In this episode, I talk with the co-founders of Heliponix, Scott Massey, CEO, and Ivan Ball, CTO. Heliponix could be described as “Keurig for food”, as it provides consumers with a GroPod an automated hydroponic appliance that allows you to grow fresh food in your home. Some of the things grown in their pods include culinary herbs, such as basil, cilantro, and mint, leafy green vegetables, including romaine lettuce, spinach, and kale, and even jalapeno peppers and cherry tomatoes.
Scott and Ivan shared the story of how they met while completing their undergraduate degrees at Purdue University while working on a NASA hydroponic research study. This lead them to be interested in hydroponics and bringing it to the consumer. They describe future plans for their product, as well as the future of hydroponic technology.
Topics in this episode
How hydroponic vegetables address food safety concerns and perishability of produce
Description of the GroPod
Implementation of technology and social media with their product
Use of the subscription model
Environmental benefits of hydroponics
Future of agriculture industry for culinary herbs and leafy greens
Mike Kelly: Welcome to the podcast. Today we have Scott Massey who is one of the co-founders and the CEO of Heliponix, and with him is Ivan Ball, who's also co founder and the CTO. Welcome guys. Why don't we start one of you give me the elevator pitch for Heliponix?
Scott Massey: A Heliponix provides consumers with the GroPod. The GroPod is an automated hydroponic appliance that allows you to grow fresh food in your home. Our business model could be described as Keurig for food where we install the IoT enabled device once and a recurring subscription of seedpods going on a monthly fulfillment cycle after that. We turn everyday people into farmers regardless of their prior knowledge of agriculture, time available, or even space inside their home.
Mike Kelly: I love Keurig for food. What kinds of things am I growing? Like I'm clearly not growing potatoes, right?
Scott Massey: Right, right. Tubers, anything that grows under the ground, like carrots, peanuts, require a whole lot of extra root space, and you have a pretty slow growth rate with those varieties that don't really work well with hydroponics. What we focus on our high value, high turn crops, so culinary herbs, basil, cilantro, mint, leafy green vegetables, Romaine lettuce, spinach, cabbage, Kale, things like that that you have a high food safety concern at the highest likelihood of e. coli, Salmonella outbreaks, and also perish very, very quickly. These are the things that people really gravitate towards are branch because the freshness is unmatched with what they can get at the grocery store. The taste is overall superior.
Ivan Ball: Yeah, and some of the other things that we started growing Jalapeno peppers. We've successfully grown marigold flowers as well and some small hybrid varieties of cherry tomatoes.
Mike Kelly: Awesome. Okay. How big is the pod? Give me an idea like where is this thing sitting? Is it in my kitchen? Is it like what? What does this look like?
Scott Massey: The machine itself is the size of a dishwasher identically about 24 inches by 24 inches, about 34.5 inches tall. It fits under the counter. It's a very aesthetically appealing appliance that will blend in seamlessly with the other appliances you have with a beautiful stainless steel front. The physical pods, which are kind of a K-Cup similarity, has about a one inch diameter maximum, and it's about two inches in height. Those are the little ponds that actually plug into the machine and the user is able to grow consistently. One pod gives you one plant.
Mike Kelly: Got It. How hard is this? What's involved in installing? Like is this something I could install on my own if I just took out a couple of cabinets and wanted to put it in there or-
Scott Massey: You don't even have to take the cabinets out. We have a unique design with multiple utility patents on it that gives us a pretty unfair advantage of just having the lowest energy consumption of any system on the market. That's typically the biggest drawback for this industry, because if you're spending more money on the power bill then you'd otherwise spend at the grocery store, we're not solving any problems for you. We're just giving you a more expensive grocery bill overall. This system could go to any standard 110 volt outlet in your home. We have people putting in attics, garages, basements, and even in their kitchen. They want to have it front and Center for the company they have over. It can be plumbed in. It does use about eight gallons of water per month, so we recommend using a quarter inch water line just like your refrigerator. If you don't want to do that, that's fine as a standalone option, and you'll just get remote notifications pushed to your cell phone of when you need to manually add water.
