Bart Bradshaw: (00:26)
Hey builders, direct to consumer is a big deal. It’s time we talk about that in depth. So Wyze, you may have heard of it, w-y-z-e, was founded by four ex Amazon employees who saw a hole in the home security market. They wanted quality cameras with an affordable price tag, so they developed a $20 security camera. It turns out the market hole was bigger than they thought. On launch day, they sold out their 10,000 units and in the first six months they sold 300,000 units. They recently raised 20 million in funding and with us today is one of the cofounders, Dave Crosby. You might also recognize Dave from season 13 of the Voice or his family, his YouTube channel where he duets with his daughter, Claire.
Bart Bradshaw: (01:12)
Dave, thanks for joining us today. Thanks so much for having me. Absolutely. So I’m really excited to talk with you about Wyze, you know, very cool company. Before we get there though, as we do with all of our guests, I’d like to back up a bit and just ask you a question. Like, have you always thought of yourself as an entrepreneur?
Dave Crosby: (01:30)
Uh, I, I would say yes. I remember many times in, you know, going through business school applications and going through business school when I was asked that question. And for the most part I would say yes. That was definitely where I was headed. I mean, there were times when I got a little bit scared. I had to be totally honest and I did different things, but I’ve always had kind of that drive to be an entrepreneur and I’ve gravitated towards those types of opportunities for sure. What did you study? Undergrad? Uh, I did, uh, undergrad. So this is kind of a weird, especially if we get the rest of my history, but I actually did accounting looking back, I have no idea why I studied accounting. It’s kind of a long story is basically my, my dad had talked me into it. That’s what he did and he was all about like stability.
Dave Crosby: (02:14)
He knows he’s not much of a risk taker. So it was all about do what’s always going to be needed and he’s like just to accounting. And at the time I was going to BYU and their accounting program was like ranked number one in the nation. So I was like why not just do accounting then figure out my life after that. It turns out I hated accounting. So are you sure it was number one in the nation? Cause I went to the university of Texas, got my masters in accounting and it was number one as well. So probably depends on who you ask but I know it was definitely in the top three and most of the things that I saw.
Bart Bradshaw: (02:48)
Yup. Illinois, BYU and Texas are always top three. No, and I just mentioned that because you know, you and I are the same in the sense that uh, we think of ourselves as entrepreneurs heart, but we did get accounting degrees at one point.
Dave Crosby: (03:02)
It’s the language of business, right? It’s like you got to learn the language of business and then you can go and communicate and speak the language and do whatever you need to do. Whether or not that’s true, I don’t know. I don’t know if it was super helpful for me, but I do have an accounting foundation which, which has been good I guess.
Bart Bradshaw: (03:17)
So where did you go from there? Did you actually go into work in accounting?
Dave Crosby: (03:20)
Yeah, so I actually went in, you know, I had, um, so this is kind of entrepreneur ish of me, but I had offers to go to all like the big four accounting firms.
Bart Bradshaw: (03:28)
And it’s very hard to turn those down cause that’s where the school seems to be going.
Dave Crosby: (03:32)
Yeah. Everyone’s going there. That’s like the cool thing. You didn’t get enough from price Waterhouse Cooper, Ernst and young like, so I got some offers and I was excited about it. But then, um, I, at the end of the day, this, this startup company was, was around accounting. They were doing this like really interesting thing called a cost segregation study is basically a whole business that was built on, on a tax loop. So I don’t know if you mean accounting, you probably understand that, but it basically speed up depreciation on buildings, which I know sounds like the dumbest thing ever. But um, it was actually kind of unique at that time. So I actually turned down those offers to go to the big four and I was like, you know what, I’m going to go join this little tax loop startup and see what happens. Interesting. And that’s what I did. And how long were you there? I was only there for a year and a half.
Dave Crosby: (04:15)
And so although I did appreciate the entrepreneurship of that experience, like I quickly realized like, why am I in accounting? I’ve always been like a musician and an artist. And so for me it was like, what in the world, why did I major in accounting? This is like the weirdest thing ever. So I mean, I was just in like spreadsheets all day and I was doing taxes and stuff and I was just like, I just, I quickly realize like this is not the path that I laid out from my life. I, I want to do more than this with my life. And um, yeah. So I, I turned around and I, I started playing music. I joined a little, like a film company for awhile and started writing. It’s kind of a side gig I was doing anyways. I just made it more of a full time thing.
Dave Crosby: (04:53)
But, um, started writing music for film and like commercials and stuff and started gigging on the music side of things. And then I went back to business school. And so were you married and did you have the time? I got married at that time and so what really happened is I was like, I was like, I’m done with this account today. I’m going to go play music. And then, um, and then I had a kid and then it was like, that’s when reality really hit me. It was like, I, I do want to be a musician. Like this is my true passion and desire to like make art, whatever the format that might be. But, but when you have a kid and like it was a, it was a total wake up call for me.
Bart Bradshaw: (05:28)
A lot of responsibility.
