And then we just, like, ran out of money. And I owed, one of our vendors, like, over $400,000 before they were re released the next batch of books as well. So it was, like, kinda stuck. Right? And what were we gonna do? We do tell the rest of the backers that sorry. We're just bankrupt. We can't deliver a product. You just heard from Joe Lemay. He's the founder of a company you might have heard of before. It's called Rockabook. A reusable notebook company that exited to BIC for over $50,000,000.
This is a story of how he and his co founder Jake took the company from over $400,000 in debt to an 8 figure exit. And without any further ado, This is my conversation with Joe Lemay. I'm gonna start this episode with one of your posts on LinkedIn. It starts with in 2016, my balance sheet was negative $400,000 and no VC would touch me. You were receiving death threats from people who funded your crowdfunded campaign.
But just 4 years later, you climbed out of the hole and sold rocket book a reusable notebook company for over $40,000,000. To understand that journey, I wanna start with what you were doing before rocket book. When you're working at Salesforce, you're actually one of the first people selling software licenses when you came up with the idea for a reusable notebook. Can you tell us a little bit more about that story and how rock the book gets started?
Yeah. When I I was, You know, I I spent most of my career in technology, first as an engineer, and then over on the enterprise sales side, you know, always always like technology that was selling into businesses, right, as opposed to consumer technology. But as an engineer, as a salesperson, I was a notebook person. I was a whiteboard person, even though I had technology, I'd I really gravitated to those media in terms of, like, jotting down or sharing ideas.
And I even remember really taking a flight to Seattle just because I was, as an engineer, partnered with, Microsoft on a partner, on a, on a project we were working on. And I just, like, felt like I had to get in the room with a whiteboard with these other engineers. It's like, and something online wasn't good, wasn't gonna cut it. So that just kinda got my, like, got my interest in solving a problem around, like, whiteboard. That's actually what I started to solve first.
And, I started working on a project that I called Rocket Board at the time, which was all about just being able to share an ordinary whiteboard, just your markers, just your whiteboard, no electronics, except your smartphone, and be able to sort of turn that into something that feels like a Zoom experience with your whiteboard. It went pretty high one day on product hunt. It went to, like, number 2 when it was listed. And I got, like, 20,000 email sign ups for it.
But the problem was it didn't really work very work well in its first iteration. There was a lot of image enhancement, streaming going on, and it's just it was its first version. So I was churning users, and this was just something I was for a while, just doing on the side. But I was, like, running out of money, waiting for this thing to create, like, product market fit, Brian.
I was like, how can I use this things app I've built to actually, like, make some money before I have to, you know, for when the towel? And at one point, I had quit my job and been focused on this. And then I was like, you know, focus a short, short runway based on how much savings I had. I just had a few $100 in the bank, and I was spending on, on developers to help me build this too. And then that started to become, like, pretty close to nothing.
And I when I was like, how can I actually take this technology and do something with it? I just, like, took a walk, took some space away from what I was building. And, after just a few days of just, like, just thinking and and, like, I'd I literally just, like, woke up with the idea of, like, a notebook. So I had built an app that that did some scanning of of a whiteboard. Why not scan paper and make like a scanning app?
And Then I thought, how can I make it really a special notebook so that the the paper, the pages itself, maybe had some special markings on it? Right? Is at the time, I was in love with the idea of crowdfunding. And, and I knew I wanted to be able to sell a physical product that people could buy on crowdfunding. And maybe that's something that, you know, I could, you know, maybe raise a $100,000 on crowdfunding if I came up with a cool cool project and then be able to go back to rocket board.
Right? So that's where I was where I was. And and so I was like, alright. If I take a notebook, and I build my own scanning app for it, but it does some special stuff. Maybe I'll have, like, some special, like, markings down at the bottom of the page here. If you mark it and then scan it in, it'll instantly send it to somewhere where you've preset, like, your math, folder notes inside of Dropbox or your some email address based on these 7 markings on the bottom of the page.
And that's that was the first idea that I had that would make it a proprietary notebook that worked with a proprietary scanning application. And then from there, I was thinking, like, how could I, you know, make this even a more badass notebook? So you know, through through the years, you know, doing things like, like OCR and character recognition, auto titling your pages and etcetera, etcetera. Doing more things with your handwritten notes was the name of the game.
But I really just had the idea for just a proprietary markings on a page and notebook I was thinking maybe now that I'm scanning it in, I could wipe it down like a whiteboard. So I was looking at whiteboard, technology, you know, just to be able to, you know, make your notebook like a whiteboard. And I thought that that would be the first thing that I'd launch. And I went, Madan Calicanas, who is well known for, you know, now for the all in podcast and, you know, a lot of startup stuff.
He was having a launch festival And he invited me, he basically, I got an invite to launch this product on stage at his launch festival. And as I was demoing it to him and to some VCs at, at Sequoia, who were just like like helping him out during some some rehearsals for the big event, he he asked me, or they asked me, you know, what's going on with the notebook? Is it gonna, you know, you're gonna have, like, new versions of it?