Mike Kelly: Love it. That's awesome. Current status of the company, how many of these do you have? Have you sold? That are out there? Any vanity metrics you can share about where you guys are on this journey?
Scott Massey: Yeah, so the company's coming up on its three year anniversary this November. We started this as students where we were Undergrad at Purdue University. We originally competed in business plan competitions and were building prototypes in our college apartment just kind of as a hobby. Realized it was an expensive hobby, and we needed to get some funding, hence entering into the business plan competitions. Early 2018 is when we started selling our first beta models to early adopters as paying customers. We produced 20 of those units. About 15 customers purchased the GroPods, and we have 12 active subscribers today. These were people who simply responded to the press releases that we had of the system and wanted to buy it once it was available. Now that we've secured some recent investment funding, we're actually now producing our full production model with a dedicated manufacturer. We're expecting to have over a hundred users by the end of this year.
Mike Kelly: What is, and I think you said this before and I either missed it or forgot, what's involved in the subscription? That's me just getting the K-CUPS, the pods on a regular basis?
Scott Massey: Yeah, so it's actually the fertilizers and nutrient packages, which are pre-measured for you to simply put into the system whenever you get a notification telling you when to do so, and the physical ponds themselves. The pods are currently a polypropylene plastic cup. Imagine a little tiny K-CUP with little holes all the way around to allow a water in and root growth out. Inside of that Pod, we use a growing media called rock wool. It's essentially calcium, which is spun at a really high temperature, kind of like cotton candy, but gives you a very nice porous medium that gives you great aeration and root growth.
Scott Massey: Then we're very particular about finding non-GMO, organically certified seed suppliers, which are impregnated in it. For you, the hardest thing you've got to decide is what you're going to grow first. The pods come in a box once a month, and you plug in place ,and you forget.
Mike Kelly: How many times have you given this pitch?
Scott Massey: You know, I think the benefit of starting a company when you're broke, delivering newspapers to pay for it as students, you get used to doing it a lot, especially at these pitch competitions because they put me through the ringer and-
Mike Kelly: Scott, you are so freaking good. Like just taking something and making it as accessible as you're making it, even the simple things of like calcium spun at a high temperature, and it's kind of like cotton candy. That makes it super accessible for somebody who doesn't necessarily know what you know. Right. It's fantastic. Unpack that founding story a little bit more. Like why? Why this start startup? Like how do two college students decide, "I need to grow fresher lettuce in my kitchen"?
Scott Massey: Yeah. I originally had no experience in agriculture. I originally worked in the oil natural gas industry as a mechanical engineer, so all fluid control systems that brought liquids from point A to point B. Then my junior year at Purdue, I saw a job opening looking for a student who was a mechanical engineer and familiar fluid mechanics to work on a NASA funded hydroponic research study. Was really lucky to get the introduction to the study, the whole technology of hydroponics and, more importantly, meet my co founder who was originally my coworker Ivan Ball.
Ivan Ball: Yeah. We actually grew up in the same area but never met until our a senior year.
Scott Massey: Junior.
Ivan Ball: Junior year on that NASA research study. For me growing up, I've always been around agriculture. I'm from a small town, a rural area, and my first job was picking melons in a field. Moved over to Pioneer where we detasseled corn, and then from there it's just I started actually working when I graduated at Grain Processing Corporation. I've always been around the AG industry, and it's been a pretty exciting road.
Scott Massey: The NASA research study is really what just opened her eyes to the industry. What we were specifically doing was building an air tight growth chamber that used hydroponics and it had sensors monitoring the amount of CO2, carbon dioxide, going into the chamber and oxygen leaving the chamber. We had an addressable LED array that allowed us to change the colors and ratio of colors shining on the plants. In real time, we can actually see how these different led spectrums would affect growth rates. That research is actually was used to steer the design for the current LED array, which is growing about 12 heads of lettuce at this moment on the International Space Station. For us it seemed like a no brainer. Hydroponics uses 95% less water than conventional agriculture. If it's in a controlled environment, you don't have to worry about the climate, no pesticides. It's all fresh and there.
