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Filip Valica: Hey, everyone. Welcome to the product startup podcast, podcast that helps bring your product idea to life by chatting with successful inventors, product designers, and other industry professionals. This podcast is run by Mako

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Filip Valica: Design + Invent and hosted by Filip Valica. Our goal here is to get to the bottom of what makes a product successful, from initial idea to putting your product on the shelf. We're taking you step by step to build a functional product and scale your product business. Now onto the show.

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Filip Valica: The product startup, episode 15. Welcome to the product startup podcast. helping you turn ideas into successful products step by step. With your host,

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Filip Valica: Filip Valica.

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Filip Valica: Hi, everyone, and welcome to the Product Startup podcast. In the last episode, we talked to Mickey Swortzel, who, along with her husband, owns a small business based out of Ann Arbor, Michigan, called New Eagle. They create custom control systems

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Filip Valica: and automate construction equipment, electric vehicles, and most recently drones using electronics, mechanics, and software. So make sure to check out that episode, if you want to hear how they bring custom products to the market and how they handle when

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Filip Valica: the customer is not always right. So before we get started today, I wanted to highlight one reviewer on iTunes, Jeremy the veteran artist, who said, I started with the puppy cake episode. I really enjoyed listening to this podcast and I would recommend it to anybody with a startup

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Filip Valica: or thinking about one. The host is very knowledgeable and has guests on who are already walking the path and have so much knowledge to pass on. Plug into this show. Jeremy, thanks a lot for the

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Filip Valica: review. I really appreciate you taking time out to send me a note. I love seeing what other people think of the interviews, and that's really what keeps me going. And now on to the show. In today's episode, I'm joined by Dean Salakas with the party people.

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Filip Valica: 30 years ago, his mom was Patches the clown, and she opened up a party store in Australia. Dean and his brother took over this family business, and now they're the online market leader in the space. They're also growing their

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Filip Valica: brick and mortar network, and they appeared on Australia's Shark Tank, and I've worked with brands like 3M and Avery to introduce new products to the market. So let's get started. Hi, Dean. Thanks for coming on the show today. Good. How are I, Philip? Pretty good. So you have a really interesting story.

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Dean Salakas: You took over a family business along with your brother, and it is in the party supply space. And that sounds pretty wild. Can you talk a little bit about it? Yes.

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Dean Salakas: The whole business started 30 years ago when my mom was a clown carrying for kids' parties, actually. So we've got quite a fun and interesting. long history as a business,

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Dean Salakas: but then my brother and I took over the business about seven years ago. When my mum, when I said she was a clown, she then opened up a party store and we took over that business essentially.

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Dean Salakas: And at the time, I mean, my mum's always been quite innovative. She got us online in 1998 and we kind of followed in her footsteps from there with innovating

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Filip Valica: online and we've grown our party store quite significantly since then to having a couple of stores

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Dean Salakas: and a significant online presence.

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Filip Valica: Yeah, so when you say you've grown your online store, I think you're giving yourself a bit of a disservice.

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Dean Salakas: You're one of the largest online stores in Australia for party products, isn't that right? Yeah, we're the market leader, yeah. Right. So can you just give us an indication of how much business do you do per year? So we do about two million per year through that. So it's not huge, but Australia's a little bit of a smaller country.

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Dean Salakas: Sure.

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Filip Valica: But yeah, we do about two million through that and things are sort of going quite well, obviously,

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Filip Valica: continue to grow and moving up from there.

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Dean Salakas: Yeah, and you were on Shark Tank recently in Australia. Can you talk a little bit about that experience? I know you didn't get funded, but I think by reading some of the articles, it sounds like you got what you wanted from it, which was some of the advertising. Yeah, I mean,

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Dean Salakas: yeah, actually, yeah, so the going on Shark Tank was a really good experience. I did receive an offer,

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Dean Salakas: and I turned it down.

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Dean Salakas: But that itself opened up doors for me. Like, you know, straight after the show, people, you know, investors were calling, suppliers were calling,

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Dean Salakas: customers were obviously through the roof. So I just raised the profile of the business in general.

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Dean Salakas: And, you know, it was just a really great PR experience. But also from an investment. point of view, while I didn't get investment on the show, you know, turning it down made for

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Filip Valica: some good conversations with other investors after that. And subsequently, we're now still talking to investors. And, you know, we're probably in a much better situation than we would have been if we had to take a deal on air. Sure. Well, that sounds really great because some of the

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Dean Salakas: people I speak with that have been on Shark Tank that weren't able to close a deal, some of them felt like it wasn't maybe as worth their time or they didn't feel like they got the publicity

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Dean Salakas: out as much publicity as they expected anyway. Do you have any indication of why you were so successful in kind of leveraging that?

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Dean Salakas: I think there's a couple of things. You know, I definitely

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Dean Salakas: went into the show as well prepared as I could possibly have been. And definitely I noticed a difference with some other contestants not going in there very well prepared. And, you know, it's TV. So they'll, they sense it.

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Dean Salakas: professionalize everything and they may either make you look really bad or really good. Absolutely.

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Dean Salakas: I went in there with a very high valuation. So watching, you know, Dragons Den and Shark Tank in the US, typically they tear people apart like me going in with high valuation.

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Dean Salakas: So, you know, I had a very deliberate strategy to mitigate that situation and not go on here and make a fool of myself.

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Dean Salakas: But at the same time, try to preserve that valuation and justify it. So I spent a lot of time preparing for the show and I'm making sure I, you know, I watched all the US episodes and quite a few of the UK episodes as well

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Dean Salakas: and made sure every time there was a question, I made sure for my business, I could answer that question.

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Dean Salakas: And, you know, if I didn't have a good answer, I revisited it and I had, you know, friends and family and accountants and all that review my pitching and quiz me and really ask difficult questions and just to make sure that I was, you know, exceptionally well prepared.

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Dean Salakas: So I think, you know, going on the show,

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Dean Salakas: you know, I would hope that they didn't have that much negative material to pull out, to put me.

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Dean Salakas: So instead, they sort of probably pushed more the angle of, oh, he went on there, he had a great business, and he wasn't going to take a low offer.

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Dean Salakas: And that's the story the media published afterwards, you know, they said, oh, he didn't want to give up his family business.

