How two engineers teamed up to produce a better night’s sleep

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TRANSCRIPTION WITH SPEAKERS
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[00:00] SPEAKER_01: Welcome to Canada's podcast.
[00:06] SPEAKER_02: Hello, this is Robert Smigel and welcome to the BC edition of Canada's podcast where we talk to the entrepreneurs who are making it happen here in British Columbia.
[00:14] SPEAKER_02: Today's guests are Marty, First and Jason Elliott.
[00:18] SPEAKER_02: They have been near your friends for nearly 20 years and share backgrounds in engineering, manufacturing and business development.
[00:25] SPEAKER_02: Marty is currently CEO of perfectly snag ink has proven his entrepreneurial skills and high technology business development for many years in digital imaging products, including cameras that have been used on the space shuttle and international space station.
[00:43] SPEAKER_02: Marty retired at 46 years old but kept bugging his friend Jason to quit his job so that they could start a company together.
[00:49] SPEAKER_02: Eventually Jason quit his job and together they wrestle to find just the right project. Finally they founded perfectly snag to develop a solution to Jason's hot sleeping problem, the smart, copper air conditioning for your bed.
[01:08] SPEAKER_02: Well Marty and Jason welcome to Canada's podcast and thanks for taking the time today to be here for all our listeners.
[01:17] SPEAKER_02: Awesome, let's get started. You guys are in two different locations. We've got one Vancouver and one in Victoria.
[01:25] SPEAKER_02: Why don't you give us a little bit of detail about yourself and maybe we can start with Marty just give us a bit of a background. We kind of got your business background and then we can roll over to Jason. He can tell us a little bit more about himself as well.
[01:38] SPEAKER_01: Sure, well my background is an engineering graduate in engineering physics at UBC and worked for years on the technology side doing engineering at Vancouver general with medical robotics and then with Creo products, which was BC's largest high technology company and grew with it from 90.
[02:05] SPEAKER_01: I was employing 92 I think and it grew to 2000 people I think by the time I left.
[02:13] SPEAKER_01: And I left to found a company called Q imaging doing digital cameras for the biomedical primarily biomedical market.
[02:24] SPEAKER_01: And so we sold that to one of our competitors and a little while later founded Rosilica Inc which did machine vision cameras for mostly manufacturing and traffic imaging that kind of thing.
[02:44] SPEAKER_01: And by then you know really all I was doing was stuff on the business site.
[02:51] SPEAKER_01: Always had a finger in the engineering but now I'm pretty much exclusively on the business side.
[02:57] SPEAKER_03: Awesome. Cool. Okay Jason.
[03:00] SPEAKER_03: Sure like like Marty I'm an engineer by trade I graduated from Waterloo systems that design engineering a while ago and did a master's at UBC as well and spent 10 years my first 10 years in industry in the field cell industry designing hydrogen powered for good.
[03:20] SPEAKER_03: And which was lots of fun but learned a lot about how not to do a business from a business perspective there.
[03:28] SPEAKER_03: I moved on from there and worked at Kodak and developed optical systems high precision optical systems.
[03:34] SPEAKER_03: It was very challenging work and then my just before we started perfectly snug I worked in the capacity of the many leading the engineering team at Schneider electric solar division.
[03:49] SPEAKER_03: So looking after global solar solar product development also a very challenging business from margin perspective.
[03:59] SPEAKER_03: And so you know Marty had lots of experience on how to do business well he had seen good margins and good good growth.
[04:09] SPEAKER_03: My companies that I ended up working for had always had margin trouble.
[04:14] SPEAKER_03: So that's a that's a theme of what we're about and perfectly snug to not have margin trouble.
[04:22] SPEAKER_02: Right so perfectly snug is a topper that matches topper which I guess keeps your body cool.
[04:28] SPEAKER_02: Can you kind of just tell us a little bit more about that and how you're different from anyone else out there.
[04:32] SPEAKER_03: Sure yeah sure. So most of the products on the market are a piece of foam that have some sort of you know special property that makes it marginally cooler.
[04:44] SPEAKER_03: So the problem that we're trying to solve is is people that are too hot to sleep and there's a lot of people that are hot and it causes them to toss and turn all night.
