Tayson: Here's the big question, how do we live a life? Full of Adventures travel and memories on our terms without being millionaires without previous experience? And without unlimited amounts of time, that's the big question and this podcast will give you the answers. I'm your co-host Tayson Whittaker and I'm Dave Keim and you're listening to the Live Ultralight podcast powered by Outdoor Vitals. Hey, what's up little ultralight podcast? Listeners, it is. Me Tayson your host. And today, I'm going to be doing A solo session. This is the first time I've ever done a solo session but I'm kind of doing it this way. Well one because I got a few guys out of the office but two because this is more of a rant. I wanted to talk about the may change your perspective on how you buy outdoor gear or just any products in the future.
Tayson: You see, I'm going to talk about why we refuse to touch Venture Capital Money And how that actually benefits you as a consumer recently, I was reached out to by an employee or previous employee, I should say. Of a competitor company and this person was seeking employment as that company was doing some quote unquote. Restructuring, maybe you guys have heard of something like that. Happened to your friends, your family, or you personally going through a restructuring and changing up basically, the core values of their company, which can sometimes cycle every three to five years. Anyways, this person is really got me thinking about why, why it is so important that we stay the course. The course that we are on is a family owned, privately owned no Venture Capital, no, additional Partners type company. And I want to talk about why that is important to you.
Tayson: The consumers and the long tail effect of what happens when you start touching venture capital, I also wanted to touch on with this, you know, the things that we are doing to avoid Venture Capital. How we're making it possible to do what we're doing without venture capital and we'll kind of touch on that. Some of you may know that we already do crowdfunding and some of you may have heard this month in the month of August 2020, that we released our Live Ultralight membership. And if you do sign up for that store credit membership, which just means that you load store credit into that membership. Every month that of 10 dollars that you are going to be entered into a 1500 dollar giveaway. And if a future giveaways, which we plan to do for memberships, there's a bunch of benefits there like free priority, shipping discounts limited edition gear.
Tayson: You can buy The Stormlight backpack in there on a presale for 50 dollars off, which is massive. And it's only available for pre-sale, two members. So a lot of really cool benefits you get on top of just being signed up for that but there's a whole reason. There's there's a very logical methodical reason that we do. A store credit membership. There's a very logical reason that we do crowdfunding and there's a very logical methodical reason. We don't touch Venture Capital. So I wanted to talk about that. I wanted to talk about things that maybe you've already seen this. You just haven't put this to words inside of our industry but I wanted to talk about it very openly. Kind of rant about it a little bit.
Tayson: I'll try not to rant too much, but I think by the end of this, you guys are going to understand something that you've never understood before, or at least be able to explain it to someone else, maybe that has does not understand this now. And that's kind of my goal of this. So back to The Story. So this individual reached out to me and they said, hey, I'm looking for new employment, the company that I'm at, which is a competitor company, which I do have a lot of respect for, they make some decent gear. It's actually But anyways, they are competitor company and this guy was seeking employment, it didn't end up working out because he was from the retail side of the game and we don't do retail. And so this connection isn't going to work out for us. But I started to ask some questions. I said, you know what, what's going on?
Tayson: And he said, well basically the investors of this company are wanting out. So they're positioning the company to sell to the next round of BC. So this company originally started with the founder, the company gotten some financial trouble and this is just background that already know, but got originally got into some, some some trouble. And so they went and got some Venture Capital Money And basically the Venture capitalists came to them. And said, yeah, we need to out the president of this company, which may have been a good or bad decision. I really don't know. They Out at him. Put the number two guy in charge and went forward with that. Well, what happens when you invest with venture capital and a little background on Venture Capital Venture, capitalists typically and let me just say this, what the heck is a venture capitalist, right?
Tayson: That is someone who is basically, taking high risk investment, sometimes it's high risk investment. They're buying equity in a company. And then they're waiting three to five years. Typically, different portfolios, different groups of investors. Look at different things, but most of them are looking between a three and a five year, turn around on their money and their exiting by doing this because it's usually a little more high risk and they're usually in, you know, involving maybe some of their connections or different things. They're able to get high returns High Returns on their money when they go to sell it. But the To being venture capitalist is you have to rotate your money. So back to the story of this company here, he basically said that. Yeah, you know the investment up the the VCS that are involved in this company are wanting out.
