Transcript

#35 - King of Kickstarter

Peak Design are a brand that makes some really fantastic products. There's a lot of good things to say about the Peak Design everyday backpack. I don't think I've ever been this excited to talk about a bag. This is the Peak Design travel tripod. It has a lot of unique elements that I've never seen on a tripod before. This thing is so hot right now. Your granny is probably talking about it. Every day backpack from Peak Design's really, really fucking awesome back. Tons of innovation. Tons of things to be like really celebrated. If there's awards for bags, this should win all of them just because it's like game changer. We are the company that's earned the second most on Kickstarter in our collective history. It's a little north of 30 million dollars. Going back to 2010, that's when I quit my job. I was a construction engineer and I'm living on my savings with about 25 grand. I did like a four month walkabout when I was twenty five. I went to India and Southeast Asia and Australia and New Zealand I had a camera with me the whole time. A real pain in the ass to carry with me because it's on a strap and it's banging against your chest. I just came up with this idea. It's this clip that clamps onto a backpack strap.

And then your camera is immediately accessible, totally hands free, locked into your camera strap. When you need it, push the button, pull it out. So we totally solved that problem. To this day, we sell millions every year. There is nothing as sweet as that first Kickstarter when the money comes rolling in and people are saying, I like that idea. That's incredible. I just sold a thing that I haven't even made yet to a guy in England that I've never met. Right. This is magic. God, the internet is cool. you got the friends and family email that goes out and that's the extent of the marketing that I did. I mean that is the sum total is I emailed my friends and family. You know, frankly the whole entrepreneurial side funding a business where you go out there and you raise money and you you ramp up the stakes did not even cross my mind like, ooh, should I raise money for this? No, it's ridiculous. I'm gonna make a fucking thing. You know, last year I think we had an average of thirty eight employees and we did somewhere between sixty five and seventy million.

Five million is not enough. Ten million dollars. Fifteen. Twenty million dollars. one or two people in a bedroom actually the threats to these like giant multi-billion dollar companies because you have creativity and you have nothing to lose. Add another zero to that price, buddy. Add two more zero. First. No.

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Cool. So Peter from Peak Design, how are you? I'm doing just fine, man. It's a it's a new year. We're ready to rock. Ready to go? Okay, cool. I was telling you right before this, these are my favorite types of interviews where we just met. I don't know your full story. I know enough to know that it's interesting. But I don't know what are all the details. And so I'm gonna be discovering it for the first time because in some of these interviews I already know the and I'm just trying to get the greatest hits out of the artist. I'm trying to get you to play your your best stories that I already know. In this case, I don't know exactly what they are. We'll be figuring it out together. Fair enough. I like to play that greatest hits album myself, no problem. And so the reason I think this is interesting is because you make a product that is very relatable. that I want, that a lot of people want. I think your background was kind of interesting where you weren't just one of those people who said, I want to start a business just for starting a business's sake, necessarily, it sounded like. You've had phenomenal success on Kickstarter. So give people a sense of two things. What does the company do? And then the second thing is give us a sense of scale. I like to talk about, you know, what you guys have achieved because really we're gonna work backwards and say, Great, how'd you start?

But if people don't know what you've achieved, they'll tune out within five minutes because they're like, I don't know why I should care. Why should they care? Well, let's see here. Scale. We are at present, I think the company that's earned the the second most on Kickstarter in our collective history, somewhere a little north of thirty million dollars on Kickstarter, maybe maybe thirty two or so. Who would be first? Pebble. Um Pebble was first three g three campaigns, twelve million, twelve million, and twenty million dollars on their campaign. Smart watches, who knew? Yeah, who knew. I guess Apple and Samsung also knew. In any case, I I think with our with our twenty twenty Kickstarter, which it should be no surprise to people. Uh we're gonna be doing another Kickstarter in twenty twenty. I'm very optimistic that we're gonna take that spot. I think our next product is going to be certainly the most widely adopted. I think one of the coolest And no, I can't share with you what it is. That's all right. It's gonna be a lot of fun. So okay, so tell people what the what does the company do? What do you guys make in So g going back to twenty ten, that's when I quit my job. I was a construction engineer and for about two years I'd had this idea kinda tinkering around in my head after I did like a four month walkabout when I was twenty five. I I went on a leave of absence. I went to India and South East Asia and Australia and New Zealand. I had a camera with me the whole time and it was great because I was you know, I fancied myself a photographer and a writer and

having that little semi spiritual journey as a as a young buck. And what is a walkabout? What is it w how does that actually work? You so you take a l you take some time, you travel, and you do what? Well, I think quite specifically you don't make a plan. You j you just go figure it out. So I bought a one way ticket to Hong Kong and arrived at six AM and had literally no idea what to do. It was kind of weird because I'd never asked it. I didn't like