Scott Massey: One of the best benefits is you have triple the growth rates. The best comparison I can make is when you put a plant in the field, it's fingering its roots around. It's looking for nutrients in the soil, and it's exerting a lot of energy to do so. All the while, it's constantly battling pest and disease outbreaks and different climate conditions, so you have losses. We take away all of that variability and give you a consistent environment that's exactly what the plants need. If I had to make a comparison, it's like going from a hunter gatherer lifestyle to being an all you can eat buffet where the nutrients are just being food spoonfed right to you. That's where the idea kind of sunk in our mind. You hear this great technology, it eliminates our dependency on climate for farming, and how is it being applied today? To massive stationary warehouses kind of like the building we're in now.
Scott Massey: To me, that seems so counterproductive because the inherent benefit is it's a mobile technology. It democratizes agriculture, and that's when the Keurig for food idea really kind of started to cook in our mind. Another analogy I love to make is the ice industry evolution. Ice has always been dependent on climate. You got it once a year when it was cold enough for it to freeze. The breakthrough in the industry was refrigeration. You could now have these massive ice factories in the early 1900s, and they would deliver you a block of ice, a perishable good that you had to buy on a regular basis. How do you get your ice now?
Mike Kelly: I just go to my refrigerator.
Scott Massey: Yeah, you have your own personal ice factory. When you look at all the reasons why that industry ultimately decentralize itself, it's almost impossible to find an exception as to why agriculture for the crops we're growing are not going to follow that same suit. Now, cereal crops, corn, wheat, soybeans, that's going to stay outside for many, many decades to come. For leafy greens, culinary herbs, you're going to see a shift happen where the majority of these crops will be grown indoors in the next few generations.
Mike Kelly: Hmm. What's the difference between the kind of the current model that's out there today and the full production model?
Scott Massey: Apart from aesthetics and it not being made in a garage with 3D printed components anymore, we've really identified a lot of opportunities to first improve the user experience. Having a great connectivity to the home. We learned very quickly if you can successfully grow plants when you're an educated person in the field, that's great, but that by no means is an indication that Linda down the street with no knowledge of agriculture, no knowledge of how even Wifi works is going to be able to replicate that process.
Scott Massey: We had a lot of safeguards that we started put in kind of wash on timers to make sure we weren't going to have to deal with connectivity issues when the power goes out, when the kid unplugs the Wifi, all those kind of weird use case scenarios. We've also found a lot more reliable suppliers. We started working with hobbyists to create electrical components in our system. Eventually things like corrosion started to happen. You have these nutrient salts that can crystallize in certain metallic properties and certain areas, and that can lead to mechanical and electrical failure. Switching everything to stainless steel, marine, and food grade, and even pharmaceutical grade components just gave us a much more reliable system.
Mike Kelly: You're officially pitching my next product that I launch that's happening. Alright, so step back for a second. Look at if we looked at the market, who are the closest competitors in this market? You're perfectly allowed to name companies. You don't have to do that. You can also talk about categories of competition. Like it could be your biggest competitors of food delivery, like a Green Bean, right? Like your grocery delivery service? I don't know, but when you guys think about competition in terms of go to market, what comes to mind?
Scott Massey: First you got to look at the demographic, because food is a wide, wide category as is farm equipment and as is hydroponic growing equipment. We didn't invent hydroponics. That's been around for thousands of years. The ancient Egyptians used in the Nile. The Aztecs had floating rafts. It's been around. The breakthrough has been LEDs. They've made indoor growing very energy efficient. You've kind of seen a proliferation of the technology in the last 10, 20 years. What makes us unique is that we are the first system I would say that's genuinely useful. There's a number of competitors out there that sell small little desktop units, which is fine. It was a great entrance to the market, but it's not useful to the user. It's not cost effective. It's not really giving you anything that a flowerpot couldn't otherwise get. We went with a pretty tech heavy route, but you constantly deal with that dilemma.
