Latest / Millennial Masters / The hard work starts after the first sale 💧 Eric Kurbanov

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The hard work starts after the first sale 💧 Eric Kurbanov · Millennial Masters

• 0:00
  SPEAKER_00: There is no way we're going to be able to scale this product to any sensible volume
• 0:05
  SPEAKER_00: if you would have to re-inspect and repackage every system.
• 0:09
  SPEAKER_00: That was an eye-opener for me.
• 0:10
  SPEAKER_00: The deal that made it all possible.
• 0:12
  SPEAKER_00: When they would send the product in and we would sell it and then repay it from
• 0:17
  SPEAKER_00: the proceeds of the sales afterwards.
• 0:19
  SPEAKER_00: We designed our consultation flow where it becomes part of the product.
• 0:24
  SPEAKER_00: It's just as important as someone buying our product.
• 0:28
  SPEAKER_02: This week's Millennial Master is Eric Kurbanoff, founder and CEO of Arkin Water Systems.
• 0:34
  SPEAKER_02: Getting his first customers proved people wanted his product.
• 0:38
  SPEAKER_02: But the harder part was turning that demand into a business that could actually scale.
• 0:44
  SPEAKER_02: In this episode,
• 0:45
  SPEAKER_02: we talk about why demand doesn't mean you can scale,
• 0:49
  SPEAKER_02: when supplier terms can fund growth,
• 0:52
  SPEAKER_02: and how helping customers
• 0:54
  SPEAKER_01: choose is part of the sale.
• 0:57
  SPEAKER_02: Erik, welcome to Millennial Masters.
• 0:59
  SPEAKER_02: Where are you joining us from today?
• 1:02
  SPEAKER_00: Thank you for having me, Daniel.
• 1:04
  SPEAKER_00: I am right now in Fort Myers, Florida.
• 1:06
  SPEAKER_00: That's also our headquarters.
• 1:08
  SPEAKER_02: Okay, give me the short version, Erik.
• 1:10
  SPEAKER_02: How did you end up selling water filtration in the first place?
• 1:14
  SPEAKER_00: So the story with water systems begins from my own personal need.
• 1:19
  SPEAKER_00: Before I turned 21,
• 1:21
  SPEAKER_00: I somehow got super lucky and ended up buying a home and it was
• 1:25
  SPEAKER_00: a little bit outskirts of the main town and it had its own private well.
• 1:30
  SPEAKER_00: And there was a water system to clean the water up a little bit before it goes into the house.
• 1:36
  SPEAKER_00: They are very common here in Florida and many parts of the U.S.
• 1:39
  SPEAKER_00: as well when you have your own private well.
• 1:41
  SPEAKER_00: But the main thing, it had a drinking water system under the sink.
• 1:45
  SPEAKER_00: And I didn't know what it was.
• 1:47
  SPEAKER_00: We just started using it.
• 1:48
  SPEAKER_00: We got used to it.
• 1:50
  SPEAKER_00: We stopped buying bottled water.
• 1:52
  SPEAKER_00: And I thought it was just amazing.
• 1:54
  SPEAKER_00: Well, fast forward.
• 1:56
  SPEAKER_00: Couple years,
• 1:57
  SPEAKER_00: I ended up selling that home,
• 1:59
  SPEAKER_00: moving into a different house that was in town,
• 2:03
  SPEAKER_00: and it was on city water, and I thought I was moving up on life, you know?
• 2:08
  SPEAKER_00: And I have found myself, again, we start buying bottled water.
• 2:13
  SPEAKER_00: I'm like, well, that's dumb.
• 2:15
  SPEAKER_00: Is that because of the taste?
• 2:18
  SPEAKER_00: The taste, that's correct.
• 2:20
  SPEAKER_00: A lot of people here in the U.S.
• 2:22
  SPEAKER_00: don't drink the water straight out of the tap because it's heavily chlorinated.
• 2:26
  SPEAKER_00: And especially in warmer clients, like in Florida, they have to do it.
• 2:30
  SPEAKER_00: Otherwise, the bugs and bacteria just tends to grow in warm places and wet places like water.
• 2:37
  SPEAKER_00: So back to buying bottled water and started looking around.
• 2:42
  SPEAKER_00: I'm like, well, I missed a little system that we had and I couldn't find one anywhere.
• 2:48
  SPEAKER_00: Then started calling local water treatment companies and they were quoting $800,000,
• 2:54
  SPEAKER_00: $900,000 to come put one in.
• 2:56
  SPEAKER_00: And at that time I was like, I can't afford that.
• 2:58
  SPEAKER_00: So I didn't go for it.
• 3:01
  SPEAKER_00: And one day,
• 3:02
  SPEAKER_00: I was strolling through Costco,
• 3:05
  SPEAKER_00: and I see a box on the bottom shelf,
• 3:08
  SPEAKER_00: and it had a picture on it,
• 3:09
  SPEAKER_00: and exactly looks like the system that I used to have in my previous house.
• 3:14
  SPEAKER_00: So I grabbed it, installed it in my home.
• 3:18
  SPEAKER_00: We are super excited,
• 3:19
  SPEAKER_00: and I'm buying bottled water anymore,
• 3:21
  SPEAKER_00: and I'm very happy with the result that I was getting from it.
• 3:24
  SPEAKER_00: So I told everybody, at that time I was working at Cori, where we're digging rock,
• 3:31
  SPEAKER_00: I told everybody on my crew,
• 3:33
  SPEAKER_00: like hey I got this system it's great not buying bottled water anymore.
