Profit Minded

Art of the Pitch: The young entrepreneurs behind Fluzzle interlocking floaties on closing

Memo to garage inventors who have spent years pitching their brilliant idea but can’t find a retailer willing to put their product on the shelves: pay attention to Eduardo (Eddie) De Arkos and Clark Whitehead, a couple of twenty-something college dropouts from Sonoma County, Calif.

In 2012, the childhood friends decided to launch a watersports business making colorful pool-toyish inflatable tubes that lock together like jigsaw-puzzle pieces. Within weeks of filing for a utility patent for their unusual invention, which lets groups of friends easily hitch themselves together so they can float rivers and lakes en masse, the pair got a chance to pitch their idea to Big 5 Sporting Goods, one of America’s top sporting goods chains.

Less than 15 minutes after detailing their product for a Big 5 buyer in Los Angeles, Whitehead and De Arkos were celebrating their first order: a 3,200 unit deal that validated their gamble to start their own company with $6,500 in life savings.

Whitehead, 23, and De Arkos, 22, have since gone on to land orders for their $34.99 Fluzzle Tube (that’s the name of the product) from another dozen retailers including Costco. To find out how they’ve managed to sell with such success, Alizila managing editor Jim Erickson recently talked with the entrepreneurial pair, who seem like they’d be more at home bobbing around a sunny lake with beers in their hands than coping with the pressure of make-or-break pitch meetings.

Alizila: First, we gotta ask: What’s a Fluzzle?

Clark: I had a dream that all my friends were connected on this big raft, but they were kind of like individual rafts. When I was drawing it out in the morning, I just drew a puzzle shape pretty much, and that’s what a Fluzzle Tube is. It’s like a floating puzzle.

A lot of small business owners would be interested in how you went about selling the product. How did you get Fluzzle Tubes into the first retail outlet?

Eddie: Clark and I had been working on the project for about a month and we were waiting for our utility patent to clear. We were working with a buyer for a small distributing company down in L.A. and she happened to know an assistant buyer at Big 5 Sporting Goods. We got the buyer on the phone, and after she looked at our product on the Internet she asked us to come down to L.A. a few weeks later.

You had no business experience, no experience drawing up a business plan. How did you prepare for the pitch?

Clark: I didn’t really prepare too much, we just grabbed everything we had about the product, so we could tell them about it, like pictures, stuff like that. When we got down there, we went into a room, and we waited for a little bit. They take your name down and everything, and then they call you in, and we just had our product, blown up, on the table. [The buyer] looked at it, and we told her about it and told her about ourselves. I also talked about my sister, who went to the same college she went to, I thought that would help make a personal connection.

That was the game plan pretty much … it was a really short meeting, it was like 10 minutes, max.  She understood the product—because it’s so simple, you know, it definitely fills a niche—and she wanted it, and talked about how many she wanted to order and at what price.

Did you get any advice from anyone before the pitch?

Eddie: I actually did prepare. We spoke to a handful of people about what to say and what not to say.   We had numbers in mind and a game plan as far as what we would do in certain situations, if [the buyer] said they wanted better margins. As far as business experience, I had gone to business school. I had drawn up examples of business plans. But not until after that meeting did I actually write up a business plan for this business.

Were you nervous?

Eddie: Before we went in, I was super nervous, I was sweating. This was the point where if she said “yes,” we would drop everything we were doing, including school, to focus on the business. I was in that little conference room thinking “this is our chance.” [But] when [the buyer] came in and once we started talking to her, she was a really easy person to talk to and she loved the product … When we left the office, we were both so excited we were ready to scream.

Clark: We went down to the beach to a really nice restaurant. We had these celebration cigars we had been given, and we smoked those.

Eduardo: (Laughs) We tried to smoke them. That didn’t work.

Did you wear a suit and tie? Did you remember to zip up before the meeting?

Eddie: We were fully suited up with our dress shoes on. And we looked at each other before we went in, like, are we all right? I had my lucky shirt on.

Clark: We were looking sharp.

Have you since pitched anybody else?

Eddie: We’ve pitched to pretty much every major sporting goods store for the 2014 season and they’re all interested, and we’re going into Costco in March. We’re pretty excited, next year is going to be a big year for us.

So you’ve continued to have to make pitches to all these companies?

Eddie: The way it’s worked for us is, after we got Big 5, it was easier to sell to others. I can go to Sports Chalet and say “hey look, we’re in this [competing] store,” and they’ll say “ok, then we’ll consider carrying you.” Once you send some product samples it’s usually pretty much a shoo-in.

What advice do you have for other entrepreneurs about how to handle a pitch meeting?

Eddie: One thing that Clark said about the way we approach buyers on a more personal level - a lot of the sales calls we saw when we were waiting is, people would go in there and just throw all this product information at the buyers, and tell them how they’re going to make all this money off the product. We’d go in there and really talk to the person, kind of see where they’re at in their day, but also bringing in the product in a way where the questions we ask aren’t questions they can respond to by saying “no.” And we’d always leave on a personal note, even if it’s just suggesting we go have lunch or dinner together or whatever.

We tried not to be like all the other sales reps who come in and pitch cookie-cutter ideas. [The Big 5 buyer] told us one of the things she liked about us was that we’re young and we’re out there actually using the tubes, and our friends are using the tubes. We weren’t just some executive high up in a company, we really know what people want, we can tell what’s actually going to sell because we are out there in the real world.

So it helps to have hands-on experience and passion about the product.

Eddie: Exactly, passion about the product.

You found a Chinese manufacturer on the Internet through Alibaba.com. What are your reasons to manufacture overseas? What do you tell people when they ask why you don’t make the tubes in the U.S.?

Eddie: You need to manufacture where it’s cost effective and Clark and I from the beginning knew we had to go overseas. People don’t like it but it’s the cold hard truth.

Clark:  The manufacturing capacity just isn’t there domestically, there’s no way they can make as many as we need them to make, in the amount of time we need them to make them in.

You actually went to China to meet the manufacturer.

Clark: I just didn’t want to order anything that didn’t turn out the way we wanted. The cool thing was, we worked with this master technician dude, and he was kind of adding his own touches to the product. A couple of times he looked at what we wanted and told us why it wasn’t going to work.

Eddie: That’s not something Clark or I could have done on our own. It was a great way to perfect the design.

Any new tube-related products in the pipeline?

Clark: I definitely want to make a [beverage] cooler that interlocks with the tubes.

Eddie: It’s really exciting watching Clark come up with different accessories to go with the tubes, like floating basketball hoops and other games.

Clark:  We’re coming up with a giant floating community, called a flotilla, that you can build with different puzzle pieces. We call it social wet-working.

Originally published on Alizila.

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