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Dean Salakas: And, you know, I guess it's true. but you know it's just the picture they paint a lot of people go on there and just get destroyed

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Filip Valica: or they make it look really bad when it wasn't so bad sure i know for me i went on there and had a great conversation with them you know it was great fun like you said it's tv you have to make it

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Dean Salakas: entertaining so yeah that's it i was in there for two hours actually and and they show you 10 minutes and and most people that i've spoken to have had similar experiences just depends on what 10 minutes

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Dean Salakas: they pull out you talked about being prepared i'm surprised at how many people make up facts

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Filip Valica: to support their case and somehow they get a deal and then obviously the deal dissolves you know when the shark does their homework yeah i've heard a lot of that in the australia

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Filip Valica: version here there's i think out of five people i know that went on the show only one so far i've confirmed it's done a deal geez that it's sorry five that accepted a deal on air only one

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Filip Valica: right right well you know congrats on that positive experience and uh that you're able to turn that into a positive you know marketing effort for you guys yeah yeah no thanks it was

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Dean Salakas: it was great so uh when we initially talked before the show you mentioned that you were co-developing some products um maybe we'll we'll start with the first one you're working with 3m

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Dean Salakas: to develop some mounting hooks now i'm familiar with the command brand hooks that you can buy at the hardware store here in the states where you peel off the back and you can kind of stick them to something.

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Dean Salakas: So can you kind of elaborate on on what your role was and how that fit into the store with the products that you sell? Yeah, it's probably a good lead in from the Shark Tank conversation we just had there because they actually called me after seeing me on Shark Tank.

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Dean Salakas: Oh, nice. So they saw me on Shark Tank. And actually, I'd met 3M before, but, you know, it was more just a, you know, hi, how are you type thing. And that, you know, they're doing a little

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Dean Salakas: bit in the e-commerce space just like us. So I met them through e-commerce channels. But

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Dean Salakas: The guy had my contact and he saw me on TV. So he called me up, said, oh, I saw you on Shark Tank. That was great. We'd love to work on a product range with you and launch a range of party hanging products.

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Dean Salakas: And, you know, it was quite a good time, quite good timing, I guess, in respect that we'd actually worked with some products actually from the US

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Dean Salakas: that, not branded products. just just general products to hang party products and they're one of our best sellers because every time someone buys you know some like a banner or whatever to put up on the wall they buy

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Dean Salakas: something to hang it with absolutely and we we cross sell that in our checkout you know so when people buy a banner that there's you know when they get to you know the whole you might also like you know would you like fries with that style of cross sell you do and sticky tabs and hooks

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Dean Salakas: and things like that are always you know the most you know common item we put there so So it was quite a product that I was interested in in talking to 3M about, and it just made sense. So we had a few meetings about the type of products that would work.

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Filip Valica: And, yeah, I mean, obviously they have a lot of technology, which I didn't know a lot about 3M before going into their head office and seeing the amazing technology they do there.

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Filip Valica: But they have a lot of technology in adhesives and all those sorts of things. So they're about to put together a product, which essentially,

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Dean Salakas: it was ideal for hanging party products on the walls that then obviously didn't damage the walls themselves. And I think we came up with a range of about seven products that would be suitable.

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Dean Salakas: So that's pretty neat. Did they come to you and say, hey, listen, we need a test bed or we need a retailer to see how well these work or what basically what did they want from you? And obviously,

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Dean Salakas: from your perspective, it was cool because you were able to have a product that maybe nobody else did at the time.

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Dean Salakas: What were they looking for from their end of their arrangement?

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Dean Salakas: So from their end, obviously they have all the technology to do what we just spoke about there, but they weren't really in the market here in Australia with any products to do it.

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Dean Salakas: So for them, they were saying, look, this is an easy product to come up with because

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Filip Valica: it's just a matter of using the technology we have there with the type of hook and, you know, where we go, we got a party product.

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Filip Valica: So for them, it was easy to develop the product. Sure. And, yeah, they came to me and said, look, we think there's a market in this space.

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Dean Salakas: We'd like to pilot with someone,

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Dean Salakas: you know, get your feedback and pilot with you and see what your customers think of our products. So, yeah, so they approached me and said, look, can we do a pilot to see how this will go?

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Dean Salakas: And obviously, like I said, being one of our major selling items, it worked out quite well to fund that partnership. you so that's pretty exciting that at least you got to at least speak to maybe the quantity and how

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Dean Salakas: it was designed and maybe a little bit of the marketing i'm looking at some of the products online now and and it's funny that some of them are branded specifically for party use and they they definitely

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Filip Valica: helped us with the marketing and um yeah i mean really interesting from a retailer point of view

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Dean Salakas: i've never really been in the position where you know a manufacturer has come to me and said, what can we do for you?

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Dean Salakas: And, you know, in this case, it was a really good partnership

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Filip Valica: because, you know, they did all the marketing. They helped me with, you know, certain funding of Facebook campaigns.

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Filip Valica: You know, we did, we did a lot with them to get their brand out into the market and leverage our customer base and our social following and things like that. Nice. Yeah, so basically help both of you out.

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Filip Valica: Yeah, that's it. And it was a win-win. Wow, that's amazing. So hopefully you guys.

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Dean Salakas: We'll get to work with them in the future on some other things or the next time they want to test a product out.

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Filip Valica: Yeah, and those products, I mean, this is about two years down the line now. So those products are going really well for us, selling quite well.

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Dean Salakas: And like I said, it's now a best-selling item. Funny enough, you wouldn't think a hook is a best-selling item for a party shop, I guess. Well, I guess it's the lowest common denominator, right? How are you going to hang up what you're buying?

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Dean Salakas: So a lot of the products that I'm seeing on your site are similar to what we have in the state. could certainly see how from a manufacturing perspective they maybe just had a speak a couple

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Dean Salakas: things and it wasn't a ground up design for them it was just kind of like you said repurposing some of the existing designs into your market that's it yeah i mean you guys have party city over there

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Dean Salakas: yeah um which is very similar to what we do here you also talked about that you had a similar arrangement with avery and some of their printable labels um yes i'd say um i'd say it's similar i mean we

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Dean Salakas: We actually went out looking for that ourselves. So with that one, it was probably the reverse. We went to them.

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Dean Salakas: We, you know, obviously identifying that there's a trend online in the personalization space

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Dean Salakas: to have people able to customize labels and custom products and things like that.