Scott Massey: Everyone says, "Make it simple." Is your product simple, or is the user experience simple? We prefer to have a simple user experience, and what we've done is automated the process that you're not going to have any more than about 10 minutes of maintenance on a weekly basis, and that includes you harvesting and planting your pods from the system. As far as the competitors, there's three main limitations. It's yields. The systems that do exist don't grow much food to really make it a viable source of food for you consistently. They're energy inefficiency. They're so hungry on the power bill that it's not saving you money or even a cost effective way to have food. Food safety. A lot of these systems have absolutely no way of keeping the system clean. There's no protocol of reminding the user that you need to sanitize the system or having some sort of dish washable element. We'll be one of the first UL approved systems in the not too distant future, which gives us a pretty unfair advantage overall.
Mike Kelly: Yeah, that's awesome. I should have asked this earlier and it's going to bug me if I don't ask now. What, what's the payback period on this unit once it's in production? Maybe that depends on what kind of food I grow, but wasn't that wide a variety of the things that you said. What do you anticipate my break even is if I spend x dollars on this? It's Y months or years until I've made my money back. What do you guys think that is?
Scott Massey: If you're doing culinary herbs, something, basil. Local farmer's market, locally grown organic pricing could be anywhere from 10 to $15 per pound. We have a system that can grow 200 pounds of produce annually. That right there has an ROI of well within a year, and that includes your subscription, the hardware cost, and the energy consumption all in. Now, we have people growing a variety of different crops, some of which are just leafy greens, like Romaine lettuce. One of the cheapest things you can buy at the grocery store, but the people who are subscribing to that are young and expecting mothers. People who are hypersensitive of what they're giving their kids. What we're finding is that once the kids are a part of the process, they see the produce grow, they put the pod in, and they take a plant out, they develop a connection to the food that you don't get at the grocery store because you don't know who packed it, and you don't even know how many people touched it before you.
Scott Massey: That's kind of a scary thought. That peace of mind kind of reinforced with better tasting food that the kids are more inclined to eat is, to be honest with you, an instantaneous payback. I mean, you spend what $50, 100 bucks at a nice candle lit dinner more at a restaurant? You do that because you want the experience, and you want that high quality food. There's kind of a human element I would say that goes deeper than just the ROI, of the metrics, of what you're paying and not paying. Once you're talking about health, I mean that's an investment no one's gonna take lightly.
Mike Kelly: Nice. Awesome. Good answer. Back to competition. When you play out this market three years from now, or five years from now, what do you two anticipate this market looks like?
Scott Massey: Ah, well we've got some things cooking right now that could rapidly accelerate our footprint in the market and getting a lot of hardware out there lots sooner.
Scott Massey: I pitch a lot that our goal is to become the world's largest farming company without owning a single acre of land. That's actually a fairly obtainable goal, because the system is 500 times increase in efficiency use of land as what you'd otherwise see in that same four foot, I'm sorry that two foot by two foot, square piece of land, which is limited to climate availability. That's only 250,000 units and the marketplace, and in three to five years could potentially be at that scale.
Ivan Ball: I'd say our goal too is to just drive the price down to where it's highly affordable, so that way anybody can now have their own. We want to make everyone a farmer basically to have access to this fresh food.
Scott Massey: Right now we're at a pretty high price. $2,000. It's luxury product. There's no denying that. We have a more affluent demographic, but it's been interesting to see I would say less affluent people purchase this. This is a funny story. We had a a YouTube promotional campaign where YouTube said, "If you guys agree to buy $300 worth of ad words, we'll send a videographer to your garage, and we'll make the video for free." Just do it.
Mike Kelly: That's a thing?
Scott Massey: Yeah. Yeah.
Mike Kelly: That's cool.
Scott Massey: They must have someone out there kind of like I guess curating who they send that to. I've talked to a few other startups who said they got that, and they didn't think it was legit.
