Launch Labs’ Journey to Portfolio Entrepreneurship

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Launch Labs has seen many ups, downs and projects come into their orbit, but the story of the “maker meets startup studio” begins with 12-year-old best friends Andrew Lien and Scott Scherpenberg.

A sign of things to come, the pre-teens took on XBox customization for their first business venture. Then it was paintball guns, then, in their mid-teens, building beer pong tables (for bars they couldn’t even get into).

“It was really just anything that we were interested in, that was fun, that we could use some of our talents to make cooler and modify and sell it on to our friends,” Lien says.

That interest in creating followed the friends to OSU. A frequent college past time served as the inspiration for the duo’s first foray into product design: beer pong. Sliding cups, a sticky, smelly mess to clean up, Lien and Scherpenberg decided to combat the common woes with the Pong Mat.

After getting their hands on some bar mats, they prototyped the triangular mat that keeps cups in place and collects the mess before creating a 3D design and starting the search for manufacturers. The process sailed along. They found a supplier in China and within a month, Pong Mats were on the way to the states.

“Then we started our education about tariffs and taxes and customs and brokers,” Lien says. “The whole Pong Mats business was kind of the perfect, I think, learning for us on how to price things and how to do cost of goods analysis, because that was the nail in the coffin for the business.”

While the mat might have only cost $5 to make, the additional costs to get it to Columbus put the break even point for the product point near $12 – more than a case of beer. As they had difficulty finding retailers for Pong Mats, a new product idea came to the surface.

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In April of 2014, Scherpenberg, Lien and their business partners launched the Kickstarter campaign for Juiceboxx. The plastic case that covers a charger to prevent the Mac user’s worst enemy of cable fray, earned $31,000 and 860 first customers on Kickstarter in just 30 days.

After the campaign, “We were now the crowdfunding guys,” Lien says.

Requests for speaking engagements, as well as help with campaigns, came pouring in. It was at one of those crowdfunding talks that they met Ray Walker, the designer of Spoolee. Walker had been sitting on the idea for the neoprene spool that provides a quick and easy way to wrangle earbuds, but didn’t know how to take the next step.

It was perfect timing for the Juiceboxx team. As updated tooling costs came in for their product, they realized they needed more money. With tooling on hold until those funds appeared, team Juiceboxx became team Spoolee, working with Walker on the campaign for a flat fee.

“We got to use a lot of the stuff that we learned and developed on Juiceboxx as far as advertising, promo, press,” Lien says.

When the Spoolee campaign earned just over $50,000 in pledges, $42,000 more than the original ask, it further elevated the team’s status as “the crowdfunding guys.” While they had extremely limited experience as a team of creators in their early 20s, they used what they did have going for them – also youth, passion, and an ability to deliver – to officially form Launch Labs.

“This is really fun,” Lien says. “Every three months we get to totally tear down everything on the walls, retool everything, and work on something completely new in a completely new industry. And learn so much. And get paid to do it.”

The team envisioned Launch Labs with two divisions: one helping startups with services like crowdfunding and another launching their own internal division of brands.

Launch Labs would get their next chance at helping a startup during the summer of 2015 with the crowdfunding campaign for Nikola Labs. Building on technology coming out of OSU, the campaign touted a phone case that harvested radio frequencies from the air to charge the phone.

Although Nikola Labs showed promising technology, there were still too many unknowns for the Kickstarter community, and the startup elected to end the campaign as it became clear they wouldn’t hit their $135,000 goal.

It was lesson in crowdfunding.

“You can’t just run out and launch something and expect people to trust you,” Lien says. The campaign did, however, achieve the goal of starting a conversation around Nikola Labs’ technology.

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The Nikola Labs project had several impacts on Launch Labs. First, it took the studio from a local to a national stage, and it left the team with a new set of skills – building a brand from the ground up.

After Nikola Labs, Launch Labs wanted to explore other opportunities beyond crowdfunding. The group saw that crowdfunding was another strategy in the arsenal of brand launch.

“It’s not magic; it’s still so much work,” Lien says. “That’s the big false conception people have about crowdfunding.”

The extraordinary cases of a startup netting big bucks are the exception, not the norm. And in the relatively new industry of crowdfuding, Launch Labs was finding it difficult to set and justify rates. Seeing that working solely on crowdfunding campaigns would not be a sustainable business model, Launch Labs looked for different projects to better utilize their time and resources.

Finding success in their first few years of product development, 2016 brought a new set of challenges that saw a year of burn with few dollars coming in. While Jucieboxx continued bringing in orders, an administrative error outside Launch Labs’ control put an end to a multi-million dollar technology grant the group had spent much of the year working towards. After three months of negotiations, the contract on another major project fell through.

But for the struggle in 2016, Lien says the first half of 2017 has been a complete 180.

Launch Labs found the “perfect client” in a local entrepreneur with an idea for a golf app. Designed to streamline the communications of finding a group to golf with, the duo has taken Foursome all the way from customer discovery, to full stack development, and soon, launch.

The team partnered with a pair of brothers for Milspin.com, which sells fidget spinners customizable to represent military members’ and veterans’ time in the service. Produced by veterans from a small manufacturing facility on the west side of Columbus, Launch Labs is also gaining experience with metal goods and local manufacturing.

Finally, the Succulight (succulent + nightlight) represents an internal pursuit, giving Launch Labs the business model it always intended.

“I want both of those divisions to continue,” Lien says.

Launch Labs practices portfolio entrepreneurship. Having a number of projects brewing at all times, “I think it’s more of a perfect match for what we’re capable of and what we enjoy doing,” Lien says.

He knows the main critique of their approach – if any of these were truly successful, why wouldn’t they just focus on that?

“It does go back to risk in having that portfolio approach,” Lien says. “And we would rather be working on three to five projects with varying degrees of risk at one time than putting all of our eggs in a basket and working on one thing full-time.”

He and Scherpenberg want to be exposed to new opportunities and new industries, taking what they learned on the previous projects and reapplying those best practices and best tools.

“We keep getting faster,” Lien says.

For more information, visit launchlabsco.com.

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