• 3:37
  SPEAKER_00: Long story short everybody ended up buying the water system from me not
• 3:43
  SPEAKER_00: because they couldn't go pick it up and install it themselves they just didn't want
• 3:49
  SPEAKER_00: to mess with
• 3:49
  SPEAKER_02: it they're like yeah go ahead you take care of your coming and put
• 3:52
  SPEAKER_02: in how much cheaper was that water
• 3:55
  SPEAKER_00: So it was $200 at that time.
• 3:58
  SPEAKER_00: And, you know, I just charged a couple of hundred bucks to put it in.
• 4:00
  SPEAKER_00: So it was like half the price.
• 4:02
  SPEAKER_00: Still half price.
• 4:03
  SPEAKER_00: Still half price.
• 4:05
  SPEAKER_00: That's how the whole thing started.
• 4:07
  SPEAKER_00: And here we are so many years later.
• 4:10
  SPEAKER_02: So what did you think you were selling them at the time?
• 4:12
  SPEAKER_02: Because you were clearly selling to people you already worked with,
• 4:16
  SPEAKER_02: so you had a warm relationship with them.
• 4:18
  SPEAKER_02: And were you selling them the actual water filtration system or your services of installing it?
• 4:25
  SPEAKER_00: So at that point, I think it was both.
• 4:28
  SPEAKER_00: And the main thing is I came to realization later is I wasn't selling neither.
• 4:34
  SPEAKER_00: I was selling a convenience of having access to bottled water
• 4:40
  SPEAKER_00: or better quality water right inside a home where they didn't have
• 4:45
  SPEAKER_00: to carry all those heavy,
• 4:47
  SPEAKER_00: you know, packs of water or the jugs of water that a lot of people still do.
• 4:53
  SPEAKER_00: And it's just a big convenience.
• 4:55
  SPEAKER_00: I have this idea, right?
• 4:56
  SPEAKER_00: And I know people want it.
• 4:58
  SPEAKER_00: And also it was around that time when the online e-commerce stores was starting up
• 5:03
  SPEAKER_00: and it was all the big grades.
• 5:05
  SPEAKER_00: And social media.
• 5:06
  SPEAKER_00: And social media, that's correct.
• 5:08
  SPEAKER_00: So I thought to myself, well,
• 5:09
  SPEAKER_00: maybe I'll open up a website and start selling it because it's such a great,
• 5:14
  SPEAKER_00: great thing, which I did.
• 5:16
  SPEAKER_00: Then I found a manufacturer that made the systems for us, just like I wanted them.
• 5:23
  SPEAKER_00: I opened the store up and I started getting phone calls.
• 5:27
  SPEAKER_00: I'm talking to people, and they're like, well, are you going to come in and install it for me?
• 5:32
  SPEAKER_00: I said, well, no,
• 5:33
  SPEAKER_00: I'm sorry if you were here,
• 5:34
  SPEAKER_00: like in Fort Myers area, you know, out in the Lee County area.
• 5:37
  SPEAKER_00: I'll gladly do that, but I, you know, I couldn't travel.
• 5:42
  SPEAKER_00: It was just you, a one-man band at that point.
• 5:45
  SPEAKER_00: That's correct.
• 5:46
  SPEAKER_00: That is correct.
• 5:47
  SPEAKER_00: Yeah, so then...
• 5:50
  SPEAKER_00: So that was one objection.
• 5:51
  SPEAKER_00: Who is going to install it for me?
• 5:53
  SPEAKER_00: Not everybody is handy.
• 5:55
  SPEAKER_00: There were a lot of people who did it.
• 5:57
  SPEAKER_02: Including me.
• 5:58
  SPEAKER_02: Yeah, I know.
• 6:00
  SPEAKER_00: Yes.
• 6:00
  SPEAKER_00: And the second part is,
• 6:01
  SPEAKER_00: you know,
• 6:02
  SPEAKER_00: a lot of people would be like, hey,
• 6:03
  SPEAKER_00: I do really want it,
• 6:04
  SPEAKER_00: but I'm renting and I cannot,
• 6:07
  SPEAKER_00: landlord won't allow me to do any kind of permanent modifications to the plumbing.
• 6:13
  SPEAKER_00: I said, okay.
• 6:14
  SPEAKER_00: So thinking about that and talking with the manufacturer about all this hurdles
• 6:20
  SPEAKER_00: that I was facing,
• 6:22
  SPEAKER_00: we ended up designing a countertop version of the system which What
• 6:30
  SPEAKER_00: happened next?
• 6:31
  SPEAKER_00: And the recession happened.
• 6:33
  SPEAKER_00: And those were the crazy times.
• 6:37
  SPEAKER_00: Looking back, you know, 2009, I think that's when we finally launched the website.
• 6:43
  SPEAKER_00: And also my son was burned.
• 6:45
  SPEAKER_00: My first child was born.
• 6:48
  SPEAKER_00: And the We just moved into this nice,
• 6:52
  SPEAKER_00: beautiful new home that I mentioned that was on the municipal supply.
• 6:57
  SPEAKER_00: Recession happened.
• 6:58
  SPEAKER_00: And I remember thinking to myself, my wife was due to give birth probably in a month or two.
• 7:05
  SPEAKER_00: And I was sitting there thinking to myself,
• 7:07
  SPEAKER_00: if I don't do this now, I will probably never going to be able to do it.