Dave Crosby: (05:30)
Yeah. I was like, I could either like try to grind it out cause my plan is like, I’m just going to go play music.
Dave Crosby: (05:33)
Right. And so, um, I can either grind it out as a musician and give my kid basically a terrible life where we’re always living paycheck to paycheck. Um, or I could do something more responsible with my life. I didn’t really have a ton of guts, I guess that time to go for music, even though I wanted to, I just felt like I had, I owed it to my daughter to do something more for her. And so that’s when I actually went back to business school. But, but my, my, um, goal and going back to business school was to do something artistic with business, some, some way to blend those two passions of mine.
Bart Bradshaw: (06:05)
Okay. So how long did you kind of dabble in, not dabbled, but pursue music before you decided, Hey, I need to go back to business school after quitting the accounting startup is about a year.
Dave Crosby: (06:18)
And there was a lot of blending in between. Like I, I didn’t just jump out cold Turkey. It was, it was, um, I had side opportunities. Yeah. Yeah, there’s a bunch of side gigs and then it kind of jumped out and did it, did it for awhile. And then I went back to business school.
Bart Bradshaw: (06:28)
Got it. And where’d you go to business school? I’d be why you went back to BYU. Okay. It’s, uh, it’s one of the lowest costs for the high ranking status. Like seriously.
Dave Crosby: (06:39)
So I applied to different schools. I was in to go to university of Washington. Uh, my wife’s from Spokane, so we were kind of looking at Washington state anyways. So, um, when I looked, started looking seriously at these programs and how I had the offers and stuff, it was like the cost is just no question BYU the ranking.
Dave Crosby: (06:56)
And it was, yeah, easy, easy choice.
Did you use business school as a time to kind of not only potentially get you know, some corporate career where you have enough money to take care of your daughters and family but also to like look into entrepreneurship. Yeah. So that’s, that’s when I kind of say with the applications I was going to go full on entrepreneurship, like I’m going to start something. And then, um, I got into some of those programs. Basically what I realized is like I didn’t really necessarily have to major in entrepreneurship to be an entrepreneur. Like I can still do that. So I actually ended up putting my emphasis in marketing just because I wanted to do something that was, like I said, artistic and more on like the advertising side. So, um, I chose to go that route just for the connections on, in the marketing side.
Dave Crosby: (07:41)
Um, but yeah, I’ve always had the entrepreneurship thing in the back of my mind for sure.
Bart Bradshaw: (07:44)
Very cool. In business school where there are a bunch of other like fellow travelers who you felt like not only were kind of going the, you know, um, big corporate route, but also others who were interested in startups.
Dave Crosby: (07:58)
Oh yeah, for sure. Uh, tons of my friends ended up, you know, it’s, it’s, it’s especially hard when you get to business school because you start getting offers from corporations that are like more money than you’ve ever seen before in your life. Yeah. And um, I don’t know, we’ll probably do that later, but I’ll, I, it was hard. I couldn’t turn it down when I eventually went on and worked at Amazon, but, but some of my friends did, like they had, they had these massive offers, not massive, but at the time it seems massive, but they had really good offers, you know, six figure offers and then they, they turn it down and start their own thing.
Dave Crosby: (08:29)
And I have all the respect in the world for those of my friends. And some of them, some of them made it in, some of them didn’t. Some of them tried to grind it out and it didn’t work out. And there’s there, I’m back trying to find a landing place. Yeah. That’s kinda how it goes.
Bart Bradshaw: (08:41)
But yeah, yeah. You can either kind of jump cold Turkey and go after it and you know, take, it’s risky. Right. But it’s exciting too. So Amazon you decided on Amazon?
Dave Crosby: (08:53)
Yeah. So this was kind of, this was excruciating, excruciating decision for me because I, I had like these three things that I’ve discussed is like music entrepreneurship, but also my wife is very different from me and she was like, stability, we want stability. And so, um, you know, don’t need to jump too into the weeds there. But like that was her emphasis.
Dave Crosby: (09:11)
And so I was trying to find a balance of like my, my passion for music and entrepreneurship and stability for my wife and my kid and um, two kids at that point, I had another kid in business school and so that’s why I landed at Amazon. I got this really interesting job offer for Amazon. On the retail side, on their musical instruments team. So it was a really cool blend of like, I just, if you ever bought a guitar or like a keyboard or a recording equipment microphone or something about off Amazon back in 2014, 2015, like that was, that was me, that was my team. I was managing parts of that business, especially guitars and pianos and sound recording equipment. So, um, that was a really cool opportunity for me to work in like business. It was, it was very entrepreneurial. That’s what I loved about Amazon.
Dave Crosby: (09:51)
It’s like they give you a ton of ownership, so it’s like you build this guitar business, like go, go find out ways to do it. And then it was also obviously music, I was working with these vendors that I’d grown up just like huge passion for some of these vendors. Right. Um, I grew up loving their brands like Taylor guitars. Yeah. And then, um, you know, it was also a very stable job, especially at the time Amazon’s stock was doing awesome. And so it was, it was a great job. I loved it.
