The First Customer - Shark Tank Series: The Art of Small with Mini Materials CEO Jared Waters

[00:00:00] Jay: Hi everyone. Welcome to First Customer Podcast. My name is Jay Aigner. Today I am lucky enough to be joined by Jared Waters. He is the CEO of Mini Materials, a very cool company. something different for us. Another Shark Tank, product that was on the show. Jared is over in Portland, Oregon. we had a nice little talk before the show.

Jared, how are you, buddy?

Jared: I'm doing well. How are you doing? Thanks for having me.

Jay: You got it, man. You got it. I'm good. I'm good. It's hot as hell over here. It's in the 90s. I think it's going to be that way forever. It's almost as if the globe is warming. so, tell me the story, man, about you [00:01:00] growing up. where did you grow up and did that kind of lead you to being an entrepreneur later in life?

Do you have anything that influenced you early on?

Jared: so I grew up, mostly all over Idaho. we've moved around a fair amount. one interesting thing is I went to a two room schoolhouse, lived in a town of like 300 people, which is kind of a unique experience. but, As far as being an entrepreneur, I think really the only big thing was just, you know, moving around a lot, you have to make new friends.

I'm maybe a smidge more introverted than others, but I think just due to my lifestyle, it helped me, you know, kind of be a little bit more, outgoing and, that definitely helps with being an entrepreneur for sure.

Jay: Yeah, that's a great point. I've actually heard that quite a bit. people who move around a lot as kids kind of develop that ability to, embrace the uncomfortableness a little bit. so that makes sense. so, what was the business, the first business you started?

Jared: this is the first business that I've really, that I've started. Yeah.

Jay: Got it. and, you mentioned before the show that you actually bought this business, which [00:02:00] I find super interesting. I don't talk to many people who have done that. I've talked to some people who have done that, but, tell me the story, like how, and why did you buy this very unique, different, Business.

I mean, if somebody came to me and said, Hey, I have this, many materials company, would you want to buy it? I'm not sure I'd have know how to answer that. how, where did it come from? How to tell me the story.

Jared: Yeah, so, the try to find the best way. So the company itself started, one of the founders, wanted to make these little bricks. He couldn't find anywhere to buy them. And so he made them and he actually posted in the reddit and they went viral on reddit, made the front page and he had people saying, Hey, I want to buy them.

I want to buy them. So started making them out of his garage. quickly was like. I don't want to do manufacturing and, he had a college buddy that kind of took over operations and they just kind of developed that out sticking just a couple core products like one of the biggest things that we're known for are little miniature cinder [00:03:00] blocks And you know, they posted on reddit again went viral again And that's one of the nice things about the product is it?

You It, you know, is cute and that kind of has a little bit of built in virality on its own. And meanwhile, I'm working corporate financial publishing actually in business valuation of all things, running some, running a division of the company there. And I'm on Reddit, just kind of looking, or I'm just on the internet looking for different, types of businesses to You know, use for content and I found this business and I've been looking for a business for a long time.

I had thought about starting my own business, but at this point I have a family and things were really, you know, a little bit of stability was required. So, I was looking for a business to buy just so I would start with cashflow rather than starting from zero and, found the business on Reddit of all things, and the person was basically like, Hey, I have this business.

I don't really know where to start. And, you know, I've been seeing like a lot of dry cleaners and [00:04:00] convenience stores and just kind of watching the businesses for sale out there. And I really like the idea of something that was, you know, could be based anywhere, was e commerce based and had the potential to grow.

And that's when I made the leap.

Jay: Why did they want to sell it?

Jared: So, One of the partners was a little bit, maybe not a silent partner, but they were located in different States. So, you know, basically one of the, one, you know, one of the persons was running things day to day and also was doing another job and, running a business is super intensive and they, you know, they knew they weren't focusing on it a hundred percent and they would love to see someone who would, and so to just reach that odd stage where it was.

You know, more than something part-time, but not something that they wanted to devote fully, or that they could work on together. So they just thought it would be a good,a good fit to sell, if they could. So, yeah.