I said, yeah, I think maybe we'll launch one where you wipe it off. Another one, you know, we've got other innovations for the notebook coming. And and he said, stop right there. Like, who the fuck do you think you are? Do you think you're the Elon Shamus of notebooks? Like, don't be vague. Right? A soy collier venture capital and asked you about your, your roadmap. I said, okay.
Well, one of the ideas I have is that I've figured out a way to make this notebook such that when you wanna erase it all, you could actually just put it in the microwave for, like, a minute, and it'll all erase. And you can reuse that notebook over and over. And he was just like, stop. That's the only cool thing you said all day. Like, that has to be your product. You're not allowed on my stage. Unless that's, like, your product.
So just make that your product and announce it, you know, in a couple weeks when you go on stage. And I went back through an Airbnb. I was staying in with my friend Jake at the time. And I said, I think I could we could make this he wasn't even officially my co founder at the time, but he was like, I think we could do it. I just if we launch a crowdfunding campaign, which we were gonna do right on when we're on stage, And we just give ourselves a lot of time.
We can figure out how to really make this this notebook, because I had already figured out the prototypes of it, just making safely and doing it at scale and things like that and properly testing it was was was gonna be a trick. So we're We're on stage. It's like 2015, right, at the launch festival. And at the end, like, I show everyone how this thing works, You put it in the microwave at all erases. People are like, are you kidding me? This is crazy. Right?
It's just a paper and pen notebook, but it all erases in the microwave. And I tell everyone, Now, who here wants a rocket book? And I get people to raise their hands. I'm like, great. You can buy it now or pre order yours now on indiegogo. Go get it. And then Jason kind of made a noise. Like, he did not think that that was a cool thing to do, like, to use the stage to launch a crowdfunding campaign, I think. But But so be it. We did we did it. We pulled it off.
I think, you know, that day, we got, like, somewhere, like, $2000 worth of preorders. The next day, you know, maybe another $3000 and we're like, that's pretty cool. But and it would it's very cool when you have a crowdfunding campaign and then you get a a backer who, you know, paid for your product, even though you're not ready to send it to them, and the little notification comes up, a ding on your phone. It's super cool. But Saturday woke up, and it was like our phones went berserk.
It was just we we sold $99,000 worth of microwave to erase no no book presales that day. Quick question. So before we get to you raising that money and and and going viral and indiegogo, How did you get that invite from Jason Calakanas to speak on the stage? Cause I'm sure it's it's pretty difficult for startup founders, to do that. Right? Or Oh, yeah. I saw a tweet by him saying, hey, I'm looking for stealth startups to launch on my stage, you know, tweet treat at me, which he got.
And at the time, my product that I call the rocket board had been out there. So it wasn't it wasn't stealth. But this idea of Rocket Book, I had not really shown to anyone. There was no website. So I, I tweeted out him, and I said, I'll have a video at you by the end of the weekend. And then I just spent the weekend, like, making a video of this thing. I made it kinda look like it worked. Like, I had it scanning. I had it doing things, organizing things, but it was a complete paper tiger.
It did not actually work or do anything. You know, I put it in the microwave press go, cut You take it out, and it and it's all perfect, etcetera. Right? Or maybe there wasn't a microwave in the video, but, but, like, the app looked like that worked. It was it was a complete, you know, just just a video, MVP. And he's like, perfect. This is great. You're in. I love it. You know, he's like, I've tried to get my team to use live scribes. I've tried to get them to use other note taking apparatus.
You know, if you can make this work as a product, I'd like to see this like, happen in the world, you're invited to San Francisco. And you have to be out here a couple weeks in advance in order to, you know, rehearse and you're not you know, you have to do a good job in rehearsals to actually make it on stage, etcetera, etcetera. So long story short, got that invite and and got on stage there. And he was he was pretty excited. He was like, hey.
You know, you guys, you guys are gonna have a great demo. You could win, like, best, demo. You know, he had he had various or best presentation or something like that if you guys crush it. And we worked really hard, and we gave a great presentation. I mean, it was it was just like, it was just so fun. It's available on YouTube. But I think the the move of us launching our crowdfunding campaign, like, while we're on stage was a little bit too much for him.
So nobody got a best presentation award that year, when everything was said and done. And during that process of the demo and actually meeting Jason and all that kind of stuff, what is one thing about that process that surprised you or you thought? That was unique. Yeah. I mean, it was really cool for me to meet him when I, started my startup and, like, when I started working on stuff in 2013, 2014, there was not a lot of media about startups. Right?
And so, you know, I had promised myself to just stop listening to any news, not not sports guy anyway, but just only pay attention to content that's gonna educate me and inform me and make me a better founder. And so this weekend startups was just on my on my rotation constantly. And I love that podcast because it just being in a room virtually, another podcast other founders. I just felt like maybe I could absorb stuff from them. Right?
You're you're you're a lot like the people you spend time with, as they say, but even people you, like, you know, listen to podcasts with. So that was just my my thing of educating myself and putting myself in in that. And so when I met him, actually in person. It was really cool. You know, he's a very, he's a very direct candid, provocative type of guy, you know, calls, like, when he said to me, like, who the fuck do you think you are? Elon Musk and notebooks. Like, that's so on brand for him.
What I really appreciated about him, was he just has a lot of opinions. And he's like, he would just Someone would give a pitch. She'd like, stop. No. Here's how you need to pitch it. You need to highlight boom boom boom boom boom. You'd break it down, and, like, that founder was just left better off.
Because his opinions were, you know, for the most part, really good because he spent so much time in media and with startups that he's seen everything, right, in his neural net for how to pitch a startup is super strong. And I really appreciated that about him. And, you know, the fact that he gave us an to get some exposure on the stage, I'll, I'll always appreciate, you know, him him for that. And after you got that exposure, you got the I I believe he said those 2000 initial backers.
You launched on indiegogo. How did you go from those 2000 initial backers to then raising, I believe, like, a $1,000,000 in funding from that campaign. Yeah. We, a couple things were instrumental. One is we had a a product that was really worthy of of, like, people talking about really worthy of word-of-mouth. So a paper and pen notebook is something that everyone has used.
And now taking that product and inventing it, such that it has an app that goes with it, and you put it in the microwave to erase Like, that was just fundamental to be able to create buzz about this, a gimmick, if you will. Right? It was it was gimmicky. But it but a good gimmick that really worked. That day where we got $99,000 worth of sales, what had happened was indiegogo had decided to us to, like, feature us in their, in their newsletter.
So it went out to all these indiegogo backers, and they just jumped aboard. Madan then once that had, you know, got into the 6 figure range, then when we started emailing people in the press, just there was really good uptick for people wanting to cover this product, and we got just a ton of coverage from it. And this was probably this is back in the day 2015.
People were starting to no longer cover crowd funding campaigns because so many people have been burned on failed crowd funding campaigns, but it wasn't a hard rule at the time with a lot of reporters. And this was a zany enough product that plenty of reporters would cover it. And then our conversion rate was really, really good. Our copy, our our, our video was effective.
We used things to, like, pull people in, on the video and even just starting off the video with, like, what if question What if you could, you know, write an a pen and paper notebook? And then instantly, all of those notes were, you know, available to you in the cloud. What if when you were done with that notebook?
Just with the push of a button, it was instantly erased available to reuse, right, that type of stuff that what if questions get people intrigued and interested in, like, learning more and pulled them further and further into the to slip inside of watching the video. And then by the end of the video, people were like, boom click by, I've got a their thought process was more like, hey. I've gotta try this product. It's so unique.
And there are actually some of the videos that you did were actually super unique, especially compared to other product videos at the time. I believe one of which was in Staples where you got kicked out. Could you tell, could you tell that story? Yeah. Yeah. So We this was our 2nd big product. We had, decided when we came back from shark tank and and and been basically laughed off of off of shark tank. I decided we've gotta get another product out there ASAP.
And so we launched our next product, and this one is now called the rocket book core. It is the one that, you know, 99% of people buy when they buy a rocket book today. It's a product that you don't put in the microwave, but rather, just a little bit of water and your writing comes off perfectly on the page. Because it's like synthetic paper with proper, coatings on it to make it a good writing experience.
So when we launch that, video, we decided we wanted to, like, go down the staple do it on the isle of Staples. So it's me and Jake just walking down the isles, pulling notebooks, off of the aisle and, like, making fun of the notebook industry because all these notebooks have just been sitting here collecting dust. While other products have been innovated, you know, the smart helmets, the smart shoes, they're smart everything. Right?
But the notebook was Notebook industry has been asleep at the wheel, and we're making fun of them and pulling up, you know, a mole skin off of the shelf and saying, Hey, what is this? The notebook that Heminway wrote in, that's cool, I guess, and tossing it. And so we're we're, we did not have any permission from Staples to do this. So we just dressed in our orange astronaut outfits that we got off of Amazon, right, and we just decided to do it until we got kicked out of staple.
But it took a surprising long time to get kicked out of Staples. I think it was like our our 12th take or our 13th take where I was saying to myself, like, when are they gonna kick us out? But finally, the manager came over, and he was actually pretty cool. He was like, hey, guys. Like, I see what you're doing here. You can't do this anymore. And so, we're like, alright. Thanks, buddy, and we got out of there. But that was just a fun way to, like, use we didn't really have any marketing budget.
Right? So we had to be irreverent. We had to stand out. We had to capture people in the first you know, 10 seconds of the video, and we thought a good way to do do that would be, like, 2 dudes in sunglasses, in an astronaut outfit, throwing notebooks around the notebook aisle of Staples was a good, was a good start. Right?
And then we got into, like, we made people chuckle and then, boom, hit them with what the product actually does when they're open, and they they think that these guys, at least can entertain them. And maybe enough to to to listen to what we have to say. And then we've thought about the notebook and how to reinvent it and you know, then we got great conversion rates off of that. Yeah. And even like you said, the video was low quality, but the script was actually excellent as storytelling.
And I think that's sometimes something founders miss. And is that they think they need the best equipment, the best editors, and I think although that could certainly help, it's more like icing to the cake. It it none of that really matters if the story or where the cake really isn't there. I wanna get to, 2015, in November of 2015, you guys plan to launch the rocket book wave. But when November comes around, the backers were anxiously waiting and still crickets.
That's when the heat started to turn up what happened. Yeah. So you could imagine, we had launched this crowdfunding campaign in March and had given an estimated delivery day of November. We thought that that would be any of time. We had some work to do to build out the app and and complete the the app and the scanning process. That was harder than expected. As you can imagine, you know, building an you run into issues and delays and things like that, but that wasn't like a major thing.
But the the the notebook itself and getting it to work reliably in various microwaves was a problem. So the problem there was that that, you know, if you took a notebook, one of our prototypes, and I put it in your microwave for a minute. Maybe it would all the the the, heat to erase ink would all turn clear and everything would work great, but the same notebook in my microwaves It might not erase completely after one minute.
And if you put it in someone else's, it may burst into flames within a minute, right, because there's just different power power levels, different hot spots in every microwave. So as we tried everything, and you gotta Madan, we're trying every combination of paper, every, as you can imagine, like, every thickness of paper, every coating of paper, every combination of that with different covers. We tried synthetic papers.
We tried synthetic papers with, silicone covers silicone doesn't actually turn warm in the microwave neither do a synthetic, but if we could embed it, the silicone with a little bit of, graphite, for example, then it could absorb some just the right amount of, the energy. And then maybe it would turn everything, you know, and turn everything and get to the right temperature. We tried something called Garelite. Like, we have product development firms we were working with.
We were spending a lot of money trying to come up with something that worked fairly reliably. And, finally, we found a system that was would produce a reasonably effective cost of goods sold. So we sold this thing for, like, I think it was $27 something like that, 25 or 27 bucks. Some of the prototypes we made would have had a, after we're doing development, would have had a cost of goods sold for, like, over $30. So we would have been bankrupt immediately.
If we decide to go into that direction, like, with something called Garrelate that I mentioned. So we had to cross different things off of our list. But I gotta give my cofounder Jake a lot of credit because he came up with a lot of this solution, but, just the idea that you could put this thing in the microwave.
And then but if you put in with it and on top of it, a little mug of water, What that would do is that water would absorb a lot of the microwaves, and it would just slow everything down. Right? And then instead of giving somebody an amount of time, like, hey, after one minute, which would which wouldn't work in some microwaves and would be too hot on others, we said, just watch it. And we we put a chroma, a thermochromic logo on it.
So when that turn went from a from, blue to clear, now it was ready to take out of the microwave. Right? So now we finally had a universal system that worked with cellulose paper and worked very reliably across, you know, a huge spectrum of microwaves. And then we were ready to ship. And then we were, We basically had, we were able to get about, like, maybe half of them out a third or half of them out until we just, like, ran out of money completely.
And We, yeah, we we ran into some problems there just, like, fulfilling it, getting it manufactured, and then we just, like, ran out of money. And I owed one of our vendors, like, over $400,000 before they were re released the next batch of books as well. So it was, like, kinda stuck. Right? And what were we gonna do? We tell the rest of the backers that sorry. We're just bankrupt. We can't deliver your product.
One thing we did to get out of the situation was we went over to Kickstarter, and we we started a new Kickstarter over there. And we almost got kicked off on Kickstarter for doing this. So what we did was all of the rewards were the was the same product. You would get for $27 a rocket book wave. But the project that we were funding was, You know, some integrations with slack, with Dropbox, things that we hadn't didn't have integrations for before.
And fortunately, thank god, you know, that thing raised just enough money to, like, get us out of the hole. So we were able to deliver on that crowdfunding campaign and use the profits of it to fund the stuff that we, like, couldn't ship, and we just squeaked out of bankruptcy. It was, like, so close. And we were able to ship everyone their books that got. And during that delay, in November, how did how were backers adding to it. What what was the feedback you were getting from them?
Some were patients. Some were like, cool. This happens in crowdfunding. Others were like, I want my money back. And I'm not, you know, I just said no to everybody if they wanted their money back. Like, this is a crowdfunding campaign. I'm sorry if you're mad at us, but we're trying to use all the funds to get everything out. For everybody, and some people got extremely angry about that. But I just made the decision.
You know, I didn't have I would have liked to have said, oh, customer service comes first. And I need to take care of my customers. And if someone asked for a refund, give it to them, but I Madan wanna start, like, a run on the bank and actually have it jeopardize the whole project. And give a few people a refund and therefore jeopardize giving everyone else their product, right? My job was to get this product out even if people are pissed at me along the way. That was what I decided.
And then others were just absolutely livid. They're like, I can't believe this. This is outrageous. You know, you clearly have a $1,000,000 in your bank account and you're, like, taking off for Jamaica. I wanna kill you. You suck. You know, all these, like, direct messages or comments or comment threads. And, I didn't even have time. I didn't between, like, making the product. I didn't even have time to, like, respond to all of the comments because I just decided I'm gonna focus on the product.
If I have, you know, if I have to spend 15, 20 hours in a day working on It's gonna be working on this emergency, which is the product. And these other people are gonna have to deal with, you know, terrible customer support until until I, you know, found somebody to help us with customer support. So, yeah, they were at super some of them were super super angry. And then others, you know, that They don't care at all. Right? They spent $27 on something many months ago, and they didn't notice.
But the people who are vocal, they want to catch your attention. So they'll say things that, like, they'll accuse you of being a scammer. So that just so that you'll respond, right, probably. But it getting, like, death threats, basically. And then when we launched that Kickstarter campaign, and I did reach out to some press that I thought was friendly in the Boston area. Boston O was one of them. And they just, like, wrote bad press about us. And we probably deserved it. Right?
We're launching 1 crowd funding campaign when we hadn't fulfilled the other crowd crowd funding campaign, and Kickstarter did not like what we were doing at all. They're like, you can't do a crowdfunding campaign for a product that already exists, right, that you previously did. And my explanation was, no, the project that we're funding doesn't exist, the new integrations. The rewards are the same. So they were like, we are really close to kicking you off, but we're gonna let this fly.
But they didn't promote us. They kinda, you know, subdued us in the search results and things like that, but we're still able to raise, I think, well over $400,000. And so you were receiving these death threats being called a scammer. One reality, you and the rocket book team were on the other end, putting out fires almost literally. Literally. Yeah. And everything was on the line to get product out to backers. Yeah. Did that impact what you were feeling at the time in your emotional health?
Yeah. Definitely. My emotional health was that it's at a really low point. I was at a point where I was, like, taking Adderall during the day to, like, keep going, right? And then at night, like, late at night to come home and have some drinks to to, be able to comp myself out. That was a really terrible pattern. I I was just terrified that we wouldn't make it through and that, you know, I just would look like a disgrace and look like a loser.
And have to go get a a a real job, but now with a big, you know, loser mark after having tried to sell, like, having tried to create a company and failing. And I was like, just suicidal thoughts came up. Right? I mean, I'm not saying I was on the brink of suicide, but It was one of the few times in my life where, like, these intrusive suicidal thoughts were in my head at times.
And I remember I would often go to other crowd funding campaigns that were struggling and read the comments on their on their project, which were terrible, which were mean and terrible and horrible. And, it would give me solace to know that I wasn't the only one. Everyone else out there was struggling in in a similar way for the most part. Yeah. And then I but I do remember when we were actually, like, when we got most of them out, like, 90% of them out, and we were no longer bankrupt.
That was an amazing feeling. And, but, you know, we still had people messaging us from time to time who had, problems with the product. Sometimes it would not burst into flames in their microwave, but maybe get a little brown. Right? And we'd have to ship them a new one. Sorry about that. Be careful. Time, things like that.
When we came up with our next product, which we with the crowdfunding campaign, we called it the EverLab but now that there are some trademark issues, so it's now called the rocket book core. That did not go in the microwave, and it worked really well. Like, the erasing of the ink work very, very well. And it is a very highly rated, product to this day on Amazon elsewhere. And that was a gigantic relief to me that our main product was no longer something that somebody could put in the microwave.
And potentially, like, burn down their house or or something like that. Right? Yeah. So If you could give, like, one piece of advice to yourself during that dark time, what would you say? You know, part of me wants to tell myself, like, it's gonna be okay. But I don't know if if that would actually be productive because I think part of the panic and having our backs up against the wall is actually what made all of this possible.
In hindsight, if we had not done this crowdfunding campaign in this way, the product may never have existed. Meaning, let's say my intent was to, like, let's say I had a $100,000 in a bank account or a couple $100,000 to to make the book, and I didn't need crowdfunding. And I set out to make a microwave to erase notebook. I think eventually I would have just given up. It was hard. It was really, really hard. Easy in hindsight, but it was really hard to to figure it out.
But what kept us going was that tens of thousands of people had preordered thing and had expected it that we had promised it to them. And just we had we were we had our backs against the wall. And the idea of not delivering freaked me out. Right? So just that pressure actually got us to to figure out the problem. So, I mean, if I could really go back in time, I would maybe hand the design that ultimately worked to Joe Lemay, so he didn't have to go through this. Right?
But that's not really, like, universal advice, is it? Maybe I would tell myself, like, to relax. Maybe I would tell myself to, I would tell myself to figure out how to get cut drinking out of my life, which I I did later. But I've I've definitely used it as a crutch, and in healthy and unhealthy ways. And I think it's, then something that I don't I don't abstain from it completely. Anymore. Like, I'm not a a total, a 100% sober, but I keep my distance from it now.
Whereas before, it was a daily part of my life and part of my, a coping mechanism. And that was not something that was serving me at all, even though I thought I needed it. And after you were able to get out of that hole, you raise some of that money from from Kickstarter. And then you eventually launched on Amazon with the rocket book core. With this show, we've had, like, episodes skyrocket with all time high downloads and then boom back to normal levels.
And It can sometimes take a lot of work to create that new catalyst for growth. And some companies just never can. What were some of the things that you did to continue growing sales and revenue after those campaigns? Yeah. Yeah. Good good question. One thing You know, we never got, like, scalable paid ads to work for us. Right? We never got, any big, like, marketing channel just to, like, really, really work for us like that.
But what we did have going for us was very reasonably good word-of-mouth. And for a few reasons, one was the product delivered and said what it would do, but we we did build, messaging, all of our assets, all of our videos. We put a ton of time into making sure that they were portraying a brand that people could really feel great about getting behind. We took an attitude that we don't we we scoffed and made fun of the the industry and the seriousness of a notebook company.
And we, ourselves, like, had a ton of fun and didn't take ourselves seriously. Right? So there are just a ton of space jokes, notebook jokes, dad jokes, wearing wild, ridiculous stuff, sunglasses, etcetera, we would do, live shows where we had our fans be able to call in and talk to us. Right? So we we tried to be the the in alright. So since we couldn't spend money on marketing in a way that we could measure would would pay off in a positive way.
We over invested in anything that would amplify word-of-mouth. So, like, when we did, a live stream, we we had a call in number, and everyone would call in and talk to us. We'd We'd have a little sketch, and we make it funny. And there'd be, like, little little, jokes going through through the whole thing, and we we just, like, make it really, like, a a funny little party.
But we wanted to be the the company that was, like, most accessible and most connected with our customer base in our industry. The other thing that we had going for us is if you buy a pen or a notebook off of the isle of Staples. Right? You don't pilot who might might have sent you sold you the pen doesn't have your email address. Or Mead who sold you that notebook doesn't have your email address.
However, we did, for the most part, because when you buy a rocket book, you go and register for the app and give us your email address. And so for a long time, we didn't actually have to because we didn't actually have to ask people to opt in but we started delivering, you know, email to them, and we just made sure that those emails were awesome. They were not just talking about the the product which they were, but not just that. And we were really trying to make them fun and funny and engaging.
We had really great open rates. When we created media, like, social videos and things like that, we decided we're not really using organic social to find new customers. My idea was we're gonna build a content engine in house and do it to amplify word-of-mouth. So our existing customers may now be recommending us to 2 or 3 of their friends. Right? Let's put content out there and so that our existing customers see it.
And now they're just more likely to make that 2 or 3, like, 5 or 6 friends because we're just in their brain a little bit more, and we're entertaining them and telling them how do you get the most out of the product. Right? And that worked for like, our whole duration of a company while I was there. It brought us up to, like, $50,000,000 in, in revenue until I, you know, I ultimately sold the company.
And we just never really were able to, for better or worse, get Facebook ads or, for example, which a lot of have been reliant on, but I, I wanted them to work. I really did, but we, we couldn't. So we just had to do guerrilla marketing tactics over and over and over and never let up on the the DIY, marketing angle. When did you decide that you wanted to sell the company, and it was a good time to do so. I think when so when we did sell it, we were somewhere around 50,000,000 in revenue.
It was a couple years before that when we were probably closer to, like, $20,000,000 in revenue. And I had a conversation with Jake. About it was my cofounder, and we we discussed it. And the cut we both agreed that, like, we at least wanna see what we could get for this company, right, and begin that process because maybe we wanna sell it now, or maybe we wanna sell it 5 years from now. I don't think we're gonna, put ourselves into service to, like, test the market right now.
So our lawyer, our our corporate lawyer was also a really, experienced M and A lawyer, and we asked him for some, recommendations for bankers. Investment bankers who, you know, are basically like, like brokers for your business, you know, like real estate agent is for houses as an investment bankers for, through your business. And we we interviewed a a bunch of them. They said, this is what we think you should be able to sell your company for.
We agreed to go with one of them and bring the company to market And what they do is they have a huge email list of family offices and private equity and and then more that they develop of strategic buyers that they that they then get in touch with and send, like, a teaser out to that an NDA might go out to get more information, etcetera, etcetera. And we got a few interested parties. But it was really that's that's sort of how it worked out. And we we really thought, like, hey.
We've heard of companies who turned down offers and, like, really regretted it. So why don't we at least see what the market will bear, fortunately through the whole process, which took at least a couple of years, to actually turn into a sale, we just kept growing and growing and growing.
So then by the time somebody got really interested in it, it was life changing money for us, where it just it just felt like we couldn't say say no to such a big acquisition for us because we we raised very little money for the company. We, we took some money from Techstars, but they were all just, you know, convertible notes and common shares. We never raised any VC money. We did it at a time, like, well after we were solvent. We didn't really need it.
It was just kinda part of the Techstars Accelerator program. So I still go around, like, saying that we bootstrap the company because we we really did in spirit, but we we took about a $100,000, in equity and sold it for what was ultimately over $50,000,000. So when you sold for over 50,000,000, was BIC the company you sold it to? Was that the highest offer? Or big There were other comparably high offers, but they all had different facets to them. But it was, like, among the highest offer.
Right? It was, like, maybe the highest or 2nd highest, right, but others were interesting too. So it's it's hard to set because There was one, for example, that offered to buy 49% of our company, and we would continue to run it for a while. And they put some money into it, and then we would go for a much larger acquisition down the road where the investor and us would maybe 5 years then later sell it. Right?
So that was it was hard to say whether that one was more or less because it had a higher valuation, but a lower lower liquidity now, things like that. So, yeah, the, ultimately, the company that that put what was to us the most attractive offer was the deal terms, you know, being able to get liquidity for all of it and and exit completely. We, we decided that was important to us, and that we didn't want to, you know, go another 10 years.
And they also, like, made it clear that they could be a good home to the company, right, that they would take the company and do smart things with it that we could be, you know, proud of and they had, you know, they they have a a gigantic stationary line. You know, a Bic pen, is a is a well known household item. Right?
You mentioned why you eventually went with BIC, but what are some of the things in that M and A process that you learned about selling a business and getting acquired and stuff like that? Yeah. Yeah. I'll Oh, boy. So quite a bit. Sometimes, like, your previous agreements that you do when you're a young scrappy founder that you don't pay a lot of attention to, can really be tricky when it comes to M and A. When it comes to, like, you know, due diligence in getting over the line.
I'll I'll give you an example of what was tricky for us. We had a, every rocket book right now, and before it's sold with a friction pen by pilot. Right? And pilot is technically a competitor of the people who we were selling our company to. And a rocket book really doesn't work with anything but a pilot pen, and they've got some good patents around that, at least in the US. Right? So it's not like we could say we don't need pilot anymore. Right?
We really needed them for it to, to sell our product. In fact, that was one of the reasons I was interested in selling the company because if Pilot ever decided to, like, we're not gonna sell you pen anymore, our company would, like, essentially evaporate. It was a big risk point of risk.
But it also became an issue in our acquisition, as you can imagine, because we had a supply agreement with them, that said we have the right to to, like, basically refuse depending on, like, if you get acquired, right, And, but, sort of, the game theory didn't work out that a really pilot should, like, cancel our contract. Right? But they didn't like us getting acquired by Pick. They didn't, they didn't love it.
And they didn't make it a bid on they could have made a bid on the company, but they didn't. And it just took forever for them to approve of the sale of our company so that our supplier agreement would transfer over to rocket book once owned by BIC. I mean, forever. Like, they weren't taking my meetings. They wouldn't talk about it months and months months would go by. We're working on other parts of the deal. We're making progress. Why is pilot not not answering us about this, etcetera?
They're a Japanese company that I have all my contacts were in the US. One day, I was talking with my one of my contacts And she said, yeah, Dennis, the CEO is gonna be leaving to go to Japan for a while. And I was like, but we need to get this done. And she's like, well, he's leaving on Friday, so we're not gonna be able to do it for a while. I was like, you know what? I'm gonna be in your office tomorrow.
I'm gonna be in your off, and you're gonna have to figure out, like, to get a conference from him and get me a meeting with Dennis or call security? Because I I gotta do this. Like, the 6 months have gone by, and we've made no progress. And this is personally important to me. So I just need help. I need this urgently. And she said, don't do that. Do not do that. Like, don't do that. And Dennis I'm doing it. Dennis at Bick? Or And Dennis was, like, the CEO of the US Bick. Right?
Okay. I needed to get signed off from. And, and I did. I just hopped on a plane and went there, and they were pissed at me. But I got in a room with him, and I explained to him that we had every intention to continue being his customer and partner that, being bought by BIC would only grow the rocket book line, which would be good for the line because it introduces a lot of people to friction, etcetera. And I made the case for him, and that got things unstuck.
And we ultimately got the agreement signed and got past all of that. Right? That was really big. I would say another thing I've learned through selling a company is, sometimes you you think as a small company is selling to a larger company, you don't have a lot of leverage, but I I I learned that I did have a fair amount of leverage. And there were some times to kind of test that as well. One is that, you know, basically, we we had an LOI on the table and then COVID happened. Right?
