THE BROKEN HOVERBOARD SUPPLY CHAIN [PART 3: HOW IT TURNED SOUR] Published by Silicon.NYC

By summer 2015, it became evident that our company was in a mad-dash to stay atop the Hoverboard industry as the market leader. Everyone and their grandmother were looking for the “segway” hoverboard as cheap as possible. Demand for the product was sky-rocketing and in order to stay ahead of the pack we needed an abundance of inventory to be continuously selling.

We figured, okay well other companies are now competing with us, so all we have to do is sell more product than them. This was our second horrible decision since the company went viral, as we soon found out and learned the hard way.

Back in late 2014, we had the opportunity to personally meet the Chinese factory owners we were purchasing our units from. This factory had developed a Chinese patent around their device and so, as a reseller here in the United States, our company felt confident that we were purchasing and re-selling the highest quality Hoverboard on the market.

When we first ordered our 20–30 Hoverboard units from this factory, we experienced zero delays in shipment. In fact, ordering Hoverboard units at this time was no big deal, primarily because the world (on a mass scale) wasn’t aware that the product even existed.

This seamless ordering process changed dramatically however, by the time May 2015 came. By the end of May, millions of people had become aware of our Hoverboard product because of the massive reach celebrities like Kendall Jenner and Justin Bieber had on social media when they would promote our company. The general public was becoming mesmerized by the Hoverboard, day by day. People even started seeing an opportunity to make a quick buck by re-selling the product themselves.

Suddenly, there was a massive number of people in the States demanding Hoverboards. But these Hoverboards weren’t just being purchased for personal use but rather for re-selling. New companies each day were popping up on the internet such as Buzzwheel, Monorover, Uniwheel, Skywalker, along with so many others by the time June 2015 came around.

These companies were being started by one or two individuals who would order 10–30 units from China in order to flip them for a profit here in the States. This saturation of the Hoverboard marketplace suddenly resulted in a significant jump in demand, which then put major pressure on Chinese factories to produce and ship Hoverboards by the millions.

The Chinese factories weren’t the only ones feeling the pressure. We were feeling intense pressure of our own. We were getting hundreds of orders per week, but we didn’t have adequate inventory to fulfill the demand we were receiving.

When delays in shipment started taking place, we would contact our factory usually between 12 – 4 AM EST due to the 12 hour time zone difference, trying to find out the status of our shipment. We would get in contact with our factory having to deal with incredibly difficult language barriers and we would continuously hear some of the following responses from our factory:

1. "Sorry for the delay, we will get your shipment out tomorrow."

2. "We're finishing up production very soon, don't worry."

3. "There was a delay with the shipping company, but we're fixing the issue."

These responses from our factory were excuses. Oftentimes, they were simply lies. Our factory was clearly not in a position to ship us our Hoverboards, but they were denying this fact by coming up with various excuses for the delay in our shipment. They were so inundated with other companies ordering their Hoverboards that they couldn’t keep up with the rise in demand that had taken place.

Once our shipment would finally arrive, there would frequently be issues. Oftentimes, we would only receive partial shipments of our order to the office. For example, we would have a 500 piece order scheduled for delivery and only receive 200 pieces. Then it would take another two full weeks before we received the remaining 300 Hoverboards.

Other times, we would receive our shipment of Hoverboards, but the keys wouldn’t be in the boxes accompanying the Hoverboards. Our keys were shipped separately and our small team would have to manually match up the keys for each Hoverboard individually by serial numbers on each of the Hoverboard boxes. It was a big pain that could only be solved through sheer force of will (and manual labor).

Our company took a big hit due to these problems that we simply didn’t have the ability to fix. This lack of consistency really damaged our reputation, as our company was on a high following the viral success of not only Hoverboards, but our company as the place to go for them.

The four week delay in shipment started creating miserable experiences for our young startup. It resulted in our customers calling our office, yelling and screaming at us trying to find out why their Hoverboard, which they had just spent $1,500 on, still hadn’t arrived.

Most importantly, the problems we had with our Chinese manufacturer made the simple task of fulfilling orders very difficult. This four week delay gave consumers the impression that our company was a scam, which a young business simply can’t afford. When customers didn’t receive their Hoverboards anywhere close to when we told them they would, they logically started concluding that our company had stolen money from them. It was at this point where things started to take a massive turn for the worse. These customers started calling their credit card companies complaining, and the results of these complaints resulted in one thing, disputes!

Stay tuned for Part 4, on Why Going Viral Sucks…

Big thanks to the team over a Silicon.NYC for allowing me to begin contributing to their publication. This was my first article published on their site and you can definitely check out this story and plenty more other exciting technology oriented stories over at Silicon.NYC.

COPYCAT HOVERBOARD STARTUPS POSE MAJOR THREAT [PART 2: A CAUTIONARY TALE] Published by Silicon.NYC

With the viral explosion of the hoverboard, thanks in large part to celebrity promoters, our original hoverboard startup was on cloud nine. We continued full steam ahead with our promotional strategy, which in hindsight, was the first in a series of problems we would experience.