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Dean Salakas: And Avery being in the labels business, you know, kind of seen, you know, I went to them and said, look, is there a way we can do this? Because traditionally they've just been a manufacturer and not really.

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Dean Salakas: doing much on that, on that technology side and how we can, you know, get a product that can then be customized by the customer and, you know, just the whole experience with the party

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Dean Salakas: side. So we went to them and said, look, how can we do this? We've been looking for someone in this space. And here in Australia, they're, you know, they're the leader in, in labels. So, you know, we, we approached them and said, look, how can we make this work? And what do we

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Dean Salakas: need to do and yeah I mean quite a few months went by with with their conversations internally and you know we came up with a range in the end that was a a product that could be customized by the

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Dean Salakas: consumer in native tools like Microsoft Word and things like that so we had a few false starts and what we what we were finding along the way you know we just weren't happy with the product

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Dean Salakas: that was being developed because you know we were having a lot of teething issues for the customer where, you know, if their printer didn't line up, all sorts of things that you'd expect from a, you know, a new solution like this that would be buggy.

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Filip Valica: And we just weren't happy with rolling something out that the customer would, well, could potentially have a lot of issues with. So we ended up going with a solution where the customer could use their own native tools and use their own printer. So, you know, we came up with a Microsoft Word solution

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Filip Valica: where customer could download a template in Word. And then they used, you know, obviously a system they already know how to use. to do the personalisation so they can add their images and all that. And then they just stick it into their printer and adjust the margins and away they go.

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Dean Salakas: So, you know, we did that solution with them and they actually provided a level of support as well. So customers can now call them and subsequently, so that range, again, we piloted. We did a whole test on it and saw how it went.

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Dean Salakas: Then we even assisted them to get it into the other party stores in Australia.

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Dean Salakas: And, you know, subsequently they've rolled that range out to, sort of the more mass, mass retailers. Yeah, so in the States, Avery is probably one of the largest players with labels as well.

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Dean Salakas: And, uh, but I've only, you know, seen the classic labels that you put on envelopes or stationary or things like that. And I'm looking through your label products now.

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Dean Salakas: And you've got things like bag toppers, which are those, those paper pieces of paper that you

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Filip Valica: fold in half and then staple on top of a bag if you're giving out favors for a party or something like that. And that's pretty cool. I don't think we even have that in the state. Yeah, I'm not sure if Avery have taken.

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Dean Salakas: This product obviously was developed here in Australia with Avery, Australia.

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Dean Salakas: So it would be interesting to know if they're actually going to roll this out to the States. I assume we're probably test marketing it for them here in a smaller market in much more contained environment and then determining if it's successful. I assume they may take it to the States. But you're right.

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Dean Salakas: There was a whole range of products from, you know, all the different labels to, like you said, even the bags and the headers. So you can get the whole, you know, the whole party bag thing.

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Dean Salakas: personalized trying to think what other products is a bunch of products that they did do with us yeah I saw some labels for bottles of wine and things that were curved yeah place cards I think was another one that they did you know for name cards for the tables and things like that so yeah

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Dean Salakas: there's a bunch of products so while we're on the topic can you speak to maybe any trends that you see that are going on in your industry now you mentioned that people like to personalize some of their own items and do things themselves is that where you see pieces of the industry going it's actually

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Dean Salakas: a trend I noticed in the States. I do travel to the States because my wife from the US and I took her over here to Australia and keeping me here. But we go over there a lot. So I noticed

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Dean Salakas: the trend of personalisation in the States first quite a few years ago. And definitely, you know, it was something that caught mine. I thought, look, this just makes sense to the customer.

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Dean Salakas: The customers, you know, you go on Instagram and Facebook and people always got their fancy, you know, lollibars and things done up with their personalized, you know, lolliebags and things like that.

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Dean Salakas: And I just thought that just makes sense from a business point of view that people are looking for personalisation in party as, you know, obviously other industries are in the same boat, but in party as well.

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Dean Salakas: And, you know, so I guess it's something, yeah, I definitely noticed the trend.

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Filip Valica: And it's getting more and more. I think people are just in general looking to have more and more unique style of events.

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Filip Valica: You know, I guess the whole world is sort of embracing, you know, people being unique and, you know, customizing.

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Dean Salakas: Individualism and stuff like that. Yeah. So it's no longer cookie cutter like it was in the 80s where if you're going to have a first birthday party, especially in Australia, you had probably one range to pick from at every retailer.

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Dean Salakas: So everyone had the same birthday party where now you have so much more choice. And so, yeah, I'm definitely seeing that whole personalization space in a lot of industries. becoming more mainstream. I mean, there's a couple of Australian companies sort of making

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Dean Salakas: big waves internationally. I'm not sure if you've heard of shoes of prey where people can personalize their shoes to all the colors and things like that. There's a company called Mon Perth, which is another one where people can personalize their handbags.

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Dean Salakas: So this whole personalization thing is going to be sort of more prominent, I think, in the future. Wow. For our wedding, my wife and I got married three years ago.

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Dean Salakas: We did all our own wedding inventations and placeholders for the tables and everything. We ended up getting them online, but I think that was the same trend is because we were able to save just a ton of money by doing everything ourselves. Yeah.

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Filip Valica: And I think there's also that other trend, you know, where it's similar to like cooking at the moment, you know, where people can buy,

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Filip Valica: you know, people want to be a chef. You know, they want to cook at home. They've seen all these cooking shows on TV, so they want to actually cook, but a lot of people can't cook.

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Dean Salakas: so but they don't want to buy takeout or or you know microwaveable meals so you know there's now this whole you know movement towards you know buying the the package if you like online or whatever

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Dean Salakas: that has all the ingredients so you can cook that you know so it's almost like you don't have to work at all yeah it's just a kit that you you go and do and I think and party's kind of the same as well I think a lot of people would love to do their own invitations from scratch and

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Filip Valica: And we'd love to do all that stuff, you know, but people, I think more and more, there's a lot of people out there that, you know, probably aren't gifted in doing that on their own.

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Dean Salakas: So they're looking for something where they don't just want out of the box and cookie cut up, but they also want to create something. And so there's a lot of that more packaging and DIY party sort of trends happening. That's interesting.