Tayson: So they are basically higher or excuse me, firing half of the company, they're cutting costs in any way they can, they're liquidating a bunch of product. They're they're changing up their their basically, they're fulfillment Services. They're they're doing all these things because they wanted to make it look really, really pretty highly profitable show all these things so that they can then take that position it and make it available for sale so that they get the most out of their investment. Now, some of you might be seeing the problem already in what's happening. If you're doing this, probably the first thing that you don't care about is the future products that are coming in the company, you don't really care that much about R&D. You don't really care that much about. I don't know, say, different types of marketing or branding or Customer Loyalty.
Tayson: You probably don't care that much about taking care of your customers because all you're trying to do is increase your bottom line. So, Obviously this guy, he was he was in the company. I mean he had stock yet Equity, essentially in this company and he was let go. They needed to dress this up and make it ready for sale. So you might be thinking, okay? Well what does that? What? How come that affects me so negatively? Well, the key there, I would say, is the R&D side. See, when you're constantly focused on next. Month's profits, next, quarter's profits, next year's profits. And that's what drives you, you typically aren't investing in, what's going to be best in five years. What's going to be just in 10 years and Essentially what happens as you start to run the company, is you find out that you have two stakeholders now?
Tayson: Stakeholders are people that matter to the company, they're people have significant. Stake, or significant impact on the company. So, typically your stakeholders in this situation now is not just your customers, not just the people that are buying from you, but now you're you've got a secondary stakeholder who carries a lot of weight which is the Venture capitalists. They are not there every day, they're not running the company but now you have to go and answer to them and you've got to make them happy while making customers, happy while making sales go up, while making profits go up. And, you know, doing all of these different things that they require and so, that's Key here, I guess. So when you aren't owned by Venture Capital, well, we are able to focus on, is the long term. I can focus on what kind of company do we want to build in 10 years, three years, five years.
Tayson: I'll tell you right now, we don't Focus that much on a yearly goal. I don't even have a yearly goal set for 2020. That's kind of sad. I mean, I have I do but I don't I set a four-year plan up for Outdoor Vitals a year ago. And so in 2020, we're still trying to follow and keep up and keep pace and do all the right things to keep up with the four year plan, because we're not that nervous. About missing at Target. I'm not tell you right now. We missed last year's Target but We set a really good foundation up. And this year, we're on target, we've climbed back up, we've done significantly. Better this year because we continue on a long-term vision and it's paying off.
Tayson: You guys are really responding to some of the new branding, the new products, and these Investments, which we've made in the long term, There's a whole different story line that we're going to we're going to talk about a little bit later this month with the retail side of it and how retail all so inhibits InnOVation how it inhibits quality and some of these different things. But I won't get into that. I'm gonna stick with VC here for a little bit. So it's kind of interesting because you've got all this going on and when you're constantly so focused on turning the right profit the Claimed or promised profit levels, you don't always get to design what you want to design. It's becomes more about profits. Will this sell a lot of times with with Venture Capital as well?
Tayson: Not always, but, A lot of times they've got, they've got relationships and Retail and these different areas where that becomes like, hey, all by in. And then I'll connect you with him and connect you with him, and then we'll blow up sales because we'll go to retail and Retail. dictates things like prices and and where it's placed and what you know color there's all these different things that retail gets to dictate which is why we saw a huge Resurgence with cottage companies. I mean, I'm sure all of you guys have heard of all these different Cottage companies and the question that comes down to why are these Cottage companies doing so well? Why are they so talked about why is everyone buying these random Cottage Company products? Instead of going to their local REI anymore?
Tayson: And the reason is these Cottage companies are family owned they're privately owned and they get to focus on the stakeholder. That matters which is You guys they get to design the products. You guys want they get to really focus on? What do does the customer want and whether that, you know, looks like it's going to be good on paper whether it may not look like it's going to be good on paper. They get to just do what they want without outside opinion. It's just between the maker and the buyer, that's all that matters. Not the the quote-unquote banker, you know that this investment banker, that's driving the code. Any of you guys have probably heard, I'm kind of a big follower of like Tesla.
