The Exchanges

Q So what I'm trying to figure out is how did you, how are you growing? I mean, presumably you started out by just selling these to these shops on Hawthorne Boulevard. Were you driving all over L.A. and going to different shops, or were different shops finding out about the cables just through the grapevine?

A Yeah, in the earliest days, it, It was all outbound, and, ah, almost immediately our constraint was, um, our ability to make the stuff quickly enough. So we actually didn't have any trouble getting orders. We had trouble keeping up, and then as we increased our, um, capacity, then I would hit a couple more places, and then I think we ran our first ad in Computer Dealer magazine, And we got an order for a hundred pieces. It was one of our bigger, biggest orders ever for cables that went from the parallel port from an IBM PC to a, to an Epson printer, and they bought a hundred of these things. It was the, um, student store from Carnegie Mellon University.

AI assessment note: “in the earliest days, it, It was all outbound”

Q When you had the upheavals and, and the anger, um, connected to the verdict over Rodney King, and, and it resulted in a lot of, uh, anger and, and obviously violence, um, What do you remember about that time? Were you, were you at work that day? Were you in Compton?

A Yeah, I have so many memories of that day. Um, I remember as the civil unrest started to, um, accelerate, I was at work, and on the drive home from the freeway, we could see the fires across south, um, L.A., And then the next day, ah, there was a little bit of thought and discussion about whether or not we should be open and go to work, and, and we chose to be open. We're in very close contact with the Compton Police Department saying, hey, we think it's important for us to be here and, and just promote normalcy. And we'd call into the police department every hour, and now we can start to see fires out the back door of Belkin, and First, the feedback was, hey, it's all fine. You don't have anything to worry about. Um, hey, it's getting pretty active around here, to, hey, you guys should think about what you're doing, to the last call we made. I think the quote from the Compton police official picked up the phone was, get the hell out of Dodge. And, uh, I think that that was probably about two in the afternoon or something like that, so we worked with all of our people on safest ways to get home. And that night, I'm at home, I'm watching the news, and, ah, more and more buildings are burning, and I feel this overwhelming desire to go to work to make sure that things are ok. My wife, ah, convinced me that that was probably not a smart thing to do. Um, so, yeah, you know, it was a…

AI assessment note: “I remember as the civil unrest started to, um, accelerate, I was at work”

Q But were you into computers? Was that, I mean, were you like trying to program computers and take them apart? Or, or was it something different?

A I was definitely interested in how things work. So part of what I did as a kid was I took things apart just to kind of see how they worked, and every so often I was able to successfully put them back together. And I had a lot of ideas about how to make things better. I imagined creating a different kind of shower head that would maintain a constant temperature. Um, I thought about putting little metal strips in the road to be able to To allow cars to kind of drive themselves down the road and different kinds of things. So I didn't know anything about computers per se, but it looked like it was going to be This next huge generation of transformational change for, um, how people might live, and I wanted to learn as much as I could.

AI assessment note: “I didn't know anything about computers per se, but it looked like it was”

Q And you would just walk into these computer shops where you'd been kind of hanging out and knew the owners probably. You would just say, hey, I'm making these cables. Do you want to sell them to your customers? Like, was that your pitch?

A That is exactly right. I said, hey, I can build these for you. Would you like for me to, um, do that? And the, uh, answer was almost always yes. And then the next question from them would be, how much do you want for them? And, uh, I said, boy, I don't know. What do you usually pay? And then in those early days, the cost that I was paying for the components wasn't competitive. Some of the times I was buying it at a place like a Radio Shack or an electronic store or something, but my labor was, you know, free, and, um, there was no doubt in my mind that I didn't have to worry about that. I just started to make it work and just get a little bit of scale, and then I'd figure out how to get the cost right later.

AI assessment note: “That is exactly right. I said, hey, I can build these for you.”

Q They did live long enough to see you become quite successful, very successful, in fact. Um, obviously you paid their loan back. Uh, what did they, what did they make of it? Did they ever talk to you about it or reflect on it with you?