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Filip Valica: So are you able to capitalize on that at all? for example, if someone buys a dinosaur-themed play setting, does your e-commerce website recommend

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Dean Salakas: other dinosaur-themed items that kind of go with that? So in theory, they could kind of plan out all the parts. Yeah, it does, yeah. So if you buy something, then we, every product that we put on

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Filip Valica: our website, we actually will link it to other products, which we suggest to the customer

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Dean Salakas: that they might like. And then there's also an algorithm setting in there, which, you know, the whole, you know, sort of learning,

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Dean Salakas: digital learning where the site looks at if someone buys a dinosaur balloon, and they're also buying dinosaur cups and plates, then it knows that, well, that's a good item to show the customer when they buy a dinosaur balloon. That's pretty sharp. I didn't know that was available in a roll your own e-commerce site.

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Dean Salakas: I thought only Amazon and some of the larger online merchants had that capability. Can you talk a little bit about that?

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Dean Salakas: It is becoming more standard today. I think, yeah, in the past it was probably something you had to be very fancy. and come up with some sort of algorithm. But in a lot of the website platforms today that are out there, it is quite standard.

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Dean Salakas: That must work really well for you since your catalogue must have thousands of items. Yeah, we have 25,000 items, yeah. Jeez.

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Filip Valica: So we're, like I said, very similar to a party city in size and range. Our stores are similar size to the size of a party city as well. So what came first? I guess you said you took on the online e-commerce space.

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Dean Salakas: And then you expanded to brick and mortar? Actually, we had the bricks of mortar first.

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Dean Salakas: So my parents started the store and that store was sort of a little party shop, not too big. They identified the opportunity online. So they, you know, decided to put together a website. And back in the, you know,

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Dean Salakas: 98, I think they started putting together a website, you know, that cost us about 10 grand, which was crazy in those days. I mean,

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Dean Salakas: my family was asking, what the hell are we doing? Why are we spending 10 grand on a website? What a waste of money?

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Dean Salakas: So it was back then. It was, you know, what the hell? But my mom, you know, obviously she stuck by her, you know, entrepreneurial spirit there and decided to go with it and that she saw the opportunity that people all around the country

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Dean Salakas: would have access to products that, you know, that we provide in Sydney.

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Dean Salakas: And, you know, obviously she was right. and that took off. You've grown to two stores now and you're looking to expand even further. Can you talk a little bit about maybe the reasoning behind that?

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Dean Salakas: Someone would say, well, you know, it might be distracting because your online business isn't the same as running brick and mortar.

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Dean Salakas: Yeah,

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Dean Salakas: I get this question a lot, actually. And especially right now, like obviously after Shark Tank, we're talking to a lot of investors. And I get the comment always, you know, why don't you focus on the online, get rid of the bricks and

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Dean Salakas: order and be a pure play online business and that's a much more scalable and larger market.

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Dean Salakas: And I guess a couple of things that I disagree with the notion that, you know, particularly in my industry, that we should be a pure play online retailer for a couple of reasons.

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Dean Salakas: So the first one is, I think the future for online pure play is going to be, I would say

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Dean Salakas: quite rocky. I think a lot of businesses have become successful online just because of the benefits that online gives.

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Filip Valica: But I think more towards, you know, looking to the future, there's a massive advantage of having bricks and water and online and being good at both.

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Filip Valica: You know, I don't want to

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Dean Salakas: spend ages sort of going through the exact sort of mechanics and economics of why. But, you know, to give you sort of a very quick example, you know, say on Google, you can

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Dean Salakas: competing for, you know, position on Google and, you know, you can pay either pay more than

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Filip Valica: someone else or if your relevance is good and your quality of your ad is good, then Google give you an additional boost. So it's a marketplace essentially for advertising.

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Dean Salakas: And if you're a business that's driving just online sales only from that ad, you're limiting to one channel to drive your sales where if you're a multi-channel retail and you've got bricks and mortar

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Dean Salakas: and online, then that ad itself is going to get you those online sales just like anyone else. But it's also going to drive traffic to your stores. So you're getting a double revenue stream from the one ad where your competitors are if they're pure play. So you'll

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Dean Salakas: have a distinct advantage, which means you can bid more so you can outbid them. You get better rankings organically and just naturally you'll be able to beat them in that space. So I think

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Dean Salakas: the future for a lot of industries, and particularly mine, is going to be a multi-channel retailer rather than a pure play market leader.

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Dean Salakas: So that's my... No, and I could definitely agree with what you're saying regarding ranking on Google because they'd prefer brick and mortar stores as well in some of the search results, especially if it's local to you, so they'll give you an organic boost.

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Dean Salakas: Yeah, and more people will talk about you and review you and things like that. So there's just the whole, I guess, the whole ecosystem, and I see the whole online ecosystem favoring people with bricks and mortar. So you'll be able to compete better as a multi-channel than you would.

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Dean Salakas: a pure play. Do you find that your target audience is also responding to brick and mortar more because maybe sometimes they need something right then and there and they don't have time to wait for shipping?

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Dean Salakas: Not necessarily for that reason, because with online, you know, we now offer three out, you know, people can order now and get it two hours later. So we offer that

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Dean Salakas: level of service that, you know, people are now starting to come to expect rather than go, you know, Wow,

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Dean Salakas: I'd like to think that was the, you know, the view of the customer.

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Filip Valica: But I think more and more people are seeing that as what they expect rather than, you know, an impressive level of service.

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Filip Valica: So, yeah, I mean, we do that. And obviously, that's great that we offer that service because a lot of our competitors don't. But I definitely know that's a trend in the US to move towards, you know, getting people

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Dean Salakas: stuff when they want it right away.

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Dean Salakas: And, you know, we're trying to follow that here. But I think the bigger factor with the bricks and mortar is, especially with party, maybe not so much other industries, but even fashion and things like it. People still want to try stuff on, particularly with parties. People are styling, you know, it's like interior design.

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Dean Salakas: I mean, if someone said here's a wallpaper and you can buy it online, that's probably a little harder than going in somewhere and seeing the wallpaper with the couch, you know, like IKEA, I guess, you know, you guys got IKEA there, right? Like, IKEA is still around and anyone can

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Dean Salakas: buy any of that stuff online and probably for cheaper. But, you know, IKEA, you can go there, you can see it in a room, you can put things together, say, does this match that?