So when we had the opportunity to work with the famous rapper Soulja Boy, we quickly grabbed at the chance. After he rode Chris Brown’s, he realized he just had to have one.
Having just gifted Chris Brown three hoverboards a week earlier, we also decided to give three hoverboards to Soulja Boy in exchange for his promotion. We figured that we would see the return on this investment quickly, especially considering how our most recent influencer posts performed.

It was a hastily made decision that would come back to haunt us.

As we got more media coverage, we noticed a threatening problem developing: identical looking, but lower quality hoverboards started to appear on e-commerce sites like Amazon and Alibaba, selling at half the price of our’s.

 

These cheaper hoverboards were so shodily made that we feared they would affect our own product’s reputation, as they later would when government regulations would begin cracking down….

To thwart competition, we decided to heavily push our celebrity marketing strategy, such as collaborating with Justin Beiber and Soulja Boy.

So when a week later, our team received a notification from Soulja Boy, assuming that he came through with his social media post promoting us and our product, we clicked the notification excitedly only to discover it was thrilling in the worst possible way.

It turned out that Soulja Boy liked our hoverboard technology so much that he decided to start his own company called “Soulja BOARDS.” Just like that, Soulja Boy officially joined the ranks of the 50+ other competitors selling hoverboards at the time.

For any early-stage startup, witnessing identical companies popping up shortly after you just launched virally is debilitating to say the least. Those same companies were tail-riding on the massive wave of popularity that our company started, just at a lower price and lower quality level, adding intensive pressure to your own startup to grow.

Not only were our influencers informing the world of our product, but they also were demonstrating to the world how simple it is to start a hoverboard company. 

How do you compete under those circumstances?

The competitive landscape for hoverboards was heating up. Millions of people worldwide witnessing the opportunities available in the market were trying to get in the game. This massive saturation about to occur meant only one thing: our company had to stay equally as competitive against our hoverboard by having higher hoverboard sales.

The only way to do that was to have inventory to resell, which is where our next big problem came into play, and why ultimately, our company was suffering from the very early decision to use celebrities to go viral.

The drawbacks of going viral were about to become all too apparent. Find out how in the next article in this series, coming soon!

Stay tuned for Part 3, on Why Going Viral Sucks…

Big thanks to the team over a Silicon.NYC for allowing me to begin contributing to their publication. This was my first article published on their site and you can definitely check out this story and plenty more other exciting technology oriented stories over at Silicon.NYC.

POPULARITY EXPLOSION OF THE HOVERBOARD [PART 1: HOW IT WENT VIRAL] - Published by Silicon.NYC

Viral marketing is a daring strategy that can yield extremely potent results for a company that produces something revolutionary. As a serial entrepreneur, I’ve had success with viral marketing, and have faced the challenges that it can bring.

HOW WE WENT VIRAL

Back in Fall 2014 our team had discovered an interesting new product in China and at this point in time no one was really even sure what to call the device. When we initially brought some units back from China into the United States it was apparent early on that this device was going to be a hit as people’s jaws dropped when they would see us riding one.

Initially we planned on selling the units wholesale to various larger retail stores throughout 2015 and especially for the holiday season. We were under the expectations that we would be one of a handful of other companies re-selling this device since we were lucky enough to discover it very early on. But our strategy changed rather quickly once we started to see the mass appeal of the product for celebrities.

During the course of 2015, there was one product, the Hoverboard, that captivated the entire world on a daily basis. This once innocent (eventually notorious) two wheeled device was appearing in every media publication, news outlet, and government press release for all sorts of positive and negative reasons. One of the initial massive forums where the viral success of the Hoverboard can be attributed to was The Tonight Show With Jimmy Fallon.

The Tonight Show has always been famous for its curtain call introductions, which introduces the special guests featured on each episode while they are standing behind the massive blue curtain while the live band plays the different jingles and tunes as the crowd gets hyped for the celebrity to appear. In May 2015, one of these curtain call introductions was just a little more special than the standard “wave hello to the audience and sit in your seat next to Jimmy Fallon.”

Many of you probably know who Jamie Foxx is and, let’s be honest, that guy has always known how to make a grand entrance. In his most recent appearance on The Tonight Show with Jimmy Fallon, his curtain call introduction was epic. In front of a crowd full of America’s finest Marines, Jamie rode onto the stage on a Hoverboard. At the time of the show in early spring 2015, no one in the audience (including Jimmy) even knew what the hell a Hoverboard even was or even seen one before.

First it was Jimmy asking Jamie,  "Hey Jamie what are you doing, and what the hell is that?"

That was then was followed by Jamie name dropping our company on national television. Finally, Jimmy went ahead and got on the Hoverboard and tried it out for himself!

Millions of people around the world saw the skit that night and plenty of other celebrities did as well. The following morning our email inboxes were stuffed and phone lines were ringing off the hook. Hundreds of customers and more big name celebrities were reaching out to our company asking to promote our product similarly to what Jamie Foxx did.

Seeing this kind of demand, direct outreach, and real desperation for our product proved to our team two things.