And the funny thing is is it dawned on me for the first time as I got off the train, I was like holy shit, I don't know what to do.'Cause it was also six AM and there was no like you can't check in to a hostel or something like that. So anyway. And you decided to do that because what? My buddy Dave was three years older than me. Coincidentally he's my CFO now. And he had taken five leaves of absence from Ernst and Young where he was working. And it was just a cool thing that he did is he'd just go explore the world. Right. And say it doesn't if you don't hire me back, that's fine. But I'll you know, I'll come back if you got a job for me. And it just worked for him. And so that was kind of the confidence and the inspiration for for traveling. Once you experience that. You know, I'd I'd studied abroad in college and went to Europe for my first time, first time out of the country. And it was clear that travel is just it's so full of novelty. You know, one of the coolest things in this world is doing something for the first time. Right. And travel is the opportunity to do that nonstop. Right. I love it. Yeah, I studied abroad and it wasn't really a tough decision on my part, but I was trying to convince friends to do it. And they were all coming up with reasons not to. And I just told him, I said, Look, look at the year ahead of us

The people who tr studied abroad won't shut up about it and none of them regret it. So like what are the odds it's really gonna be like a bad thing? We're probably gonna end up just like them not shutting up about it, not regretting it. That's exactly what happened. That is exactly what happened. It's uh it's you're batting a thousand across that every time. So you're on the walkabout. Yeah, and I had a camera with me the whole time and it was a real pain in the ass to carry with me, because it's on a strap and it's banging against your chest and you look like a tourist. You are a tourist, but you know you're wearing nothing. But it's essential if you're a photographer, you have to have it with you. So I just came up with this idea, which actually doesn't necessarily make you look like too much less of a tool, but is incredibly useful. It's this clip that clamps on to a backpack strap and then your camera is immediately accessible, totally hands free, locked into your camera strap. When you need it push the button, pull it out. Right. And to this day, you know, I think Peak Design makes a hundred and twenty different SKUs at least. We still sell hundreds of thousands of capture camera clips every year. And yeah, almost ten years running now. It's just a fantastic product. And people used to put this just around their neck, right? You just hang your camera around your neck, this sort of heavy DSLR camera around your neck.

Well, and and I'd say certainly that's still the most common way people do it. Of course, at the time I was you know, when I was twenty six, I was like, No one is ever gonna use a neck strap again. We have revolutionized the world and in retrospect a little bit more more humbly. It's like well The thing is it's actually kind of a niche case. In that niche case, it's an excellent product, but it's not the be all end all. And that realization came soon enough, and actually that led us to our second product, which was a camera strap. But guess what? This one solved the problem of you know what's a real pain in the ass? Removing camera staps and putting them back on. It's a ridiculously complex friction mechanism that is hard to figure out on your own. So we totally solved that problem. And camera straps Again to this day. are our very best selling product. We sell millions of camera straps every year. And so now we've got clips and now we've got straps

And we're chugging along about four years into this business, and a very well known photographer named Trey Ratcliffe called us up and said, Hey You guys are solving all the problems in photography and you're doing it in cool ways. I want to make a camera bag with you guys. Okay. And so given that this guy was gonna throw his considerable reach behind it, we endeavored to design a camera bag. And that was, you know, we were not bag designers. But we took the exact same fresh approach to making a camera bag that we did everything else, and we said, Well, what are the actual problems? And that's what peak design I think has been really, really good at over the years is truly discerning what the actual problems are, not paying attention to the gimmicks, and then just executing beautifully and elegantly on those problems. Right. And and being very clear about that in our marketing. Here's the problem. This is why we did it. I think it looks nice.

What do you think? Wow. I like the way you said that. And I like the principle, but I like the way you said it more because I found that when I do these interviews, there's like two things that will just stick with me from each one. And I know that's one of them. And it's not gonna sound warmed up. It's not gonna sound profound, but to me it sings in because the best principles tend to be the simplest ones. If you can actually drill them into your head and stick to it and not get distracted. And it sounds like that's what you guys did. So you go from construction engineer, which I don't know exactly what that means, but I'm imagining yellow hat on you. I don't know what I don't know if that's true. You got a job. And the first thing you made was this the clip. How do you go about making a Product. Where do you like you don't you don't know how to do that. That's true. Uh I did not know how to do that. And I I look back on that period of my life and I I think I know I would know what to do now much better than I did then. But whatever I did it worked. And what it what it was was I first made crude prototypes. I mean really ugly things out of plastic and wood.

to prove the very basic concept. And I was like Yep. You can hang a camera from your backpack. Right. And then I used a tool that I'd gotten pretty good at from construction called SketchUp. SketchUp is a three D CAD modeling software, but it pretty much only handles right angles. I've used SketchUp. It's like the kind of beginnery thing, right? Is it like it's kinda like it's not like AutoCAD. It's like