Bart Bradshaw: (10:16)
Yeah. I feel like, uh, you and I are kindred spirits, or at least we have adventure because my wife started out the same with stability is one of the core needs that she had. Um, even though I wanted to kind of go the entrepreneurial path, I had to really think about, you know, how am I going to do something that works for both of us?
Dave Crosby: (10:37)
Man, it’s so hard. It’s still, it’s still hard. Even with the successes that we’ve had, like the living as an entrepreneur is just like living in an, this is very unpredictable and so it’s tough on family and you have to be super respectful that if you’ve got a wife and kids that like just trying to balance the way that they feel about everything.
Bart Bradshaw: (10:55)
Yeah. Okay. So tell us, tell us what happened there. How long were you at Amazon?
Dave Crosby: (10:59)
Yeah, things, things really get crazy. So yeah, like I said, I loved working at Amazon. I was only there for just over a year actually because what happened is, um, a number of things. I guess I’ll start with, I, I had had, I’d always been really into like YouTube and I had had a couple of YouTube channels that I tried and failed. I mean, at the time I felt like it was decently successful.
Dave Crosby: (11:21)
I had my own like music, YouTube channel. I had like 10,000 subscribers or something. And um, I was like, I was like, this is okay, but it wasn’t really like making money, you know? I was doing okay. But, um, I started doing like, I did like an entrepreneurial, like I had Allie. Have you ever seen the show? Uh, Nathan for you? Just like my favorite show ever. But it’s like, it’s like this idea where this guy has dumb, so he gives like terrible advice to startups and it just results in hilarious things. Like I had this idea to start a YouTube channel called the Kickstart Steve, the basically that we would just launch a bunch of Kickstarters for stupid products and see if any of even funded was actually build them. That was kind of fun, but I mean, didn’t really work out obviously.
Dave Crosby: (12:01)
So there’s like these number of these, like those types of things like blending the artistic and entrepreneurial passions that I had that I had started as side gigs over the time and they all basically, um, you know, failed. So then, then I have, uh, this daughter Claire, and at home she starts, she starts getting really into Disney movies and, um, and I don’t know how much you wanna get in the story. Basically I realized that she can like sing pretty good for a three year old. Yeah. And I think it’s, I think it’s adorable, but I’m also like really self aware and, and understand that everybody thinks they’re the cutest thing in the world. Yeah. Yeah. Like I watched this documentary once, it said like how, how much bias there is for thinking that your kid is the cutest and literally every person thinks that their kid is the cutest kid in the world, right.
Dave Crosby: (12:42)
So I understand this. And so like she’s singing in it. I think it’s absolutely adorable, but like I, that’s, that’s about as far as it goes. And then we’re at this one time, we’re getting an oil change. I’m just like in a Jiffy lube and I’m getting my oil change. And like, she starts bursting out in song in this little mermaid song, a part of your world’s like in the waiting room. And so she starts singing and she’s like doing all the actions with their hands and like going around and just like so passionate. And she was just like a really funny little girl. And like these people start whipping out their cell phones and recording your performance. Wow. And then there’s like dying laughing, like this is adorable. And that’s when I had the moment, like I was like, what would be kind of funny?
Dave Crosby: (13:17)
Like I, I love music. How fun would it be just to like start a YouTube channel with my daughter where we just like make little music videos. Yeah.
Bart Bradshaw: (13:23)
What’s that called?
Dave Crosby: (13:24)
And so, uh, so the channel is called the Crosby’s. Okay. That was when it was born. So we went home and we recorded our first music video, um, part of your world from the little mermaid. And I just had her sing in a microphone. It’s pretty edited. Like she was only three. So I had her like sing it in bits and we recorded the whole song and we made a little music video of like us showing us, making the actual song, like just showing her singing to the mic and, and then I just put it on, uh, my Facebook page and YouTube. Yeah. And then I remember I went to like this conference for Amazon.
Dave Crosby: (13:55)
We had this big vendor meeting called Nam and you’d go down and um, meet with all the vendors like Gibson and Fender, all my big vendors on there. And like my phone just starts blowing up. Like I’m just like, what is going on? So I keep checking this video and it just like gets more and more views and then all of a sudden these reporters, I’m sitting there, I’m going to to meet with vendors and reporters are just hitting me up like crazy. Then like all these different, um, people start writing about it. Then all of a sudden celebrities started tweeting about it. It’s like Nicki Minaj tweeted it. Jenna Fisher.
Dave Crosby: (14:27)
Um, the video, like that’s the thing that was weird about it cause I posted the video and it was, it got a lot of like traction from like my friend, my friends. Like this is like adorable. I can’t believe it. Yeah. But then this was like three weeks later, three weeks later out of nowhere someone found in, wrote an article about it and then it just spread like wildfire among like the media cause then they saw the article and someone else started about it and then it started getting international news and then like celebrity started tweeting it and that’s when it just blew up. It got got, they got like a hundred million views on ’em on Facebook. That’s the thing. It’s like this is mostly on Facebook now. YouTube, I think YouTube has, I don’t know, 20-25 million views or something, but YouTube or Facebook is where it like totally blew up.
