay him the same terms that I was up front.
John Jantsch: What do you ultimately see your team looking like?
Jonah Lupton: I’m in the process of hiring right now. I would say of all the things that we are trying to tackle, hiring is the one that scares me the most. From running my own podcast for a couple years and doing 200 interviews, almost across the board, when I asked the founder, “What’s been the most critical aspect to your success in growth?” And it’s always the people. First, it’s people. Second is focus. So, those are the two things that I’m really, really honing in on is one, don’t get distracted by other meaningless ventures and projects that are going to come my way and two, I have to get the right people in place. I’ve never had to hire at scale before, and that’s what really scares me.
So, I don’t know if I should be trying to do it all myself or if I should try to bring in a part-time recruiter. There’s a couple companies out there that are trying to invest in us or form strategic partnerships. If I did something like that, one of the reasons would be so I could plug in to their HR staff and have their HR team help me hire the right people. We have 65 sales reps across the country, commission only guys, great people, but it’s very hard to get production from them unless you’re right in their face all the time. You’ve got to stay top of mind. I can’t manage 65 sales reps and then we’re probably bringing on another 50 distributors. That’s too many people and relationships for me to manage by myself. I need to hire at least a couple sales manager. I need to hire an operations manager, at least one or two, to help me go around the country and act as a project manager once things are up and running.
Right now, I’m outsourcing everything else. So, bookkeeping’s outsourced, obviously the legal work. I’m currently working with a digital marketing agency. Although, I’m getting ready to hire someone a little bit bigger and better. I’m quarter-backing a lot of things. I’m trying not … I can’t micromanage every little aspect of the company, so I really need to get the right people in place and then act as a manager of managers.
John Jantsch: Do you have, and again, maybe premature to be asking this question, but do you have an end-game in mind, or do you just want to see where this can go?
Jonah Lupton: Yeah. I mean, a little bit of both. I mean, I’ve certainly thought about it. I mean, I’ve put together spreadsheets of projects and everything else that may or may not come to fruition. Right now, with B2B market, like I said, so the hotels, the apartments, et cetera. In five months, we go B2C, so the homeowners, the small business owners, et cetera. I think this year, we can do at least 15 million in revenue, two-thirds of that coming B2B, one-third of that B2C. I think 15 is actually a little bit conservative, and we bring on the right distributors. Right now, I have a couple $250 million companies from Canada, Europe, and Australia asking to be the exclusive distributors in those areas. There’s so many good things that can happen over the next few months that could take that $15 million number up to 20 or 30 million.
I’ll say right now, I mean, I’ve already declined offers for $10 million for the company. It took me all of three seconds to say, “No thanks,” but each of those companies that wants to buy us would also be a great partner for us. Whether they make a strategic investment or whether we put together some sort of a joint venture partnership … I mean, all that stuff’s on the table. I’ll be in Boston all week meeting with a couple companies to discuss those things. VC firms are starting to call me, but right now, I’m just not ready to go down that VC channel. I don’t think it’s every going to make sense for us. I’d rather focus on strategic partnerships and strategic investments from big,..
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Transcript of How to Market a Product Idea That Nobody Has Heard Of
Transcript of How to Market a Product Idea That Nobody Has Heard Of
Transcript of How to Market a Product Idea That Nobody Has Heard Of written by John Jantsch read more at Duct Tape Marketing
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John Jantsch: Let’s say you have this idea for a product that nobody has ever heard of before. Nobody else has created. This innovation now has blue sky opportunity for you, but at the same time, now you’ve got the immense job of educating people about an entire new category of business, both treacherous and intriguing, at the same time.
You’re going to hear from Jonah Lupton, who did just that. He created a company called SoundGuard, which is producing soundproof paint, something nobody else offers, and we talk about his journey.
This episode of the Duct Tape Marketing podcast is sponsored by Podcast Bookers, podcastbookers.com. Podcasts are really hot, right? But you know what’s also really hot? Appearing as a guest on one of the many, many podcasts out there. Think about it. Much easier than writing a guest blog post. You get some high-quality content. You get great backlinks. People want to share that content. Maybe you can even transcribe that content. Being a guest on podcasts, getting yourself booked on podcasts, is a really, really great SEO tactic, great brand-building tactic. Podcast Bookers can get you booked on two, to three, to four podcasts every single month on auto-pilot. Go check it out. PodcastBookers.com.
Hello, and welcome to another episode of the Duct Tape Marketing podcast. This is John Jantsch, and my guest today is Jonah Lupton. He is an entrepreneur, advisor, and also a podcaster, who has started numerous companies and he admits that some were a success and some were failures. He’s currently the founder of a company called SoundGuard.
So, Jonah. Thanks for joining me.
Jonah Lupton: Thank you, John. Appreciate it.
John Jantsch: Give me a little bit about your background. I’m always intrigued. This is from your bio. Started numerous companies. So, tell us I guess the two or three minute version of your entrepreneurial journey.
Jonah Lupton: Absolutely. I actually spend nine years after college working for the Wall Street investment banks, the Morgan Stanleys, the Smith Barneys, managing money for wealthy individuals and non-profits and foundations. Halfway through that, I realized that I wanted to be an entrepreneur, but I couldn’t give up my salary. So, I started figuring out how to launch some projects on the side. My first venture was back in 2007, failed miserably, and I did a couple more while I was still employed, all failed miserably. Then I realized, the only way I’m going to be able to be a successful entrepreneur is if I do it full-time. I can’t do nights and weekends.
So, in 2011, I walked away from the investment business, started another company, and over the last … I guess it’s six years, I started a few different companies. Some were successful. Some were not. Some were in the, let’s see, nutritional supplement space. I did a couple payment startups or fundraising startups like Crowdfunding. Then a couple years ago, when I was just trying to find a solution to my own problem, which was noisy neighbors in an apartment building, and I could not find anything out there that really solved my needs at an affordable price point, that’s when I came up with the idea for soundproof paint, hired some chemists, and for the last two and a half years, we … Well, spent about a year and a half doing product development and testing. Then, we filed all the patents, and now we’ve been live in the market for a few months.
John Jantsch: This is a silly question because it sounds like one of those things that seems obvious enough that someone would’ve tackled it before. Why has nobody tackled soundproof paint?
Jonah Lupton: It’s a good question, and it’s usually the first question I get when I tell someone what I’ve been doing. They all say, “Why isn’t Sherwin-Williams doing this? Or, why isn’t Benjamin Moore? Or PPG? These 30, 40, 50 billion dollar companies, why haven’t they done it?”
I don’t have a good answer. I’d like to think that they’ve tried, and maybe they couldn’t figure it out. Maybe it was just too difficult. I know a lot of those companies … The Silicon Valley … The saying is, “If you want to beat the big boys early on, do things that don’t scale.” I heard that five or six years ago, and that always stuck with me. I think there’s some truth to that ’cause these big paint companies, they want to develop a product, they want to put it on their shelf in their own retail-branded stores, or they want to put it on the shelf at Home Depot and Lowe’s, and they want you to come in and buy it and put it on yourself, so it’s all D.I.Y. That’s not our product. Our product will never be D.I.Y, ’cause it has to be sprayed on by a high-pressure sprayer.
So, maybe that’s one reason, is that they just saw too many headwinds going into this market, but to be honest, I just don’t know. I mean, it was very difficult coming up with a formulation. My guess is we probably tried 20 or 25 different formulations with all types of different pigments and resins and fillers. I don’t come from an engineering background or a chemistry background, so I barely understand half of this stuff. I can’t even pronounce half the things that are in the product. Luckily, I partnered with some really good chemists early on. We figured out after these 20 or 25 formulations that there was a combination of three or four ingredients that, when put together, blocked out the most sound. We put all of those ingredients into this product, of course, meaning I don’t think any other company out there could come up with a product that was as effective as ours without using one of those ingredients and impeding on our patent.
John Jantsch: Well, yeah. When you go out and tell somebody in more of a sales conversation rather than a chemistry conversation, how does this work?
Jonah Lupton: We are blocking or deflecting sound. We are absorbing a little bit of sound. It’s hard to know exactly how much sound is being absorbed, but the majority is certainly being blocked or deflected. Where we see the best use cases for our product are on walls that are separating two spaces. So, you’re blocking the sound from passing through the wall. So, hotel rooms, apartments, condos, town houses, offices, dorms and student housing, those are all the markets that we’re starting off with. So, we’re starting off B2B. We’re selling through our sales reps, through distributors, going directly to the end customer. So, the ownership group of the hotel, the ownership group of the apartment complex. We’re going right to the facilities managers at the universities. I’m talking to two or three very, very large universities about doing all of their dorms in student housing when summer comes along.
John Jantsch: Right now, you are doing … do we call this installing? Or, the application of the … You’re actually doing it with your own people?
Jonah Lupton: No. Right now, and I don’t know if this will be the case in three or four years. It’s hard to know, but at least for now, we are only selling the products. We’re manufacturing and selling the product, and then we partner with contractors to actually install it. We have a training process. Any painting contractor in the country right now that handles commercial projects can fill out our application. We have to do a little bit of due diligence on them. I want to know who are the employees, they all have to go through background checks. I refuse to let some painter go into a hotel with key cards and cause a problem that we could have found if we had just done the appropriate background check. They have to have the right equipment. They have to have the right insurance coverage, and they just have to watch some videos, so they know how this is sprayed and, most importantly, how it’s measured. It’s very important that we get 90 wet mils of product onto the wall.
John Jantsch: I’m just going to ask you, what’s your measurement of success? So, when you go up to somebody and you say, “We’re going to make it soundproof.” Clearly, the wall’s so thick, it’s got so much on it today, it’s got a sound rating of some sort today, so what’s the measure of success for how you make it soundproof?
Jonah Lupton: We do a sound test up-front. That’s part of our … We have a two or three step process before we can even sell them any product. Obviously, we have a lot of leads that come into our website. Sales reps are out there generating leads. We’re going into a lot of different marketing channels to all generate leads. Once we get interest from the property, then we have to diagnose the problem. Is it something that we can help with? Is it a wall problem? Is it room-to-room? If there’s noise … If they’re on a busy intersection in downtown Boston and there’s street noise, that’s a window problem. That’s nothing that we can really help them with. Same thing if people are running up and down the hallways or slamming doors. We can help a little bit with that, but that’s more of a door problem.
So, as long as we diagnose that it’s a wall problem, we need them to send us some pictures. If we think that it’s an appropriate wall, meaning there’s no weird vents or something going from one room to the next, which you see once in a while, but assuming that it’s a project that we want to take on, I would say to one of my sales reps … I have 65 sales reps around the country in every major market. They’d go to the property, take some pictures, make a video, shakes some hands, et cetera, and then they’re going to run their own little amateurish sound test. Each sales rep has a portable speaker system with a built-in amp and Bluetooth and all that. Then they have a class 1 sound level meter, so they can essentially run their own sound test from room to room to determine, at least, how much sound we think is coming through the wall.
From that, I can sort of predict, if we put our product on the wall, how much sound we can essentially take out. In most cases … Well, I should say in all cases, it’s somewhere between 80 and 100%. It averages out around 90% just depending on the loudness of the noise, of course, and then the frequency range. Mid-frequency, we’re the best. We obviously do a great job on the high-end and the low-end, but the higher the frequency, the better we do. The lower stuff is a little bit harder to work with, but we still do.
So, I’d say we’re blocking out 60 to 70% on the low end, and 80, 90, 100% on the high-end.
John Jantsch: Many of the listeners of my show are small business owners and marketers. I know that one of the things that I’m guessing some of them might be thinking is, are their extra challenges in essentially creating a category? I mean, you would think, okay, this is blue sky opportunity out there, but there’s also challenges because nobody’s ever bought soundproof paint before.
Jonah Lupton: Exactly. That is one of the challenges, and that’s why we’re spending a lot of money on PR and brand-awareness and educating the market, and a lot of cold email outreach. I know a lot of people want to call it spam, but at the end of the day, I mean, we really did create a product that solves a problem for the hotels and the apartment buildings. I do believe that some of them want to hear from us, and we can’t get to all of them through conventional Facebook ads and PR and SEO and all that stuff. So, sometimes, we do have to buy some lists of general managers and blast out a cold email, and we actually get some really good response rates. We get great open rates. We get good click-through rates because I think people in these markets are genuinely intrigued by what we can offer them.
Now, and then the challenge is, of course, no one’s ever heard of soundproof paint. No one’s ever used it. There’s very few searches every month for soundproof paint. So, I can’t just create a bunch of content and have a nice website and put it out there and expect people to find us because it’ll take too long. We really have to be aggressive and proactive and go find them, bring them to the website, educate them, engage with them. It is a learning process, especially as we start going into the architect and the interior designers. I mean, we can’t drop them an email and expect to see us spec’d into a project two weeks later. We really have to nurture those relationships for a while, build up their confidence before they feel they can use us on a job, and it’s not going to come back and bite them.
John Jantsch: How much skepticism do you encounter? In other words, somebody saying, “Oh, yeah. Great. No way that works.”
Jonah Lupton: I think there was definitely a lot of skepticism in the last couple years as i was developing the product before I knew or anyone knew if I could actually pull this off. Once we did a project in Connecticut this past summer, and we hired independent acoustical engineers to come on site and do all the testing before and after the treatment, as well as having employees from the hotel in there before and after, it was like … The quote that I actually … I don’t think I put it on the website, but one of the housekeepers actually said to me, “When you start selling this and you start making your millions and you buy your mansion on the beach, can I come be your housekeeper?”
I was blown away. I really was speechless because that was our first real, real-world test. I had no idea how good it was going to do, how good is perform, and the way the acoustical engineer performs the test is similar to what my sales reps do. They bring in their portable amps and speakers. They hook it up. They play white noise at 95 to 100 decibels in one room. Then they go into the next room and they take readings, and this is before we put any product on the wall. So, 95 to 100 decibels in one room was translating to about 75 decibels in the next room. 75 decibels is still very obnoxious. So, if someone was in that room trying to sleep, they would have been very, very annoyed.
Then, we put our product on the wall, three coats, 30 wet mils each, let it dry. We do all that in less than a day. Then the next day, the acoustical engineer came back, and did the same test. We had dropped the decibels from 75 down to 55. At 55 decibels, you almost can’t hear anything unless you get really, really, really close to the wall.
That’s where you do have the perceptions of a soundproofed room.
John Jantsch: What did some of your previous businesses, and you may have not thought about this, but you may have an opinion. What have some of your previous business successes and failures been able to inform you on this venture?
Jonah Lupton: I actually posted about this a couple days ago. I guess it was last week on LinkedIn. I talked about my first failure, which was a company called Social Track back in 2007, when I … I mean, this is the early days of the internet, I guess, for guys like me that are non-technical, and in 2007, I was trying to find a couple co-founders. I knew I had this idea of … I wanted to create a dashboard that aggregated all of your social media feeds into one place. So, you’re Facebook feed, your LinkedIn, your Twitter, your YouTube, all in one pretty, nice-to-read dashboard. You could see all your activity, your connections, and messages, et cetera.
I was bootstrapping it because I was working full-time in the investment business, so I was making 100 grand, 120 grand a year and paying for rent and everything else. At the end of the month, whatever I had left over, I tried to put into Social Track. I found two co-founders literally off of Craigslist. We split up the equity one-third each. I had no idea what a vesting schedule was, so we didn’t do one of those, and quickly realized that neither one of these guys was going to be a good co-founder. They were both working full-time jobs. They were both married. They both had kids. One was getting read to move from Boston to New York, so he wouldn’t be very involved. He still owned a third of the company, and I had no way to really get it back.
I learned a lot of hard, hard lessons, where if you have a great idea and you realize it’s going to take a lot of capital to take that idea to the market and grow it, you have to go out and fundraise. I mean, as much as it sucks giving up equity and the company, that was not the kind of company that I should’ve been trying to bootstrap from the beginning.
Basically, a year after I shut the company down, Hootsuite launched, with essentially the same setup, the same idea, and they’re now a billion and a half dollar company. Not that I necessarily could have grown a Hootsuite. I mean, they’ve executed incredibly well. They have great investors, great employees and everything, but it was just a lesson that, I mean, if you don’t have the right co-founders and you’re not well capitalized, it is very, very, very difficult to scale a company in the technology space.