Jay: And what was the actual sale [00:05:00] process? Like, like how long did it take? Like what was involved? Like you were doing business valuation stuff already. So you probably have a leg up on most people who are kind of coming in cold on some of that. Like, what was the process like for you?

Jared: Yeah. so, you know, the initial due diligence is really just, you know, they're sending me information and I am evaluating if that's gonna make sense for me. We first had a conversation in December, and then we went, and had everything completed by May. So it was a pretty, I mean, a pretty reasonable, time frame for a smaller business.

I think, you know, bigger businesses maybe have longer transit transaction times. But, yeah, I think, Relatively quick, a quick transaction there, went out and, you know, kind of toward their setup that they had and, then came back, and did, you know, just like a week of training and figuring everything out, packed everything up in a U Haul and drove it from, it was in Virginia Beach, Virginia.

And drove it to Portland, Oregon. So[00:06:00] 

Jay: And so tell me the process of making these things. Like how, what's the general process? Are we in the shop right now? Is that where you are?

Jared: we're in the shop right now. Yeah. So, we use a bunch of different things. so our kind of flagship product is a concrete product. So we make molds for concrete and we, you know, catch cast batches of, you know, a thousand of those. and then we use a lot of, you know, Not necessarily cutting edge these days, but we, you know, we use laser cutters and we have a bunch of the 3d printers that we use for a variety of things.

we use some pretty cool industrial printers. So, that's one of the things that's really different from this business compared to most of the miniature companies out there is that we're actually making stuff in the USA. You know, not everything we sell is in the U. S. A. But the vast majority of it is.

And,that's pretty unique for something that's kind of a, consumer product at that price point. So,

Jay: Is there a lot of [00:07:00] competition out there? Is there like other companies that do similar things as you guys?

Jared: I mean, there's a fair amount of people in, I mean, there's, you know, it's one of those hobbies that everyone's like, ah, man, I don't think that's a very big niche, but. If you start talking to people everybody like at least know somebody that does something in miniatures They're like, oh, yeah, my grandma builds dollhouses or my you know, my uncle makes like Miniature die cast displays and things like that.

So there's a lot of little there's a lot of people out there the So there are definitely people in that However, if you start looking at what everyone's doing, everyone's ordering from the same overseas markets. And it's really funny. Sometimes you'll get something that you know, purchased through another miniature company.

And you can tell that the person that made it, you know, was making a miniature version of a completely different, like non U. S. product. You'll be like, Oh. Like, you know, that's a miniature water bottle, but, you know, we don't really consume like liter and a half tall, skinny water bottles, but they're really prevalent [00:08:00] overseas.

And so you'll get things like that, that, you know, are miniatures, but they're not really what people are looking for. So, I think that's a unique thing that we're doing is, you know, the set of things that we're making are designed in the U S made in the U S and, have a level of authenticity to them.

That you're just not seeing out there. So we're a little bit, you know, standing alone there. Yeah.

Jay: So let's talk about your customers. are you going to craft fairs and like that sort of thing? Like people building train. Sets, you know, that sort of thing, or is it more the guy putting something on his desk or buying something for his company? That's kind of a cool, different thing. Like who is your customer today?

Jared: Yeah. So we have a pretty, unique customer base. So we definitely have like people that do crafting, make dollhouses, make dioramas, you know, people that do that professionally and things like that. That's maybe about like a third or maybe up to half of what we're selling to. And then we have, you know, another big chunk [00:09:00] that's.

direct to business. So we do a lot of promotional items like, you know, people, you know, will, you know, architectural firms, construction companies, lots of banks, lots of charities. They'll, you know, be doing a fundraiser and the one give everybody a little token. So, you know, they'll buy little bricks because they're going to build a building with it or, you know, different companies will have a cool product, but they'll want to, you know, you know, have cell samples that they can leave, you know, at stores or, you know, on customers desk.

