Tim's Journey to $350,000 Monthly

How did this guy go from idea to selling $350,000 a month of these? From sketching out the product to filing patents to save legal costs, Tim did it all on the side until he made so much money his only option was to go full-time. You got the excitement of the company getting ready to take off, and then on the flip side, one of the worst things ever happened. If you're looking to do the same, in this interview, Tim breaks down the exact three steps that can take you from an idea to a product that sells. Lessons from his decade-long sales career that gave him an unfair advantage in business. I was literally funding every next step with a commission check that I was hoping to get from closing a deal. And the mindset that lets you overcome life's toughest battles as an entrepreneur. We laid pretty much everything we've ever worked for in our lives on the line to make this happen. What's up, Sharks? You can't expect it to be perfect out of the gate. This is the result of an extreme pressure test. All right, Tim, before we get into how you got started in this business, I really am curious about this place. How much you're paying for lease, how many orders you're pumping out of here on a daily basis. Just curious. Yeah, so we moved into this new spot right at the beginning of 2024. Just about three times the space we had prior from where we started a couple years ago. And we can pump out anywhere from 50 to 200 orders a day. How did you come up with this incredible idea, Square Keg? So I've always had a lot of crazy ideas. Square Keg, I woke up in the middle of the night, November 2017. And for some reason I was thinking about kegs. I was like what's wrong with me? But it really boiled down to more volume in the same footprint as a round container or a round keg. With efficiency being such a high priority in the global supply chain of kegs. I was like, wouldn't it be more valuable if you could fit more in the same footprint, in the same space as a round keg? The concept was born, and then when COVID hit, we had to shift gears to the consumer product because a lot of our target breweries that we were working with locally had essentially had to shut their doors. Yeah. You know, for you to come up with this and think about kegs in the middle of the night, you know, what kind of environment did you grow up in? I was born in Detroit, obviously a very industrial, innovative city. you know, from the early days when I was born. And my dad was always a hustler. He was on the road selling, and I had grandparents, aunts and uncles that worked for GM and Ford. So I think all that industrialism was kind of in my blood. I was always kind of fascinated by it. Obviously this consists of multiple parts, right? Yep. I'd love to kind of see how the process starts and then how you continue it. Can you give us a inside look? Absolutely, let's go take a peek. All right. This machine looks pretty cool, looks pretty expensive too. Did you start off with this as well? This machine here, it's our press break. It's actually our newest addition to the team. Oh, nice. So basically, this is just enabling us to bring in another process that we were outsourcing. It's going to make us more efficient as far as inventory, not having to hold as much inventory, and be able to produce only what we need on a daily basis. Okay, what does this thing cost, brand new? Brand new, over a quarter million. Sheesh. Can you show me how it works? Absolutely. So basically, when you're ready to bend, basically just hit the green button. That brings everything into place. Basically, you see you got your little stoppers there. You always lay the stainless sheet flat across the die here. Oh, okay. So you make sure it's touching both. Yep. And then it's got two different engagements. basically just bends it boom then the back stops continue to move through both bends oh i see okay and then yeah then it actually engages oh then i so i do hold it yep yep yeah you can just kind of like loosely hold it and let it come up and then just kind of angle it and pull it out And that you guys is how you get a keg body. So let's say I have an idea similar to square keg. How do I go from that simple idea to an actual physical product? Can you break it down to us and maybe in four or five, three simple steps? For me, it was the initial research and just validating the idea. Okay, step one. Second one was, for me, was patent protection. And I think that's important depending on what the nature of your product is. And then ultimately, to break it down into the third step, I think... would be either finding a producer or finding a way to produce it yourself. Yep. Let's talk about the step number one. Yep. You know, validating the idea. How did you go about that when it comes to Square Keg? So for me, that was the biggest moment was getting online, doing some initial searching and finding that nothing like a Square Keg had ever actually been done. You know, in the early stages, validation came in the form of, you know, hitting up some buddies of mine that own breweries in town, asking them like, hey, on a commercial scale, would this make sense? And they were all really intrigued by it and were able to, you know, immediately quantify it. in their minds, like certain efficiencies that it would address really in perpetuity throughout their supply chain if square kegs came to fruition. Not bad, right? Yep. Not bad at all. For a first timer. Looks very precise. Thank you. What's next? Show us the process. Yeah. So next we'll go tack them up. Tack them up? Okay. All right. Let's do it. So this is actually the only process in the house that I'm not savvy. Oh, you're not savvy at this. Okay, so who is? Your son? Yeah, so Peyton's savvy at this. Basically, you can see the fitting. Oh, yeah. Let me see. It fits up perfectly in there. Oh, wow. That's like a perfect cut. It's like a glove. It does. It's amazing. So they have a process where they go through to get your end caps, but for the sake of today, we want to get your feet wet with the tack-up process. Yeah. So we'll have Peyton show you how to start with tacking up the seam on the bottom and then all the other parts follow after the seam is tacked up solid. Gotcha. I see it. I'm kind of getting the gist of it. Got that flash right. Yeah. All right. I think I've had enough. Well done. Well done. So this this keg is going to be for sale on a major discount for you guys because I welded it. What did the first production run cost you? Can you share with us the first? production run it I mean it didn't pencil out at all for us it was kind of a necessary evil we needed to get product in people's hands we didn't have the resources to have robotics in-house yet so we had to find a way to really just get to market and make it a reality and then and then improve on it as quickly as we could so we were buying small runs like a couple hundred kegs and believe it or not in the first production runs they were actually being welded out by hand by actual humans. What now we can weld out nine in an hour in a robot, you know, it was taking a human an hour to weld out two and a half or three. Oh wow. Yeah, so big difference. Yep. So what was your initial investment then in the prototyping development stage? Like how much money did you spend? Roughly 200 grand. So that would encompass like drafting initial designs, early patent legal work, business formation. branding, just all the basic things that are essential to creating something tangible to move forward from. Luckily, I was still working a full-time corporate sales job and I was literally funding every next step with a commission check that I was hoping to get from closing a deal. Your nine to five? Yeah. Now for others who are watching, who have an idea and they want to take it, create an actual product from it, but they don't have $200,000. What's your advice with what you've learned from Mark and Kevin and just you as an entrepreneur? What's your advice to them? How do they go about it? I think you got to be creative and resourceful. You have to be excited. I think if you're excited about your idea and you have a good idea, that energy is going to be contagious. So, you know, friends and family. I know myself personally, I didn't want to go the family route with finance. That was just a personal choice. It'd be tricky. I learned if you just get out there, the more you talk about it. You start networking, people start coming out of the woodwork that are excited about what you're doing. And it really isn't that difficult to find some small angel investors, at least to get the early stages funded. For sure. Okay. What are some of your early challenges that you faced? Probably the biggest challenge in the beginning was side hustling with a full-time job, which 90% of entrepreneurs that have specifically a product idea, that's probably what you're going to do for a while. Yeah, before you sell your first. From the logistics side of your brain to the creative side, multiple times. in a day, which gets exhausting. And you learn really quick though, that you, as an individual, you have a lot more capacity for output than you would have ever given yourself credit for just making sure you're moving something along every day. Well, show us what happens next. Take us to that robot. I want to see, we'll take this thing with us. Absolutely. We'll go meet Roberto. Roberto. All right. I did a little practice off camera here. Then we just pop this thing in here. So that's the ultra pure liquid argon that basically flushes out all oxygen from the inside of the tank. Okay. Basically the end goal is a sanitary food and beverage weld, which means it's non-porous and there's zero oxidation on it. So it's a super clean surface. This is Bubba getting to work. All right, why did you decide to do fulfillment yourself as opposed to like 3PL, I think, right? Yeah. Like most businesses do. And then mention any systems, softwares that you use to make sure the fulfillment does go smoothly. Sure. Yeah, so out of the gate when you're a small startup, we weren't doing enough volume early on to justify a 3PL and all their fees. I mean, in the beginning, you know, my wife and I, we were packing the very first orders ourselves. So as we've grown, we have started sniffing around the 3PL world a little bit. And we found there could be some advantages to us using or utilizing a warehouse on the East Coast, because about 65% of our orders are being shipped to the Eastern Sea. Oh, really? From a customer experience perspective. they could be paying for UPS ground as they do today from Spokane, Washington. The difference is instead of five to six business days to get to them, they would get it in two business days without paying for expedited shipping. So it's kind of a win-win. Take me back to early days, right? You're doing salesman by day, you're doing square cake manufacturing by night. I can imagine that's a lot. How are you balancing, you know, the two and what's your advice to those kind of that want to pursue the same route, right? When you're trying to side hustle a new startup with a day job, there's no such thing as balance. No? There really isn't. It's chaos. Yeah, it's just organized chaos. You know, you do the best you can. But like three years ago, when the other manufacturer started Our product to save on costs. I would physically be in jeans and a t-shirt in their shop They were gracious enough to let me come in Basically their guys would weld out the kegs and then I was sitting there at their sand blaster all day I'd sandblast like 70 75 kegs and then I'd get a notification on my phone or watch That it got a conference call so I'd be out in my truck doing a conference call with a hospital somewhere in SoCal or something, and being professional there, driving that, and then immediately when I'm off that call, I was back inside sandblasting kegs. Yeah. Running a small business is more of a marathon than a sprint. If you want to last, you've got to stretch. Your cash flow, that is, to make sure you have enough to cover expenses, payroll, and yourself. It's no easy task. The secret to winning the race? Supercharging your cash flow by banking with Relay. 