A They really felt, I think, a lot of ownership because they were able to participate in various ways. In those early days, my mom was making, you know, breakfast, lunch, or dinner for everybody that was working there. Um, they lent money to the business. My dad helped to build so much of the tooling. He hung out there. Um, and so, yeah, I think that they felt, um, a lot of pride, um, But they all, they, uh, always worried. So I would hear feedback from my friends, uh, and people that worked at Belkin, where both my mom and my dad would pull people off to the side and say, hey, is Chet doing ok? And, uh, they'd say, yeah, yeah, I think he's doing ok. So they felt a lot of pride, a lot of re-award, but, um, But I think they, I'm always worried, and maybe that's just a little bit of what mom and dads do.

AI assessment note: “they felt, um, a lot of pride, um, But they all, they, uh, always worried.”

Q That was the name. So, all right, and was it still just you in 1982?

A Yeah, so I drafted my brother, who was working for me for free. My dad was helping out, like, making the, uh, tools and being able to make things, uh, easier. My friends would just kind of come by to see me, because I didn't have a lot of time for, for any kind of social time then. Yeah. So they would come, hang out with me, make things with me while they were there, and then they would leave. They would go off and do, um, other things. So, and then hired the first person on a full-time basis, and then hired the second, and hired the third, and We all worked around this big table I had built. It was a four by eight piece of plywood that I put a piece of laminate on.

AI assessment note: “I drafted my brother, who was working for me for free. My dad was helping”

Q You never did, because you didn't have the capital to do it. If you were thinking about, you know, if you are an entrepreneur right now, and you feel limited by cash, right, well, I mean, what do you recommend somebody do? I mean, do you, do you recommend that they sort of do what you did, which is look for a way in through sort of the side door?

A Yeah. So I think one of the best ways to kill a startup is to overfund it. So not having enough cash isn't always a bad thing. Makes us really, really get to the essence of what it is we, we need to do. So the first thing I would encourage people to think about Is identify a true problem that is a real issue for folks. And if you can come up with a simple, elegant way to solve that problem, you'll get the rest of it figured out. If it's a solution in search of a problem that doesn't really exist, I don't care how much money you have, I don't know you're ever going to get there.

AI assessment note: “the first thing I would encourage people to think about Is identify a true problem”

Q Uh, I want to bring in Chet. Um, Chet, again, I mean, cool product to solve, so clearly solving a problem for lots of people. Um, what, what, thoughts about, uh, Meredith's question, or questions for Meredith?

A Yeah, I really like this. I've got a granddaughter who is an avid volleyball player. Uh, I travel with her on, uh, all of her away volleyball tournaments. Um, so I watch her and her teammates gear up first just for life, right? And then they re gear up for the game, and then they re gear up again for life. So it's easy for me to envision a much more organized way to do that. So really in touch with the problem that you're solving on that side. And I love the problem that you have with the business. We had the same problem at Belkin. Not enough cash. No working capital to invest in goods. So the way we solved that issue was we formed a very tight alliance with the person that was manufacturing our stuff. And we built a lot of trust with them. And so it wasn't Like a viable financial model for them, but because of the trust we built with them, we were able to get them to build a lot of things for us, and to keep them on their books. And they allowed us to pull it off of them as we needed it. We could have never afforded to have had that, all of that stuff on our own books. So I don't know if you'll be able to build a relationship like that, but if you can, it could be a way to solve your issue.

AI assessment note: “the way we solved that issue was we formed a very tight alliance”

Q Yeah. When I hear government contractors or military contractors, my, my, uh, my blood pressure goes up because it's so complex. The RFP process is just, it's, it's so complicated and challenging. And Chad, I'm sure Belkin has been through this many times. Uh, so before we tackle the question, any thoughts or any, any questions that you have for Ryan?

A Yeah. So I think you're both making a great point. A frontal assault is, Is expensive and ineffective. With this kind of sales and market development, the best way to do it is an inside job. So if you can plant these experiences from people on the inside, and a firm that's done this in a brilliant fashion in the recent years is Slack. So what Slack does is gets people inside of the organization to use it, and then people inside of the org are the ones that are fighting and clamoring for the org to adopt it. So if you can get first some, and then a critical mass of people inside the org that are using it, and being an evangelist for it on the inside that, look, we're losing all this time to people being down because they're injured, we're incurring all of these, um, costs. This is a lifesaver for me and for us. Create that demand on the inside, and I think that things will be a lot more effective.