It's it's not solid work free. Is that why I used it? It is free. Okay. You can pay for it now. And it certainly has broader application, especially for architects and things like that. But I took that simple product and and made it do curves and made it do angles and certainly a great tool for for kind of my conceptual three dimensional design of what this thing might look like. And so even though it's not a mechanical engineer's program of choice by any stretch, I maxed it out and was able to crank out three D printed prototypes and just kind of further refine the concept. And on a hiking trail one time I met this probably sixty year old dude, old school hippie who has got a little compound outside of Auburn. And I told him about my camera clip and He told me that he was a machinist and that he would make a prototype for me if I came and visited him. Okay. So I went up to Auburn and stayed in his guest trailer. And at this point are you thinking this is a company or you're just like I'm making this clip for fun

What's your what's your mindset at that time? Okay, so I don't think I was thinking that it was a company. I was fixated on the product itself, but I had every belief that this product was going to pay the bills. I just thought it was so damn useful. Right. That it was gonna pay the bills. And I'm living on my savings. I I quit my job with about twenty five grand in savings. And you quit to do this, you to do this. You told your boss, you told your family and your friends, you're like, I'm gonna make this camera clip. Yeah, what'd they say? Man, you're crazy. I recall encouragement. I suppose but but it was it was very much a solo journey, you know. I think that you know people will cite bravery or something like that. I kinda push back on that. You know, twenty five year old dude with an engineering degree. Right. And twenty five grand in my pocket. Like

the worst that was gonna happen is I don't have twenty five grand in my pocket and I go be an engineer again. Right. You know? Yeah. It didn't I I wasn't super out there on Trevor Burrus, Jr. You were realistic about your risk. You know, frankly the whole entrepreneurial side of of funding a business where you go out there and you raise money and you you ramp up the stakes right away or you I mean you're not gonna get debt financing when you don't when you don't have any to show, so that's not even an option. But it didn't even occur to me. I was like, I'm going to make this thing and Then I am going to sell it. Right. That'll be the money. That would be the money part, and I'm going to sell it for more than I made it. And that's all there is to it. It did not even cross my mind like ooh, should I raise money for this? Right. No, it's ridiculous. I'm going to make the fucking thing.

And then y'all as Kickstarters, right? You done thirty million and kickstarters and people say crowdfunding, to me this is like you're pre s you're selling your product. You're just selling it before. You're saying, Hey, here's what I'm gonna do. If you're interested, buy it now. I'll use that money to make it. It's not donations or equity in your company, right? No, it's not donations, not equity. And you're also I think done correctly, you're not putting it up there to say hey world, I made this thing and if you tell me that it's great. I will I will go and go out there and complete it. I'm doing this. Kickstart it. Launch this idea and and give that cash up front. It's actually a Perfect exchange, right? You're giving away a little bit of margin for cash up front. And they're getting the product for cheaper and they get to be the evangelists and have a closer personal connection to it. Kickstarter definitely didn't intend for there to be a ton of product companies that are going out there and selling million d of dollars worth of stuff. They intended for

artists to say Hey, I want to make a cool thing. It's gonna cost five thousand dollars for me to produce but if you guys pay for it Ahead of time, I'll produce it. We kinda flipped the model on its head, as did s the ear other earlier Kickstarter successes, but obviously that's what's really propelled Kickstarter.

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And now they've come out with teams. Just help teams. chat, communicate, and and work together. And I think it's awesome. All right, great, let's get back to this episode. Right. And so you this first one you did a Kickstarter with. Yeah. Why'd you decide to do that? Somebody said, Hey you should sh you should do a Kickstarter or where did that come from? Like three people within the course of one week in January twenty eleven because I I had no business plan. Right, mind you. I was gonna make this thing and I was confident that I could get people to buy it. But as far as selling it, I was like, I don't know, I'll figure that out later. You know, had Kickstarter not come around this whole thing would probably be a slightly different story. I'd be talking to a construction engineer who had his own very cool clip.

Wishing that that the end of the day would come. So three people recommend hey you should do Kickstarter You don't even know what this is at the time. But I you know, I check it out obviously and it's like oh no brainer, this is what I'm going to do And then it's like it looks like I have to make a video. And so I made my first and made and edited my first video. Right. And the funny thing is is uh it became the second most funded project of all time ever on Kickstarter at the time. And I gotta say, man, I'm sure this sounds cocky, I'm sure it sounds arrogant, but I wasn't the least bit surprised. Right. I thought it was such a good idea. And I looked at the other projects that it that had made that had done uh better and I was like man capture is

Way more useful than that stuff. So I think this thing is gonna kill it. And it did. It totally did. And it was a dream come true, man. Like Th there is nothing as sweet as that first Kickstarter when the you know, the m the money comes rolling in and people are saying I like that idea. It's just such affirmation of everything you've been working on. Right. And it's a really Do you remember like that morning when you st you know you're waking up or you're you're seeing the orders come in? What was that w w where were you doing that day? What what was it like? I was kind of borrowing desk space. in a little six person company that was called Plume, which would eventually become Pax and Jewel. Okay. When they were six people. And I I was hanging out there, I pressed go on the kickster. I'm like, Well, see what happens. And I think it took like ninety seconds before some dude he couldn't have even watched the whole video, but some dude in England, just a random person, back to the project. And I was like, Holy shit.

