Update: How We 10x'd Revenue And Just Hit $2.7M/Year
This is a follow up story for Hand Held Legend. If you're interested in reading how they got started, published over 4 years ago, check it out here.
Hello again! Remind us who you are and what business you started.
My name is Kyle, and I’m the founder and CEO of Hand Held Legend – a hardworking team of people who believe we can make video game modding more accessible by curating and engineering high-quality hardware that any gamer can install.
Hand Held Legend started in 2013 as an e-commerce company focused exclusively on the Nintendo GameBoy. Since we interviewed with Starter Story In 2019, we expanded to other Nintendo consoles and established ourselves as a solid player in the retro video game community, enabling the business to generate over $27k a month.
Today, we’re bringing in over $230k a month, almost tenfold what we were doing just a few years ago. We’ve come a long way!
Tell us about what you’ve been up to. Has the business been growing?
Covid was a catalyst for Hand Held Legend and the larger video game industry. In the single month of March 2020 alone video game console sales increased by 180%.
Thankfully, right before the world went into lockdown, we were able to move from a residential garage and home office to an office building nearby. This move enabled us to grow in ways we couldn’t before, and in retrospect, it was a godsend for the imminent increase in demand.
Physical office space was a requirement to expand, but so too was people power. During this high-demand period, we doubled our inventory and multiplied our product offering by sixfold. We couldn’t do any of this without deciding to hire our first full-time employee.
This is a decision a lot of other business owners struggle with. In my case, the choice to hire was one of necessity - I could not fulfill orders coming in on time or respond to customers through email in a reasonable amount of time.
Retro gaming may seem fun or even whimsical at first, but we quickly realized we’d need someone who understood retro gaming lingo and had a basic technical aptitude if we were going to be successful. We found a few candidates with casual gaming experience and decided to take a risk and hire our first order fulfillment specialist.
Thankfully, this turned out to be a great fit, but it further emphasized how much nuance there is to what we do. There’s a certain type of skill required to be able to tell the difference between eighteen different types of electrical resistors or memorize over fifty acronyms that might be seen as gibberish to anyone off the street.
With some momentum behind us, we decided to take another risk and hire a dedicated customer support rep. Having a stellar customer experience was very important to me, and I knew I was falling short of customer expectations.
Therefore, we shifted to a model that gave people just one role so that they could execute it effectively. By dedicating a full-time mind to customer support, we were able to do more than respond to tickets - it also set us up for future ability to add to our documentation library and build self-help articles. This had a positive impact on our customer satisfaction scores.
I am a bit of a perfectionist - the fact that less was getting done even though there were more people bothered me to no end at the early stages of our first few hires. Over time, however, I quickly learned that this was not the correct way to think. By delegating work, even at the risk of a slower overall initial pace, I was able to move on to more valuable work while tasks were still getting done (and perhaps even a bit better).
My brief foray into “more valuable work” was temporary as I started to realize there are A LOT of areas I had yet to master. I quickly understood that there were people who could complete the tasks I was doing in far less time with far less energy.
For instance, hiring someone to manage, organize and forecast inventory was essential to creating a consistent catalog of products customers could rely on. Previously, my cues to reorder inventory came with the dusty feel of an empty box rather than a predictive ordering system. Wiping down an empty box is not the right way to know when to order inventory!
In time, our overhead became stable and I could accurately predict how much capital was needed to order products and maintain inventory while investing in new employees and other variable expenses yet to be explored.
Our brand trust improved as well as our customer retention rate as we were able to offer consistency in product selection. Many of our sales contain 5+ items that all have to be sold together to complete a project, so having all in stock at one time was key.
In retrospect, I should have hired a lot sooner as I was spending too much time working in the business instead of on it.
Hiring the right people, even if it costs more, is worth it. The business may not be as profitable as it could be, however, I can sleep knowing things are getting done correctly and are in good hands.
In the summer of 2021, HHL hit 100k sales LTD with little to no marketing presence - we know this isn’t typical. Like other industries, we expected demand to decrease after Covid; however, demand remains surprisingly strong. We attribute some of this growing demand to new (and perhaps unexpected) generations of gamers entering the scene, like Paul Graham’s 10-year-old son seeking out a Nintendo 3Ds.
Our sales numbers are also made possible by returning happy customers. Our returning customer rate is high, which we work very hard to maintain.
