The Way of the Dodo — How to Sell 10,000 iPad Cases at $60 Each (and Other Lessons Learned)

DODOcase, one of more than 1,000 businesses created in the last six months, has sold more than 10,000 units at $60 each.

From today’s New York Times coverage of the Shopify/4-Hour Workweek build-a-business competition that just ended:

To encourage early, positive buzz among Apple iPad buyers, Mr. Dalton [of DODOcase] hired street teams via Craigslist to “hang out with Apple fanboys, while they waited on line for hours, maybe even days, outside of Apple retail stores for a chance to buy the first edition iPad.” The street teams, he said, hit Apple store locations in Boston, Chicago, Los Angeles, New York and San Francisco.

DODOcase also scored favorable reviews with the tech blogs Engadget and The Unofficial Apple Weblog. Some endorsements came unsolicited from high profile customers; on July 14, Evan Williams, chief executive of Twitter, posted a DODOcase endorsement on his Twitter feed: “Got my Dodocase. Sweet.”

The company, which plans to continue manufacturing its product and creating jobs in San Francisco, received more than 10,000 orders within a few months of the iPad’s debut…

DODOcase iPad cases cost around $60, so you can do the math. Amazing.

This post will cover how it all happened…

In December 2009, I published a post titled “No More Excuses – How to Make an Extra $100,000 in the Next 6 Months,” announcing a $100,000+ bribe intended to solve a problem: inertia. Perhaps a better translation: temptation to remain in comfortable routine.

The Shopify build-a-business competition was a financial carrot for anyone who’d dreamed of starting a business but hadn’t taken the jump. Each person had six months to build a business, and their two highest-grossing consecutive months would be matched against everyone else.

The competition just ended on June 30th. So what happened?

This post will cover the overall results and focus on the winners: their lessons learned, marketing tipping points, mistakes, and much more. First, some stats:

Revenue PER HOUR for the duration of the contest (180 days): $696.38

Total number of people competing: 1,819

Total number of orders placed: 66,503

Below is a sweet infographic that shows some of the highlights and a few other fun numbers (full-size here):

Click here for a gorgeous full-size view.

The Prize Winners and Analysis of Successes

I use the term “prize winners” because more than 500 viable businesses were created by you all, and I consider all of you winners (including those who participated but didn’t get this first attempt quite right).

For prize winners, here are the category and overall winners:

$5,000 Top Apparel Store: Nashville Flood Tees (www.nashvillefloodtees.com)

$5,000 Top Digital Good: Buy Mafia (www.buymafia.com)

$5,000 Top Miscellaneous: Grove (www.grovemade.com)

$5,000 Top Electronics Store: Vaporizers.com (www.vaporizers.com)

$100,000 Overall Top Store: DODOCase (www.dodocase.com)

In that order, I asked all of them the following questions:

1) How did you decide on your product? What ideas did you consider but reject, and why?

2) What were some of the main tipping points (if any) or a-ha moments?  How did the tipping points happen?

3) What were your biggest mistakes, or biggest wastes of time/money?

4) Key manufacturing and marketing lessons learned?

5) If you were to do it all over again, what would you do differently?

6) What’s next?

Here are their answers.

Lessons Learned: From Manufacturing to Marketing

NASHVILLE FLOOD TEES

Nashville Flood Tees is a group of artists and designers utilizing their talents to help the victims of the recent flooding in Nashville and the Middle TN area. We sell T-shirts for adults and children, with all of the profits going towards local charities.

Nashville Flood Tees was the brainchild of graphic designer Susannah Parrish, of texaSUS design, who posted 2 tshirt designs on Facebook. What was intended to be a modest project, turned into a viral marketing explosion- over 25,000 Facebook fans amassed within two days.

As it became clear this couldn’t be just a couple hundred tshirts printed in her basement, Susannah teamed up with Josh and Bethany Newman of ST8MNT design, a graphic design firm, to create an online store and additional designs. Josh and Bethany were able to get a Shopify store up and running within 2 days.

Render Apparel, a custom apparel company, joined the team to produce the product. The online store sold 800 shirts the first hour it went live. It’s been estimated that over $200,000 has been raised for the charities, of which $120,000 that has already been given to the charities.

1) How did you decide on your product? What ideas did you consider but reject, and why?

T-shirts seemed to be the perfect mix of raising money, as well as promoting the cause in the marketplace and giving the consumer sense if empowerment and ownership.