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Oh, yeah. All right. To undo this? Yep, undo the argon. So where we go next? Next up, pressure test station. Pressure test, let's do it. So this is where we check for leaks. Yep. This process is obviously a quality and a safety measure. Got it. Back in the early stages we would test maybe one out of ten and then we realized we wanted to up our quality standards so now we pressure test every single one we weld and send out to a customer. When you're using a robotic welding process it is possible to have a porosity leak that's not visible to the naked eye. So we literally pressurize the kegs with air, we submerge them and do kind of an old school manual. manual process, just a submersion test. I'm gonna, I'm guessing I'm doing it right, right? Yep. Let's do that. Oh, you're right, because you got the three hoses. Yep. And how long are they gonna be in there? So you just do one at a time. Yeah, just a few seconds each. Oh, that's it? Okay. You don't want to sit there for a minute. So I like to put it in first just upright. Oh. Yeah, so just push it down all the way. flat and then you can inspect that fitting because traditionally if we are going to have a leak it's typically around the fitting so you just kind of inspect under the bright light no bubbles so you're good to go so I'll roll it kind of onto its side so I can see the bottom seam So the weld termination point, like where you see right here, where the weld actually terminated at the end, those places are notorious for being a leak if there is one. But that keg looks pretty damn good. Paul approved. Early days, you went through the prototype, you went through the patent process, you have a product, you're ready to sell it. Share with us how you found those first customers. Where? What did you do? Did you knock on doors, send out flyers? Was it all meta? The very first customers were friends and family from within our network. Gotcha. And we facilitated. We facilitated a lot of that through a Kickstarter campaign that we didn't know what the heck we were doing. And then immediately out of the gate was just spending low amounts on Facebook, Instagram ads, and Google placements. What was the most pivotal moment for you in the business in those early days? So in the beginning, all of our efforts, R&D, prototyping, it was all focused specifically on the commercial product, so large kegs. We had a lot of partner breweries in the region that were open and willing to do beta tests on site, and then COVID hit. So all their doors were closed. We knew they weren't going to be investing in any new capital. So Square won the product. It was always kind of a fun idea we had in the back of our minds. Like, hey, you know, someday we'll launch this to people who wouldn't want a little square keg in their fridge or whatever, you know. It's so cute. And so at that point, we didn't even have a physical prototype. So I called up the other local manufacturer that had been helping us with prototyping. Said, dude, how quick can we get two of these? Like, I need them like a week, two weeks. And so they ended up pulling some strings, getting them out there so we could put logos on them. From there, we just started going. Yeah. Blitz time with Tim. Thanks guys for submitting your questions. Tim, ready? Let's go. If you could have dinner with anyone, dead or alive, who would it be and why? What would you talk about? Steve Jobs because he was the ultimate dreamer. And his motto is basically, you're already naked as a human being, so why not leave it all in the field and chase your dreams? What is the most bizarre or funny customer interaction you've ever experienced? Experienced. We had a real estate agent out of LA, a gal who bought herself, her husband, and her business partner Kegs with a bunch of vulgar emojis on it. Okay. Hey, it's customizable, right? Hey, she loved them. What's your favorite way to unwind after a long day? My favorite way to unwind, love to go to the gym. I actually just started training MMA with a buddy of mine. Oh, wow. About two months ago, who used to be a pro. We're not going to mess with you. That's for sure. I'm a rookie. If you could change one thing about me. about your business, what would it be? I would be global tomorrow. What's a good day for Square Cake, dollar wise, and what's a bad day? 3000 would be a bad day. Yeah, 25, 30,000 is a good day. Nice. What is the secret to a happy life? Tim's version. Oh man, no fear, kind of live in the moment, you know, make wise decisions to a point, but you just gotta pony up and go sometimes. Perfect, that's, great job. Thanks. Boom. What about like when you're doing the sales job, at which point did you- quit that job? It was the last few months of working the full-time job with Square Keg. It was honestly miserable. It was terrible. I was just literally, it was almost like physical pain because I hated that world so much. I see. I was just so driven to make Square Keg a reality. So every second I had to spend on that corporate job was, it felt like without purpose. Coming into those last few weeks when I was able to quit, it was obviously, I was excited. My wife was nervous because she's like, Like, oh my God, you're going to quit your job. We're not going to have health insurance, any of these things. And I was just like, let's go. I was just ready to go. I knew we'd figure it out. And so she was like, okay, we got our health insurance. I'm going to go get all my appointments, checkups done, and that sort of thing while we still have insurance. And it made a lot of sense. And then sadly and disappointingly, through those office visits, she found out she actually had breast cancer. So at that point... No, it was crazy. I mean, you got the excitement of the company getting ready to take off, you know, we're going to production, getting ready to go to market, which was like a dream for me. And then, you know, on the flip side, one of the worst things ever happened. So that first year, SquareKeg grew a ton. I was able to go with my wife every week for 24 weeks to her chemo appointments. And fast forward to now, the company is four, five, six X'd. since its first full calendar year. My wife is healthy. Amazing. How do you withstand that? Again, does it just tie into the belief and the excitement for the product? I know for a fact that being an entrepreneur or achieving any level of significant success is attributed to how much suffering you can endure. And that's kind of the dark side of entrepreneurship that you don't hear a lot about. You don't see the blood, sweat, and tears and sleepless nights and everything else that that person had to endure to get to that point. You know, it's always an overnight success, which... we all know that doesn't exist. So we tested for leaks. Yep. Paul approved, Tim approved, right? Paul approved. We're ready to go to the next stage. Yep. What happens there? Let's go there and check it out. It's basically a citric acid hot tub for kegs. Okay, let's go check it out. All right, let's go. What's this called again? So this is a citric acid passivation tank system. The citric acid runs at about 138, 140 degrees. So the top one, if you just barely push it at slow speed, so you pretty much will run it on that the whole time. So just grab this bad boy with your other hand. And then I just. I'd raise it up a little more. And then basically you'll just grab the side of the basket, and I like to angle it about like that. And then lower it? And then just lower it in. All right, so we're just lowering them? Yeah, you can get a little more aggressive. Okay. Get some weight going down on them, and then you'll set them right on the grate down there. Oh, wow, yeah, there. it's like a little mini citric volcano there we go now go all the way all the way down yep and then we're right there once it stops you're good that's it yep all right so this is gonna be in here for what ten minutes yeah it'll be in here for 10 minutes so essentially now the kegs the inside of the kegs are being treated with citric acid so the keg will be fully treated and passivated and then from there it's gonna be a quick empty and rinse after 10 minutes okay and that's it can you give us a quick rundown of your year over year revenue uh first year was roughly 400 000 ish that's not bad uh second year was roughly a couple million and then third year was over four wow and what moment in time changed everything where where it went like from 400 to. Yeah, I think it's just in general, more brand awareness from all of our digital marketing efforts, just naturally more people know about us now, but Shark Tank definitely was, you know, that put some fuel on the fire early on to get us that brand visibility that we couldn't have afforded to buy at the time. All right. So this is going to be here for 10 minutes and we're going to what, take it out and just basically rinse it, clean it. And then they will eventually go into this part dryer. We actually hand dry the outsides to prevent hard water spotting. And then the kegs will actually go into the dryer. that dries out the inside 100% before we cap them and create them to go off to the powder coater for the final finish. Is that locally done as well? It is. Okay. And this is basically ends up looking like this with a brand image on here? Yep, exactly. Nice, it's well done. Well let's continue the conversation at a local brewery right? Yeah, they helped you out early on and you bounced ideas with them. Yeah, they let us host our shark tank party there so we can go say hi to them. Let's do it. All right, check it out. So tell our audience kind of why we're here and you know the story that in the relationship that