The Next Big Thing discusses topics that other hardware entrepreneurs will find useful, such as prototyping and manufacturing, tools the companies use to keep them moving forward, sales channels that have been effective (as well as others that have been complete failures), and managing cash flow.
In Episode 3 of The Next Big Thing, we chat with Brendan McAuley, the co-founder and CEO of Chippo – a company that managed to sell seven months of inventory in one day. Chippo makes a backyard cornhole game with a twist. Instead of tossing bean bags into a hole, players use a chipping wedge to hit golf balls into the hole.
Company: Chippo Golf
Product: Chippo is a backyard game reminiscent of cornhole, where players chip golf balls into holes in a wooden board.
Sales channels: 80% online. 20% retail.
Location: Hicksville, New York.
“Chippo is our own invention. It’s what we like to call the glorious love child of golf and traditional backyard games like cornhole.”
What is Chippo?
Chippo is our own invention. It’s what we like to call the glorious love child of golf and traditional backyard games like cornhole. It’s a two on two competitive backyard game, similar to horseshoes, cornhole or washers but it’s infused with golf.
Where did the inspiration come from to create the game?
I come from a big athletic family and was always competing, I can’t sit still. So every party or gathering we have some sort of backyard game. So one morning after a get together I had at my house I was cleaning up the backyard and the corn hole set was still up. I had my wedge in my hand and just started chipping golf balls at it. At the time I had just finished getting my MBA and knew that I wanted to do something entrepreneurial and thought – wow, this is kind of fun. How come something like this doesn’t exist? And so I did a bunch of research and realized nothing like Chippo had existed or had ever been really done before. And so I decided to man up and run with it.
Now you had the idea for the business. How did you go about prototyping that first product?
I look back and it was one of the funnest things that we did. Me and my business partner Matt went to Ace, Home Depot and Lowe’s to get a bunch of materials. We looked at stuff that was out there like cornhole and other types of backyard games and messed around with types of turf, netting and the angle which the board should be set up when you chip the golf balls at it. Really importantly [we investigated] types of balls. There’s a lot of different types of golf balls out there on the market and we quickly realized that we want this game to be something that can be played by anyone and anywhere.
I guess a quick aside – golf’s traditional perception is that it’s exclusive and expensive and time consuming, [played by] rich white guys in the country club with expensive collared shirts, but that’s not what Chippo is. It is golf, but it’s none of those things. We realized that we wanted this thing to be played anywhere by anybody.
So we searched for the best practice golf ball and found some that played like a regular golf ball but it was made of a special high density foam that wouldn’t break a window, drywall or your grandma’s nose. Then we figured we gotta have chipping mats to go along with it so you could play it anywhere on any surface. So you can plan on sand or at a tailgate in a parking lot and you won’t ruin your clubs.
“Before long there was a crowd of three or four people deep around us, cheering us on and asking questions.”
At what point during this initial phase of development did you realize you were actually onto something?
Matt and I lived in the same town and decided to take it to the beach. Before long there was a crowd of three or four people deep around us cheering us on and asking questions: What is this? Where do I get one? We had dads on their phones searching the internet for it, moms asking about where they can get it, and kids asking if they can play. We realized that maybe we’re on something and we should probably never bring this thing out in public again. Not until we could answer the questions and sell it to them.
“By the end of the 30 days on Kickstarter we had raised $234,000 from over 1,200 backers versus our original goal of $12,000.”
How did you fund the start of the business to get it off the ground?
We decided that we wanted to do a crowd-funding campaign. We went back and forth on it and in the end decided that we wanted to do a Kickstarter campaign. We spent a lot of time researching other campaigns and we decided to build the brand around our own values and make something that we thought our friends and family would like and appreciate.
We were trying to raise $12,000 and on day one the Kickstarter we were picked up by places like Golf Digest, golf.com, Barstool Sports and Bro Bible. A viral video was made and we hit our goal [on day one]. Over the next couple of weeks the video was viewed 12 million times and shared over a hundred thousand times. By the end of the 30 days on Kickstarter we had raised $234,000 from over 1,200 backers versus our original goal of $12,000.
This is a product that’s going to get the most use in summer months. How do you work around seasonality?
The big selling months for us are around Father’s Day and holidays. For the golfer that has everything, you’re not going to get them another golf shirt, another pack of golf balls or a new driver every year, so it’s become a great gift around those times of year. The other period we do really well is when college football or pro football season starts [for tailgating].
We’ve introduced some other products–a custom carry case, replacement balls and we’re also developing some other products that we think it could help with the seasonality.
“In July of 2017 another video on Chippo went viral and was viewed 15 million times. We had what we thought was six or seven months of inventory that we sold in one day.”
Outside of seasonality what are the biggest challenges holding the business back?
