Two students put their all into their inflatable raft start-up
It started with a dream…
Fluzzle Tube started with a dream. A real dream that the start-up's co-founder, Clark Whitehead, had. Clark and his friend and co-founder Eduardo (Eddie) De Arkos, grew up on lakes and rivers. Clark was the one who always got stuck tying the family’s rafts together. One night, he dreamt about a group of rafts that could be attached to each other like a puzzle.
In the morning Clark began doodling a design for floating puzzle inner tubes that interlocked. Clark’s parents thought he had a good product idea, but he put the idea on the back burner since he wasn’t sure he wanted to take on the risks of launching a business. Also, both Clark and Eddie were full-time students at the time.
Then, one day, Eddie was at Clark's house and saw a box. He asked him what it was and that’s where it really began. "I knew in about 5 seconds that this was a winner," said Eddie.
Eddie agreed to provide half of the $6,500 that was needed to secure a utility patent for the Fluzzle Tube. He and Clark agreed to launch a business together, splitting the company 50-50.
They filed for a patent at the end of October 2012.
"We were so excited about the product that we didn’t want to tell anyone about it," said Eddie.
"I had decided I needed to drop out of school to focus on the business," he continued. "When I told my mom she lost it. Everyone was mad with me, especially as I was so close to finishing school. But I knew that this was a great opportunity that I couldn’t let slip through my hands."
The partners have clear-cut responsibilities in their company: Clark is all about the product and getting it right, and Eddie concentrates on the business and sales side.
The first obstacle Fluzzle Tube encountered was finding domestic manufacturing. “Currently there are no domestic facilities that have the production capabilities of what we need at a cost-effective price,” said Eddie.
As a young company who wants to make an impact on the first year, Eddie said it was very important to be as cost-effective as possible. “In today’s global economy, attaining a competitive edge is vital. With many companies competing in crowded marketplaces, having to compete on price alone has become a reality for many companies,” said Eddie.
"We found Alibaba.com and did lots of research to find the best manufacturer," said Eddie. The pair worked with China Machinery Engineering Company to perfect their design, get samples and eventually fly to visit in person.
"It was our first time in China and we loved it," said Eddie. "We were there for 10 days and we got a mold and a prototype made." Earlier this April, they traveled back to see the first batch of tubes being made. Seeing stacks of tubes coming off the assembly line was when it hit home that they had really done it. "It was a teary-eyed moment!" said Eddie.
"People get upset; (they) have this romantic notion to keep it domestic," Eddie said. "It's just not realistic. We would like to produce them domestically someday, but right now it's a fraction of the price to manufacture in China."
Getting into retail stores
The entrepreneurs' big break was when they reached a buyer at Big 5, after calling non-stop to try to connect with buyers at sports stores. The buyer had only been in the job three weeks and came from Texas where “floating” is big.
"She fell in love with the Fluzzle and said she would talk to the senior buyer," said Eddie. "Then we got a call asking if we could come to Los Angeles and bring samples. We went with our photo album and sample -- we were so nervous!"
Big 5 ordered an initial run of 3,200 units.
The entrepreneurs needed funds so they talked to angel investors, venture capitalists, private individuals and banks. However, nobody wanted to help them initially. Banks said they were too young and that they had no track record. "Even though we had orders, we were still considered too risky," said Eddie.
"Finally we found an investor who liked our product," Eddie continues. "He gave us a check on the same day we presented it to him. The timing was great – it was the day before we had to send a 30% down payment to the manufacturer! A friend of our first investor came in a little later and gave us funds. Both of them took equity in the company."
Since the company's online store went up this year, sales of the Fluzzle Tube have gone through the roof. Much of the marketing they have done has been driven by social media, including cross-promoting their products on river community Facebook pages, for example.
The young entrepreneurs have also been fortunate to have had the insights of a valuable mentor. One of their investors introduced them to Greg Lehr who used to be a VP at Wham-O. "He has become my mentor. I speak to him nearly every day. He is providing invaluable guidance," said Eddie.
As for the future of Fluzzle Tube, the founders are talking to larger stores about new orders. They say they are looking to "go really big." They are looking to bring in a distributor and sell at least 500,000 units next year. They are also working on a new line of innovative water sports products including floating coolers.
"We know this is our moment: we need to hit the inflatable market hard and strong and make an impact quickly," said Eddie.
Fuzzle Tube website: www.fluzzletube.com