Tayson: You may have heard, you know, Elon Musk say things like the worst thing that he ever did was take the company Public public is like the next level of venture capital, because now you got stockholders on the company and World breeding down your neck about these different results and it really can be tough, a tough tough team to deal with. You know, let me tell you different story for a second. There's another company here in Utah and they Are they have a really cool premise? I really like the idea of the company. I've heard the founder speak. He's, he's good. He's like just a good dude, right? Well, they start this company and he goes out and he raises a bunch of venture capital money. And then he raises another round and another round, and they continue to raise until they've raised millions and millions and millions of dollars in Venture Capital to grow this thing, right?
Tayson: And it seems like they're doing well, and then I feel like things just kind of stagnate almost. I'm like, I just kind of noticed this, right? I didn't really and I might have just been my perspective, so don't read into this too much, but comes up on their five year anniversary. And the company was really built on this premise. Which is basically like there are certified B Corp and they they do things to benefit us. I don't want to give too much information out here but They're really built on this single premise of basically a donation and on there, literally, like I said, Venture capitalists they want their money back out in three to five years. Literally on their 5th anniversary. The same time, they announced that they had been in business, five years, the same time. They all announced that they were cutting that program in half Yes.
Tayson: They kind of dressed it up and maybe, you know, maybe from the outside, I'm not fully understanding this. All I know is that the percentage that they give and it, you know, not ended got cut in half on their five year anniversary. And I heard from a friend of mine who raced some venture capital, That that they had invested in this company and the guy had talked about, you know, we'll be, you know, the basically that they're really good at raising venture capital and they hope to get their money back out. So that so kind of perspective from this Venture capitalists was man where we need to push these things and get this this money back out of this company because it it's not as it hasn't lived up to the acclaimed thought of what it could be right. but imagine that like you build a whole company on a premise and then, A venture capitalists, you have to change it.
Tayson: I promise you that the idea was working people lOVed the idea of what they were doing and they still doing it, don't get me wrong. They're still around, they're still, they're still kicking butt, they're still great company. I would buy their products, but I believe from the outside in that a big portion of what happened is the Venture capitalists needed. Their money profits were at the level they needed to be. So I said look, we need to cut this program. That really do us any good. It's just money that we're giving away hypothetically, we need to cut it so we can have more bottom line profits. That's what happens with Venture capitalists is. They come in and they basically take the heart and soul out of the business and what they're trying to build and what they're trying to create. You look at, you know, two of the biggest Outdoor companies in the world.
Tayson: Look at number one, the number one biggest Outdoor Company in the world. I won't say their name. I'm sure you can find them easy but they have been owned by Venture capitalists firms for a long time and to me, they widgets they don't sell anything that impressive. They don't. It's just not a heart and soul in it. They just mOVe a crap ton of product. And in fact, if you read I listened to some stuff about the company in different things, when they actually had a lot of success, when things started to really pick up for them is when they you know rather than have a face of the company, they started to hire ambassadors that would became the face of the company for a time and they had to they had a lot of success with that. But you compare that to someone like Patagonia where you have a privately owned company owned by you know, bombard.
Tayson: He's run the company for many, many years and since this is stepped back and as the board member is rightly should be, you know, it after all of what he's done and whether you like Patagonia or not, you just cannot argue with what they've been able to do in the products, they've been able to create and the mOVement they've been able to create. And it's, it's remarkable. But you can compare that to somebody's other companies that are selling widgets that are just trying to hit Revenue numbers and profit numbers. It's a totally different experience. Again, is why I think some of these Cottage companies have had such great success. So why so what can you learn from this, in my opinion, the biggest thing that you can learn from this is do your homework and spend your dollars where they're going to matter the most.
Tayson: The most people don't realize, but every time you spend a dollar you're voting for the future that you want, if I'm going to go and spend all of my money, you know, buying cups of coffee or something like that. There's going to be more cups, you know, coffee houses that pop up. If I'm gonna go spend all of my money on, I don't know. A big diesel truck and fuel. There's going to be more things that are going to get created around that. Or if I go spend my money with Tesla and buy solar panels for my house or something like that, there's going to be more that happens there. You've vote every day for the future, you want with your dollar. So, I want you to be very conscious when you go through this of what you're voting for and also, just recognize. And again, we're going to dive so deep into this.
Tayson: your podcast about the retail side of things, but just recognize the difference per se in the type of gear that is being created from Cottage, type companies direct to Consumer companies and Retail companies. Yes, most Cottage companies are direct to Consumer companies, but You can get a lot more bang for your buck. You can get A lot more. I say this product that is focused and built 100% around you the customers if you go with companies that aren't run by Venture capitalists. So let's talk a little bit about what we do here at Dr. Vitals that makes it different. We've really got two methods that we focus on very heavily that help. Us not have to touch Venture Capital but still grow at, you know, a fairly significant rate year OVer year. Number one, which you guys are all aware of. I'm sure is our crowdfunding projects. We raise OVer million dollars with our Loft tech jacket.
Tayson: We've raised now I think we've raised OVer 700 thousand dollars with the Sawtooth pants and dragon wool products. So we've raised, I don't know when it's all said and done, we're probably about 1.8 million dollars in crowd-funded product. What's really cool about crowdfunding product is, you know, we're able to take input from our customers design a product and then you literally tell us on the front end. Is this good enough that you're willing to spend your money up front and wait for the product to ship to you. We take a you know we take loaning money from a venture capitalist. We take giving up Equity completely out of the equation and we give it 100% back to you the customers to decide the future and that allows us to focus. Hey, we can't raise a million dollars with the product in less.
Tayson: It is a kick butt product, you know, bigger companies with massive lists and, you know, huge brand loyalty and all those things. They can probably do things like that but that also isn't big enough for them to mOVe but for us. For us that was a massive thing that we did two years ago by raising a million dollars for the product. And we did that because we created a product that was so desirable. That was so focused on the customer that it worked. Same thing with the pant with Dragon Ball, we have to make something that you guys want. Single stakeholder in our business, our own customers so much that it works. So that's one way that we get around having to go and raise Venture Capital Money. The second thing that we are now releasing have released. As now, available is the membership. I'm not going to get too much into this.
Tayson: I'm a little, I guess for I do have some fears, we have some companies that really watch us, copy us, follow us. And so there's some fears there. But the main reason that we do the membership is we get some buy-in effect. We also will get to carry a little bit of store credit balance, and that allows us to do a couple things one. It allows us to make very finite Financial projections. It's like more solid stable income that we can show to a traditional bank that is just loaning us, you know, on a line of credit or something. It also allows me to look at this and say, hey, you know what, we can afford to hire another employee and employees, really are what drive this thing forward.
Tayson: So, that's one thing also, like, let's say, you remember for three, four months, you're loading up your 10 dollar store credit every month and it's four months, you know, about 40 dollars of yours in store credit, you know, essentially what we're able to do with that is go and produce more productive. To get a little bit quicker at producing more product, and having more inventory on hand, and releasing more gear and doing all of these different things, which is what the membership does for us. So, you're probably saying, well, what does it do for me?
Tayson: It does just that it allows us to create better and better and better products for you without an outside influence without an influence on pricing without an influence on profits without an influence on, you know just just next quarter's profits and how quickly this needs to happen and how quickly doesn't it allows us to maybe have longer R&D times. You know, we don't have timelines when things have to launch, they launched when they're ready to launch. Yes, we want to launch them as quickly as we can and we we push those things but at the same time, like I don't have a hard time line for when our trekking pole tent is going to be released. It's not a hard time line. It is going to be ready when it's ready and then we'll get it ordered and then we'll have it available. Anyway, so the membership itself is going to help you your voting with your ten dollars of store credit.
Tayson: Every month, you're voting for a company to build the products that you want. Obviously, with that, you're getting all the other benefits, which I guess I can run through really quick, you get free priority shipping, you get 10% or more off year round, you get limited edition gear such as the green regulator jacket, Brown pillow. You get limited runs of products, such as The Drifter backpacks that are available to member. So there's some exclusivity there and you get access to pre-order the storm, light backpack at 50 dollars off 25% off which is not even available to other people to order right now. So There's all those reasons you get access to our closed Facebook group, I just did a live Q&A on there today where you could personally ask me specific gear questions to you, questions about the company, whatever it is that you want.