John Jantsch: I suspect that SoundGuard has been a bit capital intensive.
Jonah Lupton: It was. Yeah. Certainly developing the formula, all the testing. I did not appreciate how expensive all the testing would be, from lab testing to field testing, hiring acoustical engineers, doing fire testing, testing on the ingredients to make sure that we could pass all the EPA standards. We’re considered an environmentally friendly and low VOC product. We’re about 105 grams of hazardous material per liter, and the EPA says you have to be below 250. So, we are well, well below the EPA standards for eco-friendliness, which is good. I mean, that was obviously one of my goals from the beginning. It’s a water-based product.
So, coming up with a environmentally-friendly, water-based product that could block sound that didn’t infringe on any other patents out there, that could be sprayed onto a wall, could dry within two hours, that didn’t sag, that didn’t bubble … I mean, it was not easy, and it was expensive. I mean, in the last year and a half, I’ve probably spent 50 or 60,000 dollars just on legal work. Filing all the patents, having a manufacturing agreement set up and sales rep agreement and warrantees and all that stuff. Probably 50, 60,000 in legal work, 50, 60,000 on testing, 50, 60,000 on product development, maybe more than that, probably more than a 100. It has been expensive. I bootstrapped it with just my personal capital and business loans, more business loans than personal capital. My last couple starters basically wiped out my personal capital.
I went to a couple friends that are not even high net worth, but they just believed in what I was doing and they were willing to take a chance on this before we even had the product. I just did the classic Kevin O’Leary from Shark Tank, like, “Hey, give me $50,000. If this thing actually works and we start producing revenue, I’ll pay you back double your money.” Because a banker’s not going to give me any money. That was my only option. Then once we had the product, we did the test in Connecticut, we knew this stuff actually worked, I went back to them and I said, “Give me another $50,000, but now I’ll pay you 75% return on your money.” Then the last chunk of $50,000 was, “I’ll pay you 50% return on your money.”
Because as we took risk out of the company, obviously I was not willing to pay him the same terms that I was up front.
John Jantsch: What do you ultimately see your team looking like?
Jonah Lupton: I’m in the process of hiring right now. I would say of all the things that we are trying to tackle, hiring is the one that scares me the most. From running my own podcast for a couple years and doing 200 interviews, almost across the board, when I asked the founder, “What’s been the most critical aspect to your success in growth?” And it’s always the people. First, it’s people. Second is focus. So, those are the two things that I’m really, really honing in on is one, don’t get distracted by other meaningless ventures and projects that are going to come my way and two, I have to get the right people in place. I’ve never had to hire at scale before, and that’s what really scares me.
So, I don’t know if I should be trying to do it all myself or if I should try to bring in a part-time recruiter. There’s a couple companies out there that are trying to invest in us or form strategic partnerships. If I did something like that, one of the reasons would be so I could plug in to their HR staff and have their HR team help me hire the right people. We have 65 sales reps across the country, commission only guys, great people, but it’s very hard to get production from them unless you’re right in their face all the time. You’ve got to stay top of mind. I can’t manage 65 sales reps and then we’re probably bringing on another 50 distributors. That’s too many people and relationships for me to manage by myself. I need to hire at least a couple sales manager. I need to hire an operations manager, at least one or two, to help me go around the country and act as a project manager once things are up and running.
Right now, I’m outsourcing everything else. So, bookkeeping’s outsourced, obviously the legal work. I’m currently working with a digital marketing agency. Although, I’m getting ready to hire someone a little bit bigger and better. I’m quarter-backing a lot of things. I’m trying not … I can’t micromanage every little aspect of the company, so I really need to get the right people in place and then act as a manager of managers.
John Jantsch: Do you have, and again, maybe premature to be asking this question, but do you have an end-game in mind, or do you just want to see where this can go?
Jonah Lupton: Yeah. I mean, a little bit of both. I mean, I’ve certainly thought about it. I mean, I’ve put together spreadsheets of projects and everything else that may or may not come to fruition. Right now, with B2B market, like I said, so the hotels, the apartments, et cetera. In five months, we go B2C, so the homeowners, the small business owners, et cetera. I think this year, we can do at least 15 million in revenue, two-thirds of that coming B2B, one-third of that B2C. I think 15 is actually a little bit conservative, and we bring on the right distributors. Right now, I have a couple $250 million companies from Canada, Europe, and Australia asking to be the exclusive distributors in those areas. There’s so many good things that can happen over the next few months that could take that $15 million number up to 20 or 30 million.
I’ll say right now, I mean, I’ve already declined offers for $10 million for the company. It took me all of three seconds to say, “No thanks,” but each of those companies that wants to buy us would also be a great partner for us. Whether they make a strategic investment or whether we put together some sort of a joint venture partnership … I mean, all that stuff’s on the table. I’ll be in Boston all week meeting with a couple companies to discuss those things. VC firms are starting to call me, but right now, I’m just not ready to go down that VC channel. I don’t think it’s every going to make sense for us. I’d rather focus on strategic partnerships and strategic investments from big,..
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Transcript of How to Market a Product Idea That Nobody Has Heard Of
Transcript of How to Market a Product Idea That Nobody Has Heard Of
Transcript of How to Market a Product Idea That Nobody Has Heard Of written by John Jantsch read more at Duct Tape Marketing
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John Jantsch: Let’s say you have this idea for a product that nobody has ever heard of before. Nobody else has created. This innovation now has blue sky opportunity for you, but at the same time, now you’ve got the immense job of educating people about an entire new category of business, both treacherous and intriguing, at the same time.
You’re going to hear from Jonah Lupton, who did just that. He created a company called SoundGuard, which is producing soundproof paint, something nobody else offers, and we talk about his journey.
This episode of the Duct Tape Marketing podcast is sponsored by Podcast Bookers, podcastbookers.com. Podcasts are really hot, right? But you know what’s also really hot? Appearing as a guest on one of the many, many podcasts out there. Think about it. Much easier than writing a guest blog post. You get some high-quality content. You get great backlinks. People want to share that content. Maybe you can even transcribe that content. Being a guest on podcasts, getting yourself booked on podcasts, is a really, really great SEO tactic, great brand-building tactic. Podcast Bookers can get you booked on two, to three, to four podcasts every single month on auto-pilot. Go check it out. PodcastBookers.com.
Hello, and welcome to another episode of the Duct Tape Marketing podcast. This is John Jantsch, and my guest today is Jonah Lupton. He is an entrepreneur, advisor, and also a podcaster, who has started numerous companies and he admits that some were a success and some were failures. He’s currently the founder of a company called SoundGuard.
So, Jonah. Thanks for joining me.
Jonah Lupton: Thank you, John. Appreciate it.
John Jantsch: Give me a little bit about your background. I’m always intrigued. This is from your bio. Started numerous companies. So, tell us I guess the two or three minute version of your entrepreneurial journey.
Jonah Lupton: Absolutely. I actually spend nine years after college working for the Wall Street investment banks, the Morgan Stanleys, the Smith Barneys, managing money for wealthy individuals and non-profits and foundations. Halfway through that, I realized that I wanted to be an entrepreneur, but I couldn’t give up my salary. So, I started figuring out how to launch some projects on the side. My first venture was back in 2007, failed miserably, and I did a couple more while I was still employed, all failed miserably. Then I realized, the only way I’m going to be able to be a successful entrepreneur is if I do it full-time. I can’t do nights and weekends.
So, in 2011, I walked away from the investment business, started another company, and over the last … I guess it’s six years, I started a few different companies. Some were successful. Some were not. Some were in the, let’s see, nutritional supplement space. I did a couple payment startups or fundraising startups like Crowdfunding. Then a couple years ago, when I was just trying to find a solution to my own problem, which was noisy neighbors in an apartment building, and I could not find anything out there that really solved my needs at an affordable price point, that’s when I came up with the idea for soundproof paint, hired some chemists, and for the last two and a half years, we … Well, spent about a year and a half doing product development and testing. Then, we filed all the patents, and now we’ve been live in the market for a few months.
John Jantsch: This is a silly question because it sounds like one of those things that seems obvious enough that someone would’ve tackled it before. Why has nobody tackled soundproof paint?
Jonah Lupton: It’s a good question, and it’s usually the first question I get when I tell someone what I’ve been doing. They all say, “Why isn’t Sherwin-Williams doing this? Or, why isn’t Benjamin Moore? Or PPG? These 30, 40, 50 billion dollar companies, why haven’t they done it?”
I don’t have a good answer. I’d like to think that they’ve tried, and maybe they couldn’t figure it out. Maybe it was just too difficult. I know a lot of those companies … The Silicon Valley … The saying is, “If you want to beat the big boys early on, do things that don’t scale.” I heard that five or six years ago, and that always stuck with me. I think there’s some truth to that ’cause these big paint companies, they want to develop a product, they want to put it on their shelf in their own retail-branded stores, or they want to put it on the shelf at Home Depot and Lowe’s, and they want you to come in and buy it and put it on yourself, so it’s all D.I.Y. That’s not our product. Our product will never be D.I.Y, ’cause it has to be sprayed on by a high-pressure sprayer.
So, maybe that’s one reason, is that they just saw too many headwinds going into this market, but to be honest, I just don’t know. I mean, it was very difficult coming up with a formulation. My guess is we probably tried 20 or 25 different formulations with all types of different pigments and resins and fillers. I don’t come from an engineering background or a chemistry background, so I barely understand half of this stuff. I can’t even pronounce half the things that are in the product. Luckily, I partnered with some really good chemists early on. We figured out after these 20 or 25 formulations that there was a combination of three or four ingredients that, when put together, blocked out the most sound. We put all of those ingredients into this product, of course, meaning I don’t think any other company out there could come up with a product that was as effective as ours without using one of those ingredients and impeding on our patent.
John Jantsch: Well, yeah. When you go out and tell somebody in more of a sales conversation rather than a chemistry conversation, how does this work?
Jonah Lupton: We are blocking or deflecting sound. We are absorbing a little bit of sound. It’s hard to know exactly how much sound is being absorbed, but the majority is certainly being blocked or deflected. Where we see the best use cases for our product are on walls that are separating two spaces. So, you’re blocking the sound from passing through the wall. So, hotel rooms, apartments, condos, town houses, offices, dorms and student housing, those are all the markets that we’re starting off with. So, we’re starting off B2B. We’re selling through our sales reps, through distributors, going directly to the end customer. So, the ownership group of the hotel, the ownership group of the apartment complex. We’re going right to the facilities managers at the universities. I’m talking to two or three very, very large universities about doing all of their dorms in student housing when summer comes along.
John Jantsch: Right now, you are doing … do we call this installing? Or, the application of the … You’re actually doing it with your own people?
Jonah Lupton: No. Right now, and I don’t know if this will be the case in three or four years. It’s hard to know, but at least for now, we are only selling the products. We’re manufacturing and selling the product, and then we partner with contractors to actually install it. We have a training process. Any painting contractor in the country right now that handles commercial projects can fill out our application. We have to do a little bit of due diligence on them. I want to know who are the employees, they all have to go through background checks. I refuse to let some painter go into a hotel with key cards and cause a problem that we could have found if we had just done the appropriate background check. They have to have the right equipment. They have to have the right insurance coverage, and they just have to watch some videos, so they know how this is sprayed and, most importantly, how it’s measured. It’s very important that we get 90 wet mils of product onto the wall.
John Jantsch: I’m just going to ask you, what’s your measurement of success? So, when you go up to somebody and you say, “We’re going to make it soundproof.” Clearly, the wall’s so thick, it’s got so much on it today, it’s got a sound rating of some sort today, so what’s the measure of success for how you make it soundproof?
Jonah Lupton: We do a sound test up-front. That’s part of our … We have a two or three step process before we can even sell them any product. Obviously, we have a lot of leads that come into our website. Sales reps are out there generating leads. We’re going into a lot of different marketing channels to all generate leads. Once we get interest from the property, then we have to diagnose the problem. Is it something that we can help with? Is it a wall problem? Is it room-to-room? If there’s noise … If they’re on a busy intersection in downtown Boston and there’s street noise, that’s a window problem. That’s nothing that we can really help them with. Same thing if people are running up and down the hallways or slamming doors. We can help a little bit with that, but that’s more of a door problem.
So, as long as we diagnose that it’s a wall problem, we need them to send us some pictures. If we think that it’s an appropriate wall, meaning there’s no weird vents or something going from one room to the next, which you see once in a while, but assuming that it’s a project that we want to take on, I would say to one of my sales reps … I have 65 sales reps around the country in every major market. They’d go to the property, take some pictures, make a video, shakes some hands, et cetera, and then they’re going to run their own little amateurish sound test. Each sales rep has a portable speaker system with a built-in amp and Bluetooth and all that. Then they have a class 1 sound level meter, so they can essentially run their own sound test from room to room to determine, at least, how much sound we think is coming through the wall.
From that, I can sort of predict, if we put our product on the wall, how much sound we can essentially take out. In most cases … Well, I should say in all cases, it’s somewhere between 80 and 100%. It averages out around 90% just depending on the loudness of the noise, of course, and then the frequency range. Mid-frequency, we’re the best. We obviously do a great job on the high-end and the low-end, but the higher the frequency, the better we do. The lower stuff is a little bit harder to work with, but we still do.
So, I’d say we’re blocking out 60 to 70% on the low end, and 80, 90, 100% on the high-end.
John Jantsch: Many of the listeners of my show are small business owners and marketers. I know that one of the things that I’m guessing some of them might be thinking is, are their extra challenges in essentially creating a category? I mean, you would think, okay, this is blue sky opportunity out there, but there’s also challenges because nobody’s ever bought soundproof paint before.
Jonah Lupton: Exactly. That is one of the challenges, and that’s why we’re spending a lot of money on PR and brand-awareness and educating the market, and a lot of cold email outreach. I know a lot of people want to call it spam, but at the end of the day, I mean, we really did create a product that solves a problem for the hotels and the apartment buildings. I do believe that some of them want to hear from us, and we can’t get to all of them through conventional Facebook ads and PR and SEO and all that stuff. So, sometimes, we do have to buy some lists of general managers and blast out a cold email, and we actually get some really good response rates. We get great open rates. We get good click-through rates because I think people in these markets are genuinely intrigued by what we can offer them.
Now, and then the challenge is, of course, no one’s ever heard of soundproof paint. No one’s ever used it. There’s very few searches every month for soundproof paint. So, I can’t just create a bunch of content and have a nice website and put it out there and expect people to find us because it’ll take too long. We really have to be aggressive and proactive and go find them, bring them to the website, educate them, engage with them. It is a learning process, especially as we start going into the architect and the interior designers. I mean, we can’t drop them an email and expect to see us spec’d into a project two weeks later. We really have to nurture those relationships for a while, build up their confidence before they feel they can use us on a job, and it’s not going to come back and bite them.
John Jantsch: How much skepticism do you encounter? In other words, somebody saying, “Oh, yeah. Great. No way that works.”
Jonah Lupton: I think there was definitely a lot of skepticism in the last couple years as i was developing the product before I knew or anyone knew if I could actually pull this off. Once we did a project in Connecticut this past summer, and we hired independent acoustical engineers to come on site and do all the testing before and after the treatment, as well as having employees from the hotel in there before and after, it was like … The quote that I actually … I don’t think I put it on the website, but one of the housekeepers actually said to me, “When you start selling this and you start making your millions and you buy your mansion on the beach, can I come be your housekeeper?”
I was blown away. I really was speechless because that was our first real, real-world test. I had no idea how good it was going to do, how good is perform, and the way the acoustical engineer performs the test is similar to what my sales reps do. They bring in their portable amps and speakers. They hook it up. They play white noise at 95 to 100 decibels in one room. Then they go into the next room and they take readings, and this is before we put any product on the wall. So, 95 to 100 decibels in one room was translating to about 75 decibels in the next room. 75 decibels is still very obnoxious. So, if someone was in that room trying to sleep, they would have been very, very annoyed.
Then, we put our product on the wall, three coats, 30 wet mils each, let it dry. We do all that in less than a day. Then the next day, the acoustical engineer came back, and did the same test. We had dropped the decibels from 75 down to 55. At 55 decibels, you almost can’t hear anything unless you get really, really, really close to the wall.
That’s where you do have the perceptions of a soundproofed room.