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Dean Salakas: You can work out what you're going to, you know, what you're going to have with what, and then you can go and buy it all. And the same, I think, is with parties, is that a lot of people are going to want to style their party. So they're going to want to pick up these napkins and put

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Dean Salakas: it with those plates and, you know, get this, you know, bunting and see how that looks with it and, you know, style their event. And that's very difficult to do online because it's very hard to get a, even though you can have as much information for the customer as possible and

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Dean Salakas: videos and everything.

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Filip Valica: It's still very hard to get a sense of what the color is exactly what the size of it is exactly and all that sort of stuff. So when people come to your store, do you provide a different experience than you would online? And by that, I mean, are your employees trained to

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Dean Salakas: maybe help customers out to kind of help plan their party for them? Do you have like party planners that are also associates? Do you provide any additional services? We do actually.

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Dean Salakas: So say our store, you get a much sort of high level of customer service in the store.

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Dean Salakas: It's something we're just actually sort of struggling with

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Filip Valica: and trying to replicate online and offline and provide the same level of service for both.

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Filip Valica: But, you know, we're finding that. That's probably a challenge for us at the moment. You know, we've used things like we have live chat

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Dean Salakas: and, you know, people might disagree with me here, but we actually turned off our live chat because we found that customers were asking questions.

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Dean Salakas: Customers were getting lazy, and the actual cost to us to maintain live chat was we were finding not beneficial to the value we were providing to the customer for the service.

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Dean Salakas: Yet, when you think about it, customers come in store and talk to our service assistance.

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Dean Salakas: It's one of those things that we're actually struggling with from a business model perspective trying to replicate the online and the offline, but certainly like you said, yeah, the service they get in store is, is you know excellent they can come in talk to someone and if they've got no clue about organizing

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Dean Salakas: a party we'll help them out with it well you know certainly the people that come to your store in person are probably have a much higher chance of converting into a buyer than the people that are visiting your website and typing into a chat box yeah absolutely so i could i could definitely

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Dean Salakas: see why you'd want to spend more time with people in store yeah and i mean i think the other thing is with online you um you know things are very price sensitive online where in the store, like you said, they've come to your store.

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Dean Salakas: The price is not as big of an issue. It's more about getting what they came to get. They've made the trip. If they're going to say 50 cents by going down the road, it's not really worth it.

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Dean Salakas: So, yes, so people tend to convert more in store. All good points that we can probably apply to some of our own products.

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Dean Salakas: Do you feel like as you went through this journey with your brother that you had some unique skill set that helped you along that made things easier for you or maybe gave you this advantage that other people didn't have?

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Dean Salakas: I think there's probably a couple of things. I guess, first of all, being two brothers running the business rather than a single owner certainly is a big help.

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Filip Valica: You know, having a business partner there that can pick you up when you're, you know, when you struggle with something. So we've had our turn at doing long hours. But, you know, it might be one or the other because we both have different skill sets.

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Filip Valica: So getting on to your question about, you know, what skills do we have that helped us all in the way? I'd say it's our complementary skills. So I come from an analytical background.

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Dean Salakas: So, you know, I'm very technically savvy. And that's the skill set I bring to the two of us. And my brother's a very good people manager.

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Dean Salakas: So between the two of us, we were able to obviously use our strengths.

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Dean Salakas: And, you know, I was very fortunate. I came from a supermarket background. So, you know. You understood retail really well. I understood retail, but I think the hard thing with being a startup, I mean, we weren't

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Dean Salakas: exactly a startup, but with being a small business is, you know, the tools that you need to do things are expensive. You know, the big companies have the tools. And one of the advantages we were able to develop those tools in-house with, you know,

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Dean Salakas: things like Excel and Access, Microsoft Excel, Microsoft Access and things like that, being

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Filip Valica: able to actually create efficiencies through without, you know, put it. in a whole big software, really developing the software ourselves through a tool like Excel or Access.

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Filip Valica: So to give you an idea, like, we have a lot of Excel spreadsheets all over the places which automate a lot of processes we do. I built our whole ordering inventory forecasting system from scratch in Access, which,

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Filip Valica: you know, forecast how we wanted to forecast. I probably could have bought something off the shelf for a few million dollars, but, you know, being a small business, you just don't have that kind of money. So we built it ourselves.

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Filip Valica: Right. Now, I'm familiar with that. I worked for some small businesses that basically ran off of Excel. And then when I put on my other hat, when I worked for IBM for a little bit, it was kind of a nightmare because you try to go in and to help the business take the next step

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Dean Salakas: and you realize everything was just custom coded to that business. Yes, yeah. And so it was really hard to get them onto a standardized solution. But, you know, at the end of the day, if it's working and you're happy with the price that you paid for it, then. That's it. But I think that's the hardest thing for a small business.

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Dean Salakas: businesses to grow and grow organically and you know it's almost like where you want to be it's too expensive where you where you how you want the business to run and you're always in that situation you're like I wish we could do this and this and this and wish we could manage this

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Dean Salakas: better and you know we need this to make that better but sometimes having that is just not cost effective to do it you especially when you're early stage and you're not turning over enough revenue you can't afford all the fancy systems and tools you can't put the time in to

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Dean Salakas: develop those things so you have to grow organically and I think that's probably a skills you know those skills in terms of having you know I was a subject matter expert at Australia's largest

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Dean Salakas: supermarket here in Excel so having that skill set definitely was an advantage you talked about some of the standard things that businesses struggle as they grow I'm huge on doing things myself

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Dean Salakas: I'm also really analytical I can code if I need to and so yeah yeah you sound like me and I started everything from scratch and maybe six months into it, I realized that I was spending 20%

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Dean Salakas: 30% of my time fixing the hooks that didn't work quite right and the little annoying things

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Filip Valica: that didn't transfer over and the hiccups and the, because I, you know, did everything myself.

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Dean Salakas: And so there was some point that I had to say, you know what, I'm just going to buy a template or I'm going to buy something that's kind of half done, that's a middle of the road solution. And as much as I hate to do it, because I absolutely refuse to pay for some of these

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Dean Salakas: SaaS, you know, software as a service products, but just found myself spending way too much time on the nuts and bolts instead of the, you know, the bigger picture. How do you balance that, especially as a technical person? So I think we've done that, we've done, we've been through that

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Dean Salakas: process so many times that you described there. It's, it's a really good example of, hey, you know, sort of a life cycle of a business in, you know, in that technical area. And we've gone through

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Dean Salakas: that so many times. It's almost like we just know how it works from now. And like we, when we have to do something, I always start with an Excel spreadsheet. Start with a prototype, if you like,

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Dean Salakas: a test system, whatever you want to call it. We always start off doing it ourselves and that allows us to get, you know, understanding of what we really need because, you know, you never get it right first time.