you have established with the brewery here. From the time I had the idea you know I mentioned before there's a lot of local companies you know breweries, restaurateurs, a lot of people that kind of supported the idea. idea. They'd let me use them as a sounding board or what have you. And since these guys are in the beverage space, you know, they were one that made just natural sense to talk to about it and they loved it. And so they did some product testing early on and we actually even hosted our big Shark Tank viewing party here on the big screen, which was massive. All right. Speaking of Shark Tank experience, what was that like? Yeah. I mean, so they reached out to us spring of 2022. They just thought we were a cool, innovative company with a good energy that would be a good fit for the show. And naturally, I've been watching the show for over a decade. Same. Always been a huge fan. So yeah, preparing for the show, it was a lot of work. You know, a lot of applications, a lot of planning for your set, all that kind of stuff. crazy it was way different than what you see on TV we ended up actually closing the business deal with both Mark Cuban and Kevin O'Leary and some Mark Cuban came back in realized he made a big mistake and came back in nice what about like what did it do to the business afterwards what do you think when what did you show aired yeah business popped off it was two weeks prior to Black Friday so the timing couldn't have been more impact of our faith we were coming off one of the worst sales months we had had the entire year And it all turned out to be, you know, everything happens for a reason. It's kind of a cliche, but in this case it was 100% true. It allowed us to pack up as much inventory as we possibly and physically could, which helped that initial rush to be not as big of a strain on the business. We were ready to ship pallets and pallets of product. Good for you. And I think you made a pretty solid offer to the Sharks. You know, 20% for $300,000. I was being generous. That's very generous of you. I was a little generous. Yeah, but you know, those relationships that you've established and the connections, I think far outweigh that. Absolutely. So that's cool. So your sales career was mostly B2B. What have you found most surprising about having to do B2C and dealing with consumers directly? Sure. I mean, I think dealing with consumers can be an advantage in a way. You have the ability as a small company to really connect with individuals, which when you're trying to grow a small business organically, word of mouth is everything. Yeah. You know, we get comments all the time about. best customer service I've had in 10 years. Like that's something that we stay true to all the time and we'll always have real customer service people that actually respond to emails. They're not using AI. Dealing with a business, you know, you might crack a big chunk of revenue in one deal, but you also might put a year, year and a half into that deal. Whereas now we're able to keep consistent cash flows and those sorts of things, which are really pertinent to keeping a small business afloat. How critical have mentors like Mark Cuban, Kevin O'Leary been to your success so far? Just from a confidence factor, like knowing that guys of that business stature cared about what I was doing enough to invest their own money into it. Like that was probably the biggest thing. But, you know, more than anything, just remembering they started out like I did. You know, back in the day, they weren't rich. So just knowing that they're where they are today because they started where I had to start too, just reminds you that none of it was easy. They weren't born wealthy. I think probably the biggest takeaway I have from it is to continue to think big. When you start a business, I think no matter what the business is, it's easy as the founder to get stuck in the weeds, the day-to-day operations. And really the only way I think to grow any business is to be able to be out there with the big picture mentality. and be forging big relationships. Never lose sight of the big dream that got you into this in the first place because if you do, things will just be flat. Yep. Gotcha. Okay. Well, on that note, since we're talking about mentors, we're talking about world-class entrepreneurs and business owners, you've had time to check out the Amphib Academy, right? Yeah, a little bit. Absolutely. What do you think about it? What's your take just with what you've seen and what you've used there? I think I could say I wish there were resources like that when I was young. where you could get on there and look at multiple different business models and then kind of figure out where you would fit in with certain ones and which ones would engage you but you have so many different business ideas on there and be able to see like you know revenue potential for an average business you know some of the startup tools and things you would need to do to get there super valuable i think for a lot of people for sure world-class business blueprints from active business owners it's a powerful network to keep you accountable and the best part actually i won't ruin it for you click the link below to check it out for yourself So what is your marketing budget as of today? And then what platforms are you seeing the best return on your investment? So as of today, we spend the majority of our budget on Facebook, Instagram, Meta. That's about... 90% of our monthly spend. Oh, wow. And then the other 10% is Google, Ad Search, Search Words, etc. We can spend upwards of $100K a month on advertising. Wow. To be honest, though, we don't really have a budget. If we're getting a target, a ROAS of a certain point, we'll spend more, we'll scale. I'd say overall... has been more engaging for us just because our product is catchy, it's flashy, so I think it really catches the eye of people because they've never seen anything quite like it. Whereas on Google, traditionally people aren't really searching for kegs that often. It's not an item that most consumers are looking for on a daily basis so really our kind of our goal is educating people on why the commercial industry uses kegs as the gold standard for beverage containment and then telling our consumers you know you can have those same advantages in your own fridge at home so what's your number one advice when it comes to marketing on meta just being willing to make changes on the fly don't expect that just because one thing works today it's gonna work tomorrow yeah I think we all know our viewers with social media being so huge nowadays they have such a short attention span We got to keep changing the game to keep people engaged and interested. What's your monthly overhead today? Just to stay open, pay the bills and cover this lease and so on. Monthly overhead is typically around $30,000 to $35,000. That includes payroll, machines, power, building lease, all the essentials basically just to keep running. How many people do you have working for you right now? We have seven. Including you or? Including myself, yeah. Gotcha. Okay. What about profit margins? What do you guys think? Our gross margin being a manufacturer is north of 55% gross margin. Take home, I'm guessing, is much lower than that? Always. Like before tax? Yeah. Yeah, always. Like what, 10, 15% possible? Yeah, around there. That's always a target. Being an e-com advertiser, it's always contingent on the efficiency of your ads. For sure. So you could see some super profitable days and then other days that are completely in the tank. Yeah. So a lot of things you just don't have control over. So earlier you mentioned bringing on angel investors. Talk to us how that happened and what's your advice for those looking to partner up with investors? Yeah so for me it was kind of a kind of a unicorn situation how I found my initial angels. I was actually coming out of the gym one day this is very early on in the conceptual stage we did have a website and I got I had a phone message a voicemail from a guy. named Troy. He was a long time manufacturing guy back in Illinois. Apparently a few years prior, him and his other manufacturing buddies, they had a conversation over dinner one day and one of them was like, why wouldn't we make square kegs? And so they had a similar idea from an efficiency perspective, but their engineers, like some of these guys worked at Caterpillar, big companies, and they're like, oh, you can't make... a keg square they revisited the conversation like four years later and so they were like it's got to have been done so they looked it up on google and they found square keg so they called me and uh basically it was coming from a place of hey we had this conversation what you're doing is really cool cool, we're all in manufacturing, what can we do? Is there anything we can do to help you? So, started there, got to know the guys, ended up flying out there to Illinois a couple months later and we became friends, just all really good, genuine dudes that love innovation and building stuff. Probably like six months later, that exact core group ended up being our angel investment group. Is it because at that point in time, in a business growth, you needed money and so you were open to it? I mean. Yeah, we had had a lot of conversations about raising money and stuff. And then for me, it's all about where the rubber meets the road. And, you know, I was like, hey, are you guys, do you guys want to be involved in this? They're all like, oh, yeah, yeah, we 100% want to be involved in this. And so it was perfect timing because I did need to bring in capital and kind of get to production. What's your advice then for those looking to partner up with investors? Like, is it a mistake to do it super early on? You did it pretty later on. Yeah. Like, what's the timing of it? I know it's different probably per product and in your situation, but. It's definitely situational, I think, without a doubt. But I would say in the beginning, I mean, do what you can and scrap and try to get by. But at the same time, you know, depending on what your mission is, I would say if your mission is to grow a ma and pa business, that you're going to run and operate until you're 65 years old, maybe keep more of it. in the family if you will but if you're working on something that's innovative and you're planning to blow it out of the water and create a mega brand you're going to need the capital. Yeah makes sense. This is the world's first stainless steel rugby ball formerly known as a square keg. So you guys do testing? Yeah and this is what this thing went through. Yeah very early on we knew that no matter what an engineering program said the kegs could withstand as far as pressure. Don't reveal it. We wanted to we wanted to prove it out. in the practical environment and make sure that our product was safe for our customers. So this is the result of an extreme pressure test. So our recommended maximum