• 7:13
  SPEAKER_00: So...
• 7:14
  SPEAKER_00: I quit my job and went full time, went all in, into starting this business.
• 7:21
  SPEAKER_00: Right around the same time as well,
• 7:23
  SPEAKER_00: my father had an idea to start up a outsource housekeeping company, which we did.
• 7:31
  SPEAKER_00: So that was another thing,
• 7:32
  SPEAKER_00: like trying to start up two things at once and juggle those things around.
• 7:38
  SPEAKER_00: You know, the economy just tanked.
• 7:40
  SPEAKER_00: Everything tanked.
• 7:42
  SPEAKER_00: It was really tough times.
• 7:44
  SPEAKER_00: It was really tough times.
• 7:46
  SPEAKER_00: Because people weren't spending on what would be considered a luxury.
• 7:51
  SPEAKER_00: That's correct.
• 7:51
  SPEAKER_00: Yeah, people were not spending on anything.
• 7:53
  SPEAKER_00: There was a lot of people without work.
• 7:55
  SPEAKER_00: A lot of people were struggling.
• 7:57
  SPEAKER_00: And it was just, I would say, it was probably the hardest years of my life.
• 8:05
  SPEAKER_00: 2009, 2000 and up to probably 2011.
• 8:11
  SPEAKER_02: But starting a business at the beginning or in the middle of
• 8:15
  SPEAKER_02: a recession can also make the business stronger.
• 8:20
  SPEAKER_02: Is that how you reflect on it now versus how it felt
• 8:25
  SPEAKER_00: at the time?
• 8:26
  SPEAKER_00: You get quite creative, quite creative.
• 8:30
  SPEAKER_00: And now looking back after so many years,
• 8:34
  SPEAKER_00: I think that would be one of the blessings in disguise, really.
• 8:39
  SPEAKER_00: Because once you go through something like that with a firstborn and a new business
• 8:44
  SPEAKER_00: and a new family,
• 8:46
  SPEAKER_00: you know,
• 8:46
  SPEAKER_00: where you don't have enough money to buy diapers and everything else that comes
• 8:51
  SPEAKER_00: with it, you kind of learn to be tough.
• 8:55
  SPEAKER_00: You learn to endure pain.
• 8:59
  SPEAKER_02: So what did you sell then in those early years of the economic crash?
• 9:05
  SPEAKER_02: And we're talking about 2009, 2010, 11, before things started recovering.
• 9:11
  SPEAKER_02: Did you continue with the countertop water filtration device you had?
• 9:17
  SPEAKER_02: Or did you start looking at a new product, maybe something that was cheaper for people to have?
• 9:25
  SPEAKER_02: Where did you go next, Derek?
• 9:27
  SPEAKER_00: So during those first years, I kept trying to sell the undersink systems.
• 9:32
  SPEAKER_00: We had those.
• 9:33
  SPEAKER_00: Yeah, much more expensive as well.
• 9:35
  SPEAKER_00: Yeah.
• 9:36
  SPEAKER_00: And we also did have some other countertop systems,
• 9:40
  SPEAKER_00: but they needed to be connected to the faucet.
• 9:44
  SPEAKER_00: And most of them may not be standard.
• 9:48
  SPEAKER_00: And then you have water lines all over your kitchen counter
• 9:52
  SPEAKER_00: where one is returning back with all the reject water. So those systems...
• 10:00
  SPEAKER_00: I think I ordered the first container and I was selling that for the longest time.
• 10:05
  SPEAKER_00: And it's not that many, but that's what kept the dream going.
• 10:09
  SPEAKER_00: And also that other business kept going as well.
• 10:12
  SPEAKER_00: And I remember the paychecks were like $300 every two weeks.
• 10:17
  SPEAKER_00: I mean, for a family with a newborn,
• 10:19
  SPEAKER_00: even, you know, at that time, many years ago, it was nowhere enough.
• 10:23
  SPEAKER_00: It was nowhere enough.
• 10:25
  SPEAKER_00: So had
• 10:26
  SPEAKER_02: to make it.
• 10:28
  SPEAKER_02: And...
• 10:29
  SPEAKER_02: Then you decided to start designing your own product and build some specifications for it.
• 10:35
  SPEAKER_02: But it also meant that you had to do an upfront investment that wasn't readily available.
• 10:41
  SPEAKER_02: How did you go about that?
• 10:43
  SPEAKER_00: That's a very good question.
• 10:45
  SPEAKER_00: So at that time,
• 10:49
  SPEAKER_00: the manufacturer who I've been working with,
• 10:51
  SPEAKER_00: they saw the vision and we decided together that we would create a joint venture.
• 10:57
  SPEAKER_00: And from their end,
• 10:59
  SPEAKER_00: they would not be making any cash investments, but they would front the product.
• 11:04
  SPEAKER_00: And that was the deal that made it all possible.
• 11:09
  SPEAKER_00: When they would send the product in and we would sell it and then repay it from
• 11:15
  SPEAKER_00: the proceeds of the sales.
• 11:16
  SPEAKER_00: Rather than paying for the product up front.
• 11:19
  SPEAKER_00: That's correct.
• 11:21
  SPEAKER_02: So that was a way that basically allowed you to co-develop with them
• 11:25
  SPEAKER_02: a particular system that was adapted to your market and your market needs.
• 11:30
  SPEAKER_02: That's correct.
• 11:31
  SPEAKER_00: That's correct.