Another initiative that’s helped us grow over the past 2 years is an increase in social media presence. In addition to developing our own (stunning) Instagram content, we’ve made an effort to showcase mods and builds from the larger retro video game community.
Platforms like Discord and Reddit have been bittersweet as there are loud voices of criticism at every turn. We do not always do things perfectly but we do strive to do them right. It has been difficult to train staff to learn all the nuances of this modding world and at times has led to mistakes that generate negativity. We continue to push through and focus on the customer.
Expanding our partnerships, like the ones we have with RetroSix and Rose Colored Gaming, has also played a large part in advancing what we can offer to the larger North American market and even less accessible markets like Europe.
Working with individual modders, too, has helped us to stay connected with our community - we love to promote folks out there who are making awesome stuff, like @keeppluggin and @boxypixel and @my_retro_bones.
Check out some examples of our media posts:
In addition to social media posts on Instagram, we’ve started a weekly newsletter and weekly YouTube videos showcasing how to start out modding and in some cases even master the art of modding. We have a pretty simple practice for growing our newsletter - we rely on people to sign up from our website and we include a link to sign up with each completed order.
We have not paid for newsletter growth as we believe organic attraction will produce a much more effective base. This has been fun, but we still have a long way to go to reach our viewer's goals. A tip for growing channels organically is creating anticipation. For example, communicating about a new product launch on social channels will lead people to subscribe to stay up to date.
Despite starting exclusively with GameBoys, we expanded our offering to include consoles and controller mods for other systems like the N64, SEGA GameGear, and Atari Genesis and even modern consoles like the Nintendo Switch. You could consider this our “growth” strategy. Our work with RetroSix UK allowed us to offer pioneering content like North America’s first third-party Game Gear replacement parts since its debut in 1991, which was featured in Nintendo Life.
Other products we’ve added to our portfolio are add-ons or easily complement an existing mod. This has slowly helped to increase our average order value, and at the same time make shopping more enjoyable, too!
What have been your biggest challenges in the last year?
Growth has not come pain-free. We’ve struggled quite a bit to scale from a small, family-run business to a company supporting eight employees. You might even say that this was a sink or swim moment for us…literally.
The business had grown so large that inventory was spilling over into other areas of my home. I recall a time when my dog was almost literally “swimming” in N64 controllers in my garage because a large cardboard box had busted and spread all across the floor (I tell you, this is the most N64 controller I have ever seen in my life).
There was a level of sacrifice here that took a toll on me and my family. In retrospect, I recognize that this point in time was where some other businesses may have failed or their owners gave up and decided to sell.
Did I spend my evenings shipping until I couldn’t stand up? Yes. Did I organize over 1200 SKUs over a weekend, labeling and barcoding each one so we could operate on Monday? Yes. Did I build 16 sets of steel shelves in a single day? Yes. Was I tempted to sell and be done with it all? You can do more than you think is possible.
Some of the more obvious pain has come from supply chain issues and inflation. Products are harder to source and take longer to get to our warehouse (sometimes more than six months longer). Prices for components have increased and we’ve had to pass some of that increase on to our customers despite trying very hard to keep prices reasonable.
To combat the supply chain issues, we’ve pre-ordered more material so that we have a stockpile when it does finally arrive. In addition to product, we’ve also invested in people, hiring engineering power in-house to help us create some of our hardware to rely less on creators overseas.
The most challenging aspect of our growth, however, has been hiring and retaining the right employees. Hand-Held Legend serves a niche community - finding people with the right expertise can be difficult. The right folks are enthusiastic about retro video games, have at least attempted some form of modding, and have a professional business sense in them at the same time.
Not every hire has worked out. In retrospect, I should have taken corrective action sooner than I did. Lower standards as a result of an ill-fitting hire have made it harder to raise standards after the fact.
The Human Resources world has been ripe with new questions to answer and problems to solve. Employees have rightfully gone out sick more, but this still brings with it the staffing trouble that comes when people are not able to be present. We’ve had to create paperwork and FAQ documents for “what if” scenarios that attempt to outline policies and procedures in the event of a Covid exposure or another related event.
This type of unpredictable environment has made things… difficult to predict. Thankfully, my team has done a tremendous job of communicating, giving other folks the benefit of the doubt, and working hard to cover one another when needed. I can’t thank them enough.
What have been your biggest lessons learned in the last year?
