The Hardtech Podcast - Babba Episode
Guest: Dan Evans, CEO & Founder of Babba
Hosts: DeAndre Harakas & Grant Chapman (Glassboard)
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[0:00] Welcome to the podcast.
[0:09] everybody welcome back to the The Hardtech Podcast I'm your host DeAndre Harakas with my usual suspect Grant Chapman. How's it going. Good to be in a back to back day. Yeah back to back.
[0:17] And at some point you have to stop being the usual suspect. And also just a co-host of the podcast. But everybody is super excited for for this podcast today. If you guys have it checked out the The Hardtech Podcast up until this point, if you can check out season two. We did 42 different episodes of founders and product leaders all across the country.
[0:33] I think in season three already up to like 57 episodes. So it's been a ton of fun,  but super excited for this conversation. Met Dan out at the ABC Kids Expo in Vegas a couple months ago and was super fascinated by the product, his story, his background. So Dan, welcome to the show.
[0:59] Absolutely. Yeah, whenever I was walking around, I was looking at some of the cool products. And definitely from an engineering perspective,  Bob definitely piqued my interest. Just and also just learning about your journey.  So I guess to kind of kick it off, Dan, maybe a quick intro on yourself and then maybe if you could sprinkle in a little bit about your previous startup and kind of how that led you to where you are today.
[2:57] That's awesome. It's a very good to be a great episode in the seasons we had whooped  on earlier, and they're all about tracking, you know, when breast milk was made, how long has been the freezer? What stages of that?  So again, this is going to be the really great now. But great to hear the background from you know, medevac to thermal control in sports and wellness space to thermal control and the baby space.
[3:19] I think the question I've got is,
[3:21] do the two products share the same basic cooling technology? Cooling and heating?
[4:15] Can confirm  thermoelectric coolers. Heaters based on the Peltier effect are very non-linear and very hard to learn how to control and use. Well, we've done a couple of products with them. So  for everyone listening, Dan is is doing the right thing in engineering where you get really good at a party trick that almost nobody else knows, and then you find all the nails that need the hammer in town.
[4:36] So again, that's an awesome topic within the hard disk ecosystem to talk about that. You know, you've learned a really hard technology to master in consumer product and sort of using that across the band. How was that experience for you  going from one product to the next? But having all the standard and shoulders of giants of a core technology, not necessarily an application or anything like
[4:57] that.
[5:33] Absolutely, absolutely. I think it's one of the things we talked about kind of in our intro call to talk about topics for the pod was exactly that, right? Like kind of that use case of a founder who kind of went deep on this one technology. How do you kind of carry that throughout your career and launched just yet the next new product?
[5:49] You kind of had an interesting story, though, with recovery in terms of you guys had like a crazy exit experience, like probably unheard of when it comes to like the industry kind of can you pull that at pick apart a little bit and kind of that journey of, yes, we got to launch, but then very quickly something happened.
[8:08] That's the amazing exit for the tech founder. You built probably a technical team underneath you that got you all the way to market, went through the fire and flames of bringing your product up and doing its first revision. And then you could acquire the fear is, oh no. To those engineers now longer, no longer have the fun startup environment to live in.
[8:25] If you would have got acquired by a large corporate or something like that, but it sounds like you found the perfect home to go park them in, or do they get to do what they were best at for a larger brand with probably more resources and more products in the pipeline so they can continue their craft if they  wanted to stay?
[8:39] And then you found the right moment to start your next thing, which sounds like, you know, happy ending for everyone. That which is super rare in the exit space, that sounds like it's great for everybody.
[9:24] Was top of mind. You're solving a problem. You have. Yeah, so I guess.
[9:31] So I guess. Yeah. Jumping over to Babba. Right. So when it comes like thermoelectric cooling, like it's notoriously power hungry. Right. And so whenever you were having conversations with folks talking about the idea, they're like, oh, this isn't possible. And so kind of walk through that process that you kind of went through to actually like, how did you prove them wrong and kind of what was that experience like for you even hearing from experts like, yeah, sounds good, but you can't actually make this happen.
[9:53] Just been at our director of product, and I literally whiteboard this product during the pandemic, like  actually did the first principles of energy and how big the battery need to be and how much thermal energy you like with thermoelectric cooler like fully whiteboard did this and
[10:07] maybe it's pretty border ones. I cannot wait to hear you prove this wrong.
[11:23] Is non-linear, so when you're off by an inch, you're off by a mile. I think for everyone listening to the damn story like you do the math and then you have to guess the check to get perfect. It's not one of those things is linear when you get some checking your 5% off. So you just need to wiggle around that 5% mark.
[11:37] You'll land on the sweet spot. The curve is like a crazy nonlinear curve, so you have to nail the math and the engineering to match the math to make them as efficient as they need to be for the product to work. Is that about the right story?
