Today I interview Lily Chu, one of the founders of PCOW. This is an interesting one: They’ve created a holding company (“a mother company”) of smaller businesses. It goes against everything we’ve heard about focusing, but as you’ll see below, it’s working very, very well. One of their ventures, JetPens, sells 10,000 pens a month.
As you can imagine, I was excited to interview anyone who deals with pens all day.
Below, notice how Lily talks about the importance of a team, and the significant of a lifestyle company (“I have a 1 minute commute from my bed to my desk”) and about failing fast. Also, you’ll notice that Lily calls my ass out for some bad advice I once gave them. Finally, they’re hiring interns, so whether you’re looking for an interesting opportunity, or just want to chat with her about how their team took this company to selling 10,000 pens a month, get in touch with them.
PCOW, Inc. is the mother company of smaller business ventures, the main one currently being JetPens.com.
The company got its name from Seth Godin’s book “Purple Cow”, which talks about making your business remarkable. It helps to remind us daily to innovate in what we do.
PCOW consists of three co-founders, Adrian Mak, Shu Lindsey and myself. We were great college friends and decided we were going to start our own business together. So we established a company first and then we started brainstorming the business ideas second. Each of us put in $3000 in savings in 2004 and so the journey began. Now, the mission of PCOW is to do business through a diverse set of microenterprises. The markets we focus on are large enough to be profitable, but small enough to be overlooked by retail giants (like Wal-Mart, etc).
Wow, that sounds like a lot. One of the most popular phrases we hear is “focus,” but it sounds like you’re doing the opposite. Why?
We are focused. We’re focused on niche markets.
Adrian complains that I’m a random person, but I like to think that I bring creative chaos to our organization. Right now we’re focused on 1.5 businesses. JetPens and a new one we’re launching called Miralieu. You could say we’re always actively exploring new opportunities. As individuals we have diverse interests, so that translates into the projects we take on. That doesn’t mean we jump into businesses randomly, we do the numbers (see question about analysis of data) and analyze to see if it’s feasible. But we don’t box ourselves in to just one type of business.
How’s it going?
JetPens and its products have been featured in Martha Stewart’s Blueprint magazine, Wired magazine, World Journal, Gizmodo and Uncrate.com. We currently sell over 10,000 pens a month.
Wow. That’s amazing. So how is it working with friends?
It’s awesome. Having good partners is so important! Shu, Adrian and I truly care about each other, and we know that our friendship is more important and lasting than any business At the start of our company, while we were sitting on my bedroom floor after a long day of scouring wholesale marts and brainstorming ideas in the streets of LA, we made the pact that we would always value our friendship above the company. It didn’t matter if the company made money or not, we verbally committed to valuing each other and our friendships first.
A mentality like that is crucial when you start a business from scratch. It took us a while to become profitable, and during that time we had nothing tangible to hold on to except the fact that we trusted and enjoyed working together. When we started making money, we had to be generous with each other and sacrificial. For a while I was the only one getting paid through PCOW, while Adrian and Shu held part-time jobs to support their continued involvement. Nobody ever complained, “Hey I want equal pay!” When you think about that, that’s pretty amazing. And it’s only possible with a healthy mentality towards the business.
Working with my partners is wonderful. Shu’s got a heart of gold and the power of an atomic bomb. Adrian’s got the brains of a genius and the work ethic of an ant. Both of them are two of the most capable, loving and motivated people I know. We just sync together, and it’s great.
Tell us about your lifestyle.
I have about a 1 minute commute from my bed to my desk every day at home. Sometimes the office migrates to the library or café, depending on my mood. I also take work when I travel, such as when I was in Korea for three months this year.
I normally work in the mornings, take the afternoon off, and work again in the late evenings. It’s not about hours really, it’s about getting work that needs to get done done. I just got married last summer. I have a wonderful husband and it’s important to me to be able to spend quality time with him and be flexible in my work times.
