Intro: Are you ready for an open discussion with the best of the best fans the best of what’s next Welcome to the Tony Durso show. Join in on a great conversation today with some of the world’s great influencers as they showcase great advice and techniques that made them the game changers they are today. Now here’s Tony Durso. Tony: Welcome… I’m your host Tony Durso, we interview world class influencers celebrities and elite entrepreneurs and I thank you for joining us we broadcast every Friday at 1 pm Pacific on voice America’s influencers channel and you can listen to all of our shows on your Android or Apple device, go to TonyDURSO.com/mobile and get the app TonyDURSO.com / mobile, before we get going here’s a big thank you to some amazing sponsors of our show and please stay tuned for an important message from select-quote. If you’re thinking about life insurance or would like to know more about it, more info on them just ahead, so please stay tuned, today shows with John Kramer and Kevin Williams, the floow and trusting your gut. All right here’s some info on John Kramer. John’s vice president of the floow North America, where he leads and manages business strategy and implementation based in the U.K. And with us headquarters in Detroit the floow is one of the world’s leading providers of device Gnostic telematics solutions for the auto insurance industry and we can explain what that all means in just a moment. Hi John welcome to the show, it’s so great to have you on with us today. John: Thanks for having me, Tony great to have some time to chat with you. Tony: John, this is a very interesting subject and I’m so curious because I really don’t know very much about it and I’m piqued by what you do and how you do and how you got into it but 1st things 1st, I’d love to know John how did it all start for you, what’s your back story? John: Yeah, so interestingly enough when I was a young man I thought I was going to be a musician. And when I realized I couldn’t get health insurance as a musician, I decided you know I may be better go to college and focus on something a little bit more lucrative and stable and actually I went to college, I thought I was going to be an English teacher and my 1st job out of college was a I worked as a car salesman. Car salesman is lives if you aren’t familiar with them can be rather trying, they’re lots of long hours, lots of deadlines, lots of drive and lots of sales and can be a little crazy. And a college roommate of mine said, “hey man we’ve got an opening on my team to work in insurance would you be interested?” So I had no idea about insurance, no interest in insurance but I thought you know what one I’ve never met a poor insurance salesman. The other thing is to I know that insurance people typically don’t work on the weekends and then on holidays, so I was like you know what? I’m going to go into insurance I’m going to see what I can do. Lo and behold I worked in insurance for a top 10 insurance provider for the better part of 10 years and through that time I actually found that I loved what I was doing. You know there’s a little bit of nobility in insurance that I really find is pretty awesome cause you have an opportunity to make people whole on the worst possible times that they have, you know if a person has a claim but my last role at the insurance company that I was working with was. For telematics they asked me to be a project manager a product manager excuse me for a telematics product and telematics very loosely defined is using sensor data to collect information about how, when, where and how much a person drives. So this is very early days and the hiring manager said to me would you be interested in applying for this and I said you know what let me let me see what I can do. Did that for the better part of 4 years and fell in love with the industry and with a couple of like changes a were, I found that I’ve been working in this space now for the better part of 8 years and am now working for one of the telematics leaders here in the United States of America and actually globally as well as, which is a company called “the floow.” So it’s funny how it all starts you know you think that you’re going to be on M.T.V. at the age of 18 but then realize you know your friend gets super glue in his eye and you realize how important insurance and stability is. And that’s kind of where it came from for me. Tony: It’s very interesting, I almost expected you to say that instead of being a musician you went into being a waiter or you went into the food industry or something, it just seems to be kind of what they do, so that would be very interesting. John: Yeah that would have been the next natural progression, if I didn’t realize that there are other opportunities out there that’s for sure. Tony: Yeah and now for the audience the we’re going to talk about the floow and the site because I’m going to spell “thefloow.com.” And before we get into this this is where you work now, I know you define telematics but it’s like what? Can we get more information so it can make more sense to us? John: Absolutely, so I’m going to simplify it, I’m going to use some common or I should say popular products that are out there and the one product I always reference is if you’re familiar with Progressive Insurance and the snapshot application or the snapshot device, progressive actually started Insurance Telematics, oh gosh a better part of 20 years ago now and basically what they did was they realized that you can pull data off of a vehicle through sensors, right? So the way that progressive did this in the early days was they actually put a little piece of technology it’s called “the dongle” into the O.B.D. 2 port of cars. The O.B.D. 2 port for your benefit and your listeners benefit Tony is the diagnostic ports, it’s about… it usually underneath the dash, so if you get that mysterious check engine light you know your mechanical stick something in there and be able to pull information out of there usually D.T.C. codes or diagnostic trouble codes, so that you know they can say, all right you know your your gas cap is loose, your 02 sensor is wrong or God forbid you need a new transmission or something like that, but that report had a lot of data and it allowed insurance companies to understand how people actually drive. So if you think about the way insurance is done currently without telematics or kind of thrown into a pool right based upon demographic data, right? So you’re put into you know age, gender, marital status, zip code, what type of vehicle you drive and of course your driving history. But the question was can ask is it possible for the riskiest driver let’s say an 18 year old male to drive like a 45 year old married man and the answer is definitively yes, you can do that but the problem is there was no way to get that type of information out. So progressive in the early days used the O.B.D. 2 device pulled that data, started collecting that data, the data would be transmitted via cellular network to their servers and then they would rate drivers based on how they drive. Fast forward today, we’re at a place where we obviously have connected cars which are able to provide that type of data, also your cell phone is a super powerful sensor and has a lot of that key data elements in it as well. So awfully that kind of explain the science behind it and how to demystify that for you. Tony: It does a little bit, so if I understand this the telematics in terms of the vehicle part which I think is where we’re going to go with this interview, it can let the company know how the driver drives. I’ve seen some of your little demos how the driver drives, does he drive really fast, does he hit the accelerator very quickly, does he brake a lot to be jerked the steering wheel things like that, right? John: That’s correct, you’ve got it and basically all that they’re all we’re trying to do is assess how risky a driver is behind the wheel. That is the sweet part, that’s all that we’re trying to do. Tony: I want to address that but before I do, how is this so different what your company does in terms of telematics? How is it so different compared to what’s already out there in the marketplace? John: That’s a great question and there’s 2… actually I should say there’s 3 key points. So the 1st thing is the Company the Floow, with 2.0 as you kindly pointed out, you know we started out very early on with a mission, a simple mission which is to make mobility safer and smarter for all. And knowing that what we realized was there’s an aspect of how do you make a person safer and that’s really understanding what causes risky behavior or what is risky behavior and then how you can change that. So the floow in and of itself is a little bit different than you know maybe some of our competitors or some of the things that are out there in that we actually harness social science to help influence and change behavior so people become safer, so that’s one of the ways that we do things a little bit differently. From a perspective of how we do things compared to competitors in this space, the floow is actually a device diagnostic solution, so basically what that means Tony is we can take sensor data from any number of sensors, I’ve mentioned the smartphone ,I’ve mentioned the OBD 2 dongle device, if you think about the big over the road trucks they have embedded black boxes and of course the soon to be ubiquitous connected car, all of these tort types of data sources can be powerful sensors and essentially we view ourselves as a refinery. So all we need is the crude data from whatever sensor there is and we can extract information from that, so that’s one of the other ways that makes us a little bit different. The 3rd and final way that makes us different is our IP model. And what that means is so we provide services to Insurance companies, right? We can provide the technology, we can provide the data analysis, we can provide scoring algorithms, we can do scrubbing of data all sorts of wonderful things and we also have products that we can let them use, but the one thing is in that traditional telematics service provider, model most insurance companies don’t ever get to learn about the data that they’re getting and aren’t kind of shepherded through the process of understanding it. so one of the things that our company has done and decided this very early on and it’s fantastic is we like to give insurance companies the opportunity to build their own unique intellectual property on top of our score. So we have a score, customers can use that but anything that’s derived on top of that is their own use unique IP which is unique in this market and pretty appealing to an insurance company looking to you know be a little bit different than their competitors out there, hope that answers your question. Tony: It does and I have more questions based on that which is fine. Forgive me if I have something that you’ve already answered or perhaps if I do on something you’ve already commented, just give more information but I want to understand this a little bit more does this make me safer when I drive and if so how does that make me safer ?II don’t necessarily use your product I want to talk about that but does it make the average person on the road safer? John: Yes it can, so here’s the one side of it and what I’ll call usage based insurance 1.0, which is what most of the companies have out there now and then usage based insurance 2.0. So 1.0 is just an assessment of risk based upon driving data, right? so I can say you know… if we just use an example scale of one to 10100 being perfect and or 0 being the worst. We know that certain drivers are going to drive closer to 100 certainty. I was going to drive closer to that 0 but most drivers are going to drive in that middle period there right and basically the way it works right now with usage based insurance 1.0 is they simply say you’re a bad driver or you’re a good driver Here’s a discount and that’s where it went right and there is something that could be said, there’s a little bit of a halo effect that can occur when a person knows that they’re being monitored and that their data is being recorded. And typically what we’ve seen is people will drive really safely in the beginning and then that starts to wane off after a bit of time, just because you know the novelty has worn off, usage based insurance 2.0 and this is something that the floow does and we’ve seen that happen, there’s a lot of different ways that we can provide incentives to drivers to improve their behavior. So that’s the key there too, it’s not just a matter of saying, “oh you’re a bad driver do this and you’ll become a better driver.” There need to be an incentive there right safety unfortunately is not very sexy it’s important but it’s not very sexy However there are things you know cues and and triggers that customers can receive that makes it interesting and makes it sexy. One of the things that we do is we offer rewards. So for example the safer you drive the more points you accumulate the more points you accumulate You can then redeem those for Amazon gift cards or Starbucks cards. And in turn you’re developing long term habits that are sustainable So yes the answer to your question is we can change behavior and that’s really the mission of the company is you know making the that mobility safer and smarter for all. Tony: This is the Tony Durso show, just ahead to check continues with John Kramer and Kevin Williams, the floow and trusting your gut. but 1st it’s time for us to take a short break see you back here in just a moment. [break: Voice America influencers. Be inspired.] Hey guys are you thinking about life insurance, did you know that the older you get the more costs that’s why locking in your rate for up to 10 or 20 years now makes sense. The rate you lock it won’t change even if your health status does and if you think you can’t afford it I’ll you can, chances are select quote can help you get it for less than a dollar a day, select quotes breakthrough technology allows them to quickly match you with the best insurance company to find your best policy. Plus quotes are free guys this is important stuff for your family and loved ones, let’s select quote save you time and money get your free quote at selectquote.com/DURSO today. That’s select selectquot.com/durso for your free quote. Don’t put off protecting your family another take selectquote.com/durso. Intro: Join us the voice America influencers channel. You’re listening to the Tony durso show with key influencers. We’d love to hear from you via email be sure to send questions and comments to Tony @tonyDurso.com. Now back to Tony and his guests. Tony: All right we’re back on the Tony Durso Show. Today show is with John Kramer and Kevin Williams, the floow and trust in your gut. In addition to his professional experience John is a regular industry blogger and speaker and is featured in articles about the future of telematics and connected life he’s passionate about the win-win opportunities for insurers and consumers in the areas of safety health and productivities. All right and now back to the chat with John. OK John so-so far because your company helps make more people safe, it makes me safer even though I’m not necessarily using your services but there are safer drivers on the road and that of course helps and impacts us, we don’t have to go into the accidents in the and other issues that happen on the road. So I see how that like a domino effect it just makes things better and better, OK. John: Yes, it’s a quality of life thing, you know like I said safety is not sexy but if you think about it and actually you live out in L.A. and goodness knows there’s a little bit of traffic out there right and in fact just to tell you a quick story here. The last time I was out in L.A. I was driving on the major south highway and I forget what one that is but we’re heading down towards the Orange County and I passed a guy who had an i Pad in the middle of his steering wheel and he was watching something, I don’t know what it was but he’s watching something. Clearly that’s a risky bit of behavior and in fact I had an accident during that traffic rush hour time that we’re driving. Imagine the kind of ripple effect that causes. It’s not just a matter of you know God forbid somebody loses a life but there’s also the inconvenience of road congestion and you know traffic headaches and gosh you know the left lane closed up here service margin over which in fact creates more risky behavior, so you’re right and it is greater than just simply making one driver safer which is important but it in turn does kind of translate out and ripple out for all. Tony: You know that’s a very interesting point John to deviate from this conversation for just a little bit, every single time I drive I think it’s 100 percent, I spot and see people with erratic driving behavior and if I do get a chance to see them up close there on their cell phone perhaps seeing how many people like their Facebook posts or something I can’t believe it, it’s 100 percent of the time and the people who are stopping have green lights and stopping when there’s no vehicles and then you get in the other lane you go by them, they’re on their cell phone can this system help detect that, I guess it can because it can detect how they drive right. John: That’s correct and actually you bring up a really amazing point here, you know just to just to give you some geeky statistics. So I tell you I work in insurance for 10 years so you’re not going to get up easy with just cool anecdotes about the cool technology that we do, you’re going to have to unfortunately listen to me you know yammer on about statistics a little bit, you know actually the National Safety Council has estimated that automotive fatalities have topped 40000.00 deaths for the 2nd consecutive year and there’s a lot of reasons for that and you actually touched on that Tony which is you know all of these things are happening because there’s increases to claim severity, there’s increasing claims frequency and just all sorts of madness. And the reason these things are happening the one key reason that everybody keeps pointing to is driving while distracted driving is that is considered to be a scourge right now you know and it’s really really creating a lot of issues, in fact I think I remember a statistic it was one in 3 accidents that are caused by distracted driving which is frightening. I mean think of the quality of life we would have if you know people would actually put their damn phone down and actually concentrate on their driving and reduce that distraction so far organization in its infancy thought well what is the main cause of this and I should say the cause of it but the main tool of distraction. You know there’s a lot of things that you can be distracted by, you know fest some of the radio I’ve seen guys shaving you know, even taking a phone call can be distracting but the one thing is it’s that mobile phone and we were one of the 1st companies out there to actually create a distraction score to show you know and to help one show people that the distraction in fact does influence their safety. But also in our research we’ve actually found that it’s the single most predictive piece of information that we’re recording with regards to predicting risk. Tony: So true I really want this product out there because it’s frustrating, you’re in a 40 mile an hour zone and the person in front of us doing 20 miles an hour and they keep breaking because they’re texting, it’s like please pull over. John: The selfie can wait. Tony: Exactly, we won’t even go into that any more now. Tony: The floow as I said is a device diagnostic. So we don’t manufacture devices but we do create code that we can put and develop applications that can be put into smart phones so we have a lot of different providers and based on our insurance partner’s needs you know we have a lot of different providers that can provide you know devices. So you know as I was talking about that dongle space, we’re working with several partners here in the United States where they’re using dongles, we’re actually finding that it’s more applicable for commercial lines insurance applications so Case in point if I’ve got a fleet of 5 delivery vans, I own a flower shop and I 5 delivery vans at the liver flowers around town, they want to be able to record that data from the device we don’t manufacture the device but we have several companies that we work with to provide that service to the customers, but we do manufacture and develop mobile applications, in fact we have a couple of them we do have several ways that we can do that for our partners. The 1st of course is what we called Floow drive which is an off the shelf white label telematics solution, it includes all of those scoring elements and attributes that we’ve developed and one thing to say about our scores too is they were developed using actuarial science, they’ve been rest against claims and we know that they’re super predictive and just to give you an example our floow score off the shelf we know that it can predict risk very-very accurately and what we found is the worst drivers the lowest desolate drivers that we have recorded actually have an accident about every 18 months, every 2 years to 18 months excuse me, whereas we found that the best drivers actually have an accident about once every 20 years. And the interesting thing about that is if you think about that score those, lowest decile drivers are also the ones with the most severe accident so you know we do have that within our floow drive platform we also have what’s called Floow kit which is an S.T.K. So if insurance companies as an example had a mobile application and they wanted to provide an engine to record this type of information on their mobile application and be able to render information to the customer in terms of scoring and such we can do that as well. We also have floow custom and floow custom is a fully customized solution using data from pretty much any source, you know if somebody wanted to you know us to create a bespoke mobile application for them, we could do that using our Floow custom platform. And as I mentioned we also have floow Fleet which is a fleet focused white label telematics solution one other thing that we have too is underneath that we have I had mentioned our floow score but we also have 2 other products that can be layered into these one is the rewards platform which I had talked about which is a fully integrated online rewards program to encourage and reward safe driving and we also have what’s called Floow coach which is interestingly a telephone based personal coaching program which has been proven to improve scores and reduce accidents and claims. So it’s literally an outbound calling type of situation so yeah we’ve got a lot of different things that we could we can certainly provide. Tony: John I love this, the world needs this now is there anything that the average person in the audience listening to this right now, is there anything that we can do to get this act of what do we have to call the color congressman to be a little silly with the color and students company how can we get this more out there in the United States and other parts of the world. John: Sure-sure. So as I said we’re global company and we are working with many large insurance companies throughout the world, in fact I can tell you we’re working with a California based insurance company, we’re working with a Detroit based insurance company, some very household brand insurance companies that we are supporting, so I would say that the average consumer needs to bring this up to their agents. Interestingly enough, so this is once again me putting on my insurance hat and tightening it up a little bit, so apologies for the geekyness in advance. Interesting enough if you think about this there is a bit of a bias that an agent will have with this. So if you call your agent and say hey I want this you know there is an aspect of privacy and. So to put it out there people have a lot of opinions about privacy and if your agent particularly has an opinion that you know I don’t want to necessarily… I don’t want you to acquiesce this type of data to your insurance company, they may not offer it to you. Believe it or not I’ve sat in front of agents who said I’m not offering this to my customers because I know better because you know this is a violation of their privacy even though the customer has the opportunity to opt in or opt out. I digress but the entrusting thing is you know if customers were to actually go to their insurance company and say, “hey you know what I’d really like this.” You’ll start to see a proliferation of this and just to give you a bit of insight, 9 of the top 10 insurance companies in the United States are offering programs like this. So it’s out there it just needs to be looked into and sought out. Tony: I love it, I think it’s going to be a great help and one last the fast question, I happened to see that the floow got the H.R.H. Prince Michael international road safety award, I think that’s amazing. John: Thank you. Yes, very-very proud of that and actually Tony that to me and to into our organization really is the sign of what we’re doing here. Tony: This is the Tony Durso show just ahead the chat continues with John Krammer and Kevin Williams, the floow and trusting your gut but 1st it’s time for us to take a short break, see you back here in just a moment. [Breaks: And change starts, change starts now. Join us the Voice America influencers channel]. [You’ve heard that a majority of businesses fail don’t be a statistic get my book Free the vision map beat the odds for your… ] Intro: You’re listening to the Tony do your so show with key influencers We’d love to hear from you via email be sure to send questions and comments to Tony and Tony Durso show. Back to Tony and his guests. Tony: All right we’re back on the Tony Durso show, today shows with John Kramer and Kevin Williams, the floow and trusting your gut. All right and now back to the chat with our guests, we want to save lives we want to help people, we want to make people safer and smarter you know and we want to educate people to make better decisions when they’re behind the wheel and to have that type of a word and thank you for mentioning that, really it validates everything that we’re doing and actually I would even say a greater validation is you know when we see a customer go from you know one of the worst deciles of collection and we see them move up into a safer profile because it’s actually something that’s measurable and actionable and we can put a value on that and that truly could be the value of life. So thank you for recognizing that, understanding and mentioning that, we’re very proud of that. Tony: Fantastic indeed, once again this is John Krammer making mobility safer, I love the concept, it’s not a concept. I love the concept that it provides of safe driving and it’s almost like a little bit of artificial intelligence out there and it’s embryonic stage and it could help us drive so much better and saver. I like it, check it out everyone to website is the floow.com That’s THEFLOOOW.com and ask your insurance company and anyone else that’s involved in vehicles to see because it will make you and your family safer and of course I ready know being a driver all drivers think that they’re great and they’re wonderful. So how about if you help push this along to help your family be safe and your kids and their kids be safe because of course we as you know we’re all the best drivers in the world ourselves right, a little joke there. John: Well I’ll tell you there’s something to be said about hat so we did some research and in my former life and we found that the vast majority of drivers consider themselves as above average. And interestingly enough that’s not true. [laughs] Everybody can’t be above average, so everybody does have some opportunity to improve in their driving. Tony: Correct but they think they’re above average, so if only to help their family and their kids and their friends drive better this is something that can help because we certainly don’t want all these distractions there while people are driving machinery of several tonnage up and down the roads at high speeds. We just have to we have to something about it. John: Would you like a job, i love it. Tony: Thank you so much John, it was wonderful and yes sure we will put some of your commercials on our show, it was great, I really enjoyed it and please when you have an update or something additional or new on top of this, please come back we would love an update. John: Thank you Tony, we appreciate it and thank you so much for having me, it’s a true honor. Tony: My pleasure, it was great thank you and now we have Kevin Williams join us. Kevin is the global marketing in Operations Executive who has a deep understanding of new social entrepreneurship one of the founders of brush arrow. He recently appeared on Shark Tank leaving the tank with 2 offers on the table Welcome to the show Kevin it’s so great to have you on thank you so much Tony it’s great to be here I haven’t I am very interested in finding out what busting your gut is all about and I know there’s some really great stuff we’re going to talk about. What happened there with nobody’s going the beliefs of that but 1st things 1st haven’t I’d love to know how did it all start for you, what’s your backstory? Kevin: I have a traditional business background after business school, I started my 1st company back in 2006 and I managed to win this is prime competition which served to Rails my original plans but what it did is it me introduced to the angel community in the venture capital community in Washington D.C. that led to a series in Gage minutes in startup companies in the D.C. area. I was generally an Operations Executive that the board would call on to help straighten out a company that needed help, getting ready for a large round of funding and sadly sometimes I was the guy that they would call to shut things down, particularly in 2008 sort of range. What I really recognized going through that process and going through a number of different start ups usually start ups that had many-many millions of dollars that had been invested. That people had put a lot of money between behind ideas they hadn’t fully vetted out and they hadn’t really tested and I started to develop a thesis for how I might be able to test new business concepts, using social media and so I did I was a little bit tired of working for other people and. They started coming up with concepts for testing individual product ideas or business ideas using social media and spending as little time as I possibly could on, it sort of jokingly I started to call this the mini M.V.P. We hear about a minimum viable product has been a real hot topic for a number of years now but this is a minimum viable product, this is taking not actually a viable product but a product idea and putting it in front of a likely audience and seeing if they care, if they do care I have some data that I get rolling with and see if I have a real product in my hand. About the same time I bumped into an old C.E.O. of mine, his name Cline Archer he is still in the D.C. area and he had a license opportunity on this crazy continuously variable transmission that was hour by water but at the end of the day was a spinning brush and the spinning brush became brush arrow and I employed my methodology for testing and sure enough we put this idea in front of people and quickly discovered that the right market place for it was probably the automotive community, so it’s this brush that hooks up your hose and it helps you clean the wheels of your car as opposed to banging up your knuckles, you can use water power to keep your wheels clean. When we put this idea on Facebook and we had almost 7 percent of people who landed on our very basic landing page actually click on an Add to Cart button that button at that point didn’t actually go anywhere, it just went to sign up page for an e-mail and then we knew that we had something, we licensed the product and we started rolling with it. Tony: That is really interesting and you know a long time ago and I mean long. There was a similar product and I remember someone in the family getting that product where it was a brush or something that would spin from the power of the water hose and I’m telling you water got everywhere, it just lashed with high intensity and it was so powerful and strong, it was like it was just never used it now I’ve seen the videos and I’ve been through the brush arrows, I’ll let you describe it but it is so different than anything imaginable and you make people go this wasn’t invented before it’s so it’s such a no brainer sometimes but it’s such a cool product. Kevin: Yeah, I think it’s a great product, not to get a little bit geeky on it but there’s often a tradeoff in mechanical engineering between revolutions as an R.P.M. or force as in torque and what we realized is that we could produce. R.P.M. pretty easily with a straight of water but R.P.M.’s are not what you’re after, you really need force to clean and that’s where this piece of intellectual property in and it’s absolutely phenomenal stuff, you know to be honest, there’s a brilliant mind who’s behind it and it has to do with the folding properties and water but it does what it’s supposed to do and I am absolutely a believer in products that I can stand behind you never going to see me trying to sell something that doesn’t have intrinsic value. Tony: I love it and for our audience this is not an infomercial on brush arrow, but it is so cool and when you look at it from the standpoint of marketing and learns from what they’ve done which we’re going to talk about a little bit more there are lessons here to use in your business or anything and that site is brusharrow.com, check it out the videos this thing. It’s just a bad ass device, is just being that are especially those from…. my wife and I we have and we love washing our vehicles ourselves for whatever reason that it’s just the thing, it just seems to get cleaner and better to our standard when we do it ourselves and something like the brush arrow just completes that when you really get those rims as Brazier Kiki is a baby but I’m going to go back to you and have you tell us a little bit more about this and also tell us if this a virtual management, I would like to hear more of the story. Kevin: Sure well to be clear the brush Arrow isn’t the only brand we have, our objective wasn’t just to take one product and launch it although that’s really part of what we’ve done, it was to develop a framework that we could use to acquire other brands and successfully launch them in this new commerce that they were seeing these days. Develop the retail skills the direct to consumer skills, social media, logistics capacity, International capacity for international fulfillment, etc. I never been afraid of things that are complicated and that definitely one of my skills that I can I can roll through very complicated things and make some sense out of them. We developed a framework for investing in these concepts and they required several different components, one is that the product had to be in some way shape or form protectable, that means that it had an existing brand that had value to it or it had a patent set as this particular item did or some other mode or barrier to entry the next is that the product had some sort of consumable element to it. I have learned over time that acquiring customers only gets more expensive during a brand arc, so I want to make a life long relationship with my customers if I can and the way that I’m going to be able to do that is if the product has a need to touch the customer frequently. So in the case of the brush arrow it has the precious themselves which are very durable they do wear down over time and they need to come back to me to get more brushes accessories, we also developed a line of soaps that go with the product, so there’s that sort of consumable element to it as well. Tony: This is the Tony Durso show just ahead the check continues with Kevin Williams But 1st it’s time for us to take a short break see you back here in just a moment. [break] All right we’re back on the Tony Durso show, this segment of today’s shows with Kevin Williams who will tell us more about trusting our gut and now back to the chat. Kevin: Next products have to have what I like to call a universe of accessories so other things that I can sell along with the product that complete that customers need so in this case it’s microfiber towels or it’s extension ones, other products extensions that I can do and I think most importantly given the way that a lot of these e-commerce companies like ME market is the product has to have some sort of natural geniality to it. there has to be a story that I can tell that I can tell visually or I can tell through video that makes sense to consumers and makes them want to engage with the brand. The brush you have a dirty wheel, you have a clean wheel, it’s kind of great you have you can do a before and after, we have a cooking product line and in that case inventor behind the product is actually one of the white house cook. So the last 4 presidents have eaten off of that device and that’s a story that we can talk to, that this is a Michelin trained chef who works in the White House kitchens and he cooks chickens on this device, so you too consumers can get ahold of that device. Tony: The topic of our talk here is trusting your gut and I believe that that is where Shark Tank comes in because you left money on the table take apparently a good deal well, so I say apparently because I don’t know the deal but could you just tell us the whole thing, what’s that whole story? Kevin: I do want to clarify just a little bit because I cheat when it comes to trusting my gut, the Shark Tank story is a little bit different but I am a very data oriented person and I believe that we are in a unique period in commerce where there is so much information that’s available and can be obtained very early in a product lifecycle that they can allow you to make decisions that aren’t just based on your gut, they’re based on real information that’s coming from real customers that you can look at and really then feel comfortable with going with your gut. If that’s fair, in the case of shark tank that was an adventure unto itself we grew very rapidly become pretty started in late 2015 and was very heavily focused on direct response advertising specifically Facebook video advertising. So we developed content that has the before and after sort of screens I won’t call it informatial but it was sort of informatially, that’s OK and we started to get attention from people and some folks suggested that we applied to Shark Tank and we found some channels for applying to them, the whole process took almost 8 months, back and forth, interviews and videos and all kinds of things that you hear about these companies going through and right up until the end. We had no idea whether we were going to fly out and then they flew us out and then once they flew us out we had no idea whether or not we were going to film and we were on set for several days and had no idea and then we filmed and then once we filmed we had no idea whether or not we were going to air because they have a lot more episodes than they actually use not all the stories are good so you don’t know if you’ve gone through all of that agony and all of that stress only to have yourself end up on the cutting room floor somewhere. As far as the experience itself I liken it to being loaded into a rifle and shot down a hallway. You are all familiar with the show in that hallway, it’s too long and maybe in my imagination it’s gotten even longer, but I swear we are walking down for minutes and minutes. There’s shark tanks on either side and it’s raising for anybody who has ever been on a production set the lighting is very-very hot, so they keep the ambient temperature of the studio itself really-really low, so it’s about 55 degrees inside and the doors swing open and you step forward and there’s dead silence for a period of time as they get everything ready and then it just starts and I’ve spent a lot of my career in and out of pitches with investors and with boards and all kinds of things and I’ve never seen anything quite like this. They’re out there and they have 2 different agendas, the one agenda is that they legitimately know nothing about your business and I want to make this totally clear, they go to huge lengths that I can’t really describe to disguise your business from the Sharks, most people think that oh of course they get a briefing on it doesn’t make sense if you are a V.C. Of course you get a briefing on the business, you’re going to see No they don’t get anything disguise your name it’s completely cold. So they have roughly an hour to decide whether or not they’re going to make a significant investment in your company, so that’s important they need to get these details out on the floor as thoroughly as they possibly can. And then there’s the more important factor which is it’s entertainment they need to be firming they need to be engaging, it might be at your expense, it might be at each other’s expense but they have to come up with things that make them sound funny to the audience and engaging to the audience so they can build their personal brand and they’re all sort of stumbling over each other not stumbling something but they’re all sort of fighting against each other to get the limelight and you certainly don’t see it in the production but they’re all talking at the same time so I found myself in this very strange position where I had to say Excuse me Mr. Cuban can you please let Lori finish and you just have to manage them out there. And you have to get your message out 30 seconds pitch of what is this product? It’s a real viable product, it’s a real viable audience and there is there is value to you the share to do this you know the episode was in January 2018 when it aired. It was filmed in 2017, it takes a while for it to percolate system and it went pretty well for us, I think we ended up with offers from both Damon and Lori, that were $500,000.00 or 25 percent of the company individual offer that each was offering and then they did their thing where they were sort of battling against each other and we made the critical error and the critical error on the Shark Tank as everyone knows is you never leave the tank and we left the tank and when we left the tank everything went sideways, Robert got involved in the conversation and Robert is sort of the defacto car guy in the group. And he had a perspective on the device that didn’t really make that much sense, he had a memory of the sort of ice that you were describing Tony of water floowing through brush and water flying all over the place and it’s degraded the uniqueness of the product and created risk in the Sharks minds and that he had credibility within the group and meanwhile we were in the tank and we couldn’t go back in because of filming requirements and I could hear it going sideways out there and I wanted to scramble out there and say Robert No you’re wrong, you don’t want to be a jerk either, you can either be good in theory entertainment or you can be a bad guy entertainment. And if you’re the guy who starts yelling at the Sharks, guess what sort of entertainment you’re going to end up? Tony: That’s so good and Kevin I want to ask that there was no video because if you look at the video, it’s such a no brainer, how easy it is used, how simple. Kevin: This was sort of a nightmare too. If you watch it again it hooked the device up to a hose that was almost 300 feet long and it ended up with an air bubble in it and as I’m starting to demonstrate it there’s this panicked look on my face as the device just stops turning in front of all the sharks and I could hear the production team laughing but no my device is broken in front of the shark but they were so nice about it I really give Lori in particular credit she had clearly recognized exactly what had happened she rolled right through it she was game to go up there and try it and that that’s a good observation, that the two who gave us offers Damon and Lori were the 2 who actually tried it and they actually felt the force of it in cleaning and it is that sort of product that needs to be experienced in order to be converted. Tony: Very interesting. And how embarrassing for that air bubble. Kevin: Well we had for so when we left Damon rescinded his offer, I think Robert had really influenced him and Lori change the dynamics of her offer, it had gone from 25 percent stake or $500000.00 so $2000000.00 valuation to $250000.00 equity and $250000.00 as a line of credit at 7 percent which was remarkably precise for her just off the cuff. But that left the company with a valuation of $1000000.00 and you can see the agony on my face, I clearly want… they took some liberties with that today and they’re allowed to do whatever they want but you can see that I between my partner and I really-really wanted to take the deal, I’m the operator, I’m the C.E.O. I saw it as an opportunity to really accelerate our penetration into retail but before we walked out there we made an agreement we shook hands and we said that the most will take the most that will sell the company for this $500000.00 is 20 percent, we probably still would have taken the 25 percent in just the heat of the moment but when the valuation declined that much it just no longer made sense, we also had some information that we’re weren’t really allowed to talk about on the on stage involving purchase orders with Costco. So we had several $1000000.00 of orders that we knew was going to happen that we couldn’t really talk about yet,, so we knew the company was worth far more than that and giving away that much of it when the valuation was objective like quite a bit harder higher was hard. Now that said is we missed an opportunity and the opportunity was to broker a deal between both of them and this is dynamics and maybe we should have spent more time watching more episodes even though we watched hundreds. Had we been a little bit quicker on our feet and perhaps a little bit less nervous the right deal to me make in the deal that would have been worth it would have been to split the investment between Damon and Lori because then we would have had 2 of these guys on our side and Laurie with their penetration into Bed Bath and Beyond and Q B C and Damon with his sourcing expertise there could have been real value with having those guys involved in the company and neither of them would have had such a large chunk. Tony: I get it Kevin, it’s a very interesting story. So what happened to your company afterward? Kevin: There’s good and bad here. As we were chatting about a little bit earlier it aired in January and if you you know when you’re cleaning your Jeep and I imagine you don’t do it when it’s really cold outside, so that wasn’t ideal for us, it was fun to watch the spike of traffic to our site, we had tens of thousands of people on the site for those for the airings when they when they occurred and we of course sold quite a few units in that time, it gave us a great deal of legitimacy when we were talking with Major retailers, it certainly helped with Costco sales, we’re now entering our 3rd season Costco. Summer season short run from mid February until June but we’ll be in almost every Costco this year again, which is great. Also in the schedule in we’re placed in Wal-Mart right now as well, in talking to lots of other retailers and being able to whip out the Shark Tank, it really has, they are able to watch it, they get service a sense it. It’s helped. We also have a high brand relevance as far as our online sales we find that Amazon in particular, there are lots of people when they run across our advertisement advertisements just scoot on over to Amazon and do a search for our brand and buy the product over there. So that’s great. On the negative side the sharks and you all once the only ones watching the show, the Chinese were also watching the show and within only 5 weeks of airing, we had our 1st counterfeit version of the product and at this point we have 5 known factories in China that are producing pure counterfeit, and I want to make clear that this product is actually manufactured with parts around the U.K, from Germany, from Wisconsin and then it’s assembled in Salt Lake City. So it has an it has made in America origin on it and it’s not made in China, this is not our own factory that’s making it out the back door, these are actually new factories that are producing it independently and they weren’t just clones either, they just stole our copyrighted images, they stole our trademarks they even put our customer service number and patent numbers right on the packaging. So we found out about it because upset customers started calling us and it was horrendous that all of a sudden out of nowhere we were getting these calls about brushes shooting off and the things stopped turning and this one shatter and this one just smelled bad and whatnot and we could not figure it out. So we started buying our own product from Amazon and what happened is the Chinese had gotten their baked version of it into our Amazon product listing. So people thought they were buying a real one and were receiving cheap knock off of our problem and they did a natural thing it left a one star review behind on the Amazon and about 150 of those in a row. Tony: Not to bash Amazon please but this is exactly why my wife refuses to buy anything from them, she says just too many knockoffs and I don’t do all the shopping like she does and I’m going What knock offs and now you tell me this story is like oh my goodness. Kevin: It’s rampant it is absolutely rampant and it’s been enormously damaging to our business and other businesses like ours, I definitely have a love hate relationship with Amazon and I do believe that it is the winner in the on line marketplace for us but it’s encouraging news from the counterfeits and it’s been very difficult for us to make progress and clean it out. To date since airing we have taken down that’s from intellectual property perspective, so either a trademark violation of copyright or of copyright violation, 8000 individual listings on Amazon. Tony: 8000? Kevin: Yes I was looking at the numbers the other day, that’s not just Amazon, that is e-bay, e-bay is the worst by far but it’s e-bay international. So e-bay brazil or India, it’s individual e-commerce stores that are shipping directly from China, so they use in what’s called e-package which is tax payer subsidized postal rates from China to ship directly to U.S. customers. So they advertise our brand they price it super-super low and they ship directly from China. It actually costs… if I were to ship 1 of the products to you in California it would cost me around $5.00 to go through the postal system or Chinese counterfeiter to ship a fake version of my product to you cit will cost them $2.8. Tony: Kevin our audience must be wondering when they actually find, buy, obverse real product. Is that by only going to brusharrow.com? Kevin: It’s funny, hopefully folks are actually doing Google searches, you’ll see that our meda-data on our website says beware of counterfeiters. So that people are aware that counterfeiters are out there. At this point buying directly from us. Or buying from our Amazon listing and the brush arrow Amazon listings will show up as sold by brush arrow and ships by Amazon. So we keep inventory at the Amazon warehouses and we ship from there, we have been going through lots of tactical exercises to clean out counterfeits that were in the system but it was it was very damaging. So Amazon lives and breathes sales velocity and review ratings, so the faster an object sells and the higher it’s reviewed, the more likely it is to float above the rest of the film and be seen by consumers and when we started to get these negative reviews are rankings within Amazon sank, we still of course sell people who search for brush arrow but of people who are searching for wheel cleaner, wheel detailer, wheel brush, things like that we suddenly wouldn’t appear in the rankings anymore because Amazon viewed us as an inferior product because our reviews were so impaired. That’s been a long painful process to pull ourselves out of that pit and it was really quite sobering and I am an optimist, I think to be an entrepreneur you need to be an optimist but my optimism has been truly tested over the last few months. So that I didn’t need to go longer on the negative side than the positive because the positive outweigh the negatives I think. Tony: It’s a great product. If you go from the right company, I wonder does it does it work where you see this on social media profiles official, does it help to say but some work there so that people know that they’re buying the official brush arrow? Kevin: Yes we use that terminology definitely, we also on Amazon we use a new mark of authenticity where every individual unit has its own coded identifier that makes it very hard for fakes to sneak into the mix but that’s a very new program on Amazon and it’s taken over 6 months for us to get it into place, so we don’t really know how that’s going to play out but theoretically that should keep pace from creeping into the system and give consumers a greater sense of confidence but you should be concerned as a consumer, this is just it’s a neat product and it clean really well but imagine if it was a baby toy or a nutraceutical or something like that or I heard flotation device for disabled children recently that had knock off problems. Products like that could really kill somebody and there’s going to be a comeuppance with Amazon I believe. As this all gets figured out because they are a consumer focused company and they do want to have good products for their behavior recently has not been encouraging that. Tony: I thank you for sharing that and what is outstanding out of all this is your demeanor and just how you deal with that. Kevin: Oh I have to thank our customers as well, what we found we have customers who really-really do like the brand and they really enjoy the product and they go to bat for us. So these guys creep out now and again and our customers will comment on social media and say these guys are fake, you need to buy a real one, this one is a Junk. You need to try the real. So that’s the objective in a consumer product companies to build a following like that, where there’s reciprocal Trust. Tony: Thank you for that Kevin, as we finished on trusting your guts, is there any final words you want to say or do you think that we haven’t covered? Kevin: Well again I think I have an interesting spin on trusting your gut, I do trust my gut but it’s about being informed with having data in your hands and being able to make informed decision. I believe that the art of business is being able to make decisions with a lack of perfect information and that’s certainly true in my business, as with most others but I pay a lot of attention to the data that is available. Tony: Thank you once again Kevin Williams. We talked about trusting your gut, his website is brusharrow.com. And Kevin by the way if someone goes to the website and they actually contact you, if they want to give you some communication. Kevin: Oh absolutely, yeah there’s a contact that will filter through to me, contact@brusharrow.com, we’re a small company, we’re were virtual. When I was counting this morning, we have 6 full time staff and 4 part time staff spread over 5 states and 5 different countries. Tony: Kevin thank you so much for spending the time with us I very much enjoyed it. THANK YOU. Kevin: THANK YOU This has been great. Tony: And for my amazing audience thanks so much for listening, remember success awaits those who persevere and remain steadfast despite the odds. Be righteous join me on the next episode of the Tony Durso show. Closing: We hope you’ve enjoyed the. Show with his key influencers, be sure to tune in again next Friday 4 pm Eastern time 1 pm Pacific Time on the influencers channel.