Take
Don't take money too early or you'll waste it and your equity
Smith bootstrapped Big Ass Fans because he 'didn't know any better' and concluded it was the best path. Taking too much money too early invites misuse, and you trade away significant equity for something you end up wasting.
“And if you take money, too much money too early, there's certainly the opportunity that you're going to misuse it, and then you've traded typically a significant amount of your equity for something that you've turned around and wasted.”
Steal thisBootstrap until you actually know what the money is for; raising early trades equity for waste.
Story
Customers renamed the company: HVLS Fans became Big Ass Fans
Carey Smith's company started as 'HVLS Fan Company' (high volume, low speed). Callers kept asking 'Are you those guys that make those big-ass fans?', so he renamed the company to match what customers already called it.
“And so what was funny about it was in the beginning, there weren't many people working for the company and we would have a call and answer the telephone, HVLS Fan Company, and there would always be a pause. And the people on the other end of the phone would say, "Are you those guys that make those Big Ass Fans?" And I don't know, it took us a little bit of time to figure that one out because we're not the sharpest knives in the drawer, but we renamed the company Big Ass Fans.”
Steal thisName your product what customers already call it, not what's technically accurate.
Take
A polarizing name is free marketing: hate mail and fan mail both win
Big Ass Fans drew hate mail ('you're going to burn in hell') and church-goer support in equal measure. Smith argues the controversy created tribalism and word-of-mouth, making the risque name a marketing asset rather than a liability.
“I mean, we'd have people writing us, as you can imagine, we had some pushback. For every one of the letters, the emails that we got that said, you know, you're going to burn in hell, you're contributing to the delinquency of an entire country by using a name like this. We would receive a number of letters that said things like, you know, "I go to church every Sunday and I think your name is great," and the word "ass" is used 46 times in the New Testament, and Mary rode to Bethlehem on an ass, and so what are these people talking about? So it was one of those things, I guess it brought out a little bit of tribalism. For us it worked, and as a matter of fact, over a period of time, unfortunately for us, it was less and less controversial”
Steal thisPick a name polarizing enough that detractors and fans both talk about you.
Number
Expected 1,000 fans in year one, sold 142
Smith projected selling 1,000 fans in Big Ass Fans' first year but sold only 142, then 400 the next year. He took the slow start as a sign nobody had seen the product before, not a sign to quit.
$142
Fans sold in first year · fans
“I expected the first year that we were going to sell 1,000 fans, but we sold 142 fans. Not quite what I anticipated. And the The next year it was wonderful, we sold 400 fans.”
Number
Expected 1,000 fans in year one, sold 142
Smith projected selling 1,000 fans in Big Ass Fans' first year but sold only 142, then 400 the next year. He took the slow start as a sign nobody had seen the product before, not a sign to quit.
$142
Fans sold in first year · fans
“I expected the first year that we were going to sell 1,000 fans, but we sold 142 fans. Not quite what I anticipated. And the The next year it was wonderful, we sold 400 fans.”
Number
Priced to a maintenance manager's $5K budget, later raised to $10K
Smith priced the original fan at about $5,000 to fit a typical plant maintenance supervisor's budget. After building a brand and iterating the product, the same standard fan now sells for about $10,000.
$5K
Original fan price · USD
“priced it so that it would fit within the budget of the typical— that the typical maintenance supervisor in a plant had to work with, which is about $5,000.”
Steal thisAnchor your launch price to the budget your actual buyer already controls.
Number
Priced to a maintenance manager's $5K budget, later raised to $10K
Smith priced the original fan at about $5,000 to fit a typical plant maintenance supervisor's budget. After building a brand and iterating the product, the same standard fan now sells for about $10,000.
$5K
Original fan price · USD
“priced it so that it would fit within the budget of the typical— that the typical maintenance supervisor in a plant had to work with, which is about $5,000.”
Steal thisAnchor your launch price to the budget your actual buyer already controls.
Number
Paid Kentucky workers 40% above local, 30% above US average
Smith ran the business in Kentucky and paid wages roughly 40% above the Kentucky average and 30% above the US average, with everyone getting a bonus of about a month's salary every profitable year.
$40
Wages above Kentucky average · percent
“We were in Kentucky and our wages were typically 40% above average in Kentucky and 30% above average in the US. Every year, everybody got a bonus. Everybody got a bonus typically as long as we made a profit. We always made a profit.”
Number
Paid Kentucky workers 40% above local, 30% above US average
Smith ran the business in Kentucky and paid wages roughly 40% above the Kentucky average and 30% above the US average, with everyone getting a bonus of about a month's salary every profitable year.
$40
Wages above Kentucky average · percent
“We were in Kentucky and our wages were typically 40% above average in Kentucky and 30% above average in the US. Every year, everybody got a bonus. Everybody got a bonus typically as long as we made a profit. We always made a profit.”
Number
Paid Kentucky workers 40% above local, 30% above US average
Smith ran the business in Kentucky and paid wages roughly 40% above the Kentucky average and 30% above the US average, with everyone getting a bonus of about a month's salary every profitable year.
$40
Wages above Kentucky average · percent
“We were in Kentucky and our wages were typically 40% above average in Kentucky and 30% above average in the US. Every year, everybody got a bonus. Everybody got a bonus typically as long as we made a profit. We always made a profit.”
Story
The $500M price came from a casual kvetch with a new COO
Smith never planned an exit. Venting one morning, his GE-trained COO of one year asked if he'd ever sell; Smith said he'd sell for $500 million off the top of his head. The COO made calls and the deal happened.
“And he said, "Well, geez, you know, have you ever thought about selling this?" And I said, "You know, I tell you what, if somebody offered me $500 million, I would sell it." And he said, "Oh, okay." And I'm serious. This is the way it happened. So this guy who had worked corporately with GE for some time, he said, "Well, let's see." And he called some people and we got it going. It happened.”
Story
The $500M price came from a casual kvetch with a new COO
Smith never planned an exit. Venting one morning, his GE-trained COO of one year asked if he'd ever sell; Smith said he'd sell for $500 million off the top of his head. The COO made calls and the deal happened.
“And he said, "Well, geez, you know, have you ever thought about selling this?" And I said, "You know, I tell you what, if somebody offered me $500 million, I would sell it." And he said, "Oh, okay." And I'm serious. This is the way it happened. So this guy who had worked corporately with GE for some time, he said, "Well, let's see." And he called some people and we got it going. It happened.”
Framework
Marketing by educating a large portion of the market
Smith frames the repeatable Big Ass Fans playbook as 'marketing based on educating a large portion of a market', the same approach he sees in plant-based meat and bidets, win by teaching buyers a better way exists.
“I think what's key to that or the way we look at it is it's marketing based on educating a large portion of a market.”
Steal thisIf your product is unfamiliar, make educating the market the core of your marketing.