One of the big ones is managing inventory. In July of 2017 another video on Chippo went viral and was viewed 15 million times. We had what we thought was six or seven months of inventory that we sold in one day. That was a problem. We kept a presale open and hurried some manufacturing and got a bunch more product in as quickly as we could.
As we move into new channels and start working with new partners, trying to manage our cash flow and financing has definitely been a challenge for us.
What are your most effective sales channels?
We started just selling on chippogolf.com, direct to consumer, and then at the end of 2017 we launched on Amazon through their Brand Exclusives Program which went really well. The launch was way beyond what we expected and we continue to sell well there.
We’ve also done well in the ‘Green Grass’ channel in golf. These are pro shops and golf courses that sell gear and apparel. That’s been a really great channel for us because these pro shops stick Chippo out on the patio so it’s great marketing for us. When you finish up a round [of golf] our target audience gets to see and play with the product. They have a couple of beers after the round. Maybe gamble a little bit playing Chippo and they ask the golf-pro at the course where they could get one.
At the end of last year we launched on thegrommet.com, which was another really great launch for us. The grommet is a website that focuses on showcasing innovative new products.
We’ve had a measured approach to choosing channels that we enter into so that we can get it right. We’ve started to move into some retail channels as well and that’s a whole other ballgame, so we’ve done that slowly.
Do you see your sales becoming retail dominated or do you think you will stay primarily online?
With a product like ours you probably have to have an omnichannel approach but I also think that you can be smart about the partners that you choose. And you know, one of the things that we really wanted to do from the beginning is have as much control as possible over our brand as possible. We are obsessive over our customers. Answering customer service emails, calls and making sure that everyone’s experience with our brand is a great one. That’s so that [customers] all go out there and become ‘Chippo-potamus’ or members of ‘Chippo-nation’. It’s sort of silly, but one of the coolest things that we’ve experienced since launching this is this incredible group of customers who love the product and love the brand and love our silly, irreverent and fun way we go about our social media presence.
We think carefully about not only our expansion into different channels, but also how that’s going to impact the way the customers experience products and brand.
Have you had any sales channels that were a complete disaster?
In the beginning one of the most challenging channels that has worked out better for us over time is the pro shop ‘Green Grass’ channel at the golf courses. There’s a lot of them, they don’t have a lot of space and they’re not all sophisticated buyers. We came up with an interesting way to [sell through them] where they have one demo unit set up on their patio and we provide them with a discount code that they can share and handout to their customers. Their customers and then come to our website and we’ll ship direct to them and that pro shop will get a referral fee that we pay quarterly. A lot of the pro shops thought it was a no brainer and really like working with us in that way.
What tools do you use to keep the business running?
Google Suite – Email and spreadsheets
Rush Order – Fulfillment (East and West coast locations)
Hubspot – Marketing
Shopify – E-commerce platform
Kickpay – Financing inventory
“…we think about Chippo as a gateway drug–the marijuana of golf.”
How do you see the business evolving over the next one to two years?
I definitely see our team growing. We hired my brother as a third team member who handles a lot of the customer service and operational tasks.
New products, new services and new channels. We’ve had a lot of international interest. There’s a lot of golfing countries out there where we have IP and we’re looking to expand into.
The perception of golf is that it’s expensive, time consuming and for rich white guys. If you talk to people my age that have young kids, starting to raise a family, have a house and a lot of responsibilities at work they probably can’t get away all that much on the weekends for four or five hours to play a round of golf. Since you just set Chippo up in your backyard and play with your buddies at a barbecue or take it out to the beach when you’re on vacation it introduces people to the sport who maybe wouldn’t have seen it otherwise. In that regard we think about Chippo as a gateway drug–the marijuana of golf. That’s the brand we are trying to build and around that, the possibilities are endless.
What have been the biggest learnings you’ve had since starting Chippo?
Considering we knew nothing when we started this almost everything’s been a revelation.
The logistic side of things took us a little bit to figure out. In the beginning we went through a couple of logistics providers understanding what our expectations should be.
The greatest thing has been coming into an industry that [was new to us]. Neither of us are really even that good at golf, or backyard games. Coming into the industry with an original idea, a fresh approach to marketing and an authentic brand that is genuine and inclusive and seeing the response from customers and people in the industry who’ve been willing to speak with us, point us in the right direction, or make introductions to the right people and the right places has been a really cool experience.
Even though you might not think you have the best [understanding] on how something might happen, if you put in the time and elbow-grease to create something that’s authentic there are people out there who can help you get the answers.
If you had one piece of advice you could give to founders just starting off in their journey to create a hardware business, what would you share with them?
There’s just so many questions in the beginning and almost all of them seem insurmountable. Just take the first step, dive in and have trust in your own hard work and intellect. I don’t even think you really have to be that smart, but just knowing that if you work hard enough you can probably figure out an answer or at least get close enough. Before you know, you’ve fixed a lot of things and figured a lot of stuff out.
Do you need help financing inventory like Chippo? Come find out more details about the process here.