Ep. 4: INTERVIEW: Katherine Krug on Building BetterCo

 
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Brian Scordato:
Hello. This is the Idea to Startup podcast brought to you by Tacklebox. I'm Brian Scordato and this week is a treat. I spoke with Katherine Krug, founder of BetterCo, which makes BetterBack and SuperStraps. Katherine was the first solo female founder to raise 1 million bucks on Kickstarter. She went on to raise millions more for various products. She built a distributed company that allowed her to work from 25 countries last year and she talks us through the tactics that got her to that point. This is the most thoughtful, helpful podcasts for early stage founders I've ever heard. It's terrific! This has literally nothing to do with me, and if you want a fun drinking game, take a shot every time I say "I love that". But listening back, this was incredible. There's so much insight in this 55 minutes. We had a transcript made and popped it in the show notes.

Brian Scordato:
I guarantee you're going to want to access it. You can also get lots of detailed notes at gettacklebox.com then click on "Podcast". I link to all the services and tools Katherine discusses there including her life design process. If you want a BetterBack or SuperStraps, I have both and I couldn't recommend them more. Use code "tacklebox" to get 20% off.

Brian Scordato:
And finally I keep forgetting to mention that I'm running a business. So two notes. First, if you're enjoying the podcast, please rate, review and subscribe. If you haven't, all three of those things are incredibly valuable for us. Second, we've got two sessions of our Tacklebox Accelerator program coming up. These are for founders with full time jobs. One is a virtual and one is in person in New York City. Apply at gettacklebox.com if you've got to startup idea that you're trying to validate and build.

Brian Scordato:
Now onto the good stuff, it takes us a few minutes to get into the flow, but then we really get rolling. I would definitely have a notebook handy. There's just an incredible amount of value. Here is Katherine Krug of BetterCo.

Brian Scordato:
So Katherine, for people who don't know what BetterCo Is about, what should we know?

Katherine Krug:
Well we make products that help people feel better and be better. So the company started out really as a side project. I was building a tech company and got hit with really terrible sciatica pain to the point where I couldn't sit down for over a year. So I ended up making this very janky product with a buddy of mine who is in industrial design Grad school and I would wear it around San Francisco and I was unearthed that so many other people had back pain. And so I ended up throwing this guy on Kickstarter with a $12,500 funding goal and amazingly ended up being the first solo woman to break the million dollar mark through crowdfunding. And, uh, my side project became my full project and I've been at this now about four years and we have started a second product line called SuperStraps, which launched last year as well.

Brian Scordato:
Wow. We're going to have to take a giant step back. Um, talking about that, this is so cool. I'm super excited to talk through those early stages. So you, you started this as a product for yourself. You've had back pain. How did you sort of do that? Did you just literally cobble it together to solve your own problem?

Katherine Krug:
Well, I was trying what felt like every single product and therapy on the market and there were lots of little inputs that would help my back for bits of time, but I couldn't find a full solution. And one of the products that I tried was something that was invented maybe 30 years prior and it had this really interesting form where it had a backpack and loops that go around your knees, that really did give me support, but it just nailed my knees, like within 60 seconds of putting it on, I had to take it off. So I basically used this form factor and pulled in my Buddy, who as I mentioned was in industrial design Grad school and we were using like the tops of protein, like big protein packs as you know, new knee pads that we were trying out and Asian to-go containers for all of these different types of support and pushes and different places around the body. And we ultimately started working with a proper industrial designer up in Seattle who had a whole prototyping shop and really evolved this product into what ultimately jumped onto Kickstarter.

Brian Scordato:
What was, what was your background? So what were you doing at this point and did any of it sort of lead you to this idea?

Katherine Krug:
So I did have manufacturing experience from about a decade prior, but I was really working on a tech business. I was doing the like 12 hour grind without, uh, my ergonomic desk set up and it just totally nailed me. And this, this side project, I really didn't think it would be anything more than, uh, more than that. I thought I would block this on Kickstarter. He had enough money to be able to do like a minimum order quantity run with my factory. And then I thought this would be something that I just blitzed on Amazon and you know, could pick up sales here and there and the idea that this would become my full thing, you could have paid me $1,000 and I would have said no way.

Brian Scordato:
Wow. What was the product you're working on at the time? The startup?

Katherine Krug:
I was, um, a consumer mobile APP called Everest. We set out with a goal of helping people set and achieve their personal goals. So no small, no small task. We were effectively trying to take these black boxes, uh, of of how people went about achieving a goal, whether it was becoming, um, an amazing father or running your first marathon or learning French. And we felt that by connecting people who had done similar goals, we could both help people stick to what they were hoping to achieve as well as really a nurse, almost like this dream genome. And find the best ways that people who are most successful at a goal achieved them. And then spread that knowledge to others. So it was a really exciting company and something super near and dear to my heart and hopefully something that I'll get back to working on someday.

Brian Scordato:
I knew the answer when I asked it because I loved Everest. I, I forget. I mean, we had met each other probably 3, 4 years ago now, but I actually didn't realize you were the founder of Everest until I was looking in prepping for this. So I was very excited. I actually was an early user

Katherine Krug:
I love that. That's awesome. I love hearing that.

Brian Scordato:
Yeah. So just a quick question on that before we get back to the Kickstarter story. Did you, was there anything you took away from Everest? Anything you learned from that early startup experience that helped you moving forward?