John Jantsch: What did some of your previous businesses, and you may have not thought about this, but you may have an opinion. What have some of your previous business successes and failures been able to inform you on this venture?
Jonah Lupton: I actually posted about this a couple days ago. I guess it was last week on LinkedIn. I talked about my first failure, which was a company called Social Track back in 2007, when I … I mean, this is the early days of the internet, I guess, for guys like me that are non-technical, and in 2007, I was trying to find a couple co-founders. I knew I had this idea of … I wanted to create a dashboard that aggregated all of your social media feeds into one place. So, you’re Facebook feed, your LinkedIn, your Twitter, your YouTube, all in one pretty, nice-to-read dashboard. You could see all your activity, your connections, and messages, et cetera.
I was bootstrapping it because I was working full-time in the investment business, so I was making 100 grand, 120 grand a year and paying for rent and everything else. At the end of the month, whatever I had left over, I tried to put into Social Track. I found two co-founders literally off of Craigslist. We split up the equity one-third each. I had no idea what a vesting schedule was, so we didn’t do one of those, and quickly realized that neither one of these guys was going to be a good co-founder. They were both working full-time jobs. They were both married. They both had kids. One was getting read to move from Boston to New York, so he wouldn’t be very involved. He still owned a third of the company, and I had no way to really get it back.
I learned a lot of hard, hard lessons, where if you have a great idea and you realize it’s going to take a lot of capital to take that idea to the market and grow it, you have to go out and fundraise. I mean, as much as it sucks giving up equity and the company, that was not the kind of company that I should’ve been trying to bootstrap from the beginning.
Basically, a year after I shut the company down, Hootsuite launched, with essentially the same setup, the same idea, and they’re now a billion and a half dollar company. Not that I necessarily could have grown a Hootsuite. I mean, they’ve executed incredibly well. They have great investors, great employees and everything, but it was just a lesson that, I mean, if you don’t have the right co-founders and you’re not well capitalized, it is very, very, very difficult to scale a company in the technology space.
John Jantsch: I suspect that SoundGuard has been a bit capital intensive.
Jonah Lupton: It was. Yeah. Certainly developing the formula, all the testing. I did not appreciate how expensive all the testing would be, from lab testing to field testing, hiring acoustical engineers, doing fire testing, testing on the ingredients to make sure that we could pass all the EPA standards. We’re considered an environmentally friendly and low VOC product. We’re about 105 grams of hazardous material per liter, and the EPA says you have to be below 250. So, we are well, well below the EPA standards for eco-friendliness, which is good. I mean, that was obviously one of my goals from the beginning. It’s a water-based product.
So, coming up with a environmentally-friendly, water-based product that could block sound that didn’t infringe on any other patents out there, that could be sprayed onto a wall, could dry within two hours, that didn’t sag, that didn’t bubble … I mean, it was not easy, and it was expensive. I mean, in the last year and a half, I’ve probably spent 50 or 60,000 dollars just on legal work. Filing all the patents, having a manufacturing agreement set up and sales rep agreement and warrantees and all that stuff. Probably 50, 60,000 in legal work, 50, 60,000 on testing, 50, 60,000 on product development, maybe more than that, probably more than a 100. It has been expensive. I bootstrapped it with just my personal capital and business loans, more business loans than personal capital. My last couple starters basically wiped out my personal capital.
I went to a couple friends that are not even high net worth, but they just believed in what I was doing and they were willing to take a chance on this before we even had the product. I just did the classic Kevin O’Leary from Shark Tank, like, “Hey, give me $50,000. If this thing actually works and we start producing revenue, I’ll pay you back double your money.” Because a banker’s not going to give me any money. That was my only option. Then once we had the product, we did the test in Connecticut, we knew this stuff actually worked, I went back to them and I said, “Give me another $50,000, but now I’ll pay you 75% return on your money.” Then the last chunk of $50,000 was, “I’ll pay you 50% return on your money.”
Because as we took risk out of the company, obviously I was not willing to pay him the same terms that I was up front.
John Jantsch: What do you ultimately see your team looking like?
Jonah Lupton: I’m in the process of hiring right now. I would say of all the things that we are trying to tackle, hiring is the one that scares me the most. From running my own podcast for a couple years and doing 200 interviews, almost across the board, when I asked the founder, “What’s been the most critical aspect to your success in growth?” And it’s always the people. First, it’s people. Second is focus. So, those are the two things that I’m really, really honing in on is one, don’t get distracted by other meaningless ventures and projects that are going to come my way and two, I have to get the right people in place. I’ve never had to hire at scale before, and that’s what really scares me.
So, I don’t know if I should be trying to do it all myself or if I should try to bring in a part-time recruiter. There’s a couple companies out there that are trying to invest in us or form strategic partnerships. If I did something like that, one of the reasons would be so I could plug in to their HR staff and have their HR team help me hire the right people. We have 65 sales reps across the country, commission only guys, great people, but it’s very hard to get production from them unless you’re right in their face all the time. You’ve got to stay top of mind. I can’t manage 65 sales reps and then we’re probably bringing on another 50 distributors. That’s too many people and relationships for me to manage by myself. I need to hire at least a couple sales manager. I need to hire an operations manager, at least one or two, to help me go around the country and act as a project manager once things are up and running.
Right now, I’m outsourcing everything else. So, bookkeeping’s outsourced, obviously the legal work. I’m currently working with a digital marketing agency. Although, I’m getting ready to hire someone a little bit bigger and better. I’m quarter-backing a lot of things. I’m trying not … I can’t micromanage every little aspect of the company, so I really need to get the right people in place and then act as a manager of managers.
John Jantsch: Do you have, and again, maybe premature to be asking this question, but do you have an end-game in mind, or do you just want to see where this can go?
Jonah Lupton: Yeah. I mean, a little bit of both. I mean, I’ve certainly thought about it. I mean, I’ve put together spreadsheets of projects and everything else that may or may not come to fruition. Right now, with B2B market, like I said, so the hotels, the apartments, et cetera. In five months, we go B2C, so the homeowners, the small business owners, et cetera. I think this year, we can do at least 15 million in revenue, two-thirds of that coming B2B, one-third of that B2C. I think 15 is actually a little bit conservative, and we bring on the right distributors. Right now, I have a couple $250 million companies from Canada, Europe, and Australia asking to be the exclusive distributors in those areas. There’s so many good things that can happen over the next few months that could take that $15 million number up to 20 or 30 million.
I’ll say right now, I mean, I’ve already declined offers for $10 million for the company. It took me all of three seconds to say, “No thanks,” but each of those companies that wants to buy us would also be a great partner for us. Whether they make a strategic investment or whether we put together some sort of a joint venture partnership … I mean, all that stuff’s on the table. I’ll be in Boston all week meeting with a couple companies to discuss those things. VC firms are starting to call me, but right now, I’m just not ready to go down that VC channel. I don’t think it’s every going to make sense for us. I’d rather focus on strategic partnerships and strategic investments from big,..
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Transcript of How to Market a Product Idea That Nobody Has Heard Of
Transcript of How to Market a Product Idea That Nobody Has Heard Of
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John Jantsch: Let’s say you have this idea for a product that nobody has ever heard of before. Nobody else has created. This innovation now has blue sky opportunity for you, but at the same time, now you’ve got the immense job of educating people about an entire new category of business, both treacherous and intriguing, at the same time.
You’re going to hear from Jonah Lupton, who did just that. He created a company called SoundGuard, which is producing soundproof paint, something nobody else offers, and we talk about his journey.
This episode of the Duct Tape Marketing podcast is sponsored by Podcast Bookers, podcastbookers.com. Podcasts are really hot, right? But you know what’s also really hot? Appearing as a guest on one of the many, many podcasts out there. Think about it. Much easier than writing a guest blog post. You get some high-quality content. You get great backlinks. People want to share that content. Maybe you can even transcribe that content. Being a guest on podcasts, getting yourself booked on podcasts, is a really, really great SEO tactic, great brand-building tactic. Podcast Bookers can get you booked on two, to three, to four podcasts every single month on auto-pilot. Go check it out. PodcastBookers.com.
Hello, and welcome to another episode of the Duct Tape Marketing podcast. This is John Jantsch, and my guest today is Jonah Lupton. He is an entrepreneur, advisor, and also a podcaster, who has started numerous companies and he admits that some were a success and some were failures. He’s currently the founder of a company called SoundGuard.
So, Jonah. Thanks for joining me.
Jonah Lupton: Thank you, John. Appreciate it.
John Jantsch: Give me a little bit about your background. I’m always intrigued. This is from your bio. Started numerous companies. So, tell us I guess the two or three minute version of your entrepreneurial journey.
Jonah Lupton: Absolutely. I actually spend nine years after college working for the Wall Street investment banks, the Morgan Stanleys, the Smith Barneys, managing money for wealthy individuals and non-profits and foundations. Halfway through that, I realized that I wanted to be an entrepreneur, but I couldn’t give up my salary. So, I started figuring out how to launch some projects on the side. My first venture was back in 2007, failed miserably, and I did a couple more while I was still employed, all failed miserably. Then I realized, the only way I’m going to be able to be a successful entrepreneur is if I do it full-time. I can’t do nights and weekends.
So, in 2011, I walked away from the investment business, started another company, and over the last … I guess it’s six years, I started a few different companies. Some were successful. Some were not. Some were in the, let’s see, nutritional supplement space. I did a couple payment startups or fundraising startups like Crowdfunding. Then a couple years ago, when I was just trying to find a solution to my own problem, which was noisy neighbors in an apartment building, and I could not find anything out there that really solved my needs at an affordable price point, that’s when I came up with the idea for soundproof paint, hired some chemists, and for the last two and a half years, we … Well, spent about a year and a half doing product development and testing. Then, we filed all the patents, and now we’ve been live in the market for a few months.
John Jantsch: This is a silly question because it sounds like one of those things that seems obvious enough that someone would’ve tackled it before. Why has nobody tackled soundproof paint?
Jonah Lupton: It’s a good question, and it’s usually the first question I get when I tell someone what I’ve been doing. They all say, “Why isn’t Sherwin-Williams doing this? Or, why isn’t Benjamin Moore? Or PPG? These 30, 40, 50 billion dollar companies, why haven’t they done it?”
I don’t have a good answer. I’d like to think that they’ve tried, and maybe they couldn’t figure it out. Maybe it was just too difficult. I know a lot of those companies … The Silicon Valley … The saying is, “If you want to beat the big boys early on, do things that don’t scale.” I heard that five or six years ago, and that always stuck with me. I think there’s some truth to that ’cause these big paint companies, they want to develop a product, they want to put it on their shelf in their own retail-branded stores, or they want to put it on the shelf at Home Depot and Lowe’s, and they want you to come in and buy it and put it on yourself, so it’s all D.I.Y. That’s not our product. Our product will never be D.I.Y, ’cause it has to be sprayed on by a high-pressure sprayer.
So, maybe that’s one reason, is that they just saw too many headwinds going into this market, but to be honest, I just don’t know. I mean, it was very difficult coming up with a formulation. My guess is we probably tried 20 or 25 different formulations with all types of different pigments and resins and fillers. I don’t come from an engineering background or a chemistry background, so I barely understand half of this stuff. I can’t even pronounce half the things that are in the product. Luckily, I partnered with some really good chemists early on. We figured out after these 20 or 25 formulations that there was a combination of three or four ingredients that, when put together, blocked out the most sound. We put all of those ingredients into this product, of course, meaning I don’t think any other company out there could come up with a product that was as effective as ours without using one of those ingredients and impeding on our patent.
John Jantsch: Well, yeah. When you go out and tell somebody in more of a sales conversation rather than a chemistry conversation, how does this work?
Jonah Lupton: We are blocking or deflecting sound. We are absorbing a little bit of sound. It’s hard to know exactly how much sound is being absorbed, but the majority is certainly being blocked or deflected. Where we see the best use cases for our product are on walls that are separating two spaces. So, you’re blocking the sound from passing through the wall. So, hotel rooms, apartments, condos, town houses, offices, dorms and student housing, those are all the markets that we’re starting off with. So, we’re starting off B2B. We’re selling through our sales reps, through distributors, going directly to the end customer. So, the ownership group of the hotel, the ownership group of the apartment complex. We’re going right to the facilities managers at the universities. I’m talking to two or three very, very large universities about doing all of their dorms in student housing when summer comes along.
John Jantsch: Right now, you are doing … do we call this installing? Or, the application of the … You’re actually doing it with your own people?
Jonah Lupton: No. Right now, and I don’t know if this will be the case in three or four years. It’s hard to know, but at least for now, we are only selling the products. We’re manufacturing and selling the product, and then we partner with contractors to actually install it. We have a training process. Any painting contractor in the country right now that handles commercial projects can fill out our application. We have to do a little bit of due diligence on them. I want to know who are the employees, they all have to go through background checks. I refuse to let some painter go into a hotel with key cards and cause a problem that we could have found if we had just done the appropriate background check. They have to have the right equipment. They have to have the right insurance coverage, and they just have to watch some videos, so they know how this is sprayed and, most importantly, how it’s measured. It’s very important that we get 90 wet mils of product onto the wall.
John Jantsch: I’m just going to ask you, what’s your measurement of success? So, when you go up to somebody and you say, “We’re going to make it soundproof.” Clearly, the wall’s so thick, it’s got so much on it today, it’s got a sound rating of some sort today, so what’s the measure of success for how you make it soundproof?
Jonah Lupton: We do a sound test up-front. That’s part of our … We have a two or three step process before we can even sell them any product. Obviously, we have a lot of leads that come into our website. Sales reps are out there generating leads. We’re going into a lot of different marketing channels to all generate leads. Once we get interest from the property, then we have to diagnose the problem. Is it something that we can help with? Is it a wall problem? Is it room-to-room? If there’s noise … If they’re on a busy intersection in downtown Boston and there’s street noise, that’s a window problem. That’s nothing that we can really help them with. Same thing if people are running up and down the hallways or slamming doors. We can help a little bit with that, but that’s more of a door problem.
So, as long as we diagnose that it’s a wall problem, we need them to send us some pictures. If we think that it’s an appropriate wall, meaning there’s no weird vents or something going from one room to the next, which you see once in a while, but assuming that it’s a project that we want to take on, I would say to one of my sales reps … I have 65 sales reps around the country in every major market. They’d go to the property, take some pictures, make a video, shakes some hands, et cetera, and then they’re going to run their own little amateurish sound test. Each sales rep has a portable speaker system with a built-in amp and Bluetooth and all that. Then they have a class 1 sound level meter, so they can essentially run their own sound test from room to room to determine, at least, how much sound we think is coming through the wall.
From that, I can sort of predict, if we put our product on the wall, how much sound we can essentially take out. In most cases … Well, I should say in all cases, it’s somewhere between 80 and 100%. It averages out around 90% just depending on the loudness of the noise, of course, and then the frequency range. Mid-frequency, we’re the best. We obviously do a great job on the high-end and the low-end, but the higher the frequency, the better we do. The lower stuff is a little bit harder to work with, but we still do.
So, I’d say we’re blocking out 60 to 70% on the low end, and 80, 90, 100% on the high-end.
John Jantsch: Many of the listeners of my show are small business owners and marketers. I know that one of the things that I’m guessing some of them might be thinking is, are their extra challenges in essentially creating a category? I mean, you would think, okay, this is blue sky opportunity out there, but there’s also challenges because nobody’s ever bought soundproof paint before.
Jonah Lupton: Exactly. That is one of the challenges, and that’s why we’re spending a lot of money on PR and brand-awareness and educating the market, and a lot of cold email outreach. I know a lot of people want to call it spam, but at the end of the day, I mean, we really did create a product that solves a problem for the hotels and the apartment buildings. I do believe that some of them want to hear from us, and we can’t get to all of them through conventional Facebook ads and PR and SEO and all that stuff. So, sometimes, we do have to buy some lists of general managers and blast out a cold email, and we actually get some really good response rates. We get great open rates. We get good click-through rates because I think people in these markets are genuinely intrigued by what we can offer them.
Now, and then the challenge is, of course, no one’s ever heard of soundproof paint. No one’s ever used it. There’s very few searches every month for soundproof paint. So, I can’t just create a bunch of content and have a nice website and put it out there and expect people to find us because it’ll take too long. We really have to be aggressive and proactive and go find them, bring them to the website, educate them, engage with them. It is a learning process, especially as we start going into the architect and the interior designers. I mean, we can’t drop them an email and expect to see us spec’d into a project two weeks later. We really have to nurture those relationships for a while, build up their confidence before they feel they can use us on a job, and it’s not going to come back and bite them.