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Dean Salakas: Like you said, there's always bugs and things that you didn't set up right or you didn't think of a scenario that comes up and you find yourself spending a lot of time fixing issues. And so you do get to a point eventually where you think you probably know enough about what that

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Dean Salakas: system you've developed is and does that you know you can probably more comfortably go to market and then ask you know and buy something out off the shelf because like you said I'm in the same boat

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Dean Salakas: as you were there where I'm constantly going in having to fix things and I think I've got better things to do with my time than sit there and fix little L XL problems you know that that you know we could just buy something.

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Dean Salakas: So eventually you get to a point where you just think, you know what, it's going to be cheaper to buy something out of the shelf here. But the best thing is you know what you've grown so that you can probably support your revenue. You can support a tool like that. And you have a better understanding of what you need, right? You've got a better understanding what you need.

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Dean Salakas: And it's almost necessary because you can't grow as a business if I'm continually being IT support for everyone in my company, you know, so you do, you do have to start thinking about simplifying your role as a CEO.

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Filip Valica: So while, like you said, it might be better for you to develop a particular tool to do something just by getting it out of the box and spending that little bit more and

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Dean Salakas: buying a system, then you take that complexity out of your role because you just don't have enough time in the day to do everything you need to do.

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Dean Salakas: So slowly bit by bit, we've been evolving where those things that I built early on when we started the business up, they're starting to disappear and integration start filling the gap. I think also we've been in a fortunate space where we've been an early adopter in the tech.

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Dean Salakas: space, you know, with online and a growing business. So, you know, back in 98 when we launched the website, most of the tools we needed, we didn't even exist. So we had to build them from scratch.

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Dean Salakas: I had to build my own, you know, our site was completely custom built back then. Sure. Where now. It's out of HTML. Yeah. It was, yeah.

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Dean Salakas: It was, which was fun. And then, you know, now you got things like, I mean, we're on Magento now with a website. So we've been able to grow to a point where we've gone, you know what, well, now the tools exist that we need, and they come out of the box, 90% of them, so we were able to move to that.

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Dean Salakas: And, you know, that whole process of getting from a custom built to a software out of the box and with a whole bunch of customizations, by the time we got there, we had a very good understanding of what we needed.

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Dean Salakas: So like all these little Excel tools, when I go and say, okay, cool, let's go and buy something out of the box, I know every requirement, we just go through our Excel tool and say, these are all the things we need the new system to do. and go to market and go to the guy, you know, go and say, look, this is what we need.

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Dean Salakas: And let's say you get a logistic system. That's one that I've been working on more recently because I've built my logistic system again from scratch. We know everything we need. And then there's the bits that the out-of-the-box solution doesn't do, which you can customize.

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Dean Salakas: But at least when you implement that new solution, you're much further down the track and much more knowledgeable about what you need than going to market and looking at a bunch of tools that you might need and not knowing which one's the best because you haven't used any of them yet, you know?

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Filip Valica: So speaking about tools, are there any that you found to be helpful in your day-to-day job,

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Dean Salakas: then maybe not anything specific to your industry, but just in general, things that make your life easier? I think my most favorite one at the moment is Asana. Have you heard of that? Asana? Yes. I have. Oh, it's my favorite. It's probably the most recent and favorite implementation we've done.

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Dean Salakas: So Asana is a task management tool like you would know, but maybe the listeners don't. So it's a task management tool, a bit like, I think there's a couple out there, is Jira from Atlassian, they've got one, and there's a bunch of others.

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Dean Salakas: But Assana is a free tool, depending on what level you're using it. But for most startups, it'll be a free tool. For us, it's a free tool, and we're a little larger. But it's a great task management tool, and you can assign tasks to people.

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Dean Salakas: And I just found it's made our life so much easier, especially me as a manager.

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Filip Valica: You know, everything was managed in emails before, and I had to constantly follow people up. Where's this at? You know, is that finished? Who was dealing with it? I thought you were dealing with it, and they thought I was dealing with it, and stuff just fell through the cracks.

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Dean Salakas: With something like Asana, we've created some rules around how it's supposed to be used, but obviously it's a tool where you can create a task for someone, assigned it to someone, so whoever's assigned it, they're in charge of it then.

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Dean Salakas: So, you know, there's always an owner of a particular, everyone, there's always someone responsible for some task to get it to completion. and I just found that has really made my life easier.

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Filip Valica: I could sleep better at night knowing that everything's in there

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Dean Salakas: and someone's working on it. You know, I've even got a couple of employees that report to me

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Filip Valica: were going through a very difficult period with their role where they were just overly stressed and it was becoming a bit of a problem and I was struggling to figure out how I deal with the stress level in their roles. And Asana changed that overnight.

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Filip Valica: They felt more in control or their tasks were online. I work with them to continue to monitor their priorities at any time I can jump in there and see where they're at with what tasks.

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Filip Valica: So it's been really a really great little tool that we've implemented recently and would

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Dean Salakas: definitely recommend a tool like that to any business that has, you know, a couple of people that are managing a project.

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Dean Salakas: Yeah, I was going to say, all I need to do is get some employees. Then I'm set. Yeah, but I even use it for things like my bookkeeper, my accountant, you know, like instead of following up, where's my tax returns? return. Sure. Bug of that.

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Dean Salakas: Create a task, tax return, get it done, put a due date on it and assign it to them. And then you get notified when they miss the due dates. So, you know, you follow them up. Hey, what are you doing? It's sitting in your asana. What's going on? Right. Or they generally miss it less, you know.

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Dean Salakas: So it's just definitely been a great, it's a great tool to use just in general. I have to keep that in mind. I think they're developing some tools at the moment. I've seen a couple of startups actually because I'm obviously in the investment space now

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Dean Salakas: trying to get investment and some people are developing some tools that work with your email, which I think would be awesome if you could convert those emails straight to tasks in a tool like Asana. Right.

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Dean Salakas: That's how we used to manage a lot of our task in my last job in engineering where we had spreadsheets for action items and things like that. You basically were a spreadsheet wrangler for half the time, just keeping it updated. Oh, yeah. So that's what I love about this.