That's incredible. I just sold a thing that I haven't even made yet to a guy in England that I've never met. Right. This is magic. God, the internet is cool. You know? And then they just started rolling in. Of course, then you got the friends and family email that goes out, and that's the extent of the marketing that I did. I mean that is the sum total. Maybe I posted on Facebook, I mean twenty twenty eleven. Yeah, Facebook. And so it just got picked up by bloggers or or wh what was the spread line? blog was Gizmodo and it really it really rocked. Did you do anything, you know, either intentionally or unintentionally to help that spread? Did you have like really good assets or uh you know like Nope. Nothing. Nope. Your Kickstarter video was good, like now that you look back on it, are you like that was a good one or you cringe when you're hysterical. Oh it's it's it's it's actually beyond cringe. It's into it's into just laugh laugh country. The cringeworthy ones are like years two through or maybe like three and four, where you're like, Oh, we're good at this now. And you you put something up there and it's like It's like oh this is emotional. It's g this gets at the

At the heart of camera carriage. Yeah, exactly. Exactly. Those are the ones where you're cringing because you're like you know, you're like oh God, you're so amateur. Right. And now we've settled into something where I feel confident that we do know what we're doing and that and the products and also the marketing products in the collateral we put out are truly dialed on on kind of a a global platform. Right. That first Kickstarter does how much? Five, six million, something like that? No, the first Kickstarter did three hundred and sixty four thousand dollars. Which was good for second place of all time. And then the next Kickstarter we we did it was two hundred and fifteen thousand, but it was like a twenty day campaign. So in my mind, because the dollars per day were twice as much, that was a better campaign. And then the next one after that was capture version two. Same damn thing. Just a fair amount better. That did like eight hundred and sixteen eight hundred and eighteen thousand. And then we did slide and clutch, which are basically camera straps. Which is kind of like our second Kickstarter had been camera straps, so

Straps V two. That did eight hundred and sixty eight. And in the meantime, we of course like we had developed international distribution because when you go on Kickstarter, random ass people throughout the world will be like, Hey, I live in Croatia and I would like to be your distributor here. And Y you go prepay? They're like, Sure. Like Oh great. Fantastic. Let's do it. Right. We just say no more. Yeah, exactly. We've legitimately grown our distribution that way, you know, from all these people who started super small.

And now they are writing Peak Design into the w it it like Peak Design has become the anchor tenant of their distribution companies. That's the case in in Hong Kong, which manages a ton of different Asian countries. That's the case in in France, there's the case in the UK. So it it feels really good. These are not retailers, these are distributors. So who is this person? They buy from you, then they sell to the to their country. And in some cases they're selling to a network of retailers, right? It's the middleman. We can't translate into Czech. We have no capacity to understand the Cze market. They do their boots on the ground there. So We sell them a hundred dollar product, we'd like to sell it to them for forty bucks. So that keep that in mind. These are the kind of details and information that people I think it's important to know. They would like to have what's called sixty points of margin to work with there and go turn that and they'll probably sell it you know, they'll they'll take twenty bucks from that hundred dollar product and and the retailer will get forty. There's a lot of money, a lot of the value of a product goes into the price of that resale. Which is of course why direct to consumer is is is

For you guys, which one is are you guys fifty fifty? Is one is direct to consumer a bigger part of your business? wholesale is larger by volume of sales, that is. If you were to include Amazon, the website and Kickstarter and eBay for our for our secondary market, just a little bit larger in terms of revenue. Gotcha. Yeah. And so for you guys, you start adding these channels, I'm sure, sort of organically, right? People reach out, oh this is a good idea, we should do more of that. Why aren't we on Amazon? We should get on Amazon, that sort of thing. Is that how things evolved? Yeah, absolutely. The notion of the the premeditated business where you sit down and you formulate your business plan. I don't know, maybe that does exist, but from my experience, being good at business.

This is about being good at reacting to what's six inches in front of your face. You gotta remember that proactivity is kind of a double edged sword because you might think you're being proactive, but you can be just being inefficient. meaning you think something's gonna be a good idea, so you invest a lot of time, effort and energy into that. And in retrospect, Monday morning quarterback says like ah we didn't you know maybe we shouldn't have gone for selling to third party retailers and letting them sell on Amazon. That that kinda just ruined it. So I don't know. There are all sorts of situations where I think reactivity is every bit as wise as proactivity. Right. Um and it certainly sets up for the natural tendency toward laziness that most humans have to be a The balance there, right, is if you're gonna be highly adaptive and r responding and reacting to what's coming your way. You still need to do some proactive things to like