[04:52] SPEAKER_03: Yeah you me too. And that's where this came from was was my issues I basically sleepless in the summertime and poor sleeper in the winter times.
[05:01] SPEAKER_03: And so that's that's where we where the idea came from and so all that you can get and I tried all these solutions on that are available on the market which are basically foam solutions or some sort of passive system not system but passive material that put on your bed.
[05:18] SPEAKER_03: And they really are a gimmick and they don't really work.
[05:21] SPEAKER_03: So we you know one night we were sitting around looking for ideas of what to do for a company and I was like Marty I just can't sleep by you know what I really need is an air condition bed like a bed that will take care of my temperature and actively monitor my temperature and and and keep me at the right temperature all night.
[05:38] SPEAKER_03: And we're like oh that's a great idea and we started looking into it and you know lots of people had that issue.
[05:43] SPEAKER_03: So what what we came up with after you know a year or a year and a half of development is a is a product that's a here I got one beside me here.
[05:52] SPEAKER_03: It's a it's a thin layer that goes on top of the bed and inside that there's some very compact technology that allows us to use some small fans and provide air flow that flows up and underneath a person's body and around them.
[06:08] SPEAKER_03: And then we monitor the body temperature during the night and change the amount of cooling that they get as well it has a heating system inside of it so it's got distributed heating element throughout the bed and and so if a person's cold they can also get a little bit of heating.
[06:24] SPEAKER_03: It's dual zone so you know very very often one person has a is hot another person is typically cold so each person gets the set it on their own.
[06:33] SPEAKER_03: It's got a remote control in your phone so you can change the settings and there's a number of preferences that you can choose and and what we find is it improves people sleep and that's that's really what we're about is is giving people their life back improving the mood improving their health.
[06:53] SPEAKER_03: So it's allowing them to sleep when they couldn't sleep before you know menopausal women have found this to be especially fantastic for them and people who sweat at night just sweating stops the hot flashes reduce your disappear and people are getting more solid sleep at night.
[07:13] SPEAKER_03: Okay so what do people go buy something like this and what's it cost if I want to get one what does that look like so we sell online exclusively so we're ecommerce company so people find us through internet and various online forums and we sell and ship directly from our factory to the consumer.
[07:34] SPEAKER_03: So you can't go to Walmart can't go to Walmart no.
[07:38] SPEAKER_02: Okay especially product okay now this looks like it mean some R&D so how do you guys managed to put together the capital to put the time and energy resources where's that come from.
[07:53] SPEAKER_01: Well from my previous enterprises that were sold I have a little bit of money so I've funded most of the company until now although we recently added a few shareholders amongst friends.
[08:16] SPEAKER_01: So we're kind of funding it along the way with the idea that really as quickly as we can we want the product to be generating enough revenue to fund the company and the growth of the company.
[08:31] SPEAKER_02: Okay now sleep is a very important aspect to just good health and entrepreneurs need to be in good health and because late hours about hectic schedules things like that those eight hours six hours are needed maybe Jason you could help me with this one I want you to give me a key piece of knowledge or information about your industry that our listeners can learn from that they may not know what I'm going to do.
[09:00] SPEAKER_02: So I'm going to talk about now the mattress industry to top industry mattress industry maybe all the cooling stuff that's not doesn't dating.
[09:09] SPEAKER_03: Yeah it's not really technology the mattress industry really isn't technology it's a it's a marketing industry and a lot of the differentiation between our competitors is marketing you know how it looks how it's presented and marketing is powerful and and companies have grown.
[09:28] SPEAKER_03: The bed box industry is growing very fast the direct to consumer segment of the mattress industry is growing and doing very well and it's based on marketing.
[09:39] SPEAKER_03: We differentiate based on technology and and that our product is actually different it does something different than other people than other people's product.
[09:48] SPEAKER_02: So okay so there's nothing quite unique is there fans or there's just something different that makes it that no one else has out there you know whether there are some kind of vaguely similar products there's one of our competitors for instance cycles temperature controlled water through your bed.
[10:09] SPEAKER_01: So you set the temperature of the water you want and or the vaguely the temperature of the bed you want and it pumps water through little tubes kind of thing.
