The Transcript Is Auto-Generated And May Contain Grammar And Spelling Errors
You’re listening to biz ninja entrepreneur radio. This show was created for entrepreneurs, business owners, marketers and dreamers who want to learn from the experts of today and drastically shortcut their own success to build a business that supports their dream lifestyle. Since 2011, Tyler Jorgensen has been interviewing business thought leaders from around the world, a serial entrepreneur himself, Tyler also shares his personal insights into what’s working in business today. Welcome to biz ninja, entrepreneur radio.
Tyler Jorgenson 0:38
Welcome out to business to entrepreneur Radio. I’m your host, Tyler Jorgensen. And today, we have Charles Mellon, who, and I think you go by Chad.
Chad Mellen 0:47
But my dad, unless you’re my dad, it’s Chad.
Tyler Jorgenson 0:50
All right. So Chad, I’m super excited to talk with you because I love what you’ve created. I love the product that you’re currently working. I love the industry that you’re working in. Chad is currently the founder and CEO of Knack Inc, which is a company that creates knack bags. And we’re gonna talk all about what those are. And as we get into that, and how you ended up doing this, but before that, just welcome to the show. We’re super excited to have you here.
Chad Mellen 1:12
Hey, thanks, Tyler. I’m really psyched to be here, too.
Tyler Jorgenson 1:15
So Chad, When was the moment in your life that you realized you were an entrepreneur?
Chad Mellen 1:19
That’s a great question. I’m not sure I’ve quite gotten to that yet. Because you know, when you hear entrepreneur, it’s like the scary thing. You know, it’s like, you’re a Viking, you burned all the boats on the bridges around the beaches. And I’m not quite there yet, I don’t think but I guess it was when I had to make payroll for the first time. That was, you know, that was something I didn’t call the CFO, I didn’t call the you know, anyone else. It’s like, Okay, do we have the cash in the bank account to make payroll? And then I realized, yep, this is this is on me.
Tyler Jorgenson 1:52
So the interesting thing, we were talking a little bit earlier that there’s kind of two general types of entrepreneurs and business owners, the ones who were born that way, right? I mean, from five years old, they were having lemonade stands. And by high school, they’re selling stuff out of their trunk. And then there’s the ones who take the career path and really learn the and this is I have so much admiration for this, because they fix a lot of the gaps that entrepreneurs have, which is that are like the Born guys that they had they understand the operations, they understand the systems, they grow systematically, then they get to a point where there’s, they see an opportunity in the market, and they decide to go after it. So you you came up through the through the ladder, right? You’ve worked with some big, amazing companies. What was the aha moment for you that made you decide you wanted to start knack? Well, it’s interesting.
Chad Mellen 2:39
I had spent a lot of my time in the accessory business. So I was with coaches, you mentioned it to me for a long time. And the interesting thing about those businesses is that I had kind of an entrepreneurial role in a corporate environment. You know, at coach, I was head of business development, and I launched their footwear business for them. It to me when I started, we were a small business and grew dramatically, and you know, got them into E commerce, for example. That was that was something I did there. So I always had carved out kind of a, an entrepreneurial role within a major company. And but still, you had all the backstops, and you had all the support. And you know, it’s just it’s a different environment. When we came to Rhode Island, I came here to ultimately run at cross company, which is a writing instrument brand. And we sold that business to a private equity firm, and I left a couple years after the sale. And, you know, frankly, I was too young to retire. And what happened was, I was on this fishing trip to Costa Rica. And I landed in the San Jose airport over the weekend, and I was still doing some consulting work. So I had a business backpack with me that was like filled a laptop and other things, and a duffel that had you know, shorts and some T shirts and some fishing stuff in it. That was like half full to, I don’t speak Spanish. And I’m schlepping these two bags through the San Jose airport trying to get on this puddle hopper to the coast. And I’m sweating and I’m trying to get a coffee. I don’t understand the language. I’ve got my phone in one hand. I’m looking at translator apps to figure out what the heck I’m doing. And like this is a flippin nightmare. And I said when I get home I’m gonna get a bag that I can carry that carries all my work stuff in my clothing stuff. You know just travel and work everyday stuff and I want to carry it every day and I want to keep switching behind between bags. I went back home started to look for this thing. I’m like wait, I can’t find it anywhere. This bag doesn’t exist. Why doesn’t this bag exist? The days of us flying conveniently somewhere with a nice piece of set of luggage and then handing that off to a porter and then going to a hotel and that getting handed off and being brought up to your room and then you take your briefcase with all your into your handbag with your things that it’s the offs, it doesn’t exist anymore. You’re getting up in the morning, you’re going to work, you’re going to work out, you’re going to meet a client, you’re going to hop on a plane or train to go somewhere for a day. Like, who wants to carry all the bags that are for those specific needs just don’t make sense. And I was shocked Tyler that there, there wasn’t a bag out there. That’s when I knew that I had to start something. Someone else had this same problem that I did. I had to start get this thing, this problem solved. And that’s when I think