Mike Kelly: That's I would not have thought that was legit.
Scott Massey: Yeah, but I can tell you it's very legit. We did it, and we made a sale to some guy in Indianapolis. Never heard of the guy, and it wasn't the best neighborhood. Be honest with you. Grass was about as tall as this tabletop in all the yards out there.
Scott Massey: I myself, as the person delivering the GroPod, and you sent me your location and you're like, "If I don't call about two hours call the police." I knock on a home, and I knock on the door. A Guy answers it says, "What do you want?" I said, "Well, sir, your GroPod is here." He goes, "Great. Put it right there." "You're an early adopter. I'm going to plug it in. I'll connect you to the Wifi, the whole nine yards. This is the white glove installation experience." "I don't care. Put it right there on my porch." I'm thinking, "Uh oh. I don't know what's going on here. Maybe I don't even want to go inside this house." I tell him, "Here's my business card. If you have any questions, please do not hesitate to call me." He looks at the card and it says co-founder. He goes, "Oh, co-founder. I thought were just some worthless intern."
Scott Massey: No, no. Next best thing. It's Scott. Here I am. He says, "Let me talk to you. I'm a I'm truck driver. It's a blue collar job. I eat a lot of fast food because I'm on the road a lot, and I'm now a diabetic because of that. I eat poorly, and my doctor told me that if I don't start eating more healthier plant based diet, I could either spend more on food or die sooner, pick one." He bought a GroPod because he looked at his market. A lot of Indianapolis unfortunately is a food desert. Hopefully that's going to change, and looks like there's a lot of good initiatives doing that already, but that is the case today, and he didn't have a lot of fresh food options nearby. He was looking for a way to grow his own food. Well, he doesn't have the time to do the hassle with all these manual systems connecting lights.
Scott Massey: Once you talk about automating all the kind of analog systems out there, forget about it. The average person, I mean, I struggle to even do something like that. We were the first fully automated platform that was reliable, nearby, and affordable for him, and he decided to buy it. You're going to see a price point that's going to become more affordable over the next few years. You're probably gonna see some financing options open up to people that might not have $2,000 or a little less than that to fork out, but are able to do it on a payment plan. Especially if you kind of look at the fact that we're kind of augmenting what you're already spending at the grocery store today. Really, I just kind of see a lot of different, different demographics purchasing this product than what already does it now.
Scott Massey: We've had three kinds of interesting categories purchased since. Restaurants want higher-end culinary herbs, and it's a marketing statement too. Everyone says locally grown, but the dirty secret is there's no regulation on that word. Locally grown could mean a thousand miles away or one mile way. There's no differentiation according to the USDA or the FDA at this moment, so having it in the store, that's proof. I mean it's a glowing box of plants that catches the eye and then we also have schools purchasing it. We never expected that. When you asked if you could do it, I was going to say literally kids do it and do it now, and they do it pretty well. A lot of schools are being mandated.
Mike Kelly: Kids are a lot smarter than I am.
Scott Massey: We've learned from them watching how they interact from it. It's a really interesting experience, but they're being mandated to include agriculture in their STEM curriculum, which is now being called STEAM in a lot of cases including agriculture in that acronym, but a greenhouse, a good automated greenhouse, it's going to have some sort of data play for the students to interact with and have that education experience. Easily 100, $200,000, this is a great modular solution. I mean literally 100 times cheaper than that to have in the classroom.
Scott Massey: I'd see all of those categories kind of growing. I see there being potentially curriculums built around this for more classrooms. I see more restaurants having it in the B2B play and potentially larger systems as well. We hold multiple utility patents on our rotary aeroponic design, which could easily be licensed to a commercial facility if someone wanted to pursue that opportunity.
Mike Kelly: What are some of the new technologies that may not be here today, but you think might be coming in the near future that have you excited for how those could be applicable in what you two are doing?