create opportunities to to get things to just kick up the dust and let some new things come to you. So like the Kickstarter created a whole bunch of opportunities and then you reacted well to those. And so how do you I guess to h what are the things that you proactively do to just sort of create some action, k kick the dust up a little bit. Well we only do one thing and that is design great products. that and and every year we will have designed a great product and that I mean we're a product company. So d doing other ancillary things like you know there's a lot of product comp like take away For for example. We are not like away. They are they're a marketing company first. They are selling a brand and a lifestyle first. We allow our brand and lifestyle to follow behind on the on the on the heels of the product. The actual away suitcase is it's a totally fine suitcase, but it's nothing at all special, really. It's it's essentially a white labeled uh suitcase out there from any suitcase manufacturer and they stuck a nameplate on it and got a bunch of models and and and well known people to say this is a brand.

Right. And that's not what we do. We I I I totally respect that as one model of of doing business, but We are a product company. Yeah, to be conscious of, right? Let's say there's some strengths with it, but what are the weaknesses? Well I think I think it's rather I think that people are a bit fickle when it comes down to it. I mean, there is brand loyalty that exists and that is a real thing and and and it's a very important thing. But if you don't actually create innovation. I think that competition will eventually eat your lunch because they're gonna outbid you on the digital ads. And when it becomes a race of who's willing to throw down the biggest checkbook and get the most play

across the digital landscape, I don't think that's territory that we certainly don't want to be in. We'd rather be able to come in with a clearly superior product, not have to spend very much on marketing. And let the product market itself. Right. What do you guys I read a stat It's a couple of years old now, but I read a stat that was twenty sixteen. It said You guys had I think eighteen employees at the time. I don't know how many do you guys have now? And it said, Hey, the these guys are doing, you know, s something like twenty three million in revenue on eighteen employees. Million dollars ahead in revenue or a little bit more than that. And I thought that was pr pretty remarkable. And I I love that stat. I always pay attention to the sort of the per capita earnings of a company.

And is that something you think about or did you sort of architect the business in a way to be sort of small footprint on the number of people it takes or m or dollars it takes to build. Do you think about the sort of the revenue per head Uh, only only retrospectively, only like it's kind of a fun thing to look at after the fact. And it re remains true. You know, last year I think we had an average of thirty eight employees and we did somewhere between sixty five and seventy million. So we're almost at two million dollars in revenue per employee. Right. And the business has b you haven't raised money since then, right? We talked about the Kickstarter, so you guys have been bootstrapped the whole way. Bootstrap the whole way. What keeps the overhead low and keeps it keeps it thin is that We don't we really don't want to hire new people. We only do it when we're bursting at the seams. And and there's all sorts of good reasons for doing that. I think the the the most important is because we don't want our culture to experience any kind of shocks to the system. Right. You know?

This is a a a family that's kind of grown up over time. And we can add, you know, five to eight people per year At infinitum. without affecting our culture and and the larger we get, the probably the more we can add. But slowly. that will allow it to to maintain itself. And that's the most important thing. Like at the end of the day, the point of peak design the point has never been about making money. That is a result. The point of Peak Design is for the employees of Peak Design to enjoy their lives. That's why we exist. So not even for the

To make products that people love. You're saying it's not to make making products that p that people love and doing right by the customers are things that we enjoy doing. But it is not the point. Like when I when I searched myself, did I did I quit my construction job to make other people happy? I didn't. I quit my construction job to make me happy. Right. And hopefully that's the reason that everyone gets into business. Is that you think there's an opportunity for greater fulfillment in your life. And happy's kind of a weird word, you know, m I I do think the word like fulfillment is probably a better word, yeah. A better word. But it was somewhat controversial with within peak design to be very Upfront and brazen with that as like no, the purpose of peak design is so that we can be happy people. Right and and there some of the people are like ah, but that sounds so selfish. And you can call it selfish if you want. To me it is more honest, yeah than it is selfish. Yeah, I joke about this a lot, which is Companies.

By law, essentially, uh depending on what type of company you are, you're incorporated as your job is to maximize shareholder value. It's the actual requirement of your of of your that's the if we're talking about mission, that's the required mission for most companies. They state that their mission is to make the customers happy. They probably honestly Are trying to do what you're doing. Yeah. And then the the sort of the the final you know lie or or hand waviness that that happens is is then talking about making the world a better place. Um you know, just tack that on at the end. And it's funny you say exactly what you're saying. At at our company, I told the team exactly this. I said, We're trying to build the company that we want to work at. Uh-huh. That's the whole thing. That's the whole thing. And in order to do that

We're gonna need to What's the type of company we wanna be at? We wanna make awesome products that we find inner interesting and innovative and scratch our creative itch. Hearing their feedback it matters to us. And we need to make money so that this whole operation can exist and we can have an awesome workplace with awesome people and hire the best talent. And that's what this is about. And it was a very foreign thing that I was telling them that seemed Like the only logical thing to me at the time. Mm-hmm. I certainly agree. And I'm really proud of uh of us for ar articulating it and And for the rest of the team ultimately being okay with m you know, us getting very public about that. Right. I will tack on that that last part which you mentioned, which I think frequently is hand waving. Well, first off, we became a public benefit corporation. So Yeah, explain that what that is. So basically instead of being we're a C Corp