Tayson: We're just available there, but really, we hope to make that more of a professional coaching program. Then then anything about the company. Anyways, you get all of this stuff and it doesn't cost you anything. You just need to load store credit every month and that right there is helping us beat Venture Capital companies. Yes, if I went and took venture capital, I went and raised a few million bucks and we and we got started with Venture Capital. Yes, we could grow faster but the long-term result does not benefit you the stakeholder. So I wanted to really paint that picture. I wanted you to really see it in all of the aspects of it because It does influence the future of products. It does influence, what's going to be, you know, and I'm not saying you have to come and buy product from us by any means, but I personally would rather see you buy a cottage product.
Tayson: Then a retail store product Cottage product then and Investment Company own product because you are voting in something that is 100% focused on making the best possible product for you. The stakeholder, the customer, and not someone else's agenda, so, That cOVers most of what I wanted to cOVer in this rant. You say we are doing a giveaway for those that join the membership in the month of August. And it's all you got to do is go load 10 dollars in store credit this month, and you'll be intruding to 1500 dollar giveaway. Got a bunch of a pair, a bunch of pre-order items. Sleeping bags, pillows apparel. A little bit of Swag. I mean, and then obviously, like our, like, our satu pants shorts. Zip-off Dragon Balls products. All of that is all in the giveaways. You win 1500. It's actually more than 1500 dollars with the gears probably 17 1800 dollars of the year.
Tayson: I really should double check on that now. I think we added a few more things to it, but you can win all of that by just loading up ten dollars just for credit and your membership. Save up, you know, it's basically your new outdoor savings account. You can load that up and around Christmas time, you'll have a little bit of money. Plus you get all the discounts and priority shipping to use around Christmas time for all of your friends so go check that out. Make sure you're aware of venture capital. Now you know why I'm so anti Venture Capital just don't want one thing to I am not 100% opposed to venture capital. I am 100% of venture capital, but I'm not opposed to equity crowdsourcing. So let me talk to you just a little bit about that. If we ever came to a point where we were just mOVing along so quickly, we needed to mOVe. Along quicker. You guys were demanding it.
Tayson: what we would do instead is we take the crowdfunding approach we would go and ask you the customers to buy Stock in our company, we would use that money to grow. The reason that we would do that is we don't have different stakeholders, our customers, our stakeholders for being the buyers and purchasers and our investors our stakeholders, because they're all. So our customers, there's no confusion, it's very clean cut, it's very clear and guess what? We get to remain, you know, the same people and focus on the same things and not have things come in and rip, you know, that heart and soul out of our company. So beware of that, you know, we're not doing it this year. We're not doing it pretty next year. But if things, you know, if we're seeing really good growth, our team continues to grow and develop we get really good systems processes in place and it just makes sense.
Tayson: We may look at a crowd funding crowd Equity, funding campaign, where we would allow you guys to invest in Outdoor Vitals, so, Something to think about. Anyways, I'm gonna go ahead and wrap this up. Thanks for joining me on this rant about why venture capital is bad for your gear. I do appreciate you guys staying tuned. I hope that you guys are constantly learning things on this podcast that benefit you. If you have comments, make sure to let us know. I'm very interested in your comments, you can reach out to us, a support at Outdoor Vitals.com, go on our website, how to revitalize things in there. And if you haven't subscribed to this coach subscribe, and if you haven't reviewed us, go give us a review. That really helps us. Get found helps us further our cause hopefully, it helps us benefit.
Tayson: The outdoor industry more and get more people outside, get more people, more piece of Mind, get more people, disconnected from the digital and electronics, and allow them to really connect with nature and people. That's, that's really where. You know, sometimes you can fully fully connect with people as just by getting all those distractions out of there. So thanks for joining us on the Live Ultralight podcast. We will catch you on the next one. We've got A few upcoming, I guess they've got some about retail. And why retail is probably worse than venture capital. And I will say 100%, it is worse than venture capital for developing better gear and bad for gear and bad for, you know, you your dollars and then we've also got one about why Slot, Canyons Which are those Canyons that you have out here in West.
Tayson: The Sandstone really tall Canyon slot, canyons while there's some of the most beautiful and dangerous places to be hiking in. So a couple of upcoming podcasts, thanks for joining us on the liberal Joi podcast. I will catch you on the next one.