AI assessment note: “With this kind of sales and market development, the best way to do it”

Q And what, what, what was it? I mean, what was, I mean, did you have an idea what that thing was going to be, or you just thought, I'm going to do something in computers?

A Yeah, so the early thought was, I'm gonna understand this, and it's going to be inevitable that, uh, there are gonna be gaps, that there are gonna be things that people want to do that other people are not thinking about. So I didn't know exactly what that was, but I knew the kinds of things that I was looking for. And then as I began to hang out in these stores, and most of the folks seemed to enjoy having me around, I just watched. And one of the things that, ah, was an impossible situation to miss almost from day one was These folks would buy this PC and, and a printer, and then they would say, how do I make this work? Well, you just plug it in. Ok, well, could I have the thing to plug it in with? And because these computers were being made by all these different manufacturers, they had different connectors on them, and the printers had different connectors on them. And it's not like The way that it works today, that there's a relatively small number of, um, interfaces to get things to work together. It was almost unlimited in that day and age. It was an absolute nightmare for folks who were just trying to get this stuff to work for them.

AI assessment note: “So I didn't know exactly what that was, but I knew the kinds of things”

Q Yeah, how were you, like, collecting, you know, billing people and accounts receivable and payable? Like, did you just have papers all over the place just to jumble?

A Yeah, so, you know, we created a purchase order form to kind of buy things off of, but it didn't have, like, purchase order numbers. We just went, like, one, two, three, You know, really, really crude stuff. We didn't have a lot of money always. The cash flow was very, very tight, so if it was a bill, um, I often just stuck it in a desk drawer and just said, you know, I'll deal with it later. My girlfriend at the time, she's now my wife, Jan, worked in a family business in Northern California, and she knew how to do all this stuff. And so then she would come down for the weekend, and she would dig out all of these old bills, and get them taken care of, and kind of show me how to do the books, and it took a little while for me to get that concept, but, uh, she was a really, really big help.

AI assessment note: “if it was a bill, um, I often just stuck it in a desk drawer”

Q So you, you are a student at UCLA, hanging out around these, like, early PC kind of, I don't know, enthusiast shops. Did you eventually, like, try to get a job at one of these places?

A So there was a bunch of things going on for me all at once. I was, um, working at the YMCA as a day camp counselor. Uh, most of these kids were kids that had had negative, um, encounters with, uh, society or people of the law or something. I was also working for an electronic components, um, manufacturer. I remember I was, um, counting some of these things, and I asked someone, I go, what do they do? And the person says, Doesn't matter what they do. You just count them. And so I just sort of smiled and got a catalog and figured out what it is they did do, and yeah, I was going to class. I should have been doing my homework, and I was learning as much as I could about PCs. So, so instead of spending time on my studies and my homework, I finally just said, why don't I just give it a go, and then it's either gonna work, or I'll get it out of my system, and then I will take it from there, but this is just something that I had to go do.

AI assessment note: “I was also working for an electronic components, um, manufacturer.”

Q You go onto your website today, and there's tons and tons and tons of things you make. How, how are you able to kind of stay ahead of Competitors. Because I can go on, ah, Amazon today and buy the same cable made by Amazon, or, you know, there's a hundred different companies that are offering very similar cables. How are you guys able to stay ahead of those competitors?

A Yeah, so we're really fortunate in that our reason for being, just as we were first imagining what this organization and this brand could be, is almost exactly the same as our reason for being now. So it's doing the hard, complicated innovation and engineering work that allows these interfaces to have worked together with, um, one another. For 30 some odd years, um, more often than not, we've been able to do that in a little bit better or more elegant way than, um, other folks, and as long as we're able to keep doing it, we're gonna do ok. But we are only as good as, as how well we are doing things this morning, so there's a lot of positive pressure on us, because the moment we are not best is, is the day that, um, we will be at greater risk.

AI assessment note: “doing the hard, complicated innovation and engineering work”