[11:59] The fan?
[12:05] The material that he think?
[13:14] Is so cool, and I'm just blown away that I had an inkling when I was reading  up on the product before the podcast, like, if this is thermal collision, that's been set for fun conversation because I've been down this rabbit woman burned and one so many times. And again, I think the the other balance, it's so hard. It's what you were building with the top aware of what we call like an alpha prototype.
[13:32] It's ugly and it doesn't look like the product, but it works like it. And then somewhere else you have the 3D print that looks exactly like what you want to become, but it doesn't work at all. And it's that you know the merit to those two. That is the hard part, especially when you're trying to balance the airflow and the fan, the battery size.
[13:46] And then for you, the insulation really matters. Like, you know, you're basically you need a cooler around their system. So thermoelectric cooler, cooler doesn't have to waste as much heat. You know, recycling heat that's leaking into the system. So you're balancing mechanical engineering, electrical engineering, fluid dynamics with the airflow and the heatsink. It's one of the hardest technical challenges we've ever worked on outside of the like, you know,
[14:06] electronics and radio frequency RF world.
[14:08] This is this is one of the hardest parts to get right.
[14:44] It's not like.
[14:47] It wasn't like
[14:48] some standard technology just came out that unlocked this. Right. We see this in product development all the time where the new  you know  L1, L2,  GPS, they came out like the L2 real five whatever the next generation was. And everyone in the next generation had to integrate that new radio frequency that all the GPS satellites had.
[15:05] That was way more accurate. And it's you versus your competitors first to market, but you were using a technology that's been around since. I mean, when was the effect of discovered like the 18 or 17
[15:15] hundreds?
[15:34] Its use case for its balance of cost performance and the  non-linearity is very hard to design for, makes it you have to really need it in that product. What you have is. So if we can like, let's jump into the actual product itself that you made, because I can keep out about the engineering forever, but the engineering is only half the story when it comes to making a successful product company and a good.
[15:55] So you have this amazing like thermoelectric cooler that can heat and cool the liquid. I'm assuming powered by a battery.
[17:57] So you mentioned something there about kind of speed to heating. And whenever we had a conversation, you kind of mentioned that there was like a bit of a roadblock in terms of like how quickly you guys had this issue you had to solve that took you like six months to solve. Can I pull that apart a bit, a little bit?
[18:12] And then I think following that question,  I would love to start diving into, you know, when people talk, when you talk to people with babies, like these are very high consideration purchases. And so I would love to kind of learn about the difference between selling into the athletic market versus selling into like the the baby child market, and how that's been different for you on that side.
[20:35] I love that. I think the the Ben and I were whiteboarding the side of the product of what, five years ago we were playing with this. So I know the exact math you're working on was like, well, we need to put this many watts into this much water, but I can't get the surface of my heat sink or my my thermal transfer to the milk.
[20:50] Too hot, or I'll denature the milk and we're cooking the milk instead of heating the milk on the surface, even though the three inches away in the top of the milk is now cold, you know, surface area, do you mix it? There's all these equations of how do you transfer heat efficiently in a fluid and with water, who cares?
[21:04] You just get really, really hot in itself. Mixes. But was something that you can't cook or burn, like breast milk or caramel. You're trying to make, you know, sugar and caramel on the stove. There's this magic ratio of heat in. And again, it's one of those like the cooking, food science and chemistry blends in with the thermal engineering blends in with the electro engineering of how much power can pull for my battery and where does it go.
[21:23] And I think this is this product is such a wonderful balance of how hard it is to make a great product in engineering, how many different disciplines you have to understand.
[22:09] To  the person developing the product. It's never forward which feature or which number on the spec sheet is the go no go gauge. It's this magic art in building a product of calling the shot of this is the thing I think the customer cares about, and this is the value that needs to be to be competitive in market.
[22:28] I think you found
[22:28] this out like a good.
[22:57] It sounds like you at least cared enough to ask all the right questions, and started making trails internally and pressure test those in asking right people and doing these beta tests. And we see so many founders that are in love with their idea and and guard it from the market's opinions until they think it's flavoring. Oh, they'll like it when I finish it.
[23:16] They just don't like it as a prototype. They don't like this feature. That is the part of the development. And it's this art of hearing through the noise of the prototype 3D printed and has some rough edges, but truly hearing through that noise what the users truly care about. Right? Which sounds like you totally nailed the heating time and the battery time.
[23:33] And some of these things were very critical to make this functional for a new set
[23:36] of parents.
[24:37] Absolutely. I think that the same way that you kind of yell at Claude or ChatGPT today to like, don't tell me what I want to hear. Tell me the real. Be blunt, be honest.  I think that's just a later  iteration on what used to be the the getting feedback from customers, right? Like I actually say, nothing positive right now.
