How I Created A Multitool And Built A $1M Sustainable Product Business

$100,000
revenue/mo
1
Founders
2
Employees
product
Tactica
from Melbourne
started
$100,000
revenue/mo
1
Founders
2
Employees
651K
alexa rank
9.57K
followers
38
followers
platform
productivity
freelance

Hello! Who are you and what business did you start?

My name is Mike Chijoff and I’m the founder of Tactica. We create cool stuff for your everyday adventures.

After many years running an industrial design consultancy, I decided it was time that we started developing our own products. It was too often a case where In the consultancy, innovation after innovation would not, for varying reasons, see the light of day. It was at this point that I decided it was time to take ownership of the client and develop our own products. In 2016, Tactica was born.

Our founding product the M100 is sold around the world through distributors, wholesalers and direct to the customer. Tactica generates around 80,000 revenue a month and continues to grow through its investment in research + development in materials, design, and technology.

how-i-created-a-multitool-and-built-a-1m-sustainable-product-business M100 multitool (now in its 3rd iteration since the Kickstarter campaign)

What's your backstory and how did you come up with the idea?

When I reflect on my journey so far I can see how all of the paths I took led me to where I am today. From starting off studying Material Science and working in the world of steel manufacturing, production planning, and supply chain. Through going back to university as a mature age student studying Industrial Design. It is the culmination of those experiences that has placed me very well in the work that we do today with Tactica.

The company was founded in 2016 and a big part of its foundation was through the running of a crowdfunding campaign on Kickstarter. This helped create the necessary market validation that we needed to continue pursuing our line of development.

I could say that I came up with the idea through frustration using multitools but that wouldn’t be true. The truth is that we came up with the idea through research, plain and simple. We wanted to create a product that people could potentially use on a daily basis. We also wanted to create a product within the everyday carry space. We quickly landed on multitools and from there our innovation found its place.

With my broad background in manufacturing, logistics through to product development, we were able to design innovation the likes that had not been seen before in the world of multitools. The use of high-end composite materials and alternative manufacturing processes created a world first in the marketplace.

The best way for us to validate the innovation was through the use of Kickstarter. At the time I was running my consultancy but investing a lot of our time and resources into this venture. The result was that we were quickly putting all our eggs into one basket. Although it seemed like a risky move we did have validation from the marketplace along the way, from trade shows through to end consumers, we had solid backing that this was needed and that it was at the right price.

Our final validation came through our crowdfunding campaign. After 32 days on Kickstarter, we finished with the highest funded multitool in crowdfunding history - over $570K and 8,500 backers. Not a bad validation of things to come.

how-i-created-a-multitool-and-built-a-1m-sustainable-product-business Highest funded multitool in crowdfunding history

Take us through the process of designing, prototyping, and manufacturing your first product.

Over the course of running my design consultancy, we have designed around 200 products ranging from bags to speakers, barbeques to bottle openers. No matter how many products you design there is always something new to learn.

Although this wasn’t our first product we were introducing a new material that we haven’t used before and that hasn’t been used in the way we wanted to use it. So, in short, we had no playbook and what to expect. The only thing we could rely on is our confidence that no matter what happened we would work out a way forward.

We prototyped over 50 versions of the multitool during its development, from initial sketches through to final CAD. Getting into the physical aspects of the product was important - being able to pick up, hold and play with the tool was key to ensuring a great user experience.

how-i-created-a-multitool-and-built-a-1m-sustainable-product-business

how-i-created-a-multitool-and-built-a-1m-sustainable-product-business Manufacturing of the M100 multitool

As prepared as we were we still had challenges present themselves once production commenced. As this was the first time using the material we quickly saw it’s capabilities and limitations. The result saw us re-tool and eventually develop the design to its current 3rd iteration.

Although this time was very challenging for us we also knew it would be the foundation on which our business would be built. As such we did not shy away from our community but actively involved them in the process. The result was a superior product and an extremely happy community. As the name implies the campaign really did kickstarter our business by showing us the demand for our innovation in the marketplace.

Describe the process of launching the business.

We raised over $570,000 USD in our crowdfunding campaign for our founding product the M100 multitool. There is no silver bullet as to what makes a campaign more successful than others. We pursued a lot of avenues to drive interest in our campaign and fortunately, it resonated with our audience. The main thing is to listen to your audience and adjust as you progress. They are a wealth of information and often tell you what’s wrong and also what you’re doing right. You need to be nimble and adapt to the changing conditions of your campaign, marketplace, etc. We found that this has served us well.