Dave Crosby: (15:04)
So that was a like a really fun experience. Obviously I didn’t really, we kind of did the rounds on different media interviews on TV. She went on Little Big Shots, which was like a show with Steve Harvey. Yeah. And um, but, but she’s still like, she was a super talented little singer. So, you know, we made another video shortly after that and it was a, you got a friend in me and um, that was actually, it was funny cause America’s Got Talent had called me and they’re like, Hey, we want you to come on America’s Got Talent with her and with her you to sing. So I was like, okay, cool. So, um, they’re like, we need you to record like a live video of you guys seeing. And then before it, it was like an edited videos produced. Like she’s singing into a microphone. I had a reverb on it, all kinds of stuff.
Dave Crosby: (15:48)
And they’re like, we need to see how she sings, like without any editing. Right. So I was like, okay, sure. So I set up a camera on the couch and I just record her singing. “You’ve Got a Friend in Me”. And I literally like, I thought it was cute, but I was like, I didn’t really think it was anything like crazy. And then I posted it to YouTube. First of all, I put it private because it was just a private audition for the America’s got talent. Yeah. But I was like, I’m going to just make this public, like our fans will think this is cute. So I made it, I made it public. And that is when like truly our lives were changed that. So that video just blew up. So that video got half a billion views on Facebook and.
Bart Bradshaw : (16:23)
You didn’t have an expectation that it would go like that?
Dave Crosby: (16:25)
Oh like, no, I had zero expectation. I couldn’t believe it. And then so what happened is as soon as that went viral then, then we got a phone call from Ellen and Ellen was like, you guys got to come on the show. And then America’s Got Talent where they reached out and said that was our audition. Why did you make that public?
Dave Crosby: (16:42)
I was like, sorry, but I got to go on the Ellen show now. They’re like, well, don’t go on the Ellen show. Come on, America’s Got Talent. Um, anyway, I was like, well, I can’t just not do the Ellen show. So then we went on the Ellen show and you know, that was an awesome experience. And then what happened is like she did so well on the, on the Ellen show and they signed us to like a longterm deal. So we went, we ended up going on like 60 on this show.
Bart Bradshaw: (17:00)
Yeah. Wow. That’s cool.
Dave Crosby: (17:04)
So I’m jumping back to your original question of, of Amazon. So obviously I’m still working at Amazon during all this and um, people at Amazon know what was going on. Yeah. I mean, my manager, they, they definitely had to know and she was in like a movie she had, she had all these different cool opportunities that were a result of this.
Dave Crosby: (17:22)
And, and I had to just take, I was taking work off like crazy. Like I used up all my vacation days very quickly. My manager was fortunate, like super nice. Amazon in general was like so cool about it, but like just, just take, just go like, don’t worry about it. I work from home, work when you can. We’ll just say it’s a work from home day, um, unbelievable cold, like help me do that. But it just got to a point where like I, I couldn’t hold my job. Makes sense.
Bart Bradshaw: (17:44)
Cause you had to be there for all of her performances.
Dave Crosby: (17:47)
Yeah. It’s like it was a lot of it was like, yeah, me and her, it was like kind of a daddy daughter thing even though she was obviously the star. I was like her little sidekick. So I’ll kind of pivot that story into like what was actually happening and when I actually was working there at that time.
Dave Crosby: (17:59)
So my vendors, Amazon so say fender and Gibson, their traffic was getting destroyed. We couldn’t figure out for the longest time why their traffic was so down. Um, cause these are like super traditional brands that were doing really well and we couldn’t figure out like why are, why are they not doing well on Amazon? It was like out of nowhere all of a sudden. And so once I dug into that problem and finally figured out what was going on, I found the different people that were, that were stealing the traffic. It turned out to be like these absolute no name companies like, like you never heard of these companies before. Stealing all the traffic. And as we dug into like the Amazon algorithms, we start seeing that like these handful of companies stealing all the traffic, we’re just making guitars incredibly cheap and then they’re getting great Amazon reviews.
Dave Crosby: (18:43)
So you this a combination of really cheap and great reviews and turns out they were just like manufacturers from kind of all over the world, like China in different parts of the world where they, these, these super lean manufacturers they can, that can make stuff really cheap or selling on Amazon and just killing it. Which I kind of learned a base happening across the board on Amazon, right? Oh yeah. And that, so I talked to my friends like in different categories. I was like, are you guys seeing this? And everyone’s like, yeah, like this is, this is definitely a trend right now. Amazon is like leveling the playing field. It makes it so anyone, anyone can start a business and compete with the major brands. That’s what was so cool about it. Especially someone with an entrepreneurial spirit. It’s like I could literally find a guitar manufacturer and go sell on Amazon and if I have a lower price and if I can manage to get good reviews, I can beat off vendor.
