Building an 8-Figure Game Company in 3 Years

J:
Welcome to the BiggerPockets Business Podcast Show number 73.

Chris:
It was really crappy for such a long time that I’d come home, and I’d work hours every day on it. And it was like, “This isn’t worth my time anymore.” I quit. I got a full-time job because I had to pay the bills. A few months later, it just rockets, and it ended up becoming a million-dollar company. It was sick.

J:
Welcome to a real-world MBA from the school of hard knocks, where entrepreneurs reveal what it really takes to make it. Whether you’re already in business or you’re on your way there, this show is for you. This is BiggerPockets Business.
Hey, there, everybody. I am J Scott. I’m your cohost for the BiggerPockets Business Podcast. And across the computer screen from me is my lovely and amazing cohost, Carol Scott. How’s it going today, Carol?

Carol:
You know how it’s going? I am so insanely proud of you. So, listeners, get this. COVID took a toll on our family, far too many cookies, far too many baked breads, far too many yummy treats. We all got a little bit of big bellies going on, truth be told. And J had a bet with another business owner on losing that COVID weight. And boom, this morning he reached his goal in the middle of doing so many amazing things for our family, doing so many awesome things in our business, in all of our investments. He has been running around nonstop, eating healthy, and he succeeded in his challenge. So crazy proud of you, baby! Way to go.

J:
Achieved my first goal. There’s plenty more after that. So anybody out there that’s looking to lose weight, you can do it. Just set those goals and take it day-by-day. It’s no fun, but we’re getting it done.
Okay. Let’s jump into today’s show. I love, love, love this episode. Our guest is a guy named Chris Meade. He is a young cofounder of an awesome company called CROSSNET. CROSSNET is essentially a volleyball game that he and two friends essentially just made up one day. They made up this game and said, “We’re going to go build it and sell it.” So they had it developed. They found a manufacturer. They had it prototyped. They went through a bunch of revisions. They started selling it literally one at a time by playing on the beach, and when people came up and said, “What is that?” they said, “This is what it is. You want to buy one?” And here they are three years later. They’ve sold over 100,000 units of the game and are on track to do over $15 million in revenue. You heard that right, 100,000 units, $15 million in revenue this year after just three years in business. This episode is absolutely jam-packed with actionable tips for any entrepreneurs out there that are looking to create a product or just build their business.
Some of the things we talk about… First, Chris gives us literally the exact process for going out and finding a manufacturer and getting a prototype developed and a product developed in China. And you won’t believe how inexpensive the whole process is if you follow Chris’s instructions and the process he lays out. Next, Chris gives us a list of things that can be negotiated, things that you probably don’t even realize you can negotiate in your business that will help you keep your costs down and get your profits up. Chris talks about some of the key performance indicators that he tracks to ensure that his business is growing every day and every week and every month and every year. Then Chris tells us his single biggest tip for building relationships that are going to help your business take off and grow. And remember, this company has gone from nothing to $15 million in sales in three years. So you’re going to want to hear this tip. Finally, make sure you listen to the end, where Chris tells us all about the single biggest money-losing mistake that he’s learned in the product business and how you can avoid that mistake, as well. It turns out that’s a mistake I’ve made in one of my businesses, as well, so I absolutely love that tip.
Now, if you want more information about Chris, about CROSSNET, or about anything else we talk about on this show, check out our show notes at biggerpockets.com/bizshow73. Again, that’s biggerpockets.com/bizshow73. Now, without any further ado, let’s welcome Chris Meade to the show. How’s it going today, Chris?

Chris:
Good, man. Thanks for having me on.

Carol:
Thank you so much for joining us. You have so much great information, such a fun, energetic, action-packed story, and we totally can’t wait to dig in. We’re going to hear more about your backstory and the origin of your company, your growth and evolution. But to start, could you please just set the stage for our listeners? What is CROSSNET? What’s your revenue like? Where do you sell? Just give us a high-level overview of what your company is.

Chris:
Yeah. So I’m Chris. I’m one of the cofounders of CROSSNET, the world’s first four-way volleyball net. It’s exactly what you think it may look like. It’s two volleyball nets that intersect. We’ve combined four square and volleyball together to make a really competitive, fun game to 11, win by 2. We’re sold in over 1,500 stores across the world. Started this three years ago, self-funded it, and on track for over eight figures this year.

J:
Wow, eight figures. That’s $10 million plus. That’s awesome. Okay. Now let’s dig in a little bit. I guess we should start with… It’s not just you. You have a couple partners. Can you take us back and just tell us your backstory, what you did leading up to here, maybe what your partners did leading up to here, how you guys got together and how you came up with the idea?

Chris:
Yeah. I had graduated film school from Quinnipiac University in Connecticut, a small liberal arts college. Got out of school with way too much student loan debt to even swallow and went to start working on film sets in New York City. I was working on a show called HBO Girls as a production assistant. But quickly, I was working like 14 hours a day, making pretty much minimum wage and celebrating when we got over 10 hours so made double time. And it was just a grind, absolute grind.
So I pivoted into software sales. Had a good buddy who was always raving about his job, so got hooked up there. It was a company called Contently. It was a SDR so just outbounding to people who probably didn’t want to talk to me. Ended up getting some big meetings at Fortune 500s, but it really, actually, looking back, helped me outbound, helped me get in front of people that really helped me at CROSSNET. So that was kind of that, and then I moved over to Uber, where I was one of the first ever account executives over there, so just selling Uber Eats, launching Uber Eats in Boston and Providence. Then, one night, we all had this idea and kind of just said, “Why not us?” And we all quit our jobs within two weeks.

J:
So tell us, you came up with this idea. Were you all sitting around drinking and said, “Hey, what can we do?” Was it, “Okay, we need to find something else,” and said, “Okay, let’s do a brainstorming session”? What was the discussion? And who are your partners? Where did they come from? How did they get into this? Take us back to that…

Chris:
Yeah, that night.

J:
… that night, yeah.