• 11:32
  SPEAKER_00: And how did that pick up?
• 11:35
  SPEAKER_00: So that went fairly well and only up to about 2018.
• 11:41
  SPEAKER_00: And this is where certain cracks started to appear in the relationships.
• 11:48
  SPEAKER_00: Maybe there was a thought that because the product was coming in
• 11:51
  SPEAKER_00: and it wasn't paid up front,
• 11:53
  SPEAKER_00: there could be some,
• 11:55
  SPEAKER_00: would be the best way to put it,
• 11:56
  SPEAKER_00: some concessions to be made on the quality side, which I didn't agree with at all.
• 12:03
  SPEAKER_00: And that kind of led to us drifting apart.
• 12:09
  SPEAKER_00: And that's where the joint venture had stopped.
• 12:13
  SPEAKER_02: With these quality concessions,
• 12:15
  SPEAKER_02: did you notice them or was it your customers who started complaining
• 12:21
  SPEAKER_02: about them first?
• 12:22
  SPEAKER_00: So here's one example.
• 12:25
  SPEAKER_00: And this one is quite amazing.
• 12:28
  SPEAKER_00: I think I can share it now.
• 12:29
  SPEAKER_00: It's been many years.
• 12:31
  SPEAKER_00: So there was a fire at the factory.
• 12:35
  SPEAKER_00: And some of the packaging got some of the black sod on the surface of it.
• 12:42
  SPEAKER_00: So instead of cleaning that up and then assembling the system,
• 12:46
  SPEAKER_00: there was nothing wrong with the system itself.
• 12:49
  SPEAKER_00: It was just the packaging.
• 12:50
  SPEAKER_00: They would just package it up and send it in a container to me.
• 12:57
  SPEAKER_00: And we were inspecting each and every unit at that time.
• 13:02
  SPEAKER_00: And we would have to manually clean up the packaging,
• 13:04
  SPEAKER_00: the styrofoam, wipe it down and et cetera, et cetera.
• 13:08
  SPEAKER_00: And the company is like, guys, what are you doing?
• 13:10
  SPEAKER_00: You can't keep sending us the stuff with the,
• 13:12
  SPEAKER_00: we have to open and inspect every pocket and reclean it and then retape it.
• 13:16
  SPEAKER_00: That's a lot of work.
• 13:17
  SPEAKER_00: This product should be shelf ready.
• 13:19
  SPEAKER_00: What is going on?
• 13:21
  SPEAKER_00: And then I met with the owner of the company in California when he flew in at
• 13:25
  SPEAKER_00: the time we met up.
• 13:27
  SPEAKER_00: And he told me like, no,
• 13:29
  SPEAKER_00: you have to inspect every unit and then clean up whatever needs to be cleaned up.
• 13:34
  SPEAKER_02: I said, that's just insane.
• 13:36
  SPEAKER_00: There is no way we're going to be able to scale this product to any sensible volume
• 13:44
  SPEAKER_00: if you would have to re-inspect and repackage every system.
• 13:48
  SPEAKER_00: That was an eye-opener for me.
• 13:49
  SPEAKER_00: And that's why I thought,
• 13:50
  SPEAKER_00: you know,
• 13:52
  SPEAKER_00: maybe that's because we're partners and I'm getting this type of treatment.
• 13:57
  SPEAKER_00: So we might have to end our relationship as far as being partners.
• 14:02
  SPEAKER_00: We're going to become a customer.
• 14:05
  SPEAKER_00: And then we're going to demand quality that a customer should get.
• 14:10
  SPEAKER_00: And that's when also the arcane was born.
• 14:14
  SPEAKER_00: It was also coincided that we went into whole home water treatment
• 14:19
  SPEAKER_02: as well.
• 14:20
  SPEAKER_02: So you were getting then a new system installed at the source of the water coming
• 14:26
  SPEAKER_02: into the house versus something that was just for drinking water.
• 14:30
  SPEAKER_02: And I'm assuming typically in the kitchen.
• 14:33
  SPEAKER_00: That's correct.
• 14:33
  SPEAKER_00: Yes, sir.
• 14:34
  SPEAKER_00: So in the water treatment,
• 14:36
  SPEAKER_00: there is two on the homeowner side,
• 14:39
  SPEAKER_00: like on the residential side, there's two types of water.
• 14:43
  SPEAKER_00: One, you get drinking water, which is fairly easy to understand.
• 14:46
  SPEAKER_00: You just make it like a gallon or half a gallon of water, or it makes it for you.
• 14:51
  SPEAKER_00: You drink it, you use it for cooking and et cetera, et cetera.
• 14:54
  SPEAKER_00: So it's consuming drinking water.
• 14:56
  SPEAKER_00: And then we have what is called working water.
• 15:00
  SPEAKER_00: And working water is the water that has been filtered before the main line enters
• 15:07
  SPEAKER_00: into your home.
• 15:09
  SPEAKER_00: So every tap in the water is filtered and it's really good quality.
• 15:15
  SPEAKER_00: How did you solve that issue, Eric?
• 15:17
  SPEAKER_00: So for us, there is no easy way like a countertop system for drinking water.
• 15:24
  SPEAKER_00: We're going to just put it on the top and it's ready to go.
• 15:28
  SPEAKER_00: The way we're solving it now is by having consultations with customers.
• 15:35
  SPEAKER_00: Because it can get very technical because you have to get the right size.
• 15:42
  SPEAKER_00: You have to get the right type of equipment for what you're trying to remove.