Tyler Jorgenson 5:31
it hit me. It’s i I’m so excited by it. Because, you know, I’m that guy that will travel through Asia for a week with a single backpack, right? I’m the guy who, you know, everyone else is loading up tons of, you know, I just took a trip on a train up to Portland and then flew back, you know, and that whole trip with a single bag? Yeah. So I love the idea of a bag that was deliberately designed to meet both like, the work and the travel and the clothes side, right? Because usually, it seems like they’re one or the other. And I know you you spent time with to me, right? That was one of the bags I used to use. I had like, Okay, I had my messenger bag for to me and then a backpack for everything else. It just seemed excessive, right? I’m like, I’m simple. I want one thing
Chad Mellen 6:16
spot on. And the whole industry, it’s a $32 billion industry. The whole industry is set up and predicated on the fact that existing brands want you to buy as many of their single use products as possible. So you’ve got this, like wardrobe of bags, that do one thing really, really well. And the kind of the big aha was, wait, why can’t one bag, do a couple things really, really well. You know, and we’re not claiming to be sustainable, or, you know, anti consumerist or anything like that. Feel like, you know, carrying around a lot of bags, go for it. But it seems to me that there’s a real need out there to kind of simplify what you carry, carry one bag with you every day. And that’s what it does a lot of things for you really well.
Tyler Jorgenson 7:03
Alright, so you came back from this trip? You have this epiphany after you couldn’t find the product, that so but how do you make that jump? Right? Because you’ve been the guy that has run great companies, and you’ve worked and led some amazing initiatives? That’s not the same thing as the guy who’s now going to start a company. Yeah, like what what was the inspiration to do it to go for it? Right, but
Chad Mellen 7:25
I literally was doing nothing.
Tyler Jorgenson 7:30
Time was your inspiration type. It’s
Chad Mellen 7:32
like I have some time. And you know, it’s interesting, your your comment earlier about people born to it, and people kind of come to it later in life. The one thing that I had that I’m not sure a lot of folks have when they started earlier is is I had this amazing network, I mean, just an amazing network. So let me give you an example. I don’t know how to design product. But there’s a lot of great product designers I’ve worked with. And I don’t know how to design packaging, but there’s a lot of great packaging designers I worked with, I couldn’t go into a factory and tell you Yeah, we should have eight stitches per inch or 12 stitches per inch. And this, I know sourcing and development people that can do that. Right. And you know, I was able to kind of call on this network, bounce the idea off of people I really respected and then say does this make sense. And you know, just the number of light bulbs that went off in people that I was talking to about the idea said, There’s something here for me. And then by the way, if you’re excited about it, would you be interested in helping me and you know, got a lot of help from folks. So so that was really what I did first was just saying, Am I crazy? Is this just me? Is this just a Chad problem? And I found out? No, it’s quite a big issue. And it was a big issue with people who’ve been in the category the industry for a while and
Tyler Jorgenson 8:52
people who I really respected. I think what you’re saying is what I I think a lot of young entrepreneurs struggle with, right. And that is you didn’t necessarily know the how but you knew the who. Yeah, right. And so the challenge when you’re young or inexperienced, even if it’s later in life, if you’re doing something completely out of your your zone of of experience, is that you have to figure out the how and the who, yeah, right where you were able to say, You know what, I don’t know how I haven’t I have a vision for what I want to create. But I can go to all of the WHO that I’ve met over my career and run into that and that’s amazing. I always encourage like young people or anyone who’s trying to grow in business to really focus on growing the who like learn from others, grow your network, get experience, try new careers, try new jobs, because the people are what are gonna allow you to like grow faster, right?
Chad Mellen 9:42
And the other thing Tyler, treat people, right? Always, always treat people right. You know, you might think, Hey, I’m in marketing. Hey, um, you know, I am I’m managing a killer campaign. I don’t need to really talk to the person or understand the person who is you know, worried about how Cardboard bins and my packaging. Now you kind of do because you never know how that person might help you out or might have insights that you just don’t have.
Tyler Jorgenson 10:09
When you decided to get started, you went through the first set of who’s right asking is, am I crazy? Is this a good idea? Do you want to help? What was the first major obstacle that you hit? And how did you overcome it,
Chad Mellen 10:20
I really wanted to do this in the United States, for a lot of reasons, I wanted to make it the United States for a lot of reasons, I talked to a lot of manufacturers that I’ve known in the United States, and then found out we just simply couldn’t do it the products too complex, the needle work skills, the sewing skills, the manufacturing skills just weren’t in the United States anymore, at the level that we needed, and at the cost we needed. Yes, you could get it but it was just no one would be able to afford the bag, that was a huge stumbling block. Because then that puts you into a very different type of business, when you’re importing your cash cycles are much longer, your working capital needs are much higher. You know, it’s all the stuff that I was hoping to avoid. And that was that was something we had to overcome. And we had to go to Asia, and call on a network that I had there and find some really great partners over there people who treated their employees well, and, you know, treated their suppliers well and treated their customers well. And we found them and we’ve got some great partners now.
Tyler Jorgenson 11:25
That’s great. How long was it from you decided you wanted to start this bag to where you actually got the first prototype? We’ll call it like, and then then the next question that so how long to go from idea to prototype, and then from prototype to first sale like actually in market,
Chad Mellen 11:40
I think you’re gonna see I’m not the smartest or quickest guy you’ve ever talked to. So we started talking about this in at the end of 2015. And really got involved, you know, I hired a designer in 2016, the first prototype happened at the end of 2016, I still have that bag in my office, it’s like my inspiration was actually not bad. I don’t think anyone would have worn it, but it was not bad proof of concept. So that was what from the idea, which was September 2015. The first prototype was about 15 months, we sold our first bag on October 26 2018. So, you know, almost three years and two months after the idea, it took some time.
Tyler Jorgenson 12:30
So when you got the first prototype, right, and then you decided to get into it into production. How did you determine your go to market strategy?
Chad Mellen 12:39
Well, I wanted to be direct to consumer, I knew that. And that’s really what I wanted to focus on solely, I’d spent much of my career selling to consumers, but through retailers, and I have nothing against that model from a business perspective. But I thought it was really, really important to keep the consumer front and center and I couldn’t figure out how to do that when I’m selling to the consumer, or we call Knack packers, I was selling to enact Packer through somebody else, it just made no sense to me. And also you lose control of all sorts of things of how your brand is presented, how it’s priced, how you know, just all sorts of things like that. And I didn’t want to lose control of that because I thought it was really important to tell our story directly to consumers. So we knew we wanted to go directly direct to consumer that that was the first and foremost thing and you know the beauty of what’s happened now versus like when I launched to me site, Gosh, 2001 You can do it, you can do it pretty easily, you know better than I do. We didn’t have to go and spend hundreds of $1,000 on a proprietary site. You know, we got onto Shopify and we’re able to launch pretty quickly you know, product was probably more complicated than then distribution for us.
Tyler Jorgenson 13:56
Yeah, it’s amazing how that’s evolved right? The Yeah, in some ways production has gotten more complex because of distance and communication language but the tech side is almost gone the other direction Yeah, yeah. Now at the highest levels, things always get tricky but it’s nice that you can prove concept and get moving as you guys so you launched on October 26 2018 Get started selling what was the first moment where you realized we’re onto something good this is going to be this is going to win
Chad Mellen 14:24
oh when we completely sold out about three months later I bought I bought so much inventory I thought I was literally going to be gifting my grandchildren Knack bags and and we sold out and you know it’s unfortunately been a situation where it’s happened pretty consistently since then. I said okay, that that’s really we’ve got something here and we were getting great feedback to from from Knack packers. You know, like, oh boy, I really never understood I needed this thing until I saw your bag and your bag really delivers on what you promise So when it comes to another thing that I think is really important and made a point of difference in what we do, what we do is that we’ve got this guiding principle that we kind of my, my partner, and I kicked off in 2015, which is everything we do everything we say, we want to do it as if we’re doing it for or to or with a friend. And it just, it’s amazing how that principle, I guess it’s just a derivation of the golden rule, but how that principle has informed so much of what we do from who we hire, to how we treat each other, to how we develop product, how we market and communicate to neck packers, it’s really, you know, would you do this to a friend do this for a friend? And, you know, how would a friend react, and it’s just, it’s a very clarifying principle, very simple, very clarifying. But it really informs so much of what we do.
Tyler Jorgenson 15:56
That’s a neat guiding principle, especially if you’re the kind of guy that is kind to your friends, um, then it’s really makes it’s really a strong guiding principle, and you can see it because I think everything on our conversation, everything I’m seeing in your, in your company so far, comes off warm and genuine, and not manipulative, or salesy, or, you know, there’s no bait and switch. In fact, I was more impressed when I received the product and saw the packaging than I was expecting. Because so many products, you know, they flash something online, when it shows up, it’s less than expected. I’ve been very impressed so far with the product, I, when it came, I did a whole unboxing and a review. And I kept being like, a little bit surprised, because it hid all these things, that as a traveler, I loved and I’m like, Man, I didn’t expect this right? I’ve gone through Patagonia bag recently, I’ve gone through like an OG O bag recently, I used to use to me and I’m like, oh, but this might hit all of them. Because every other one, I felt like I had to sacrifice something.
Chad Mellen 16:55
What because they’re all legacy brands, great brands, and they make fantastic products. So I don’t want to put them down. But, you know, if you got a dynamic lifestyle that changes, and you want to be prepared for that, you know, it’s it’s, there’s not a lot out there. We like to think of our bags as that kind of travel friend you take with you. It you know, you can you can pitch to you can, you know you can be happy with you can share things with but they’re always with you. And they, you know, they don’t let you down and depart bags do that, or at least partially do that. We’re really happy.
Tyler Jorgenson 17:29
That’s awesome. So you get started, you’re, you know, October 26 2018. You you’ve got a pretty good sized team. Now, what were some of the first hires that you made? And how important were they
Chad Mellen 17:42
the very first Well, besides my partner, who is a guy named Keith Bristol, who’s helped me launch the to me website, we’ve known each other for ages. And he really understands that side of the business, the first person we hired was our designer, and then our developer over in Asia, so that we could actually when I kind of struck out here domestically, we could actually get some things going. So really, it was product centric, you know, in terms of our initial hires, but then we had to build up the marketing team. And we knew that social was going to be very important for us. And creating content that at least tried to tell our story was going to be really important to us. And creating content that folks could empathize with and realize was authentic and not, as you said, early salesy, that was really important to us also, to find the right people, that kind of voice was pretty critical. And then finally, customer service, you know, given that we try to live by this code of, you know, treat everyone, like, do everything to someone like you would to a friend, if a customer has an issue, you know, we don’t think of that as you know, a customer, it’s our friend has an issue and what do we do to solve it, you know, leads to some sometimes some decisions that may be not the best decisions financially, but they’re ultimately the right decisions. I’ll give you an example. And this is why I’m really, really pleased with our customer team. If you remember those fires right before Christmas in Denver, a woman had gotten a knack bag for her son, which had gotten delivered. The day of the fire. The house burns down the bags gone. And she called and said, Listen, this is a situation I just wanted you guys to know. The bag was we proved it was delivered and every and we send our new bag. You know, it’s kind of the right thing to do. You told me you lost your bags, your house burned down. i You’re my friend, I’d send you a bag right?