Chris:
Yeah, absolutely. So it’s my brother, our childhood friend, Mike, and myself. Mike had just graduated from Northeastern with an engineering degree. My brother was running a few e-commerce companies at the time, didn’t really have a corporate job ever, actually dropped out of college to do e-commerce. And I was just in this rut of doing my 9:00 to 5:00, an hour commute on the train each way, making great money but just fed up with it. I was 24 at the time. So I was like, “I got to do this for another 40 years? I can’t do this.”
Mike came over. He’s like, “Hey, guys, let’s come up with a cool idea.” We just wrote down stuff all night long of ideas. We had ESPN on in the background. And we grew up in a small, small, small farm town. The nearest Walmart’s an hour way. Gas station’s super far. If you don’t get gas before the exit, your car’s going to break down. So we wrote down four-way volleyball net, and we assumed we’d just google it and some big, private Fortune 500 company would own it or do something, and we just were never aware. But there’s nothing on Google. So we figured, “Hell, why not us?” We woke up the next day, went to Walmart, got two badminton nets and rigged them all up. We were just so excited because we had our friends over, and we just played for hours on that first prototype.

Carol:
That is so much fun. I love that it was actually, it sounds like, a conscious decision, that you were not willing to do this grind anymore. You were just over… Already, at the ripe age of 24, you were just completely over this idea of many more decades of working for somebody else. So you all got together.

Chris:
Absolutely. I mean, I can’t tell you how many times I woke up and I was like, “I got to do cold calls again, another eight hours of cold calling?” It was too much, or having to report to a boss who may not fully understand the job. Or if I need a sick day or if I want to go on vacation or if I just don’t feel like going in, I have to measure how many days I have, and somebody else is in control of that. I was so over that.

Carol:
Understandably. Did I hear you say you just quit your job and started? Or did you start developing CROSSNET while you were still at your full-time job?

Chris:
Yeah. Sorry, yeah. We were developing it while I was at my full-time job. Then, literally two weeks after we had the idea, I told my boss like, “Hey, we’re moving to Miami.” Our leases were expiring. We either had jobs or were leaving our jobs, and we literally just picked up and left to Miami because we were living in Connecticut. It was about to turn into fall, and it’s not the best place to create a beach game, in the fall in Connecticut when it’s pretty cold or getting pretty cold. So I told my boss at Uber… I said, “Hey, guys, I’m moving to Miami. If you let me work remote, I’ll definitely keep the paycheck going for a few months.” So they let me work remote in Miami, but my whole mind was just CROSSNET, CROSSNET, CROSSNET every day down there. I was full-time CROSSNET January 1st, 2018.

Carol:
That is great. I think there’s actually a great pro tip in there. It sounds like your mind was in the place of CROSSNET, but you still wanted that income so that you still had your stable job. But it sounds like, maybe approach it for our listeners, just full-on asking your boss if you can work remote and continue doing it is something that might seem like a big, bad, scary, horrible thing to do, but it worked out okay for you?

Chris:
Yeah. I mean, you never know what they’re going to say. If you don’t ask, you definitely know what the answer’s going to be. And you’ll be surprised. Most of the time, it sides in your favor just because you worked up the courage to ask. So, for me, it was all about finding how I could start this but also: when could I actually make an exit? My whole thing was I had a lot of student loan debt. I was paying $1,000 a month for my loans plus my rent, which was another $1,000. So it took a while to have some type of cash flow. I had to be really frugal for like six months, but I worked up enough cash where I had about four or five months of living expenses, and I said, “Hey, we’ll figure it out after that.”
We had this big whiteboard in our apartment in Miami where it was Chris, Mike, and Greg, and we all had how much money we had in our bank account. And every week, we’d deduct how much money do we have left to live on before we all have to figure this out big-time. It was our doomsday board. It was pretty cool.

J:
Okay. So the three of you are living in Miami. How much did you formalize this idea? Was it just every day you wake up and say, “Okay, what do we do next? Let’s build a prototype or let’s figure out how to package it”? Or did you start and say at the beginning, “Okay, let’s create a plan. I’m going to do this. Mike’s going to do that. The other guy’s going to do this”? How formal was the whole thing? Or were you just winging it the whole time?

Chris:
Oh, yeah, nothing’s formal. To this day, we still just kind of have fun with it. But, no, our partners… Fortunately for us, when you get in business with people, for us, all of our skillsets were completely complementary. What I mean by that is I’m the sales and the marketing person on the team. My colleague, Mike, is the engineer. I know nothing about engineering or AutoCAD. Who am I to tell him how to design a blueprint? So he was able to just run with that and take it straight to China. Then Greg does all the finance. He has e-commerce experience. So he’s another part of the business. The three of us together has helped grow the company so fast. But, no, we never had a one-sheet or a business plan.
All we knew is we reached out to Alibaba. We found a factory that we liked. We said, “Hey, guys, can you make this for us?” And we told them, “We have enough money for 50 nets. Can you make us 50? We promise we’ll come back and buy more.” After that, we pooled all of our cash together. We got our first 50, and we went to the beach and started selling them.

J:
Okay. I want to hear about the selling it, but I’m sure there are a lot of listeners out there who are thinking, “Okay, there are these three kids.” I don’t mean that in a derogatory way, but you were young.

Chris:
Yeah, of course.

J:
You probably hadn’t done any manufacturing before. So you figured out how to find a factory in China to build a prototype. Walk us through that. If there’s somebody out there that’s listening to this right now, thinking, “I’ve got an idea, and I want to find a factory in China to build it. What do I do?”