[10:20] SPEAKER_01: Another one of our competitors uses what amounts to a big air dryer that they stick in the end of your bed underneath the covers and it blows air through your bed.
[10:34] SPEAKER_01: Now we we rejected those approaches for a number of reasons and really decided what the problem was you know and the reason you can't just use a fan or a fan is not that effective.
[10:50] SPEAKER_01: There's a fan this kind of makes the top of your cold but you're still hot where you're lying on the mattress and cooling gel mattresses don't work really at all they initially feel cool or more cool than a regular foam but the way they work is they suck up heat so eventually they get really hot and then stay really hot.
[11:11] SPEAKER_01: So even cooling forms don't work so what we came up with and the reason is a is a way to actively cool your body and uses air but air percolates up right against your your body under like right where you're lying so it's cooling you down exactly where you're getting hot which is right against the mattress.
[11:36] SPEAKER_01: And then because it's airflow it also vents gently vents air out of you through the blankets like out through the top of the blankets to take away any excess moisture so the comfort level is really great because it keeps you just at the right temperature and keeps you kind of that dry comfy feeling no no slimy sheets kind of thing.
[12:03] SPEAKER_01: And the reason we made it a topper is we kind of felt that we didn't want to have to deal with different firmness of different beds we wanted to just address the problem of.
[12:18] SPEAKER_01: Temperature so we made it thin enough that it doesn't really affect the underlying character of the person's bed so if you like so firm bed stays firm like so soft and works in all those situations.
[12:35] SPEAKER_01: So it's it's quite different than anything out there really.
[12:38] SPEAKER_02: Okay what's the long term vision and what will your company look like in the future do you see the company expanding into other areas and where beyond Vancouver BC or even Canada.
[12:50] SPEAKER_01: Well certainly it could be a global business we've restricted ourselves to North America primarily because of regulatory issues bedding is regular is regulated.
[13:06] SPEAKER_01: And that was one of our big challenges actually was to get all this technology to pass through regulatory approvals.
[13:15] SPEAKER_01: So to sell it all over the world we have to get regulatory approval everywhere that we're going to sell it pretty much everywhere that cares.
[13:28] SPEAKER_01: So you know we could grow that way but also we have some plans of you know eventually creating our conditioned mattresses also but with more of kind of a maybe a bit of a green angle where one of the materials we're using is highly recyclable.
[13:52] SPEAKER_01: Whereas regular foam mattresses are not recyclable.
[13:58] SPEAKER_01: So we have some ideas about how to create a mattress that's fully recyclable.
[14:06] SPEAKER_01: That is also temperature controlled smart bit.
[14:15] SPEAKER_01: And you know we think that would be a great product and the only reason we haven't done it yet is again this issue of wide range of well that and the need for different types of mattresses different furnaces you know it gets to be quite complicated in terms of creating just the right we're getting the right product of the customer.
[14:43] SPEAKER_01: Whereas with the top or no work with anybody's bed.
[14:47] SPEAKER_02: Now we've learned a little bit about both you guys and your company and your product let's talk about doing business in care specifically British Columbia.
[14:56] SPEAKER_02: What are the biggest benefits for you and being an entrepreneur in British Columbia I want you to give us some of the good points about starting a company here but I also want you to give us some of the tough things or challenges for listeners so they can keep an eye on them.
[15:09] SPEAKER_03: Sure maybe I'll start maybe Marty you can feel in but you know that one of the strong things that Vancouver has to offer is the is the human resource pool.
[15:19] SPEAKER_03: There's a lot of very talented people here.
[15:22] SPEAKER_03: Lots of good technical people to pull on on the HR side though there is a weakness in manufacturing generally manufacturing in Vancouver is tough.
[15:35] SPEAKER_03: It's a hard to find labor that's good that's inexpensive and the facilities are expensive so so manufacturing is not a knife Vancouver is not an ideal place to be.
[15:49] SPEAKER_03: But you know our vision is we eventually will grow and have other facilities and other places that are lower cost like southern US to keep shipping down.
[15:58] SPEAKER_03: So you know you have to think about the real estate cost of Vancouver definitely when you're starting a business.
[16:06] SPEAKER_03: Yeah I think that's one of the biggest impacts for us is the real estate cost.