Raising funds through a campaign is one thing. Building a sustainable business is another and one that presents a whole new set of challenges.

It might sound like a lot of money but there are also a lot of fingers in the pie - kickstarter, payments services, marketing, ads, fulfillment agencies, logistics, and so on. For this reason, it is critical to get your numbers right the first time. Luckily for us, we were able to ride through the manufacturing challenges that we were presented with and still deliver on our promise. Unfortunately, not everyone is as lucky. Too many times we’ve seen campaigns go bust when things don’t go as planned.

Raising funds through a campaign is one thing. Building a sustainable business is another and one that presents a whole new set of challenges. Some of the areas that needed to be addressed as we moved into the retail space were:

  • Product pricing - retail, wholesale and distributor pricing
  • Product packaging - customer experience including upstream channels
  • Brand - development of the brand identity
  • Logistics - warehousing, freight and location considerations
  • Online presence - website development, integrations
  • Staffing - Finding staff to undertake the jobs at hand
  • Support - what level of customer support that could be provided
  • And so on, and on, and on...

We found this ‘foundation’ building period the most challenging. It was as if you were covering new ground every time something came up. This resulted in things taking longer than anticipated or other issues present themselves as a result.

It certainly takes a special sort of breed to do this and the one word that comes back time and time again is ‘grit’. Being able to drive through the challenges ahead and come out the other side, albeit a little bloodier.

Since launch, what has worked to attract and retain customers?

Since our launch, we have focused our efforts on establishing a foundation on which to build our business. To scale effectively we needed to ensure we had all of our brand, design, manufacturing, etc all aligned to be able to deliver at scale. With this in mind, our focus on the sales pipeline has only been a recent focus.

Through our crowdfunding campaign, we have built a loyal following of people that love our products and what we stand for. It is this foundation in our customers that have helped get us through the past few years.

Today our focus is very much on sales and have looked to find the right channel partners in online sales, distribution, and partnerships. This strategy has helped us to focus on the right sort of companies to work with.

  • Distribution partners have allowed us access to large regions and drive volume sales (need to ensure you have the margins that allow this)
  • Direct sales typically deliver less volume but higher margins. The important element here is that you are directly engaging with the consumer. Great for feedback, product ideas, etc
  • Partnerships provide opportunities to new markets, communities as well as potential new product directions. Also great to keep the creative juices flowing

Relationships are crucial for us. We aren’t interested in short term gains but looking for long term relationships that can continue to deliver. Although early in our sales process, this approach has already started to deliver dividends for us.

Amazon has been a mixed opportunity for us. On one hand, it has been a solid source of revenue, it has also demonstrated to us that its focus is on the customer and not on the business owner. One time we were suspended from the platform by someone complaining they had received a second-hand product. This was an impossibility as we were the only vendor and we only supply brand new stock from our facility. Although we explained the situation we were looking at a permanent sus[pension. It was only through the intervention of our Amazon contact that stopped this from happening.

The moral of the story is to make sure that Amazon only represents part of your revenue stream. Diversification is key to the success of any business and making sure that Amazon falls inline is vital.

How are you doing today and what does the future look like?

After our first campaign, many people asked what our next big idea was. For us, it wasn’t about finding something new, but to go deeper into what we were already doing. As such our focus was to continue developing awesome tools using the latest in design and materials technology.

After our first campaign many people asked what our next big idea was. For us, it wasn’t about finding something new, but to go deeper into what we were already doing.

Today we are in the middle of our second crowdfunding campaign for our newest tool - the M250 hex drive toolkit. We listened to our community and found that many were looking for a great screwdriver toolkit. After some development, we released it to a great response. You can check it out the M250 Hex Drive Multitool here.

how-i-created-a-multitool-and-built-a-1m-sustainable-product-business

how-i-created-a-multitool-and-built-a-1m-sustainable-product-business The new M250 Hex Drive toolkit on Kickstarter

embed:vimeo

To date, we have grown about 50% YOY and have been profitable from the beginning. Cash flow has always been challenging when growing the business but it's a balancing act that you need to get right (or get used to using credit cards:)

We are excited about the future as it seems all the hard work is beginning to pay off. In the coming months, we will have gone from a single product to a family of about 5. We have distribution arrangements, marketing channels and 3PL’s set up to handle all sales. This means that we can focus on continued product development which in turn supplies our network with new and exciting products.