It’s important to have control over your future… or at least do everything you can to prevent variables and other unpredictable events from throwing a business off track. Covid has brought the world to its knees here, and our business was no different.
Hiring the right people, even if it costs more, is worth it. The business may not be as profitable as I would like it to be, however, I can sleep feeling like things are getting done correctly and are in good hands. In addition, good management is essential. I’ve recently attempted to implement OKRs, a goal-setting methodology coming from HP and Google, to align our company around a shared sense of purpose and the results that help us get there.
In contrast to hiring the right people, I’ve also learned more about letting people go. Some of my employees quit because I didn’t manage other employees well. Similarly, when poor-performing employees didn’t raise their standards, it hurt productivity for the rest of the team - this was a hard lesson to learn and something I will take with me as I continue to learn how to manage.
Business doesn't wait for you to obtain the right data. Said more simply, act and adjust.
The process of actually measuring performance was a challenge as well. When you have just a few, trusted, part-time workers, it’s easy to use intuition to measure performance. When we started growing rapidly, however, it was almost impossible to understand what everyone person was doing and how well they were doing it. Micromanagement was a huge temptation - one that left me exhausted and clearly in an unsustainable place.
To solve this problem, we turned to OKRs (objective and key results) and KPIs, a methodology used in the larger business world to align teams around a common and shared purpose all while using objective measurements to guide progress. We selected Gtmhub as our OKR tracking tool and spent weeks generating scorecards, consolidating data, and leveraging other tools to objectively measure success.
Here’s an example of how we measured bringing down our average shipping time. As a net-new addition to our process, we took the time to implement a “scan to verify” with ShipStation, which scans each product's barcode and verifies the product and quantity in each order before the box is shipped. This not only lowered shipping times but increased accuracy.
The addition of an inventory manager to our staff also greatly improved our ability to keep products in stock and the correct places on the shelf. This was a great hire and one I would make again.
What’s in the plans for the upcoming year, and the next 5 years?
Our plans for the upcoming year are twofold:
- Reduce overhead. Perfect the forecasting process amidst supply chain issues
- Continue the trend of bringing more and more of our operations and product creation capabilities in-house. Making our products better, more innovative, and less dependent on the supply chain will only set us up for a greater chance of success in the future.
- Diversify our product offering into new consoles and controller mods. Novelty and innovation here will be key! We don’t want to simply offer products that look like everything else out there already. There’s still room for innovation in the retro video game industry, even after all the decades in between the original hype and enduring nostalgia!
What’s the best thing you read in the last year?
There are a few resources that stand out:
- Why Kindergarteners Make Better Entrepreneurs than MBAs
- Measure What Matters, How Google, Bono, and the Gates Foundation Rock the World with OKRs by John Doerr
Advice for other entrepreneurs who might be struggling to grow their business?
My brother is in software and tends to throw out terms and concepts that he thinks are relevant to me (e-commerce should do things the same as the software industry, right?). Leaving any facetious comments behind, there is indeed one concept here I’ve grown to like. Despite declining sentiment in the larger tech arena, the concept of “Agile” development is something that I have applied to my business thinking.
As opposed to crafting a complicated plan and then only slowly watching it unfold, I’ve learned how to move more quickly when it comes to making decisions. Making decisions and iterating on them over and over again is often more effective than analyzing results and slowly waiting to make changes. Business doesn't wait for you to obtain the right data. Said more simply, act and adjust!. The act of making a change often reveals new angles, better ideas, or can simply give you the certainty that the decision you made wasn’t the right one!
The Forbes article I referenced above about kindergarteners does a great job at explaining this concept. Having kids of my own, I often reference this scenario in my head when I find myself laboring over decisions that in the end don’t have a clear answer. If you’re struggling to make decisions, perhaps in a state of analysis paralysis, make decisions in a way that you can “undo” so that you can test what concepts work best and rapidly try new ideas to solve a problem.
Implementing OKRs was one of those decisions we made quickly. We ran a pilot, brought the team on board for just a few weeks, and then assessed if it was providing any value. We found it did! The team was better able to objectively measure success as opposed to letting my subjective opinion take over.
Just because you can make a cardboard box quickly doesn’t mean you’re improving shipping rates! The lesson here is to stop relying on subjective measures of success. Sales often feel good and they can easily be mistaken for health. Does the data reflect a state of health, however? Make sure you’re evaluating your business through a clear lens and take the time to establish key performance indicators and find ways to measure them.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