[16:11] SPEAKER_02: Yeah that's obviously been Vancouver's rated the most expensive place in North America now.
[16:16] SPEAKER_02: I think that's not my fault so it's getting up there.
[16:20] SPEAKER_02: Okay I want you guys to imagine we're getting back to British Columbia again.
[16:24] SPEAKER_02: If you start all over again and you just moved here to British Columbia but this time you don't know anyone knowing what you know now what would you do and how would you go about starting all over again as an entrepreneur.
[16:35] SPEAKER_02: Give us some of the things that you do differently that you've learned along the way during this venture.
[16:40] SPEAKER_01: Well I've definitely learned a few things you know it's it's all all of our experience both Jason and I have been in product based businesses not not service based businesses.
[16:54] SPEAKER_01: And you know I've kind of developed rules of thumb that I think are important and that might be of use to people.
[17:04] SPEAKER_01: And one Jason's already mentioned the importance of margin you know so many people when they started business they kind of think oh I just need you know twice the cost and I'll be fine.
[17:16] SPEAKER_01: Well twice the cost in your your basically out of business.
[17:21] SPEAKER_01: You really need a margin if you want to grow fast you need a gross margin.
[17:28] SPEAKER_01: Kind of a 10% I would say.
[17:32] SPEAKER_01: You know to handle the growth and to create some room for making a few mistakes and a lot of companies especially in BC there and in products you started by an engineer or a professor and they have great technical.
[17:52] SPEAKER_01: Uh interesting they spend all their time developing the product.
[17:57] SPEAKER_01: But don't really consider the marketing and pricing and end of things which really should be developed at the same time so.
[18:07] SPEAKER_01: Because the first rule you know make sure you can achieve a good margins to so that you can discount for reselling and so on so you can make some mistakes and so you can grow quickly.
[18:22] SPEAKER_01: Also you should sell what people are buying if it's your first product is again you want to have money to fund the business and you need something to sell to it if you're going to raise money other than through venture capital.
[18:37] SPEAKER_01: Um you want to move as fast as you can to a casual positive so our metric was try to achieve casual positive within the first year.
[18:50] SPEAKER_01: Now perfectly snug we didn't quite achieve that but that was our goal.
[18:57] SPEAKER_01: Uh I kind of alluded to this before but another rule is you know develop your marketing and sales engine at the same time you're developing your product.
[19:08] SPEAKER_01: Many high tech companies they spend all their money and time developing the product and as the product finishes they go okay let's sell it and they haven't realized that it takes the same amount of time and effort.
[19:23] SPEAKER_01: To develop the distribution and sales and advertising and there's a whole engine that has to get running on the market and sales and things as well.
[19:36] SPEAKER_01: Those are just kind of some of the rules that I would use if I was advising somebody who's just starting a product business in BC or anywhere else really.
[19:47] SPEAKER_02: Okay do you think entrepreneurs have to be weird or unique in a positive way or are wired differently.
[19:57] SPEAKER_01: Well yes and no I think they have to be hard workers of course because when you're starting off you're doing everything and you have to be fairly widely skilled.
[20:11] SPEAKER_01: Because you have to do everything and usually you're short of cash at the beginning.
[20:18] SPEAKER_01: So you can't afford to hire expertise so you have to learn it quickly so you have to be a quick learner.
[20:25] SPEAKER_01: And you have to you know be willing to do whatever needs to be done.
[20:30] SPEAKER_01: If you're starting out you might be sweeping the floors at the same day that you're.
[20:38] SPEAKER_02: Closing a multi multi million dollar deal.
[20:41] SPEAKER_01: Yeah exactly somebody's got to clean those targets.
[20:44] SPEAKER_02: Yeah okay Mario you're obviously a very well read person by the look of your book shelves there so I'm going to talk a little bit about that.
[20:54] SPEAKER_02: What books are you reading now and why or even audio books or podcasts and can you recommend any books for listeners who are also entrepreneurs.
[21:03] SPEAKER_01: I'm reading a number of books at the moment.
[21:06] SPEAKER_01: I like I read a fair bit of fiction actually.
[21:11] SPEAKER_01: I just started reading the.
[21:18] SPEAKER_01: Virginian it's a old book written in the 1800s.