Katherine Krug:
Oh, a thousand things. We made so many beautiful mistakes and we'll never, we'll never repeat again. Um, a few of them. Let's see. Number one, this is going to seem trite because everyone talks about it, but pick your cofounders wisely. It's something that is really beyond a marriage. You spend more time with your cofounders and in the highs and lows, the thick of things. And if you aren't with people that you would literally want to run into a war with, then uh, just, just cut it off now, cut it off early so that, that would be one point. And then a second one, we thought we knew how to, we thought we knew the answer and we did not spend nearly enough time out of the office watching people use our product, understanding their frustrations and developing a really tight iteration cycle with our, with our software team.

Katherine Krug:
So that was a huge problem. And then, um, the third, I think we were too early. Technology wasn't at a point where people could effectively checkin on their goal without having to manually input it. So, you know, something that that started to come out and become really popular was geo fencing, but it was after we had already developed the first version of our product. So if your goal was to go to the gym six days a week, he had to literally manually input you are going in the gym. And that was a real buzz kill on the user experience side. So those are a couple, but I mean I've got dozens more.

Brian Scordato:
Cool. I love that. On the first one I talk about my dad a lot so people who are listen to the podcast a lot have probably heard about him, but I think of him as this like six-foot seven Italian Yoda. He's, he's full of incredible insight. And one of the things he says is the most successful people have the most hard conversations. On the cofounder thing, kind of cutting that off early might be hard, but is a good long-term strategy.

Katherine Krug:
Absolutely. And that really applies to every part of a business. It applies to cofounders, it applies to team, it applies to a particular strategy, you know, making sure you're not...it's very important to be tied to an outcome, not how you get there.

Brian Scordato:
I love that. So back to Kickstarter stuff. So you pulled together this, this product with your friend that works for you. I think it's pretty incredible that you just threw it up on Kickstarter. That's, that's really cool. Where were we in the life cycle of Kickstarter then? Were there a lot of success stories coming out of kickstart or what was going on?

Katherine Krug:
I think we were the 88th most funded product at the time, so there were still a lot of whopping successes. This would have been back in 2015. We actually had a pretty interesting journey even before landing on Kickstarter that might be interesting. So basically after I had gotten this, this Janky prototype together that worked for me and I would wear it into meetings wear it to meals, really wear it anywhere I had to sit and I realized that so many people had back pain. I dove into the research and I realized just how huge the market was. It's literally four out of five people get back pain in their lives. So that was a time we jumped out and found the person in Seattle who has a really amazing designer and prototyper. And from there we would try to create a prototype about every week or two weeks.

Katherine Krug:
And I grabbed an Ikea chair and I would throw it on the Embarcadero in San Francisco, so just a very busy walkway and we used to pull people off the street and ask them to try the product on and it was very difficult because you want them to like it. Of course it's your baby, but you really want to see how they feel about it in all the ways. So you would literally, as the best way to do it as you hand them something without any background info and you see how they put it on where they fumble, ask very generic questions to get at their thoughts before you dive into really targeted questions. And through this iterative process, we ended up doing about six rounds of prototyping and grab dozens and dozens of Beta testers and it was at that point that I realized we were really ready for Kickstarter.

Brian Scordato:
Wow, that's incredible. I love that. What was sort of the impetus for you going out and doing this? This is, I imagine like a pretty uncomfortable thing to go out there and get strangers to sit in a chair. Where did the conviction come from to do that?

Katherine Krug:
Well, I knew the product worked for me, but I wasn't sure if it would work for other people with other types of back issues. There are about 14 really common drivers of back pain. So Sciatica, that was sort of a check. I had a couple other friends who had it. I knew we were going to be locked and loaded there. So it was wanting to get the product on people of all different shapes and sizes, all different backgrounds, different pain levels. Today about one third of people who buy BetterBack actually don't have back pain. They're doing it for preventative reasons because they're stuck sitting all day and they know their posture isn't great. So we were even looking at people who, who didn't have that pain to understand is this a potential market to go after? So it was taking a lot of the lessons from Everest realizing that you can't just come to market with what you think is right. You need to stress test it. You need to get it into as many people's hands and ask as wide and open questions as possible in order to grow your conviction.

Brian Scordato:
Awesome. So you're prototyping, you're getting closer to something you think will be better at scale and you decide to launch Kickstarter. Something that a lot of our founders ask is how, how many ducks should they have in a row before they take a step like that. So how prepared were you for Kickstarter to blow up or not at all? Or what were the expectations and what was the preparation like?

Katherine Krug:
Don't do anything unless you expect it to blow up and you're prepared for it to blow up. Before we got to Kickstarter, I spent about three months just diving as deep into the platform as possible. I reached out to the top 20 most successful campaigns in San Francisco and uh, set up a string of dinners. So I would have people who had successfully gone through Kickstarter over to my house and got the chance to ask really pointed questions going around the table. You know, what was the most impactful thing you did in your Kickstarter that helped drive your success and what was a mistake you made that you know you'd never would want to do again? I reached out to other successful Kickstarter campaigns that weren't in the bay asking very similar questions. I also went out and found manufacturers in China. So, uh, I had manufacturing experience before, but in a completely separate field.

Katherine Krug:
So literally through Alibaba I reached out to about 60 cut and sew manufacturers and built a funnel that whittled it down to about three different manufacturers. That seemed interesting. I had only one prototype, so of course they want you to send something over in order to push it forward. And I didn't have anything to send over, but I got as close as I could to a sense of pricing, dimensions, weights, and went out and got an understanding for what my shipping cost would generally be. And on all of these things, you generally have to at least multiply the numbers you're given by a third, ideally a half.

Katherine Krug:
So if a manufacturer says it's going to cost $6, well maybe expect that it will cost $8. If a manufacturer says we can, you know, manufacturer 10,000 in 60 days, you're going to probably want to actually factor in 90 days. So you want to pad everything but have as good of a sense as you can before you launch. And I have seen on Kickstarter a lot of people miss out on pricing, they're shipping appropriately and it kills their entire project. So it's a big, big, big step that's very important, to actually work with manufacturers, understand what your real cost will be. Mark those up, understand timeline, mark those up and get true shipping costs.

Brian Scordato:
That's awesome. I mean I'm, I'm still sort of in awe of the dinners that you hosted. That's amazing. That's such a good approach. So when you said earlier you had a prototype, you threw it up on Kickstarter, that was really simplifying. You did a ton of work before this. Everything takes work. So you did this customer research. I'm interested in the customer you were going after initially and how are you are marketing towards them and how, how you marketed the Kickstarter and how they helped you market. Was it sort of you pushing on it or were they the driving force of it?

Katherine Krug:
Yeah, so a few things. One is understanding the market of the platform itself. So Kickstarter is largely young men, so I knew that was going to be the audience I was really trying to reach. I did an online version of my offline testing when it came to understanding the Kickstarter campaign page. So using M Turk or using Crowd Flower, I tried to test and through surveys as a thousand different things that I thought could be beneficial for the campaign. So I would throw a photo of me wearing the prototype up and I would pay 2 cents for people, maybe a thousand people to respond to the question, why would you not buy this product if you had back pain? And you'll get a range of qualitative answers that can generally be bucketed up. Some people in in mass would say, hey, it doesn't look very comfortable. Some people would say, hey, at that price it's just too much. Hey, I don't know if it will work.

Katherine Krug:
You sort of collect these buckets. Maybe there's nine or so. You can then run a new survey. Maybe this one's only 300 people and you can try to understand the prioritization. So of these nine things, which are the three that matter to you most, you start understanding people's objections and then widdling down their most important objections. And then you start feeding people solutions and understand which satisfies them the most. So let's say for example, on the, I don't know if this will work for me. I did a brainstorm of what are all the ways that could convince somebody. One would be a doctor testimonial, one would be an actual person trying this who had never tried it before, who had no skin in the game. Um, one would be explaining the mechanics behind how it works physically so they can understand why it would work for them, etc., etc.

Katherine Krug:
So you sort of create this big matrix of problems and you figure out the best way to, to market it to people in a way that they're going to digest. And another thing that's really great about running surveys is the very best way to market a product to people is to use their own language. So if somebody says, Hey, this doesn't look comfortable and you know, it is quite comfortable, you want to make sure in your marketing language that you're sharing this is very comfortable. Or if you go out and you get testimonials from people, and some people mentioned the comfort, make sure you're leading with some of those testimonials that mentioned comfort. So there's a lot of ways where surveys are incredibly helpful. And then if you'd like, I can get to this sort of the nitty gritty on how I approached the Kickstarter campaign and the marketing.

Brian Scordato:
I think that'd be helpful. I think real quick, first, can you just explain what M Turk and Crowd Flower are?

Katherine Krug:
M Turk and Crowd Flower are two of many crowd sourcing platforms where you can put a job that's generally a micro task and the amount you're willing to pay for that job, which could be anywhere from a penny to 25 cents to $5. And you can select different filters. So do you want people only in the United States? Do you want people worldwide? Do you want people who are on iPhone, uh, et Cetera, et cetera. And you're able to very quickly collect really short, tight surveys or micro actions from a crowd.

Brian Scordato:
Awesome. Very helpful. Thank you. And yes. Now I'd love to hear how you approach the marketing, uh, from a granular perspective for Kickstarter.

Katherine Krug:
Cool. So on Kickstarter when I approach a crowdfunding campaign my north star is around getting at least two hundred people a day to pledge at least one dollar to my campaign. So the reason for this is the crowdfunding sites are often a popularity game. The most popular projects get more airplay and at least to to this point it doesn't matter if somebody gives one dollar or a thousand dollars all that matters is the volume of people that are backing a project. So having this north star of the most number of people you can pull in for $1 pledge each day remains the fastest way you can get lots of people involved in your campaign to build some momentum. Out of the gate. I had exported my contacts from every single device in place and started to bucket them. You'll have one bucket that's your very closest people that you can call up and ask for a favor no matter what. That might be 50 people that might be a hundred people, who knows.

Katherine Krug:
You're next bucket will be people you're also really close with where it kind of feels uncomfortable to ask for a favor, but you could probably do it anyway. The next bucket are people that you totally recognize their names, but you haven't connected with them in forever. So maybe people that you worked with a while back, you know, maybe um, people, people from college, you're going to put all those people in bucket three and then in bucket four are going to be the like Craigslist response ads. Maybe the ex boyfriend, your ex boss. It's the people who, you know, you're going to try to minimize that bucket. But those are people that you're just going to throw out for the purpose of your Kickstarter campaign. So with each bucket, you then want to ascribe an action.

Katherine Krug:
So on, on my campaigns that my very closest people, I ask for a $1 pledge from them that day that I launched. In order to build momentum on the campaign, I use a tool called MixMax, which allows you to embed a survey in your emails where people can respond without actually clicking through. So it, it removes the most amount of friction possible to get somebody to sign up and say, yes, I'll pledge a dollar for your campaign. I also did a little social pressuring. So, you know when I asked for the $1, there's the yes and then the no column will be, no, I don't like you enough. You know I get, I'm sending this to this bucket of people that I'm really close to and hopefully very few people will say, no, I don't like you enough. So with that, at least on my first campaign, we were able to get about a 120 people to say, yes, I got you.

Katherine Krug:
The next bucket down, I generally ask for a social media share. By far, Facebook is the most effective, but some people just won't do it. And if they're down to tweet that's great, whatever, whatever you can get. And then for the buckets below, generally I will email everybody except for that very last, that last bucket, uh three to five times during the campaign. And generally speaking, I'm not asking anything from that third tier or below. I'm just letting them know about the campaign and hopefully some of them will be intrigued enough to want to go check it out or to share it. But I don't have a particular call to action. One other bit. That is a little bit of an interesting thing that I discovered on my first campaign. There was a bunch of people on LinkedIn who I really respected or I'd only met briefly at a conference and I wanted to, it was sort of in the middle of my first campaign, we had, uh, the traditional campaign slump in the middle.

Katherine Krug:
So just to, just to share really fast, generally in the beginning, first few days of your campaign, things go crazy and skyrocket and then you go through this valley of despair, where you, you just aren't getting that many pledges a day unless you're pushing, pushing, pushing, and then the last 48 hours of your campaign against skyrockets. So during this valley of despair, since I was trying to find 200 people, I tested out reaching out to people on LinkedIn and my call to action for them was asking for their opinion. So I shared, "hey, quick update, this is what I've been up to. I would love your opinion on this." And shockingly, so many people responded to this and people would jump on and say, "Oh, I actually needed this" or "my partner has back pain, I forwarded this on". So this was one that, um, was very, it was very effective but also a lot of work because once somebody responds back with their opinion, now you've got a lot of emails you have to catch up with.

Katherine Krug:
But that's, that's an interesting one as well. So you're using your network to really give momentum to your campaign and it's generally good to do it at the beginning when you launch, when you hit a milestone or two in the middle of your campaign and then a few days before the end of your campaign, and there's a lot of people who will just be too busy, too busy, but by the time you've emailed in the fourth time, they're like, okay, I'll help you out. Fine, you're persistent. So it's going to feel very uncomfortable to do this, but you just have to do it. One of the best ways to do it is to have all this stuff pre-drafted before you launch your campaign. So that you can't chicken out. That's the network side of things.

Katherine Krug:
Then the next one is press. It's gotten a lot harder to get great press coverage on a crowdfunding campaign. But the best way to approach press, even in general, once you've launched a product in my opinion, is working with a virtual assistant from the Philippines, which you can hire pretty easily on Upwork and have them build out a big database of journalists who write about your product, service or industry. So one thing you can do is utilize Google images, reverse image look up. So if there's a particular product in your space that has done quite well, you can literally drag and drop some of those main images and it will uh, sorry, you can drag and drop them into the Google image search bar and it will pop up a huge list of articles where that photo was featured. So that's one, one way of doing it. Of course, in general, just SEO. So typing the name of a competitor or the name of a competitive service or name of your industry and seeing who's writing articles about what, and you want to break out your, your database into a few buckets in and of themselves.

Katherine Krug:
So you might have some local press where that journalist matters as long as you're in that location. Some might be regional, semi be very niche and some might be big national players. So you want to ultimately have a database of at least ideally a thousand journalists and you can understand very quickly who they are. And then you can develop some press pushes. So what's something that makes your product really notable and newsworthy? Is there some timely connection to something that's already sort of taken over in the press? Is there something new? Is there some big first that you're bringing to the world? Have you hit some big notable milestone? There's a number of ways you can try to shape your, your press story, but you want to effectively write the headline. That would be awesome for your journalist readers to see had they already written the article for you

Katherine Krug:
So that's your goal. How can you shape a story that you know the journalist readers will want to read? And then you go pitch that. So using the same virtual assistant, you can develop a handful of different pitch ideas and you want to make sure every single one of those journalists hears from you at least three to five times during your campaign using different angles. So that's, that's the press.

Katherine Krug:
And then the next one that I didn't realize, how big and important Facebook ads where when I first launched, but now they've become a normal part of business on crowdfunding campaigns is paid social media advertising. So the most important thing to know is that no matter how good you are at running Facebook, Instagram ads, a normal life for crowdfunding, you probably won't be very good at it. The key is to be able to market to people who've already backed Kickstarter campaigns. Your CPA is just going to be extraordinarily lower. So working with some agencies where this is all they do, crowdfunding, paid social is the way to go. I highly recommend a company called Gella at j. E. L. L. O. P. They're based in Israel and in a field where there are lot of snakes running Facebook ad agencies have for crowdfunding campaigns, they're actually really good guys and they have the biggest sort of database of lookalike audiences in crowdfunding and they're really wonderful. So if you're going to do Facebook ads, probably go through Jellop.

Katherine Krug:
And then the very last bit is to actually get your backers involved. So the moment somebody pledges to your campaign, hopefully that same virtual assistant that helps you build out your, um, your list of journalists can immediately reach out to them and connect with them. You want to of course thank them for helping bring your project to life, but also see if they'll do a Facebook post, see if they can share your campaign with at least one other person and get them involved with continuing to spread the love. Another way that you can get backers involved as to have some kind of digital reward that has a price tag on it, but that you offer for free to anybody who takes a screenshot of them sharing your campaign on Facebook. So we've generally generate about a hundred or so Facebook shares per campaign by having this digital reward and that's been really excellent.

Brian Scordato:
Wow, that is so much helpful information. I really appreciate you going through all that. I have some follow up thoughts on that stuff, but I think we'll just move, we'll move forward to make sure we hit everything and we can circle back potentially at the end. So now that you've got the marketing plans set, how did you think about supply chain and pricing and actually producing all of this product?

Katherine Krug:
Yeah, so you have to start that part of it as early as possible. I mentioned that I had built out this big funnel through Alibaba, which is of course not the very best way. If you know of anybody who is manufacturing something similar to you, see if they will share some of their resources. It is often the best secret in their world. So don't expect them to give it to you, but you should at least ask. And then if you're stuck going to Alibaba route, make sure you're starting early and you want to vet manufacturers on a few different levels. The first is how easy are they to communicate with? If somebody is really frustrating to talk to or they're not thorough in their communication, cut it off early, it's going to end up in disaster. So how easy are they.

Katherine Krug:
Two, you want to make sure they have the expertise. So in an ideal world, you do have a prototype, you can share with them and you have them make a sample. It's really only through sampling that a factory can give you a somewhat realistic look at pricing. And if they aren't able to make a sample, make sure you mark that up. When they give you a timeline. Of course you want to extend that timeline ideally by 50%, um, or at least by 33% more than what they'll say. And if you're able to, the very best thing is to actually go meet in person. So on my first Kickstarter campaign, you know, it didn't have the funds to go fly to China, but before the Kickstarter campaign, as soon as the campaign had taken off, I booked myself a flight and even before the campaign was over, I had landed overseas and was meeting with people. So nothing beats the face to face.

Brian Scordato:
There's just a tremendous amount of work that you've described over the past however many minutes. Was it just you and your virtual assistant or what? What did the team look like?

Katherine Krug:
Yeah, so my virtual assistant was my first hire. The moment that, uh, our, our crowdfunding funds hit. So she's been with me now for many years and everybody else was a contractor. Um, you know, it's about finding expertise where you can, and generally speaking, the model for, for at least this company has been working with, with contractors. I find that our ideal person is either doing their own thing plus working with me or they have maybe three other clients and we're the third or the fourth. But where you can, you can really develop a strong relationship and an almost feels like they're part of your team even though they've got a whole bunch of other stuff going on. So we've had quite a few contractors who we've worked with now for three plus years as a business and they're fricking awesome.

Brian Scordato:
So how did you think about this initial price point?

Katherine Krug:
So I did a lot of surveying and I did a lot of testing. So one of the questions when I would pull people off the street was what price point is this a total "Hell Yes". Is this a no brainer that you're going to buy the product? Generally that was around $39.99 for a lot of people and some people said $49.99 so we set out at the $49.99 price point knowing that we could always peel it down if we needed to, but knowing you can't exactly go raise it. So that's one way we looked at it. What's interesting is post Kickstarter, we ran a pricing test on our online store and we found that the $59 price point actually performed better. So we ended up raising our price point based on data and that's the most important thing. Data, data, data. Don't pull this out of thin air. Go collect real information.

Brian Scordato:
Two more questions on this early stage. The first is around prioritization, so there's a ton of stuff going on, especially once the Kickstarter starts taking off. How did you manage your time and what you did each day during the Kickstarter campaign?

Katherine Krug:
I was a psychopath obsessed with getting 200 $1 pledges and that was it. Because we began raising so much money, I realized that we had a chance to upgrade the product in some ways, so we were able, instead of using off the shelf parts to create some custom components. So the manufacturing side was about 15% of my effort, but 85% was, was just staying focused to my core on raising as much money as we could as the hours tick by. And I think that's the most important thing. Most women are phenomenal multitaskers. Most men are not. But no matter how good you are at multitasking, the answer is you should not. You should not multitask in any part of your life. It is a number one way that you will perform okay but not great. And the difference between okay and great is the difference of everything.

Brian Scordato:
Awesome. What about early mentors? Did you have anyone helping with this process or were you sort of steering the ship totally?

Katherine Krug:
I think it's really important if you have a hole in your knowledge to go find people who have that specific knowledge. Uh, generally speaking, I found advisory boards to, to not be particularly helpful. People just aren't as in the weeds as you are. So I always recommend you go find a solution to the particular problem you have. Don't invent problems before and don't think that there is a, you know, some magical person who's going to answer all of your questions. You are the only person who knows all the nuances there are in your business. And so it's good to ask questions to people and then really triage the answer for yourself.

Brian Scordato:
Great. I think a lot of founders don't prepare for the emotional side of starting a company. So I'm curious as to how your emotional state was during Kickstarter campaigns so you're raising a lot of money. How were you feeling about all of it? Were there doubts? Where was your head at?

Katherine Krug:
I was completely blown away by the success of the crowdfunding campaign and completely disappointed in myself and my ability to be a normal human being during it. I became so mono maniacally focused that there would be days that I would look up and my teeth were not brushed and the blinds were still down still at 6:00 PM and I hadn't gotten out of bed because I was so obsessed with getting this, you know, the 200 pledge for the day and I was successful in one realm and basically a failure in the other. And one of the most exciting journeys for me as an entrepreneur and human over the last four years has been tackling that exact problem of not being swept away by either success or failure as an entrepreneur and making sure that I take ownership for my health. Both physically and mentally every single day.

Katherine Krug:
So I would say that, uh, it's something that I've gotten much better at. But a Kickstarter campaign really will take a lot out of you as well and, any startup venture. Elan Musk has this great quote that "being an entrepreneur is like chewing glass and staring into the abyss" and it can feel like that at times. The highs are highs and the lows are low and you have to enjoy that and be prepared to put a process just like you would for a problem in your business, for yourself to make sure that you're in a good place each and every day.

Brian Scordato:
Awesome. And I love that focus on process because it will transition us nicely into the next, the next thing I want to talk about. Which is how the Kickstarter ends. You raised, you can correct me here, it's over $1 million now what do you do? So it's like, all right, we've got this product that is successful on Kickstarter. Are you building on a process to transition this into a company? Was your thinking and what were the next steps?

Katherine Krug:
Yeah. So it was a bit of a process for me too. See, if I wanted this to be my main thing, in a thousand years I thought this would just be a little side hustle. And through some pretty intense life design processes, I realized that it actually hit a lot of the things that drive me, even though it wasn't quite apparent. So I really want to help people live up to their full potential. And when I was gripped with back pain, it felt like it rain cloud was sort of following me in my life. And pain was a dominant factor and I, I wasn't able to do my best work. And so I realized that by helping people get out of pain and back to doing what they love, that it was something I could get very excited about. So first step was actually going through that process, which was non obvious.

Katherine Krug:
And then after that it was deciding, okay, now that something that I never thought would be my business is my business, what do I want from it? What are my actual goals? And I decided, first and foremost that I wanted to have a distributed team. I Looked at entrepreneurship and technology as being able to build a business that has huge scale. But I was finding in all of my previous ventures, I was like stuck in an office from 9:00 AM until 8:00 PM helping other people and then I even have to do my individual contributor work. And there was a lot of burnout that came from that. So I realized I wanted as a focus to have people who are all super excited to work on the mission but who really valued their home and personal lives where they were okay giving up the water cooler talk and the birthday cakes at the office and people that wanted to stand on each other's shoulders and really race. So that was a, a core decision we made early on.And

Katherine Krug:
And the other core decision was to never raise venture. So after crowdfunding, after we did so well, there was a bunch of interest people who wanted to throw money on top of the money we had just raised. And, uh, it was a very core decision to decide to not take that, to stay bootstrapped. And the trade off was we can get to where we want to go but it will just take longer without venture capital. And that was a choice that I was very excited about taking. So with all things, everything has taken longer and I've had to say no to so many interesting opportunities or really not yet, but it has been just such a phenomenal ride. And I'm so grateful for that.

Brian Scordato:
Had you raised money at Everest, is that why you made that decision?

Katherine Krug:
Yeah, we had raised money and with Everest, we were really playing a numbers game. So the way we could most properly monetize, just like any social network was to scale, scale, scale, scale, scale. And with raising venture, you of course need to have insane growth. And that insane growth needs to tie in perfectly to hopefully a great part of the economy where people want to throw cash at you with great valuations. And it's a, it's a very painful process as an entrepreneur I found to not truly have control over your own destiny. So left that route and really decided that cashflow was king. Run a smart profitable business and yeah, again, grow, grow slowly but, but don't stop until you reached your goals.

Brian Scordato:
I want to dig in on the decision framework that you potentially employ. I'm sure you have lots of interesting opportunities. Is there a specific decision framework you have for saying no to most things and saying yes to a few?

Katherine Krug:
Yeah, so like you, I saw in your notes that you're an essentialist. One of the most important books that I've also read is Essentialism: The Art of Saying No. And that helped me a lot. It really gave me permission to say no anytime I had an inkling of saying no. So we run a process where we set yearly goals for the company that are very high level and then we run a sort of modified Google OKR process on a quarterly basis. For us we call them our GMA's goal metric actions and we define over the course of a quarter what are the three things that will completely the needle for the business and I'm signing up to go make this happen. And if it's not in one of those three things, it does not matter. Just say no. So by defining the most important things, it's again giving permission and forcing people to say no on all of the shiny objects that seem very alluring but then truly mess up your focus.

Katherine Krug:
And then on a weekly basis, and actually my husband is an entrepreneur, and he and I set weekly goals together every Sunday night and on end of day Friday we have the accountability where we circle back and we put checkboxes or accents around what we achieved or didn't achieve. And having these kinds of frameworks really helps you keep your eye on the prize on the things that are going to really move the needle for your business and not just say, not just get distracted by the little things that always pop up.

Brian Scordato:
I love that, on the team. I think the distributed team is really interesting and I was, as I was prepping for the interview, I was reading some recommendations on LinkedIn for you and and one from an employee said, "I remember in year one she arranged an all team holiday meeting where she told us that what she valued most in her work was putting people in positions where they could truly thrive and grow. I've watched that manifest repeatedly over the years. She's built a team that is clearly more than the sum of its parts." I thought that was a really interesting and obviously terrific quote about you and the culture you've built and the followup question is then what's the core role of a CEO or a founder in a small potentially distributed team?

Katherine Krug:
Yeah. First of all, that made me blush. Yeah, I think it's two-fold. When you're distributed it's especially important to reiterate the "why" to people. Why are they there? Why are they choosing to spend their time, day in and day out, working on the mission you've recruited them in to work on. So absolutely reiterating their connection to something bigger and giving them the fun touch point. So we tend to get love letters every week, which are just mind blowingly sweet, of people whose lives are changed by using our products. And so in our Slack channel we have a place for reviews, whether somebody emails me, whether it goes up online, whether it comes to a customer service channel on almost a daily basis, people are getting a chance to reconnect to George who was a vet who's been in crippling back pain for 10 years, nothing has helped and now he's able to to sit and move around during the day.

Katherine Krug:
And that stuff is so extraordinarily powerful. So finding ways to keep people connected to your community and to your purpose. Super important. And for me personally, as it relates to, you know, the LinkedIn recommendation I suppose is what it was. It's a matter of really understanding everybody on your team, what drives them, and taking a high level approach to see how you can help them along their path. So what do people want to work on? What are people so afraid to say they want to work on? But it's the thing they truly do want to work on and how can you shape their work and their environment to help give them those opportunities.

Brian Scordato:
Great. On the growth side, so you had one product for a, you can correct me if I'm wrong, but at least three years.

Katherine Krug:
That's right.

Brian Scordato:
Which I think is awesome to focus on something like that for that amount of time, continue to grow it. Then you decide to launch SuperStraps. Can you talk me through the process of deciding to add that product at that point and how you decided to move forward and how you did that?

Katherine Krug:
The real answer is that I was getting bored. I had been working on BetterBack for three years and what we were doing. I felt like I had really learned all of the steps, all of the components of it, and I was aching to be challenged and to learn something new. So that's why we jumped in to SuperStraps. It absolutely does plan to this larger vision. We want to be a brand that has many product lines as a way that we're going to, to grow. But the truth was I got bored.

Brian Scordato:
That's awesome. Um, I love that and appreciate the honesty. How did you land on SuperStraps?

Katherine Krug:
We had a handful of products we were thinking about doing and I was wearing a backpack walking the manufacturing line one day and I realized that at the beginning of the day, my backpack seemed so light. But at that point in the day, it was just gnarly. I was like doing that weird hunched over bendy thing. I was doing everything I could to move the weight off my shoulders and neck, looking like a total weirdo. And I realized that I kept using my fingers to pull my backpack straps away from my body.

Brian Scordato:
The thumb hook, I do that.

Katherine Krug:
Exactly. I think everyone does. And just how helpful would it be if I had something attached to my backpack straps that could do it for me so that I could keep going with my business meeting. And that was the, the sort of initial spark and then so much changed over the course of development on it. My team of industrial designers took it from a very simple dumb idea and built it into something really great.

Brian Scordato:
And then you had the playbook from the first product for how to launch on Kickstarter. And so I assume that's how you launched SuperStraps as well?

Katherine Krug:
Absolutely. So we really look at crowdfunding as our source of seed capital and if we are able to show that there is traction through crowdfunding, then we continue with the product and it pays for your first manufacturing run. And if you set up everything smartly, then you're also profitable and you can out of the gates begin to grow.

Brian Scordato:
Great. One more question before we get to the final couple of questions, which I titled as the hard questions. As you move forward, are you thinking about vertical or horizontal growth? Are you trying to sell more products to the customers that you have or is the focus on finding new customer segments and growing that?

Katherine Krug:
For us growth has been nonlinear. We, our main channel has been paid social media acquisition, but within that channel we've found it to be a total roller coaster. So you work really hard to find a particular ad that does great and if it can scale, you feel like you're on top of the world, money is rolling in and then at some point Facebook either updates it's algorithm or you've really reached the end of, of that look alike audience and it starts to burn and then you begin this new process of hunting for this next ad that can pair with a scalable audience. So we have had huge highs and huge lows on that. So we will often look at, you know, on a horizontal level, what other channels are we able to hit? How can we find different audiences? Are we going international, is it time to go offline. And then the, the more exciting part for me is just what are the products that we can we build that are very complimentary, that can continue to help people's lives be better

Brian Scordato:
Last one, what are the core tactics or the fundamentals that have driven your business that you think are applicable across industries?

Katherine Krug:
Well, number one is really looking to the crowd and trusting in the crowd. So whether it's plopping, you know, the chair on the Embarcadero and getting people's feedback or running the surveys because we now have done a few successful Kickstarter campaigns. When we were setting up for SuperStraps, I reached out to our audience and said, "Hey, we're looking for some ambassadors. We're going to send you one survey a week. That's all you have to do. Is anyone game?" And we had 1200 people sign up. So yeah, and these 1200 amazing people literally change the design of our product, helped us pick logos, answered questions for us. They, they truly changed our product. So realizing that you have one answer and your answer may be right, but it may not be right. Really looking to a very targeted demo that's going to be your customer base and collecting as much feedback as you can, I think is a great differentiator.

Katherine Krug:
Number two is just saying no. So it's this essentialism that you had brought up before. Say No. Say No. Say No. Almost a 10 to 1 ratio of saying no to yes to things and it's very difficult to say no. For example, we were on shark tank and as a result of our shark tank airing, we had about 400 inbound partnership requests come in and at the time it wasn't our focus. We weren't ready to go roll out into a whole bunch of of new categories. So we wrote back to everyone said, "Thanks so much. We're just a tiny team right now. We'll get back to you as soon as we're ready." And it was literally January of this year, two and a half years later that we wrote back to people saying, hey, we're now ready. But you just have to say no. If you're going to achieve the goals that you believe are the most important at that moment.

Katherine Krug:
And if you're going to achieve some level of sanity and enjoyment in the process, the last thing would just be experimenting. So we touched on this earlier, about being tied to an output, not how you get there and it's so core. When we set up our GMAS, our quarterly goals, we define the exact output we want and then we build out a list of potential ways we could get there. But the action items don't matter. That has to be the thing that is always lucid and changing. It's a matter of testing, testing, testing, testing, testing, finding what works, doubling down on that. Seeing if you can devise any other creative correlates off of that and just never think that you know the solution just because something worked in the past. It's a constant iteration.

Katherine Krug:
I sort of make a golf analogy in my head when you're teeing up to hit a golf ball, if you are off by two centimeters, three centimeters. then where the ball actually ends up is, you know, it can be hundreds of yards difference. And we like to take really focused shots frequently. So every time you're stepping up to the ball, it's like a new experiment rather than thinking that you're going to drive all the way to the green.

Brian Scordato:
I love all of those. Those are terrific. Thank you. So I'm really excited for this question. I love your approach to building stuff and figuring out if people are interested in stuff. So I'll ask this one that I ask guests, and it's a weird one, but if you were starting a Taco Truck today, what would your first six months or even six weeks look like?

Katherine Krug:
Oh my gosh, that'd be so much fun. I love that.

Brian Scordato:
That's why I ask it.

Katherine Krug:
That's a great question. So the most important thing is location, location, location. How can you find an under-served market of people just dying for Tacos? So I think there'd be a lot of location scouting. My next thing would be focusing on the recipes. I would go down to Lupita's in Cabo and San Jose del Cabo, Mexico, and see if I could get their recipes and if not, would probably look to the crowd. So invite anybody I know who's a chef or anybody I know who knows a chef over and have a big taco competition on a weekly basis and then open it up to uh, to people to buy tickets to come eat and vote on their favorite tacos. And really by bringing in a lot of amazing folks, get to the point where you know you've got something that you have real conviction behind.

Katherine Krug:
And then getting a taco stand or truck, you have to, you have to have some kind of really cool branding. So it would of course depend on where the location is, but do something that really stands out and then probably do some guerrilla marketing, whether it's a play off your name or you just make fake tattoos of Tacos and you just drop them all around the location. Just are building up interest in Tacos, Tacos, Tacos. Make people so hungry for a Taco that by the time you launch it's obvious that they have to go visit you.

Brian Scordato:
I love that. That, that might be my favorite answer.

Katherine Krug:
No way. That's awesome.

Brian Scordato:
I love it. And it's also lunchtime. I'm so hungry now.

Katherine Krug:
Go get a Taco. Taco!

Brian Scordato:
Your answer actually reminds me of one last thing I wanted to touch on. So I know that you work from all sorts of cool places. So you mentioned your favorite Taco place in Mexico. I'm interested in how your, your work looks like. So you're working from different countries pretty consistently. I believe so. I'm just interested in hearing about that.

Katherine Krug:
Yeah, so I think it's very essential for every entrepreneur to do an overall life design process. Really figure out what are your drivers in life and it's important only then to make sure that your entrepreneurial endeavor maps well to that. And for me, one of the most important drivers in my life is exploration. And travel is one of the core ways that that gets fulfilled. I just love learning about new places, people, et cetera. So building the remote team enabled me to go travel. Last year I worked from about 25 countries and as long as there is great Wifi, I can be anywhere and it's frickin' awesome.

Katherine Krug:
So one one thing just to dive into this, if it's helpful doing it. A lifestyle design exercise, it's great to grab a bunch of, post it notes, grab some different color pens and start with some prompts that you're asking yourself. One prompt might be thinking back when have I been in flow and you write down one answer per post-it note on all the times you can remember being in flow.

Katherine Krug:
Then you'll go to your next prompt, what are the things that I'm most proud of in my life? One answer per post-it note, put those on the wall. If money were no object and I could do anything with my time, what would I do? One answer per post-it note, put those on the wall. You can ask more and more questions like this and ultimately you'll end up with a huge wall full of post-it notes that you can start to bucket together and see themes on and you want to do that.

Katherine Krug:
And ultimately you will extract maybe two core drivers, maybe five core drivers, maybe seven core drivers, but they'll, they'll generally be a set amount. And for me, I've found that challenging myself, laughing and playing, exploring, giving back to the world with a focus on people and growing in wisdom are the five drivers for me that really make my life. And as I zoom out and I think about my overall goals for a year, of which my business is part of it, I make sure that in all the ways possible I can live out each of those values.

Brian Scordato:
That is fantastic. I love that. Really, really cool. That's terrific. Well thank you so much. I love this interview. I learned so much. I think that it's going to be really helpful to all of our entrepreneurs. Everyone listening, I'll end with everyone should go if you've got any sort of back problem or if you're in pain or you want to prevent it, you should go buy a BetterBack. I have one. It's awesome. And also if your backpacks too heavy, you should get some SuperStraps. Anything you want to end with?

Katherine Krug:
I just want to say Brian, I think you're amazing and awesome and I'm so excited for all the ways you're helping entrepreneurs. I think the world of Tacklebox and thanks for having me on, wishing you the best.

Brian Scordato:
Of course. Thank you so much.

Brian Scordato:
I hope this was as helpful as I hoped it would be. Head over to gettacklebox.com and click "Podcast" to get some more detailed notes, and if you made it this far, please toss up a subscribe, a rating and a review. Thanks. Enjoy your week!

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Episode Description:

We chatted with Katherine Krug, founder of BetterCo. This conversation is packed with insight - you'll need a notebook handy as you listen. Katherine takes us through the tactics and tools she used to ideate and develop BetterBack, a product that raised over $3mm on Kickstarter (first solo female founder to do so). We then touch on validation techniques, not raising funding, life design frameworks, and prioritization. She also gives an amazing answer to the "Taco Truck" question.

Show Notes:

BetterCo - 20% off with code “TACKLEBOX”

Katherine’s site - tons of wisdom

Tools / Services listed: 

  • Mechanical Turk:  Crowdsourcing marketplace for outsourcing processes / jobs

  • Crowd Flower (now Figure Eight): Human Intelligence + Machine Learning 

  • Upwork: Hire freelancers

  • Jellop: Crowdfunding ad agency 

  • Mixmax: Email tracking + surveys

  • Google reverse image lookup to see what journalists have written about competitive / similar products 

Goal Metric Action; 

  • What are 1-3 things that will move the needle for the business, and we only do those 3 things. Say no to everything else.

Life Design Process Questions: One answer per post it note, as many answer per question as you’d like. Put them all up on the wall. Extract core drivers. 

  • When have I been in flow? 

  • What are the things I’m most proud of? 

  • If money were no object, what would I do? 

“Being an entrepreneur is like chewing glass and staring into the abyss” - Elon Musk


You can find this and all future episodes on iTunes and here on gettacklebox.com/idea-to-startup.



Brian Scordato