So they'll be like, Hey, can you make me a thousand miniature X or Y? and we do a lot of that. And then,

Jay: a lot of different things, not just, I mean, I know there's different things than just bricks, but like how wide is your range of stuff that you're making?

Jared: yeah, so we have about 200 set skews of different things that we make. And, we add maybe about like 10 a month or something like that, that are just new, unique items. And then, you know, we do a lot of custom off, usually not. [00:10:00] I don't do a ton of custom things for just like one offs, but for like, commercial clients,we'll make custom things like that.

Jay: Do you remember who your first customer was after you bought the business? I mean, obviously the person's name, the company's name, but do you remember what the first thing you sold was after you bought the business?

Jared: so, I use Shopify and you get that little ding. And so I definitely remember the, like the little ding, and I like, you know, and it was like within like an hour of like closing on the business. And so it's just like, you know, and that's the powerful thing about buying a business is that, you know, you do have that cash flows and customers and, you know, things can be improved and they can still be improved, but, that's definitely, you know, that cashflow is what you're paying for.

So, yeah.

Jay: How many units are you shipping, you know, a month, a year, whatever, like how many of these little miniatures just in general, do you think you're pumping out?

Jared: Oh, I should have looked that up, ahead of [00:11:00] times. I mean, we're doing, you know, you know, tens of thousands of bricks. Um,what's her order volume? on a yearly basis. Yeah, II would have to look that up. But I mean, we're doing, you know, enough that I'm doing this full time. And, you know, you know, you know, have, you know, people helping me do it,you know, on, you know, I don't know, like, not crazy numbers, like maybe like 20, you know, no, maybe like, you know, 10 orders a day, average across all the seasons, maybe, You know, we have a pretty high order value.

It's, you know, nearly like, you know, like a hundred dollars, an order is, what it averages out to. so, yeah, I don't know. I think that's a fair indication of the volume.

Jay: Yeah. and how are you guys marketing this stuff today? You mentioned kind of going viral a few times before you bought the business or maybe [00:12:00] even after. How do you, what are you doing to get out there other than obviously being on things like Shark Tank?

Jared: Yeah. so Instagram is our best social network that, that seems to consistently deliver good traffic. Very hit and miss, I had one video last year do like a million and a half views and then you know other ones that do like 400 and it's not really oftentimes rhyme or reason about why one thing, you know, one thing that, you know, does well or doesn't do well, and then we're on all the other social media that think, you know, all the other, you know, Pinterest, YouTube, Tick Tock as well.

and then we do some paid advertising, And, you know, just, you know, and things like this, where are you going to talk to people and learn a bit about the business? we've been in, you know, things like Magnolia Magazine, and you know, a couple different books and things like that. So yeah,

Jay: Do you got a big crowd? Like, you know, there's big fairs for that kind of stuff.

Jared: we don't, I don't, I've done a [00:13:00] little bit of that. I usually sell more online than I do at the shows. so I definitely focus more on, you know, the scalable parts of the business, which to me is online. there, there are sometimes fun to go to, but, there are a lot of work and a lot of time and,not necessarily, I think something that would be a huge growth driver for.

for us. Yeah.

Jay: what is the biggest surprise to you after buying the business? Something that was different than you thought it was going to be, after you bought it?

Jared: Yeah, I thought like, One thing that I was very mistaken with is I thought I would enjoy marketing. I was like, oh, I you know I enjoy, you know taking cute pictures and posting and things like that. In my previous life, I did a lot of stuff working with the marketing team on emails and they'd be like, Oh, that's a great subject line.

We love, you know, we love that angle and things like that. And so I felt like I had a [00:14:00] pretty good hold on the marketing world and,I was not prepared for how just relentless. Relentless it is, like constantly having, or constantly wanting to post, you know, interesting, creative things all the time.

and, you know, every week, you know, we usually do like a weekly email and making sure that it's something that's interesting to the people that are going to be reading it. All those things, are so much effort,and time. And, I didn't expect that part to not be as, as, I didn't expect that part to, I didn't expect, I expected me to enjoy that part a lot.

