Spotlight on a Startup

Many accredited investors are looking for alternatives to stocks, bonds, gold,
real estate, and bank accounts. With excess funds available for speculation,
investors are willing to take some risk with significant potential for the
upside. The buzz around the upcoming Facebook IPO has caused investors with
substantial amounts of capital to ask themselves 'where can I get in on the next
ground floor opportunity'? Investors who are willing and able to take a chance
on these opportunities are taking closer looks at early-stage venture capital
opportunities. What goes on in a startup? What are the opportunities and
challenges with startups? In order to give readers an inside look at a startup,
we decided to interview Lief Storer, CEO and founder of a San Francisco based
company called BoomBotix Inc. Let's start by having you describe your current
product line. What is it that you are selling? Boombotix makes portable speakers
designed for life in motion. Our current product offering is the Boombot line
which is a skull shaped speaker inspired from Japanese Urban vinyl toy design.
We've fused together modern audio technologies with a fun aesthetic that we
thought would really resonate with our target demographic. How did you happen to
come up with the idea for the product? I was an engineer by day and artist by
night. I painted skate decks, canvas, and sneakers typically going for an
urban-surrealist style. My company flew me out to Taiwan to work on programming
LED illuminators. I was at this place called the Dream Mall when I discovered
all these blank Do-it-yourself toys and that's when I started working on this
toy as a new medium. I blew out my knee skiing and I started to ride my bike to
work to rehab. During my healing, I was painting a lot and I discovered this toy
called the Skully that was basically a tennis ball sized skull with asymmetrical
eyes. In looking for an alternative to my DJ headphones for riding, I thought
I'd hack together my own hand-made speaker using an iHome audio portable
speaker and a Motorola walkie-talkie belt clip. I made my first prototype as a
weekend project and my life went on another adventure from there. Who is your
target consumer? I think our product line will do great in mass market, BUT our
core market is 12-28 years of age with an active lifestyle, a passion for music
and technology. Smartphone users are getting younger and few companies are
really addressing accessories that hit home with this market. We are not just
addressing the way a product looks, but adapting our products to the lifestyle
of this market. To really understand it, you have to really get in their shoes
and understand what their day-to-day life consists of. Any direct competitors?
It really depends on how you look at it. On one side of the spectrum, there are
a number of brands that are offering mobile audio solutions whether it is
headphones or speakers. Most notably, we would say Skullcandy and Jawbone are
major competitors to us in the space. We're trying to distinguish ourselves
with software AND hardware solutions that have substantial barriers to entry
supplemented by a close tie to our core community. How do you go about marketing
your product? With very few resources, we have relied on social media and
grassroots marketing. Major tradeshows like CES, Interbike, and Surf Expo have
been good for us as well, but they are also tough on cash flow when there is no
marketing budget. Our key to success has been to really pursue relationships
where people are just happy to use our product and promote it knowing that we
can't offer them much more than that. The bike market has been great for
finding customers that truly love the experience that Boombotix offers. When did
you first start your company and was it hard to get started? I came up with the
idea in 2009 and I spent about a year designing and sourcing a good vendor in
China. It was REALLY hard to get started. It's really intimidating to raise cash
when you've never done it before. I funded the company to get to the point of
having our first production quality prototype. Once I had a piece that looked
and sounded as amazing as I envisioned, raising investment got easier, but it is
still hard as hell in today's economic climate! Tell us a little about your
background, such as where you went to college, previous jobs, etc. I went to UC
Davis for Optical Engineering. It was a unique program that let you bounce
around a lot of different departments. Out of college, I was the lead engineer
in a new LED Lighting division at DiCon Fiberoptics. That job taught me so much
about product design and marketing. It was essentially a startup division that
had the backing of the parent company. A lot of the skillsets I learned there, I
transferred right over to Boombotix and was able to spec and design my own
product. I pride myself in my eye for design and I think my artistic side has
really allowed me to share my vision with everyone around me much better. It's
really important as an entrepreneur because if nobody GETS your vision, there is
no way you can expect them to help execute it. How did you happen to locate it
in San Francisco? I was running the business out of my parent's garage until
March 2010. My CFO had me go into the office of another tech-toy startup where I
met Mike North. He was a super cool guy with a lot of amazing projects under his
belt and he offered me some studio space. As soon as I got in there, I brought
more hands on deck and it made sales skyrocket. We quickly outgrew the spot and
I found a sweet studio on 23rd and Mission that I thought would be the ultimate
headquarters for a startup like ours. What is your current staffing level like?
We have six people in the office every day and we're always churning in
interns to help us with social media and PR. We like to keep a small team of
really talented individuals that understand the scrappy startup life and just
love getting their hands dirty. After all, even the CEO takes out the garbage.
Can you give us an idea of what your growth has been in terms of products sold
and revenues? Just to give you a ROUGH idea, at our 18-month mark, we hit the
half-million in trailing revenue milestone. In one year, we had 127% growth in
sales and we are currently on pace to shatter last year. Our goal isn't to
spike it and burn out but rather sustain year after year of triple figure growth
and continue fostering relationships that we have. How did you get your original
funding for the company? By clawing and scratching at friends and family and
taking out loans. I'm so thankful to have the support of everyone around me.
What do you consider your biggest challenges relating to running a start-up?
Being a boss. Before this job, I had absolutely no management experience and
human capital is by far the biggest variable. I've always been strong with
interpersonal relationships, but managing people was completely new. Every time
that I'm not happy with someone's performance, I try to always ask myself,
"Is it their fault, or can I do something better as a manager to help make
them better at it?" Every day, your mood dictates your organization. If
you're down about something, your entire team will be too. Be stoked, be
inspiring, and sell the future. Can you let us in on any new products on the
horizon? I'm very excited for the waterproof watch we're making for the iPod
nano. I get tons of compliments on the prototype, but it's got some work to
get the bugs out. We're also just starting to get into advancing our software
to allow audio networks to be created on the fly and that is the technology that
I think is going to set our sound systems apart from the rest. Are you still
looking for more funding? We're looking to raise $1.5 million to float us
through 2013. Most of the funding will be used to finance inventory production
and keeping our team fed. We're fortunate enough to have a good amount of
investors hovering around so now we get to be a little more selective about whom
we bring on to our team. We really are looking for investors that have more to
offer than just cash. What is your long-term goal for the company? First and
foremost, we want to make key innovations in mobile audio technology. We think
there are a lot of shortcomings of current hardware/software products and we
would like to fill the voids and really define our niche in the space. Beyond
that, we also want to create a lifestyle around our products and ultimately have
a big impact on culture. We are not really thinking of exit strategies, but
selling to a conglomerate or going public are viable ways to cash out for our
investors. Anything else you would like to add? Yes. If you are trying to
pronounce our name, its Boom-bah-tics. The name is derived from creating a field
of science around the mobile audio. If someone wanted to get in touch with you,
is your contact information on your website? Not my direct contact, but you can
certainly reach out to investors@boombotix.com and it will likely find me. You
can reach out directly to me on my LinkedIn. Thank you for your time and
enlightening us. No investment recommendation nor any investment promotion is
expressed or implied by either Stockerblog.com, the interviewer, BoomBotix Inc.,
or the interviewee.