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Dean Salakas: You don't have to do any of that.

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Filip Valica: Because I was the same, we said, do some new, every now and then you'd start a new project of some kind and say, look, I'm going to put this project in a spreadsheet just so I can manage it better. Right. Everything's in there, even little tasks, you know, anything I want to ask anyone to do instead, like I'll ask them.

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Dean Salakas: Usually I'll ask them in person, but if I think, oh, shit, I don't want to have to follow that up. I just create a task and assign it to them. Then I'm done.

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Dean Salakas: I'd have to think about it ever again.

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Dean Salakas: Yeah. Perfect.

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Dean Salakas: Cool. If only the task completed themselves, right? That's it.

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Dean Salakas: That's the last step. When we get robots that do the toss forward.

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Dean Salakas: So maybe while we're talking about things that worked out really well, do you have any like success stories or stories about like your biggest high? You know, people will listen to some of these interviews and say, that sounds really

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Dean Salakas: straightforward and it might be oversimplified, you know, maybe we skimmed over some of the biggest lows that you've had and some of the biggest highs because at least in my experience, to get to where you are today wasn't a definitely wasn't a straight line.

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Dean Salakas: And there's going to be some bumps along the road.

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Dean Salakas: So can you maybe share some of the worst bumps and maybe some of the highest highs that you've had? Yeah, sure. So if I went through all of the bumps and all the bumps we'd be here all day, there's a lot of bumps, you know.

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Dean Salakas: And, oh, man, it's, you know, probably, it's a good point you bring up because, you know, often, you know, talking to you about it, it sounds like, oh, he's had a lot of success and it's been really easy. It hasn't been easy. There's been a lot of failures. There's been a lot of mistakes made.

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Dean Salakas: along the way,

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Dean Salakas: probably some of the biggest failures we've had along the way. So we implemented a new store, new bricks and mortar store. We're going to move the internet. I won't go into this for hours, but, you know, we moved into a new store. We moved the internet operation.

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Dean Salakas: And, you know, that whole process was more difficult than we anticipated. We moved at a busier time than we anticipated because we were late in moving. And it was just a disaster. And then we struggled to keep up with capacity and at the time we were growing so our internet sales were going

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Dean Salakas: through the roof and we just struggled capacity wise we just weren't planned well enough so a lot of the time when we've looked at the bumps along the road it's just been due to poor planning more than

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Dean Salakas: anything we've just failed to look ahead and see what was coming and and adequately you know mitigate the risks or the issues that were that were there if we had to sat down and spent five I mean, it's thinking about it. So we've had a lot of those.

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Dean Salakas: Would you say that's because maybe sometimes you get lost into the day-to-day and you're focused on maybe making sure, you know, this particular issue has been solved

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Filip Valica: for today and maybe there's not anybody tasks with looking forward? Yeah, I think it's nearly always because we're just too focused on getting jobs done rather than sit back and planning. We actually have more of a, I mean, like we're talking

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Filip Valica: earlier about growing as a business and adapting as we've grown. We now have much more planning activities we do, you know, because we identified every time we have a failure, we'd look back

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Dean Salakas: and say, why, what happened? How do we miss that? How do we, you know, fail to plan that correctly and make sure we put something in place to make sure that never happens again? You know, some failures are acceptable and that's a strange thing. It's part of learning.

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Dean Salakas: Well, also sometimes we take calculated risk, you know, and not everything can, you know, sometimes you might take a risk that 80% chance you'll succeed and 20% chance you won't and that 20% happens and I don't think you can plan for that 20% sometimes.

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Dean Salakas: So often we've looked back and said, you know what,

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Dean Salakas: based on the information we had it, like hindsight's great, but based on the information you had at the time, it was the right decision. We just, you know, the chips just didn't fall our way with it and, you know, often we're wrong.

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Dean Salakas: We just, we were wrong, but we couldn't have made a better decision based on the information we had at the time. I mean, as a CEO of a company, especially growing, there's so much uncertainty. You're making decisions on no information.

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Dean Salakas: And you have to make the best decision

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Filip Valica: you can with the information you have. So often we've said, you know, look, the chips did fall, but also on the flip side, a lot of the time it's just been, look, we didn't think

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Filip Valica: enough about that problem. We didn't spend enough time to properly analyze it, talk to the people

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Dean Salakas: in our company that know more about the role than we do as CEOs, and make sure we make the right decision so often it just yeah like you said came down to we were in the detail and we

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Dean Salakas: were complacent because we didn't think we'd have any issues and then issues came up and and you know you get bitter and you look back and say what did we do wrong i mean i i'm so guilty of it personally

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Dean Salakas: as well i it's almost like you you just don't want to deal with some problems when you're on you know you're on you've got a lot of work to do you're really busy and you know there's a little problem there but you just think oh it'll be fine you won't you won't happen the chance

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Dean Salakas: desire it won't happen and it always happens it would always that problem that you think won't happen will happen and you just ignore it and you put your head in the sense it's it's just so easy to do it's something that I don't know like I feel like I'm guilty of it always every time we

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Dean Salakas: have those problems I think I thought about that but I didn't I didn't explore it you know and I just kept moving forward instead of thinking about hey what would happen if that happens so yeah we've we've had a lot of bumps along the way I probably haven't been very specific to you but

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Dean Salakas: it's interesting that you say all that because you know you You're talking about making decisions with information that you have, and ultimately not making a decision is a decision. If you stall because you don't have enough data or you feel like you're not ready, that is a decision.

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Filip Valica: And some people believe, I certainly believe that I wish that I made more decisions faster because I'm in the other end of the camp where I try to plan for all the other contingencies.

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Dean Salakas: And in reality, then I don't get anything kicked off. Yeah. I do like the saying, there's no such thing as a bad decision. there's just a bad decision-making process.

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Dean Salakas: And that's something we kind of live by. We will analyze, are we making a bad decision here? Well, hang on. Have we actually gone through the right steps to make this decision? And if we have and we've got all the information we need, well, we're making it on the assumptions that we have, and that's all we've got to go by.

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Dean Salakas: So let's not dwell on this decision whether it is or isn't right, because at the end of the day, we understand everything we need to know to make the decision. We just have to have an opinion, especially like in starting a product or whatever.