It’s a high priority that PCOW grows according to our values and personal goals. We intend to work on this as a career for the rest of our lives. At the same time, we also plan for it to grow into an organization of substantial size and influence. So it will have to be able to accompany a growing number of team members, a growing number of projects, and have more structure, etc. Our mission is to think about people every step of the way. So we won’t grow like a factory that employs machines, we take interest in people’s personal needs and wants. That translates into flexible schedules, opportunities to pursue independent projects, ability to travel, and so on.
I talk about the difference between being sexy and being rich. You sell pens. What’s up with that?
As much as I may rave about it, selling pens isn’t all that sexy (yet). Of course there are a lot of people who are supportive. But then sometimes I go to events with older business folk or fellow entrepreneurs and I tell them that I sell specialty stationery online and their eyes glaze over. Everyone wants to hear that we’re developing an Uber Skype or a Super YouTube or anothersocialnetworking website. Ok, we know at least 2 other companies started by friends (we love you guys!) whose companies dried up because they were in exactly those markets. The competition is just too tough! You want to be in the business before it becomes the sexy thing to do.
I mean what is entrepreneurship? For us, it’s about having a company that can be used as a vehicle for our dreams and goals in life. Many times the beginning is humble. People used to ask us “So, you’re going to make a living selling pens??” Well, the answer is two fold. Yes, we’re now profitable and make a living selling pens. And no, that’s not all we’re going to do. We’re going to grow beyond that, we have other dreams and business projects incubating (you can read about our newest business at www.miralieu.com). But we can’t get there if we don’t first start from somewhere first.
By the way, our Uniball Signo Bit (World’s thinnest pen) is pretty sexy. It was featured in Wired Magazine.
You don’t even know how excited I am right now. One of the things you told me is “don’t listen to others unless you’re seeking advice.” (I got some horrible advice here). Can you talk more about this?
As we recall, weren’t you one of the people that told us not to make a living selling pens? ^.^ Good thing we didn’t listen to you.
Yes, don’t always listen to what people say about your business unless you’re searching for advice. Take note of it (of course, people give it to you because they care), but don’t always follow it.
Ooh, called out. Damn. You’re right, though, and I was wrong.. Ok, one of the things I encourage people to do is reach out and meet random people. Take them to lunch. Ask them what they’re up to and how they did it. Do you believe that? How important is it to meet people?
I love meeting people, especially if they pay for my lunch. But as I remember it I had to pay for yours, what’s up with that?? But you did offer some good insights. ^.^
Meeting and befriending people is probably the single most important skill you can learn in life. It’s not just about learning from others, but also sharing in turn the lessons you have learned. The relationship blesses both.
And, you’d be amazed at how receptive people are! Over a year ago I randomly emailed Mark Sanborn, the author of the nationally bestselling book “Fred Factor”, to say that I admired him for his vision and mission statement. What resulted was a one year weekly email mentorship! I got to email him every week and get his responses and advice on my experiences, how cool is that?! Not to mention the two autographed books I received (sweeet!). I learned a lot, and was especially touched that such a busy, prominent author would take the time and effort to mentor me. What would have happened if I had never emailed?
In summary, the bulk of my business relationships have been the result of random acts of reaching out to people. Do it!
Yep. Adrian once asked me about lowering prices, and I discouraged him from doing it. If I remember correctly, it turns out he made $15k the next month (I think that # is right), the highest ever at that point. Can you talk about pricing?
One thing Adrian always likes to emphasize is “Don’t spend time caring about the competition”. That’s because in the niche market we’re in, we’re never going to win based on price, instead it’s about offering value. I used to always bite my nails about price competitiveness, and then I realized that if we continued to focus on that then we’d never have energy to bring JetPens out into fresh water. When it comes to the stuff we sell, the 10 cents a customer may save is really negligible. Providng valuable products our customers are looking for is much more important.
We both share a fanatical love of testing and experimenting. How does it work for you?
Do things, try things. Don’t endlessly debate, just make a decision and get on with it and see how it turns out. A lot of our successful projects have been a result of a “let’s just do it” mentality. It makes you succeed and fail fast.
Another way we practice this is when we purchase products. We go through a lot of products at JetPens. We throw away the ones that aren’t good, but we also hit some homeruns, like white gel pens. Who knew white gel pens were so sought after, but our Signo White gel pen (check out the reviews) has driven thousands to our site, and it all happened by experimentation.
We also love data and actually looking at the numbers. For example, I’ve seen lots of people spend $5,000 on an ad when their product costs about $5. There was no way to recover that unless they had millions of people visiting their site (with their conversion rate). What do you think?
1) Do the math.
There’s solid math behind everything we do. Before we started JetPens, we sat down and calculated the gross margins we’d need on Hi-Tec-C pens (the main pen we started off with http://www.jetpens.com/advanced_search_result.php?keywords=PILOT+BLLH&x=0&y=0) and looked at the volume we’d need to make it feasible to support us full time. Shu and Adrian took on the number crunching and found that a business was possible.
2) Set concrete goals
Every month we have sales targets. Each product we carry has to have the potential to meet certain sales targets before we buy it. And, our company has to have an overall vision of the direction it’s growing.
3) Wise advertising
A gazillion impressions a day does not make a banner a wise purchase. Leverage the two most powerful tools available, Google and Word of Mouth. Adrian estimates that probably 90% of our business comes from those two alone. We spend very little money on traditional marketing. We run a Google Adwords campaign with monthly budget of less than $20, but this $20 generates about $1000 a month in revenue.
A lot of people think you have to get an office, hire an assistant, etc to be “official” and to get something done. Do you agree?
There’s a really wise saying from the Bible that says “Just as the rich rule the poor, so the borrower is servant to the lender” (Proverbs 22:7) This is so, so applicable not only to our personal lives but to our business lives. You say it all the time in your blog, but many of us have the wrong mentality about spending money. There are statistics that say that the average American has anywhere from $2000-$8000 in credit card debt. We overspend on things we just don’t need right now. And even if you or your business had the money, that doesn’t mean you need to spend it. When we put ourselves in such a financial situation, especially if we develop a debt, it dramatically reduces our freedom to transform and change the direction of our business.
Whether we’re borrowing from relatives, credit cards, whatever, once we develop a debt it will affect our business decisions, our comfort in taking risks, and our overall happiness at work. If we can learn to be frugal from the beginning, it will have huge payoffs in the future.
PCOW was very adamant about “bootstrapping” things from the start (Blast from the past quote during one of our early meetings “We will eat canned beans every day if that’s what it takes to get this company to work”). We were plain cheap. We got our fax machines, computers and printers donated from my uncle’s computer recycling business. We hosted all the inventory in our homes (and still do.) We worked from home and cafes (and still do). Every step of the way, we question if an expense is truly necessary, and it has helped us tremendously. A favorite PCOW motto is that we will not sacrifice long term goals for short term ones. That means we grow gradually, and only when we need to.
On that note, we’re receiving over 1000 lbs of inventory at Adrian’s doorstep next month so we might need to get a warehouse soon… ^.^
Are you looking for interns or help?
So glad you asked! Can everyone send us one brilliant idea for marketing www.jetpens.com? For the really good ideas maybe we’ll give out free pens, haha. Practically though, in addition to meeting interesting new people these are a few things that would help us greatly:
- People who will code for free
- Asian manufacturing contacts
- New vendors interested in selling products on JetPens
- Possible ideas for expansion and marketing
We also offer unpaid internships. We had three interns last summer and it was a great experience.
Feel free to sign up for our newsletter and buy pens. ^.^ We’re very open to talking and meeting new people, so drop us an email!
Any other suggestions and things you’d like to share?
Don’t do it for the money
Infusing your company with a higher vision is crucial if you want to make your business holistic. Money isn’t everything, purpose matters. In the beginning there are days that you want to give up, but then you have to go back remember why you’re doing it. Think long and hard about things before you embark on this business.
As cheesy as it sounds, PCOW wants to make a positive impact on the world. And that’s what keeps us going. In addition to the new business projects being launched that will support people in need, we’re working on setting up a non profit arm of PCOW. It’s important to us to not only fulfill the personal goals of members of PCOW for the present and future, but also to give back to the community.