And it's been the part that I've enjoyed the least.

Jay: The grind, man. It's a real, it's a real, You feel like you're part of the machine that you just have to keep feeding it. And you're like, yeah, I do astrophotography on the side. And I was trying to kind of grow the channel on Instagram. And, you know, you get the four or 5, 000 followers and you're like, [00:15:00] this is just so much work to like, do this.

It's not even fun at all. So, and even for our business, for the QA firm, Yeah. And you have to be consistent to stay relevant in the algorithm and the machine. So, that's very interesting. what's next for you guys? Do you have any big kind of plans? Is it just going to business as usual, growing things kind of the way you're going, or do you have any new products or, I mean, you said you have 10 a month, but, any kind of major, you know, initiatives or things you guys are going after?

Jared: Yeah, I mean, we're definitely, you know, I kind of looked to like Lego as like an aspirational brand and to see the things that they're doing really well. and we started to kind of as Like a miniature home depot. We had all the building supplies all the things to do And you could take that and make whatever you wanted.

and now we're starting to really move into Building more kits so people can buy a box and build, you know, x y or z People just really love that guidance. So that's the big initiative of [00:16:00] the year is to start putting together You know more just like build a kits and then people can You know You know, kind of have fun with them from there.

Um,but yeah, following that Lego model, they seem to be doing pretty well.

Jay: They seem to make a couple bucks here and there for a little mom and pop shop. They seem to be doing all right. no, I would love, I mean, it seems, I mean, also maybe similar to your marketing thing. Like, it seems like it would be really fun. I would love to like build a little brick house with some mortar and stuff.

And like, that seems like it would be a fun thing.

Jared: it definitely, is just a very creative, outlet. And then the nice thing about it too, is that, you know, unlike building something huge, you can just like sit, it's a little bit more like doing a puzzle where it's something that you can sit down and start it and finish it in a reasonable amount of time.

It's a very, relaxing hobby. So, you know, the kind of interesting thing about my business too, is that, you know, I got about a 50 50 split between male and [00:17:00] female, which most of the craft industry is, you know, heavily weighted towards females. but I, you know, get pictures all the time from people saying, Hey, I built this garage and I put my die cast cars in there and, you know, things like that.

So, yeah.

Jay: pretty cool. I like that. what's your take on personal brand as a business owner? Do you make it a point to kind of put yourself out there at all? Or are you just more of a CEO that kind of just lives through the brand and that's what you're trying to promote?

Jared: Yeah. So with a small business, you, I don't feel like I can step away and like not be front and center. even though I don't necessarily want to be all, you know, like, like I don't want my voice to be the background voice on all the videos necessarily. Like, it's not, it's, you know, but,from where we're at with things, I definitely have to be, I have a colleague who runs a, like a t shirt business and he just hates being on camera and, you know, it's just really limiting if you're, you know, you have to do things where you [00:18:00] know, are part of the brand and, people like knowing that they're buying from a person.

And, you know, when people call up more often than not, they. Get me and I talked to them and there's, you know, something really powerful when you're like, Hey, you know, my name is Jared waters. I'm the owner of the business. And if you have any problems, give me a call back and we'll take care of you. So, um,you know, it's not that I'm necessarily setting out to make, you know, people think, you know, Jared and many materials in the same thing, but,I think you have to take ownership of the business and put yourself out there.

So. Yeah. I hope that's a good answer. Yeah.

Jay: That's a great answer. I love that. what about partnerships? Do you guys have any partnerships with any organizations that kind of help you guys distribute the product?

Jared: we definitely have like wholesale accounts and people that we've worked there. we used to do, like a specialty brick with Frank Lloyd Wright, but we just kind of round, wound that up this year. so there's, you know, opportunities out there for [00:19:00] sure. more on the corporate side, we're just doing, you know, we're doing, you know, You know, creating unique things for people, rather than I, the word partnership, and I don't know, I don't know if you get this a lot, but it's become a scary word because I get so many people that want to partner on something, but really what they'd like to do is for me to give them free stuff in exchange for something nebulous.

So, yeah. Um,but yeah,

Jay: yeah, no, I think, they come in lots of forms and certainly, I think a lot of times it's people just looking to get referral fees or whatever. but, you know, the strategic partnerships is what kind of excite me. Personally, just because like, if there's some actionable way for me to partner with another business that can like both deliver value to the same customer, then like what, I mean, it's just a match made in heaven and you kind of cross pollinate between, you know, customer bases and everything [00:20:00] else.

So, yeah, I think the strategic partnerships are great, but I totally hear you. we also get in that. Space where people like, Hey, if you want to use our platform for free, but also give us all your services for free. I'm like, those values are not

Jared: Okay.

Jay: up to the same

Jared: It's the same. Yeah.

Jay: So, so I hear that.

so real quick, so tell me about the, the shark tank experience, man. Like what, you know, I've heard about it, you know, having to build your own set and bring all this stuff and all, what was your experience like just in general?

Jared: Yeah. really positive. so I spoiler for anybody who hasn't seen the episode. I didn't get a deal. and you know, it,it's a pretty long process, which I think, you know, you know, From looking at the show. It doesn't feel Like it necessarily would have to be but there's a ton of thought stuff that happens ahead of time where they're preparing you And working for you and even the filming is it's you know Like people are like, oh, why don't you talk about this or this i'm like, well We did talk about a lot of those things.

They just you know, they just make it, [00:21:00] you know for tv. so, umbut I'm trying to think about what I can talk about. That's you know, I, you know, if I don't necessarily think going on shark tanks a smart strategy for everybody, as far as even just, you know, the application process is so time intensive, that it's not something that, I would recommend doing unless you have a business that would be entertaining for people to watch, which, you know, it's first and foremost, the TV show, the investment piece, you know, comes right at the very end.

So, and, you know, I think it goes back a little bit to putting yourself out there. They're definitely looking for, people as much as they are, you know, businesses and, Yeah, I think,yeah,I don't know if I really answered that question. Well, is there anything.

Jay: No. I mean, did you get, did you get the, the shark tank bump, you know, after your episode was on?

Jared: I did. Yeah, and then they re air it and then it's all on tv So it's definitely been a good bump. Every time it's there and It [00:22:00] has a lot of staying power people will be like hey I saw you like four months ago and then just remembered you so yeah

Jay: I love that. all right, last question. Non-business related. this is more about just you as a business owner or a human being, but, non-business related. If you could do anything on earth and you knew you wouldn't fail. What would it be?

Jared: and I knew this question was coming and I should have had a better answer prepared. I I mean, I don't I the failure thing doesn't really Me Slow me down. like, I don't know, maybe if I had like unlimited resources, I'd have a really different question for that, but I feel like I'm doing what I, you know, I feel like I'm doing.

I'm doing what I should be doing, now, you know, may, maybe with the caveat of maybe like a YouTube travel blogger, if I could do that, I think that would be, you know, something that, I love to travel and I've been everywhere or not everywhere, but I've been to a lot of places and,it's a passion of mine.

So I guess if I could do something that was just a [00:23:00] passion, Of mine and still easily pay the bills without,maybe something like that would be a fun imaginary job. So,

Jay: I love that. No, you're not the only one. I've gotten that with a bunch of times Everybody wants to just travel but still have the ability to have an income somehow. So yeah, you're not I think we all love to just you know, just see everything but also make money at the same time. all right Well Jared, you're awesome, man.

I love this story. if you want to reach out to you directly how do they do that? And if you want to find out more about many materials, where do they find you?

Jared: minimaterials. com info@mini materials. com is the email and it goes directly to me, if you'd like to kind of see the kind of stuff we do, check us out on Instagram at many materials. and, yeah, thank you.

Jay: Beautiful, man. All right. Well, stay cool brother and good luck with everything. We'll talk to you soon. Okay.

Jared: All right. Thank you.

Jay: Thanks for being on, man See ya [00:24:00]