Chris:
Yeah. So, if I was starting a company from scratch tomorrow… Let’s just say it’s for a basketball hoop, and I have a new, revolutionary idea for a basketball hoop. I would go on to Alibaba or AliExpress. Those would just be my two starting places, not where I’m going to end up. And I would type in basketball hoop. I would type in basketball hoop supplier. Then, from there, you’re actually going to be able to click on the listing and see who sells it. From there, you could actually contact the manufacturer, and you could open up a dialogue with them. Most of the time, people are in the business of making money and making products. They’re a manufacturer. So, “Hey, I’m Chris. I live in San Diego, California. I have a great idea for a new basketball hoop. It’s revolutionary. Can I send you an NDA, and are you open to taking on the manufacturing of it?” So we did that, and we vetted several factories. Especially when you have this brand-new idea, you don’t want to message it to a million people because then you’ll wake up the next day, and somebody’s already selling your product and you’re like, “Damn. I shot myself in the foot.” So be selective. If your product is not top-secret, then no need to be that secretive.
But that’s how the conversation started, and the things we vetted for were: do they speak the English language well, or whatever language you are? Are they responsive, so not waiting nine hours to get a text message back, just to keep the dialogue going? And are they reasonable? Because most of these times, people think you’re VC-funded. You have mommy and daddy money. It wasn’t the case for us. We pulled our 401ks. We took our last two paychecks, and this was all the money we had to our name. And either you worked with us, or we were going to find somebody else to work with us.

J:
That’s fantastic. I love that. So what’s the process? That’s the process for finding a factory, but then you find a factory, and you say, “Okay. We want you to build this.” What do you give them? What kind of specifications? What types of drawings? Is it a collaborative process? How long does it take? When do you pay them? How much do you pay them? What’s that all look like?

Chris:
Absolutely. So, in hindsight, negotiate your rates even better than we did because once you start at a number, you’re always working your way down. I definitely wish we would’ve started lower, but you don’t have so much leverage when you’re a 24-year-old broke college kid with not much money to your name. So what we started with was we pretty much sent over a blueprint. We said, “Hey, this is our idea for the product.” We rigged up the blueprint based off of the prototype we made in our backyard that night. Fortunately for us, like I said, my partner has engineering experience. So we didn’t have to go outsource that to a tradesman. From there, we sent that over. They started putting together the pieces that they thought would make the net. We waited patiently for about 60 days, 60, 90 days, I forgot the real number, until it was overseas, and it landed in Connecticut. We unboxed it that day, brought it straight to the beach, and we started playing.
From there, we started doing revision rounds. It stood up the first time. It worked. It was fine, but it was far from perfect. So we started playing, started to see what people wanted. We decided, “Hey, this thing is too short.” It was only like six feet tall. Pro volleyball nets are almost eight feet tall. It would be sweet if it was men’s, women, and children adjustable. So we made it adjustable. And we found that the stakes weren’t staying in permanently so the game would fall down. So we made the stakes more permanent. We did about four or five rounds of revisions, took about a full year before we were really ready to start selling this thing.

Carol:
And it sounds like, if you just took it out to the beach and you were testing it, it sounds like you’re almost inadvertently doing focus groups by getting other people to join in. Is that about right?

Chris:
Absolutely. I mean, that’s exactly how we sold the first 50 models, the first 50 units that we had, too. We’d go to the beach. We’d set it up. People would be like, “Okay, they’re setting up a volleyball net.” And then we take out the other side, and they’re like, “Whoa, what’s going on?” And by the end of the day, we’d literally have 40, 50 people in line every single day playing the game. People would be recording it, tagging it. I’d be going around with my camera, taking photos for the website, taking videos on my phone to run Facebook ads at night. And at the end of the day, we knew our product costs. We’d say, “Hey, take it for $100. Take this model home.” And people would buy them almost every time we went to the beach.

Carol:
That is so cool. So how’d you come up with that $100 price point?

Chris:
I mean, I just knew my manufacturing cost, kind of figured, “Hey, this sounds like a decent margin.” We started at $100 for the retail cost and then quickly learned that we needed to bake in wholesale margins for our vendors if they were going to sell the product and take it on. So we raised it from $100 to $150 about six months into the business.

J:
Awesome. I want to go back and ask one more question about the whole Alibaba and prototyping process because this is something that I always wonder. About how much did you spend to get that original prototype and then some revisions before you finally had a product that you could go out and actually start using?

Chris:
That’s a good question. The big thing that cost a lot of money is the shipping from China, shipping a 20-pound product from China. We were paying like $300, $400 at a time to express ship this thing over because otherwise you’d have to wait a long time. So I’d probably say… I’m just ballparking here, probably $5,000 to get the final prototype. Then, from there, we mass-produced and we brought in 50 units, mass-produced 50 units.

J:
So that’s actually not too bad. I mean, $5,000 to go from concept to getting a first prototype to getting several revisions. That’s something that most people, if you have an idea for a product and you want to go overseas, you could use a credit card and do that. You can borrow money. You can find a small investor. I was thinking you were going to say something like $50,000 or $100,000, but literally $5,000.

Chris:
Absolutely. One thing to note, most manufacturers do not take credit cards. You have to use some type of cash advance to get the cash into your bank account for a bank wire.

J:
That is a really good tip. I never would’ve expected that.

Carol:
That’s an awesome tip. Okay. So you were getting these lots of 50 at a time, it sounds like, and they were selling out at the beach. I think you also mentioned in there that you were taking photos and maybe posting on social media or something. Can you talk to us more about that? I think that’s so intriguing because it sounds like you may have a blend of some type of… I don’t want to say free advertising, but what was that online advertising like in the early days? And how do people get started doing that type of thing?

Chris:
For us, we built a website on Shopify, about $29 a month, super cheap. We’re still on Shopify. And my whole goal was every night, I’d come home, and I’d edit the photos I took at the beach and just drop them on the website like, “Here’s the clips from the day.” I’d make a brand new little project page. We’d upload to Instagram. We’d upload to Facebook, and then we’d actually start running targeted ads on different demographics. As we got older and smarter about it, we’d split-test different demographics. But in the beginning, it was just, “Let’s get a 15-second clip, record it on the iPhone. There’s no need for these $5,000 videos that most companies start in debt with, and we could do this on our own.” So, yeah, we’d go to the beach every day. What we ended up seeing was customers would end up buying it. I remember these girls from New Jersey bought it. They were on vacation in Miami. They took it home to New Jersey, and we kept getting sales from their town. So we knew that those girls were out doing the same thing we were doing in Miami, but doing it on their local beach.
Our mindset eventually got to, “Let’s stay inside and go on the computer, work on getting more of these out to the world rather than us going and having fun on the beach, and having our customers do the marketing for us.” So we ended up creating a product that just really markets itself, and now we have 100,000 units out there. At any time, people are out there playing, getting that 40, 50 people reaction.

J:
Wow. So it really is… It’s a snowball effect. You get a couple units out there, and that sells more. Like you said, you have 100,000 units out there. If each one, if somebody’s playing with it and one other person sees it, you’re just going to get sales forever.

Chris:
Exactly.

J:
That’s awesome. Okay. So I want to go back. You now have a product that you’re getting from China. Did they create the packaging, as well? Did you create the packaging? How are you storing these? Do you have a warehouse? Are you keeping them at your house? Are you doing drop-shipping? What’s the whole taking orders and fulfillment process look like now that you’re starting to gain some traction and it’s not just… I assume you’re selling more than a few a day. You need a process. What’s that look like?

Chris:
Yeah. So, for the first year, we weren’t selling too much, to be honest. Our first year in business was 2018. We did $87,000, which was less than I was making at Uber. So that was tough, a tough pill to swallow. The second year, we went to $2.5 million. That was a skyrocket from the year before. But for us, when we started looking at: how do we actually fulfill this? Do we keep them in our mom’s basement? That wasn’t really practical. The things were big. We weighed the pros of owning our own fulfillment center versus going to a 3PL. There’s places like ShipMonk, ShipDaddy, ShipBob, all these other companies, but for heavier products, they charge you an arm and a leg for the storage fees and the moving of the packages. So we were getting quoted at $10 per unit, which ate up so much of our margin. So we’re like, “We could just hire a friend to do this. We’ll pay him a salary of like $40,000, and he can go to the warehouse a few times a week, and we can get it done for way cheaper.”
So we ended up shipping it ourselves. We got that $10 quote down to 50 cents. We manage it ourselves. I could simply text or Slack now and be like, “Yo, we need this order out now,” and I know he’s our full-time worker dedicated to it around the clock. So we’ve built our fulfillment team in-house. We have a warehouse now in Connecticut, California, and Windsor, which is right outside of Toronto. So we have three warehouses, and, yes, we do all fulfillment in-house. It’s all done through Shopify. One thing we’ve learned over the years, roughly… We used to just accept whatever quote UPS or FedEx gave us, and that was tough because our game weighs a lot to ship. What we’ve recently done was reach out to the biggest shipping companies like UPS and FedEx. We put them against each other, had a bidding war, and they’ve just come back and had a huge little RFP for… And UPS won. So we’re moving forward with UPS. We have a flat rate across the country. We can ship these guys for really, really cheap, which is awesome.

Carol:
That is really cool. I had no idea that you could do that, that you could send out… It sounds like a call for proposal, an RFP, to these different companies and say, “Give us your best price, and go for it.” That’s really good to know.

Chris:
Yeah. I don’t think we could’ve done that at the beginning. But now, at the scale we’re at, they’re bringing tractor-trailers to pick up stuff every day. So it’s like, “Do you guys want our business, or do you not?” So we do that for RFPs for that. We’ve done RFPs for freight-forwarding, so bringing stuff from China to your warehouse in America. That’s a whole logistics process that you could get negotiated for right off the bat. Then the biggest one that we’ve learned also… I’m just throwing this out there… is payment processing. We were getting killed with rates on Shopify. We were paying 6%, 5% for stuff. So we’ve switched to a smaller bank, and they give us a fee that’s almost a third of that.

Carol:
Wow. So you can really shop around all these different aspects of your business.

Chris:
Everything.

Carol:
So you have all these new systems, processes, etc. in place, but I want to go back to one thing you mentioned earlier that I think is insanely valuable. You mentioned that in your first year, in 2018, I think you said you did about $87,000 in revenue, and it was less money than you were making at Uber, and it was really tough pill to swallow. I would love to know more about the mindset that got you over that hump that said, “This is worth it. I’m going to keep going,” because I think a lot of people, at that point, might’ve just said, “I don’t know if I can sustain this.” Can you talk to us more about that?

Chris:
Absolutely. It’s twofold. One, the biggest thing I measure for as a founder is: are we making progress every day, or at least every week? So things that I’m looking for are: is revenue going up, even if it’s just one extra order a day? Is online site visitors going up? I use everything off of a metric of 100 visitors. If I have 100 visitors coming to my site, I know my predictable conversion rate. I know my predictable net profit. So I know I get 100 people, I know x amount of customers are going to buy, and I know that I’m going to make this money net based off how much money I’m spending on ads to get those 100 people to my site. So, if that metric is improving every day, my business is improving because I’m making more net profit. My goal during that first year was: how do I get an extra 100 people coming to my site every single day? And now we’ve scaled it up to 15,000 people to our site some days, which is awesome.
So it was really tough, but also I had a learning lesson before I started CROSSNET. I had another e-commerce company with my college roommate and my brother, and I quit it. I quit right before it started being good. It was really crappy for such a long time that I’d come home and I’d work hours every day on it, and it was like, “This isn’t worth my time anymore.” I quit. I got a full-time job because I had to pay the bills. And a few months later, it just rockets, and it ended up becoming a million-dollar company. It was sick, but it’s a lesson for any entrepreneur. You just got to keep going because you never know what’s behind that next door. If it comes to a point you can’t do it anymore, that’s understandable. But sometimes you just got to keep going and just look for the little wins every day. And that’s what I saw in CROSSNET, and that’s why we’re still working on this.

J:
I love that. We’ve done 75 of these podcasts now over the last year and a half, and that’s something we hear over and over again, which is things start out slowly. It’s so easy to give up, thinking, “Okay, the idea’s not working. I’m not good enough to do this. There’s no market out there.” But a lot of time, it’s an exponential growth sort of thing. You’ll get a little bit of traction, and then things will just start to take off. But it can take months, years, even a decade or more. I mean, our very first episode was with Josh Dorkin, founder of BiggerPockets, who talked about the fact that it took him 10 years before he started to see that traction. But as soon as you start to see that traction, I mean, it’s just…

Chris:
It’s crazy.

J:
It’s a bolt of lightning, and things just start to take off.

Chris:
Absolutely.

J:
So I love that tip. It’s something that just needs to be reiterated over and over, that you just got to keep going. Those were the exact words you used, and I think that’s perfect. Okay. So you’re starting to gain traction, and you’re focused on some of these KPIs, these key performance indicators like: is revenue going up? Are online site visits going up? You’re tracking your ad spend to know what your conversion costs are or your acquisition costs are. At this point, is it time to just sit back and enjoy the fruits of your labor, or do you have plans to keep growing and keep building? What are you doing to get to the next level, to get from eight figures to nine figures or 10 figures?

Chris:
Yeah. I mean, at this point, those are still metrics I’m looking at every day. I’m spending less time on that and more on the overall brand of the company and expanding to retailers. My biggest thing is this. We just got nationwide with Dick’s Sporting Goods. So that’s really cool. And we’re in Scheels nationwide. We’re in Academy Sports nationwide. I can’t mention a name, but we’re working with one of the largest stores in the world, come Spring 2021, yet. That’s going to be huge. That’s going to be 800-plus stores.
Then, for us, my biggest thing to grow the sport from an eight-figure sport to a nine-figure sport is twofold. It’s international expansion. Volleyball is popular in every country. Volleyball’s not even that big in America. So, if we get out to Brazil and all these European countries that absolutely love… and South America, that love volleyball, we could definitely duplicate the business that we’ve done here. Then building more roots in the professional volleyball game, so we’re having AVP players, these professionals, rep CROSSNET, become CROSSNET athletes and really start showing the sport off.

Carol:
Okay. There are so many things to unpack in all of this amazing growth story. It’s so fast. There are so many things that you have done in such a short amount of time, so many questions. Let’s start with… You originally had a manufacturer in China producing 50 units at a time, for example. It sounds like you have them producing a heck of a lot more at a time after that. You had a Shopify site. To begin getting into these big-box stores, did you have a distributor? Were you just making phone calls on your own? How did that process work out?

J:
Yeah. What was the story of getting Dick’s to say, “Okay, we’re going to carry your product on our shelves”?

Chris:
Yeah, of course. It all goes back to those days at Contently, where I was an SDR finding ways to book meetings with those Fortune 500 people. You actually learn lessons from those jobs that you hated, which is crazy to say. The first store ever was Scheels, which is a small, Midwest store. They have about 34, 36 locations. I just messaged the dude on LinkedIn, and then I got his email address, and I said, “Hey, man, please. I guarantee this will sell. This is going to be good for you.” And he said, “Okay, fine. I’ll take 16.” And at the time, 16 was out of this world. So he took 16. They never sold. It took eight months for him to even write me back. I assumed he was mad at me, and eventually I guess our viral marketing just kind of took off. We woke up to a really big viral video from some famous players overseas. And he said, “Hey, guys, let’s go nationwide with this product. All the units sold out overnight. We need it in every store.” So we went nationwide with Scheels.
And I check my inbox one morning, and the buyer from Dick’s Sporting Goods wrote on our chat box on our Shopify store, “Hey, this is so-and-so from Dick’s. We want to carry CROSSNET. We have a buying proposal for you. Let’s chat.” And I see so many people without chat boxes on their website, and I’m like, “You need to have a chat box. You never know who’s going to write on there.” That’s how we got the Today Show. But, anyway, to go back to your question, Dick’s wrote to us. I sent them a quick email. They placed an order for 300, and before we even shipped the 300, they’re like, “Can we scale that order to 5,000?” I said, “Of course you can scale that order to 5,000. Just give me an extra week or two to fulfill it.” Yeah. That’s what’s going on there. And it definitely helped with COVID changing everybody’s mindset to, “I need to be outside. I need to get some fitness activity.” So that’s helped our growth, as well.

J:
Awesome. And I do want to clarify one thing for anybody out there that’s listening. You’ve used the term SDR a few times. For anybody that’s not familiar with that, it’s basically a sales development rep. Is that what it stands for?

Chris:
Yeah, absolutely. It’s just somebody to set up the meetings for the bigger guys to close.

J:
And a lot of it is cold-calling. Is that correct? You’re just basically reaching out to potential prospects and saying, “Hey, I’m so-and-so, would love to get a meeting with you to talk about our product.”

Chris:
That’s absolutely… And then you get your little bonuses for scheduling qualified meetings. That was the whole job.

J:
Okay. So there’s a lesson in here for everybody, and again, we hear this a lot. You need to be willing to pick up the phone. I mean, you can have the best product in the world. You could have the best margins in the world. You could have a customer base that really wants what you’re going to sell. But if you’re not willing to pick up the phone and sell yourself and make things happen… If you build it, they will come just doesn’t really work in the real world. So it’s just another good reminder that picking up the phone and being willing to make these cold calls is huge.

Chris:
Absolutely.

J:
Okay. So I want to talk a little bit about your partners now. It sounds like, at the beginning, everybody was kind of doing everything. You’re still kind of doing everything. But you mentioned that you’re focused on sales. One of your partners is focused on product development. The other one, it sounds like he’s more like the finance/CEO type. What is the breakdown of roles now between the partners, and how has that been formalized?

Chris:
Those roles are actually all pretty much the same. They haven’t changed much since we started. Our CEO kind of handles the legal and the finance stuff. We’re actually bringing on a full-time finance person hopefully by the end of the week, so very much long overdue. But Mike, the guy who’s in charge of the product, he’s been working really hard over the last three years. We’ve actually just rolled out our indoor bases. So we’re in 7,500 schools right now. Kids are going to gym class, learning how to play volleyball on a CROSSNET, which is a crazy concept. But a lot of these northern states that get really cold in the winter have been begging to play CROSSNET inside. So we developed an indoor base. That’s been out. We developed a doubles net. It’s two times as long. So you have more room to run around. You can make it a team sport rather than a solo sport. And we also just put out CROSSNET H2O, which is a pool model, so the first ever four-way volleyball net in your pool. Yeah, he’s been busy.

Carol:
I want to follow up on that, J. Even though that’s his specific role, how are you coming up with these iterations? Is it from customer feedback? Is it just from, “Hey, let’s give this a try?” Is it what stores are asking for? How does that R&D process work?