And instead of being beholden to maximize shareholder value at risk of being sued by the shareholders, which in the case of Peak Design isn't a very big risk because I'm the only owner. Right. But still from a s kind of a structural perspective. Or a spiritual standpoint even, like the we wanted to make sure that the point of peak design has nothing to do with shareholder value and has everything to do with upholding our mission. Our mission and our purpose. We we kind of we kind of delineate the two the purpose for us to be happy. The mission is six different points, including build the best thing succeed at the expense of nobody, offset our environmental impact, use our voice to expire positive change, put happiness over growth. But the part about offsetting our environmental impact and then using our voice to inspire positive change is really what drove the thing I've been working probably the most on, which is a new organization called climate neutral. Right. And so just to explain the mechanics first. So you said you're a C Corp, but you're public benefit company, which which means what what is what do you do if you're an entrepreneur who wants to do this? How do you do that? When you file with the secretary of state, you have to make an election to be a PBC, public benefit corporation. You can still be an S Corp. Or C Corp. I d I don't know if L C I I would imagine L C works as well within that. But then it's just, you know, about your operating agreement and things like that. Um

And that allows you to not Adhere to the maximized shareholder value as the core tenant or requirements. To my knowledge it is, but I think it would s stand to reason that it has to be some specific public benefit. You exist for the broader shareholders, which includes the public that we all live amongst. And so you have your company, that's Peak Design, and now you have A new entity, is that right? It's a new entity. It's a it's a non it's a five oh one C three, it's a nonprofit. I'm the founder along with a guy named Jonathan Cedar, who heads a company called BioLite, the CEO of of Climate Neutral. His name is Austin Whitman, and there's about five people working for the org right now. And so what are you trying to do with climate neutral? Climate neutral is An organization that owns a label called Certified Climate Neutral. And when you see certified climate neutral on a product, it means that the brand displaying it has measured their entire carbon footprint.

All the way down to raw materials. Reduced what they reasonably can, and then critically offset the rest. And it is all about the The fact that the conversation about climate change is what it is, and businesses sit there and continue to wring their hands and say, Oh we We hope that by twenty fifty We will have reduced our footprint or like we're gonna straight line our reductions between now and twenty fifty without actually taking any concrete action is absolutely abhorrent to me, especially when I

understood finally what Peak Design's carbon footprint was and then how much it cost to eradicate. And how how'd you do that? How did you figure out what your consultancy for forty thousand dollars which was a lot of money. And I wasn't too happy about having to pay that. That led to part of climate neutral, which is the fact that we'll measure your footprint for free with a tool that we're developing along with some of the world's best carbon L C A experts. So we've handled that part of it. Right. And then the other thing is that what'd you learn? So they you pay forty grand, they did it in an analysis. And what did they give you back? What were you surprised to learn? Well at the ten thousand dollar mark, they had done what's called a they had used a tool called the scope three evaluator, and they ask you How many dollars did you spend on metals? How much on plastics? How much on air shipping? How much on sea shipping, et cetera? And they said, Okay, your footprint is about sixteen thousand seven hundred tons. Plus or minus twenty percent. And this was at the ten thousand dollar mark in the contract. And and I was like, Okay, well, what do we do now? It's like well Now we're gonna do the the the deep dive analysis and we're gonna knock on the doors of your entire supply chain and uh get their energy bills and find out their proportionate amount. It's just like oh wow.

That's gonna take up the rest of the year. Right. And that's gonna cost an additional thirty grand. I see why it is. Like that's an insane amount of work. I was like, can we just can we just round up? Yeah. That twenty percent? And call it good? And they're like, Well what do you mean call it good? Well, we want to offset it all. And did you think okay, sixteen thousand plus minus twenty percent, is that horrible? Like I wouldn't even know how to I don't know how to interpret that. I had no idea, but I d I did know this. Well what's the how much does it cost to offset a ton of carbon? And the average price to offset a ton of carbon. These are verified offsets.

by a third party auditing agency. That doesn't mean they're absolutely perfect. Each individual offset subject to a margin of air, a certain amount of risk, but taken as a whole, this is an audited group of carbon offsets and and and and you have to look at it as a looking at the whole. The average price for an offset is three bucks a ton. So you take sixteen thousand seven hundred You round up by twenty percent, twenty thousand tons of carbon. And this is on About thirty million dollars worth of business. That's what we did in twenty seventeen. Sixty thousand dollars. Yeah. Could cover half the footprint. Yes. Yeah. And I like I was pulling my hair out with like wait a second, wait a second, there's all sorts of things about this that are just lunacy. First off, the cost or the the notion that that doing something which gets you know to a closer level of precision than twenty plus or minus twenty percent.

