Going Viral And Selling 300,000 Cameras In 6 Months

Yun Zhang

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Published: May 29th, 2018

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Yun Zhang

Founder, Wyze Cam

$1M

revenue/mo

Founders

Employees

Wyze Cam

www.wyze.com

from Kirkland, Washington, USA

started July 2017

$1,000,000

revenue/mo

Founders

Employees

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Discover what books Yun recommends to grow your business!

Good to Great: Why Some Companies Make the Leap...And Oth... Jim Collins

The Xiaomi Way: Customer Engagement Strategies That Built... Li Wanqiang

Hooked: How to Build Habit-Forming Products Nir Eyal

How to Win Friends & Influence People Dale Carnegie

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Hello! Who are you and what are you working on?

My name is Yun Zhang and I am the CEO of Wyze Labs, as well as one of the founding members. We founded WYZE Labs in July 2017 and launched our first product, a smart home camera – the Wyze Cam – in October of the same year.

Within our first six months of launch, we’ve been fortunate to have sold over 300,000 units and foster a thriving user community that we rely on every day for product feedback.

Our mission at Wyze Labs is to make great smart home products and make those products accessible to everyone.

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

Wyze has four co-founders and we all met while working at Amazon. As a team, we have a very deep understanding of retail operations, including both e-commerce and big box chains. Team members have worked at Microsoft, Best Buy, REI, Groupon, etc. At each of these companies, as well as Amazon, roles varied between team members. Some of our team members have expertise in operations, some in marketing, some in sales, and so on. We complement each other very well when we bring it all together. This is absolutely at the core of our success since we are able to see problems from many angles and perspectives.

We discovered that in the smart home market, customers only have two options:

Expensive premium brands
Cheap, low quality me-too brands with little-to-no customer service.

With our extensive background in retail and operations, we thought we could make a difference in the smart home space.

We also found that most of the smart home products on the market are difficult to use and non-intuitive for the user. Different smart home platforms confuse customers. We believe smart home products should be simple so we decided to build a Wyze smart home ecosystem with one simple Wyze App.

We also looked closely on competitors and did our market research. I'll refrain from using any competitor names, but we ordered a number of competing units and all of us carefully reviewed them. We discussed the pros and cons of each device and shared our experience with each other. A lot of our research was just being customers ourselves and identifying what we liked, disliked and identified as missing from the experience.

We believe that if we focus on users and products, we can make great products and offer those products at disruptive prices. This way, everyone will have the ability to enjoy the power of technology.

Describe the process of designing, prototyping, and manufacturing the product.

We have strong relationships with suppliers in China, allowing us to produce great products at competitive prices. We formed this network by completing an intensive search around the world, traveling to meet factory owners and networking. We were able to identify manufacturers that shared the same beliefs and mission as our own: Products should have good design, high quality and affordable pricing.

We started with a smart home camera because visual connection is a deeply rooted human need. Once we knew which product we wanted to launch, we worked with our ODM partner to license the hardware for Wyze Cam. This turned out to be a great first product, because on the hardware side we were quite satisfied with what the partner already had to offer.

We then put our focus on the software and hired a great engineering team to create the firmware and the Wyze App. Ease-of-use and the user experience were of utmost importance to us during this process and we think we accomplished that task as our customer feedback has been extremely positive.

Describe the process of launching the online store/business.

Direct to consumer is an important part of our business model since it allows us to offer the lowest price to our customers.

We created wyzecam.com as our e-commerce platform and prepared three months for the launch. We used Wordpress and WooCommerce, which were easy to set up and optimized for user experience.

For the launch, we targeted the technology enthusiast audience. We chose a technical audience because we believe this customer can resonate with our mission and will understand the enormous challenges we are solving with this tiny camera. Another major benefit of targeting this group is that the audience is a very bright and engaging group; a community that we can lean on for product improvements, upgrades, and general bug fixes.

Finding this segment was a mix of gut instinct and careful research. Since we're all former Amazonians, we've picked up some great skills along the way in our careers for identifying retail market segments with potential.