John Jantsch: How much skepticism do you encounter? In other words, somebody saying, “Oh, yeah. Great. No way that works.”
Jonah Lupton: I think there was definitely a lot of skepticism in the last couple years as i was developing the product before I knew or anyone knew if I could actually pull this off. Once we did a project in Connecticut this past summer, and we hired independent acoustical engineers to come on site and do all the testing before and after the treatment, as well as having employees from the hotel in there before and after, it was like … The quote that I actually … I don’t think I put it on the website, but one of the housekeepers actually said to me, “When you start selling this and you start making your millions and you buy your mansion on the beach, can I come be your housekeeper?”
I was blown away. I really was speechless because that was our first real, real-world test. I had no idea how good it was going to do, how good is perform, and the way the acoustical engineer performs the test is similar to what my sales reps do. They bring in their portable amps and speakers. They hook it up. They play white noise at 95 to 100 decibels in one room. Then they go into the next room and they take readings, and this is before we put any product on the wall. So, 95 to 100 decibels in one room was translating to about 75 decibels in the next room. 75 decibels is still very obnoxious. So, if someone was in that room trying to sleep, they would have been very, very annoyed.
Then, we put our product on the wall, three coats, 30 wet mils each, let it dry. We do all that in less than a day. Then the next day, the acoustical engineer came back, and did the same test. We had dropped the decibels from 75 down to 55. At 55 decibels, you almost can’t hear anything unless you get really, really, really close to the wall.
That’s where you do have the perceptions of a soundproofed room.
John Jantsch: What did some of your previous businesses, and you may have not thought about this, but you may have an opinion. What have some of your previous business successes and failures been able to inform you on this venture?
Jonah Lupton: I actually posted about this a couple days ago. I guess it was last week on LinkedIn. I talked about my first failure, which was a company called Social Track back in 2007, when I … I mean, this is the early days of the internet, I guess, for guys like me that are non-technical, and in 2007, I was trying to find a couple co-founders. I knew I had this idea of … I wanted to create a dashboard that aggregated all of your social media feeds into one place. So, you’re Facebook feed, your LinkedIn, your Twitter, your YouTube, all in one pretty, nice-to-read dashboard. You could see all your activity, your connections, and messages, et cetera.
I was bootstrapping it because I was working full-time in the investment business, so I was making 100 grand, 120 grand a year and paying for rent and everything else. At the end of the month, whatever I had left over, I tried to put into Social Track. I found two co-founders literally off of Craigslist. We split up the equity one-third each. I had no idea what a vesting schedule was, so we didn’t do one of those, and quickly realized that neither one of these guys was going to be a good co-founder. They were both working full-time jobs. They were both married. They both had kids. One was getting read to move from Boston to New York, so he wouldn’t be very involved. He still owned a third of the company, and I had no way to really get it back.
I learned a lot of hard, hard lessons, where if you have a great idea and you realize it’s going to take a lot of capital to take that idea to the market and grow it, you have to go out and fundraise. I mean, as much as it sucks giving up equity and the company, that was not the kind of company that I should’ve been trying to bootstrap from the beginning.
Basically, a year after I shut the company down, Hootsuite launched, with essentially the same setup, the same idea, and they’re now a billion and a half dollar company. Not that I necessarily could have grown a Hootsuite. I mean, they’ve executed incredibly well. They have great investors, great employees and everything, but it was just a lesson that, I mean, if you don’t have the right co-founders and you’re not well capitalized, it is very, very, very difficult to scale a company in the technology space.
John Jantsch: I suspect that SoundGuard has been a bit capital intensive.
Jonah Lupton: It was. Yeah. Certainly developing the formula, all the testing. I did not appreciate how expensive all the testing would be, from lab testing to field testing, hiring acoustical engineers, doing fire testing, testing on the ingredients to make sure that we could pass all the EPA standards. We’re considered an environmentally friendly and low VOC product. We’re about 105 grams of hazardous material per liter, and the EPA says you have to be below 250. So, we are well, well below the EPA standards for eco-friendliness, which is good. I mean, that was obviously one of my goals from the beginning. It’s a water-based product.
So, coming up with a environmentally-friendly, water-based product that could block sound that didn’t infringe on any other patents out there, that could be sprayed onto a wall, could dry within two hours, that didn’t sag, that didn’t bubble … I mean, it was not easy, and it was expensive. I mean, in the last year and a half, I’ve probably spent 50 or 60,000 dollars just on legal work. Filing all the patents, having a manufacturing agreement set up and sales rep agreement and warrantees and all that stuff. Probably 50, 60,000 in legal work, 50, 60,000 on testing, 50, 60,000 on product development, maybe more than that, probably more than a 100. It has been expensive. I bootstrapped it with just my personal capital and business loans, more business loans than personal capital. My last couple starters basically wiped out my personal capital.
I went to a couple friends that are not even high net worth, but they just believed in what I was doing and they were willing to take a chance on this before we even had the product. I just did the classic Kevin O’Leary from Shark Tank, like, “Hey, give me $50,000. If this thing actually works and we start producing revenue, I’ll pay you back double your money.” Because a banker’s not going to give me any money. That was my only option. Then once we had the product, we did the test in Connecticut, we knew this stuff actually worked, I went back to them and I said, “Give me another $50,000, but now I’ll pay you 75% return on your money.” Then the last chunk of $50,000 was, “I’ll pay you 50% return on your money.”
Because as we took risk out of the company, obviously I was not willing to pay him the same terms that I was up front.
John Jantsch: What do you ultimately see your team looking like?
Jonah Lupton: I’m in the process of hiring right now. I would say of all the things that we are trying to tackle, hiring is the one that scares me the most. From running my own podcast for a couple years and doing 200 interviews, almost across the board, when I asked the founder, “What’s been the most critical aspect to your success in growth?” And it’s always the people. First, it’s people. Second is focus. So, those are the two things that I’m really, really honing in on is one, don’t get distracted by other meaningless ventures and projects that are going to come my way and two, I have to get the right people in place. I’ve never had to hire at scale before, and that’s what really scares me.
So, I don’t know if I should be trying to do it all myself or if I should try to bring in a part-time recruiter. There’s a couple companies out there that are trying to invest in us or form strategic partnerships. If I did something like that, one of the reasons would be so I could plug in to their HR staff and have their HR team help me hire the right people. We have 65 sales reps across the country, commission only guys, great people, but it’s very hard to get production from them unless you’re right in their face all the time. You’ve got to stay top of mind. I can’t manage 65 sales reps and then we’re probably bringing on another 50 distributors. That’s too many people and relationships for me to manage by myself. I need to hire at least a couple sales manager. I need to hire an operations manager, at least one or two, to help me go around the country and act as a project manager once things are up and running.
Right now, I’m outsourcing everything else. So, bookkeeping’s outsourced, obviously the legal work. I’m currently working with a digital marketing agency. Although, I’m getting ready to hire someone a little bit bigger and better. I’m quarter-backing a lot of things. I’m trying not … I can’t micromanage every little aspect of the company, so I really need to get the right people in place and then act as a manager of managers.
John Jantsch: Do you have, and again, maybe premature to be asking this question, but do you have an end-game in mind, or do you just want to see where this can go?
Jonah Lupton: Yeah. I mean, a little bit of both. I mean, I’ve certainly thought about it. I mean, I’ve put together spreadsheets of projects and everything else that may or may not come to fruition. Right now, with B2B market, like I said, so the hotels, the apartments, et cetera. In five months, we go B2C, so the homeowners, the small business owners, et cetera. I think this year, we can do at least 15 million in revenue, two-thirds of that coming B2B, one-third of that B2C. I think 15 is actually a little bit conservative, and we bring on the right distributors. Right now, I have a couple $250 million companies from Canada, Europe, and Australia asking to be the exclusive distributors in those areas. There’s so many good things that can happen over the next few months that could take that $15 million number up to 20 or 30 million.
I’ll say right now, I mean, I’ve already declined offers for $10 million for the company. It took me all of three seconds to say, “No thanks,” but each of those companies that wants to buy us would also be a great partner for us. Whether they make a strategic investment or whether we put together some sort of a joint venture partnership … I mean, all that stuff’s on the table. I’ll be in Boston all week meeting with a couple companies to discuss those things. VC firms are starting to call me, but right now, I’m just not ready to go down that VC channel. I don’t think it’s every going to make sense for us. I’d rather focus on strategic partnerships and strategic investments from big,..
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Transcript of How to Market a Product Idea That Nobody Has Heard Of
Transcript of How to Market a Product Idea That Nobody Has Heard Of
Transcript of How to Market a Product Idea That Nobody Has Heard Of written by John Jantsch read more at Duct Tape Marketing
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John Jantsch: Let’s say you have this idea for a product that nobody has ever heard of before. Nobody else has created. This innovation now has blue sky opportunity for you, but at the same time, now you’ve got the immense job of educating people about an entire new category of business, both treacherous and intriguing, at the same time.
You’re going to hear from Jonah Lupton, who did just that. He created a company called SoundGuard, which is producing soundproof paint, something nobody else offers, and we talk about his journey.
This episode of the Duct Tape Marketing podcast is sponsored by Podcast Bookers, podcastbookers.com. Podcasts are really hot, right? But you know what’s also really hot? Appearing as a guest on one of the many, many podcasts out there. Think about it. Much easier than writing a guest blog post. You get some high-quality content. You get great backlinks. People want to share that content. Maybe you can even transcribe that content. Being a guest on podcasts, getting yourself booked on podcasts, is a really, really great SEO tactic, great brand-building tactic. Podcast Bookers can get you booked on two, to three, to four podcasts every single month on auto-pilot. Go check it out. PodcastBookers.com.
Hello, and welcome to another episode of the Duct Tape Marketing podcast. This is John Jantsch, and my guest today is Jonah Lupton. He is an entrepreneur, advisor, and also a podcaster, who has started numerous companies and he admits that some were a success and some were failures. He’s currently the founder of a company called SoundGuard.
So, Jonah. Thanks for joining me.
Jonah Lupton: Thank you, John. Appreciate it.
John Jantsch: Give me a little bit about your background. I’m always intrigued. This is from your bio. Started numerous companies. So, tell us I guess the two or three minute version of your entrepreneurial journey.
Jonah Lupton: Absolutely. I actually spend nine years after college working for the Wall Street investment banks, the Morgan Stanleys, the Smith Barneys, managing money for wealthy individuals and non-profits and foundations. Halfway through that, I realized that I wanted to be an entrepreneur, but I couldn’t give up my salary. So, I started figuring out how to launch some projects on the side. My first venture was back in 2007, failed miserably, and I did a couple more while I was still employed, all failed miserably. Then I realized, the only way I’m going to be able to be a successful entrepreneur is if I do it full-time. I can’t do nights and weekends.
So, in 2011, I walked away from the investment business, started another company, and over the last … I guess it’s six years, I started a few different companies. Some were successful. Some were not. Some were in the, let’s see, nutritional supplement space. I did a couple payment startups or fundraising startups like Crowdfunding. Then a couple years ago, when I was just trying to find a solution to my own problem, which was noisy neighbors in an apartment building, and I could not find anything out there that really solved my needs at an affordable price point, that’s when I came up with the idea for soundproof paint, hired some chemists, and for the last two and a half years, we … Well, spent about a year and a half doing product development and testing. Then, we filed all the patents, and now we’ve been live in the market for a few months.
John Jantsch: This is a silly question because it sounds like one of those things that seems obvious enough that someone would’ve tackled it before. Why has nobody tackled soundproof paint?
Jonah Lupton: It’s a good question, and it’s usually the first question I get when I tell someone what I’ve been doing. They all say, “Why isn’t Sherwin-Williams doing this? Or, why isn’t Benjamin Moore? Or PPG? These 30, 40, 50 billion dollar companies, why haven’t they done it?”
I don’t have a good answer. I’d like to think that they’ve tried, and maybe they couldn’t figure it out. Maybe it was just too difficult. I know a lot of those companies … The Silicon Valley … The saying is, “If you want to beat the big boys early on, do things that don’t scale.” I heard that five or six years ago, and that always stuck with me. I think there’s some truth to that ’cause these big paint companies, they want to develop a product, they want to put it on their shelf in their own retail-branded stores, or they want to put it on the shelf at Home Depot and Lowe’s, and they want you to come in and buy it and put it on yourself, so it’s all D.I.Y. That’s not our product. Our product will never be D.I.Y, ’cause it has to be sprayed on by a high-pressure sprayer.
So, maybe that’s one reason, is that they just saw too many headwinds going into this market, but to be honest, I just don’t know. I mean, it was very difficult coming up with a formulation. My guess is we probably tried 20 or 25 different formulations with all types of different pigments and resins and fillers. I don’t come from an engineering background or a chemistry background, so I barely understand half of this stuff. I can’t even pronounce half the things that are in the product. Luckily, I partnered with some really good chemists early on. We figured out after these 20 or 25 formulations that there was a combination of three or four ingredients that, when put together, blocked out the most sound. We put all of those ingredients into this product, of course, meaning I don’t think any other company out there could come up with a product that was as effective as ours without using one of those ingredients and impeding on our patent.
John Jantsch: Well, yeah. When you go out and tell somebody in more of a sales conversation rather than a chemistry conversation, how does this work?
Jonah Lupton: We are blocking or deflecting sound. We are absorbing a little bit of sound. It’s hard to know exactly how much sound is being absorbed, but the majority is certainly being blocked or deflected. Where we see the best use cases for our product are on walls that are separating two spaces. So, you’re blocking the sound from passing through the wall. So, hotel rooms, apartments, condos, town houses, offices, dorms and student housing, those are all the markets that we’re starting off with. So, we’re starting off B2B. We’re selling through our sales reps, through distributors, going directly to the end customer. So, the ownership group of the hotel, the ownership group of the apartment complex. We’re going right to the facilities managers at the universities. I’m talking to two or three very, very large universities about doing all of their dorms in student housing when summer comes along.
John Jantsch: Right now, you are doing … do we call this installing? Or, the application of the … You’re actually doing it with your own people?
Jonah Lupton: No. Right now, and I don’t know if this will be the case in three or four years. It’s hard to know, but at least for now, we are only selling the products. We’re manufacturing and selling the product, and then we partner with contractors to actually install it. We have a training process. Any painting contractor in the country right now that handles commercial projects can fill out our application. We have to do a little bit of due diligence on them. I want to know who are the employees, they all have to go through background checks. I refuse to let some painter go into a hotel with key cards and cause a problem that we could have found if we had just done the appropriate background check. They have to have the right equipment. They have to have the right insurance coverage, and they just have to watch some videos, so they know how this is sprayed and, most importantly, how it’s measured. It’s very important that we get 90 wet mils of product onto the wall.
John Jantsch: I’m just going to ask you, what’s your measurement of success? So, when you go up to somebody and you say, “We’re going to make it soundproof.” Clearly, the wall’s so thick, it’s got so much on it today, it’s got a sound rating of some sort today, so what’s the measure of success for how you make it soundproof?
Jonah Lupton: We do a sound test up-front. That’s part of our … We have a two or three step process before we can even sell them any product. Obviously, we have a lot of leads that come into our website. Sales reps are out there generating leads. We’re going into a lot of different marketing channels to all generate leads. Once we get interest from the property, then we have to diagnose the problem. Is it something that we can help with? Is it a wall problem? Is it room-to-room? If there’s noise … If they’re on a busy intersection in downtown Boston and there’s street noise, that’s a window problem. That’s nothing that we can really help them with. Same thing if people are running up and down the hallways or slamming doors. We can help a little bit with that, but that’s more of a door problem.
So, as long as we diagnose that it’s a wall problem, we need them to send us some pictures. If we think that it’s an appropriate wall, meaning there’s no weird vents or something going from one room to the next, which you see once in a while, but assuming that it’s a project that we want to take on, I would say to one of my sales reps … I have 65 sales reps around the country in every major market. They’d go to the property, take some pictures, make a video, shakes some hands, et cetera, and then they’re going to run their own little amateurish sound test. Each sales rep has a portable speaker system with a built-in amp and Bluetooth and all that. Then they have a class 1 sound level meter, so they can essentially run their own sound test from room to room to determine, at least, how much sound we think is coming through the wall.
From that, I can sort of predict, if we put our product on the wall, how much sound we can essentially take out. In most cases … Well, I should say in all cases, it’s somewhere between 80 and 100%. It averages out around 90% just depending on the loudness of the noise, of course, and then the frequency range. Mid-frequency, we’re the best. We obviously do a great job on the high-end and the low-end, but the higher the frequency, the better we do. The lower stuff is a little bit harder to work with, but we still do.
So, I’d say we’re blocking out 60 to 70% on the low end, and 80, 90, 100% on the high-end.
John Jantsch: Many of the listeners of my show are small business owners and marketers. I know that one of the things that I’m guessing some of them might be thinking is, are their extra challenges in essentially creating a category? I mean, you would think, okay, this is blue sky opportunity out there, but there’s also challenges because nobody’s ever bought soundproof paint before.
Jonah Lupton: Exactly. That is one of the challenges, and that’s why we’re spending a lot of money on PR and brand-awareness and educating the market, and a lot of cold email outreach. I know a lot of people want to call it spam, but at the end of the day, I mean, we really did create a product that solves a problem for the hotels and the apartment buildings. I do believe that some of them want to hear from us, and we can’t get to all of them through conventional Facebook ads and PR and SEO and all that stuff. So, sometimes, we do have to buy some lists of general managers and blast out a cold email, and we actually get some really good response rates. We get great open rates. We get good click-through rates because I think people in these markets are genuinely intrigued by what we can offer them.
Now, and then the challenge is, of course, no one’s ever heard of soundproof paint. No one’s ever used it. There’s very few searches every month for soundproof paint. So, I can’t just create a bunch of content and have a nice website and put it out there and expect people to find us because it’ll take too long. We really have to be aggressive and proactive and go find them, bring them to the website, educate them, engage with them. It is a learning process, especially as we start going into the architect and the interior designers. I mean, we can’t drop them an email and expect to see us spec’d into a project two weeks later. We really have to nurture those relationships for a while, build up their confidence before they feel they can use us on a job, and it’s not going to come back and bite them.
John Jantsch: How much skepticism do you encounter? In other words, somebody saying, “Oh, yeah. Great. No way that works.”
Jonah Lupton: I think there was definitely a lot of skepticism in the last couple years as i was developing the product before I knew or anyone knew if I could actually pull this off. Once we did a project in Connecticut this past summer, and we hired independent acoustical engineers to come on site and do all the testing before and after the treatment, as well as having employees from the hotel in there before and after, it was like … The quote that I actually … I don’t think I put it on the website, but one of the housekeepers actually said to me, “When you start selling this and you start making your millions and you buy your mansion on the beach, can I come be your housekeeper?”
I was blown away. I really was speechless because that was our first real, real-world test. I had no idea how good it was going to do, how good is perform, and the way the acoustical engineer performs the test is similar to what my sales reps do. They bring in their portable amps and speakers. They hook it up. They play white noise at 95 to 100 decibels in one room. Then they go into the next room and they take readings, and this is before we put any product on the wall. So, 95 to 100 decibels in one room was translating to about 75 decibels in the next room. 75 decibels is still very obnoxious. So, if someone was in that room trying to sleep, they would have been very, very annoyed.
Then, we put our product on the wall, three coats, 30 wet mils each, let it dry. We do all that in less than a day. Then the next day, the acoustical engineer came back, and did the same test. We had dropped the decibels from 75 down to 55. At 55 decibels, you almost can’t hear anything unless you get really, really, really close to the wall.
That’s where you do have the perceptions of a soundproofed room.
John Jantsch: What did some of your previous businesses, and you may have not thought about this, but you may have an opinion. What have some of your previous business successes and failures been able to inform you on this venture?
Jonah Lupton: I actually posted about this a couple days ago. I guess it was last week on LinkedIn. I talked about my first failure, which was a company called Social Track back in 2007, when I … I mean, this is the early days of the internet, I guess, for guys like me that are non-technical, and in 2007, I was trying to find a couple co-founders. I knew I had this idea of … I wanted to create a dashboard that aggregated all of your social media feeds into one place. So, you’re Facebook feed, your LinkedIn, your Twitter, your YouTube, all in one pretty, nice-to-read dashboard. You could see all your activity, your connections, and messages, et cetera.
I was bootstrapping it because I was working full-time in the investment business, so I was making 100 grand, 120 grand a year and paying for rent and everything else. At the end of the month, whatever I had left over, I tried to put into Social Track. I found two co-founders literally off of Craigslist. We split up the equity one-third each. I had no idea what a vesting schedule was, so we didn’t do one of those, and quickly realized that neither one of these guys was going to be a good co-founder. They were both working full-time jobs. They were both married. They both had kids. One was getting read to move from Boston to New York, so he wouldn’t be very involved. He still owned a third of the company, and I had no way to really get it back.
I learned a lot of hard, hard lessons, where if you have a great idea and you realize it’s going to take a lot of capital to take that idea to the market and grow it, you have to go out and fundraise. I mean, as much as it sucks giving up equity and the company, that was not the kind of company that I should’ve been trying to bootstrap from the beginning.
Basically, a year after I shut the company down, Hootsuite launched, with essentially the same setup, the same idea, and they’re now a billion and a half dollar company. Not that I necessarily could have grown a Hootsuite. I mean, they’ve executed incredibly well. They have great investors, great employees and everything, but it was just a lesson that, I mean, if you don’t have the right co-founders and you’re not well capitalized, it is very, very, very difficult to scale a company in the technology space.
John Jantsch: I suspect that SoundGuard has been a bit capital intensive.
Jonah Lupton: It was. Yeah. Certainly developing the formula, all the testing. I did not appreciate how expensive all the testing would be, from lab testing to field testing, hiring acoustical engineers, doing fire testing, testing on the ingredients to make sure that we could pass all the EPA standards. We’re considered an environmentally friendly and low VOC product. We’re about 105 grams of hazardous material per liter, and the EPA says you have to be below 250. So, we are well, well below the EPA standards for eco-friendliness, which is good. I mean, that was obviously one of my goals from the beginning. It’s a water-based product.
So, coming up with a environmentally-friendly, water-based product that could block sound that didn’t infringe on any other patents out there, that could be sprayed onto a wall, could dry within two hours, that didn’t sag, that didn’t bubble … I mean, it was not easy, and it was expensive. I mean, in the last year and a half, I’ve probably spent 50 or 60,000 dollars just on legal work. Filing all the patents, having a manufacturing agreement set up and sales rep agreement and warrantees and all that stuff. Probably 50, 60,000 in legal work, 50, 60,000 on testing, 50, 60,000 on product development, maybe more than that, probably more than a 100. It has been expensive. I bootstrapped it with just my personal capital and business loans, more business loans than personal capital. My last couple starters basically wiped out my personal capital.
I went to a couple friends that are not even high net worth, but they just believed in what I was doing and they were willing to take a chance on this before we even had the product. I just did the classic Kevin O’Leary from Shark Tank, like, “Hey, give me $50,000. If this thing actually works and we start producing revenue, I’ll pay you back double your money.” Because a banker’s not going to give me any money. That was my only option. Then once we had the product, we did the test in Connecticut, we knew this stuff actually worked, I went back to them and I said, “Give me another $50,000, but now I’ll pay you 75% return on your money.” Then the last chunk of $50,000 was, “I’ll pay you 50% return on your money.”
Because as we took risk out of the company, obviously I was not willing to pay him the same terms that I was up front.
John Jantsch: What do you ultimately see your team looking like?
Jonah Lupton: I’m in the process of hiring right now. I would say of all the things that we are trying to tackle, hiring is the one that scares me the most. From running my own podcast for a couple years and doing 200 interviews, almost across the board, when I asked the founder, “What’s been the most critical aspect to your success in growth?” And it’s always the people. First, it’s people. Second is focus. So, those are the two things that I’m really, really honing in on is one, don’t get distracted by other meaningless ventures and projects that are going to come my way and two, I have to get the right people in place. I’ve never had to hire at scale before, and that’s what really scares me.
So, I don’t know if I should be trying to do it all myself or if I should try to bring in a part-time recruiter. There’s a couple companies out there that are trying to invest in us or form strategic partnerships. If I did something like that, one of the reasons would be so I could plug in to their HR staff and have their HR team help me hire the right people. We have 65 sales reps across the country, commission only guys, great people, but it’s very hard to get production from them unless you’re right in their face all the time. You’ve got to stay top of mind. I can’t manage 65 sales reps and then we’re probably bringing on another 50 distributors. That’s too many people and relationships for me to manage by myself. I need to hire at least a couple sales manager. I need to hire an operations manager, at least one or two, to help me go around the country and act as a project manager once things are up and running.
Right now, I’m outsourcing everything else. So, bookkeeping’s outsourced, obviously the legal work. I’m currently working with a digital marketing agency. Although, I’m getting ready to hire someone a little bit bigger and better. I’m quarter-backing a lot of things. I’m trying not … I can’t micromanage every little aspect of the company, so I really need to get the right people in place and then act as a manager of managers.
John Jantsch: Do you have, and again, maybe premature to be asking this question, but do you have an end-game in mind, or do you just want to see where this can go?
Jonah Lupton: Yeah. I mean, a little bit of both. I mean, I’ve certainly thought about it. I mean, I’ve put together spreadsheets of projects and everything else that may or may not come to fruition. Right now, with B2B market, like I said, so the hotels, the apartments, et cetera. In five months, we go B2C, so the homeowners, the small business owners, et cetera. I think this year, we can do at least 15 million in revenue, two-thirds of that coming B2B, one-third of that B2C. I think 15 is actually a little bit conservative, and we bring on the right distributors. Right now, I have a couple $250 million companies from Canada, Europe, and Australia asking to be the exclusive distributors in those areas. There’s so many good things that can happen over the next few months that could take that $15 million number up to 20 or 30 million.
I’ll say right now, I mean, I’ve already declined offers for $10 million for the company. It took me all of three seconds to say, “No thanks,” but each of those companies that wants to buy us would also be a great partner for us. Whether they make a strategic investment or whether we put together some sort of a joint venture partnership … I mean, all that stuff’s on the table. I’ll be in Boston all week meeting with a couple companies to discuss those things. VC firms are starting to call me, but right now, I’m just not ready to go down that VC channel. I don’t think it’s every going to make sense for us. I’d rather focus on strategic partnerships and strategic investments from big,..
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Transcript of How to Market a Product Idea That Nobody Has Heard Of
Transcript of How to Market a Product Idea That Nobody Has Heard Of
Transcript of How to Market a Product Idea That Nobody Has Heard Of written by John Jantsch read more at Duct Tape Marketing
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John Jantsch: Let’s say you have this idea for a product that nobody has ever heard of before. Nobody else has created. This innovation now has blue sky opportunity for you, but at the same time, now you’ve got the immense job of educating people about an entire new category of business, both treacherous and intriguing, at the same time.
You’re going to hear from Jonah Lupton, who did just that. He created a company called SoundGuard, which is producing soundproof paint, something nobody else offers, and we talk about his journey.
This episode of the Duct Tape Marketing podcast is sponsored by Podcast Bookers, podcastbookers.com. Podcasts are really hot, right? But you know what’s also really hot? Appearing as a guest on one of the many, many podcasts out there. Think about it. Much easier than writing a guest blog post. You get some high-quality content. You get great backlinks. People want to share that content. Maybe you can even transcribe that content. Being a guest on podcasts, getting yourself booked on podcasts, is a really, really great SEO tactic, great brand-building tactic. Podcast Bookers can get you booked on two, to three, to four podcasts every single month on auto-pilot. Go check it out. PodcastBookers.com.
Hello, and welcome to another episode of the Duct Tape Marketing podcast. This is John Jantsch, and my guest today is Jonah Lupton. He is an entrepreneur, advisor, and also a podcaster, who has started numerous companies and he admits that some were a success and some were failures. He’s currently the founder of a company called SoundGuard.
So, Jonah. Thanks for joining me.
Jonah Lupton: Thank you, John. Appreciate it.
John Jantsch: Give me a little bit about your background. I’m always intrigued. This is from your bio. Started numerous companies. So, tell us I guess the two or three minute version of your entrepreneurial journey.
Jonah Lupton: Absolutely. I actually spend nine years after college working for the Wall Street investment banks, the Morgan Stanleys, the Smith Barneys, managing money for wealthy individuals and non-profits and foundations. Halfway through that, I realized that I wanted to be an entrepreneur, but I couldn’t give up my salary. So, I started figuring out how to launch some projects on the side. My first venture was back in 2007, failed miserably, and I did a couple more while I was still employed, all failed miserably. Then I realized, the only way I’m going to be able to be a successful entrepreneur is if I do it full-time. I can’t do nights and weekends.
So, in 2011, I walked away from the investment business, started another company, and over the last … I guess it’s six years, I started a few different companies. Some were successful. Some were not. Some were in the, let’s see, nutritional supplement space. I did a couple payment startups or fundraising startups like Crowdfunding. Then a couple years ago, when I was just trying to find a solution to my own problem, which was noisy neighbors in an apartment building, and I could not find anything out there that really solved my needs at an affordable price point, that’s when I came up with the idea for soundproof paint, hired some chemists, and for the last two and a half years, we … Well, spent about a year and a half doing product development and testing. Then, we filed all the patents, and now we’ve been live in the market for a few months.
John Jantsch: This is a silly question because it sounds like one of those things that seems obvious enough that someone would’ve tackled it before. Why has nobody tackled soundproof paint?
Jonah Lupton: It’s a good question, and it’s usually the first question I get when I tell someone what I’ve been doing. They all say, “Why isn’t Sherwin-Williams doing this? Or, why isn’t Benjamin Moore? Or PPG? These 30, 40, 50 billion dollar companies, why haven’t they done it?”
I don’t have a good answer. I’d like to think that they’ve tried, and maybe they couldn’t figure it out. Maybe it was just too difficult. I know a lot of those companies … The Silicon Valley … The saying is, “If you want to beat the big boys early on, do things that don’t scale.” I heard that five or six years ago, and that always stuck with me. I think there’s some truth to that ’cause these big paint companies, they want to develop a product, they want to put it on their shelf in their own retail-branded stores, or they want to put it on the shelf at Home Depot and Lowe’s, and they want you to come in and buy it and put it on yourself, so it’s all D.I.Y. That’s not our product. Our product will never be D.I.Y, ’cause it has to be sprayed on by a high-pressure sprayer.
So, maybe that’s one reason, is that they just saw too many headwinds going into this market, but to be honest, I just don’t know. I mean, it was very difficult coming up with a formulation. My guess is we probably tried 20 or 25 different formulations with all types of different pigments and resins and fillers. I don’t come from an engineering background or a chemistry background, so I barely understand half of this stuff. I can’t even pronounce half the things that are in the product. Luckily, I partnered with some really good chemists early on. We figured out after these 20 or 25 formulations that there was a combination of three or four ingredients that, when put together, blocked out the most sound. We put all of those ingredients into this product, of course, meaning I don’t think any other company out there could come up with a product that was as effective as ours without using one of those ingredients and impeding on our patent.
John Jantsch: Well, yeah. When you go out and tell somebody in more of a sales conversation rather than a chemistry conversation, how does this work?
Jonah Lupton: We are blocking or deflecting sound. We are absorbing a little bit of sound. It’s hard to know exactly how much sound is being absorbed, but the majority is certainly being blocked or deflected. Where we see the best use cases for our product are on walls that are separating two spaces. So, you’re blocking the sound from passing through the wall. So, hotel rooms, apartments, condos, town houses, offices, dorms and student housing, those are all the markets that we’re starting off with. So, we’re starting off B2B. We’re selling through our sales reps, through distributors, going directly to the end customer. So, the ownership group of the hotel, the ownership group of the apartment complex. We’re going right to the facilities managers at the universities. I’m talking to two or three very, very large universities about doing all of their dorms in student housing when summer comes along.
John Jantsch: Right now, you are doing … do we call this installing? Or, the application of the … You’re actually doing it with your own people?
Jonah Lupton: No. Right now, and I don’t know if this will be the case in three or four years. It’s hard to know, but at least for now, we are only selling the products. We’re manufacturing and selling the product, and then we partner with contractors to actually install it. We have a training process. Any painting contractor in the country right now that handles commercial projects can fill out our application. We have to do a little bit of due diligence on them. I want to know who are the employees, they all have to go through background checks. I refuse to let some painter go into a hotel with key cards and cause a problem that we could have found if we had just done the appropriate background check. They have to have the right equipment. They have to have the right insurance coverage, and they just have to watch some videos, so they know how this is sprayed and, most importantly, how it’s measured. It’s very important that we get 90 wet mils of product onto the wall.
John Jantsch: I’m just going to ask you, what’s your measurement of success? So, when you go up to somebody and you say, “We’re going to make it soundproof.” Clearly, the wall’s so thick, it’s got so much on it today, it’s got a sound rating of some sort today, so what’s the measure of success for how you make it soundproof?
Jonah Lupton: We do a sound test up-front. That’s part of our … We have a two or three step process before we can even sell them any product. Obviously, we have a lot of leads that come into our website. Sales reps are out there generating leads. We’re going into a lot of different marketing channels to all generate leads. Once we get interest from the property, then we have to diagnose the problem. Is it something that we can help with? Is it a wall problem? Is it room-to-room? If there’s noise … If they’re on a busy intersection in downtown Boston and there’s street noise, that’s a window problem. That’s nothing that we can really help them with. Same thing if people are running up and down the hallways or slamming doors. We can help a little bit with that, but that’s more of a door problem.
So, as long as we diagnose that it’s a wall problem, we need them to send us some pictures. If we think that it’s an appropriate wall, meaning there’s no weird vents or something going from one room to the next, which you see once in a while, but assuming that it’s a project that we want to take on, I would say to one of my sales reps … I have 65 sales reps around the country in every major market. They’d go to the property, take some pictures, make a video, shakes some hands, et cetera, and then they’re going to run their own little amateurish sound test. Each sales rep has a portable speaker system with a built-in amp and Bluetooth and all that. Then they have a class 1 sound level meter, so they can essentially run their own sound test from room to room to determine, at least, how much sound we think is coming through the wall.
From that, I can sort of predict, if we put our product on the wall, how much sound we can essentially take out. In most cases … Well, I should say in all cases, it’s somewhere between 80 and 100%. It averages out around 90% just depending on the loudness of the noise, of course, and then the frequency range. Mid-frequency, we’re the best. We obviously do a great job on the high-end and the low-end, but the higher the frequency, the better we do. The lower stuff is a little bit harder to work with, but we still do.
So, I’d say we’re blocking out 60 to 70% on the low end, and 80, 90, 100% on the high-end.
John Jantsch: Many of the listeners of my show are small business owners and marketers. I know that one of the things that I’m guessing some of them might be thinking is, are their extra challenges in essentially creating a category? I mean, you would think, okay, this is blue sky opportunity out there, but there’s also challenges because nobody’s ever bought soundproof paint before.
Jonah Lupton: Exactly. That is one of the challenges, and that’s why we’re spending a lot of money on PR and brand-awareness and educating the market, and a lot of cold email outreach. I know a lot of people want to call it spam, but at the end of the day, I mean, we really did create a product that solves a problem for the hotels and the apartment buildings. I do believe that some of them want to hear from us, and we can’t get to all of them through conventional Facebook ads and PR and SEO and all that stuff. So, sometimes, we do have to buy some lists of general managers and blast out a cold email, and we actually get some really good response rates. We get great open rates. We get good click-through rates because I think people in these markets are genuinely intrigued by what we can offer them.
Now, and then the challenge is, of course, no one’s ever heard of soundproof paint. No one’s ever used it. There’s very few searches every month for soundproof paint. So, I can’t just create a bunch of content and have a nice website and put it out there and expect people to find us because it’ll take too long. We really have to be aggressive and proactive and go find them, bring them to the website, educate them, engage with them. It is a learning process, especially as we start going into the architect and the interior designers. I mean, we can’t drop them an email and expect to see us spec’d into a project two weeks later. We really have to nurture those relationships for a while, build up their confidence before they feel they can use us on a job, and it’s not going to come back and bite them.
John Jantsch: How much skepticism do you encounter? In other words, somebody saying, “Oh, yeah. Great. No way that works.”
Jonah Lupton: I think there was definitely a lot of skepticism in the last couple years as i was developing the product before I knew or anyone knew if I could actually pull this off. Once we did a project in Connecticut this past summer, and we hired independent acoustical engineers to come on site and do all the testing before and after the treatment, as well as having employees from the hotel in there before and after, it was like … The quote that I actually … I don’t think I put it on the website, but one of the housekeepers actually said to me, “When you start selling this and you start making your millions and you buy your mansion on the beach, can I come be your housekeeper?”
I was blown away. I really was speechless because that was our first real, real-world test. I had no idea how good it was going to do, how good is perform, and the way the acoustical engineer performs the test is similar to what my sales reps do. They bring in their portable amps and speakers. They hook it up. They play white noise at 95 to 100 decibels in one room. Then they go into the next room and they take readings, and this is before we put any product on the wall. So, 95 to 100 decibels in one room was translating to about 75 decibels in the next room. 75 decibels is still very obnoxious. So, if someone was in that room trying to sleep, they would have been very, very annoyed.
Then, we put our product on the wall, three coats, 30 wet mils each, let it dry. We do all that in less than a day. Then the next day, the acoustical engineer came back, and did the same test. We had dropped the decibels from 75 down to 55. At 55 decibels, you almost can’t hear anything unless you get really, really, really close to the wall.
That’s where you do have the perceptions of a soundproofed room.
John Jantsch: What did some of your previous businesses, and you may have not thought about this, but you may have an opinion. What have some of your previous business successes and failures been able to inform you on this venture?
Jonah Lupton: I actually posted about this a couple days ago. I guess it was last week on LinkedIn. I talked about my first failure, which was a company called Social Track back in 2007, when I … I mean, this is the early days of the internet, I guess, for guys like me that are non-technical, and in 2007, I was trying to find a couple co-founders. I knew I had this idea of … I wanted to create a dashboard that aggregated all of your social media feeds into one place. So, you’re Facebook feed, your LinkedIn, your Twitter, your YouTube, all in one pretty, nice-to-read dashboard. You could see all your activity, your connections, and messages, et cetera.
I was bootstrapping it because I was working full-time in the investment business, so I was making 100 grand, 120 grand a year and paying for rent and everything else. At the end of the month, whatever I had left over, I tried to put into Social Track. I found two co-founders literally off of Craigslist. We split up the equity one-third each. I had no idea what a vesting schedule was, so we didn’t do one of those, and quickly realized that neither one of these guys was going to be a good co-founder. They were both working full-time jobs. They were both married. They both had kids. One was getting read to move from Boston to New York, so he wouldn’t be very involved. He still owned a third of the company, and I had no way to really get it back.
I learned a lot of hard, hard lessons, where if you have a great idea and you realize it’s going to take a lot of capital to take that idea to the market and grow it, you have to go out and fundraise. I mean, as much as it sucks giving up equity and the company, that was not the kind of company that I should’ve been trying to bootstrap from the beginning.
Basically, a year after I shut the company down, Hootsuite launched, with essentially the same setup, the same idea, and they’re now a billion and a half dollar company. Not that I necessarily could have grown a Hootsuite. I mean, they’ve executed incredibly well. They have great investors, great employees and everything, but it was just a lesson that, I mean, if you don’t have the right co-founders and you’re not well capitalized, it is very, very, very difficult to scale a company in the technology space.
John Jantsch: I suspect that SoundGuard has been a bit capital intensive.
Jonah Lupton: It was. Yeah. Certainly developing the formula, all the testing. I did not appreciate how expensive all the testing would be, from lab testing to field testing, hiring acoustical engineers, doing fire testing, testing on the ingredients to make sure that we could pass all the EPA standards. We’re considered an environmentally friendly and low VOC product. We’re about 105 grams of hazardous material per liter, and the EPA says you have to be below 250. So, we are well, well below the EPA standards for eco-friendliness, which is good. I mean, that was obviously one of my goals from the beginning. It’s a water-based product.
So, coming up with a environmentally-friendly, water-based product that could block sound that didn’t infringe on any other patents out there, that could be sprayed onto a wall, could dry within two hours, that didn’t sag, that didn’t bubble … I mean, it was not easy, and it was expensive. I mean, in the last year and a half, I’ve probably spent 50 or 60,000 dollars just on legal work. Filing all the patents, having a manufacturing agreement set up and sales rep agreement and warrantees and all that stuff. Probably 50, 60,000 in legal work, 50, 60,000 on testing, 50, 60,000 on product development, maybe more than that, probably more than a 100. It has been expensive. I bootstrapped it with just my personal capital and business loans, more business loans than personal capital. My last couple starters basically wiped out my personal capital.
I went to a couple friends that are not even high net worth, but they just believed in what I was doing and they were willing to take a chance on this before we even had the product. I just did the classic Kevin O’Leary from Shark Tank, like, “Hey, give me $50,000. If this thing actually works and we start producing revenue, I’ll pay you back double your money.” Because a banker’s not going to give me any money. That was my only option. Then once we had the product, we did the test in Connecticut, we knew this stuff actually worked, I went back to them and I said, “Give me another $50,000, but now I’ll pay you 75% return on your money.” Then the last chunk of $50,000 was, “I’ll pay you 50% return on your money.”
Because as we took risk out of the company, obviously I was not willing to pay him the same terms that I was up front.
John Jantsch: What do you ultimately see your team looking like?
Jonah Lupton: I’m in the process of hiring right now. I would say of all the things that we are trying to tackle, hiring is the one that scares me the most. From running my own podcast for a couple years and doing 200 interviews, almost across the board, when I asked the founder, “What’s been the most critical aspect to your success in growth?” And it’s always the people. First, it’s people. Second is focus. So, those are the two things that I’m really, really honing in on is one, don’t get distracted by other meaningless ventures and projects that are going to come my way and two, I have to get the right people in place. I’ve never had to hire at scale before, and that’s what really scares me.
So, I don’t know if I should be trying to do it all myself or if I should try to bring in a part-time recruiter. There’s a couple companies out there that are trying to invest in us or form strategic partnerships. If I did something like that, one of the reasons would be so I could plug in to their HR staff and have their HR team help me hire the right people. We have 65 sales reps across the country, commission only guys, great people, but it’s very hard to get production from them unless you’re right in their face all the time. You’ve got to stay top of mind. I can’t manage 65 sales reps and then we’re probably bringing on another 50 distributors. That’s too many people and relationships for me to manage by myself. I need to hire at least a couple sales manager. I need to hire an operations manager, at least one or two, to help me go around the country and act as a project manager once things are up and running.
Right now, I’m outsourcing everything else. So, bookkeeping’s outsourced, obviously the legal work. I’m currently working with a digital marketing agency. Although, I’m getting ready to hire someone a little bit bigger and better. I’m quarter-backing a lot of things. I’m trying not … I can’t micromanage every little aspect of the company, so I really need to get the right people in place and then act as a manager of managers.
John Jantsch: Do you have, and again, maybe premature to be asking this question, but do you have an end-game in mind, or do you just want to see where this can go?
Jonah Lupton: Yeah. I mean, a little bit of both. I mean, I’ve certainly thought about it. I mean, I’ve put together spreadsheets of projects and everything else that may or may not come to fruition. Right now, with B2B market, like I said, so the hotels, the apartments, et cetera. In five months, we go B2C, so the homeowners, the small business owners, et cetera. I think this year, we can do at least 15 million in revenue, two-thirds of that coming B2B, one-third of that B2C. I think 15 is actually a little bit conservative, and we bring on the right distributors. Right now, I have a couple $250 million companies from Canada, Europe, and Australia asking to be the exclusive distributors in those areas. There’s so many good things that can happen over the next few months that could take that $15 million number up to 20 or 30 million.
I’ll say right now, I mean, I’ve already declined offers for $10 million for the company. It took me all of three seconds to say, “No thanks,” but each of those companies that wants to buy us would also be a great partner for us. Whether they make a strategic investment or whether we put together some sort of a joint venture partnership … I mean, all that stuff’s on the table. I’ll be in Boston all week meeting with a couple companies to discuss those things. VC firms are starting to call me, but right now, I’m just not ready to go down that VC channel. I don’t think it’s every going to make sense for us. I’d rather focus on strategic partnerships and strategic investments from big,..
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Transcript of How to Market a Product Idea That Nobody Has Heard Of
Transcript of How to Market a Product Idea That Nobody Has Heard Of
Transcript of How to Market a Product Idea That Nobody Has Heard Of written by John Jantsch read more at Duct Tape Marketing
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John Jantsch: Let’s say you have this idea for a product that nobody has ever heard of before. Nobody else has created. This innovation now has blue sky opportunity for you, but at the same time, now you’ve got the immense job of educating people about an entire new category of business, both treacherous and intriguing, at the same time.
You’re going to hear from Jonah Lupton, who did just that. He created a company called SoundGuard, which is producing soundproof paint, something nobody else offers, and we talk about his journey.
This episode of the Duct Tape Marketing podcast is sponsored by Podcast Bookers, podcastbookers.com. Podcasts are really hot, right? But you know what’s also really hot? Appearing as a guest on one of the many, many podcasts out there. Think about it. Much easier than writing a guest blog post. You get some high-quality content. You get great backlinks. People want to share that content. Maybe you can even transcribe that content. Being a guest on podcasts, getting yourself booked on podcasts, is a really, really great SEO tactic, great brand-building tactic. Podcast Bookers can get you booked on two, to three, to four podcasts every single month on auto-pilot. Go check it out. PodcastBookers.com.
Hello, and welcome to another episode of the Duct Tape Marketing podcast. This is John Jantsch, and my guest today is Jonah Lupton. He is an entrepreneur, advisor, and also a podcaster, who has started numerous companies and he admits that some were a success and some were failures. He’s currently the founder of a company called SoundGuard.
So, Jonah. Thanks for joining me.
Jonah Lupton: Thank you, John. Appreciate it.
John Jantsch: Give me a little bit about your background. I’m always intrigued. This is from your bio. Started numerous companies. So, tell us I guess the two or three minute version of your entrepreneurial journey.
Jonah Lupton: Absolutely. I actually spend nine years after college working for the Wall Street investment banks, the Morgan Stanleys, the Smith Barneys, managing money for wealthy individuals and non-profits and foundations. Halfway through that, I realized that I wanted to be an entrepreneur, but I couldn’t give up my salary. So, I started figuring out how to launch some projects on the side. My first venture was back in 2007, failed miserably, and I did a couple more while I was still employed, all failed miserably. Then I realized, the only way I’m going to be able to be a successful entrepreneur is if I do it full-time. I can’t do nights and weekends.
So, in 2011, I walked away from the investment business, started another company, and over the last … I guess it’s six years, I started a few different companies. Some were successful. Some were not. Some were in the, let’s see, nutritional supplement space. I did a couple payment startups or fundraising startups like Crowdfunding. Then a couple years ago, when I was just trying to find a solution to my own problem, which was noisy neighbors in an apartment building, and I could not find anything out there that really solved my needs at an affordable price point, that’s when I came up with the idea for soundproof paint, hired some chemists, and for the last two and a half years, we … Well, spent about a year and a half doing product development and testing. Then, we filed all the patents, and now we’ve been live in the market for a few months.
John Jantsch: This is a silly question because it sounds like one of those things that seems obvious enough that someone would’ve tackled it before. Why has nobody tackled soundproof paint?
Jonah Lupton: It’s a good question, and it’s usually the first question I get when I tell someone what I’ve been doing. They all say, “Why isn’t Sherwin-Williams doing this? Or, why isn’t Benjamin Moore? Or PPG? These 30, 40, 50 billion dollar companies, why haven’t they done it?”
I don’t have a good answer. I’d like to think that they’ve tried, and maybe they couldn’t figure it out. Maybe it was just too difficult. I know a lot of those companies … The Silicon Valley … The saying is, “If you want to beat the big boys early on, do things that don’t scale.” I heard that five or six years ago, and that always stuck with me. I think there’s some truth to that ’cause these big paint companies, they want to develop a product, they want to put it on their shelf in their own retail-branded stores, or they want to put it on the shelf at Home Depot and Lowe’s, and they want you to come in and buy it and put it on yourself, so it’s all D.I.Y. That’s not our product. Our product will never be D.I.Y, ’cause it has to be sprayed on by a high-pressure sprayer.
So, maybe that’s one reason, is that they just saw too many headwinds going into this market, but to be honest, I just don’t know. I mean, it was very difficult coming up with a formulation. My guess is we probably tried 20 or 25 different formulations with all types of different pigments and resins and fillers. I don’t come from an engineering background or a chemistry background, so I barely understand half of this stuff. I can’t even pronounce half the things that are in the product. Luckily, I partnered with some really good chemists early on. We figured out after these 20 or 25 formulations that there was a combination of three or four ingredients that, when put together, blocked out the most sound. We put all of those ingredients into this product, of course, meaning I don’t think any other company out there could come up with a product that was as effective as ours without using one of those ingredients and impeding on our patent.
John Jantsch: Well, yeah. When you go out and tell somebody in more of a sales conversation rather than a chemistry conversation, how does this work?
Jonah Lupton: We are blocking or deflecting sound. We are absorbing a little bit of sound. It’s hard to know exactly how much sound is being absorbed, but the majority is certainly being blocked or deflected. Where we see the best use cases for our product are on walls that are separating two spaces. So, you’re blocking the sound from passing through the wall. So, hotel rooms, apartments, condos, town houses, offices, dorms and student housing, those are all the markets that we’re starting off with. So, we’re starting off B2B. We’re selling through our sales reps, through distributors, going directly to the end customer. So, the ownership group of the hotel, the ownership group of the apartment complex. We’re going right to the facilities managers at the universities. I’m talking to two or three very, very large universities about doing all of their dorms in student housing when summer comes along.
John Jantsch: Right now, you are doing … do we call this installing? Or, the application of the … You’re actually doing it with your own people?
Jonah Lupton: No. Right now, and I don’t know if this will be the case in three or four years. It’s hard to know, but at least for now, we are only selling the products. We’re manufacturing and selling the product, and then we partner with contractors to actually install it. We have a training process. Any painting contractor in the country right now that handles commercial projects can fill out our application. We have to do a little bit of due diligence on them. I want to know who are the employees, they all have to go through background checks. I refuse to let some painter go into a hotel with key cards and cause a problem that we could have found if we had just done the appropriate background check. They have to have the right equipment. They have to have the right insurance coverage, and they just have to watch some videos, so they know how this is sprayed and, most importantly, how it’s measured. It’s very important that we get 90 wet mils of product onto the wall.
John Jantsch: I’m just going to ask you, what’s your measurement of success? So, when you go up to somebody and you say, “We’re going to make it soundproof.” Clearly, the wall’s so thick, it’s got so much on it today, it’s got a sound rating of some sort today, so what’s the measure of success for how you make it soundproof?
Jonah Lupton: We do a sound test up-front. That’s part of our … We have a two or three step process before we can even sell them any product. Obviously, we have a lot of leads that come into our website. Sales reps are out there generating leads. We’re going into a lot of different marketing channels to all generate leads. Once we get interest from the property, then we have to diagnose the problem. Is it something that we can help with? Is it a wall problem? Is it room-to-room? If there’s noise … If they’re on a busy intersection in downtown Boston and there’s street noise, that’s a window problem. That’s nothing that we can really help them with. Same thing if people are running up and down the hallways or slamming doors. We can help a little bit with that, but that’s more of a door problem.
So, as long as we diagnose that it’s a wall problem, we need them to send us some pictures. If we think that it’s an appropriate wall, meaning there’s no weird vents or something going from one room to the next, which you see once in a while, but assuming that it’s a project that we want to take on, I would say to one of my sales reps … I have 65 sales reps around the country in every major market. They’d go to the property, take some pictures, make a video, shakes some hands, et cetera, and then they’re going to run their own little amateurish sound test. Each sales rep has a portable speaker system with a built-in amp and Bluetooth and all that. Then they have a class 1 sound level meter, so they can essentially run their own sound test from room to room to determine, at least, how much sound we think is coming through the wall.
From that, I can sort of predict, if we put our product on the wall, how much sound we can essentially take out. In most cases … Well, I should say in all cases, it’s somewhere between 80 and 100%. It averages out around 90% just depending on the loudness of the noise, of course, and then the frequency range. Mid-frequency, we’re the best. We obviously do a great job on the high-end and the low-end, but the higher the frequency, the better we do. The lower stuff is a little bit harder to work with, but we still do.
So, I’d say we’re blocking out 60 to 70% on the low end, and 80, 90, 100% on the high-end.
John Jantsch: Many of the listeners of my show are small business owners and marketers. I know that one of the things that I’m guessing some of them might be thinking is, are their extra challenges in essentially creating a category? I mean, you would think, okay, this is blue sky opportunity out there, but there’s also challenges because nobody’s ever bought soundproof paint before.
Jonah Lupton: Exactly. That is one of the challenges, and that’s why we’re spending a lot of money on PR and brand-awareness and educating the market, and a lot of cold email outreach. I know a lot of people want to call it spam, but at the end of the day, I mean, we really did create a product that solves a problem for the hotels and the apartment buildings. I do believe that some of them want to hear from us, and we can’t get to all of them through conventional Facebook ads and PR and SEO and all that stuff. So, sometimes, we do have to buy some lists of general managers and blast out a cold email, and we actually get some really good response rates. We get great open rates. We get good click-through rates because I think people in these markets are genuinely intrigued by what we can offer them.
Now, and then the challenge is, of course, no one’s ever heard of soundproof paint. No one’s ever used it. There’s very few searches every month for soundproof paint. So, I can’t just create a bunch of content and have a nice website and put it out there and expect people to find us because it’ll take too long. We really have to be aggressive and proactive and go find them, bring them to the website, educate them, engage with them. It is a learning process, especially as we start going into the architect and the interior designers. I mean, we can’t drop them an email and expect to see us spec’d into a project two weeks later. We really have to nurture those relationships for a while, build up their confidence before they feel they can use us on a job, and it’s not going to come back and bite them.
John Jantsch: How much skepticism do you encounter? In other words, somebody saying, “Oh, yeah. Great. No way that works.”
Jonah Lupton: I think there was definitely a lot of skepticism in the last couple years as i was developing the product before I knew or anyone knew if I could actually pull this off. Once we did a project in Connecticut this past summer, and we hired independent acoustical engineers to come on site and do all the testing before and after the treatment, as well as having employees from the hotel in there before and after, it was like … The quote that I actually … I don’t think I put it on the website, but one of the housekeepers actually said to me, “When you start selling this and you start making your millions and you buy your mansion on the beach, can I come be your housekeeper?”
I was blown away. I really was speechless because that was our first real, real-world test. I had no idea how good it was going to do, how good is perform, and the way the acoustical engineer performs the test is similar to what my sales reps do. They bring in their portable amps and speakers. They hook it up. They play white noise at 95 to 100 decibels in one room. Then they go into the next room and they take readings, and this is before we put any product on the wall. So, 95 to 100 decibels in one room was translating to about 75 decibels in the next room. 75 decibels is still very obnoxious. So, if someone was in that room trying to sleep, they would have been very, very annoyed.
Then, we put our product on the wall, three coats, 30 wet mils each, let it dry. We do all that in less than a day. Then the next day, the acoustical engineer came back, and did the same test. We had dropped the decibels from 75 down to 55. At 55 decibels, you almost can’t hear anything unless you get really, really, really close to the wall.
That’s where you do have the perceptions of a soundproofed room.
John Jantsch: What did some of your previous businesses, and you may have not thought about this, but you may have an opinion. What have some of your previous business successes and failures been able to inform you on this venture?
Jonah Lupton: I actually posted about this a couple days ago. I guess it was last week on LinkedIn. I talked about my first failure, which was a company called Social Track back in 2007, when I … I mean, this is the early days of the internet, I guess, for guys like me that are non-technical, and in 2007, I was trying to find a couple co-founders. I knew I had this idea of … I wanted to create a dashboard that aggregated all of your social media feeds into one place. So, you’re Facebook feed, your LinkedIn, your Twitter, your YouTube, all in one pretty, nice-to-read dashboard. You could see all your activity, your connections, and messages, et cetera.
I was bootstrapping it because I was working full-time in the investment business, so I was making 100 grand, 120 grand a year and paying for rent and everything else. At the end of the month, whatever I had left over, I tried to put into Social Track. I found two co-founders literally off of Craigslist. We split up the equity one-third each. I had no idea what a vesting schedule was, so we didn’t do one of those, and quickly realized that neither one of these guys was going to be a good co-founder. They were both working full-time jobs. They were both married. They both had kids. One was getting read to move from Boston to New York, so he wouldn’t be very involved. He still owned a third of the company, and I had no way to really get it back.
I learned a lot of hard, hard lessons, where if you have a great idea and you realize it’s going to take a lot of capital to take that idea to the market and grow it, you have to go out and fundraise. I mean, as much as it sucks giving up equity and the company, that was not the kind of company that I should’ve been trying to bootstrap from the beginning.
Basically, a year after I shut the company down, Hootsuite launched, with essentially the same setup, the same idea, and they’re now a billion and a half dollar company. Not that I necessarily could have grown a Hootsuite. I mean, they’ve executed incredibly well. They have great investors, great employees and everything, but it was just a lesson that, I mean, if you don’t have the right co-founders and you’re not well capitalized, it is very, very, very difficult to scale a company in the technology space.
John Jantsch: I suspect that SoundGuard has been a bit capital intensive.
Jonah Lupton: It was. Yeah. Certainly developing the formula, all the testing. I did not appreciate how expensive all the testing would be, from lab testing to field testing, hiring acoustical engineers, doing fire testing, testing on the ingredients to make sure that we could pass all the EPA standards. We’re considered an environmentally friendly and low VOC product. We’re about 105 grams of hazardous material per liter, and the EPA says you have to be below 250. So, we are well, well below the EPA standards for eco-friendliness, which is good. I mean, that was obviously one of my goals from the beginning. It’s a water-based product.
So, coming up with a environmentally-friendly, water-based product that could block sound that didn’t infringe on any other patents out there, that could be sprayed onto a wall, could dry within two hours, that didn’t sag, that didn’t bubble … I mean, it was not easy, and it was expensive. I mean, in the last year and a half, I’ve probably spent 50 or 60,000 dollars just on legal work. Filing all the patents, having a manufacturing agreement set up and sales rep agreement and warrantees and all that stuff. Probably 50, 60,000 in legal work, 50, 60,000 on testing, 50, 60,000 on product development, maybe more than that, probably more than a 100. It has been expensive. I bootstrapped it with just my personal capital and business loans, more business loans than personal capital. My last couple starters basically wiped out my personal capital.
I went to a couple friends that are not even high net worth, but they just believed in what I was doing and they were willing to take a chance on this before we even had the product. I just did the classic Kevin O’Leary from Shark Tank, like, “Hey, give me $50,000. If this thing actually works and we start producing revenue, I’ll pay you back double your money.” Because a banker’s not going to give me any money. That was my only option. Then once we had the product, we did the test in Connecticut, we knew this stuff actually worked, I went back to them and I said, “Give me another $50,000, but now I’ll pay you 75% return on your money.” Then the last chunk of $50,000 was, “I’ll pay you 50% return on your money.”
Because as we took risk out of the company, obviously I was not willing to pay him the same terms that I was up front.
John Jantsch: What do you ultimately see your team looking like?
Jonah Lupton: I’m in the process of hiring right now. I would say of all the things that we are trying to tackle, hiring is the one that scares me the most. From running my own podcast for a couple years and doing 200 interviews, almost across the board, when I asked the founder, “What’s been the most critical aspect to your success in growth?” And it’s always the people. First, it’s people. Second is focus. So, those are the two things that I’m really, really honing in on is one, don’t get distracted by other meaningless ventures and projects that are going to come my way and two, I have to get the right people in place. I’ve never had to hire at scale before, and that’s what really scares me.
So, I don’t know if I should be trying to do it all myself or if I should try to bring in a part-time recruiter. There’s a couple companies out there that are trying to invest in us or form strategic partnerships. If I did something like that, one of the reasons would be so I could plug in to their HR staff and have their HR team help me hire the right people. We have 65 sales reps across the country, commission only guys, great people, but it’s very hard to get production from them unless you’re right in their face all the time. You’ve got to stay top of mind. I can’t manage 65 sales reps and then we’re probably bringing on another 50 distributors. That’s too many people and relationships for me to manage by myself. I need to hire at least a couple sales manager. I need to hire an operations manager, at least one or two, to help me go around the country and act as a project manager once things are up and running.
Right now, I’m outsourcing everything else. So, bookkeeping’s outsourced, obviously the legal work. I’m currently working with a digital marketing agency. Although, I’m getting ready to hire someone a little bit bigger and better. I’m quarter-backing a lot of things. I’m trying not … I can’t micromanage every little aspect of the company, so I really need to get the right people in place and then act as a manager of managers.
John Jantsch: Do you have, and again, maybe premature to be asking this question, but do you have an end-game in mind, or do you just want to see where this can go?
Jonah Lupton: Yeah. I mean, a little bit of both. I mean, I’ve certainly thought about it. I mean, I’ve put together spreadsheets of projects and everything else that may or may not come to fruition. Right now, with B2B market, like I said, so the hotels, the apartments, et cetera. In five months, we go B2C, so the homeowners, the small business owners, et cetera. I think this year, we can do at least 15 million in revenue, two-thirds of that coming B2B, one-third of that B2C. I think 15 is actually a little bit conservative, and we bring on the right distributors. Right now, I have a couple $250 million companies from Canada, Europe, and Australia asking to be the exclusive distributors in those areas. There’s so many good things that can happen over the next few months that could take that $15 million number up to 20 or 30 million.
I’ll say right now, I mean, I’ve already declined offers for $10 million for the company. It took me all of three seconds to say, “No thanks,” but each of those companies that wants to buy us would also be a great partner for us. Whether they make a strategic investment or whether we put together some sort of a joint venture partnership … I mean, all that stuff’s on the table. I’ll be in Boston all week meeting with a couple companies to discuss those things. VC firms are starting to call me, but right now, I’m just not ready to go down that VC channel. I don’t think it’s every going to make sense for us. I’d rather focus on strategic partnerships and strategic investments from big,..
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Transcript of How to Market a Product Idea That Nobody Has Heard Of
Transcript of How to Market a Product Idea That Nobody Has Heard Of
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John Jantsch: Let’s say you have this idea for a product that nobody has ever heard of before. Nobody else has created. This innovation now has blue sky opportunity for you, but…
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Transcript of How to Market a Product Idea That Nobody Has Heard Of
Transcript of How to Market a Product Idea That Nobody Has Heard Of
Transcript of How to Market a Product Idea That Nobody Has Heard Of written by John Jantsch read more at Duct Tape Marketing
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John Jantsch: Let’s say you have this idea for a product that nobody has ever heard of before. Nobody else has created. This innovation now has blue sky opportunity for you, but…
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Transcript of How to Market a Product Idea That Nobody Has Heard Of
Transcript of How to Market a Product Idea That Nobody Has Heard Of
Transcript of How to Market a Product Idea That Nobody Has Heard Of written by John Jantsch read more at Duct Tape Marketing
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John Jantsch: Let’s say you have this idea for a product that nobody has ever heard of before. Nobody else has created. This innovation now has blue sky opportunity for you, but at the same time, now you’ve got the immense job of educating people about an entire new category of business, both treacherous and intriguing, at the same time.
You’re going to hear from Jonah Lupton, who did just that. He created a company called SoundGuard, which is producing soundproof paint, something nobody else offers, and we talk about his journey.
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Hello, and welcome to another episode of the Duct Tape Marketing podcast. This is John Jantsch, and my guest today is Jonah Lupton. He is an entrepreneur, advisor, and also a podcaster, who has started numerous companies and he admits that some were a success and some were failures. He’s currently the founder of a company called SoundGuard.
So, Jonah. Thanks for joining me.
Jonah Lupton: Thank you, John. Appreciate it.
John Jantsch: Give me a little bit about your background. I’m always intrigued. This is from your bio. Started numerous companies. So, tell us I guess the two or three minute version of your entrepreneurial journey.
Jonah Lupton: Absolutely. I actually spend nine years after college working for the Wall Street investment banks, the Morgan Stanleys, the Smith Barneys, managing money for wealthy individuals and non-profits and foundations. Halfway through that, I realized that I wanted to be an entrepreneur, but I couldn’t give up my salary. So, I started figuring out how to launch some projects on the side. My first venture was back in 2007, failed miserably, and I did a couple more while I was still employed, all failed miserably. Then I realized, the only way I’m going to be able to be a successful entrepreneur is if I do it full-time. I can’t do nights and weekends.
So, in 2011, I walked away from the investment business, started another company, and over the last … I guess it’s six years, I started a few different companies. Some were successful. Some were not. Some were in the, let’s see, nutritional supplement space. I did a couple payment startups or fundraising startups like Crowdfunding. Then a couple years ago, when I was just trying to find a solution to my own problem, which was noisy neighbors in an apartment building, and I could not find anything out there that really solved my needs at an affordable price point, that’s when I came up with the idea for soundproof paint, hired some chemists, and for the last two and a half years, we … Well, spent about a year and a half doing product development and testing. Then, we filed all the patents, and now we’ve been live in the market for a few months.
John Jantsch: This is a silly question because it sounds like one of those things that seems obvious enough that someone would’ve tackled it before. Why has nobody tackled soundproof paint?
Jonah Lupton: It’s a good question, and it’s usually the first question I get when I tell someone what I’ve been doing. They all say, “Why isn’t Sherwin-Williams doing this? Or, why isn’t Benjamin Moore? Or PPG? These 30, 40, 50 billion dollar companies, why haven’t they done it?”
I don’t have a good answer. I’d like to think that they’ve tried, and maybe they couldn’t figure it out. Maybe it was just too difficult. I know a lot of those companies … The Silicon Valley … The saying is, “If you want to beat the big boys early on, do things that don’t scale.” I heard that five or six years ago, and that always stuck with me. I think there’s some truth to that ’cause these big paint companies, they want to develop a product, they want to put it on their shelf in their own retail-branded stores, or they want to put it on the shelf at Home Depot and Lowe’s, and they want you to come in and buy it and put it on yourself, so it’s all D.I.Y. That’s not our product. Our product will never be D.I.Y, ’cause it has to be sprayed on by a high-pressure sprayer.
So, maybe that’s one reason, is that they just saw too many headwinds going into this market, but to be honest, I just don’t know. I mean, it was very difficult coming up with a formulation. My guess is we probably tried 20 or 25 different formulations with all types of different pigments and resins and fillers. I don’t come from an engineering background or a chemistry background, so I barely understand half of this stuff. I can’t even pronounce half the things that are in the product. Luckily, I partnered with some really good chemists early on. We figured out after these 20 or 25 formulations that there was a combination of three or four ingredients that, when put together, blocked out the most sound. We put all of those ingredients into this product, of course, meaning I don’t think any other company out there could come up with a product that was as effective as ours without using one of those ingredients and impeding on our patent.
John Jantsch: Well, yeah. When you go out and tell somebody in more of a sales conversation rather than a chemistry conversation, how does this work?
Jonah Lupton: We are blocking or deflecting sound. We are absorbing a little bit of sound. It’s hard to know exactly how much sound is being absorbed, but the majority is certainly being blocked or deflected. Where we see the best use cases for our product are on walls that are separating two spaces. So, you’re blocking the sound from passing through the wall. So, hotel rooms, apartments, condos, town houses, offices, dorms and student housing, those are all the markets that we’re starting off with. So, we’re starting off B2B. We’re selling through our sales reps, through distributors, going directly to the end customer. So, the ownership group of the hotel, the ownership group of the apartment complex. We’re going right to the facilities managers at the universities. I’m talking to two or three very, very large universities about doing all of their dorms in student housing when summer comes along.
John Jantsch: Right now, you are doing … do we call this installing? Or, the application of the … You’re actually doing it with your own people?
Jonah Lupton: No. Right now, and I don’t know if this will be the case in three or four years. It’s hard to know, but at least for now, we are only selling the products. We’re manufacturing and selling the product, and then we partner with contractors to actually install it. We have a training process. Any painting contractor in the country right now that handles commercial projects can fill out our application. We have to do a little bit of due diligence on them. I want to know who are the employees, they all have to go through background checks. I refuse to let some painter go into a hotel with key cards and cause a problem that we could have found if we had just done the appropriate background check. They have to have the right equipment. They have to have the right insurance coverage, and they just have to watch some videos, so they know how this is sprayed and, most importantly, how it’s measured. It’s very important that we get 90 wet mils of product onto the wall.
John Jantsch: I’m just going to ask you, what’s your measurement of success? So, when you go up to somebody and you say, “We’re going to make it soundproof.” Clearly, the wall’s so thick, it’s got so much on it today, it’s got a sound rating of some sort today, so what’s the measure of success for how you make it soundproof?
Jonah Lupton: We do a sound test up-front. That’s part of our … We have a two or three step process before we can even sell them any product. Obviously, we have a lot of leads that come into our website. Sales reps are out there generating leads. We’re going into a lot of different marketing channels to all generate leads. Once we get interest from the property, then we have to diagnose the problem. Is it something that we can help with? Is it a wall problem? Is it room-to-room? If there’s noise … If they’re on a busy intersection in downtown Boston and there’s street noise, that’s a window problem. That’s nothing that we can really help them with. Same thing if people are running up and down the hallways or slamming doors. We can help a little bit with that, but that’s more of a door problem.
So, as long as we diagnose that it’s a wall problem, we need them to send us some pictures. If we think that it’s an appropriate wall, meaning there’s no weird vents or something going from one room to the next, which you see once in a while, but assuming that it’s a project that we want to take on, I would say to one of my sales reps … I have 65 sales reps around the country in every major market. They’d go to the property, take some pictures, make a video, shakes some hands, et cetera, and then they’re going to run their own little amateurish sound test. Each sales rep has a portable speaker system with a built-in amp and Bluetooth and all that. Then they have a class 1 sound level meter, so they can essentially run their own sound test from room to room to determine, at least, how much sound we think is coming through the wall.
From that, I can sort of predict, if we put our product on the wall, how much sound we can essentially take out. In most cases … Well, I should say in all cases, it’s somewhere between 80 and 100%. It averages out around 90% just depending on the loudness of the noise, of course, and then the frequency range. Mid-frequency, we’re the best. We obviously do a great job on the high-end and the low-end, but the higher the frequency, the better we do. The lower stuff is a little bit harder to work with, but we still do.
So, I’d say we’re blocking out 60 to 70% on the low end, and 80, 90, 100% on the high-end.
John Jantsch: Many of the listeners of my show are small business owners and marketers. I know that one of the things that I’m guessing some of them might be thinking is, are their extra challenges in essentially creating a category? I mean, you would think, okay, this is blue sky opportunity out there, but there’s also challenges because nobody’s ever bought soundproof paint before.
Jonah Lupton: Exactly. That is one of the challenges, and that’s why we’re spending a lot of money on PR and brand-awareness and educating the market, and a lot of cold email outreach. I know a lot of people want to call it spam, but at the end of the day, I mean, we really did create a product that solves a problem for the hotels and the apartment buildings. I do believe that some of them want to hear from us, and we can’t get to all of them through conventional Facebook ads and PR and SEO and all that stuff. So, sometimes, we do have to buy some lists of general managers and blast out a cold email, and we actually get some really good response rates. We get great open rates. We get good click-through rates because I think people in these markets are genuinely intrigued by what we can offer them.
Now, and then the challenge is, of course, no one’s ever heard of soundproof paint. No one’s ever used it. There’s very few searches every month for soundproof paint. So, I can’t just create a bunch of content and have a nice website and put it out there and expect people to find us because it’ll take too long. We really have to be aggressive and proactive and go find them, bring them to the website, educate them, engage with them. It is a learning process, especially as we start going into the architect and the interior designers. I mean, we can’t drop them an email and expect to see us spec’d into a project two weeks later. We really have to nurture those relationships for a while, build up their confidence before they feel they can use us on a job, and it’s not going to come back and bite them.
John Jantsch: How much skepticism do you encounter? In other words, somebody saying, “Oh, yeah. Great. No way that works.”
Jonah Lupton: I think there was definitely a lot of skepticism in the last couple years as i was developing the product before I knew or anyone knew if I could actually pull this off. Once we did a project in Connecticut this past summer, and we hired independent acoustical engineers to come on site and do all the testing before and after the treatment, as well as having employees from the hotel in there before and after, it was like … The quote that I actually … I don’t think I put it on the website, but one of the housekeepers actually said to me, “When you start selling this and you start making your millions and you buy your mansion on the beach, can I come be your housekeeper?”
I was blown away. I really was speechless because that was our first real, real-world test. I had no idea how good it was going to do, how good is perform, and the way the acoustical engineer performs the test is similar to what my sales reps do. They bring in their portable amps and speakers. They hook it up. They play white noise at 95 to 100 decibels in one room. Then they go into the next room and they take readings, and this is before we put any product on the wall. So, 95 to 100 decibels in one room was translating to about 75 decibels in the next room. 75 decibels is still very obnoxious. So, if someone was in that room trying to sleep, they would have been very, very annoyed.
Then, we put our product on the wall, three coats, 30 wet mils each, let it dry. We do all that in less than a day. Then the next day, the acoustical engineer came back, and did the same test. We had dropped the decibels from 75 down to 55. At 55 decibels, you almost can’t hear anything unless you get really, really, really close to the wall.
That’s where you do have the perceptions of a soundproofed room.
John Jantsch: What did some of your previous businesses, and you may have not thought about this, but you may have an opinion. What have some of your previous business successes and failures been able to inform you on this venture?
Jonah Lupton: I actually posted about this a couple days ago. I guess it was last week on LinkedIn. I talked about my first failure, which was a company called Social Track back in 2007, when I … I mean, this is the early days of the internet, I guess, for guys like me that are non-technical, and in 2007, I was trying to find a couple co-founders. I knew I had this idea of … I wanted to create a dashboard that aggregated all of your social media feeds into one place. So, you’re Facebook feed, your LinkedIn, your Twitter, your YouTube, all in one pretty, nice-to-read dashboard. You could see all your activity, your connections, and messages, et cetera.
I was bootstrapping it because I was working full-time in the investment business, so I was making 100 grand, 120 grand a year and paying for rent and everything else. At the end of the month, whatever I had left over, I tried to put into Social Track. I found two co-founders literally off of Craigslist. We split up the equity one-third each. I had no idea what a vesting schedule was, so we didn’t do one of those, and quickly realized that neither one of these guys was going to be a good co-founder. They were both working full-time jobs. They were both married. They both had kids. One was getting read to move from Boston to New York, so he wouldn’t be very involved. He still owned a third of the company, and I had no way to really get it back.
I learned a lot of hard, hard lessons, where if you have a great idea and you realize it’s going to take a lot of capital to take that idea to the market and grow it, you have to go out and fundraise. I mean, as much as it sucks giving up equity and the company, that was not the kind of company that I should’ve been trying to bootstrap from the beginning.
Basically, a year after I shut the company down, Hootsuite launched, with essentially the same setup, the same idea, and they’re now a billion and a half dollar company. Not that I necessarily could have grown a Hootsuite. I mean, they’ve executed incredibly well. They have great investors, great employees and everything, but it was just a lesson that, I mean, if you don’t have the right co-founders and you’re not well capitalized, it is very, very, very difficult to scale a company in the technology space.
John Jantsch: I suspect that SoundGuard has been a bit capital intensive.
Jonah Lupton: It was. Yeah. Certainly developing the formula, all the testing. I did not appreciate how expensive all the testing would be, from lab testing to field testing, hiring acoustical engineers, doing fire testing, testing on the ingredients to make sure that we could pass all the EPA standards. We’re considered an environmentally friendly and low VOC product. We’re about 105 grams of hazardous material per liter, and the EPA says you have to be below 250. So, we are well, well below the EPA standards for eco-friendliness, which is good. I mean, that was obviously one of my goals from the beginning. It’s a water-based product.
So, coming up with a environmentally-friendly, water-based product that could block sound that didn’t infringe on any other patents out there, that could be sprayed onto a wall, could dry within two hours, that didn’t sag, that didn’t bubble … I mean, it was not easy, and it was expensive. I mean, in the last year and a half, I’ve probably spent 50 or 60,000 dollars just on legal work. Filing all the patents, having a manufacturing agreement set up and sales rep agreement and warrantees and all that stuff. Probably 50, 60,000 in legal work, 50, 60,000 on testing, 50, 60,000 on product development, maybe more than that, probably more than a 100. It has been expensive. I bootstrapped it with just my personal capital and business loans, more business loans than personal capital. My last couple starters basically wiped out my personal capital.
I went to a couple friends that are not even high net worth, but they just believed in what I was doing and they were willing to take a chance on this before we even had the product. I just did the classic Kevin O’Leary from Shark Tank, like, “Hey, give me $50,000. If this thing actually works and we start producing revenue, I’ll pay you back double your money.” Because a banker’s not going to give me any money. That was my only option. Then once we had the product, we did the test in Connecticut, we knew this stuff actually worked, I went back to them and I said, “Give me another $50,000, but now I’ll pay you 75% return on your money.” Then the last chunk of $50,000 was, “I’ll pay you 50% return on your money.”
Because as we took risk out of the company, obviously I was not willing to pay him the same terms that I was up front.
John Jantsch: What do you ultimately see your team looking like?
Jonah Lupton: I’m in the process of hiring right now. I would say of all the things that we are trying to tackle, hiring is the one that scares me the most. From running my own podcast for a couple years and doing 200 interviews, almost across the board, when I asked the founder, “What’s been the most critical aspect to your success in growth?” And it’s always the people. First, it’s people. Second is focus. So, those are the two things that I’m really, really honing in on is one, don’t get distracted by other meaningless ventures and projects that are going to come my way and two, I have to get the right people in place. I’ve never had to hire at scale before, and that’s what really scares me.
So, I don’t know if I should be trying to do it all myself or if I should try to bring in a part-time recruiter. There’s a couple companies out there that are trying to invest in us or form strategic partnerships. If I did something like that, one of the reasons would be so I could plug in to their HR staff and have their HR team help me hire the right people. We have 65 sales reps across the country, commission only guys, great people, but it’s very hard to get production from them unless you’re right in their face all the time. You’ve got to stay top of mind. I can’t manage 65 sales reps and then we’re probably bringing on another 50 distributors. That’s too many people and relationships for me to manage by myself. I need to hire at least a couple sales manager. I need to hire an operations manager, at least one or two, to help me go around the country and act as a project manager once things are up and running.
Right now, I’m outsourcing everything else. So, bookkeeping’s outsourced, obviously the legal work. I’m currently working with a digital marketing agency. Although, I’m getting ready to hire someone a little bit bigger and better. I’m quarter-backing a lot of things. I’m trying not … I can’t micromanage every little aspect of the company, so I really need to get the right people in place and then act as a manager of managers.
John Jantsch: Do you have, and again, maybe premature to be asking this question, but do you have an end-game in mind, or do you just want to see where this can go?
Jonah Lupton: Yeah. I mean, a little bit of both. I mean, I’ve certainly thought about it. I mean, I’ve put together spreadsheets of projects and everything else that may or may not come to fruition. Right now, with B2B market, like I said, so the hotels, the apartments, et cetera. In five months, we go B2C, so the homeowners, the small business owners, et cetera. I think this year, we can do at least 15 million in revenue, two-thirds of that coming B2B, one-third of that B2C. I think 15 is actually a little bit conservative, and we bring on the right distributors. Right now, I have a couple $250 million companies from Canada, Europe, and Australia asking to be the exclusive distributors in those areas. There’s so many good things that can happen over the next few months that could take that $15 million number up to 20 or 30 million.
I’ll say right now, I mean, I’ve already declined offers for $10 million for the company. It took me all of three seconds to say, “No thanks,” but each of those companies that wants to buy us would also be a great partner for us. Whether they make a strategic investment or whether we put together some sort of a joint venture partnership … I mean, all that stuff’s on the table. I’ll be in Boston all week meeting with a couple companies to discuss those things. VC firms are starting to call me, but right now, I’m just not ready to go down that VC channel. I don’t think it’s every going to make sense for us. I’d rather focus on strategic partnerships and strategic investments from big,..
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