Tyler Jorgenson 19:42
Yep. So and I love it. That’s such a great example of the guiding lights. A horrible example from a real life perspective for a woman but from your right if that was your friend, it’d be a no brainer. Yeah, right. Of course. Oh, I got you. But yeah, sometimes we think from the business perspective, well We met our obligation. Yeah, can prove that we delivered it. It we can’t control natural disasters, right. It’s a very Eric airplane company. That’s like an airline company response. Well, I can’t control those. Right? It’s like, Yeah, but you know, I’m still the one stuck at the airport, I’m still the one without the bag, like, how are you? So I love that guiding principle. If that was my friend, how would I have handled it? And so you did.
Chad Mellen 20:22
And by really getting back to the kind of concept of authenticity, that person didn’t be able to say, hey, this brand did right by me. And mean it, you know, not like, oh is cooler, or sexy, or that’s the reason why I bought it. Maybe it was cool or sexy. But the real reason they’re telling someone is that they did something really different or unexpected, as you said, kind of above and beyond.
Tyler Jorgenson 20:43
Yeah. And I think it’s interesting. We do that we go above and beyond for our friends. But yeah, you know, not always for other people. So I think really, it’s a powerful guiding principle that I think is really strong. As soon as you guys are reaching. So again, 2018 2019 pandemic hits, traffic slows down. Did that impact you guys?
Unknown Speaker 21:01
Oh, my gosh, yes, we came out of the gates really hot. We were really excited. And then boy, March of 20, we we literally had the best week in the company, the first week of March and 2020. It was phenomenal. You know, we’re literally sitting. I often, you know, It’s a Wonderful Life, the movie, okay. And you remember, when Jimmy Stewart’s going home for Christmas, and his uncle’s got the payroll and he loses it. Yeah, Jimmy Stewart finally is like prosperous, he’s got his pipe in his mouth. He’s got his wreaths under his arm, everything’s neat, great. And he finds out I can’t represent uncle Jimmy or whatever his name was lost the payroll. And now he’s going to be bankrupt. And we went from having the pipe in her mouth and the wreaths on her arm that first week of March two, oh, my gosh, we’ve lost the payroll. You know, business just dried up, no one was traveling, no was commuting the world was ending. So the first thing we did besides kind of the smart business things that you do, which is tightened some expenses, we said, We’ve got to change our messaging, people aren’t going to be traveling, you know, this idea of everyday work. And travel just doesn’t make sense. If people aren’t traveling, we’ve got to tell people that this is a great work from anywhere bag. You know, if you are getting sick of being in your house, you want to go to the park and work. You know, if you are trying to go from your small office, or your small dining room to your bedroom to work, take your stuff, pack our bag and go. And that sustained us. We didn’t see sales drop and 2020, which was great. And then that got us that message got us back on track and 2021. We had a great year in 2021. So as people started to travel again, so it’s really trying to understand again, okay, we’re not the only ones in this pandemic problem. What are our knack packers dealing with? And how can we help them? You know, how can the brand help have we put a message out there to say that our product actually isn’t something that should sit on a shelf during this pandemic, it’s something that can actually help you get through it.