pressure is 20 psi, but for typical drinks, you're going to be using it between like five and eight psi. So it's quite minimal. Okay. This is what it looks like. And this is what it looks like. Looks like after a pressure test. You guys, comment below on your guess how much PSI was required to turn this into what looks like a rugby ball. So comment below, we'll reveal it later. So when it came to manufacturing the square keg, why did you decide and commit to doing it yourself in-house rather than outsourcing? the manufacturing process? It's a good question. I mean, honestly, my plan in the beginning was to be a sales organization because that's what my skill set includes. But we realized really quickly after reaching out and talking to a lot of different manufacturers with a lot of capacity and capabilities that none of them really had every aspect of our product. They didn't have all the operations in one single location. So it would have ended up being, you know, a logistical nightmare to like have some parts made here, they're assembled here, et cetera. So pretty much I realized pretty early on that if we were going to make this thing a reality, that we were going to have to find a way to build infrastructure to be able to produce the product ourselves. And most importantly, it boils down to quality too, because then you have 100% control over it. So as far as challenges then, what were the, some of the biggest challenges that you faced when it came to manufacturing your own product? I mean manufacturing is just hard in general. You've got packaging, you've got gas sources, taps, all these different things coming from different places. So being able to monitor and ensure quality across all of those different suppliers. Man, you're the real deal. I mean literally took something that didn't exist, not knowing the process, not knowing anything, and just learning as you go. All right, let's talk about step two of the whole process, right? Now this prototype and patent. And I find it really interesting too, by the way, Tim, that you patented your product before you even sold the first one, right? Yep. Which is interesting. So why did you do that? How much did it cost you? Talk to us a little bit about the process as well. You know, honestly, early on when I initially got the idea, the driver to make me pursue patents was driven strictly out of fear. Really? I thought that the concept I had come up with, you know, had a lot of validity and the ability to be potentially a paradigm changing shift in the keg world. So I pursued that, interviewed like two or three different patent attorneys, and I found them through my own personal network. attorneys that practice in other areas of law and picked the one that I liked the most and we just started getting to work. What did it cost you the whole process? Oh man, I mean it's not cheap. No, I mean just like general rule of thumb you're looking at probably 10 grand for a utility patent filing. Not that bad. And usually I think like $795 of that is the actual patent filing fee, the rest is all legal time. So any fee for service stuff can eat you up especially when you're new but you're better off to be protected than not. So find the resources, at least put in the groundwork on it, and get some things in place, I think. Let's talk about the prototyping process for Square Cake. Anything you want to highlight in that process? How many times did you mess up to get to that final version? What did you learn through that whole process? Failed all the tests miserably as far as pressure tests. Part of the process. Yeah, it was all part of the process. So we had multiple rounds of prototyping. I think in the beginning, we probably could have done it a little bit less expensive. Nowadays, we all have... really cost-effective ways to do initial prototyping, you know, just to prove the concept more than anything. Obviously our product, because it's stainless steel, has to meet certain pressure requirements for operability and safety. So the prototyping got a little more expensive, but there's some things you just can't prove out with software. Like you still want to always prove it out in practice. If you enjoyed this video, I have a small favor to ask. Almost 80% of you who are regular viewers of Upflip. aren't subscribed. So if that's you, a quick subscribe would make a huge difference. As Outflip grows, we bring on better and better guests. Thank you. As you're prototyping, you've got version one, version 10, however many versions you've had. Eventually though, what did you do to turn it into an actual product? First principle to know when you're trying to create a product is you can't expect it to be perfect out of the gate and just maximize and utilize the resources that you have around you from all the research. You know, if there's a company you're prototyping with and be okay with going to market with a product that's ready to go, but maybe it's not perfectly refined yet. Most of us in the beginning, we don't have enough time or money to have a perfect product right out of the gate. That's a good point. So being able to get it in your customers'hands was the biggest thing that we had to shoot for because that market feedback was going to be... Exactly what we needed to know if there were certain tweaks we needed to make in the product or Quite honestly if it was worth pursuing. Yeah, I can see how entrepreneurs can get stuck in that prototyping process Right and think they're gonna get this perfect product Yeah, and then for two three years they keep perfecting it and not one unit is sold So exactly you're like no just get it out there and get that input get that feedback and keep improving on it. Yep Alright, well, what is the reveal how much PSI did it take to all right turn this friggin thing on a drum roll here drum roll It took a whopping 1,800 PSI. Take that. How big is your email list? And I'm curious how much revenue does... generate for your business? Yeah, so right now I think we're right around a hundred thousand people on our email list and growing rapidly. Part of being able to grow that is again, you know, enticing people with whether it's a good offer or something of value to them to get them to sign up in the first place. And then as far as revenues, it can really just kind of depend. Typically we see the best returns with our email list. Like for instance, if we do a limited drop on like the army green or something, we see those types of things really pop off well, because I think it's people that have maybe seen our OG product a lot, and maybe it's kind of become invisible to them, but they see a fresh new look on it, and they're like, okay, I'm getting it now. Yeah. Our Black Friday deal is so lit! This year, Jason Toppin, to our biggest sale of the year! How scary was it losing money in the first couple years of business? And what's your word of advice to those who probably find themselves in a similar situation right now? Sure. I would say it's a mix of extreme excitement. It's like you're investing in something greater than yourself. But at the same time, yeah, I mean, my wife and I, we laid pretty much everything we've ever worked for in our lives on the line in some way, shape or form to make this happen. I think you really just have to have the mindset of life is short. You can't take it with you. And, you know, like at this stage in the business now, you know, all the money I personally invested, it's gone. It's been gone for years. So I feel like now it's like once you get past that initial sting of how much money went out the door, you really have nothing to lose. Just keep rolling and don't even, you just can't focus on that. All right, lastly, let's talk about the final step of bringing an idea to life, which is production, right? Yep. So how can someone with a novel idea like yours get their product manufactured? And talk about maybe ways that we can get out there and source manufacturers and so on and build those relationships. Yeah, I think the biggest thing is just the power of the Internet now. You know, like we deal with stainless products, so it's pretty easy to get on there and find reputable manufacturers. But honestly, for myself, I always like to go word of mouth. So I tapped into my network first. and got referrals to other business owners in the area that maybe had certain capabilities. And obviously the big rep or a good reputation was important to me because there's a lot of companies out there doesn't mean that they have your best interests in mind as an entrepreneur. Most of you when you start out, you're starting out with very little funding, if any at all. So every dollar needs to be stretched to the max. So yeah, just make sure you're interviewing, asking all the questions and making sure that you're working with a trustworthy partner that actually sees the goal of what you're trying to accomplish. What's been the best resource to you as far as when it comes to learning a new technique or whatever? Like, was it just talking face to face or was it YouTube university or a book or? A little bit of YouTube maybe in the beginning, but really it was about. you know, face-to-face real human interactions with people that have been in metal manufacturing for 10, 20, 30, 40 years. So just leveraging the experience of people that have been there, done that to make sure that our roadmap for growth made sense financially and logistically. What advice do you have for aspiring entrepreneurs who want to turn their ideas into successful businesses? I would say just start, just start now. Even if you fail, you're going to learn so much along the way that it's going to make your next try. Even faster and more efficient and higher chance of success. So really just don't be afraid to start doing it. Okay. What about what's been the most valuable lesson that you personally learned in your entrepreneurial journey? Well, I learned that during the darkest times in business and entrepreneurship, that the biggest wins are just on the other side of that. And I think a lot of people fall into the trap of quitting when it gets hard. And it always gets hard. It's always going to. That never goes away, no matter how big of a company you are. So I think just realizing that the golden nuggets come on the other side of pain. Yeah, quick fun question. If somebody came along and offered you a crazy amount to buy the whole company, 50 mil, 100 mil, whatever that may be, what would you be doing once this company sold and you're totally out of it? Probably floating on a yacht in the Galapagos Islands. Oh, nice. Okay. I thought you'd start some other business, but you know what? Well, I would do that after the Galapagos Islands. After Galapagos? Okay. Like the idea of having your own product, but don't have the time to design it from scratch? Well, you can't miss episode 195 with Bobby's $4.2 million brand that started as a dropshipping store. Like and subscribe. We'll see you next time.