Dave Crosby: (19:27)
Like I don’t need their brand name anymore. Like I just need [inaudible] like people trust Amazon reviews so much that they’ll just look at price interviews and they don’t care about brand anymore. I’m just shouldn’t say they don’t care because obviously brand plays a, uh, an important part. But the, the playing field is absolutely been leveled with Amazon. That’s what I saw. Huge pros and cons to that. Right. Um, for different companies, big and small. Yeah. But for me, like my entrepreneurial spirit was like going crazy because I was like, man, what industry can I disrupt? Yeah. And especially cause I have access to all this data working at Amazon. Um, what products can I find that like have huge holes in the market where things are just way over priced and we can find a better manufacturer and just sell it crazy cheap and get good reviews and build a company that way.
Dave Crosby: (20:14)
So that that is playing out in my mind this whole time my stuff is going viral with my daughter. And at the same time I heard you say somewhere or we saw in an article that you were kind of like, I didn’t want to, you know, just capitalize on my daughter’s success. Like you can just [inaudible]. So that was the other huge question. And that at that point that didn’t come to become an issue until later on. Like when it came to the point where I had to quit my job at Amazon because I couldn’t do it anymore. And so then it was like, okay, now I’m literally just living off of my daughter. Like she, she is providing for our family. And this is crazy. And a lot of people do it. Like a lot of people make the daily blogging thing work. And we started a YouTube channel and we started doing vlogs and different videos and some of them were kind of dumb, but some of them and some people were watching them and we’re, we’re making money. But it was like, it was like, this is just what I’m going to do with my life. Like, am I going to say my daughter is like providing for us? This just feels so good.
Bart Bradshaw: (21:05)
So you had this kind of inspiration, like I could go and start a business, but at the same time, um, your YouTube channel with your daughter is kind of the, the main star and you as the big sidekick, um, was taking off. And then in order to keep up with that, which was something good, something she loved, I’m sure you decided to take the leap and you started to monetize that, but you hadn’t yet started Wyze, is that correct? Had not yet. Sorry.
Dave Crosby: (21:34)
So there’s actually a little bit of an in between. So what happened is I’m looking for industries that need disrupted. And I looked at the drone industry. Um, there was a couple of their players, but really there was only one main player in the drone industry and those DJI and there they had super expensive drones. And, um, I worked with some people that I worked with Amazon, uh, you know, we worked together, we decided that let’s go start a drone company. Let’s go, let’s go start. Like, you know, let’s do this and go, go capitalize on this trend of cheaper manufacturers making good product. You know, that’s a, that’s a pretty long story in and of itself. But basically the deal that I worked out with some of these guys that I worked with Amazon on his, um, we didn’t have a crazy huge following on our YouTube stuff yet.
Dave Crosby: (22:13)
I was like, Hey, I’m gonna work, I’m gonna work for the drones four days a week. Give me one day a week where I can just go and do nothing but work on my YouTube channel, my daughter. So that was, that was what we did for a year and it was called auto robotics. It’s theirs. They’re still around today. But we did that, we did that for the next year. And so as, as I was still working on that startup, uh, I still had my YouTube, I was building up the YouTube side of things as well. I would say that was my biggest entrepreneurial like thing to that point in my life. Like I’d done other stuff, but that was the one that was generating millions of dollars in revenue. Oh wow. So this one, at that point I get a call from the Voice, the TV show, the Voice, and they’re like, Hey, we saw you singing a video with your daughter and I, and our contract with ’em some contract with one of those shows, little big shots or the Ellen show hammer had had given me freedom to actually do something else at that time cause we were locking the first contract.
Dave Crosby: (23:00)
So like, we want you to come on the Voice and, uh, you know, be a contestant. So did a lot of thinking about that. Decided it was a good point in my life because I could quit. I had a little bit more financial freedom. Um, and so I was like, I’ll go take it. You get paid on the boys too and it’s, it’s not, but I was like, we’ll go, I’ll just go try this out. So what happens is when you’re on the Voice is you have to go to LA. You know, I, I straight up left my family for like two months. Oh wow. That long. Yeah. It’s actually, I don’t, I still don’t understand why they do it the way they do, but, but you, you go and leave your family. We lived in Seattle still because we were from the Amazon thing.
Dave Crosby: (23:37)
We were still in Seattle and they sent me down to LA to be on the Voice. So I mean it was an amazing experience. I loved there. So like you’ll go to these, you go to like I’d see a Voice coach, you’re basically busy like one or two hours a day and then you have like the whole rest of the day just to like hang out with friends or do whatever you want. So I did, I mean, I made good friends but, but I spent a good portion of my time on the Voice just like in a hotel room thinking about what’s interesting is like now that this drone thing is over, I knew that the trend was still alive and well at Amazon that like you could find like a Chinese manufacturer or find something and, and build a business off of and compete with major brands and just beat them on price.
Dave Crosby: (24:18)
So that’s when I really, um, I was in just tons of phone calls with my guys from Autel and Ilana, uh, or one female cofounder and we, we had a lot of discussions on what was next. And, um, basically what we had planned is we planned to go. It’s a little bit of timelines, a little bit, I’m telling a little bit off. But basically we, we went to China right before I went to the Voice. Okay. So we went on like a road show, basically one we wanted to find like the next thing that would fit this trend, but we didn’t really necessarily know what it was at that point. So you went to China to kind of see what was being manufactured in different places or, yeah, it’s almost like knocking doors. Like we knew we were a really talented marketing team and we knew that the drones had kind of failed, but we didn’t, we felt like it wasn’t on us as like marketers more than, I think it was on the technology.
Dave Crosby: (25:07)
Like we couldn’t build better drones but we could sell unravel. Uh, so it was like, what else can we do this with? And so we went out to China and we just started, we met with like 20 different products over the course of like two weeks. So this was just you and a couple of your friends from a previous startup? Yeah, there’s four of us, yet four of us that were all auto together and it was, it was more like we met with this guy and they’re like, Oh, you guys should talk with these guys over here and you talk with these guys over here. So what it came down to is like we, we, towards the end of the trip, we met like this camera maker and basically they showed us this camera that just completely blew our minds. Like we could not believe how awesome this thing was.
Dave Crosby: (25:48)
In what way was it awesome compared to what you had been familiar with? Like during all these travels? Before I had, I needed a security cam essentially and I, I’d bought this other one off Amazon that was just, it was pretty cheap. It was like 40 bucks or something like that. And it was just so bad. Like the software was so bad on it and it never worked at all. And so I tried to upgrade, but the only other option was like a $200 ring or nest Keon. And so there was nothing really in the lower price range that could, that actually worked. And besides that one, like there was, there was really nothing even like everything was at least $150 there were, there were very few options below 150 $50 and even the ones that were there didn’t, didn’t work at all. Like they had terrible reviews like two, three stars on it.
Dave Crosby: (26:30)
They were already making this camera but they were making this camera. Yeah. And so they were selling it to a company called shall me in China and show me is like a big, if you only, if never I’ve heard of it. Yeah. It’s a massive Chinese company. They call it like the Apple of China and really, really cool like young kind of new age company. And we visited show me when we were out there and like w I was super inspired by what they’ve done in China. It’s really cool and it’s like, it’s really like an awakening for me that like growing up for me is like if you got like a Chinese, it’s almost like a Chinese knockoff. You didn’t expect the quality to be the same, but it’s really an eye opening experience. It’s like China is like killing it right now. Like they have super talented manufacturers out there and really, really smart people that are just making awesome.
Dave Crosby: (27:13)
Yeah, you can get the really cheap stuff, but you can also get really advanced impressive stuff. Yeah, exactly. Like their, their AI, all this stuff that they’re doing right now is super impressive. So going out and visiting, show me it, seeing that was really inspiring to me is like that they’re just really talented people over here and just good people too. Like met just some really, really great people. So yes, the reason that we were so we love this camera so much is because it worked. Like I saw it working just as good as any of the major players, like any of the ring cams or the nest cans are looking at a much lower price. And then when they told us the cost, like, Hey, if we wanna do this, what this would cost them to make it like I could not. And so, I mean, I’ll tell you right now, it was, it was just under $20 was the price.
Dave Crosby: (27:58)
They could make this camera for doing the math in your head. You’re like, yeah, it’s like there is so much margin, there’s so much margin to be made on these cameras if we can figure out. And so the other cool thing is they were already producing them at scale cause they were selling them to show me. And so they, the hardware was done, but we knew if we were going to take this camera and then bring it to the U S like we wanted to totally redo the software side of it. We were going to take their hardware and license the hardware, but we want it to be super secure and a very American experience. We don’t want, we wanted to make an American company, you know what I mean? Like, so we took their hardware and then we just built, we just went back and hired some engineers and built the software from scratch where you control the user experience, the user, we control everything.
Dave Crosby: (28:41)
And there’s no like fear of like, yeah, we wanted to be be our own thing, just use this hardware and build it. We feel very good about the product and everything that it works. How long did it take you from when you were in China looking at this thinking there’s an opportunity here to like create the company for one and then to like actually go and get the product to the market. Yeah, so this is what’s happening while I’m in the hotel on the Voice, like we’re doing all this market research, I’m pulling data, I’m looking, we start hiring some engineers, you know, this is all happening while I got all this free time in the hotel by myself. So that was, I think we officially formed the company Wyze in July, 2017 minutes. Wyze. And then that’s when we got back.
Dave Crosby: (29:25)
So I, that was about the time I got back from the Voice. I lost in the battle rounds, which is a bummer. There’s a whole nother story, but no, I should have, I deserve to lose. I just feel like it was a, I learned a lot from like a confidence standpoint. Like I didn’t feel like I deserve to be there because I feel like I was kind of there because my daughter had Android. And so I feel like my confidence was kind of weak. And looking back on the time, I was like, I should just like believe in myself more. I didn’t have enough confidence. I guess there’s a lesson for that. But honestly, ever since then I believed in myself so much more because I know that I lost because I had shaky college. So I think that has helped me so much in my next venture.