Tyler Jorgenson 23:06
I love how you tend to lean back into your community really listen to them. Any advice for other companies that that may be trying to grow that community cycle better,
Unknown Speaker 23:16
if you really put your your, in our case, the neck back are the customer at the center of things you really should be doing. They should be informing everything that we literally, we run new products by our customers, we new run new colors by our consumers, we survey them fairly frequently, we’ve got a process by which all emails and DMS and you know, messages on Facebook and calls in are assimilated so that we can learn from what people are saying and understand both good and bad. And there’s, you know, just bad up there too. So we really tried to put our knack packer is at the center of everything, and I mean everything, is it easy to pay, is it simple to shop? Is it? Is our packaging, easy to understand, you know, and really reach out to people and continue to ask those questions, both through formalized as well as informal methods. And I think that’s really, really critical when you’re starting out, especially with the consumer brand, and a brand that has lots of competitions. You know, it’s a way to get people to to, I think, believe you’re authentic, and you really you care about them. I totally
Tyler Jorgenson 24:28
agree. What are some of your company’s big goals. As we are moving into 2022
Chad Mellen 24:34
There’s a few things that we want to do. We’re going to be introducing new product in 2022. We want to bring new new consumers into the franchise that may have similar needs. In other words, I want to have a bag that does multiple things, but backpacks aren’t right for them. So we’ve got some other products that we’re going to be bringing to market so that’s really important. We really like to pivot not pivot but but build on the foundation that we built United and bring the concept overseas. Most of my career I’ve spent with brands have done at least half their business overseas. And I know that the need that we all have seen in the United States and the NAC Packers have seen exists in Europe and in Asia, Latin America. And so I think it’s a real big opportunity for us. And it’s something that, you know, we really like to do, we also need to kind of expand our team, especially in the supply chain area, you know, we can’t keep going as a business, where we have lots of stock, the business starts ramping crip. crazily, and then we’re out of stock again, you know, it’s just yeah, it’s not consumer friendly, Knack packers don’t like it, I don’t like it. No one likes it. So we’ve got to get some people on board that can help that help us with that. So those are really kind of product distribution, especially overseas, and then get the supply chain, right, so we can deliver on our promises,
Tyler Jorgenson 25:55
all super important things. So, you know, you and I both share a love of travel. And I often say businesses is great, it’s fun, it’s fun to create it, you know, provides life or you know, funds our lifestyle, but it’s nothing if it’s not built in helping us to build the lifestyle that we love. What is one thing on your personal bucket list you’re gonna accomplish in the next 12 months,
Chad Mellen 26:18
man, I gotta get overseas. I’ve, I’ll tell you, Tyler, I’ve visited probably probably over 40 countries in my career, I’ve been really, really blessed and fortunate, and met some great great friends, you know, all across the world. And I haven’t been overseas and you know, since literally, November of 2019, and I really miss it. And I really, really miss it. I want to, I want to get out and see my friends that are overseas, I want to see countries overseas and you know, just it’s not good to just stay in one place for too long.
Tyler Jorgenson 26:54
I think once you’ve caught that international travel bug and you understand for me, it’s so it’s such a refreshing perspective, like reset when I travel, they always say like, you can’t come back the same person when you do a trip like that. And I think that growth is so such a powerful like catalyst to my individual and professional growth. Feeling like I haven’t been able to do that. It just it feels you feel trapped. So I totally agree. It’s it’s on my little to mine
Chad Mellen 27:18
Totally agree. And you know, what, what is it? I don’t know about you, but I’m assuming it’s the same what keeps you in the game, it’s because you’re learning new things every day. And that’s been the beauty of this entrepreneurial journey that I’ve been on. I’m literally learning every day. And boy, there is no better way to learn every day a lot everyday than going overseas, you know, to be in an international environment. It is really a great experience.
Tyler Jorgenson 27:43
I completely agree. So um, I want everyone to make sure they go and follow kanckbags, that’s kna CK bags, they’re on Instagram, you can find them on at their website, if you want to connect with with Chad on LinkedIn, he’s on there. Nac Nac is on LinkedIn they’re all over the place very easy to find great company to be a friend with right and be treated like a friend so please go follow them and support them. Really appreciate the conversation and and talking to how you guys came up with the idea. Got it launched and overcame some challenges. Appreciate you coming out on the show. Chad.
Chad Mellen 28:18
Thanks so much. Tyler was a great great time. Now
Tyler Jorgenson 28:21
to all my businesses wherever you are listening, streaming, watching whatever it may be, it’s your turn to go out and do something.
Thank you for tuning in to biz ninja entrepreneur radio. What you didn’t hear was one more very important question that Tyler asks each guest if you want to be a fly on the wall when the real secrets are shared, go to biz ninja.com/vip and get your access today. Remember to subscribe so that you don’t miss any future episodes and our one last favor. If this episode was meaningful to you please share this podcast with a fellow entrepreneur so they can grow along with us. Biz ninjas, it’s your turn to go out and do something
Transcribed by https://otter.ai