Our thought process looked a little like this: We have a camera with great specs at a $20 price point; an impressive value against what's already on the market. But we have no time or resources to convince people that it's an impressive value offer. Therefore, we wanted to target people right off the bat that would just 'get it.' That is, we wanted to talk to people that would understand right away how disruptive this camera is at a $20 price point.

On launch day, we sold 10k units, selling out our entire US inventory. We felt incredibly blessed that our customers understood our value proposition and supported our efforts to change the smart home industry.

One of our mistakes we continue to learn from is our under-forecasting of our product launches. With such rapid success in the first few weeks of launch, it was extremely difficult to know just how successful our camera was going to be.

Because of this, a good portion of the last few months Wyze Cam has been out of stock, causing a negative customer experience. Fortunately, our strong operations team was able to work closely with our manufacturing partner to get us quickly back in stock.

Since launch, what has worked to attract new customers?

We do not invest in traditional marketing & branding. Our spend on digital ads is close to nothing. Instead, we allocate what would have been our marketing dollars into creating value for our customers. For example, we spend all of our efforts towards product development, improvements, and customer support as opposed to Facebook and Google Ads.

Our tenet is making and being friends with our users. We ask ourselves these two questions every day:

What products are you proud of making for your best friends? And
What price would you offer to your best friends?

The answer: Great products priced at cost.

Our main marketing strategy has been word of mouth. We let our product speak for itself and recommendations from our customers have exponentially grown our business.

This has earned us steady and significant traffic to our website. www.wyzecam.com is ranked #28,080 in the US by SimilarWeb and our webstore conversion is well above industry average; something our entire team is proud of.

Several press events also have been extremely successful for us. I would say our most successful mentions have been in the below publications:

Also a few of the more popular YouTube channels have picked up on our product:

Unbox Therapy (10.4M subscribers)
CNET (1.6M subscribers)

How is everything going nowadays, and what are your plans for t future?**

Our business is growing and we continue to double-down on our user experience and the value we add to our customers’ lives. This means forecasting more accurately so we remain in stock, correcting bugs as they are identified, adding new features and products customers demand, and providing great customer support along the way.

Regarding the structure of our business, we operate with a low margin, high volume model. This creates value and drives efficiency for our customer. We strive to build long-term trust with our users and do this in a few different ways: We have created an engaging user forum on our website allowing the Wyze team to directly interact with our users, a beta testing program to hear direct feedback related to product experience, and monthly newsletters updating users on our business and any new launches.

We recently launched an accessory, which is a mounting kit for our camera. We did this because we saw a lot of people from around the forums and social media sites request it.

In terms of major product launches, we do have products in the pipeline but for the most part we are keeping this close to the vest. For the time being, we want to ensure our v2 Wyze Cam has dedicated resources focused on it to make sure we can provide the customer with the best experience possible.

Users and products are the two motors that drive Wyze forward.

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

Our big learning: Be honest and transparent to your customers.

We launched Wyze Cam v2 on 02/15/2018. We took tens of thousands of preorders and promised to ship on the 02/28. We produced 80k units and received them in Seattle but found defects right before we were about to ship them to customers. The defects were not found in all units, but the probability of defect rates prompted us to pause all shipments to customers. From our experience at Amazon, we understood that we would rather take a hit on short-term revenue in favor of long-term customer satisfaction.

We decided to return all 80k units to our factory in China. We immediately started root cause analysis and discovered that the new manufacturing process for our v2 camera led to unforeseen quality issues. Due to high standards and the complexity of the new manufacturing process, our manufacturing yield was very low.

We delayed the shipping of preorders by one month. The delay impacted tens of thousands of customers, which was really a hard pill for us to swallow. We did our best to communicate with customers every week, updating them on progress we’ve made with their orders through email and social media posts. We made sure customers were aware of the delay, the cause of the delay, and the recovery plan.

We received tremendously positive responses and support from our customers. They supported us to overcome the challenges while going through this difficult time. This incident actually tied the Wyze team and Wyze customers even closer.