• 15:47
  SPEAKER_00: And one person in one city might want one thing and one type of equipment may be right for them.
• 15:52
  SPEAKER_00: But for another person in a different town, it could be completely different.
• 15:57
  SPEAKER_00: And once you factor in well water,
• 16:01
  SPEAKER_00: that opens up even huge other potential possibilities where you really have to know
• 16:09
  SPEAKER_00: and diagnose the problem properly and match it with the right equipment.
• 16:15
  SPEAKER_00: So we designed our consultation flow where it becomes part of the product.
• 16:23
  SPEAKER_00: It's just as important as someone buying our product.
• 16:27
  SPEAKER_00: Because if you already know what you need and already know what you want,
• 16:32
  SPEAKER_00: yes, the equipment is available to purchase online readily.
• 16:37
  SPEAKER_00: However, that's not the case for most people.
• 16:39
  SPEAKER_00: People want to be able to know exactly what they're getting.
• 16:44
  SPEAKER_00: They want to know for sure that what they're concerned about gets taken care of and
• 16:50
  SPEAKER_00: that the Water pressure won't drop or something else won't be negatively affected
• 16:58
  SPEAKER_00: through that equipment.
• 17:00
  SPEAKER_02: So our consultations become part of the product.
• 17:04
  SPEAKER_00: Have a discovery call.
• 17:06
  SPEAKER_00: We'll find out exactly what they have in their water.
• 17:10
  SPEAKER_00: If it's a municipal supply, sometimes, well, most of the time in US, it's a public information.
• 17:16
  SPEAKER_00: We can pull that info and then get a Proper information on a customer's household,
• 17:24
  SPEAKER_00: how many people,
• 17:25
  SPEAKER_00: how many bathrooms, because there's flow rates that you have to match.
• 17:29
  SPEAKER_00: There's a demand on the system that it needs to meet.
• 17:32
  SPEAKER_00: We get all that information and then we connect all the dots and say,
• 17:37
  SPEAKER_00: okay, for this particular customer, this is the best piece of equipment.
• 17:42
  SPEAKER_00: And this has been our approach.
• 17:45
  SPEAKER_02: Compared to how you started online 17 years ago, What just doesn't work anymore?
• 17:52
  SPEAKER_00: That's such a loaded question and I absolutely love it.
• 17:56
  SPEAKER_00: Of course it is.
• 17:58
  SPEAKER_00: Yes, so even plus AI, right?
• 18:03
  SPEAKER_00: And we'll get to that too, yeah.
• 18:05
  SPEAKER_00: How many months?
• 18:05
  SPEAKER_00: It's like every month is something new and it's better and better.
• 18:09
  SPEAKER_00: So it is certainly changing.
• 18:12
  SPEAKER_00: Before,
• 18:13
  SPEAKER_00: you could just get away with having a nice website that had sufficient amount
• 18:18
  SPEAKER_00: of information.
• 18:19
  SPEAKER_00: But nowadays, a customer can watch 20 different review videos, read 100 worth of Amazon reviews.
• 18:29
  SPEAKER_00: But I think it's changing again.
• 18:31
  SPEAKER_00: And the reason being is social media and AI.
• 18:36
  SPEAKER_00: Now people are searching on social media and using that as a search engine.
• 18:42
  SPEAKER_00: Now, how much of that shifted over?
• 18:45
  SPEAKER_00: I'm not sure.
• 18:46
  SPEAKER_00: How much of search traffic is going to AI bots?
• 18:51
  SPEAKER_00: I'm probably betting a lot.
• 18:54
  SPEAKER_00: We're seeing a lot of traffic to our own website through the AI.
• 19:00
  SPEAKER_00: And, you know,
• 19:00
  SPEAKER_00: those are usually you would see them as chat GPT or et cetera, et cetera, et cetera.
• 19:05
  SPEAKER_00: They get disclosed.
• 19:07
  SPEAKER_00: It is changing again.
• 19:09
  SPEAKER_00: And at the end of the day, I think what it boils down to is if people can trust you.
• 19:15
  SPEAKER_00: And how do you get that trust?
• 19:19
  SPEAKER_00: Well, you as a founder, in my case, you have to become the face of the brand.
• 19:28
  SPEAKER_00: Information has become very accessible.
• 19:32
  SPEAKER_00: Even intelligence with AI is becoming very accessible.
• 19:36
  SPEAKER_00: It can do research for you.
• 19:37
  SPEAKER_00: It can do all these things.
• 19:39
  SPEAKER_00: It can present you all the facts.
• 19:41
  SPEAKER_02: But do you trust them?
• 19:43
  SPEAKER_02: You thought that you could only do that if you come back into the fray as the founder.
• 19:50
  SPEAKER_00: Yeah, so I believe for me there is no getting away from it.
• 19:57
  SPEAKER_00: Let's say even if Whatever happens,
• 20:00
  SPEAKER_00: and maybe the company ends up getting acquired,
• 20:03
  SPEAKER_00: or if it goes bankrupt, or whatever it could be.
• 20:08
  SPEAKER_00: Two extreme possibilities there.
• 20:11
  SPEAKER_00: I think I will always be able to take me with me.
• 20:14
  SPEAKER_00: And it's not only about business,
• 20:17
  SPEAKER_00: it's also becoming the person who can be the face of the business as well.
• 20:25
  SPEAKER_00: So it's not only the economic side for me, it's also my personal journey.
• 20:33
  SPEAKER_00: For the longest time, I always thought I was an introvert.
• 20:37
  SPEAKER_00: Like I would be very, I would get really shaky when talking in public and getting on the calls.
• 20:44
  SPEAKER_00: Even now, after so many of these things, I get some butterflies and I just have to overcome it.
• 20:51
  SPEAKER_00: I have to become and graduate into this next level, whatever it is.
• 20:56
  SPEAKER_00: I have to be In front of the camera,
• 20:58
  SPEAKER_00: I have to get in front of the people and earn their trust by showing up.
• 21:04
  SPEAKER_00: That's what I believe in.
• 21:05
  SPEAKER_02: Even if it made you uncomfortable, you had to put in the reps in order to get there.
• 21:10
  SPEAKER_02: Absolutely.
• 21:11
  SPEAKER_02: Absolutely.
• 21:12
  SPEAKER_02: That is correct.
• 21:13
  SPEAKER_02: Tell me, Erik, do you also sell on Amazon?
• 21:17
  SPEAKER_02: We do.
• 21:18
  SPEAKER_02: And how are you dealing with that,
• 21:20
  SPEAKER_02: with their cheapest pricing enforcement,
• 21:24
  SPEAKER_02: their rates, their shipment and warehousing fees?
• 21:28
  SPEAKER_00: I love Amazon.
• 21:29
  SPEAKER_00: I am a big fan of Amazon as a customer.
• 21:35
  SPEAKER_00: As a consumer, yes.
• 21:36
  SPEAKER_00: As a consumer, that is absolutely correct.
• 21:39
  SPEAKER_00: I've been 20.
• 21:40
  SPEAKER_00: When they came out, I signed up and I thought it was the greatest thing ever.
• 21:44
  SPEAKER_00: And I still use it every day today.
• 21:46
  SPEAKER_00: However,
• 21:46
  SPEAKER_00: just like you mentioned,
• 21:48
  SPEAKER_00: as a small business owner on the other side of it and have one of
• 21:53
  SPEAKER_00: the toughest categories of the product to have sold on Amazon,
• 22:01
  SPEAKER_00: I don't consider an Amazon as a main channel.
• 22:05
  SPEAKER_00: We are there.
• 22:06
  SPEAKER_00: For me, myself personally, my first go-to is Amazon when I'm looking to purchase something.
• 22:15
  SPEAKER_00: I go on Amazon, I look it up real quick.
• 22:17
  SPEAKER_00: Next day, delivery, great.
• 22:19
  SPEAKER_00: If it's a bigger purchase,
• 22:21
  SPEAKER_00: requires more research, I may start on Amazon and then carry on into other channels.
• 22:26
  SPEAKER_02: But you still know that some of the best prices you will find on Amazon as a consumer.
• 22:32
  SPEAKER_00: That used to be the true, used to be.
• 22:34
  SPEAKER_00: And Amazon is fighting it as much as they can.
• 22:38
  SPEAKER_00: However, a lot of brands are not very happy because Amazon is not doing it for free.
• 22:44
  SPEAKER_00: A lot of people think that you're selling a product on Amazon and it's
• 22:48
  SPEAKER_00: the same price as on your own website.
• 22:51
  SPEAKER_00: Your profit margins are the same.
• 22:54
  SPEAKER_00: They're not.
• 22:55
  SPEAKER_02: It's 30% less, at least from what I understand.
• 22:59
  SPEAKER_00: That is correct.
• 23:00
  SPEAKER_00: It is different by category.
• 23:01
  SPEAKER_00: Amazon has their tiered list of how much percentage they charge.
• 23:06
  SPEAKER_00: For us, I believe it's anywhere between 18% to 15%.
• 23:10
  SPEAKER_00: And it's a big chunk.
• 23:12
  SPEAKER_02: And that's before the advertising fees and a range of others that Amazon would add on top.
• 23:19
  SPEAKER_00: That is correct.
• 23:20
  SPEAKER_00: However,
• 23:21
  SPEAKER_00: Amazon has become such a big,
• 23:23
  SPEAKER_00: big part of, especially in US, our lives, that we have to be there.
• 23:28
  SPEAKER_02: Now, Amazon be Amazon, they don't really have any stiff competition, and that's possibly one
• 23:38
  SPEAKER_02: I'm curious about AI in your business now,
• 23:45
  SPEAKER_02: because you have the physical products,
• 23:47
  SPEAKER_02: the sales channels, the marketing and everything in between.
• 23:51
  SPEAKER_02: What are you actually using it for day to day in the business, but also personally?
• 23:57
  SPEAKER_00: That's an awesome question.
• 23:59
  SPEAKER_00: I've been experimenting with AI for last, I want to say at least a year.
• 24:03
  SPEAKER_02: And have you used it or implemented it in any parts of the business
• 24:07
  SPEAKER_02: to automate certain processes,
• 24:09
  SPEAKER_02: maybe in the sales area or the marketing or maybe even customer service?
• 24:15
  SPEAKER_00: So because of our product, it gets a little bit technical.
• 24:21
  SPEAKER_00: Up to ChatGPT 5.6 and Astra, I wasn't too confident.
• 24:28
  SPEAKER_00: Now we're starting to play around with these models that have quite
• 24:33
  SPEAKER_00: a bit more intelligence to them.
• 24:36
  SPEAKER_00: But still, we're always going to have human in the loop.
• 24:40
  SPEAKER_00: Right now, we're working on our customer service agents.
• 24:43
  SPEAKER_00: Get them set up to where maybe the response is going to get drafted for that.
• 24:49
  SPEAKER_00: But they will take a look, verify the information, and then click the Send button.
• 24:55
  SPEAKER_00: I think that's the best approach right now.
• 24:57
  SPEAKER_00: Not 100% automated, but it's that 80-20 rule, right?
• 25:02
  SPEAKER_00: Where you set up a task that your first 10%,
• 25:06
  SPEAKER_00: 80% of the work is done by AI,
• 25:09
  SPEAKER_00: and then you do that final leg of verification, the final 10%, and sign off.
• 25:15
  SPEAKER_02: But in terms of internal processes or forecasting or in the way you interact
• 25:21
  SPEAKER_02: or forecast in the business,
• 25:22
  SPEAKER_02: I'm curious, what other ways of using AI have you
• 25:27
  SPEAKER_00: found or developed?
• 25:28
  SPEAKER_00: Thank you for circling back to that and pointing that out.
• 25:31
  SPEAKER_00: I actually wanted to share this for the longest time.
• 25:34
  SPEAKER_00: I haven't yet publicly, but I'm going to do it today here.
• 25:37
  SPEAKER_00: We switched over to QuickBooks Online.
• 25:41
  SPEAKER_00: From QuickBooks Desktop.
• 25:43
  SPEAKER_00: And I'm not sure if it's relevant in UK.
• 25:46
  SPEAKER_00: And in US,
• 25:47
  SPEAKER_00: like majority of the small businesses and maybe even mid-businesses run
• 25:51
  SPEAKER_00: on QuickBooks software.
• 25:53
  SPEAKER_00: It's kind of accounting enterprise software.
• 25:55
  SPEAKER_02: There's a version of it here as well,
• 25:57
  SPEAKER_02: but there are a couple of other options which are a bit more popular in the UK.
• 26:01
  SPEAKER_00: And maybe that could be done with Astra now as well.
• 26:04
  SPEAKER_00: So what do we do?
• 26:05
  SPEAKER_00: Because we have so many transactions coming in,
• 26:09
  SPEAKER_00: and they need to be reconciled and brought in into your accounting software
• 26:14
  SPEAKER_00: from Shopify, from Amazon, from all these different channels.
• 26:18
  SPEAKER_00: Because you want to make sure your deposits are correct.
• 26:20
  SPEAKER_00: You want to make sure there's no glitch somewhere where you're Getting shorted
• 26:25
  SPEAKER_00: on your deposits or whatever.
• 26:27
  SPEAKER_00: And keeping your inventory intact.
• 26:30
  SPEAKER_00: Before, it used to take a specialized person who would just sit there
• 26:36
  SPEAKER_00: and bring all those transactions in,
• 26:38
  SPEAKER_00: reconcile them, make sure that everything matches up.
• 26:41
  SPEAKER_00: The same thing with the bank statements, right?
• 26:43
  SPEAKER_00: When you make sure that the bank accounts get reconciled.
• 26:46
  SPEAKER_00: But now, chat GPT and Astra, every day in the morning, 9 o'clock, it wakes up.
• 26:53
  SPEAKER_00: Goes through all those transactions, matches them up.
• 26:56
  SPEAKER_00: And the person who used to do it now doesn't have to do this mind naming activity, right?
• 27:04
  SPEAKER_00: But put their talents and put their Thinking and effort
• 27:10
  SPEAKER_00: into something more meaningful that requires the strategy,
• 27:14
  SPEAKER_00: that requires that human touch.
• 27:16
  SPEAKER_00: It's not just simply moving information or whatever it can be from point A to point B.
• 27:22
  SPEAKER_00: Now it's a lot more meaningful.
• 27:24
  SPEAKER_02: And is there a part of the business that you either manage to automate completely
• 27:30
  SPEAKER_02: or you have it on your hit list to move into the almost full automation area
• 27:38
  SPEAKER_02: because that's how you could save money, but also...
• 27:43
  SPEAKER_00: I would say accounting.
• 27:45
  SPEAKER_00: It's probably the biggest one on my list right now.
• 27:48
  SPEAKER_00: And just the process I've described, we're still there checking, but...
• 27:54
  SPEAKER_00: a month down the road
• 27:56
  SPEAKER_00: if it all looks like It's all good maybe we can stop checking it every day.
• 28:02
  SPEAKER_00: Maybe we will start checking it once a week and then it's once a month and
• 28:06
  SPEAKER_00: then it's Once every couple of months so We have to build up to that
• 28:10
  SPEAKER_00: But I think any area That does not face The customer is on my list Anything
• 28:18
  SPEAKER_00: That customer doesn't
• 28:20
  SPEAKER_02: Face Is getting automated Now Eric Seventeen years,
• 28:24
  SPEAKER_02: it's a long time to stay with one business, even though it's your baby.
• 28:28
  SPEAKER_02: And I know that myself, I've clocked in 14 on the previous one.
• 28:34
  SPEAKER_02: So I'm wondering what's changed most about you in this time?
• 28:38
  SPEAKER_00: Man, you know, going from like a young adult, essentially A man baby, right?
• 28:47
  SPEAKER_00: So to being a father and then starting up a small business at the same time, huge, huge.
• 28:54
  SPEAKER_00: Like in my younger days, you know, the alarm would go off and I wouldn't be able to get up.