Chris:
It’s stores and customer feedback, for sure. We use a little tool called Okendo, which is a review app that helps get customer feedback, get customer data. It’s helpful. We’re always on the beach playing CROSSNET, so we can get feedback. The first thing we ever heard was, “The thing’s a little too small. It’s a lot of fun, but I wish I had more room to run around.” The most logical conclusion was, “Hey, let’s make it two times as long and put two people in each box instead of one so you could run around, make it a team sport.”
“It’s cold. I can’t play CROSSNET in the winter. It’s snowing.” Okay. Let’s bring it inside. So how do we develop a base? So they’re all individual of logical, next-step moves, but then you talk with the retailers. For example, I was just talking to one of my retailers and said, “Hey, guys, what do you think makes more sense for this product? Do you want a box? Do you want a plastic package for the net? How do you want to sell just the net?” So I do work with the buyers at the store. They give me specific specs, and I try to hit them. Working on a new box for Dick’s next year, where it’s going to be smaller for their shelves, just so they could stack more. And it helps us get our order volume up. So it’s definitely a collaborative process between the retailers, our customers, and just ourself, kind of just dreaming up new ideas.

Carol:
This is such great information. How did you get the deal with all these schools across the Northeast? I mean, schools are notorious for having very limited budgets.

Chris:
Yeah, absolutely.

Carol:
So, as cool as this product is, the concept of this many schools signing on is amazing to me. How did that evolution happen?

Chris:
It’s real cool. What happened was we first started doing that viral marketing. We advertised specifically… There’s actually levers that you could flip where you could pick gym teachers or volleyball coaches. So we knew that we were getting volleyball coaches’ and gym teachers’ attention on Facebook and social media. So they would start, and they still do… They come to our site one-off. They’ll message us saying, “Hey, we’d like to place a purchase order for our school.” And then we would do the one-off sale. It’s a very lengthy process, but it happens five times a day still. But this schools actually have… They have a buyer’s guide, a big catalog come to them every quarter, where they pick out all their stuff they spend their budget on. So the next logical move… They’re called Gopher Sports, Flaghouse Sports, Toledo. So I reached out to the buyer there. I said, “Hey, guys, we have a four-way volleyball net. It would be great. Teachers are already buying it. It’s amazing for their students.” So they all picked us up. They put us on the cover, the inside cover of the catalog, and they just buy units every week from us. So it’s been a really good relationship.

J:
Wow. And, again, I imagine a lot of this just came from you picking up the phone and reaching out and saying, “Hey, I’m trying to build a relationship here. Talk to us.”

Chris:
Absolutely. Yeah. It’s also been a great tool for the kids because all three of the founders, we’re all terrible at volleyball. We’re so bad. We’re not volleyball players at all. We played basketball growing up and soccer. But the cool thing about it is we’re very honest people. When I saw volleyball growing up in gym class, I was like, “Man, not volleyball day,” because it’s six on six, 10 on 10. I’d hit the ball one time in a 45-minute class, and I’d be like, “Oh, what a waste of time.” Now you have a CROSSNET. Kids are spiking on each other. You’re hitting the ball every 30 seconds, and you’re working on your hand-eye coordination and volleyball skills. You don’t even realize it. So they kids are loving it at the class, and they’re begging their teachers to play it. So that’s cool.

Carol:
I would imagine that all this viral marketing that’s happening, too, makes it that much more exciting for the kids and really drives those sales. I think you had mentioned earlier, too, that you linked up with some pro volleyball players maybe that you’re sponsoring or something. Talk to us more about how that happened.

Chris:
Yeah. Well, first, actually, we just formed a partnership with Wilson, the ball company. So Wilson now makes the official CROSSNET ball, which is amazing. Literally grew up not having enough money to buy a Wilson ball growing up. That would be the $40 basketball. We’d settle for the Spalding or whatever. But now we have a beautiful Wilson ball, put that on our website. It makes it much easier to legitimize the company. We’re no longer just Chris, Mike, and Greg’s dream product. We’re backed by Wilson making our product.

J:
So what does that relationship look like? Do they literally just physically produce the ball and give it to you? So that’s one less cost to you. So basically you’re making more money because you now don’t have to produce a ball. Or are they paying you some sort of money to put their name on the ball? What’s that specifically look like?

Chris:
So, going back to that customer feedback and getting data, the biggest thing that we kept hearing was our balls weren’t good enough. When volleyball players play our game, they like to use their professional, beautiful ball that costs like $35. Can’t blame them. Why would they want to use our ball? So we’re like, “How can we improve this?” No better way than going to the best ball manufacturer in the world, right? So we reached out to Wilson. We said, “Hey, I don’t know if you guys have ever heard of us, but we’re pretty big. Do you guys want to work together?” And they wrote back, “Yeah, our colleagues love CROSSNET. We actually play it all the time. Of course we’d love to do something.” So we started pitching… They pitched us a few ball ideas that we thought we’d like.
They actually just put out a new ball this year called the OPTX ball, which is the new must-have ball in volleyball. And they’re like, “How about we just co-brand it and have Wilson and CROSSNET on the same ball?” And we’re like, “Done.” So, yeah, they don’t pay for the ball. That would be too good to be true. We actually have to pay for the ball because somebody has to pay for it. So we pay money to get it manufactured, but it’s at a very fair and affordable cost, where we could then go resell it and resell it to our customers.

J:
Love that. Once again, it was a result of you picking up the phone and asking the question and worst they could say is no.

Chris:
Exactly. No, exactly.

J:
Love it. Okay. So what does your operation look like now? You had mentioned you have a… not a finance guy. You’re bringing on a finance guy next week, I think you said.

Chris:
Finally. Yep, finally.

J:
And you said you have a fulfillment guy that you’re paying to fulfill orders. Besides those two and the three partners, what does your team look like?

Chris:
Yeah. We have nine full-time employees now. We have three founders. We have the marketing team that we’ve built out. We have a Head of Marketing and a Head of Creative Services. We have a Head of Social Media and E-Commerce. So those two report directly under me in the CMO role. We have our warehouse out in Cali. We have an Operations Manager out there. We have a warehouse out in Connecticut. So we have an Operations Manager up there. We have two full-time people in Canada running the Toronto warehouse, and then we have a team of 20 virtual assistants. They’re all based in Philippines or China or Romania, and they’re working on things such as coding, customer service around the clock, graphic design. And the best thing about having virtual assistants, I use a little tool called FreeUp.com, super, super cheap and affordable. But essentially, I’m only paying for them when I need them to work. Coming from the corporate world, I know half my day was just: how do I fool my boss into thinking I’m working? So, instead of paying people eight hours a day, I’ll pay them two or three hours and actually get the most bang for my buck there, so a really cool tool.

J:
That’s awesome. And I have to mention. You mentioned FreeUp.com. Just coincidentally, the founder of FreeUp.com is Nathan Hirsch, and he was a guest on our podcast. I’m trying to find out episode… I can’t find the episode number. But anyway, he runs an awesome organization. We talked to him for an hour, and for anybody out there that’s looking to find out more about using VAs, make sure you check out our episode with Nathan Hirsch, the founder of FreeUp.com. Pretty cool that you’re using them, as well.

Chris:
Yeah. Well, Nate actually was my first boss. We went to college together. We were in the same fraternity. Yeah. One of my first weeks of school, he’s like, “I need help on my Amazon business.” This was before FreeUp. He’s like, “Anybody want to work on Amazon with me?” And at that time, I was working in the kitchen at the school cafeteria. It was called The Rat. I was the pizza guy. So I was like, “Oh, I guess I could do Amazon instead.” I went over to his house. He taught me about Amazon, and I’ve known Nate for almost 10 years now.

J:
That’s so funny, small world. Okay. You don’t have to go into detail here. Everybody has a different comfort level with this question, but I’d like to know a little bit more about just what your numbers look like. You mentioned that you’re in the eight figures now. Can you give us an idea… For anybody out there that’s… Obviously if you sell online or through your own website, you’re going to keep most of your money. But what does the relationship look like when you’re selling either on Amazon or through a distributor? You mentioned you had to raise your prices when you started working with wholesalers and distributors. Can you give us an idea of what the numbers look like, how much goes to the distributor or to Amazon or to other people in the process and how much comes to you?

Chris:
Yeah, I can give you some insight. I won’t give you the exact CROSSNET model.

J:
That’s fine.

Chris:
But I’ll give you a model if I was working from scratch. So, if I had a $25 product cost, so it cost me $25 to land this guy, I would then to sell it to Dick’s or Walmart for $50, so about 2x what I manufacture it for. Then I would sell it to the end consumer for $100. So I’d try to make as much money as I can and as much traffic on to my e-commerce side, buy it for $25, sell it for $100. And at wholesale, I’d be about 2x, where retail I’m at 4x. That’s kind of our margins and what we’re looking for in CROSSNET. My whole goal is to drive most of the traffic to my site, and then from there, they can bounce and go to Dick’s or another reputable site. But my whole thing is I always want to own my customers data big-time. That way I can hit them with up-sales, cross-sales, other promotions and all of that.
From a revenue standpoint, like I said, first year was $87,000. 2019 was $2.5 million. This year, I’ll be pretty upset if we don’t hit $15 million.

J:
Wow, that’s-

Carol:
That is absolutely incredible, and my mind is blown that you just started this in 2017 and weren’t even selling until 2018. I think explosive is absolutely an understatement. So what’s next? What is next for CROSSNET? And I mean this in all seriousness. Is there a way you can become an Olympic sport? I’m totally serious about that. It sounds like it’s gaining such massive popularity and just becoming very mainstream. That’s obviously just an idea. What is next on the horizon?

Chris:
Yeah, for sure. We just put out the doubles net earlier this year, and then social distancing hit us and COVID. So it’s not as cool to promote an eight-person game as it was in 2019. Looking at the sport as a single sport or a doubles sport, I see doubles being the way of the future, where teams will travel across the world to play each other. You have the best professional volleyball players in the world playing together on a CROSSNET to compete. I mean, it sounds crazy, but yeah, why not the Olympics? I mean, you’ve got weirder sports in the Olympics. Olympics would be sweet. I think right now our biggest thing is just getting volleyball players and really good athletes on the net and spread the sport. We’re doing a great job selling the product, but getting the end consumer to continue to use it and use it and use it and spread and be our advocates and create that snowball is the biggest thing I’m working on.

J:
Fantastic. Okay. Give us one more piece of advice. Before we jump into the Four More segment, give us one more piece of advice for anybody out there that might be developing something similar to this, not necessarily similar like volleyball, but somebody that has an idea for a product or a game or a sport, and they don’t know where to go, where to start. Give a great piece of advice for them if they happen to be listening to this right now, and this is just perfect timing for them.

Chris:
Yeah, really just: why not you? Everybody that you look up to, everybody who has a cool product, they’re all just normal dudes. Everyone’s just a normal person with a friend group making corny jokes. If you have a good idea, a good opportunity, just go for it. Otherwise, you’re always going to live with that regret. I know it’d be absolutely killing me if I saw that Greg and Mike were doing this without me right now and I was still at Uber. So you just got to go for it, especially if you have that security of a good resume or a college degree. Those jobs are always going to be there. If it’s not that one job you’re at, it’s going to be 1,500 other ones that are all the same. So, if you have a good idea that you think it’s a once-in-a-lifetime thing, go for it. You never know what’s going to happen. And be smart. Be frugal and continue to treat all the money in your business bank account like it’s your personal bank account. Otherwise, you start falling out of control.

J:
Absolutely love it. Okay. Well, this is the point in the show… We’re about 45 minutes in. So I want to jump into the segment we call Four More, and that’s where we ask you the same four questions that we ask all of our guests. And then the More part of that is where you tell us more about where our listeners can find out more about you, your product, and can connect with you. Sound good?

Chris:
Cool, yep.