That's total waste of effort. Right. Secondly, you're telling me that as a company that makes shit in Vietnam and China and ships it all over the world Sixty thousand dollars. Yeah, we're gonna do that. And also how come everyone isn't doing this? Right. And

They just kinda threw up their shoulders and said, Yeah, that's what we say. And I was like, Well, how come I haven't heard from you guys telling me that I would have this opportunity? Um But you started to come up with a solution. Yeah, yeah. I mean like it was just so discombobulating. It didn't make sense. I'm hearing on one side climate change intractable issue. We don't know what to do about and then here's this this situation where if everybody did it.

If everybody bought verified carbon offsets for their business, climate change goes away. And what actually is a carbon offset? What am I doing? I pay the money, what happens? You pay the money, and of course what I've just described there is a hypothetical scenario. I'm sure that there are people who heard that and go, Nuh uh there aren't enough carbon offset in the world. There aren't enough carbon offsets in the world, and that is accurate. There aren't right now. But if you show a market based solution that demonstrates demand for carbon offsets and there's a revenue stream for them so that a for profit, carbon reducing business can exist. You better goddamn believe that those carbon offsets are gonna get produced. And so what it is, you you can take any Technology which sequesters carbon.

So Peak Design bought a whole bunch of landfill gas offsets. What is that? Well There's a landfill in South Carolina that is filled up. But there's no municipal law which says

Okay, landfill. You have to now cap that landfill and trap those gases. and flare it'cause landfills will sit there and they'll leach methane until they're done decomposing. For a long time. And so basically Peak Design said, Well, if that's not gonna happen, we'll make that happen. We will pay for a HDPE tarp and a bunch of dirt to get pushed onto that and you collect the methane and turn that into electricity. So that's what a carbon offset is. We have nothing to do with that landfill in South Carolina. However, there was an a greenhouse gas reducing opportunity for us. And we snapped it up. Love it.

And you had to find that yourself, or I mean there are there are actually frankly so many organizations involved in the in the retailing of carbon offsets. And I think that's great. It it has a it has the foundations of uh the type type of market solution that we desperately need. Right. We just need a hell of a lot more demand. Right. So your your plan is get the demand up. And then either you make the marketplace or someone will make the marketplace with the demand and the supply. It's already there. It's not like we need to recreate something. We just need more of it. Right. Yeah. And the other other I think it's n important to note other types of offsets that exist out there. You can buy farmland that is fallow and and and plant a forest there. And and so long as you've got the survivability of that forest, that is a carbon store, right? Like an unquestionable trees are made out of carbon. You're sucking it out of the air and you're putting it there and and you have then you have to protect that forest, and that is a carbon offset. You can uh pay a farmer to switch from traditional roe agriculture to to no tail agriculture.

cost the farmer a little bit more. You pay him that difference, and then the root structure within those fields ends up drawing down a ton of carbon. Peak Design planted a bunch of seagras in Puerto Rico. after Hurricane Maria came through. Like th there are there are all sorts of opportunities and it's a big world out there. Right. There's plenty th this earth can absorb the carbon It just costs money. Right. And it it seems like it feels good to know also where that money's going, like the fact that you guys did the seagrass right after the hurricane or whatever.

That's much better than saying we bought a bunch of credits. Right. So we're good now. Right. Right. It feels very different. It it it does feel very different. And that information I think is always achievable and you should always know what you're buying and w and what you're going to support. But I'm I am excited for the day when Peak Design and the eighty companies that we've gotten to sign up along with us right now. Including your neighbor's all birds right over there. I am excited for the day when we are not the exception, we are the norm. Right. And I'm excited for the day when a consumer picks up a bottle, looks for the climate neutral label And doesn't see it and says, puts it down. Well I'm not gonna buy this. Right. These assholes don't pay for their carbon. Right. So that's the dream scenario. And you know, it's it's it's so vastly different than peak design and I don't know it it's it's it's far far less predictable for me. I don't know if it's gonna take off, but man, we've gotten some serious traction so far. And people seem to be resonating with the idea. Yeah, I I'm excited when you tell me about it that I'm not the most environmentally conscious person by nature. It's not like I'm already up that alley or sort of knee deep in in knowing about this stuff. But when you tell me that, that just makes sense to me. It appeals to my senses as a business person, it appeals to my senses as a human being, and I'm pretty bullish on that. Not just saying that to blow smoke. I was gonna ask you about peak design.