If you're looking to do the same, in this interview, Tim breaks down the exact three steps that can take you from an idea to a product that sells. Lessons from his decade-long sales career that gave him an unfair advantage in business. I was literally funding every next step with a commission check that I was hoping to get from closing a deal. And the mindset that lets you overcome life's toughest battles as an entrepreneur.

We laid pretty much everything we've ever worked for in our lives on the line to make this happen. What's up, Sharks? You can't expect it to be perfect out of the gate. This is the result of an extreme pressure test.

All right, Tim, before we get into how you got started in this business, I really am curious about this place. How much you're paying for lease, how many orders you're pumping out of here on a daily basis. Just curious. Yeah, so we moved into this new spot right at the beginning of 2024. Just about three times the space we had prior from where we started a couple years ago. And we can pump out anywhere from 50 to 200 orders a day.

How did you come up with this incredible idea, Square Keg? So I've always had a lot of crazy ideas. Square Keg, I woke up in the middle of the night, November 2017. And for some reason I was thinking about kegs. I was like what's wrong with me?

But it really boiled down to more volume in the same footprint as a round container or a round keg. With efficiency being such a high priority in the global supply chain of kegs. I was like, wouldn't it be more valuable if you could fit more in the same footprint, in the same space as a round keg? The concept was born, and then when COVID hit, we had to shift gears to the consumer product because a lot of our target breweries that we were working with locally had essentially had to shut their doors. Yeah.

You know, for you to come up with this and think about kegs in the middle of the night, you know, what kind of environment did you grow up in? I was born in Detroit, obviously a very industrial, innovative city. you know, from the early days when I was born.

And my dad was always a hustler. He was on the road selling, and I had grandparents, aunts and uncles that worked for GM and Ford. So I think all that industrialism was kind of in my blood. I was always kind of fascinated by it. Obviously this consists of multiple parts, right?

Yep. I'd love to kind of see how the process starts and then how you continue it. Can you give us a inside look? Absolutely, let's go take a peek. All right.

This machine looks pretty cool, looks pretty expensive too. Did you start off with this as well? This machine here, it's our press break. It's actually our newest addition to the team.

Oh, nice. So basically, this is just enabling us to bring in another process that we were outsourcing. It's going to make us more efficient as far as inventory, not having to hold as much inventory, and be able to produce only what we need on a daily basis. Okay, what does this thing cost, brand new? Brand new, over a quarter million.

Sheesh. Can you show me how it works? Absolutely.

So basically, when you're ready to bend, basically just hit the green button. That brings everything into place. Basically, you see you got your little stoppers there. You always lay the stainless sheet flat across the die here. Oh, okay.

So you make sure it's touching both. Yep. And then it's got two different engagements. basically just bends it boom then the back stops continue to move through both bends oh i see okay and then yeah then it actually engages oh then i so i do hold it yep yep yeah you can just kind of like loosely hold it and let it come up and then just kind of angle it and pull it out And that you guys is how you get a keg body. So let's say I have an idea similar to square keg.

How do I go from that simple idea to an actual physical product? Can you break it down to us and maybe in four or five, three simple steps? For me, it was the initial research and just validating the idea. Okay, step one. Second one was, for me, was patent protection.

And I think that's important depending on what the nature of your product is. And then ultimately, to break it down into the third step, I think... would be either finding a producer or finding a way to produce it yourself.

Yep. Let's talk about the step number one. Yep. You know, validating the idea. How did you go about that when it comes to Square Keg?

So for me, that was the biggest moment was getting online, doing some initial searching and finding that nothing like a Square Keg had ever actually been done. You know, in the early stages, validation came in the form of, you know, hitting up some buddies of mine that own breweries in town, asking them like, hey, on a commercial scale, would this make sense? And they were all really intrigued by it and were able to, you know, immediately quantify it. in their minds, like certain efficiencies that it would address really in perpetuity throughout their supply chain if square kegs came to fruition. Not bad, right?

Yep. Not bad at all. For a first timer.

Looks very precise. Thank you. What's next? Show us the process.

Yeah. So next we'll go tack them up. Tack them up?

Okay. All right. Let's do it.

So this is actually the only process in the house that I'm not savvy. Oh, you're not savvy at this. Okay, so who is? Your son? Yeah, so Peyton's savvy at this.

Basically, you can see the fitting. Oh, yeah. Let me see. It fits up perfectly in there.

Oh, wow. That's like a perfect cut. It's like a glove. It does. It's amazing.

So they have a process where they go through to get your end caps, but for the sake of today, we want to get your feet wet with the tack-up process. Yeah. So we'll have Peyton show you how to start with tacking up the seam on the bottom and then all the other parts follow after the seam is tacked up solid. Gotcha.

I see it. I'm kind of getting the gist of it. Got that flash right. Yeah.

All right. I think I've had enough. Well done. Well done.

So this this keg is going to be for sale on a major discount for you guys because I welded it. What did the first production run cost you? Can you share with us the first? production run it I mean it didn't pencil out at all for us it was kind of a necessary evil we needed to get product in people's hands we didn't have the resources to have robotics in-house yet so we had to find a way to really just get to market and make it a reality and then and then improve on it as quickly as we could so we were buying small runs like a couple hundred kegs and believe it or not in the first production runs they were actually being welded out by hand by actual humans. What now we can weld out nine in an hour in a robot, you know, it was taking a human an hour to weld out two and a half or three.

Oh wow. Yeah, so big difference. Yep.

So what was your initial investment then in the prototyping development stage? Like how much money did you spend? Roughly 200 grand.

So that would encompass like drafting initial designs, early patent legal work, business formation. branding, just all the basic things that are essential to creating something tangible to move forward from. Luckily, I was still working a full-time corporate sales job and I was literally funding every next step with a commission check that I was hoping to get from closing a deal.

Your nine to five? Yeah. Now for others who are watching, who have an idea and they want to take it, create an actual product from it, but they don't have $200,000.

What's your advice with what you've learned from Mark and Kevin and just you as an entrepreneur? What's your advice to them? How do they go about it?

I think you got to be creative and resourceful. You have to be excited. I think if you're excited about your idea and you have a good idea, that energy is going to be contagious.

So, you know, friends and family. I know myself personally, I didn't want to go the family route with finance. That was just a personal choice.

It'd be tricky. I learned if you just get out there, the more you talk about it. You start networking, people start coming out of the woodwork that are excited about what you're doing. And it really isn't that difficult to find some small angel investors, at least to get the early stages funded. For sure.

Okay. What are some of your early challenges that you faced? Probably the biggest challenge in the beginning was side hustling with a full-time job, which 90% of entrepreneurs that have specifically a product idea, that's probably what you're going to do for a while.

Yeah, before you sell your first. From the logistics side of your brain to the creative side, multiple times. in a day, which gets exhausting.

And you learn really quick though, that you, as an individual, you have a lot more capacity for output than you would have ever given yourself credit for just making sure you're moving something along every day. Well, show us what happens next. Take us to that robot. I want to see, we'll take this thing with us.

Absolutely. We'll go meet Roberto. Roberto.

All right. I did a little practice off camera here. Then we just pop this thing in here.

So that's the ultra pure liquid argon that basically flushes out all oxygen from the inside of the tank. Okay. Basically the end goal is a sanitary food and beverage weld, which means it's non-porous and there's zero oxidation on it. So it's a super clean surface. This is Bubba getting to work.

All right, why did you decide to do fulfillment yourself as opposed to like 3PL, I think, right? Yeah. Like most businesses do. And then mention any systems, softwares that you use to make sure the fulfillment does go smoothly. Sure.

Yeah, so out of the gate when you're a small startup, we weren't doing enough volume early on to justify a 3PL and all their fees. I mean, in the beginning, you know, my wife and I, we were packing the very first orders ourselves. So as we've grown, we have started sniffing around the 3PL world a little bit. And we found there could be some advantages to us using or utilizing a warehouse on the East Coast, because about 65% of our orders are being shipped to the Eastern Sea. Oh, really?

From a customer experience perspective. they could be paying for UPS ground as they do today from Spokane, Washington. The difference is instead of five to six business days to get to them, they would get it in two business days without paying for expedited shipping. So it's kind of a win-win. Take me back to early days, right?

You're doing salesman by day, you're doing square cake manufacturing by night. I can imagine that's a lot. How are you balancing, you know, the two and what's your advice to those kind of that want to pursue the same route, right?

When you're trying to side hustle a new startup with a day job, there's no such thing as balance. No? There really isn't. It's chaos. Yeah, it's just organized chaos.

You know, you do the best you can. But like three years ago, when the other manufacturer started Our product to save on costs. I would physically be in jeans and a t-shirt in their shop They were gracious enough to let me come in Basically their guys would weld out the kegs and then I was sitting there at their sand blaster all day I'd sandblast like 70 75 kegs and then I'd get a notification on my phone or watch That it got a conference call so I'd be out in my truck doing a conference call with a hospital somewhere in SoCal or something, and being professional there, driving that, and then immediately when I'm off that call, I was back inside sandblasting kegs. Yeah.

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Well, the robot just finished welding, so. Let me take one out and you can show us what happens next. We'll keep having these wonderful conversations. All right, so what do we do?

How do we lower this thing? You just turn this to the right and that'll drop your gate. Oh, yeah. All right. To undo this?

Yep, undo the argon. So where we go next? Next up, pressure test station. Pressure test, let's do it. So this is where we check for leaks.

Yep. This process is obviously a quality and a safety measure. Got it. Back in the early stages we would test maybe one out of ten and then we realized we wanted to up our quality standards so now we pressure test every single one we weld and send out to a customer.

When you're using a robotic welding process it is possible to have a porosity leak that's not visible to the naked eye. So we literally pressurize the kegs with air, we submerge them and do kind of an old school manual. manual process, just a submersion test.

I'm gonna, I'm guessing I'm doing it right, right? Yep. Let's do that.

Oh, you're right, because you got the three hoses. Yep. And how long are they gonna be in there?

So you just do one at a time. Yeah, just a few seconds each. Oh, that's it? Okay. You don't want to sit there for a minute.

So I like to put it in first just upright. Oh. Yeah, so just push it down all the way.

flat and then you can inspect that fitting because traditionally if we are going to have a leak it's typically around the fitting so you just kind of inspect under the bright light no bubbles so you're good to go so I'll roll it kind of onto its side so I can see the bottom seam So the weld termination point, like where you see right here, where the weld actually terminated at the end, those places are notorious for being a leak if there is one. But that keg looks pretty damn good. Paul approved.

Early days, you went through the prototype, you went through the patent process, you have a product, you're ready to sell it. Share with us how you found those first customers. Where? What did you do? Did you knock on doors, send out flyers?

Was it all meta? The very first customers were friends and family from within our network. Gotcha.

And we facilitated. We facilitated a lot of that through a Kickstarter campaign that we didn't know what the heck we were doing. And then immediately out of the gate was just spending low amounts on Facebook, Instagram ads, and Google placements.

What was the most pivotal moment for you in the business in those early days? So in the beginning, all of our efforts, R&D, prototyping, it was all focused specifically on the commercial product, so large kegs. We had a lot of partner breweries in the region that were open and willing to do beta tests on site, and then COVID hit. So all their doors were closed.

We knew they weren't going to be investing in any new capital. So Square won the product. It was always kind of a fun idea we had in the back of our minds.

Like, hey, you know, someday we'll launch this to people who wouldn't want a little square keg in their fridge or whatever, you know. It's so cute. And so at that point, we didn't even have a physical prototype. So I called up the other local manufacturer that had been helping us with prototyping.

Said, dude, how quick can we get two of these? Like, I need them like a week, two weeks. And so they ended up pulling some strings, getting them out there so we could put logos on them. From there, we just started going.

Yeah. Blitz time with Tim. Thanks guys for submitting your questions. Tim, ready? Let's go.

If you could have dinner with anyone, dead or alive, who would it be and why? What would you talk about? Steve Jobs because he was the ultimate dreamer.

And his motto is basically, you're already naked as a human being, so why not leave it all in the field and chase your dreams? What is the most bizarre or funny customer interaction you've ever experienced? Experienced. We had a real estate agent out of LA, a gal who bought herself, her husband, and her business partner Kegs with a bunch of vulgar emojis on it. Okay.

Hey, it's customizable, right? Hey, she loved them. What's your favorite way to unwind after a long day? My favorite way to unwind, love to go to the gym.

I actually just started training MMA with a buddy of mine. Oh, wow. About two months ago, who used to be a pro.

We're not going to mess with you. That's for sure. I'm a rookie. If you could change one thing about me. about your business, what would it be? I would be global tomorrow.

What's a good day for Square Cake, dollar wise, and what's a bad day? 3000 would be a bad day. Yeah, 25, 30,000 is a good day.

Nice. What is the secret to a happy life? Tim's version. Oh man, no fear, kind of live in the moment, you know, make wise decisions to a point, but you just gotta pony up and go sometimes. Perfect, that's, great job.

Thanks. Boom. What about like when you're doing the sales job, at which point did you- quit that job?

It was the last few months of working the full-time job with Square Keg. It was honestly miserable. It was terrible.

I was just literally, it was almost like physical pain because I hated that world so much. I see. I was just so driven to make Square Keg a reality. So every second I had to spend on that corporate job was, it felt like without purpose.

Coming into those last few weeks when I was able to quit, it was obviously, I was excited. My wife was nervous because she's like, Like, oh my God, you're going to quit your job. We're not going to have health insurance, any of these things. And I was just like, let's go.

I was just ready to go. I knew we'd figure it out. And so she was like, okay, we got our health insurance. I'm going to go get all my appointments, checkups done, and that sort of thing while we still have insurance. And it made a lot of sense.

And then sadly and disappointingly, through those office visits, she found out she actually had breast cancer. So at that point... No, it was crazy. I mean, you got the excitement of the company getting ready to take off, you know, we're going to production, getting ready to go to market, which was like a dream for me. And then, you know, on the flip side, one of the worst things ever happened.

So that first year, SquareKeg grew a ton. I was able to go with my wife every week for 24 weeks to her chemo appointments. And fast forward to now, the company is four, five, six X'd.

since its first full calendar year. My wife is healthy. Amazing.

How do you withstand that? Again, does it just tie into the belief and the excitement for the product? I know for a fact that being an entrepreneur or achieving any level of significant success is attributed to how much suffering you can endure.

And that's kind of the dark side of entrepreneurship that you don't hear a lot about. You don't see the blood, sweat, and tears and sleepless nights and everything else that that person had to endure to get to that point. You know, it's always an overnight success, which...

we all know that doesn't exist. So we tested for leaks. Yep.

Paul approved, Tim approved, right? Paul approved. We're ready to go to the next stage. Yep.

What happens there? Let's go there and check it out. It's basically a citric acid hot tub for kegs.

Okay, let's go check it out. All right, let's go. What's this called again? So this is a citric acid passivation tank system.

The citric acid runs at about 138, 140 degrees. So the top one, if you just barely push it at slow speed, so you pretty much will run it on that the whole time. So just grab this bad boy with your other hand.

And then I just. I'd raise it up a little more. And then basically you'll just grab the side of the basket, and I like to angle it about like that.

And then lower it? And then just lower it in. All right, so we're just lowering them? Yeah, you can get a little more aggressive.

Okay. Get some weight going down on them, and then you'll set them right on the grate down there. Oh, wow, yeah, there. it's like a little mini citric volcano there we go now go all the way all the way down yep and then we're right there once it stops you're good that's it yep all right so this is gonna be in here for what ten minutes yeah it'll be in here for 10 minutes so essentially now the kegs the inside of the kegs are being treated with citric acid so the keg will be fully treated and passivated and then from there it's gonna be a quick empty and rinse after 10 minutes okay and that's it can you give us a quick rundown of your year over year revenue uh first year was roughly 400 000 ish that's not bad uh second year was roughly a couple million and then third year was over four wow and what moment in time changed everything where where it went like from 400 to. Yeah, I think it's just in general, more brand awareness from all of our digital marketing efforts, just naturally more people know about us now, but Shark Tank definitely was, you know, that put some fuel on the fire early on to get us that brand visibility that we couldn't have afforded to buy at the time.

All right. So this is going to be here for 10 minutes and we're going to what, take it out and just basically rinse it, clean it. And then they will eventually go into this part dryer.

We actually hand dry the outsides to prevent hard water spotting. And then the kegs will actually go into the dryer. that dries out the inside 100% before we cap them and create them to go off to the powder coater for the final finish. Is that locally done as well? It is.

Okay. And this is basically ends up looking like this with a brand image on here? Yep, exactly.

Nice, it's well done. Well let's continue the conversation at a local brewery right? Yeah, they helped you out early on and you bounced ideas with them. Yeah, they let us host our shark tank party there so we can go say hi to them.

