How I Built This with Guy Raz – Solo Stove: Spencer and Jeff Jan

Intro

In this episode of “How I Built This with Guy Raz,” Guy interviews Spencer and Jeff, the founders of Solo Stove. Solo Stove is a brand that sells smokeless fire pits, pizza ovens, and patio heaters. Spencer and Jeff share their journey of building a successful e-commerce business, starting with selling inexpensive products from China on Amazon to eventually creating their own unique products and selling millions of dollars worth of camping gear. They also discuss the challenges they faced along the way and their eventual decision to sell the majority of the company for hundreds of millions of dollars.

Main Takeaways

Building a Stress-Free Lifestyle Business

• Spencer and Jeff started Solo Stove as a way to build a stress-free lifestyle business.
• They tapped into Amazon’s direct selling platform in 2010 and realized they could source inexpensive products from China and resell them in the US.

Transitioning from Blogging to E-commerce

• Spencer started blogging about China business travel and personal finance after taking a blogging course.
• He transitioned from blogging to selling memory foam mattresses to expats in China through his website, Slumber Max.

Starting an E-commerce Business

• Spencer and Jeff started an e-commerce business together, focusing on niche products.
• They found a UK product called “clotches” and decided to sell them in the US.

Creating Unique Products

• Spencer and Jeff came across the concept of a double-walled gasification stove and decided to focus on camping products.
• They iterated and designed until they found a slightly better mouse trap.

Growth and Success

• Solo Stove’s first year of sales was half a million dollars with 80% margins.
• They sold their other company, Fox Outfitters, which made millions of dollars, to focus on Solo Stove.

Selling the Company

• Spencer and Jeff sold a majority stake in Solo Stove to a private equity group in 2019.
• Another private equity firm came in a year later with an offer to buy out most of the remaining stake.

Life After Selling

• Spencer and Jeff moved to board seats after selling the majority of the company.
• They still retain shares but are no longer involved in operations.

Summary

Building a Stress-Free Lifestyle Business

Spencer and Jeff started Solo Stove with the goal of building a stress-free lifestyle business. They discovered the opportunity to source inexpensive products from China and resell them in the US through Amazon’s direct selling platform. This allowed them to start their entrepreneurial journey without the stress and risks associated with traditional businesses.

Transitioning from Blogging to E-commerce

Spencer transitioned from blogging to e-commerce by selling memory foam mattresses to expats in China through his website, Slumber Max. Although the mattress program at his day job didn’t work out, he saw potential in the product and marketed it to his target market through expat forums, chiropractors, and real estate companies. This experience taught him valuable lessons about marketing and customer preferences.

Starting an E-commerce Business

Spencer and Jeff teamed up to start an e-commerce business together, focusing on niche products. They found success by selling a UK product called “clotches” in the US. By buying the clotches for a low price and selling them at a higher price on their website, they were able to generate revenue and fulfill orders by shipping the products to Jeff’s house in Dallas.

Creating Unique Products

Spencer and Jeff realized the value of unique products and decided to focus on camping gear. They came across the concept of a double-walled gasification stove and iterated and designed until they created a slightly better version. By investing in custom machinery with their manufacturers, they were able to create a product that was difficult to replicate, avoiding copycats and establishing themselves as leaders in the camping industry.

Growth and Success

Solo Stove experienced rapid growth and success. In their first year of sales, they generated half a million dollars with 80% margins. They also sold their other company, Fox Outfitters, for millions of dollars to focus on Solo Stove. Their success can be attributed to their unique products, effective marketing strategies, and their presence on platforms like Amazon.

Selling the Company

Spencer and Jeff made the decision to sell a majority stake in Solo Stove to a private equity group in 2019. Despite initial interest from investment bankers, they faced challenges due to the lack of infrastructure in their business. However, they eventually found a buyer and moved to board seats. Another private equity firm later offered to buy out most of their remaining stake at a much higher valuation. Solo Stove eventually went public in 2021.

Conclusion

Spencer and Jeff’s journey with Solo Stove showcases the power of identifying opportunities, creating unique products, and adapting to market demands. They started with a desire to build a stress-free lifestyle business and eventually built a successful e-commerce company. Their story highlights the importance of perseverance, innovation, and strategic decision-making in the world of entrepreneurship.