[21:23] SPEAKER_01: About the old west it's quite good.
[21:26] SPEAKER_01: And I read I'm reading the complete works of G K Chesterton.
[21:31] SPEAKER_01: It was a fantastic writer and highly recommend him or just kind of general wisdom and enjoyment.
[21:43] SPEAKER_01: And you know most of the reading I do on the technical side it really it's as I need it.
[21:52] SPEAKER_01: A book that I could really recommend for entrepreneurs.
[21:56] SPEAKER_01: Well start up people thinking starting a company is it's called the pocket MBA or entrepreneurship.
[22:05] SPEAKER_01: So there there is several versions of the pocket MBA but there's one that's particularly for entrepreneurship.
[22:12] SPEAKER_01: And it's excellent it really explains all the kind of steps you go through explains how to read a financial statement.
[22:23] SPEAKER_01: And step by step so you can even build a integrated spreadsheet.
[22:29] SPEAKER_01: And you can see the integrated financial statements in spreadsheet.
[22:33] SPEAKER_01: And model your business which is what we've done.
[22:39] SPEAKER_01: Yeah that's I guess those are the big recommendations for now.
[22:43] SPEAKER_02: Jason what are you reading?
[22:46] SPEAKER_03: I like Marty said I read on a as needed basis.
[22:51] SPEAKER_03: I work pretty long hours and I think it a lot of time to read right now.
[22:57] SPEAKER_03: So I generally read literature about how to improve manufacturing processes.
[23:06] SPEAKER_03: But it's you know as I said on an as needed basis and a lot of it is internet.
[23:10] SPEAKER_03: So I picked up a book in a year I don't think so.
[23:13] SPEAKER_02: How about any online or offline tools that you guys like to use on a daily basis?
[23:17] SPEAKER_01: Well we use lots of different software tools.
[23:21] SPEAKER_01: You know our online businesses is Shopify based.
[23:27] SPEAKER_01: And then there are a number of apps that we use associated with that.
[23:33] SPEAKER_01: You know integrations with Amazon and with QuickBooks and.
[23:42] SPEAKER_01: So there's a fairly wide spectrums we use Claudio for email communications.
[23:48] SPEAKER_01: And of course the full suite of while we use the Google's business suite.
[23:56] SPEAKER_01: For a lot of our stuff which really helps since we are in a few different locations.
[24:02] SPEAKER_01: To be able to work together it really helps to use that.
[24:06] SPEAKER_01: And it's relatively economical.
[24:10] SPEAKER_01: I don't know what else is.
[24:12] SPEAKER_03: I just generally say that you know our experience from 10 years ago till now it is so much easier from an IT perspective.
[24:21] SPEAKER_03: To start a company it's is really revolutionary being able to have an ecommerce business not having to develop things fundamentally.
[24:30] SPEAKER_03: You know using services like Shopify.
[24:33] SPEAKER_03: You know while it's still kind of painful.
[24:36] SPEAKER_03: It's unbelievably easier than it was 15 years ago or 10 years ago.
[24:41] SPEAKER_03: You know and collaborative software.
[24:44] SPEAKER_03: We don't have it. We don't have we all just have laptops.
[24:46] SPEAKER_03: We don't have any server for an engineering company that 10 years ago you couldn't do that.
[24:51] SPEAKER_03: Even our CAD system we use on shape.
[24:54] SPEAKER_03: It's an online cloud-based computer-aided design package.
[24:58] SPEAKER_03: It's pretty good.
[25:01] SPEAKER_03: So you know things have really revolutionized from software perspective and the software tools perspective in the last 10 years.
[25:11] SPEAKER_03: That's a big difference.
[25:12] SPEAKER_02: Cool.
[25:13] SPEAKER_02: Okay we're going to roll into our kind of rapid question answer period and we got some stuff that just kind of get to know you guys a little bit more beyond perfectly snug.
[25:22] SPEAKER_02: If you weren't doing what you do now what would you like to do for a profession?
[25:29] SPEAKER_01: Well I think both of us are doing more or less what we like to do.
[25:33] SPEAKER_01: You know we enjoy engineering especially.