Dave Crosby: (30:02)
Like I believe in myself so much. I would say it’s a good, uh, um, analogy, right? It’s so much of life is like a mental game, right? Like if you went in your mind, you can just do like amazing things. So that’s what I learned from Alex Collins. Okay. So tell us the, you know, why’s, what was your role? How did it form, um, beyond that? Yeah, so I came back from Wyze and then we started going full time. Um, at on Wyze and actually the Autel the people auto are really cool cause they actually let us use the corner of their office even though like that’s why I say it didn’t end like in a contentious relationship, we actually just stayed in, rented one of the little corners in their office. Cool. And, and started Wyze out of it. So, um, we started with like, we kind of embraced the lean startup and like we, we started with a very, very basic product that could pretty much just live stream.
Dave Crosby: (30:48)
Like if you just wanted to put a camera on your dog or your baby or an elderly parent or your front door while you’re gone, you can just live stream it from your phone. And um, had like a basic emotion detection. And we launched that product on October 24th, 2017. So we’re coming up on two years and um, that works. Having a big celebration this week for his day is what we call cool. That’s probably before you’re gonna post it. Sorry. That’s probably gonna take this. No, it’s all good. So, um, you’re almost two years in. How did you go to market? Like direct to consumer is a big deal. Getting the Amazon is a, I mean it actually is accessing a bunch of people. Did you feel like you had to do a lot of marketing beyond just some of the ads? I mean it was another that a lot of people rely on so that, that was the craziest thing about this whole experience.
Dave Crosby: (31:34)
I still came back, I’m just like kind of blown away. I remember our first, like we all sat in a room, first of all the price was a huge discussion because we were getting these things for just under $20 and we did all this market research and people were like, you could easily sell these for 40 or $50. And so that was like, that was our plan. Like we’re going to, we’re going to sell these for 40 bucks where to go. And then I remember just this one room, like we are in this conference room and just our CEO is like, what if? What if we didn’t like what if, what if we make a business that’s like we all, we all came from Amazon and this whole thing of like build longterm longevity and trust with your consumer. Like what if we just built the business?
Dave Crosby: (32:12)
What did we just sold this camera for $20 and just what if we just obsess over customer experiences? What if we make like our founding principle is what we came up with in that room is be friends with customers. Like if I had a best friend that was in that room and they wanted to buy this from me, like what would I really give them this product for? And if they’re a friend back, like they don’t want me to lose money on it either. Right? So if that were the case, I’m not going to sell it for double what I bought it for. I’m going to sell it for like barely more than I bought it for. Or even like maybe I give it away at cost. Right. That sounds like big company thinking. Right? It’s like I’m going to be the low cost leader.
Dave Crosby: (32:45)
I’m going to kick out everyone else because we’ve just go low cost and I’m not, I’m not trying to be negative here. I’m just saying this was gutsy to go after that kind of an approach. Yeah, I mean there’s no question this was, this was like the defining moment of this whole next venture cause I, it was so scary and but, but we all had come from Amazon and if you work at Amazon, I really, really admire like the business principles. They’ve just like preach into you and it’s all about customer, like longterm customer first and longterm business. Like build trust with customers. Don’t sell off that trust. Like you build trust and they will be there for you forever. So that, and we kind of had like this vision early on that like this could be more than based on the relationships that we had outside of the camera.
Dave Crosby: (33:27)
We can build more than a camera, we can build like a whole smart home experience. And so what if we, what if we do this with cameras and we just maintain that philosophy, be friends with customers and then build a business on that principle. Every time there’s a hard decision, we point back to like, what’d you do this to your friend? And that’s how we make our decisions. So that was like, we shook on it and I’ll put that in writing. Like this is how we’re going to build this business. And I love that. By the way. Would you, would you do it this way for your friend? Yeah. Yeah. I mean it’s super scary, right? Because there was, I know we lost so left so much money on the table and then, then it came, the question was like, okay, uh, how much of these should we order for our first like big launch? So we were like, we came up with a number, like I think we could sell 10,000 of these cameras. We’ll start with that. So we went back to this factory who signed a shout, me and Mike will take 10,000. What?
Dave Crosby: (34:19)
They seriously like, don’t, don’t waste our time. Like, um, you guys are nothing to us essentially. Like if you, if you want to do this, like we need a minimum of 100,000 orders or like this is [inaudible] at this point. Yeah. So we had got out, we had, we got some money, but no, we got $1 million. So then that’s, that’s a good amount. I’m not saying that’s a small, that’s, that’s pretty, that’s a pretty good amount for any startup. So we had $1 million of seed money and, and um, so we had the money to buy the cow, but the scary thing was like that was, that was, uh, that was it. Pretty much that was, we were going to spend everything on inventory and if it didn’t work out then like we’re just gonna be stuck with all these cameras that like, know that they were saying 100,000, you had $1 million, you couldn’t have done 100,000 times 20 if that was the cost. Yeah. So we did, um, our supplier was actually super generous on payment terms as well. Okay. They made it, they made it 100,000.