[24:55] I just want negative. Like if you could be negative Nancy, be negative Nancy.  And so the other question I have for you as well is you do all this work on the front end  in hardware, unlike SaaS, where you can just launch a product like or you can least get an MVP out, very like at this point you can vibe code it, get some traction, then the hard parts go to market in sales.
[25:17] Now with hardware completely different story. It's just as hard to like get the product on the market as it is to then go, oh, by the way, figure out, go to market in sales. And so from your perspective, like what has been that journey now that you guys have launched, you got you got the user feedback kind of in this category, what have you observed that's maybe different from your background and like what have you learned and kind of where's the company going.
[25:34] Where is that now?
[27:44] It still has the mode. And I think that again,  for for the limited  time that we have now,  I haven't figured out hardware yet. It's coming. Sure it is.  AI was pretty bad at writing software 18 months ago, but it would do it. And the demos I've been seeing recently at like trade shows and some partners in conduct, we have here at Glassboard of like AI for hardware is coming.
[28:05] It's crap right now. It produces really bad designs really fast.  But software did that 18 months ago. So I think that the the speed of hardware is going to shrink. However, unlike software, there's always the capital note around hardware that will never go away. No matter how much AI helps design,  right? You still have to have tooling. You have to have a factory.
[28:25] You have to have inventory.  You have to have packaging. You have to have all these things that only exist in the land of hardware, that we still fight all these software fights, we still have to go do marketing. We still have to use social media, we still have to do ads, we still do customer acquisition. And I think that mode of pain or grit is what makes hardware really attractive right now, because software's mode has evaporated, just as you said, Dan.
[28:49] And we're living this limited time where hardware is the most valuable thing in the moment, and then in a couple of years, they'll get cheaper to make hardware and make design easier. But it'll still have that capital mode that only people that are serious will be able to break through and get their.
[29:42] That's where we're hoping this podcast does at least shines a light on the inside of this office factory. But if you also enjoy pain, you can do this. It is possible.  That's that's hard there. But again, one thing you touched on  in that last segment was talking about this balance of having to raise money while also having to learn sales, marketing.
[30:01] And you touched on this topic that you and I talked about with a client earlier today about there's this pillar of like, you have to have underlying fundamentals of the thing that you're talking about, whether that's your pitch in your pitch deck, in the finances or in the sales. Like, is my product the right price and the right feature set?
[30:18] You then have delivery. Hey, am I delivering this message in the right way? Right? Is this the right polish? Am I saying the right language? Is this resonating with my market? Whether it's a set of investors that I'm resonating with or people are trying to buy my product, I'm resonating with? And that third pillar is volume. Am I reaching out to enough investors?
[30:36] Am I reaching up people on ads or social media in all three of those pillars of reach,  you know, the delivery and then the content have to be at a minimum level of good, even if that minimal is like 30% out of 100 to be perfect, they all have to be 30%. If two of them are 99% perfect and one of them is 29, it will never sell or you'll never raise money.
[30:56] And I think this is the hardest thing for most either founders or people in sales. To understand is there is this multifaceted equation that if one of them is missing by 1%, nothing converts and moving the other two knobs don't matter anymore. Have you experienced that down?
[31:14] The Sci?
[31:33] And Dan, can I pause you here quick on this part of the story? So when you say because I think this is really valuable for the listeners. So I reached out to 700 investors. Now, did you copy and paste the same ChatGPT email to each one of those 700 investors, or
[31:46] what was that outreach that you did, the 700 outreaches?
[33:14] Just to
[33:14] explicitly, again, pick up where you're leaving down, but  just say it out loud for fundraising for maybe software might be different. A startup, especially in hardware, is a full time job. So that's all you were doing for those 3 to 6 months. You were just fundraising.
[34:10] It's 700  good contacts that you reached out to you, right? This isn't like 700. I scraped the internet and sent several emails. This is 700, which probably took, you know, have you got a list of emails on the internet? Might have been 5 or 10,000 emails or contacts.
[34:26] It would have been 500,000 to get down to 700 that were a good fit for you.
[35:56] My favorite narrative there is the people you message might not be the people that invest in you, they might be the bridge to the person that invest in you. That's what you don't done. The second order or third order network effect like this is why social media works, is because it's never about your first order connections, like the people you see every day.
[36:11] It's the things that make our lives exciting. And again, in business, for me, it's what is my my mom said we've never met a stranger or friend we haven't met yet. It is always the second or third order of. I'm talking with one of my great friend that day at lunch with Ian Elaine, one of my  friends, we were chatting about this phenomenon.
[36:30] It's never actually your first order of friends that give you the intro to a sale or  fundraising connection, or whatever it is is your really good friend knows a new guy that might be related to this new space that you're jumping into, and you meet that guy, and that guy also doesn't invest, but he's got this person who's looking to invest in the, you know, underwater basket weaving in the street or getting into.