Let's do it. All right, check it out. So tell our audience kind of why we're here and you know the story that in the relationship that you have established with the brewery here.

From the time I had the idea you know I mentioned before there's a lot of local companies you know breweries, restaurateurs, a lot of people that kind of supported the idea. idea. They'd let me use them as a sounding board or what have you. And since these guys are in the beverage space, you know, they were one that made just natural sense to talk to about it and they loved it. And so they did some product testing early on and we actually even hosted our big Shark Tank viewing party here on the big screen, which was massive.

All right. Speaking of Shark Tank experience, what was that like? Yeah.

I mean, so they reached out to us spring of 2022. They just thought we were a cool, innovative company with a good energy that would be a good fit for the show. And naturally, I've been watching the show for over a decade. Same.

Always been a huge fan. So yeah, preparing for the show, it was a lot of work. You know, a lot of applications, a lot of planning for your set, all that kind of stuff. crazy it was way different than what you see on TV we ended up actually closing the business deal with both Mark Cuban and Kevin O'Leary and some Mark Cuban came back in realized he made a big mistake and came back in nice what about like what did it do to the business afterwards what do you think when what did you show aired yeah business popped off it was two weeks prior to Black Friday so the timing couldn't have been more impact of our faith we were coming off one of the worst sales months we had had the entire year And it all turned out to be, you know, everything happens for a reason.

It's kind of a cliche, but in this case it was 100% true. It allowed us to pack up as much inventory as we possibly and physically could, which helped that initial rush to be not as big of a strain on the business. We were ready to ship pallets and pallets of product.

Good for you. And I think you made a pretty solid offer to the Sharks. You know, 20% for $300,000. I was being generous. That's very generous of you.

I was a little generous. Yeah, but you know, those relationships that you've established and the connections, I think far outweigh that. Absolutely. So that's cool. So your sales career was mostly B2B.

What have you found most surprising about having to do B2C and dealing with consumers directly? Sure. I mean, I think dealing with consumers can be an advantage in a way. You have the ability as a small company to really connect with individuals, which when you're trying to grow a small business organically, word of mouth is everything.

Yeah. You know, we get comments all the time about. best customer service I've had in 10 years. Like that's something that we stay true to all the time and we'll always have real customer service people that actually respond to emails. They're not using AI.

Dealing with a business, you know, you might crack a big chunk of revenue in one deal, but you also might put a year, year and a half into that deal. Whereas now we're able to keep consistent cash flows and those sorts of things, which are really pertinent to keeping a small business afloat. How critical have mentors like Mark Cuban, Kevin O'Leary been to your success so far? Just from a confidence factor, like knowing that guys of that business stature cared about what I was doing enough to invest their own money into it. Like that was probably the biggest thing.

But, you know, more than anything, just remembering they started out like I did. You know, back in the day, they weren't rich. So just knowing that they're where they are today because they started where I had to start too, just reminds you that none of it was easy. They weren't born wealthy.

I think probably the biggest takeaway I have from it is to continue to think big. When you start a business, I think no matter what the business is, it's easy as the founder to get stuck in the weeds, the day-to-day operations. And really the only way I think to grow any business is to be able to be out there with the big picture mentality.

and be forging big relationships. Never lose sight of the big dream that got you into this in the first place because if you do, things will just be flat. Yep. Gotcha. Okay.

Well, on that note, since we're talking about mentors, we're talking about world-class entrepreneurs and business owners, you've had time to check out the Amphib Academy, right? Yeah, a little bit. Absolutely.

What do you think about it? What's your take just with what you've seen and what you've used there? I think I could say I wish there were resources like that when I was young. where you could get on there and look at multiple different business models and then kind of figure out where you would fit in with certain ones and which ones would engage you but you have so many different business ideas on there and be able to see like you know revenue potential for an average business you know some of the startup tools and things you would need to do to get there super valuable i think for a lot of people for sure world-class business blueprints from active business owners it's a powerful network to keep you accountable and the best part actually i won't ruin it for you click the link below to check it out for yourself So what is your marketing budget as of today? And then what platforms are you seeing the best return on your investment?

So as of today, we spend the majority of our budget on Facebook, Instagram, Meta. That's about... 90% of our monthly spend.

Oh, wow. And then the other 10% is Google, Ad Search, Search Words, etc. We can spend upwards of $100K a month on advertising. Wow. To be honest, though, we don't really have a budget.

If we're getting a target, a ROAS of a certain point, we'll spend more, we'll scale. I'd say overall... has been more engaging for us just because our product is catchy, it's flashy, so I think it really catches the eye of people because they've never seen anything quite like it.

Whereas on Google, traditionally people aren't really searching for kegs that often. It's not an item that most consumers are looking for on a daily basis so really our kind of our goal is educating people on why the commercial industry uses kegs as the gold standard for beverage containment and then telling our consumers you know you can have those same advantages in your own fridge at home so what's your number one advice when it comes to marketing on meta just being willing to make changes on the fly don't expect that just because one thing works today it's gonna work tomorrow yeah I think we all know our viewers with social media being so huge nowadays they have such a short attention span We got to keep changing the game to keep people engaged and interested. What's your monthly overhead today? Just to stay open, pay the bills and cover this lease and so on. Monthly overhead is typically around $30,000 to $35,000.

That includes payroll, machines, power, building lease, all the essentials basically just to keep running. How many people do you have working for you right now? We have seven. Including you or?

Including myself, yeah. Gotcha. Okay. What about profit margins?

What do you guys think? Our gross margin being a manufacturer is north of 55% gross margin. Take home, I'm guessing, is much lower than that? Always.

Like before tax? Yeah. Yeah, always. Like what, 10, 15% possible? Yeah, around there.

That's always a target. Being an e-com advertiser, it's always contingent on the efficiency of your ads. For sure.

So you could see some super profitable days and then other days that are completely in the tank. Yeah. So a lot of things you just don't have control over. So earlier you mentioned bringing on angel investors.

Talk to us how that happened and what's your advice for those looking to partner up with investors? Yeah so for me it was kind of a kind of a unicorn situation how I found my initial angels. I was actually coming out of the gym one day this is very early on in the conceptual stage we did have a website and I got I had a phone message a voicemail from a guy.

named Troy. He was a long time manufacturing guy back in Illinois. Apparently a few years prior, him and his other manufacturing buddies, they had a conversation over dinner one day and one of them was like, why wouldn't we make square kegs?

And so they had a similar idea from an efficiency perspective, but their engineers, like some of these guys worked at Caterpillar, big companies, and they're like, oh, you can't make... a keg square they revisited the conversation like four years later and so they were like it's got to have been done so they looked it up on google and they found square keg so they called me and uh basically it was coming from a place of hey we had this conversation what you're doing is really cool cool, we're all in manufacturing, what can we do? Is there anything we can do to help you?

So, started there, got to know the guys, ended up flying out there to Illinois a couple months later and we became friends, just all really good, genuine dudes that love innovation and building stuff. Probably like six months later, that exact core group ended up being our angel investment group. Is it because at that point in time, in a business growth, you needed money and so you were open to it? I mean.

Yeah, we had had a lot of conversations about raising money and stuff. And then for me, it's all about where the rubber meets the road. And, you know, I was like, hey, are you guys, do you guys want to be involved in this?

They're all like, oh, yeah, yeah, we 100% want to be involved in this. And so it was perfect timing because I did need to bring in capital and kind of get to production. What's your advice then for those looking to partner up with investors? Like, is it a mistake to do it super early on? You did it pretty later on.

Yeah. Like, what's the timing of it? I know it's different probably per product and in your situation, but. It's definitely situational, I think, without a doubt. But I would say in the beginning, I mean, do what you can and scrap and try to get by.

But at the same time, you know, depending on what your mission is, I would say if your mission is to grow a ma and pa business, that you're going to run and operate until you're 65 years old, maybe keep more of it. in the family if you will but if you're working on something that's innovative and you're planning to blow it out of the water and create a mega brand you're going to need the capital. Yeah makes sense.

This is the world's first stainless steel rugby ball formerly known as a square keg. So you guys do testing? Yeah and this is what this thing went through. Yeah very early on we knew that no matter what an engineering program said the kegs could withstand as far as pressure. Don't reveal it.

We wanted to we wanted to prove it out. in the practical environment and make sure that our product was safe for our customers. So this is the result of an extreme pressure test.