J:
Fantastic. Then I will take the first question. Tell us, what was your very first or very worst… I’ll let you choose which one… job? And what lessons did you take from it that you’re still using today?

Chris:
Good question. I think my worst job was being a janitor. That was really… I was a janitor mopping toilets. Literally, I’d just mop toilets and mop tables at a high school. That was my first job, and my second job was being the pizza boy at The Rat at my college, so both very humbling jobs. And I think what it taught me is that you have to treat everyone with the same amount of respect. It’s like that quote, “I treat the janitor like I treat the CEO.” But it’s true. Everyone’s in all different walks of life. I’m fortunate that I had a cool idea in the volleyball net, but before that, I was just a janitor. So you got to treat everybody the same and give everybody the respect, at least until they take it away.

Carol:
Awesome. Okay, I’ll take the second question. I would like to know, Chris, what is the best piece of advice or the best tool you haven’t mentioned today or just one pro tip that has served you really well that you have for small business owners or young entrepreneurs that you haven’t yet mentioned?

Chris:
I haven’t yet mentioned. I mean, Google Analytics is great, just being able to track… When you’re at scale like us, we’re flipping all these different levers all the time. And the only way we could really get to the source of that data is using Google Analytics and really setting it up really well from the get because the way I run our company, it’s always an experiment like, “Let’s throw $100 here. If I can make $105, let’s do $200 the next week.” So we’re flipping so many different levers all the time. Sometimes it’s even just hard to keep track. So, having it all come into one place is really, really important. For me, I didn’t know much about Google Analytics before I started the company, but you can take lessons online, or you could just hire a person to run it for you and then tell you what’s up.

J:
Love it, and it’s a completely free tool, too, and that’s the best part. Awesome, okay. Question number three: what is the biggest fail? I’m changing this question up a little bit. This is a different question than I’d normally ask, but I like this question. What’s the biggest fail you’ve had either in this business or a previous business, and what lessons did you take from it? And I’m not going to let you use the one that you used in your last business, where you left too soon. We need something else.

Chris:
Absolutely. Product packaging. The biggest thing you do when you start up a company is: how can I get price breaks? What price breaks can I get at what levels? So we bought a ton of packaging, so much packaging just because we got some type of price break. And we got them all into the country. We spent thousands on dollars on it, and what do you know? We changed the product up just by a little bit, where the packaging was no longer relevant. And we literally just… I think we were making bonfires out of the boxes. So don’t buy too much packaging, especially in the beginning because things change. I promise you things will change. Even if you think they’ll never change, they’re going to change slightly. So don’t overprepare. Don’t spread yourself too thin there. I definitely wish I didn’t buy all that packaging just to get a price break.

J:
That’s great, and I’ve actually made that exact same mistake in one of my businesses. I agree. That’s probably a mistake a lot of people make. Absolutely.

Carol:
Yeah. I was going to say, J, that sounds familiar. Yeah, I remember those stacks and stacks that we had to find somebody to take. Okay. So this is the fourth question of the Four More. I know you mentioned you’re frugal. You mentioned you’re from a small town, and you came from a very humble background. But that said, is there anything along the way, whether it’s in your personal life, professional life, whether it’s an experience or a thing, that you’ve splurged on that was totally worth it?

Chris:
Last winter, I went to Switzerland with my girlfriend. That was really cool, the most expensive place in the world. And yesterday, we bought a Tesla. That was cool.

J:
Awesome.

Carol:
Ooh, that’s phenomenal, Switzerland and a Tesla. What a great couple of years you have had. That’s phenomenal.

J:
Congratulations.

Chris:
Thank you, appreciate it.

J:
Okay. So that was the Four part of the Four More. Now for the More part of the Four More. Can you tell our listeners where they can find out more about CROSSNET, where they can buy it, most importantly, and where they can connect with you or any of your partners or find out more about you guys?

Chris:
Absolutely. You could buy CROSSNET at crossnetgame.com, definitely the best spot to go. You could always chat with me on LinkedIn at Chris Meade. My email’s [email protected], if anybody ever wants to chat. Yeah, we’re out. Look us up on the web. CROSSNET’s in a lot of spots.

J:
Awesome. Chris, this was absolutely fantastic. I love the phenomenal growth story over… Literally, it’s only been three years. And I’m really excited to have you, maybe even your partners with you back in a year or two just to find out where you’ve gone from here and to continue to watch the explosive growth.

Chris:
Absolutely.

J:
So congratulations on all your success. Thank you so much for being here, and I look forward to talking to you again soon.

Chris:
Thanks, guys. I appreciate it.

J:
Absolutely.

Carol:
Thanks, Chris. We’ll see you soon.

J:
Bye.

Chris:
Have a good one. Bye.

Carol:
Seriously, J, how awesome was that episode? I’ve got to tell you I absolutely loved how Chris just gave us step-by-step instructions for things like building a website that works, for prototyping your product, and mostly just dreaming a product and figuring out a way to get it going and make it happen. He’s picking up the phone. He’s building those relationships, doing all the things that so many of us talk about doing and really going out and making it happen. Absolutely loved everything about that show.

J:
Absolutely. And I love the fact… He’s pretty young, and again, I know we have a lot of young founders out there, but it’s just a good reminder. It doesn’t matter if you’re in your early or mid-20s, if you don’t have a ton of experience, if you don’t have a ton of relationships. You can be successful. Chris said it himself. Everybody out there, all founders, all businesspeople, they’re just normal people, and they put their pants on one leg at a time just like you do. So, if they can be successful, you can be successful, but you got to be willing to pick up the phone and make phone calls and talk to people and build those relationships. But if you’re willing to do that, there’s no reason you can’t build a $15 million-dollar company in three years.
So, anyway, are we good here? Anything else to talk about this week?

Carol:
I think we need to wrap this up.

J:
Okay, let’s wrap it up. Everybody, thank you so much for tuning in. We really appreciate you listening, and we hope you have an amazing, amazing week. She’s Carol. I’m J.

Carol:
Now, remember: why not you? today. Go start a business. Grow your business. Have fun. Thanks for tuning in, everybody. We’ll see you next time.

J:
Thanks, everybody.