Ivan Ball: Vision's a huge one. There's something called hyperspectral imaging where you can actually look at the nutrients in the plant, find deficiencies, and then now you can apply more nutrients whenever it's actually needed. We could have a fully automated dosing system based on how hungry your plants actually are. Then there's also a play with UV light and for sanitation.
Mike Kelly: Wait. Real quick. Visioning. Say it?
Ivan Ball: Hyperspectral.
Mike Kelly: Yep, that hyperspectral. How far away is that do you think?
Ivan Ball: The technology's there now. It's a matter of the research being dumped into the studies on growing the plants and actually making sure it's accurately reading the leaf.
Scott Massey: There's a lot of R&D that needs to be done to really train that sort of machine learning algorithm, but that could even be taken to printing out a nutritional data sheet of, "You just ate this. Here's the breakup of it," and there are some really cool opportunities at a consumer level when you're interacting with the individual who is both growing and consuming the plants to ask them, "How did that taste?" If you said it was a little too bitter, a little too sweet, maybe the texture was too tough or too limp, you didn't like it, it won't happen again.
Scott Massey: There's ways to actually implement machine learning algorithms in the future that will survey the user from those parameters and actually manipulate the growing environment naturally. We're just changing lighting, fan speeds, I mean nothing synthetic. There's no genetic modifications happening here. It's just an intimate relationship with the user asking them how can we make it better and actually doing that, so you have a system that actually learns from the user and tastes better the more it learns from them.
Mike Kelly: Are you familiar with a startup out there called GenoPalate? It's like a 23 and Me for your food intake, so they do that. In fact, they actually take it. You can leverage a a 23 and Me kit if you've already done one. They'll take your 23 and Me results, and they'll do the analysis for what foods are going to be optimized based on your biology and DNA. Then at or if you've not done one, you can do the same cotton swab with them, and they'll go run everything for you. You basically get back this report that says, "Based on your genetic makeup, these are the things that are probably going to be more favorable to your body type. These are the things that are going to be less favorable to your body type. This is where the jury might be out. We don't know. It's up to you. Go experiment.".
Mike Kelly: It really does a super interesting breakdown of like... For me for because I did... I'm not going to see this pitch and not go buy a report, right? I'm that guy. I go buy the report, and it's like, "You need more vitamin C than most people, so look for these types of foods." It gives you this whole readout of based on... One thing it does is like these are the nutrients that you need, and then it tells you where to find them, and then it tells you... Basically then of course it can all build towards food plans and stuff like that.
Mike Kelly: What would be super interesting was what you guys are talking about, right, is like you could literally start to tie into based on your genetic code, these are the pods that should be coming, and here's how you could potentially even optimize the plant that's in there based on nutrient dosing and things like that to get specific characteristics. Super interesting. That startup still pretty early, but they've got some pretty good traction. I should have them on the podcast. The science behind what they've done and how they out there is phenomenal. Like just really blew me away. Anyway, as you're talking about that I'm thinking like, "Whoa, so you'd really customize.".
Scott Massey: It's a data driven industry. A lot of people are familiar with Amazon acquiring Whole Foods. That's pretty well known at this point, but what's a little lesser known is the Amazon and Softbank put $200 million, and I think there's been some more follow up funding, could be wrong, into a vertical farm in the west coast called Plenty. There's a connection between the two. Amazon wants to consolidate the entire agricultural process from production to distribution to consumption to the user. This industry is moving a lot faster than I think a lot of people realize.
Mike Kelly: Wow. Yeah, I didn't realize that. That's amazing. All right, I cut you off, Ivan. You were going to talk about UV next I think?
Ivan Ball: Yeah. There's some more lighting plays that we could utilize. UV light, it actually sanitizes, so there's kind of a play for sanitizing our water as it runs so that way we can get rid of any pathogens or bacteria that may develop over time. Things like that as well.
Mike Kelly: Awesome. Any other kind of emerging technologies outside of?
Ivan Ball: We didn't mention the multi-spectrum can change the spectrum of light. That will actually, what he was talking about, manipulating the taste and the color and the texture of plants. You can do all that just by adjusting the red, the blue, and the green in the spectrum of light. There's actually a lot of research being done into that right now.
