CLIQ Products traces its origins to GoChair’s 2018 Indiegogo crowdfunding campaign, which resulted in 22,000 chairs sold, purchased by 9,800 backers, totaling over $1.5 million in revenue. CLIQ’s chair collapses to about the size of a water bottle and can hold over 300 pounds, making it perfect for camping, hanging out at the beach or watching weekend soccer games. One of the reasons the campaign was so successful was the inclusion of a 30—second promo video, which highlighted the chair’s unique utility.
To put CLIQ’s success into perspective, Fundera’s latest data indicates that 6.4 million crowdfunding campaigns were conducted worldwide during 2019, which netted an average of $88 per campaign. You read that right. Most crowdfunding campaigns fail.
Of those campaigns Fundera deemed “successful,” the average raised was $28,656, from 300 backers. Using this baseline, CLIQ’s campaign outperformed the vast majority of all crowdfunding projects.
During the summer of 2019, the company rebranded from GoChair to CLIQ Products. To date, the company has sold 52,000 chairs and, so far, sales have increased during 2020, despite the pandemic.
I first met CLIQ’s founding executives, Mike Zapata, CEO and Max Waggoner, VP Finance & Operations, about a year ago, as the company was transitioning from its crowdsource roots to becoming an ongoing, operational entity. Before heading up CLIQ, they worked together at Sonos (NASDAQ: SONO), where they launched the company’s direct-to-consumer eCommerce business, growing it to $120 million. Impressed with their operating abilities, I became an Advisor and a modest investor.
From Billion Dollar Public Company To Nascent Startup
(Note: Mike and Max’s remarks have been lightly edited for brevity and readability.)
John Greathouse: Mike and Max, great to connect with you. Timing is everything in life and business and the timing of you joining CLIQ was fortuitous.
Mike Zapata: Yes, at that time we had both come off a long run at Sonos, where we launched and scaled Sonos’ Direct-to-Consumer Ecommerce business from scratch. We were interested to take what we learned at Sonos to help small and medium sized companies build and grow their businesses using the playbook that we had perfected.
My friends John Stump and Sam Chesluk had just invented – and successfully crowdfunded – the GoChair – a portable outdoor chair you can toss in a backpack. They launched on Indiegogo preselling a ton of chairs and came to us for help scaling and managing the business. When we started to dig into what they had created, it was clear they had succeeded where so many others hadn’t – in establishing product market fit! They both had other, full-time jobs and no DTC (direct to consumer) experience, so it was a natural fit for us to step in and take over the business.
Greathouse: I know you weren’t involved in the initial Indiegogo campaign, but one of your first tasks was to wrap up that effort and professionalize the company. What did that involve?
Max Waggoner: Looking back, I feel like we stepped in to captain a treasure ship with broken sails and holes in the hull. The launch team did an amazing job proving product/market fit with the Indiegogo campaign. But when you do $1.5 million in 40 days, it’s easy to think that money will last forever and to underestimate the enormity of delivering on your promise to ship 22,000 chairs.
We started with a full audit of our unit economics to identify and prioritize opportunities to improve profit. Tactically, we needed to plug holes in our cash outflow, streamline fulfillment operations with a Baja Mexico based partner to mitigate tariff costs, and optimize our Facebook/Instagram spend.
Another early effort was finding the right set of Angel investors to shore up our working capital. Getting Angels to invest in the company ultimately came down to articulating how we planned to improve our unit economics, and telling a credible, long-term growth story. But our most important focus was, and continues to be, doing right by our customers. Our early backers were very patient with us, and we owe them a huge debt of gratitude.
Greathouse: What can aspiring entrepreneurs learn from your professional relationship, as they seek to recruit co-founders and other core members of their team?
Waggoner: I think most people are lucky enough to be part of only two or three teams that are truly special over the course of their careers. Try to recognize that magic in the moment and identify the individuals behind it, because that’s who you want with you in the entrepreneurial trenches. If you really want to strike out on your own, don’t be afraid to put the team before the idea. Mike and I took a leap of faith rooted in our desire to work together and the belief that, one way or another, we could build a successful business.
Zapata: Chemistry, talent, trust and communication all matter. Max and I found those things in each other and we also had complimentary skill sets. He’s extremely good at driving us to logical, data and fact-based decisions; and I bring the business acumen of having worked across software, hardware and Direct-to-Consumer businesses. When we put these things together, we’re better together. My advice is to look for people you’re better together with.
Greathouse: When you look back at your time as executives at a large company, what do you think has been most helpful in launching a startup?
Zapata: Years and years of operating with a growth mindset – and really being able to see how strategic choices played out, or not. Combine that with the experience of working with some of the most talented people in the world, and it was great preparation for launching a startup.