2) What were some of the main tipping points (if any) or a-ha moments?  How did the tipping points happen?

The tipping point was Facebook. There are now 36,970 fans. Google stats show online store visits from 93 countries/territories, with over a 108,000 visits total since we launched 2 months ago.

3) What were your biggest mistakes, or biggest wastes of time/money?

Our biggest mistake and waste of time: fulfillment. Since this was a charity idea that 3 small business owners set up to do in their spare time, we wanted to keep costs at a minimum. We wanted as much money as possible to go to the charities, so we didn’t partner with large expensive fulfillment houses or large capacity printers that could make our products the priority. This actually proved to take up more time that we didn’t have because we had to be so involved.

Our other biggest mistake: PayPal. For the same reason as fulfillment, we needed to set up payment as quickly and easily as possible. This has been a real challenge. Not only did PayPal shut us down for 24 hrs after only being live for less than 8 hrs, because of the sheer volume we sold, but they’ve been really slow and difficult releasing funds to us.

4) Key manufacturing and marketing lessons learned?

Lessons learned – the amazing power of online social networking. This idea exploded because of Facebook. We didn’t even have the time to actually use Google ad words or email marketing blasts with Emma.

5) If you were to do it all over again, what would you do differently?

If this had been a for-profit business, where we had more time and energy to devote to the resources, we would have set up a merchant account and payment gateway, instead of a third party payment processor like PayPal. We also would have integrated a more sophisticated online marketing strategy to truly capitalize on the viral explosion. And we definitely would have utilized a more turnkey fulfillment service. This has proven to be the most difficult aspect of an online store. And lastly we would have employed customer service staff to maintain communication with customers.

6) What’s next?

We plan on launching a new charity tshirt store that specializes in quality designs to raise money for a wider range of current causes: MyShirtHelps.com

This venture has been an amazing journey, (and at the risk of sounding like a kiss-ass 🙂 that strangely happened only a few days after we finished reading The Four Hour Work Week. The idea for an online apparel company had already been on our minds as a curious side business to launch. And the steps for implementation outlined in the book were on the to do list as sort of a pie-in-the-sky-if-we-ever-get-more-time plan. So as we watched the flooding on tv, and our good friend and former colleague showed us pics of a tshirt design, it all fell into place. Thanks to Shopify and The Four Hour Work Week, we scrambled a store up in a matter of days and have raised over $200,000 for the flood victims of the middle Tennessee area.

BUY MAFIA

What I sell at my online store BuyMafia.com is a service of transferring virtual items that I collect from the game Mafia Wars on Facebook, items like weapons, vehicles, armors, collectibles and many others from the game that will help improve peoples character and make them stronger for the competitive wars and fights that people take seriously, even though is just a fun game.

1) How did you decide on your product? What ideas did you consider but reject, and why?

I started playing the Mafia Wars game for Facebook and I notice that they had over 4 million fans playing the game daily (now there are over 10 million) and I did some research online and found a website that works like ebay but just for digital items for online games. I tried selling something there just to test the market, and on the same day I got an email from the site saying that someone purchased the items I listed there and they gave me their information so I could send to them, I did not expect that it would work that well but it did.

2) What were some of the main tipping points (if any) or a-ha moments?  How did the tipping points happen?

I had an a-ha moment when I saw how serious people were with the game and the competition between clans and that people wanted more and more items to become stronger and they would spend whatever it took to be the strongest player on the game. Then I used what I learned about business to create a business plan around that.

4) Key manufacturing and marketing lessons learned?

The best thing was that I did not put 1 penny out of my pocket until today do create this business, I just reinvested the money that was coming in from the items I collected in the game and sold until I got to the point that I pay people to collect them for me and I just focus on the marketing and sales.

I learned that marketing and getting traffic to the site are some of the most important things for a online business, the more I spent with marketing the more the sales grew, and that was exponential growth.

5) If you were to do it all over again, what would you do differently?

I would have invested more time looking for ways to market the business instead of trying to collect more and more items on the game. I could have people doing that for me.

6) What’s next?

Now I’m working on a affiliate program for people that wants to make money by just sending people to the site, giving them a percentage of the sale when their customer purchases something. I’m always looking to leverage and to automate more and more of the business so I can have time to create new projects.

GROVEMADE

Grove is a design collective lead by Joe Mansfield and Ken Tomita bringing art and customized natural products into your daily life.

Everything is designed and made in Portland, Oregon. We take pride in how we do things and who we are, as much as in our products.  Our products reflect our pursuit of fine design and ethical consideration.  Our main product right now is a bamboo iPhone case for the iPhone3G and iPhone4.  We curate and artist series of laser engraved art on the cases, offer customization where you can upload your own artwork, and a plain case.  The cases are a blend of high tech manufacturing and old fashioned handwork, aiming to bring warmth back into your lives.

1) How did you decide on your product? What ideas did you consider but reject, and why?

The product preceded the company.  Joe had an idea to make a bamboo iPhone case and I joined in to help him do it.  We thought we could make the best iPhone case in the world.  With so much of our lives becoming dominated by electronic products such as cell phones and computers, we felt that the world could use some products made with natural materials.  Also, contemporary design has been criticized for being cold and impersonal, while tradition is hailed as warm but old.  Why not bring back the warmth of tradition back into contemporary design?

2) What were some of the main tipping points (if any) or a-ha moments?  How did the tipping points happen?

The a-ha moment was when Joe and I decided to team up last summer.  I design/build custom furniture under the name TomitaDesigns and Joe coincidentally lived across the street from my woodshop where he conducted his laser business EngraveYourBook.  We became friends from the proximity and “nerded out” on design and art every day while tossing the football around on the street, not getting any real work done.  He had talked of the iPhone case idea for years actually.  I can’t even remember the actual moment when we decided to team up.  Now, it seems so obvious how our skills, talent, and spirit combine so well but back then we were completely oblivious to the possibility of working together.  I believed in his vision and we fed off each other to make it a reality.

3) What were your biggest mistakes, or biggest wastes of time/money?

Ive heard somewhere that it is better business wise to release a mediocre product early than a great product late.  Timing is everything.

Some people may point to our late release of the 3G model as a big mistake because of the timing.  It was in terms of sales.  However, if we were to do it again we would do the same thing.  We didn’t release till we had refined the product to our level of satisfaction.  We don’t release mediocre products just to make money.  We want to have pride in what we do, and that means sometimes we will be late to the game, and sometimes it won’t make business sense.

4) Key manufacturing and marketing lessons learned?

From a marketing perspective, everything went according to our vision.

Concentrate on making the best product possible.  If you succeed, the product will sell itself…. People will talk about it on their own.

From a manufacturing perspective, I had a lot to learn.  I am accustomed to designing and building one-off high end furniture pieces with no regard to how difficult it is to make. The goal has always been to make the best piece possible.  I had a difficult time adjusting from that mindset to that of a production situation.  Our products are difficult to make and require a lot of labor because of my mindset and lack of willingness to compromise certain things.  For example, we hand rub 4 coats of natural oil/wax on our cases which doesn’t really make any sense for mass production.

5) If you were to do it all over again, what would you do differently?

Nothing.  I don’t do the “wish I had a time machine” thing.  Experience–whether it be good decisions or mistakes–all lead us to where we are at now.  I love the ride and learning experience, bumps and all.

6) What’s next?

We have an iPad case coming up that we are really excited about.  We are mixing and matching some different materials that have radically different properties.  It will be thin, sleek, and customizable, of course.

We also have some amazing collaborations on the iPhone4 case coming up with artists and brands that we are fond of.  We love working with artists first and foremost.  Our spirit of creative pursuit is our greatest attribute and simply the most fun part.

The truth is, we have a ton of projects in development constantly in our heads.  I can’t wait to get to all of them!

VAPORIZERS

1) How did you decide on your product? What ideas did you consider but reject, and why?

We decided on vaporizers because we already wholesale in the same industry. We decided to launch an online website. Shopify was easy to use and very convenient.

2) What were some of the main tipping points (if any) or a-ha moments?  How did the tipping points happen?

The main tipping points was figuring out the keywords they generate the most conversion. Once we were able to identify the keywords, using Google Analytics, it allowed us to be more aggressive and competitive. We determine it by amount of revenue generated per click minus cost per click.

3) What were your biggest mistakes, or biggest wastes of time/money?

The biggest mistakes were starting shopify contest late. It took us much longer to develop the website than we expected. We entered in the last 2 month of the contest. Besides that, everything went very smooth for the website.

4) Key manufacturing and marketing lessons learned?

The key marketing lesson learned was how to manage the cost of PPC campaign. PPC became one of our biggest cost, it was a challenge to maximize efficiency. We really had to watch our ad campaign to keep the website profitable.

5) If you were to do it all over again, what would you do differently?

We would focus more on search engine optimization other than ppc aspect. Also spend more time planning out the website with a deadline checklist. This would allow us to launch a new site much faster. The deadline would look more like a real estate project… [with] each phase of the website constructed in a synchronized fashion.

6) What’s next?

We plan to open another site for niche market products that wal-mart, target, and costco do not carry.

DODOCASE

1) How did you decide on your product? What ideas did you consider but reject, and why?

Going back to our use first use of a Kindle, we were amazed and excited about the idea of an e-reader. At the same time we started to feel a sense of loss about not holding and reading a good book (despite what one might think, reading is at least in part a tactile thing). While we didn’t act on this feeling on the Kindle as the iPad was announced it was clear that we had to do something. Patrick considered many different types of wood materials to compliment the book element and ultimately decided on bamboo based on its eco appeal and its historic relation to paper.

2) What were some of the main tipping points (if any) or a-ha moments? How did the tipping points happen?

Since the iPad form factor was new, we had designed the DODOcase based on Apple engineering drawings. The first a-ha moment was putting the iPad in the DODOcase on launch day. We realized we had not only achieved our design objectives, but it was a way nicer experience using the iPad in a DODOcase than on its own. The second a-ha moment was when Engadget called the DODOcase ‘the Rolls Royce of iPad cases”.

The Engadget connection happened through the viral activity that surrounded DODOcase.   Our target market on launch (obviously the early adopter of the iPad) is highly connected and highly social.   They wanted to talk about their new toy and we become part of the conversation.   These conversations spun up in the ‘echo chamber’ of Twitter and Facebook and quickly made it to the tech blogger community.   Josh from Engadget reached out to us directly and we recognized he was a guy we wanted to get our product to quickly (he got case #16).

3) What were your biggest mistakes, or biggest wastes of time/money?

Fighting the urge of distractions has been a challenge for us. We pursued an iPhone 4 case design for a week before checking ourselves and deciding that while we had a cool product design execution would be a distraction from our commitment to our customers.

4) Key manufacturing and marketing lessons learned?

We’ve learned tons about book binding and woodcraft which we will certainly take forward with us. On the marketing side, we’ve learned that having a great story is as important as having a great product. As a small company, you need to connect with your customers on an emotional level as well as on the physical level of the product. We sell DODOcase’s exclusively online which means most of our customers are buying a product without ever touching it. To achieve sales in this way, its important that customers ‘want’ to buy into the story as well as the product. We’ve believe that we are in the middle of a giant cultural shift from the book to the computer (e-reader/iPad). We hope that DODOcase can help ease that transition by providing the tactile experience we’ve all grown up with applied to these amazing new devices.

Let me take a stab at ‘formulating a good story’.

For a small business like DODOcase, it is critical that our products have a story behind them.   The seeds of product development for the DODOcase originated when we first held the Kindle.   We were amazed by the power and convenience of the Kindle, but immediately felt a sense of loss about the traditional book.   That loss was a combination of the tactile feeling of a book as well as the potential that an entire traditional industry (book binding) could ultimately be destroyed by such technology.    These feelings became the core of the DODOcase product story.   We set out to make a product that helped assuage these feeling as consumers embraced the iPad.   Users of an iPad in the DODOcase ‘feel’ like they are reading a hardback book which created a positive association with their past feelings of reading actual books.    Further, through our use of YouTube videos and other online messaging, we told the story of how DODOcase is made using traditional book binding techniques.

The combination of a product that delivered on expectations we set and the story we’ve told in our messaging has strongly resonated with customers.    At the end of the day, we made a product that we wanted to use and have tried to share liberally the many reasons why we’ve made the product and manufacturing decisions we’ve made.

5) If you were to do it all over again, what would you do differently?

If we had the opportunity to do it all over again, we might look a little more carefully at our choice of wood. Bamboo is an amazing material, but it is also very difficult to work with. Choosing a different type of wood might have made our lives easier.

6) What’s next?

We will continue to expand and invest in our production capabilities. We strive to eliminate the wait to get a DODOcase and to better service our customers. We will be expanding our product line to support additional colors and customizations for corporate clients and universities. We will look at new tablet devices as they come out and decide if the market will be large enough to support a DODOcase model.

We are thrilled to grow our business in the great city of San Francisco and contribute to the local economy.

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