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Dean Salakas: I mean, most people don't have all the information. If you could go out and survey 100% of the country to find that if your product's going to survive, you'd be fine. But no one ever has that luxury.

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Dean Salakas: Often you just think this is a great idea and that's what being an entrepreneur is about.

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Dean Salakas: Often you need to make decisions, you know, with little information because like you said, you don't have the time to go and figure that all out. You have to cut corners and get to. market quicker.

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Dean Salakas: Well, that's some really good advice and that's going to roll into my next question,

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Filip Valica: which is if you had to give one tip or one bit of advice to somebody that was starting their own business, maybe a product-based business, maybe you're giving advice to your younger self, you know, what would that be to kind of help them along? It's probably a bit of a broad question.

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Filip Valica: Like I get asked a lot, like, you know, I'm doing a startup. How should I grow it? You know,

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Dean Salakas: what should I do? And I always tell people,

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Filip Valica: you know, focus on a very specific area, start niche and own that niche, you know what I mean? So whatever you do, you've got to be the best at something.

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Filip Valica: If you're just average at everything, you know, you're never going to survive in the market because there's a lot of people that are average at everything.

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Filip Valica: You know, I use the example of, you know, like in online, if you're actually, if you're in my business and you're trying to compete on the word party supplies, good luck, you know what I mean? Because everyone is trying to compete on party suppliers. Every party store in the country is trying to own.

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Filip Valica: that keyword. But if you're a startup and you're trying to compete, you know, in party, well, you really need to be very, very specific, you know, start with first birthday party supply Sydney, you know, and own that. Be the best of doing kids parties, you know, first

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Filip Valica: birthday parties in Sydney, you know, have the best range, have the best whatever in that category. And then you can beat people on that because the generalists that are trying to be good at

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Filip Valica: everything, they're not going to have that specific targeting and, you know, product range and all that. So you can beat them there. And that's what I say to everyone is to say, look, start niche and start small and own whatever space you're planning to be in. Make sure

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Filip Valica: you own it. And make sure you're different enough from the competition that you stand out. That's awesome advice. Thanks a lot for that, Dean. That's right. Where can people go to buy some products from you? Let's say we're in Australia and we're throwing a party.

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Filip Valica: Yeah, I definitely encourage people after this, you know, to check out our website. It's it's www.w.the partypeople.com.com. I think you could even, if you accidentally go to the dot com, I think you still get to us anyway. So yeah, check us out online and have a look around.

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Filip Valica: We're on all the social stuff, so feel free to jump on our social pages on Facebook and just go to our website, check out what my logo looks like. There's a lot of the party people brands around, around the world. But if you check out what my logo looks like,

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Filip Valica: then you jump on, whether it's Facebook, Instagram, Twitter, we're on all of those. incidentally while I'm on that I think another good tool for people is Hootsweet.

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Dean Salakas: You've heard of Hootsweet, great little tool to push your stuff out to social media,

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Filip Valica: especially if you're starting a new product.

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Dean Salakas: Definitely I'll find with new items like when we did, you know, the two launches with 3M and Avery, social was our first marketing channel we went to because we, you know, we thought that, you know, trying to advertise on search engines and stuff, no one's going to be looking for what you're selling if it's new.

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Dean Salakas: So we had to educate people and social was the best place for that. and getting influences and things like that on social to bring awareness to that product was great. So definitely check us out on social stuff and see what we're doing. We're on just about everything. Great.

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Dean Salakas: And you've got two brick and mortar stores? Yeah, two bricks and mortar stores in Sydney. Well, Dean, thanks again for coming on the show. It was my pleasure having you on. Thanks again for sharing all your wisdom with online commerce. After I was browsing your catalog,

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Dean Salakas: I thought, man, that's a challenge keeping that many products in stock. Yeah, it's fun. It's a good fun business.

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Dean Salakas: And that's all I've got for today. Thanks for listening. I put all the links that we covered under the show knows posted on the product startup.com slash episode 15. One of the most difficult parts of podcasting for me is that sometimes it feels that I'm talking to myself.

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Dean Salakas: So as an only child, I can say that keeping myself entertained does come second nature to me. But the real issue is that I don't get much feedback on what I put out. So what do you think of the format? Does it work? I've been focused on only getting the founders of other physical products.

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Dean Salakas: on the show. I've also been pitched a lot by prospective guests that work in the arts, like authors and developers of online mobile apps. I've resisted bringing them in because I really want

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Dean Salakas: this to be the hub for launching physical products, DIY style. And I think that's what differentiates the product startup from maybe some of the other small business podcast or the entrepreneurship

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Dean Salakas: type podcast out there. I also want to make sure that I'm giving you what you want. So please let me know what you think in the show notes or hit the Ask Philip button on the site or leave me an iTunes review, use a carrier pigeon, whatever.

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Dean Salakas: Should I broaden the guests that we have on the show to get a variety of perspectives or should I keep a laser focus on creators of physical products? So if you could, please take 15 seconds right now to let me know.

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Filip Valica: Join me next time as I speak with Luke Lucas from Fottis. Luke owns and runs a startup food production business called Fotties and they specialize in the production of low, thod map, gluten-free, and other

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Filip Valica: allergy-friendly food that they sell online. Luke also quit his career in finance last year to open a cafe and retail outlet and he's worked full-time in the business ever since. What a really

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Filip Valica: great test bed being able to validate food in a cafe. People are essentially paying you to test your product and then you're selling what works through your online store.

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Filip Valica: I'm also going to experiment with putting out episodes in higher frequency. So tune in in one week to hear that episode.

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Filip Valica: I really appreciate your support. I read all the comments and questions you guys put online. So thanks again, and I will see you next week. Thank you for listening to this episode of the Product Startup Podcast with your host, Philip Felizza.

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Filip Valica: For more great content and to stay up today, visit theproduct startup.com. Your guide to getting there.

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Filip Valica: Thanks for tuning in. this episode of the Product Startup Podcast, the show that teaches you what it really takes to bring your product to market and turn it into a big success. This podcast series is brought to you

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Filip Valica: by Mako Design + Invent, the first firm in North America to provide global caliber end-to-end physical consumer product development to startups, inventors, and small product businesses. If you're looking for product development help on your invention, head over to Mako

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Filip Valica: design.com. That's ma-k-o-design.com for a free consultation from one of Mako-design for design studios from coast to coast. Thanks for listening and see you next time.