Waggoner: For me it was the diversity of roles that I had over my career at Sonos. I started in Finance & Accounting and made a hard cut into a pure sales role; which then evolved into business planning and development and eventually led me to (a) move to Amsterdam to manage Sonos’ DTC business for Europe and Asia/Pacific. The breadth of experience that I acquired lends itself really well to a startup environment where everything falls on the shoulders of a small team.
Greathouse: You mentioned the importance of product/market fit earlier. How would you describe the company’s mission and what are you doing to ensure that you continue to deliver on your brand promise and product fit, especially in these trying times?
Waggoner: Our mission is to help people spend more time outdoors, in greater comfort. Right now, that could mean setting up a couple chairs in your backyard, taking a chair with you on a short hike, or finding any open piece of nature to sit back and relax for a bit.
We’ve heard some amazing stories from our customers about how they’re using our product in unique ways amidst COVID-19. From a delivery truck driver who uses our chair on her lunch break because she doesn’t have anywhere to sit with businesses closed; to a healthcare worker who uses our chair in his living room so he can sit with his family at safer distance than sharing the couch.
Greathouse: Nice. You are both remarkable marketers. Can you share some of the tactics and tools you’ve used to manage CLIQ’s ROAS (return on ad spend)? I assume this is another area in which you lean heavily on your Sonos experiences.
Zapata: This really comes down to deeply understanding your customer, their digital journey, and the metrics behind all of it. You can break any customer journey down into the interactions a person has digitally with your brand, and work to improve each of those touchpoints – experimenting and measuring the expected outcomes along the way. In so many ways, the ad platforms themselves are becoming democratized, so the most important thing is the content that you create, and how well you’re able to articulate your differentiated value proposition to your audience. For that, we’re really excited about a new company called Genus AI – they’ve developed a way to use artificial intelligence to segment customers by personality types, and to predict the content that will be most relevant to that segment of customers. We’re working with them now and it is delivering the highest ROAS of any campaign we’ve run in the last three months.
Greathouse: I’ve heard about emotional intelligence marketing, but hadn’t heard of any first-hand successes. I would think this info would be even more important in a time of high-anxiety and uncertainty.
Do you plan to launch future products via crowdsourcing, given the company’s breakout success?
Zapata: Crowdsourcing has become such an incredibly powerful new marketplace where inventors can connect directly with consumers to prove product-market-fit in a really raw way. It’s also a great mechanism for a company to bank some revenue from their invention without having to come up with a huge cash outlay upfront; effectively flipping the traditional way that cash usually flows. This is a hugely beneficial way to reduce risk and get the sales flywheel going.
Our decision to launch our next product via crowdsourcing versus directly to our established customers and channels will be mostly about where we think we’ll be able to get our biggest return on investment. To launch via a crowdsource platform again we would have to believe that crowdsourcing will generate enough incremental sales, through PR (public relations) and audience reach to hurdle the cost of transacting on the platform.
Greathouse: Despite your relative success during the pandemic, you’ve also been prudently enhancing your access to capital. Can you tell us a bit about the debt instruments you recently secured?
Waggoner: We generally run a very lean operation, with a small number of employees, supplemented by agency partners and contractors. Over the last few months, we explored a series of options for additional working capital as we prepared to maximize upside in Spring/Summer. As a young business in uncertain times, it was challenging to find solutions with a reasonable cost of capital. Ultimately, we took deals with two partners – Shopify Capital and Kickfurther.
As our eCommerce partner, Shopify’s approval process was a breeze; but initially their rates were cost prohibitive. To their credit, Shopify brought rates down in reaction to COVID-19 to help support the businesses on their platform.
Kickfurther is a business with a very innovative model, which takes the concepts of crowdfunding and extends it to inventory purchasing. Essentially, Kickfurther has an ever-growing network of backers who fund a specific inventory purchase for growing businesses. The business then repays the backers with a small amount of interest as the inventory sells through. For us, Kickfurther was a great way to de-risk our forthcoming expansion into Amazon.
Greathouse: CLIQ is currently a one-product company, but I know you have bigger plans. What can you share about the company’s ultimate goals?
Zapata: Ultimately, we want to help people spend more time outdoors, in greater comfort. So, for us, that means thinking about design innovations where we can create unique value for our customers that make their life outdoors easier. These things don’t necessarily have to be new-to-the-world, but they most certainly need to be different and more useful than the existing alternatives. I think if we combine that approach with a unique point-of-view and strong brand identity we’ll be able to expand our reach in the U.S. and internationally and build a sustainable and profitable company.