  1. Our viral marketing strategy was working.

  2. Continuing to work with Hollywood celebrities was the right path to continue down.

When people like Chris Brown, Justin Bieber, Wiz Khalifa started asking for our product, we decided to give them one for free. We did this in exchange for their support and promotion across all their major social media channels so that our brand name could continue to lead the Hoverboard market forward. We knew that competitors wanted our market share, so keeping our brand name relevant was a must.

This worked out brilliantly for us. Soon, these new celebrities along with at least 30 others were regularly promoting or product and, specifically, our brand. All of a sudden we were just two months in from our launch and we had already eclipsed 7 figures in sales, had all the major mass media publications reaching out to us for a story, and had powerhouse programs like Shark Tank asking us to apply for their show with our product. Even Kendall Jenner, who has been widely successful by promoting brands, used our Hoverboard on her Instagram video.

With all this promotion we felt like we were on top of the startup world. We had viral marketing buzz, tens of thousands in daily sales, and A-list celebrity endorsements. What could wrong?

Well, shortly after our viral launch we started to notice some other competitor Hoverboard companies sporadically popping up on the web. Recognizing this, but understanding that we had to stay focused on our own viral company, we decided to continue moving as quickly as we could in order to stay ahead of the competition. As a result we continued to work with A-list celebrities who could generate maximum exposure for us.

GOING VIRAL HAS ITS DRAWBACKS…

Going full steam ahead with this strategy turned out to be one of the first major mistakes we could’ve made. We started noticing very quickly that this maximum exposure was creating massive catch 22s for our business. It also resulted in serious and complex problems arising for the industry as a whole to have to solve, but yet had no real control in actually solving.

Viral marketing made us, and our great success can be attributed to it. But, we learned that it wasn’t necessarily the correct strategy for sustained growth. If you believe that viral marketing may be the correct strategy for your business, knowing the positives and negatives of the strategy are critical. Use it for as long as it is reasonable to do so, then shift your marketing priorities towards long-term and sustained growth.

Stay tuned for Part 2, on Why Going Viral Sucks…

Big thanks to the team over a Silicon.NYC for allowing me to begin contributing to their publication. This was my first article published on their site and you can definitely check out this story and plenty more other exciting technology oriented stories over at Silicon.NYC.

 

HUGE “When Going Viral Sucks” Weekend For Trump

Over this weekend some videos of Donald Trump were released by the Washington Post from 10 years ago that truly defined a “When Going Viral Sucks moment,” in relation to politicians. 

Donald Trump was video taped on an Access Hollywood bus saying some extremely vulgar, rude, and demeaning comments about women to then former Access Hollywood co-host Billy Bush. Since the videos release the mass media has been eating the story up. Over the last few months Trump has been receiving the title of a “Women hater,” and this video only fueled those allegations.

I don’t want to go into the specifics on the political impact this will have on Trump’s presidential candidacy other than saying it looks damaging. However instead I’m going to examine why this is truly a “When Going Viral Sucks,” moment for Donald. 

When I saw this story break I knew the video was going to go viral in a “bigly” manner as Mr. Trump often likes to say. It was evident that this was going to be the only thing the general public, and the media talked about for the following week, and presumably the remaining 4 weeks until the election. There was no doubt the video was going to be shared millions of times on social media and be replayed on a loop hundreds of times by each of the major Television networks. It was going to have Trump being portrayed in the media for ALL the wrong reasons and that’s exactly what happened.

Below are some of the reasons I’ve recognized as to why this video went as viral as it did. I would love to hear from readers if they agree! :) 

1. Women vote struggles — Over the last 3 months or so Hillary Clinton and the media have been hammering Trump on his treatment and respect for women. Although plenty of the rhetoric I’m sure is stretching the truth, there certainly have been comments made by Trump (prior to this video’s release) that definitely were not politically correct and also displayed forms of sexism by the presidential candidate. With the election less than 4 weeks away and the numbers mattering more and more each day this video just provided more evidence that the proof is in the pudding, with what will be Trump’s struggle to win the women’s vote. The video doesn’t help Trump AT ALL in re-claiming any portion of the women population vote in this year’s election and from a polling, forecasting, and prediction standpoint it fueled the Nostradamus’ of the world to continue to feel this way.

2. “We’ve been right all along” — News pundits who have been accusing Trump of being sexist against women had their time to shine this weekend. These talking heads were brought in to speak on all the major Television stations to continue their ripping of Donald Trump and to make the general public aware that, “They were right all along.” Whenever talking heads get the chance to prove that they were right in their claims they are going to seize that moment. With a story this important, at such a critical time in the election cycle, you knew that egos were going to soar in a viral manner as each of these news pundits had their chance to claim victory.

3. Star power — The people featured having a conversation in the video are not only Donald Trump but also Television star Billy Bush who is the nephew of the former 41st president of the United States George H.W. Bush. Billy has had a successful Television career over the last 15 years being a guest correspondent and then main co-host of various shows like Access Hollywood, and The Today Show. He also has been seen doing some of the main interviews at the largest red carpet events in the world such as the Golden Globes, Grammys, and Academy Awards. When you have two stars in this case partaking in the lewd commentary seen in the video as opposed to simply just Trump, it allows for the story to receive double the amount of coverage it would normally receive.