[36:50] And that works. But it takes the grit to  have all those conversations down the line to get to the guy that the perfect
[36:56] fit right or the gals perfect fit.
[37:44] I know that, like the feedback there is amazing for us because we set up hoping that was going to be the reaction. Absolutely. That's the that's the point of the pod for those who are still listening. I mean, that's why they're probably still listening. But it's to that point kind of jumping back over to Babba, but to kind of wrap up that little segment there, I completely agree.
[38:02] I mean, we have so many conversations with as before, I even say that my one of my biggest investors for like my second and third round of funding was I knew a guy named Pete. Pete did not have capital to invest. Happened to know like probably the largest family office in Indiana, probably the Midwest and gave me a connection.
[38:19] Had a pitch and boom there like our largest investor by far in the company.  Just an example of exactly that. Like, you might be like just two people away from a conversation you would have never guessed.  And all the advice you just gave Dan, they're like, so glad we were able to capture that. We're actually going to clip that because people need to hear exactly that.
[38:35] No, it was 700 people. I actually wrote personalized, outright outreach, and out of 700, just for everyone listening, how many actual people ended up in your cap table
[38:43] so they could see what the conversion rate needs to be? Right?
[38:50] It's a low number.
[39:18] Probably.
[39:30] And that's okay though, because that's part of the conviction, right? Whenever you're starting a company and you're willing to you're willing to do that. Exactly right. And obviously people need to understand that if you're jumping into a startup and you're investing, you're likely just absolutely lighting it on fire. And that needs to be okay with you on the off chance that you know it's a recovery or going to be a baba where you get your next, you know, return or 100 x return, of course.
[39:51] So I guess jumping back on to the last couple of questions we have for you, Dan, I really enjoyed this is, you know, building to be acquired. Right. So you had this first experience with RecoverX where you guys did a ton of R&D for four years, launched the product. I mean, three months later, you guys are you guys are acquired and moving on to the next thing with Babba.
[40:08] I mean, I know I have to imagine that same kind of idea is like, maybe it happens probably building for the acquisition, knowing what you kind of went through through the acquisition. So has that kind of come into account at all and curious on like how you've approached
[40:20] that?
[42:15] The the narrative you just touched on is important? I talked to so many founders who launch a successful startup and get really sad in their role, because it changes. You're now a small business that hopefully grows new medium sized business, but running a small business is so different than running the startup. It's cash flow. It's not what's the next fundraise?
[42:35] It is. You know it is. What are the choices we need to make today that make us healthy in three, six, nine, 12 months? Not. Oh man. This is the cash we have in the bank. How governments burn rate to get to the next milestone. And that's it. There's no vision past the  milestone until you get there. And then you raise my friend.
[42:50] And then it's like, all right, what do we do? This one is the next one. And it's just this different workflow in moment in time. And it takes a different style of leadership and a different style of work every day the job changes.  Have you enjoyed the transition from like pure call it a venture startup craziness to small business?
[43:08] Like every  optimization matter is like the detail. Devil's all down the details.
[44:13] I think it's the  calling mark of like any entrepreneur, people think it's like, oh, they get into it all for like the money. Like you see the flashy stuff on Instagram. It's like, well, first of all, know if your startup founder, you usually don't make any money until you exit  but the other. But it's just that constant pursuit of knowledge and learning.
[44:29] And if you've got that, you've got a chance. You got a real good chance of being successful because you're going to continue anything that becomes a problem, you're just going to go super deep on that topic, whether it's on YouTube, podcast, what have you books, and you're going to learn how to solve that problem. And as a result, you actually feel fulfilled because you figured out you figured that part out.
[44:46] And also you learned a ton along the way.  Dan, my last question for you is ask everyone the same last question. Just any advice for folks that are building maybe a new product in a niche category, like maybe technology or anything like that that you would give them, you would impart to them from
[45:01] a lesson perspective.
[46:30] I couldn't say it better. I think that if you're always hungry to learn the existential pain, it is to be on and run a startup in a small business and never know what's coming next. And like how many hard things you get to deal with. It makes that actually fun. And I think it's the same as like old from  honors or extreme athletes that like they embrace the, you know, the burn or the effort that it takes to go do the hard thing and that becomes the joy in it.
[46:53] And I think that that analogy is so true that the world needs more entrepreneurs to solve these problems and do this work. And if you can find joy in the journey and not just the destination, you'll make a really good entrepreneur because the journey is
[47:06] always exciting. It is at least never boring, that's for sure.
[47:18] Constantly be learning everybody. This is the hard part. I'm your host DeAndre Harakas with my co-host Grant Chapman. Dan, thank you so much for joining us. This has been an absolute
[47:27] blast. And we'll see you guys. We'll see you guys next week. See you everyone. Thanks, Dave.