You guys do the innovation on the product. What happens to people just knock you off and just start copying your designs and your innovations'cause I would imagine that that's a problem, right? Yeah. We just launched a tripod. on Kickstarter this last year. And it is awesome. It is like The tripod industry has not been shaken up in decades. And we just

blew it went. And and basically what we did is instead of having cylindrical legs that are incapable of collapsing onto themselves. We made legs that were shaped more like a like a pie witch. And so they they fit around this triangular center column. So everything nests really beautifully. The idea for this came also in two thousand eight on that walkabout. I was in India, I was in Darjeeling, India, sitting there with my tripod, and I drew this sketch of these pie wedges that would collapse around at that time in my sketch. It was a s cylindrical center column still. I don't nobody made that. You know, it we sat on that idea for a long time and took four years to produce it. And in part The reason is because it's really hard to make it is you know, a hundred and seventy two moving interfaces with that three hundred and

sixty individual parts. It's complex. And so how how are you guys making these? You're designing them in house? You have a A partner uh Our manufacturing partner in China is I mean, The the prototyping and development of these things is c is a collaboration between our our manufacturer and our three D printing and our our tools in our own shop here. And how how often, I guess early on or maybe now, but how often are we going to China to visit that partner?'Cause I've been on the other side of Alibaba and

It's tough to get a product made. Are they understanding the vision here? How do I communicate this effectively? How did you do that? Spent a lot of time over there. Not me personally as much as my my engineering uh team on this one. I've I've just my role has become more b bona fide CEO than design engineer. Yeah but they spent a lot of time over there. There's a lot of calls almost, you know, it's sometimes it's every night. calls with China to communicate the day's needs and things like that. But most importantly we have a a very trusting relationship with our manufacturer. They were as tiny as us when they started and we have just grown in lockstep with one another. And that's been the case with our Vietnamese supply chain and with our Chinese supply chain. So we're not going in there to some big ass company

that doesn't really care about your business that much. No, this has been like a true partnership. From from the ground up. And like I say, you we we were very small. So anyone who's listening who who is like well I don't have that right now. It's true, you probably don't have that out the out the start, but neither did we. And we built a foundation of trust and respect. And genuine care for each other's needs. And so let's rewind. So early on, before you have that partner, talk about how you found them and how long that took and And actually he he serves as kind of a a liaison between the he sort of finds the factories and owns that that partnership and he's been he's been wonderful in going out there and helping us source these things. His name his company's name is Alliance Trading Group and they're wonderful to work with. And you know, as uh they've grown I think that they're i it's just been cool. It's another partner that's grown up alongside of us.

But even if it weren't for that, we had started with Whooshy Great Machining to do our which we found on Mfg dot com. Right. And and Shenda. I remember they were in in Ningbo, China, and that was uh Alibaba. You know. And so if you're somebody today who's looking to you know find a manufacturing partner Mm-hmm.

What would you tell them kinda bullet points or any any mistakes you made that now in h in retrospect you realize you would have done differently or you you A learning you had. It's not really mistakes as much, but Th there is something that's that's very nerve wracking about working with, you know, people who speak a different language and the communication isn't perfect. But I would just remember that the most likely scenario is that the other person on the other side of that email Is

a good person who wants to develop a strong business and their intentions are correct. And so I think it's entirely worthwhile to extend more trust than your than your your inclination might suggest. That's that that's been my experience. I I g I think it was aided by the fact that we were pretty successful right out of the shoot, you know? A manufacturer's gonna want to pay attention if they believe in your idea. And if they believe in you.

Believe it or not, like you can go over there and you can exude the charisma and the confidence that trans you know, that absolutely transcribes languages. And they will believe in you and they'll work harder for you as a result. Did you do that early on in the world? Oh hell yeah. Absolutely. You know, Did you go to the Canton Fair? No, I didn't actually go to the Canton Fair and I I never have been. A couple of my employees just went, but no, literally exchanging emails with people and and eventually saying like okay, we're gonna come go see our tooling. Will you pick us up at the airport? Sure, Mr. Peter. Okay, great. And so if you're we should wrap up. So if you're listening to this and you're like Peter sounds great, Peak Design sounds great, climate neutral sounds great. Where do they go to get more of either your thoughts, find out about the products, shout out some places? Sure. The Peak Design website is great. I'd recommend peeking into the journal. That's kinda where I I do write a lot of c my my sort of

bigger thought pieces if you're interested in my philosophy, switch you might not be. If you've reached the end of the podcast you probably are, honestly. That's right. That's right. You know, hilariously I have like nine Twitter followers, I think. Um I've just never ramp that up. I think I've got an Instagram account that I get too bashful about. I actually ridiculously I think that very few people are ha having a New Year's resolution that says, you know, I really want to bone up my social media presence. But there is a part of me that's like you know what, I I do kinda want to do that because I do love taking photographer or taking pictures and and creating videos And I don't share them with the world. And I'm I'm conflicted about whether I actually want to do that or not. But sorry, that was a long response. Just go to Peak Design, go to climate neutral dot or hopefully Google will take you there. Nice. All right, Peter. Thanks for coming on, man. I really appreciate that and I I dig the story. I th I was interested in the products in the product design part, but the climate neutral part For me kinda stole the show here, so I love it. Happy to hear that, John. Great. Thanks.