The Exchanges

Q So once you got into Dick's, I mean, that doesn't necessarily guarantee success, right? I mean, it's, there are thousands of products in a, in a, in a store, sporting goods store like that. You still, you know, people still have to notice it. Um, did that, did that change the equation for you guys quickly? Did it make a difference?

A It did. I remember, I think the product had been on the store shelf for literally four or five days or something like that, and Dix reached out and said, guys, sales data's off the charts. We're ready to go all in when you are, but we'll, we'll go at whatever pace you want. So they, they, you know, the first couple days were incredible, and then we eventually added, I think, maybe another 50, and then a hundred, and I think they have north of 700 stores now, or 800, something like that, and, um, the tricky part though was, um, wildly different cash cycle when selling to Dick's Sporting Goods than selling on spikeball.com. You know, when you sell on spikeball.com, you literally get that money in your bank 24 to 48 hours after the person buys it.

AI assessment note: “It did. I remember, I think the product had been on the store shelf”

Q Chris, you painstakingly built this brand into a mainstream game, um, starting with like PE teachers, ultimate Frisbee players, Christian youth groups. You weren't connected to any of these groups. You just found that that's where the product was resonating. How did that happen? I mean, and when that happened, how did you lean into those, into those groups?

A Yeah, absolutely. You know, when the first few years of the business, uh, you could only buy a spike ball on spikeball.com. Right. Um, and we had the benefit of, I was able to communicate literally with a hundred percent of our customers. I could email them and ask questions, and nearly every single customer I replied saying, hey, thanks for buying spike ball. I'm going to mail it tonight or tomorrow. It should show up in a few days. By the way, if you don't mind me asking, how did you hear about it? And that's where I heard a lot of people said, oh, I'm a PE teacher, and I'm always looking for new games, and new games are ways to engage kids that normally don't engage, or I'd hear from people say, oh, I was at an Ultimate tournament, and I saw some people playing there, or I'm a camp director at a Christian camp, or something along those lines, but I asked the question enough times over the years where I was able to identify these themes in these buckets, um, You know, and I, I also thought that, you know, when I launched, I was like, yeah, volleyball players are gonna love this game, and that was just what I thought. They wound up hating it, um, but it was these groups that I never would have thought of in a million years that loved it, and once I did identify those, then I started, you know, getting to know them. Some of them I'd say, hey, would you mind, can we get on a cal…

AI assessment note: “I could email them and ask questions, and nearly every single customer I replied”

Q What did you think you needed? How much money did you think you needed to raise?

A We actually didn't set a number. We kind of just said, invest whatever you're comfortable losing, because chances are very good that you're gonna lose it. Now, we're gonna have fun doing this, But, you know, I don't recall, like, you know, because at that time, I had no idea how much it was going to cost to manufacture. I had no idea how much to make a website. You know, back then, all websites were hand-coded, so they're really expensive to make. Packaging, marketing, etc. So we wound up raising, I think, a little over a 100,000 dollars. So it was roughly 10, 15,000 dollars a head. Um, And, yeah, I remember we met at, um, this bar called Casey's Tavern in South Loop in Chicago, and that was sort of our, quote, first official gathering, and where kind of everybody said, yes, I'm in or I'm out. And, yeah, once we had that, then, um, yeah, everybody kind of started doing some research to see, okay, how can we actually make this thing happen?

AI assessment note: “We actually didn't set a number. We kind of just said, invest whatever”

Q But the deal actually fell through because, because they need to actually negotiate it after off air. What happened? Why didn't it go through?

A Yeah, so we filmed in, I think it was September of 2014, and I think I spoke with him maybe like a month or two after we filmed. That was the first time I spoke with him since filming, and he was nice. He said, look, Chris, we can do the deal at what we agreed to on the show, or we can throw that deal out, and if you want to do something different, I'm open to that. And when we talked about sort of what direction it would be or what do we want to do, his main interest lied in licensing. Uh, so I think he said something along the lines of, you know, Chris, I've got friends at Marvel Comics. Let's maybe explore like a Spider-Man branded set or something along those lines. And while that sounds kind of cool, it kind of felt like we're treating it like it was a toy. And, you know, I consider ourselves like a sporting goods business. I want this to become a legitimate sport. And That didn't quite align with how I wanted to take the business. And when I expressed some discomfort with that, he said, okay, how about we license it? You know, he's like, I got some friends at the NHL. Let's make some NHL team sets. And I was like, licensing in general, at least at this stage for our business, doesn't feel right. I want to build our own brand.

AI assessment note: “his main interest lied in licensing... That didn't quite align with how I wanted”

Q people will buy the product, but generally, people are going to buy the spike ball set once, twice, and that's it, right? And so tell me about, because I know you guys acquired this software company called Fuego, right? Um, back in 2021, and, and I have to imagine that that's part of your strategy to grow. Tell me about what that does and how that will grow the business.

A Yeah, I'm very, very excited about Fuego. Um, Fuego is a platform that makes running, uh, tournaments much, much easier. So, created for Roundnet, and this gentleman, Alex Tuzel, um, he, uh, was running Roundnet tournaments. And I think he, like most others, I think it was like a Google doc or something that they were using, uh, to run the event. And it was very clunky. So he designed it and started using it. And then other tournament directors started asking him about it. And he's like, yeah, you can use it. Go ahead. And everybody fell in love with it. And we became friends with Alex and said, Hey Alex, would you be up for selling your business? Like we'll buy it. And you join us as a full-time employee, but You keep doing what you've been doing. You'll just have some more resources, and the exciting part we've been seeing the last few months is there's fairly significant interest from the pickleball world.

AI assessment note: “Fuego is a platform that makes running, uh, tournaments much, much easier.”

Q I couldn't do it, because you had to have a lot of money to do it, but But, so people have these ideas. You're like, oh, wouldn't it be cool if, like, this is a conversation that's happening right now. Like, a 100,000 people around the world are having this, like, wouldn't it be cool if we did this? And, like, 99 1999 of those conversations don't go anywhere, right?

A Absolutely. And yes, like, we would get together, you know, me, Matt, Tim, Pat, and other friends, and Would occasionally talk about spike ball, and, you know, somebody would casually mention, like, yeah, it would be, you know, wouldn't it be cool if, and, you know, that happened every once in a while, but nothing ever really took root. Um, while I'm not certain, I do believe I remember the, my first couple years at Monster were great. I loved it. Um, but the last couple years, culture went kind of toxic. Um, company got in some trouble with the SEC, um, Uh, I think maybe an exec or two went to jail, uh, and it became a pretty toxic environment and kind of, I don't know if that was what wound up pushing me to say, you know what, I'm actually gonna do some research and see if we can actually do this. I'd imagine if I were able to go back in time and interview myself, that probably was a factor. And yeah, when I started researching it, it wasn't like, oh my God, this would be amazing. We can make so much money, but it was, this would be a fun side project.

AI assessment note: “nothing ever really took root... pushing me to say, you know what, I'm actually gonna do”

Q And, and the site goes live in June of 2008. The spikeball sets are available. You got a thousand for sale. They're 50 bucks, 49 99. Meantime, tell me how Uh, how the operation is working, right? Because it's you, you've got your day job, your partners have their day job, and how did you guys divide and conquer? Who did what?

A Yeah, that was, um, never very clear, uh, in hindsight, so we did a conference call, I believe, every other week, and on that conference call, each person would sort of identify what work they were gonna do during those next two weeks, and I remember if, at times, it felt like my role would kind of be, like, um, you know, just nagging, just like, hey, this work didn't get done. What's going on? And, like, it got fairly frustrating, and I remember Talking to my brother a month or two later, and, um, he said something along the lines of, Chris, I think what we're learning is most of us, I think, want to be, uh, silent partners. We want to be involved. We're pumped that we invested, but the day-to-day work isn't really of interest, so we came up with a plan that said, ok guys, I'm gonna essentially gonna do all the work, but I need to somehow be compensated for that, um, but the company really doesn't have any money to pay me, so I came up with, I think it was like a three-year plan where if I hit certain sales numbers, I would earn stock from them. Um, if I didn't hit the number, then I don't get anything, and some of the guys were cool with that. Some were not, but, you know, I spoke with a couple of them, and I'm like, guys, look, I'm not Trying to be greedy here, but if I'm staying up till two in the morning working and you're asleep in bed or going to a movie or hanging out w…

AI assessment note: “that was, um, never very clear, uh, in hindsight, so we did a conference call”

Q Alright, so The Psycho's live. June, 2008. Spikeball.com. And, you know, you're not, I mean, it's just you and these guys, like your buddies in Chicago. It's not like you've got a big marketing budget. How did you even, who was gonna find out about this? How, how were you gonna even get any of these sold? What, what did you do to create awareness?

A Uh, grassroots marketing is what it's, Officially called, but in our world, what that meant was going down to North Avenue Beach in Chicago. And yeah, we had, like, a Thursday night league that we'd play, so I, like, just started emailing a bunch of friends that lived in the area, and, um, yeah, like, and any time I'd see somebody, like, stop their bike or stop running and just kind of look at us, I'd, like, walk up to them, introduce myself, oh, I'm Chris Rudder, just started this, uh, company, and we got a league here, if I can get your email address, um, you know, would love to add you to the newsletter, and I literally had a clipboard and a pencil, um, And that's how our email lists began. Other times I'd, you know, see people playing volleyball, and I'd walk up to them with, with this weird trampoline looking thing and ask people if they wanted to play and, yeah.

AI assessment note: “grassroots marketing is what it's, Officially called, but in our world, what that meant was”

Q Got it. Let me bring you in, Chris Reuter. What do you think? I mean, before we answer Peter's question, any thoughts or questions that you might have for Peter?

A Number one, I love it. This story, uh, although our products are wildly different, the stories, uh, this, this is really bringing me back to our early days. Not only is it a niche audience, uh, but also when you first mentioned international, I got a little uncomfortable because I know a lot of entrepreneurs in the early days, like, oh, international, the opportunity could be massive. In my experience, the only time, actually, I don't know about the only time, but The time where it makes the most sense to really consider it is if you have that existing demand. If you don't, then, man, it feels like a really heavy lift, but I love that you've got the demand. I love that people are spending just, you know, it's funny, Australians in early days, they would spend just as much on shipping as they would for a spike ball set, and we're like, oh, wait, that is the marketplace talking to us.

AI assessment note: “Number one, I love it. This story, uh, although our products are wildly different”

Q Alright, that's filmed in the fall of 20 14, and it's aired in May of 2015. What did that do to sales? Did it have, I have to assume it had a significant impact, because millions of people are gonna watch that episode.

A Yeah, it was, it was massive. It was the final segment of the season finale. So yeah, we had a massive party at our office, huge sales on spikeball.com that weekend and in the weeks to follow. Um, but the real, uh, lift was we started getting tons of inbound requests from retailers, primarily like smaller mom and pop sporting goods stores, toy stores, et cetera. And yeah, the thing I didn't Plan for, think about, was reruns. So we got that initial pop, which was amazing, and also it was a big pop, but a lot of people also DVR'd it, um, so they'd watch it a few weeks later, and, um, but reruns are still running to this day, so it's this gift that just keeps giving.

AI assessment note: “Yeah, it was, it was massive... huge sales on spikeball.com that weekend”

Q Did they, did they catch on? Were they like, oh, this is awesome? Or were they like, oh, yeah, you know, not so much.

A Walking up to them, I thought I'm like, you know, cause the rules of the games are nearly identical. So walking up to these players, I was pretty confident they're going to love it. And they played and like anybody that plays those first five to 10 minutes, you, it's kind of awkward. You don't know how far the ball is going to go. You don't know if you should have a flat hand or kind of cup it a little bit. And, you know, these were also two on two volleyball players. So, you know, you got to be a pretty good athlete to play two on two. So they were used to being at the top of their game. They were used to looking pretty good when they play their sport, and they looked like absolute fools when they were using spike ball.

AI assessment note: “they looked like absolute fools when they were using spike ball.”