So our recommended maximum pressure is 20 psi, but for typical drinks, you're going to be using it between like five and eight psi. So it's quite minimal. Okay.

This is what it looks like. And this is what it looks like. Looks like after a pressure test. You guys, comment below on your guess how much PSI was required to turn this into what looks like a rugby ball. So comment below, we'll reveal it later.

So when it came to manufacturing the square keg, why did you decide and commit to doing it yourself in-house rather than outsourcing? the manufacturing process? It's a good question. I mean, honestly, my plan in the beginning was to be a sales organization because that's what my skill set includes. But we realized really quickly after reaching out and talking to a lot of different manufacturers with a lot of capacity and capabilities that none of them really had every aspect of our product.

They didn't have all the operations in one single location. So it would have ended up being, you know, a logistical nightmare to like have some parts made here, they're assembled here, et cetera. So pretty much I realized pretty early on that if we were going to make this thing a reality, that we were going to have to find a way to build infrastructure to be able to produce the product ourselves.

And most importantly, it boils down to quality too, because then you have 100% control over it. So as far as challenges then, what were the, some of the biggest challenges that you faced when it came to manufacturing your own product? I mean manufacturing is just hard in general. You've got packaging, you've got gas sources, taps, all these different things coming from different places. So being able to monitor and ensure quality across all of those different suppliers.

Man, you're the real deal. I mean literally took something that didn't exist, not knowing the process, not knowing anything, and just learning as you go. All right, let's talk about step two of the whole process, right? Now this prototype and patent.

And I find it really interesting too, by the way, Tim, that you patented your product before you even sold the first one, right? Yep. Which is interesting.

So why did you do that? How much did it cost you? Talk to us a little bit about the process as well. You know, honestly, early on when I initially got the idea, the driver to make me pursue patents was driven strictly out of fear. Really?

I thought that the concept I had come up with, you know, had a lot of validity and the ability to be potentially a paradigm changing shift in the keg world. So I pursued that, interviewed like two or three different patent attorneys, and I found them through my own personal network. attorneys that practice in other areas of law and picked the one that I liked the most and we just started getting to work. What did it cost you the whole process?

Oh man, I mean it's not cheap. No, I mean just like general rule of thumb you're looking at probably 10 grand for a utility patent filing. Not that bad. And usually I think like $795 of that is the actual patent filing fee, the rest is all legal time. So any fee for service stuff can eat you up especially when you're new but you're better off to be protected than not.

So find the resources, at least put in the groundwork on it, and get some things in place, I think. Let's talk about the prototyping process for Square Cake. Anything you want to highlight in that process?

How many times did you mess up to get to that final version? What did you learn through that whole process? Failed all the tests miserably as far as pressure tests. Part of the process. Yeah, it was all part of the process.

So we had multiple rounds of prototyping. I think in the beginning, we probably could have done it a little bit less expensive. Nowadays, we all have...

really cost-effective ways to do initial prototyping, you know, just to prove the concept more than anything. Obviously our product, because it's stainless steel, has to meet certain pressure requirements for operability and safety. So the prototyping got a little more expensive, but there's some things you just can't prove out with software.

Like you still want to always prove it out in practice. If you enjoyed this video, I have a small favor to ask. Almost 80% of you who are regular viewers of Upflip. aren't subscribed.

So if that's you, a quick subscribe would make a huge difference. As Outflip grows, we bring on better and better guests. Thank you.

As you're prototyping, you've got version one, version 10, however many versions you've had. Eventually though, what did you do to turn it into an actual product? First principle to know when you're trying to create a product is you can't expect it to be perfect out of the gate and just maximize and utilize the resources that you have around you from all the research.

You know, if there's a company you're prototyping with and be okay with going to market with a product that's ready to go, but maybe it's not perfectly refined yet. Most of us in the beginning, we don't have enough time or money to have a perfect product right out of the gate. That's a good point. So being able to get it in your customers'hands was the biggest thing that we had to shoot for because that market feedback was going to be...

Exactly what we needed to know if there were certain tweaks we needed to make in the product or Quite honestly if it was worth pursuing. Yeah, I can see how entrepreneurs can get stuck in that prototyping process Right and think they're gonna get this perfect product Yeah, and then for two three years they keep perfecting it and not one unit is sold So exactly you're like no just get it out there and get that input get that feedback and keep improving on it. Yep Alright, well, what is the reveal how much PSI did it take to all right turn this friggin thing on a drum roll here drum roll It took a whopping 1,800 PSI. Take that. How big is your email list?

And I'm curious how much revenue does... generate for your business? Yeah, so right now I think we're right around a hundred thousand people on our email list and growing rapidly. Part of being able to grow that is again, you know, enticing people with whether it's a good offer or something of value to them to get them to sign up in the first place. And then as far as revenues, it can really just kind of depend.

Typically we see the best returns with our email list. Like for instance, if we do a limited drop on like the army green or something, we see those types of things really pop off well, because I think it's people that have maybe seen our OG product a lot, and maybe it's kind of become invisible to them, but they see a fresh new look on it, and they're like, okay, I'm getting it now. Yeah.

Our Black Friday deal is so lit! This year, Jason Toppin, to our biggest sale of the year! How scary was it losing money in the first couple years of business? And what's your word of advice to those who probably find themselves in a similar situation right now?

Sure. I would say it's a mix of extreme excitement. It's like you're investing in something greater than yourself. But at the same time, yeah, I mean, my wife and I, we laid pretty much everything we've ever worked for in our lives on the line in some way, shape or form to make this happen.

I think you really just have to have the mindset of life is short. You can't take it with you. And, you know, like at this stage in the business now, you know, all the money I personally invested, it's gone. It's been gone for years.

So I feel like now it's like once you get past that initial sting of how much money went out the door, you really have nothing to lose. Just keep rolling and don't even, you just can't focus on that. All right, lastly, let's talk about the final step of bringing an idea to life, which is production, right? Yep. So how can someone with a novel idea like yours get their product manufactured?

And talk about maybe ways that we can get out there and source manufacturers and so on and build those relationships. Yeah, I think the biggest thing is just the power of the Internet now. You know, like we deal with stainless products, so it's pretty easy to get on there and find reputable manufacturers.

But honestly, for myself, I always like to go word of mouth. So I tapped into my network first. and got referrals to other business owners in the area that maybe had certain capabilities.

And obviously the big rep or a good reputation was important to me because there's a lot of companies out there doesn't mean that they have your best interests in mind as an entrepreneur. Most of you when you start out, you're starting out with very little funding, if any at all. So every dollar needs to be stretched to the max.

So yeah, just make sure you're interviewing, asking all the questions and making sure that you're working with a trustworthy partner that actually sees the goal of what you're trying to accomplish. What's been the best resource to you as far as when it comes to learning a new technique or whatever? Like, was it just talking face to face or was it YouTube university or a book or? A little bit of YouTube maybe in the beginning, but really it was about.

you know, face-to-face real human interactions with people that have been in metal manufacturing for 10, 20, 30, 40 years. So just leveraging the experience of people that have been there, done that to make sure that our roadmap for growth made sense financially and logistically. What advice do you have for aspiring entrepreneurs who want to turn their ideas into successful businesses?

I would say just start, just start now. Even if you fail, you're going to learn so much along the way that it's going to make your next try. Even faster and more efficient and higher chance of success.

So really just don't be afraid to start doing it. Okay. What about what's been the most valuable lesson that you personally learned in your entrepreneurial journey?

Well, I learned that during the darkest times in business and entrepreneurship, that the biggest wins are just on the other side of that. And I think a lot of people fall into the trap of quitting when it gets hard. And it always gets hard.

It's always going to. That never goes away, no matter how big of a company you are. So I think just realizing that the golden nuggets come on the other side of pain.

Yeah, quick fun question. If somebody came along and offered you a crazy amount to buy the whole company, 50 mil, 100 mil, whatever that may be, what would you be doing once this company sold and you're totally out of it? Probably floating on a yacht in the Galapagos Islands.

Oh, nice. Okay. I thought you'd start some other business, but you know what?

Well, I would do that after the Galapagos Islands. After Galapagos? Okay. Like the idea of having your own product, but don't have the time to design it from scratch?

Well, you can't miss episode 195 with Bobby's $4.2 million brand that started as a dropshipping store. Like and subscribe. We'll see you next time.

Transcript for:Tim's Journey to $350,000 Monthly

Transcript for:
Tim's Journey to $350,000 Monthly