• 29:01
  SPEAKER_00: Like I keep hitting the snooze button and I would start workout routines.
• 29:07
  SPEAKER_00: I would not be able to like stick with it and be consistent with it.
• 29:12
  SPEAKER_00: Like two,
• 29:12
  SPEAKER_00: three months and then I would fall off and Well,
• 29:15
  SPEAKER_02: two, three months is already a good run, but nevertheless.
• 29:19
  SPEAKER_00: Thank you, thank you.
• 29:20
  SPEAKER_00: Well, now I am on a two-year run.
• 29:22
  SPEAKER_00: So it's a big milestone for me.
• 29:25
  SPEAKER_00: And so it's a completely different person.
• 29:28
  SPEAKER_00: Not only because you're getting older,
• 29:32
  SPEAKER_00: But because of all the experiences, it's all the responsibility and learning.
• 29:38
  SPEAKER_00: And I think journey is not over for me.
• 29:40
  SPEAKER_00: And that's why I'm so excited.
• 29:42
  SPEAKER_00: Every day, sometimes people will tell me, Eric, I don't know how you do it.
• 29:46
  SPEAKER_00: I say, oh, I don't know either.
• 29:47
  SPEAKER_00: I just do.
• 29:49
  SPEAKER_02: It's the only way you know.
• 29:51
  SPEAKER_02: It's the only way we know.
• 29:52
  SPEAKER_02: That's right.
• 29:53
  SPEAKER_02: And because it's the only way you know,
• 29:56
  SPEAKER_02: Eric, why would you say you had to sacrifice to get the business where it is today?
• 30:01
  SPEAKER_00: A lot of stuff that other people probably not willing to.
• 30:05
  SPEAKER_00: Starting with my early 20s,
• 30:07
  SPEAKER_00: as soon as I got married and got on this business journey, I stopped going out.
• 30:15
  SPEAKER_00: I remember my friends with me like, oh, Eric now got married.
• 30:18
  SPEAKER_00: He's not going out anymore.
• 30:20
  SPEAKER_00: That wasn't the reason.
• 30:22
  SPEAKER_00: The biggest reason was because I had this business and I need to pay bills
• 30:27
  SPEAKER_00: and I needed to make sure that things got taken care of.
• 30:34
  SPEAKER_00: So nights out,
• 30:37
  SPEAKER_00: vacations,
• 30:38
  SPEAKER_00: any kind of thing that you personally would get a pleasure from
• 30:42
  SPEAKER_00: that doesn't directly affect the business outcome, that got cut.
• 30:50
  SPEAKER_00: There's time for recovery.
• 30:51
  SPEAKER_00: And I had to learn that.
• 30:52
  SPEAKER_00: That's the biggest one, the biggest lesson I had to learn.
• 30:56
  SPEAKER_00: I have to take care of my body.
• 30:59
  SPEAKER_00: There was a point of time in my life a few years ago where my belly got so big.
• 31:05
  SPEAKER_00: My kids were joking.
• 31:06
  SPEAKER_00: Hey, how many months are you?
• 31:08
  SPEAKER_00: And that's my own kids.
• 31:10
  SPEAKER_00: They're like, you got a baby in there or what's going on?
• 31:13
  SPEAKER_00: I had to ask, it's time.
• 31:15
  SPEAKER_00: It's time for me to get in shape.
• 31:18
  SPEAKER_00: And start prioritizing my health and my well-being so I can be better at work.
• 31:27
  SPEAKER_00: Not to be less at work so I can be better at work.
• 31:32
  SPEAKER_00: That's the kind of mindset I think I have adopted and it has helped me.
• 31:36
  SPEAKER_02: That's very interesting, Eric, because I'd like to wrap up this chat by asking you,
• 31:44
  SPEAKER_02: what are you still trying to figure out now?
• 31:47
  SPEAKER_00: Wow, a lot of things.
• 31:50
  SPEAKER_00: I think the main one is the social media.
• 31:54
  SPEAKER_00: How can we be more present on social media?
• 31:59
  SPEAKER_00: How can we add value to people in social media?
• 32:05
  SPEAKER_00: And that's the part on the business side that I'm working on.
• 32:09
  SPEAKER_00: How do we put out more educational content and educate our customers,
• 32:14
  SPEAKER_00: even if they don't buy from us?
• 32:16
  SPEAKER_02: So that's your mission now,
• 32:18
  SPEAKER_02: but you're also trying to figure out how to do that besides just running a business
• 32:24
  SPEAKER_02: on its own.
• 32:25
  SPEAKER_02: That's correct.
• 32:27
  SPEAKER_02: That is absolutely correct.
• 32:29
  SPEAKER_02: Thank you, Erik, for sharing your story and some of your reflections so far.
• 32:35
  SPEAKER_02: I've certainly identified with quite a few of them,
• 32:38
  SPEAKER_02: and I'm pretty sure that a lot of the people listening would have had that too.
• 32:44
  SPEAKER_02: If not, that's certainly what's coming up at one point or another.
• 32:49
  SPEAKER_02: Thanks for coming on Millennial Masters, Erik.
• 32:52
  SPEAKER_02: Thank you for having me.
• 32:53
  SPEAKER_02: It's a pleasure.
• 32:54
  SPEAKER_01: Thanks for tuning in all the way to the end of this episode.
• 32:59
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• 33:03
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• 33:06
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• 33:10
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• 33:15
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• 33:19
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• 33:22
  SPEAKER_01: Catch you next week.