And then they came back to us with a completely revised offer that just wasn't comparable. And I just I just sensed it in my gut that I shouldn't make a counteroffer. Because it would be a sign of weakness. And I just said, thank you for everything. We had already both spent 100 of 1000 of dollars on lawyers seeing the due diligence. It had gotten done really far. And I was like, we're not gonna be making a counteroffer, but thank you very much. This has done a great experience.
We'll maybe we'll reconvene in 5 years or so when we're you know, and I might have said something cheeky, like, when we're interested in buying you. Right? And, and You know, then they came back to us. They took a little while, but they came back to us. You know, just walking away was helpful. And, you know, what we had going for us was we were We had a digital capability and an analog, consumer packaged, good arena, stationary. That was really important for them, and we were very profitable.
And what they they had looked at, a lot of digital writing companies that were just not profitable, but we stood out. And so I knew that we had that leverage. I also knew that if you think about BIC, right, they sell lit liters, divers and pens. And they really saw us as sort of like the, the dollar shave club of the sedationary industry. And, you know, Dollar Shave called came along with something that they perceived.
I don't know anything about shavers, but something that was not higher quality but they had a new go to market, a new way to talk to customers. And they went in there, and they really caused a lot of havoc in the, in the, the shaver market. Right? They saw Asa as somebody who, like, also had these irreverent fun videos that talked to customers with this amazing brand. We also had that direct to customer relationship.
Meaning, even if you bought us off the shelf at Walmart, we still have your email address. We're talking to you about, you know, how to get the most out of the product, talking to you about other products, etcetera. So having that sort of direct to consumer relationship, even in something that has a wholesale, you know, retail environment, was super interesting to them to acquire and to learn.
And we have, and rocket book still has the, I believe, the, the biggest asset of the biggest database of email addresses of people who write by hand. You know, we have 1,000,001,000,000 of email addresses who are, who open our emails at a really high rate. And they all have one thing in common. They they have a rocket book, right, and they write by hand, and they care about writing my hand.
So, with all these, we were we were a strategic investment to to them, and it gave us, you know, a good amount of leverage to get through the process, even when we had some some problems in the process. The only thing I think is really important for getting acquired is having at least 1, but several champions in the company who need to sell you to the rest of the company. Right?
There's always gonna be people in the company who aren't so sure about this acquisition, And I'm not in front of them to handle their objectives, objections, but you need to make friends with a few powerful people in the company who can say, We're doing this. This is why, and here's the assets that this company has that will totally transform and be additive to our company.
And be able to arm those champions to go back inside their company and handle the objections that they're inevitably gonna handle, and just be completely excited. So we had them in for visits. We got them. We showed them a lot of behind the scenes and things that we do inside of our team. But they then could, like, really understand the value that we had strategically, but also be able to articulate it back to the people in their company and their board who they had to sell it to.
And how did it feel when the deal closed and your company sold for over $50,000,000? It was such a mix of emotions. It was surreal in some ways, you know, a a big wire transfer hit my bank account. We were still kind of in COVID. Right? It was December 2020. So it was still, like, kinda COVID year. Right? So couldn't couldn't plan any, like, crazy big trips or anything like that. But also I had, you know, earnouts on the line too.
And I was on board for another two and a quarter years to be able to hit these earnouts for me and my employees Madan And, and so I felt, you know, it's still very much, like, buckled in. One thing I've I think I learned from it was I was on for 2 and a quarter years. And that was something that we had, like, co developed, in terms of a timeline. I think that's too long. I think, if a founder is going to exit the company, I think it probably should be done in about a year, something like that.
I think having somebody who's on for two and a half years, and then it just it's I got checked out. I wasn't I wasn't up for it anymore. I wasn't, incentivized to think big and think long term. And If we got somebody in there a year earlier and they started taking the reins for me earlier, I think it would have been a better transition. It would have been for me personally, for Joe, it would have been better for the employees. It would have been better for the acquirer as well.
And I think maybe that's something that Bic learned too. But, something that I I learned, I think, 1 1 year earn out period is is plenty. Anything longer than that, unless you really have you really wanna stay on for a long, long time, and that's what the founder's true intention is. I think 1 year, that's it. Do the transition. And, and hand it over to somebody who's incentivized to really push this thing for 5 years.
And one closing question that we like to wrap each episode up with what's the best piece of advice you've ever received? Well, I remember somebody just saying to me, like, Look, Madan, you're gonna work hard no matter what you do. You better just be good. Like, just go put that extra 1% in every day to be a little bit better than everybody else. And it's gonna pay off And, and if you don't, you're still gonna have the same struggles and the same difficulties in in your career at work.
You might as well kick ass. And I just remember somebody telling that to me, and it really stuck with me. And sometimes when I wanna get off my desk, And I'd be like, maybe I can get one more thing done today, in the the 1% better, Joe, that helps to drive me. Awesome. Well, thank you very much, Joe, for taking the time to join the episode of a link to rocket book in the episode description. If you want, take a look. Check it out. I love their books. But thank you very much, Jeff.
I appreciate it. Cool. People can find me on LinkedIn. I'm pretty active on there.