Scott Massey: Yeah. From Phillips to Osram, you're seeing a lot of huge LED manufacturers. A Lot of this growth is international. If you look at Israel, they're one of the best hydroponic countries in the world. Conflict region, so the likelihood of food and ports being blocked is very high.
Mike Kelly: A region of the world where water is at a premium as well.
Scott Massey: Exactly. Exactly. Those two factors are huge. The UAE, you have people, some of the most wealthy people in the world, and they want the best tasting food in the world. There's a lot of vertical farm action happening there. Asia might be the biggest of all. You're talking about the most urban dense areas in the world and some of the largest mistrust towards produce that's being sold, because a lot of times the regulation of food safety just it's not cutting it in some of these areas. People aren't looking for reactive solutions of recalls finding out, "Throw away your produce. It could be contaminated." They want proactive solutions that are going to eliminate the likelihood or minimize it if possible.
Mike Kelly: It's making you hungry isn't it? I'm always hungry. No. I'm trying to think of like... This port list will be poorly articulated, but that confluence of you guys, and I'm sure there are probably others right? Maybe not at the with the in home scale that you guys are leading the way with, but you guys running after the direct to consumer face of it, Amazon trying to do vertical integration, tons of research coming into this space. If it's coming as quickly as you indicate that it is, which I'm not challenge... This is not me challenging. Let's just take that as a given. Right? Maybe even faster than you think it will be here. What does that mean for you in terms of how you think about a go to market strategy?
Mike Kelly: I would love. I would love your thoughts on whether or not, from a customer acquisition perspective, how does that influence how you think about it? From a customer retention perspective, how does that change? From a patent perspective and what you even think is patentable in a market that's changing that quickly? If that's a given, what does that mean? Right? Because if you'd ask people 20 years ago, "What would you do if you had 5G," and then you explained what 5G was... Connectivity, right? Just basically, and 20 years ago that would be like, "Basically if you had unlimited data streaming to your phone," which that would have been interesting 20 years ago, but, "You have unlimited data streaming your Palm Pilot anytime, anywhere, what would you do?"
Mike Kelly: I don't know that 20 years ago very many people could even articulate how to use that much data, right? How that would affect how they thought about a palm pilot. That's basically what you're saying, right? This new technology will not only become ubiquitous, but will become maybe the dominant player in consumer facing food consumption, certainly in certain parts of the world. If that's true, how does that change things? Then a really interesting question there for me to you guys is, how does that influence how you think about taking your business to market?
Scott Massey: Yeah. You know, when we started, like I said, neither one of us had cash to start a business. One thing I think we were really lucky to kind of have bestowed to us, depending on how you consider lucky, is that I was delivering newspapers for the exponent produced newspaper at night. It was a 1:00 AM to 4:00 AM shift every day in my senior year. I don't have to say that's not the best shift anyone wants to have, but every time we won a competition, I developed a really good relationship with the managing editor of that paper, and we publicized it. I learned that usually once you get one publication, there will be three or four that will essentially copy it. They'll kind of mimic the exact same thing. Using that guerrilla marketing technique of making sure that we are constantly getting our name out there one way or the other.
Scott Massey: If it wasn't a competition, we were giving STEM talks at inner city schools. Kids had no idea this industry existed. There's no financial gain for us being there, but we would get coverage, and it got our name out there. Just constantly and resiliently doing that. That's how we are able to sell those first units without spending any money on our ad words except that one YouTube promotional campaign.
Scott Massey: All of these people started emailing us and saying, "When the product's ready, let me know." When we finally had that MVP ready in his garage, and we knew it was working enough that we could start selling it, I reached out to all these people and collected $500 pre order deposits. With that validation that there's people, money down, wanted to buy it, we went back to our economic development coalition in Evansville, which is a great organization, recommend any entrepreneur to contact them, and we accessed a Grow Local loan that was able to cover the remainder of the inventory. Had all the metalwork done at a shop in Anderson, Indiana. Printed our parts. Did everything ourselves in that original assembly, and then hand delivered them to the users. Collected the remaining 1500 balance and paid off the loan before interest was even due.