[25:35] SPEAKER_01: And if we weren't doing perfectly I mean we had a number of ideas before we settled on.
[25:41] SPEAKER_01: Air condition mattress topper.
[25:44] SPEAKER_01: You know we thought of we had ideas with water jet cutting machines with small engines for range extenders on electric cars.
[25:58] SPEAKER_01: And most of these other ideas we had we decided we're just a little bit too big of scope right now.
[26:07] SPEAKER_02: Yeah sounds like the story of Netflix you guys ever read that story about two guys driving driving to work every day in the barrier trying to come up with ideas.
[26:16] SPEAKER_02: Yeah and anyway we went came up with why don't we sell CDs out for movies and they said that's a terrible idea let's do it.
[26:28] SPEAKER_02: Okay what kind of job would you not like to do couldn't do it.
[26:31] SPEAKER_01: I enjoy a number of different kinds of work but if I guess at my age it's any kind of heavy physical work would be harder now.
[26:40] SPEAKER_01: No one was younger.
[26:44] SPEAKER_01: And I have a small family so any kind of I really didn't enjoy when I was working with one company I was in charge of their international business with with Krio I was their general manager of international business which meant I was responsible for all their business outside of North America and Western Europe.
[27:07] SPEAKER_01: Which also meant I was on the plane all the time.
[27:10] SPEAKER_01: Well it was in retrospect I'm glad I visited all those places and had that experience that was not a fun job and I was away from home all the time so I don't think I'd like a job away from home all the time.
[27:25] SPEAKER_03: Jason for me it's not necessarily the job I think part of being an entrepreneur is you have to enjoy work you have to enjoy doing whatever is before you.
[27:34] SPEAKER_03: And I you know so I don't mind what I'm doing I definitely enjoy designing things the most but the thing I would not want to do is is is work with people that are not constructive on a daily basis you know people who are hard to work with from not not really interested in getting things done more interested in politics of the company or something like that.
[28:00] SPEAKER_03: And so it's more about who I'd work with than what I would do.
[28:04] SPEAKER_03: Okay the makes the biggest impact.
[28:07] SPEAKER_02: Okay do you guys have any advice that you may have received that you can pass on to entrepreneurs throughout Canada?
[28:16] SPEAKER_01: Well there's lots of lots of advice and some of that I already mentioned in terms of some startup guidelines.
[28:28] SPEAKER_01: But you know most especially in a startup situation it's very hard to do it all by yourself.
[28:35] SPEAKER_01: And so you got to do it with somebody.
[28:38] SPEAKER_01: And so you got to you got to pick some partners.
[28:44] SPEAKER_01: It's it's much easier to do this with a few people than none or you just yourself.
[28:49] SPEAKER_01: And so you got to pick your partners carefully because it's going to be a stressful time growing a small company.
[28:59] SPEAKER_01: And you need to have people that are all on the same page in terms of world view and goals and commitment.
[29:16] SPEAKER_01: And so you know that's that's a big part of the reason why Jason and I are working together.
[29:20] SPEAKER_02: Awesome. Okay we're going to wrap things up.
[29:23] SPEAKER_02: How can our listeners get hold of you guys and is there anything you'd like to add before you leave us today?
[29:29] SPEAKER_01: Well the best way to get a hold of us is through our website at perfectly snug dot com.
[29:38] SPEAKER_01: And through our contact page that's probably the easiest way.
[29:45] SPEAKER_02: Okay and if you're hot sleeper you definitely want to get in touch with these two guys.
[29:50] SPEAKER_02: I'm sure they could help you a lot.
[29:52] SPEAKER_02: Certainly.
[29:53] SPEAKER_02: Yeah awesome.
[29:54] SPEAKER_02: Okay guys well thanks for coming on the show.
[29:56] SPEAKER_02: I'll learn a lot about you and I'm sure our listeners have as well.
[30:00] SPEAKER_02: Awesome. Okay and also to our lit and to all our listeners listening to this.
[30:05] SPEAKER_02: Thanks for listening to Canada's podcast.
[30:07] SPEAKER_02: Like comment and subscribe to all our channels to get the latest podcasts from entrepreneurs of course Canada.
[30:12] SPEAKER_02: Much like Marty and Jason and we'll see you guys next time.