Our focus continues to be the best in our category, delivering products that have the customer at their core and utilizing the latest in design and materials technology to create truly innovative and original products.

Through starting the business, have you learned anything particularly helpful or advantageous?

There are so many that we really can’t list them all. The biggest is to get comfortable with feeling uncomfortable.

Respect your customers. As quickly as you can ascend, you can fall just as quick (if not quicker). I’ve seen brands implode when they haven’t respected a customer’s views and their response has gone viral.

This may be with finances, development, manufacturing, the list goes on. You will be confronted with challenge after challenge from a variety of areas. The main thing to remember is that you will get through them. It may be hard, you might not like what you see, and you might come out a little bloodier at the end but it would have been worth it. For us it has been these sorts of challenges that have contributed to building a solid foundation for our business and a stepping stone for the success ahead.

Some highlights/ lowlights for us have been:

Lowlight/ Highlight

Finding out issues with our very first production run using a new material. Even though we had doubled and triple checked everything there was nothing we could do until we had made it. As challenging as it was the outcome did deliver a better product allround.

Highlight

Setting up a partnership with a complementary brand that has allowed us to enter into the bike market through an existing distribution network.

how-i-created-a-multitool-and-built-a-1m-sustainable-product-business

Highlight

Surrounding ourselves with the right support network from branding, photography, financial, intellectual property, etc. This approach allows us to remain a small, powerful, and most importantly, agile team.

Lowlight

A single manufacturer managed to derail a significant portion of our business through delay after delay. Find the right partners to work with from the beginning, it will pay dividends in the long run.

What platform/tools do you use for your business?

We have always aimed to have our business be able to operate from anywhere in the world. As such we have aimed to have many of the online tools used on a day to day operations integrated with local backups.

What have been the most influential books, podcasts, or other resources?

How I Built This with Guy Raz It’s always great to know that you’re not alone on this journey. This podcast provides some great insights into other entrepreneurs and the challenges they have faced along the way. Great to listen to while traveling.

The design of everyday things by Don Norman -This has been a great book that really showcases the number of products that exist in our world that have been poorly designed. It’s not you, it's them is a running theme. How many times do you try to open a door with a handle only to find that it’s a push, and not pull? These types of fundamental concepts help guide us to be better designers and create products that are intuitive and a pleasure to use.

Advice for other entrepreneurs who want to get started or are just starting out?

Things take longer than you expect - be prepared.

From experience, things take twice as long as you might expect. The sooner you realize this and plan for it the more effective you will be. It will also relieve a lot of stress as you won’t be pulling your hair out thinking why is it taking so long. Better to be pleasantly surprised when you shave some time off the forecast.

It also gives you time for the unexpected events that will inevitably happen.

Think long term

There is always a place for the short term gains but always have a long term mindset. It’s a marathon, not a sprint. Looking for the right partners might take longer but you will be rewarded when they stick with you through the tough times.

Respect your customers

As quickly as you can ascend, you can fall just as quickly (if not quicker). I’ve seen brands implode when they haven’t respected a customer’s views and their response has gone viral. Little can be done when the horse has bolted. A good thing to remember is to always speak as though the customer is listening. If you wouldn’t say it to their face then don’t say it behind their back or online.

Network with other entrepreneurs

This game can be a lonely one. Make sure you have other partners with you that truly understand the challenges you go through - from bouncing ideas around, asking questions, comparing notes. At the end of the day having someone there to be able to listen and understand what you’re going through means a lot.

Are you looking to hire for certain positions right now?

We are always on the lookout for great people. Although our core team is small we like to use external resources for many of our needs. As such we are always on the lookout for people doing great things and that can help us grow.

Where can we go to learn more?

If you have any questions or comments, drop a comment below!

-  
Michael Chijoff,   Founder of Tactica

Want to start your own business?

Hey! 👋I'm Pat Walls, the founder of Starter Story.

We interview successful business owners and share the stories behind their business. By sharing these stories, we want to help others get started.

If you liked this story, join our mailing list for new interviews every Tuesday.

Interested in sharing your own story? Find out how!

-  
Pat Walls,   Founder of Starter Story

Are you ready to boost your revenue?

Using Klaviyo will open up a massive, untapped sales channel and bring you closer to your customers!

We've interviewed many impressive businesses who swear by the results of the product, including Brumate, Beardbrand, and many more.

Level up your email marketing with Klaviyo!

Leave a comment

Check out our premium interviews: