Kurt Workman

she walked into the room and my wife as a little baby turned gray, wasn't breathing. They rushed her to the hospital and did heart surgery that day that saved her life. >> baby? >> As a baby. >> Oh, wow. >> So, I remember thinking like, well, how would I know? You know? >> Today we are joined by Kurt Workman, co-founder of Owlet, which is a venture-backed Utah homegrown startup. >> We're taking hospital technology and enabling parents to have access to that at home and building out the world's largest pediatric health platform. We hired a a student industrial designer. We paid him 50 bucks and he did the first visual renderings and drawings of the sock, which uh was helpful. What was funny is then 4 years later we were doing version two and we hired a design firm out of San Francisco and we paid them $100,000 to do all of this, you know, design work for us and they did not come up with a single original concept that this student didn't have in his drawings for 50 bucks. The end of '21 and 2022, hardest year of my life. Uh the business was about to go bankrupt. Like I literally called our manufacturer. We owed them like $30 million. And so we had to throw 2,000 units away. All of our money was gone and we owed 2,000 units to our customers. And so we met in this diner and we were like everybody kind of like, you know, said how many how many months they had left to work on it and that really started a clock for fundraising cuz it was like, I owe parents a device. >> Yeah. >> And uh yeah, so that was awful. We went from uh no babies to one in 10 babies in the US by 2021. So, 10% of all babies born were going home with Owlet. >> Welcome to the Startup Ignition Podcast where we speak about everything on startups. We are so excited for our guest today. I'm Tyler Richards, your co-host with John Richards over there in the corner of the room. We're back again here in this setup here where we're kind of distant from each other. We're like probably 10 ft from each other actually. You won't be able to tell on camera, but it's kind of a weird layout for our podcasting room today. But this is the Startup Ignition Podcast and we are so excited to have our guest. We have Kurt Workman today in the studio. Thank you Kurt for coming by. >> thanks for having me. Hey guys. >> Yeah, thank you thank you for coming in. We scheduled this a while ago cuz Kurt is such a busy dude and he is so gracious enough to come in and come into our studio here in person. So we're excited to have him, but I do have a bio for you Kurt. So I'm going to read it real quick before we jump into the podcast. So today we are joined by Kurt Workman, co-founder of Owlet. Owlet Baby Care is the official name? >> Owlet is the official name. >> Owlet is actually the official name. So Owlet and it which is a venture-backed Utah homegrown startup which is kind of a med-techy startup or device startup. How do you categorize what Owlet is? And and maybe for those who don't know, Owlet has a baby monitoring device and a whole suite now of devices and software for parents. Is that the category that you guys are kind of marketing to and selling to? >> Yeah, that's right. We're taking hospital technology and enabling parents to have access to that at home and building out the world's largest pediatric health platform. >> Oh, that's cool. >> That's awesome. >> Those are much better words than I would have used to describe it. >> I've said it a lot of times. >> Yeah, I know. You've been So you've been at this since 2013. You and your co-founder started this back Is it Was it 2013 or was it even earlier before that? >> Yeah. Yeah, January 2013. >> Okay, so officially started in 2013 and you invented that the smart sock. I remember being in college and around you guys as you were building out all the the idea and the first versions of the sock and the smart sock that you guys devised which is like a wearable infant monitor for oxygen and other things to put on a baby while they're sleeping to have the extra security and know, okay, the baby is okay cuz I know being a first parent I remember taking my very, very first child home and literally thinking that night when I came home from the hospital is like, oh my gosh, is my baby alive? Like, what's going on? Like, I was constantly up all night, me and my wife, like, okay, is that baby okay? You know, as a first-time parent, it's just crazy, right? And so, I I get the need there. >> And for the record, I think you and your siblings have produced eight grandchildren. All All eight grandchildren have had an Owlet. >> sure. It's a >> There we go. >> Eight of them. >> 100% >> John's the power user. He's the power >> But not only that, you've Owlet and you have captured so many awards along the way, you know, from best baby monitor and products to Forbes next billion-dollar company to 30 under 30, and now being used by hundreds of thousands of people across the world. Your products are all over the place. I think I remember there was a story about you doing some product validation in Target, and now you're literally in Target and probably selling like crazy in Target. >> used to get kicked out of Target stores. We'd kind of sneak in, and then they'd find us, you know, engaging new moms, and and yeah, they'd kick us out. >> But hey, now you're one of Target's probably best-selling monitors and baby products, so like, hey, kudos to you guys. And then, but yes, we're just excited to dive into the lessons from Kurt's journey and the story behind Owlet. So, anyways, welcome Kurt to the podcast. I know that was a long bio and a long intro, but um but Kurt, I don't know if you've ever seen our podcast, we actually do something that we call an icebreaker before every episode, and I'm going to spring something on you, and you and my dad are both going to join in today on our icebreaker for today's episode just to relax and get into the conversation and kick off the episode. So, today we're going to do a a a series called founders first icebreakers, okay? So, I'm going to ask you what was your first moment that you can remember or first circumstance of this particular situation and I want John and you to both answer this. So, I have five situations or prompting questions and it's it's something that all founders go through. So, I want to hear what yours is and also what my dad's is as well, okay? So, here we go. The icebreaker for today. We're going to go real quick and then we'll get into the episode. So, the first one is what was your first investor pitch you can remember? Your founder first investor pitch. The any any memory or anything that you ever Were you nervous? Any story that you could tell us about your very first founder pitch investor pitch you've ever did? >> Yeah, I'll tell two quick ones cuz I'm not sure which one was actually first. >> Okay. >> Um one was the Big Idea Competition at BYU, if you remember that. >> I was the founder of it, yes. >> Okay. There we go. You were probably one of the judges and and there were some some VCs there judging and um I went up there and the projector was shining right on my face. Like I stood in the wrong spot. Um totally forgot what I was going to say, kind of mumbled my way through it. Got off the the stage, but the the core concept came across, which is SIDS is the number one cause of infant mortality. And you know, parents don't know when it's happening and we there's technology today that can address that and I like got that much through and we won the Big Idea Competition and right after that I quit my job. I'm like, I'm going all in. Yeah, way too early. >> This is uh kind of what we'll get into later in the episode because this comment back what he's saying, Kurt actually was one of the best pitch men and presenters that Brigham Young University, a highly ranked entrepreneurship school with incredible output. You will get into your success as a student entrepreneur, but you were incredible. As a matter of fact, later that Big Idea Competition and the competition to follow, students watched the video of your presentations to see what a good presentation is like. >> Oh, I got to give a lot of credit to my co-founders there, too. >> Yeah. >> But, but there was just a lot of >> But, how funny do you feel like you kind of fumbled that pitch and then he's over here saying you were like one of the best ones? >> Yeah. I mean >> I mean, you're like a deer in the headlights. >> The the way that you and you went through like your the pitch, you know, you kind of had the little fire blow up your previous at Ted. Do you remember that presentation? I don't know. >> Yeah, you you do you have you did 12 13 years ago. You did a good job. We had that video was used to show other people how to do something good. And he has a lot of successes as a student entrepreneur. So, great pitcher. >> Okay, so that that was first investment. >> Yeah, my mine was, uh, actually first company kind of bootstrapped it, but at one point we had one of the biggest companies in the world come in and duplicate our product, steal some of our sales people, and kind of do some interesting things and put real financial pressure on our company. So, I had to raise money and we raised money from employees' families. So, I had to pitch to the parents of some employees. >> Oh my god, that's pressure. >> Yeah. And we raised money and it saved us. And then, uh, 9 months later we paid them back with a good gain. >> That's awesome. >> That was interesting, yeah. >> That's cool. >> Okay, that was one of five. Here we go. What was your first prototype you ever made for a product that you were developing? And I'm assuming it was Outlets, or did you do prototype something else before in your entrepreneurial journey? >> I was always tinkering, but I don't I don't have like a good memory of of kind of the early stuff. >> Yeah. >> With Outlet, it was, uh, I went into the sewing lab at BYU and I had like some neoprene. I didn't know how to sew. And I wanted to make like a concept of the sock. >> wanted to do it yourself and you didn't know how to sew. That's That's hilarious. >> Right. >> You were scrappy. >> Well, I just walked into a class and I like interrupted the teacher, and I was like, "Hey, can anybody sew? I've got this idea." And I like pitched the class, and this girl raised her hand like, "I'll do it, you know." And so, she sewed the first sock, and then I went to RadioShack and bought a battery and like an LED just to kind of show that like there was some tech in it. So, we used that, and then we hired a a student industrial designer. We paid him 50 bucks, and he did the first visual renderings and drawings of the sock. >> Oh, wow. >> Which was helpful. What was funny is then 4 years later, we were doing version two, and we hired a design firm out of San Francisco. We paid them $100,000 to do all of this, you know, design work for us, and they did not come up with a single original concept that the student didn't have in his drawings for 50 bucks. 100 100 grand versus 50 bucks. >> story, by the >> Isn't that crazy? >> It is crazy. >> Yeah. >> And the deals you can find on the college campuses like I hate to say it, but a lot of students just don't know their worth, and but they're willing to pitch in or help, or you know, >> People get excited about it. They want to work on our first website, our first video, our first prototype, you know, all of it. >> want to be over reliant on things like Fiverr, but I mean, the bottom line is, you know, $100,000, there's stuff you can get on Fiverr that can be just as creative. >> Yeah. Yeah. >> A a lot of A lot of creators making 100,000 don't like hearing that, but it the truth is, as a scrappy entrepreneur, you can't afford the 100,000 usually, right? You've got to get a little scrappy. >> to try selling them. Yeah. >> Okay, next one. This one's a fun one. Ready? >> Okay, what was my I prototyping? I I did prototyping, too, just let you know. So, I did advertising products, and so, we would prototype ads. We would go to the expense of designing, creating a real ad for people, and say, "Hey, this ad's already created, you know, you might as well just say yes to it." >> Smart. >> That's called prototyping in the advertising business. Yeah. >> Nice. >> Okay, so this one next one. So, that was investor pitch, prototype. This one is when was your first total disaster? Like as a founder. What what's the first thing that comes to mind like what was the mess that you had to clean up? >> We had done pre-sells for the smart sock and we'd pre-sold a few thousand smart socks. >> Oh, wow. >> And we manufactured 2,000 units to to do the first run and we found out that there was uh the circuit board would break when you bent it around the baby's foot a few times. And we had flexible circuitry but it we had the wrong kind of copper in there. >> Mhm. >> And so we had to throw 2,000 units away. All of our money was gone and we owed 2,000 units to our customers and so we met in this diner and we were like everybody kind of like you know, said how many how many months they had left to work on it and that really started a clock for fundraising cuz it was like I owe parents a device and yeah, so that was that was awful. >> Yeah. Oh, yeah. >> How about you? Do you remember a very very early on disaster? >> Yeah, there was this once uh early on the bank bounced payroll checks on their error and about I had four people quit thinking there was something wrong with the company and because the payroll checks bounced and it was truly a bank error and even though the president of the bank wrote a letter to all our employees saying it was their error and mistake, four people quit and I lost them cuz they didn't trust or believe that the company wasn't in trouble. >> Weird. >> You know, bouncing payroll checks makes employees nervous. >> Okay, which relates to our next one which is what was your very first employee hire? Like what was the role, why, who? What comes to mind? >> Yeah, we were looking for a head of operations to help us take manufacturing overseas. Uh so it wasn't our first employee but it was our first real like big hire outside of BYU. And um his name was Tom Bishop. We we were about to hire one of our supply chain, you know, people that we were working with to get access to these circuit boards and a mentor said, "Hey, if you could get any It was actually Bryce Johnson with Skullcandy, if you guys know Bryce. He's like, "Dude, don't don't settle. If you can get anybody, who would you get?" And I was like, "Probably somebody from Skullcandy." And so, we reached out, he responded. I took him to lunch. Um I took the train cuz my wife and I were sharing a car at the time and then I walked a mile to where we were going to meet for lunch. And as we were leaving, he saw me walking back to the train and picked me up in his BMW and drove me back to the train and um anyways, kind of an embarrassing moment, but when he came in for the second interview, he was walking up our stor- stairs and was reading all these stories about babies who'd, you know, used the device. Uh that's kind of what convinced him was was the mission, so. >> That's cool. >> Yeah. That's awesome. >> Yeah, that's great. >> How about your first employee hire? >> It's hard to remember back, long time ago. I'll say my first big one, the same way. Hired somebody from the big telephone company, huge monolithic corporation. And as the founder of Lean Startup, Steve Blank, says, you want to be the second person to hire somebody away from a big company into a smaller company because that company making that transition doesn't do well and we paid him more than we'd paid anybody. And then 6 months, he wanted a big raise and he was doing terrible and uh you know, just it was not good because he wasn't ready for to be in a scrappy startup versus the accoutrements that surround you at a large corporation. >> It is amazing how big companies people just think totally differently. >> Yeah. Yeah, you know. >> Yeah. Yeah. They're just not the star- small startup mentality. >> Yeah. >> They're not trained to just get things done. It's much more about how do you >> What are my resources? >> Yeah, it's like like I get CEOs come to me and say, "Oh, I hired four sales people. I had to fire them all. They all sucked." I go, "Well, no, you kind of sucked because you hired people that are used to coming into a a proven sales system that's systematized and they just want to regurgitate what they're trained on s- how to sell and what to sell, you actually as a scrappy startup need somebody to come in, work with the founders, and systematize it, and kind of be able to change on the fly, and all that. It's a different environment, and it's the a person coming from big company is not prepared for what a shock it is to be in a small company, and vice versa, a person that's a startup person goes into a big company says, "What is all this bureaucracy?" Yeah. Yeah. So. >> Yeah, even founders, hard to make the transition as the company grows, cuz it's a different role. >> No, exactly. That's a huge thing. Most founders can't make that transition, and most of them stay in it too long, but some do make the transition, do really well, but it's more the exception than rule that I found. I for instance, myself, I'm very good at CEO a company 20, 40, 60 people, but once you start getting around 80, and go past 80, it's not for me. It's not my I I just don't like the all the things that sneak into the culture. >> So, that's why before the podcast, I was surprised that you just stayed in this role for it's now been 12, 13 years that you've literally been the CEO Have you been the CEO the whole time? >> Almost the whole time. So, we grew, let's see, it was 2000 and >> there was changes. Yeah. >> There was a change for a year, then he came back. >> Yeah, came back, yeah. >> Yeah, that's good story, too, and that's part of the issue we're talking about over the way here, right? >> Yeah, but that's what I'm saying, it just takes a different person, or different management style, or even just type of founder, or even entrepreneur to go from small, asking people in Target, "Hey, what do you think about this sock idea?" to, you know, massive company, right? So, it's like it's crazy that, and kudos to you that you've been in that seat, basically the whole time. >> he's the embodiment of like a Steve Jobs, right? Apple sucks. >> Oh, that wow. I'll take it. >> See See, well, I mean, it happens all time. We know General Motors, the original founder got fired, and they replaced him with a manager, and then he had to come back and save the company. And and that hap- Steve Jobs had to do that. It just It that happens. The founder CEO often is the reason for the success, and then somehow he gets put down out of the CEO role, and the company's fortunes don't go as well, and that he has to come back. I don't know if that's fully your story, but I see that a little bit in there, and that's that's a a pattern that's >> I think there's a level hundreds of years. Yeah, I think there's a level of ownership that you feel as a founder that I haven't I haven't really witnessed in other like hires. Like you get a big hire, a hired >> Yeah, I call straight up a hired gun manager. >> Yeah. >> Yeah, they're very good at execution and what they've learned in MBA school and all that, but the passion and the zeal uh especially if the company is not fully into that mode where all you need is a hired gun manager. >> even But not even that. It's a It's also about the knowledge that you have as a founder. Like someone coming in who's experienced in another field or industry or vertical or whatever, and they've had success even it's like, yeah, they're great and they can do it, but like no one's going to be able to pull back all the way to 2013 and say, "What did we do here? How did we accomplish this? What's my pattern recognition now?" Like if you think about it, sit down and say, "Okay, who is the best suited to be here at this moment in time for this company, for this product line, for this, you know, exact situation?" It's going to be usually the founders, right? >> If If they can level up, you know, like you have to >> If the company outgrows them and outpaces them and, you know, then that's a different story. >> Yeah, it's But there's just as many stories of they do level up and they're the right one, and then also stories where the founder does flounder in the later stages, but it's kind of interesting. Uh It The company needs to be really established and systematized really strongly to where it can transition just having a hired gun come in, right? >> Yeah. Yeah, I think and the best time to hand it off is when things are going really well, you know? Um I think the other challenge that founders struggle with is that imposter syndrome. Where you you know, you start it in your garage. Like you you know all of your weaknesses and you see all of these people that are you know, like the the Josh James of the world, right? And you're like, that's not me. >> Yeah. >> And uh you give up. >> the same thing. >> I'm sure he did. No, I'm sure he did. But that that's exactly the point. >> he one day he realized >> Sometimes you give up. >> One time one time he realized, oh, this big guy that he looked up to, some titan, he goes, he only puts on his pants the same way I do every morning. He's not any smarter than I am, you know? >> Yeah. >> Yeah, right? >> Yeah, I think you have to have that cuz I do think people who are able to grow with the company sometimes don't because they don't feel like they they don't believe in themselves enough. >> Yeah, yeah. There's a lot more we can talk on that, yeah. >> I forget what the question was. >> Go on. We're Go to the next one. >> I can't even remember what the question was. Was that the employee or the >> Higher. Yeah, yeah. >> Oh, we got some good stuff on number three, yeah. Okay, next one. So, we did hire, disaster, prototype, first pitch, last one. Here we go. When was your first I made it moment? Where you're like, this is it. Like, I'm accomplishing what I want. Or are you still waiting for that? Like, was there a I made it moment for you yet in your career? >> I don't think there has been yet for me. >> yet, really? >> It's interesting cuz I always thought, okay, when the product is actually on shelves, right? So, we finally get into to Buy Buy Baby and the product's on shelf and I go there and there's just like a million things I would change about it, you know? It's like the packaging doesn't look great, the display doesn't You know, it's it's funny like maybe it's my the glass is half half empty kind of perspective all the time, but there's always like that next thing you want to you want to go do. So, I don't think I've ever felt like >> You've never felt like, "Oh, yes, we did it." You never felt that? >> I personally I I've always felt so insecure about what the next leg looked like and what we had to overcome that it never felt permanent. >> Yeah. >> Yeah. >> For me. >> And I I've told you before that you up and you know, the day before, you know, the hour before we're going public, I was worried people were going to find out we weren't as cool as they thought we were or didn't deserve it. And you have that feeling all the time. But I did feel really good early on when I had a year with a lot of revenue and a lot of profit. So, my EBITDA was positive and I said, "Oh, we can really run profitably and have profit." >> Yeah. I feel like my I made it moments have come and then they've leveled up. So, it's like I remember my very first I made it moment was was when we were doing a lot of revenues and I could finally pay myself more than $40,000 a year and I was like, "Oh, man, I'm making so much money. Like I've made it." But now now looking back at that like that's so that's such small achievement into where the my career has gotten to today. So, it's like >> where you were at, you're like, "Okay, I crossed a big milestone." >> it. Like I can do this for the next 30 years. Like I'm good to go." Like, you know what I mean? So, I've had multiple I made it moments and then every I made it moment has surpassed the the previous, but it's like I've definitely given myself like that achievement and recognition for myself to be like, "Okay, like I did a good job, Tyler. Good job." And then like move on, but yeah. >> That makes sense. >> But yeah. Okay, great. Founder first. Thank you for playing in my what was supposed to be a 5 to 10 minute game, now was a 15 minute game. But yes, that was great. Now I want to actually move into your story, like your background, the the starting and founding of Owlet, how it came to be. And I've done some research and I've talked to you. I've known you now for, you you 10, 15 years or whatever it's been since BYU days. Obviously, since you were in John's class and >> of like to know like before you got to BYU and had the idea of being an student entrepreneur and launching a company in college, what led you to that? What What brought you down that path? >> So, but just before we start, what Owlet is how many employees right now and what is the size of Owlet? Is there anything you can share around the size of company and where it's at today and then we can rewind all the way back to the humble beginnings? Like, can you just give us a snapshot? >> Yeah, for sure. And it's all public. We're a public company, so we're 100 employees. We've got about 100 million in in annual revenue. Um, we market cap today is like 150. It's pretty depressed. We went public at a billion-dollar valuation in in 2021. Um, and it's growing. I think we're back on a on a trajectory to get back there. >> Yeah. >> But you're doing 100 million in revenue. Wow, that's huge, right? >> Do you ever Do you ever think that you would be sitting at the >> No. >> beginning of like a hundred million-dollar revenue company when you were back in Target or back doing thinking about the smart sock? >> No, it was just like if we can just get a product out that people like, that was That was going to be success, yeah. >> That's so funny. >> Yeah. >> Okay, so what did you major in? >> Uh, I studied chemical engineering. >> Oh, chem E. That's right, you're one of those. I love I always say this to every chem E. Of all the students, the majors, chem E's first of all the hardest major on campus and the students that went entrepreneurship route and I knew about five to ten of them in my time of teaching were excellent entrepreneurs. So, I think it makes sense a little bit. So, you you finished your degree in chem E? >> I dropped out to start Owlet, yeah. I have one year left, yeah. >> How many You have one credit left? >> No, one year. >> One year left? Okay. >> Okay. >> I'm close. >> Yeah, no. >> My grandma has committed me to getting my degree, but we'll see. >> There's There's also ones that took my entrepreneurship class and they went and took their job at Exxon or wherever and they had that entrepreneur's thing, but they didn't do it, and they come back 5, 10, 15 years later, really deep into life, and they kind of regret they didn't do it in college years. So, I think you did the right thing. >> I think college is the best time. Yeah, there's nothing to lose. Like, you're already living on ramen, like >> So, what How did you get introduced to entrepreneurship as a chem e major? >> Um so, I I feel like I've always been an entrepreneur. When I was a kid, um I we we had like this kind of old horse pasture area, and I turned it into a big paintball uh course, and and uh you know, bought a bunch of paintball supplies. Like, I was just always thinking of ideas like that, and we'd host tournaments, and um would sell paintball supplies to all my buddies. Um and then in in college, I paid for a lot of my my college doing um tiling. I owned a like a tiling business. We'd tile people's bathrooms and stuff on the weekends, and so, I've always just wanted to work for myself. >> Yeah. >> Um when I was in college, there was a competition called Student Innovator of the Year, >> Mhm. >> and I got a flyer, and I was like, "They let students invent stuff?" You know, like, the thought had never occurred to me that I could actually start >> type students. That's the purpose of that. Student Innovator of the Year was to not just have business students, you know, doing the stuff, >> Business. >> but pulling engineers in, so you That was great. >> And the chem e the chem e major came into it, yeah. >> Yeah. So, it was the wrong kind of engineering for Outlet, but um I think it made me less afraid of technology, and my co-founder Zach is the genius behind making such a good product. Um but, it allowed me to work with him with more confidence. >> He was an electrical engineer. >> EE, double E, okay. >> And then Jordan is the marketing genius. He was a marketing major, so. >> Was it you those three? Those were the three the three founders of Outlet? >> Yeah, and I had a buddy as well, and then there was a another early kind of founder, his name was Jake. So, there's really five of us. >> Wow, that's a big founding team. >> It was It's founding team, yeah. >> I I are they all or >> They're all gone now, but it really kind of it really kind of was Jordan and Zack and I that over the years really kind of stuck through. >> of the year was the that first you heard about that competition and what did you submit or put in? Was it Owlet? >> Um that year I didn't put anything in. I just was like, "Oh my gosh, I need to start working on on ideas." And then Owlet came the next year. So, >> Really? Okay. >> But I was so so intrigued by that. >> Where did that idea come from then? Was it from a like the Owlet idea if you're finding this poster and you're or this flyer and you're just like, "What should I do? What should I do?" How did that pop in your head? >> Yeah, I remember um driving back home and I was just thinking about like we really only get like four or five 10-year periods of our career. And just like the strong kind of feeling hit me like, "Make it count. Make it matter. Do something that really helps people." Um so, that became a filter. Um and then my wife and I were visiting her cardiologist to see if it was okay for her to get pregnant. She's had three heart surgeries. >> Oh. >> Um and the the cardiologist said she's fine. You know, he's like, "She danced in high school. She's she's healthy. Uh but your kids are at risk of the same thing." And so, >> So, was it diagnosed or was it undiagnosed? She didn't know what it was or she knew what her heart condition was? >> It it went undiagnosed when she was a baby. So, they sent her home and 10 days later her mom just had a feeling to like go check on your baby. And so, she walked into the room and my wife as a little baby was had turned gray, wasn't breathing. They rushed her to the hospital and did heart surgery that day that saved her life. >> As a baby. >> Oh, wow. >> So, I remember thinking like, "Well, how would I know?" You know, it's like just have the feeling and it's like, "Gosh, you got to be really in tune with the spirit." You know what I mean? Um and unfortunately, you know, the oldest grandbaby in the Workman family passed away from SIDS. And you know, 4,000 families every year lose their baby unexpectedly during sleep. And so, >> Yeah, SIDS. >> like, "How am I going to know?" Yeah. Um and so then a buddy was working at the hospital and was telling me about this tech that they use in the hospital called pulse oximetry. It's that little red light that they put on your finger. Yeah. And that's kind of where the idea came from. So. >> Yeah. And then you were just like, how could I get this on a baby? Cuz I'm not going to have a baby wear a finger thing. >> Right. >> Or whatever. >> Yeah, and in the hospital they put it on their foot. And we were lucky because right when we were starting, you smartphones were miniaturizing all these components. Cuz still today these hospital monitors are these big boxes with cords. >> Right. >> Um but they were making, you know, processing, you know, chips and Bluetooth radios that were miniaturized and you could actually fit in into a small form factor. And this is when like Fitbit was still like a hip pedometer, you know? Um so it we happened to have the idea at the right time. >> Wow. That's crazy. But the the actual origination of the idea came from that when you sat down and you thought about it. Cuz I think a lot of our listeners like wonder about ideation. Like cuz they're just like, I want to be an entrepreneur. I want to be a startup founder. I want to have my own business. I want to have my own startup. But they're always kicking around like idea this or idea that or XYZ. And it's like they don't know if it's good enough or not good enough or, you know, they have problems with ideation. So your ideation pulled from that personal experience of your wife as a baby having heart >> And a family member. >> And a family member >> that had the SIDS that the SIDS >> and you know, I had probably been through 500 ideas at that point. You know, it was like it wasn't like I sat there and I like deduced it. Yeah, well, like I I didn't logically come to it. I was driving and I was like, oh. Oh, wait a minute. You know, like you take this technology and this problem and boom. >> Kind of a proverbial aha moment. >> Yes, it was. >> But it wasn't instant and it wasn't the first thing. >> Right. >> Yes. >> Yeah. >> Yeah. That's it's actually the collision of hunches that happen in society and cultures and even in a person's own mind, where these hunches start combining together, and all of a sudden the hunches form the idea. >> Yeah. Yep, very much how it happened. I mean, I think you have to say no to a lot of ideas where the hunches come together, and there are reasons why either you're not passionate about it, or it's not a good, you know, >> Yep. >> venture. So. >> So, I remember, so then you uh the next So, the way it works at BYU, a really top-notch entrepreneurship school, is it has a series of events and competitions all year long culminating in a finale. But, the Big Idea competition would have been early in the school year. So, you heard about Student Innovator of the Year, start working on something, then the next year you must have come up with the idea and entered it into their early in the academic year Big Idea competition. >> That's right. >> I think you got pretty immediate support and kudos for the idea and what you were doing. That's how I felt. >> Yeah. Well, and I think that that competition's perfect cuz you only get 30 seconds. And as like a first-time entrepreneur, that's about as much as you can really, you know, do. So. >> Yeah. Yeah. And so, you got that. And then, what happened after you said, "Okay, man, this idea's actually got some traction. Some people that have been there, done it, are liking it." What What did you do next? >> Yeah, there were two two people in school that I really respected. One was Zach Bomsta, who's our uh CTO. And he he was already developing real products, and was working at Rocketship Design. If you guys know Rocketship Design in Provo, yep. >> Brilliant electrical engineer, and I'd worked with him on campus, and um I was like, "Man, if there's any way I can get Zach." Uh and I happened So, I was I was spending a lot of time in the electrical engineering lab. We were trying to make a little prototype, and he happened to walk in the morning after he'd been up all night with his daughter who had croup and was super sick. And he was like, "Hey, what are you working on?" And um we were able to get him involved there. And then, Jordan was the other one who uh was on the PhoneSoap team. Do you guys remember PhoneSoap? >> course. >> Yeah, so he helped start PhoneSoap and he won a bunch of competitions. >> Yep. >> And so >> Jordan, he mentored Jordan a lot. I've He's a good dude. A lot of things he's done. Yep. >> Yeah, he's He's actually brilliant. When it comes to like product marketing, he he was a big secret to the success. Um anyway, so I I convinced him. I gave him a percentage of the competition winnings. And so that's how he like first got started with it. And he won a lot of my I think he won like 30 grand as a student just entering us into all these competitions and then we would pitch together. >> Owlet, I think is the all-time leader in most competi- university competition award money winning. >> It's probably true. >> Yeah, cuz I think you were I I'm guessing somewhere 600, 800,000, something in that range. >> Uh no, it was probably like 300, but yeah. >> No, I think you won over 500. I'm pretty sure you did. You don't remember it right. Cuz I Remember Scott Peterson and I who ran the program for many years, as you know, we tracked that pretty well. >> Yeah, okay. >> And you cuz you went to other universities and entered in their competitions >> Yeah, all over the country. >> A lot. >> why cuz you had told Jordan, "Hey, whatever competition you get us in and we win, like we're going to Yeah, he got like 10% of it. >> 10%? >> Just right into his bank account. Yeah, and so he We applied to everything. He's Yeah. He's also a great great pitcher. >> your And your presentations were really well done. And of course, like I think I remember telling you this. I said, you know, you you're pulling on the heartstrings just the right You know, you don't want to be too sappy and be too over-emotional in a presentation, but your product lends itself to really pulling on heartstrings in the appropriate right way, which really carries a lot of the messaging really strongly when you present to investors. Every investor, everybody listening to your presentation and pitch is going to get the business side and the potential. It's a product it could scale well and all that, but when you're talking about, you know, even an anecdotal story or two of saving the life of a baby, you know, it just puts it over the top. And so, I think, you know, that's why you want competitions because it just all came together and just the right way. It wasn't manipulative or anything, in my opinion. >> Which I was really impressed by it. I was impressed by you and your team and what you did. >> Would you and Jordan tag team the presentations in these pitches? Yeah. >> Yeah. Yeah. He's great at it, actually. And even fundraising, he and I worked on every fundraise together and, you know, we're we're similar but different enough that it was just a ton of fights before, you know, finalizing the deck and what we were going to put in there. So, >> Yeah. And and and I think I remember quite a bit. I did it a few times, mentored you as you went off to like, I think the University of Oregon you did one, which was a big competition. And there were other ones. I can't remember. You went to a lot. I think we mentored you and and helped you do this, do that. You guys you guys were you guys were super strong team, but you also listened to mentors and I think that helped a lot, too. >> Yeah. Well, in all the programs that you helped build there, I just look back and I'm like, no way does Zale exist today without all that help. No way. I mean, you just don't know where to start. >> You know, universities are the place where people, if, you know, when you're a university student, you can take massive risks in your life that you can't take when you Right now, if you were working for the man and you're 36 and you had three kids like you do and you were making, you know, six-figure salary somewhere, there's no way, or not no way, but very difficult for you to jump off that and start a company from scratch. >> Totally. 100%. I Somebody just the other day told me I was too too old to start an AI startup. I'm like, I'm only 36. He's like, "Yeah, but you're going against 20-year-olds and they have nothing to lose." I'm like, "That's a good point." So, >> is true. That is true. So, it's kind of interesting. Yeah. >> So, so you got your team, you got all the pitches, you raised some funds. At the end of it all, you're claiming around a couple hundred thousand dollars you got to kick off everything. You have Zach who's working on the prototype and like at what point did you actually get the product finished? Because I remember you taking a long time to get your prototype out. >> Yeah, I also >> Yeah. >> There was it was a difficult product cuz like I mean, we're talking electronics, web applications, mobile apps, software. >> Fitting on a baby's foot, which by the way, that first year quadruples in size and every baby's foot is a different shape. >> Yeah. >> You know what I mean? Like >> So, I want to for to our viewers and listeners, a couple principles here. The genre of entrepreneurship that you chose to embark on is one of the most difficult because you were needing to design an electrical engineering pro product. You had firmware, right? That chip sets and chips and programming those chip sets. That level. Plus, you had to have mobile application. >> Mhm. >> Probably a web application for some kind of back end >> Back end, yeah. >> and doing and then you had to also do garment design and gar making a garment. >> you'd think would be the easy part. >> Yeah. >> Which was make our >> I remember seeing you one time at the Startup Building and yes, to our viewers and listeners, there's actually a building in Provo called the Startup Building. Okay, where startups can be housed and experiment and do things. And the Startup Building, you were down there and I remember you were in one of the rooms and you had the whole conference room table laid out with pieces and parts of different things and uh we talked about this and you had said, "John, you were right." and I go, "What do you mean?" He goes, "Cuz when you first started, you told me, 'Oh, in 6 months we're going to have a product on the shelves.'" And I said, "Everybody that says that with the genre or class of entrepreneurship that you're doing never hits that goal." And how how from Think of when you might have told me in 6 months we'll have a product on the shelves. You did that when you were kind of a newer Uh, student entrepreneur. Yeah. Actually, how long was it before it was truly you got a production run done and shipped it off to a store or to a customer? >> Yeah, it was 3 years. >> Three. I do believe at the beginning you thought it'd be 6 months. >> That was our push. It was It was just blind like that's when I wanted it done and >> Yeah, I know. >> I remember Zach telling me he's like, "I think there's a 2% chance." I'm like, "Let's go." >> but every >> 2% chance to get it in 6 months? >> Yeah. >> Every single student entrepreneur that comes up with a product that's physical, tangible, especially if it has electronics, all of us feels that way and finds out it's a 3-4 years. It takes a while. >> a couple of years. >> But in your situation, what caused the delays? Like maybe for all the entrepreneurs who are probably getting into that field of hardware, software combination business model, like what was the lagging points in that whole process? >> I mean, it's like you're trying to measure the oxygen concentration in the blood from, you know, lights that are shining through the foot. Like it's not a There's maybe four or five companies on Earth that have an FDA-cleared oximeter that's gone through all the trial Like it's a tough technology to work with. And um so, that was a big part of it. The other part of it was we just, you know, we we did 14 different revisions of the circuit board. Um it was like just constant change. >> Yeah, this is I don't call them delays. This is normal. >> I think it is normal. We just didn't know it was normal, right? And >> you wouldn't do it. As a matter of fact, I worked with Pura, I remember. Pura came through the first our first cohort of our >> high school with Richie. I was on >> So, I asked Bruno 3-4 years after they were wildly successful, "Would you do this over again?" He goes, "I'm not sure I would." >> It's hard, yeah. >> I mean, you know, it just It's just kind of interesting and there was another one called Novi Security. I don't know if you remember that. >> Yeah, I remember Novi. >> Yeah, and just all these ones that had to do, you know, four five major things that, you know, like single focus software companies are much easier >> Yeah. >> than these companies like you guys are doing and they're hard. >> They are hard. Yeah. I think one of the advantage to student teams and when we were starting, we were going up against a group in California that were like ex-IDEO, ex-Google employees. There was a group out of MIT. The fact that we didn't know any better was our strategic advantage. We had a really high standard for what we were going to ship. >> Yeah. >> And then we were always measuring against that standard and it always failed and we learned. >> Yeah. >> And then we would just try again. And a lot of these startups they kept everything under wraps. They didn't release anything to their customer base until it was too late and they launched products that weren't very good. >> Yeah. >> It's It's kind of the the five steps of of behavioral change or, you know, you were kind of in that first step of uninformed optimism. You were just like, "We can do this and we're going to get this out in 6 months and we're going to conquer the world." And then you learn a little bit more and you're like, "Oh, now it's informed pessimism." And you're like, "Oh, crap. This is going to take 3 years." You know what I mean? You're going through those steps of an entrepreneur that every founder goes through, right? >> But I I think it's really good for founders to time box whatever they're working on and push the team to try and do it faster because it forces you to prioritize. If you think you're going to do it in 6 months, you can't have any fat in the project. Yeah. Um and then you learn really quickly where your biggest risks are. And I think it's those who I mean, there's responsible product development where you're like, "It's probably going to take 2 years." But you're you're testing along the way and uh I think that's that's a better uh development paradigm than, you know, we're going to get it right the first time and it's just going to take a long time to to get there cuz I think inevitably you're going to make mistakes. You're going to increase scope. So, I'm a big fan of get a prototype out there as fast as you can. >> So, you mentioned the name of the first time one of your shipped products was on the store shelf or wholesale or something. What was the name of it? >> Yeah. Yeah, it was in Buy Buy Baby. Yep. >> Yeah, but okay. So, Buy Buy Baby and now you feel, "Okay, we got a product that's ready for customers and it's in selling in a store or a storefront or online or somewhere. So, from that moment, how did it take off right away or was it a slog to get people to know what it was or how did that go? >> Yeah, we launched with um like our official launch, I think was August of 2015. Um and uh we thought that the best way to launch was with these, you know, premium baby retailers and then an online strategy where we targeted people searching for baby monitors. And that totally failed. Nobody that was walking in the store knew what Owlet was. They didn't know that they needed it. And if you're searching for a baby monitor, it was just slightly too late in the funnel to get them cuz they were like video camera. And so, they'd click on our website and it was like, "What's This isn't what I'm shopping for." and they'd bounce. And so, it's like a $1,000 per acquisition. We hardly sold any monitors. And we changed up our strategy to work with, you know, influencers and bloggers and do a lot of PR to educate the market on what this new category of monitoring was. And that >> then this new category of mommy bloggers big for you? >> Uh that was really big for us. Yeah, cuz at that time they were >> where your headquarters is and where you are out of is a huge mommy blogger >> Yep. A ton of a ton of influencers here kind of led to that success. And then kind of longer video content that educated on all the aspects of the product. >> What like on like YouTube videos >> Facebook, yeah. >> Facebook videos >> and then one of just one video, we tested all of our assets. One video was very simple, for some reason performed better. So, we just put a ton of advertising spend into that and drove like 50 million video views. And that's really kind of what got us over that energy of activation where people started to talk about it. >> wanted videos, but yours is not a video device. Yours is literally just that oxygen and wearable. >> Wearable. So, they're like they just didn't understand it, but once you educated them, did it take it took off then? >> That's when it took off, yeah. It was like that video, it was like half organic, half paid, but you'd have tens of thousands of people like tagging their friends, "Hey, you need this." And it was just a simple explanation. It was like, "Hey, you know, just like you started this this podcast with, you bring that baby home, you're worried, you don't know what's going on." >> because, you know, "Hey, my friends just had a baby, and I can tell they're nervous parents. I don't have a baby, but I'm going to tell them about it anyway." Yeah, that kind of thing, right? Yeah. >> That's great. So, it took off, and and I'm going to, you know, you know I'm a huge fan of you, huge fan of Owlet, and the product. I It just brilliant product, super important, and, you know, not just because it's a great entrepreneurial venture, but because it's also doing good, right? And helping families in this terrible problem of SIDS and other things that you need to monitor babies for. But, I am going to ask, so, you went in, how did you deal with you were kind of a medical device of in some ways you'd say How did the FDA network? Cuz we run into this all the time. How did did you Tell us the story of how the FDA relates to your product and all that, and how how you maneuvered all that. >> not have enough time. >> Okay. No, but just >> dive into it, yeah. >> Yeah, just just just simple overview like cuz I remember us bringing that up with you and trying to navigate those waters, and I just don't even know the story. So, maybe just tell the quick story of how it all went. >> Yeah. Yeah, we launched in 2015, end of 2015, right as FDA was coming out with what's called the wellness guidance document for what we thought for products like us. Um, you know, like Apple, their oximeter on their watch is not FDA approved, Garmin's is not FDA approved, Oura Ring is not. So, like all these wearables, um, built to measure heart rate and oxygen, share it with the user. You know, Garmin, you can set alarms on your watch if it goes outside of >> aren't the FDA doesn't consider them like class one or two or whatever it is. >> what they what they say in the guidance document is they may be medical devices and they may not, but we're not going to regulate it. We're going to allow people to innovate. >> Okay. >> Um there were some baby companies doing the same thing. Um and then a lot that did breathing monitoring, so like respiration rate and then would sound an alarm. Um dozens in uh in both categories. And so we thought, "Cool, this is definitely the lane we want to be in. We don't want to go full-fledged medical device." Um you know, it's a low-risk device intended to just help parents know when they need to check on their baby. There's no diagnosis. And so we launched with that. Um and I think because we were for babies, there's just heightened um Yeah, there's just >> expectations >> expectations around it. And we grew so fast, too, that I think the FDA >> Yeah, cuz you took off. You started zooming and you weren't you didn't feel you needed FDA approval. FDA didn't seem to >> We had a lot of conversations with FDA. And we're actually working on submissions with them to get approval for a >> All the while while you're having kind of meteoric sales >> growth, yep. We went from uh no babies to one in 10 babies in the US by 20 21. >> Really? >> Yep. So 10% of all babies born were going home with Owlet. >> Wow. >> Went public in 2021. Right after going public, we got a warning letter from FDA saying that it needed to be classified as a medical device. There wasn't a safety issue. Uh there weren't accuracy issues with the product. It was purely a classification issue, which still frustrated with today cuz there's five or six other companies in our space doing either the exact same thing or something very similar that don't have approval. They're not Apple still doesn't have approval for theirs. Like we got for some reason they picked on us. Yeah, and for a while I thought, "Okay, maybe it's cuz we're we're growing so fast and they're going to set a standard for pediatrics." And we, you know, we immediately changed course when they, you know, put that out there. We got two approvals. We got a de novo approval from the FDA. We got a 510k from them. We got our CE med mark in Europe. Did all the right things and still today we're the only ones. And there's, you know, five or six other companies operating >> the sock today as it was before you went public, the sock? >> Available with the software and can you have it on a baby? >> Yeah. Oh, yeah. And we are FDA approved. >> a time after you went public did we did So, let me ask this. Did the process of going public bring this attention, you think, more to you? Is that did that >> Yeah, I I don't know exactly what went into it. Um I have a lot of speculation, but I think so. I think it was going public and I think we probably had some bigger competitors >> a successful product affecting people's lives and making this impact and then you're public and then somebody somewhere starts sniffing around saying, "Well, should this be FDA approved?" And then okay. So, Okay, so that happens and was there a time where the sock got pulled and you had to not sell it? >> We had a We had >> some time where people said their app didn't sync with the sock or something for a while. >> Yeah, we had 3 months where so we we decided, "Okay, we're going to we're going to work with the FDA. We're not going to fight the federal government on this." >> Of course. Don't fight the Fed is a very losing proposition. >> listeners, don't fight the Fed. Okay, there we go. >> So, we pulled the product, um took it off all retail shelves. Uh they didn't force us to do like a recall cuz there wasn't a safety issue. Um and then we went back to them and we said, "Hey, look, you you know, we understand these certain features to be the issue. So, we pulled those features out of the product and then we relaunched it 3 months later as the Dream Sock." >> product? >> Out of the the app and then firmware. Yep. So, we >> Okay, so but did are you able to update the firmware on the sock remotely? >> Mhm. Yep, so everybody had the option to >> things off in the firmware and in the mobile app without having to have them get a new sock. >> Right. And we had to change the alarm from being a low oxygen alarm to check on baby. Was kind of like we had to take anything that could be misinterpreted as diagnosing a medical condition >> That's what it was, yeah. >> And so it was off for three months. >> So it was off for three months and then we we had to feature down and offer a wellness version and then two years later we got the approvals. So it took about two years. >> Right now it's back as it always was. >> Back as it always was. It's FDA cleared. We're the only FDA cleared product on the market. >> going to say it right now and this is not a shameless plug cuz you haven't said or asked for anything but anybody then that if you have grandkids, if you're a grandparent, there's a great gift. If you parents and grandkids should get this product for their babies. It's just peace of mind and to know what's really happening. I think it's it's and it's not to make you richer or more revenue, whatever. It's literally it's just one of those products where it's a great product. >> Oh, thank you. >> So where does that put you with the FDA now? Everything's completely cleared. You're the only one in the pediatric market that has the stamp of approval from that from them. So everything went through. You worked it out with them and all it's completely good to go. >> Even though I have no investment interest in you whatsoever, I was really bothered by the whole thing to be honest with you. Maybe cuz I you know have a kinship with you from coming through the student entrepreneurial program or that but I I did not understand why you were singled out. It really bothered me. >> Yeah, and I think at the time I was like okay, we're the biggest so maybe they're singling you just kind of set a standard for the category. It's bothering me more now. >> That why they're not pulling the others in? >> Yeah, they're not nobody else is held to this standard. But you know, to I think our team's credit, our investors credit, sticking through that really tough time. The company almost went bankrupt, we're out of money, we had to go back I had to go back to the bank, the manufacturer >> Wow. >> and our investors and say this company's done >> That was a tough time for you. >> Unless you put more money in, yeah. And so great great support. >> some of this timing in in like the month and year, okay? So, things are going great and then you went public through a SPAC >> through a SPAC process. >> process, okay? Which uh for viewers and listeners that don't know that, um in my day we called them a reverse IPO and it's just basically your operating company was put into a shell company that was already public and then you market that to the market as a public company and all that. And there's many of those >> Super popular for 2 years and now they're not popular yet. >> Yes, yeah. But every >> There was a craze, yeah. >> Popular that that attention going public may have brought something in. But when did the CEO, when did you step down as CEO to CEO and somebody came in for a while and then when did you step back in? >> Yeah, so I stepped down uh December no November of 20 19. >> Okay. >> Um we'd grown to about I think we're like 80 million in revenue at the time, you know, we've grown great. And I got to the point where I think it was a combination of lack of confidence in myself, you know, we'd we grew like 60% that year, but we meant to grow 100, you know, I was like sort of like uh maybe I'm not the right guy. Um and then um just feeling burnt out, you know, feeling like the new role we were at about 100 employees, um the new role was different than being an entrepreneur. >> If you've watched any of our other podcasts, we've had a few on that have been through the same feelings and this is super common. You that what you're going through and what you're expressing is interesting. People like you said that imposter feeling, right? It's a it's a nasty thing and people should shouldn't feel it. Um you're you we're awesome, you are awesome and you're going to be awesome. That's just the way it is. >> So you I I seem to keep self-deprecating so John will pick me up. I love it. >> So you you So you got out of there before the whole COVID thing happened. So you were >> Yeah. >> in 19 >> you know, and that year 2020 was going to be we went we we went to Hawaii, Peru, Mexico. We were going to just travel the world. >> Yeah. >> During 2020 it was like the worst year I could have picked to take off. >> you you stepped down from CEO, but did you keep a full-time position? >> No, I was on the board. They offered me the chairman position. So I went to the board and I explained this and I think they were feeling the same way. It was sort of like yeah, maybe this would be good for the company and so everybody supported it. I stepped down. I didn't I didn't want to be hyper engaged. I wanted to kind of be done. >> Yeah. >> So I took the year. We were just going to travel as a family. I joined board meetings remotely that year. Um >> How did the new CEO work out? >> So we just we promoted our president into the CEO position interim CEO while we were going to look and just kind of see is he the right guy? Should we get somebody new? He did great that year. He you know, he executed really well on our plan. Good guy. As we were then one year later the SPAC approached us and I was still not there and said hey, we love this company. We think it'd be great, you know, to take public. We were going to go raise a series C, but the valuation and the terms were way better with the SPAC. And if if you're not familiar with how SPACs work, they have a pool of money that can decide at the very last minute whether or not to convert and give you the money or or opt out. It was like $200 million. Um We're like this is great. So we decided to go with the SPAC, but the the president we had at the time really great operator. They wanted somebody to come in and and advocate and and share the story and so they asked me to come back and be the CEO to help us go public. I didn't want to at first. I was like I don't you know, it was I was literally got done skiing with my kids. I'm like this is great. I'd rather like company goes public, you know, I just I didn't want to jump back in, but we had a lot of conversations about it and I was like this is a lot of you know, a lot of good momentum for the business is we good for me. So I sit back in in January of 2021. >> January 2021? >> Yeah, so about 1 year later. >> 2021 one of the craziest easiest money years in history. >> Well, it's it's almost like we made SPACs unpopular. So like as soon as we announced our SPAC, the market seemed to shift and by the time we went public in July, 95% of the 200 million opted out. So we didn't get hardly any of that money. We raised a pipe with it so we had some money but the redemption rates went from like single digits to almost every SPAC that went public 23andMe like a bunch of SPACs had really high redemption rates. So that was a big challenge and then a month after that we got the warning letter. So it was like I signed up to like go public >> Yeah. >> and then had a 5-year 5-year you know turnaround which turned out to be as I look back my favorite part about it. >> It was awesome. >> Let me I'll share it cuz I've been through it too. So like when you go public like that and then you have this FDA thing then I think there were some shareholder suits too, right? And my company went public that everybody needs to know viewers and listeners when you go public shareholder lawsuits are going to come almost no matter what and they come in not just one multiple ones can happen and so you got so you came back SPAC happens a SPAC didn't go as well as you had hoped but you went through with the SPAC and then shortly thereafter the FDA thing happened. Personally and this is total conjecture cuz I know how this game works is some shareholder lawsuit lawyers somewhere around the country were just itching to find SPACs that they could find something wrong with so they can make these claims and who knows if they called FDA. That's my speculation because I know how that works and how the game is played and I've seen it happen and it's just nasty nasty. That's why I I thought you were so wronged in so many ways and when I I this happening but all this happens, you're back, you're having to deal with this, and you had to deal with, you know, financial situation, product is goes on hiatus for 3 months, your all-star product, and all that. And then, you've now nursed it back as the founder coming back in and sitting there Where is it today? Like, this is like, 2022 was probably a tough year for you. >> Oh, 20 Yeah, the end of '21 and '22 hardest year of my life. >> Yeah. Why? Why? Why? >> All those struggles with the SPAC and with the FDA. >> Yeah. Yeah, we we went from 250 employees down to 75 in that period of time. We had to really like, you know, a lot of projects we were really excited about. We had a pregnancy monitor that I think still today would just change the world. It would save 10,000 lives a year that we had to we had to cut cuz we just didn't have the the resources. For a lot of a lot of really like, cool things we were coming out with, we just had to stop. Um, good friends that I had to let go. You know, it was awful. Uh, the business was about to go bankrupt. Like, I literally called our manufacturer. We owed them like, $30 million. Uh, and I'm like, we're out unless you can restructure for 4 years. It was like a long-term payback program. And these guys were amazing. You know, they they were like, we love what you guys do. Same as same thing you said. We feel like this is wrong. We want to help you get through it. All of our retailers did the same thing, too. They were like, we love this product. >> Who was leading out all of that effort to kind of smooth that all out and handle all those negotiations? >> This guy. You mean? >> This guy right here. >> I called 500 vendors and I was like, we need a new payment plan. You know, I just had to describe everything that was going on. It was and it was so close and >> Turned out to be tough, but you said it was rewarding. It is. What was it rewarding? What Do you >> And now And now the business we just announced in our earnings call, um, highest first half revenue in company history, growing faster than we ever have. >> Did you ever get threatened with delisting? >> We did, yep, last year. >> Okay, and >> really, really close, yeah. >> And you survived that. I'm telling you Kurt, I I professor to student, you know, you you're you're you've long surpassed me. You're at this high levels of the public company, but I'm just telling you you have been through experience that most people won't get. The good and the bad and the ugly, and you are really a top-notch senior executive, senior founder. I'm just telling you you right now you're sitting there, you're you know, like the pay it forward in you is going to be immense. You're going to help so many entrepreneurs and founders. >> Yeah, just mitigate your experience. >> you to do that from time to time a little bit, and you've been so willing to talk to people every once in a while. I know you're super busy, but you just you have a lot to give because you've learned and picked up a lot. Nobody goes through what you've been through without becoming really >> it's interesting cuz you think that there's some there's some like right way to go through all of this or some right way to do it. And I think again my message to founders would be like just believe in that intuition. You know, just believe in that like you know your business better than anybody. >> yeah. Have integrity, um do what you say you're going to do, and also have the guts though to call it like it is. And if you have to terminate somebody, you got to terminate somebody. If you if you can't please everybody, you tell everybody up front I can please you four but not you six. That's the way it is, you know, that kind of thing. >> And that's hard. I mean, I think you know, that's not my nature I would say. >> No, it took me half my career to learn how to be more blunt and more forthright. And in the end, people respect you more and like you more. You think you're pleasing everybody and they're going to like you more, but they don't like you when you try to please them, and there's no way you can carry that forward, and six months later it all crashes. It's way better if you to say, "You know what? This isn't going to work out. This is the way it is right now. I've got to take care of the greater good here, and that's just the way it is." >> Yeah. Yeah. >> Yeah. >> And you probably had lots of moments like that. >> Yeah. Oh, yeah. >> Yeah. >> And >> Too many in a too short period of time. >> So, from when you came back from CEO, it's taken till now to get to get the company kind of into a really good spot to where cuz now I I talked to you about this prior to the podcast just 4 days ago this week, last week you announced that you're now going to be stepping down from CEO. >> Yeah. >> And you're going to Are you moving to chairman now? Is that what your role is going to >> I'll be exact chairman. >> So, do you feel like now you came back, you weathered this storm, you had the agility to navigate all of these issues and things, and for better for worse, you've gotten the company back on track, and it's now in a spot where you feel like you can do what you were trying to do back in 2019, and step away a little bit? Or what what's the decision of of you stepping down from CEO now? >> motivating that? >> Yeah, I think there's a there's a few motivators. One, I I feel like I'm an entrepreneur, and you know, do doing comp committee meetings. I actually love our comp committee, but >> Yeah. Yeah. >> audit committee meetings, like that is not it's not me. Um I like to >> said about myself, right? >> Yeah. >> I I Once it goes past 80 employees, it's just not as fun. >> Yeah. Yeah, your role changes completely. Your role >> You were 200 250 at one point? >> We were up to 250, yep. And now we're We've One of the coolest things over the last few years is like we've just adopted this culture of being lean. So, we're We're now doing with 100 people what we were doing with 250 people, and moving faster, too. That's the other thing. >> the the fiefdom building, the you know, not to put anything I'm sure you liked all the people stuff, but just humans and two When 250's too many, and you can do it with 100, all people are constantly trying to justify their jobs and roles and there's a lot of ladder climbing going >> wants to hire somebody, too. >> Yeah, because in in a bureaucracy, your power is how many people are under you. >> Yeah. >> And so, you know, it just it's and it's not Here's my two rules of thumb. You want to know what they are, viewers and listeners? I'm out of the company once you hire an HR director. >> I like that. >> and once you hire an internal attorney, >> Okay. >> on-staff attorney and/or HR director, I'm out. >> That's awesome. I love that. I might I might take that. >> There you go. >> So So, who who's now replacing you in that CEO role? Is it that same president that it was before? >> Uh new president. So, this time is a little different. We hired a president a couple years ago. I was like, I know this day is going to come. Um I want I want to make sure it's a really good transition. >> Yeah. >> You know, with somebody internally that we know can be the CEO. So, we hired this guy 2 years ago. He's been phenomenal. He took GoPro from 18 million to a billion in sales, was a big part of Roku's success. He's just an awesome awesome executive. He's a grandpa, like, you know, loves what we're building and and is um is great. And then part of my role, like, I different this time, I'm not just kind of sitting on the board. I'm having I'm I'm going to continue to have an active >> Yeah. >> role in the business and specifically working on We believe that insurance should cover uh health monitors when babies leave the hospital. And so, that's a big part of what I want to see happen and I think that's one of the biggest opportunities for the business. So. >> That's cool. So, you think you'll you'll launch any other startup or you're going to be an angel investor? What do you think? >> I want to do another startup. Yeah. Or or multiple kind of smaller startups for a while. >> Do you Do you remember uh a few years ago, it might have been when you could took that step down 5 years ago, you wrote me and said, "Hey, you kind of taught me how to be an entrepreneur, but you need to teach me a little bit about being an angel investor." And I wrote up a document for you. I don't know if you remember that or not. >> No, I do. I I started a small accelerator that year called Simpact in Mexico. >> Really? >> With with Mexican entrepreneurs, yeah. >> 10 other people. >> Oh, no way. Okay. >> they came and say the same thing. They said, "I'm finding out that being an angel investor is different than being >> Way harder. I don't think it's for me. >> Yeah, yeah, and so and and and so I got this document that I've given out and it's kind of funny and but you were one of them. So, yeah, it's pretty cool. Yeah, I What I think we're getting close to time. What Why don't we ask this question like for viewers and listeners, a lot of entrepreneurs and budding entrepreneurs, what's some of the tips like what's like one, two, three advice for somebody that would have been where you were at in your first six to 12 months? >> Yeah, thinking back, advice for the early stage entrepreneur. Let's close on that. >> Yeah. >> The two things that are coming up for me are one, um, you know, there's that saying that like a seven can't hire a 10. Like you're not going to get somebody who's like better than you. I don't think that's true. I think you need to hire people better than you and if you have a really clear mission that people are excited about, I think that's been our biggest strategic advantage is just like who can't get behind helping save babies' lives, you know? It's just You don't have to be a great entrepreneur to to hire great people around that vision and I feel like that was a big part of my success. >> Yeah, I got to give a teaching on that. We say in entrepreneurial education, I was a professor for 12 years and I've taught a lot of entrepreneurship classes outside of even that 12-year experience and we teach universities often teach A students. A students are the ones teaching. A students teach B students how to work for C students, okay? So, and this is a funny thing. I'm showing my age here. Brady Bunch episode taught me when I was a kid. They had a very successful businessman. He didn't finish college, dropped out of college. And the father of the Brady's is trying to tell his son, "You got to go to college, got to college." He said, "Well, I'm not going to college. Look at him as a success like that. And that guy sat him down and said, "Yeah, you want to know how I got successful here though? Is I surround myself with people that got degrees, very smart people, and people that are smarter than I, more intelligent than I am. And I'm the entrepreneur. And that stuck with me all of us because the entrepreneur can get that 10 person that's technically better or higher maybe even intelligence, but the entrepreneurs that risk-taker, the one who takes calculated risk and puts it all together. >> Yeah. >> Does that make sense? >> Exactly. Yeah, totally. >> So, give me a little bit more on that before we close. Like for the entrepreneur that may be a little bit nervous or in confident >> Well, that was the first one. He had a second one. He was making sure. >> just for that remark, how how do you attract that kind of talent or how do you actually get the respect or you know, paint the vision or whatever it is, how do you actually get that person on board? Like what were you doing to get these 10s around you that you're self-proclaiming yourself as a seven, which I don't agree you're a seven. >> Maybe a six, yeah. >> I was actually thinking of five, but No, so how do you get the How do you get the 10s? >> Yeah, this is going to sound super cliche, but I'm going to go back to like taking Tom Bishop, the the VP of manufacturing at Skullcandy >> ride in his Beamer. >> to lunch. Yeah, and I like didn't have a car. It's not what you think. Don't try and be somebody you're not. Don't try and like present yourself as this experienced entrepreneur if you're not. >> Yeah. >> People don't need to like let go of your ego. >> Be yourself. >> Be real. >> Be super Yeah, and just just explain like just tell them why you think it's going to work. And I had to do that multiple times with Tom cuz he's like, "I've got this other offer." And in the back of my head, I'm like, "This could fail." But I'm just like all in on like, "No, let's let's do this." >> Yeah. >> You know, and so I think just be yourself. You don't You don't need to come across as anything that you're not to get people excited. >> Yeah. >> If you have a good business. >> And have the the confidence that comes from knowing that your your role is your role, their role is their role. And and the reality is a lot of the 10s don't have the personal makeup to actually launch a company. They really don't. They're just not in in them to be that founder. There's something >> Or they don't want to take a risk cuz they have something to lose. >> They do. That's what I'm saying. That whether it's matter of fact, we test for entrepreneurial traits and risk tolerance is a huge part of entrepreneurship. I mean, I can look at even amongst my own children, Tyler takes risks. He takes a lot of risks and he's had a successful entrepreneurial career. Some of the other children are really saying, "Nope." And they can find a reason why everything won't work or that's not going to work or have doubts, right? And that's you just got to have that passion. >> Yeah, and shout out to Tyler because we hired a bunch of people from Dev Mountain. Uh you know, a friend was delivering pizzas, had a law degree, but couldn't get a job. And went through Dev Mountain and has a great job. Is a Is a you know, a developer now. >> So, the viewers who are not familiar, Tyler's the founder of Dev Mountain, which was a a coding boot camp, one of the first and most successful ones in the country, and just changed the ecosystem of Utah in a lot of ways. Everybody we talked to has hired scads of Dev Mountain people. >> That's That's awesome, Kurt. Okay, number two before we go to number >> the second tip you said? >> You said you had a few. You had a few things to say. >> two. I think you said what two that come to mind. >> stage entrepreneur advice. >> It's It's enjoy it. Like there I read this article that was titled was why I dream of quitting my startup every day. And I was like, "I got to read this." It was one of those hard times, you know. And he just goes through it. He's like, "Every day you walk in and something's broken. Something's going wrong." Like you get this like left hook to the face. There's a reason why the vision that you've laid out is not possible or at least in the timeline that you think it is. And he just talked about how painful it was, but at the end he talks about how, you know, the reason he stayed with the startup is cuz he he realized he was learning how to fight. And he was becoming a better human being through that process. And you know, entrepreneurs are you know, by nature you're taking something you're trying to make the world different and so there's a reason it exists today and you're going uphill against all of those reasons and you're trying to bring that to reality. That's really hard. All you're doing all day is problem solving. That's all it is. Um just enjoy it. Just like if if I'm sure this is impossible for a first time entrepreneur because you just haven't been through it but if you can just say problems are good, that means I'm solving problems for people. >> Yeah. >> Um and just enjoy that piece. Don't let it get to you. I wish I'd done that. So. >> Yeah. Yeah. Uh also tailing it we've seen this in the last few episodes actually tailing on that idea is this is that those that make it to the summit and you're now going to senior chairman and all that and they have a 100 million revenue company and all that. When you're on that summit, you'll look back and you realize and you even said it today the steepest part of the climb was actually the most fun. >> Yeah. >> It's that's where the stories come from. Yeah. >> It's it's what you'll look back on, right? I mean isn't that isn't that interesting about that about how that looks? So. >> You never choose it. You never choose the steep part but if you can get through it, it's worth it. >> Because but it's the one that makes you the most fit. You were saying like makes you a better person. So. >> Yeah. >> And if you learned anything today makes you fit physically, climbing steep parts of entrepreneurship makes you a better entrepreneur. >> If we learned anything today, it's that Kurt had a really steep climb some of those years. >> Yeah. Yeah. >> Cuz that that's crazy. You got a lot of curveballs. >> Yeah. Kudos to you. I I want you to know we you know, this we admire you and look up to you and >> Oh thanks. Thanks for all of your We wouldn't be here without you, John. So. >> Yeah. Well, that's nice of you to say but you really have brought a great product to market and I'm not kidding you. Just the grandchildren, all of them have had that put us all at peace. Tyler used them. >> Yeah. I used them all of my childhood. >> And and I think you know that. I think early on you kind of liked that we were so advocate cuz we were testing it or something or got it early, but long after you were successful, we still the product was used because it's just really a great product. For it what you want to do is solve people's problems and solve their needs and this product does it really well. >> Does that just that. >> Thank you guys. >> Well, Kurt, what a wild ride. That was an awesome story. Um, I think Kurt's story kind of is just driven entrepreneurship. Like you kind of moved out of the seat, you got back into the seat, you went through probably the the muddiest waters you probably could have gotten through. You just announced you're getting out of that seat again and you're putting out someone back in there, but you're moving to chairman. So anyways, thank you for coming on the podcast. It's been an amazing conversation. That is everything for this episode. I don't even know what episode we're on now, 20-something. >> Yeah, it's on 27. >> So whatever episode it is, Jordan, our our producer of the show will make sure to tell everybody what episode this is, but thank you for tuning in. Like, subscribe, share. That is all for today and thank you Kurt for coming on. Thank you so much. It's been a great time. Thanks. >> Appreciate it. Bye guys.