Scott Massey: That case, I think we were... I think God smiled on us. We were a little luckier than we even expected we were. Going forward, clearly that kind of word of mouth strategy is not going to cut it. We've looked at a lot of different options. We've considered big box retail, but the reality is big box retail stores and they're pretty tough on their manufacturers. They put a lot of hard expectations on there, and in some instances they even write things into the agreement that whatever isn't sold has to be sold back, and then they credit themselves on the next shipment. A lot of companies go bankrupt trying to compete in that market. We had to be honest with ourselves. We were nowhere near the scale or size even consider something like that. In our case, we are e-commerce through and through, at least at this stage.
Scott Massey: We've built some cool features around that strategy that I think compliments it well. We've looked at groups like Nest Thermostat and the Ring Doorbell as to what made them successful. Even the Instant Pot, that's another great one. Kind of a pressure time cooker. Most of their sales were within communities. They might make one sale within the neighborhood, and then someone might be sharing the video. Did anyone see the sketchy guy walking around? No, but how'd you get that video? It's a Ring. That kind of made the referral happen. We built it in a really cool feature that every person who has the GroPod, as our tower spins around, in creates a time lapse GIF the plants growing and an automated email to them so they can share that on their social media.
Mike Kelly: Are you freaking kidding me?
Scott Massey: It's pretty cool.
Mike Kelly: That is brilliant.
Scott Massey: You put it on your social media feed. Any friend who sees that clicks the link. They get a a hundred dollars off their GroPod. The person who made the sale gets a free month of seed pods. It's an expensive product, but that also is a benefit because we can afford to have some fun marketing stuff like that on our budget and our customer acquisition strategy. That little content generation machine automatically being produced and churned out, that's great for Facebook advertisements. That's great for us sponsoring and boosting posts of people who are real customers. They bought the product, and they just love it, and they're happy to tell the world. We'll boost that. That's a better selling point than anything he and I can say, than any social media influencer can do, because those are real people.
Ivan Ball: I mean that's basically you're going to be free marketing for us, and now we're turning every GroPod owner into a sales army, so they can just click the link. Now they get...
Ivan Ball: They could even eat for free if they can enough people. Just keep shipping seed pods and get more customers.
Mike Kelly: Have you guys talked to new home builders?
Scott Massey: We have. I mean just kind of anecdotally, nothing really serious. We've noticed that it's probably a better option for us to kind of go with the targeted words, get people who are kind of already identifying themselves as the organic consumer, then getting so many physical units out there that may or may not sell something. Just because we're small, we don't have the ability to produce 100 units and not sell them. Those 100 units have to be sold. In the future, sure. I think that would absolutely happen. There's been some new like IoT-focused department buildings going up, or we've talked to developers. They said, "We would love to have this in the model showroom," and we would love to have it there, but we're not at that stage of growth yet.
Mike Kelly: All right. If people are interested in finding your product, where do they do that?
Scott Massey: They could either look at us on social media. We are a GroPod Official. That's G-R-O-P-O-D, O-F-I-C-I-A-L, and it's also on our website at GroPod.io, G-R-O-P-O-D dot I-O, where they can put a $500 deposit down for the next generation of full production units coming out fourth quarter of this year. After that it's a continued sales scaling after that.
Mike Kelly: Always be closing. I love it. All right Scott, Ivan, you guys are awesome. Thank you so much for coming on the show.
Scott Massey: Thank you.
Ivan Ball: Thanks, man.
Scott Massey: We actually have a GroPod in the car in the parking lot, so if you want to check it out after the-
Mike Kelly: Are you serious?
Scott Massey: Yeah, yeah.
Ivan Ball: It's growing right now.
Scott Massey: We're doing that right now. All right, awesome. Thanks guys.