Dave Crosby: (35:17)
Okay. This was probably the scariest moment of my life. Um, but w w like I said, we had, we’ve got a lot of help from our seed investors and also our supplier was actually pretty, pretty awesome cause they, people say, what is your core competency? Our supply chain is like more than just like we buy from you as like a business. We, everyone is super invested in our supply chain and I can go into that later. But, but this was like the first part of building that like they really believed in us, this company that like we were the right people and they thought there’s a lot of potential. And so they really kind of helped us out. But they also said we need you to at least commit to 100,000 or this is going to go big and we’ll help you make it work.
Dave Crosby: (35:56)
Yeah, that’s exactly right. It’s like we believe that this is gonna be big and if you’re, if you guys want to think this is 10,000 units, big drought, we need someone. Yeah, let me think this. So that’s, that’s where we, where we ordered 100,000 units. And so we were like, I guess we should hire like a PR agent. So we went out and found like a PR firm and so it turns out like everyone, like we thought, like people were very surprised that we were going to make a tending to be camera for 20 bucks. And so everybody wanted samples. And so, you know, we’ve got all our software in order, we kind of freaking out, but we sent out samples, the tech crunch and Siena and all the major Engadget, all the major publications, all wanted samples. So I sent out samples, put the embargo date for October 24th and we buy 100,000 units and we just launched and pray for the best. And then the next three days were just insane. Like we sold 100,000 units in three days. It was, and we were out of stock like 100,000 units in three days.
Dave Crosby: (36:53)
I mean it just went viral. Like it was weird cause cause I had gone viral before, right? Like I had gone viral in like a music cue daughter’s anyway, but this is completely different audience. Like this is a tech focused on, these are all like guys in their thirties and um, my audience was like 90% females. Yeah. So it was really like a weird kind of cool experience, but it was totally different than the expense I had before. And um, it gets picked up by like every major tech publication out there. Like these Amazon bets all left Amazon. Cause all of us had worked at Amazon, four of us. The story was like Amazon vets leave Amazon to launch a $20 camera, which is a [inaudible] story. Yeah. And we went out of stock and so for the next, I want to say like eight months, like we were just chasing inventory.
Dave Crosby: (37:40)
Like we could not make it fast enough like we are, we were just doing everything we could to make more product and we just, we just took forever. The manufacturers couldn’t like, yeah. And, um, but that also gave us time because like I said, the first product that we launched was very basic. And the whole thing with like being friends with our users is we wanted to take the original product that we made but also like make it way cooler. Like we, we didn’t want to just launch a product and move on. Like we wanted to take a product and like make it better and better until it was just more it. So like a product that is an initial buyer. Has your model become SAS or how did you kind of expand that? We’re still, and that’s still our main, our main, um, social revenue. But we’ve launched several more products down it, but we basically, we get, we get into the Wyze campus, we start building the software on top of it. And they were saying like, we start adding tons of more features. Um,
Bart Bradshaw: (38:36)
you know, detection zones. People only want motion if they see motion in a very specific part of the, the view, like their porch or whatever, not the cars passing on the road. And so it was our building all these new software features in. And then one thing that came up was like, Alexa integration. Like people want to see, use it to like say, you know, Alexa, show me my camera or whatever on their echo shows. And so when we got to that point, it was like we don’t have the hardware that’s capable of working with Alexa. And so we went back in, we worked with our manufacturer and we redesigned the hardware so that it was compatible with Alexa. And then we launched a version two, this was in February, so it was pretty quick. Um, we got feedback from customers and rebuilt it, uh, was we call it Y scam V2 which works with Alexa, works with Alexa and also had a much better speaker.
Bart Bradshaw: (39:17)
That’s the feedback we also got with the two way audio. Is we charge more with all of these additional features? No, no. We keep it all the same price. So the idea is it’s incredibly hard. Like there’s no doubt, but it’s all like that being friends with your customers, trying to lean on that. Like keep it the same price, keep improving the product. And I mean there has to be some profitability at some point. We do. We make money on every product. Like we don’t, don’t lose money. It’s just a small amount. It’s our margin is small. Like you have time. I tell anyone. It’s like, how do you guys survive? And we’re just as lean as we. Do you remember this type commercial you guys did? Oh yeah. So funny story that was actually filmed in my sister’s house.
Bart Bradshaw: (40:00)
I was there on set. That’s funny. That’s awesome. So, okay, so we need to wrap up, but um, w what I want to know is, and you’ve given us a lot of really interesting things to think about, like, you know, this longterm thinking around like what would we do for our friends? Like that’s an amazing principle to build a business around, you know, kind of doing side gigs and seeing what works before jumping off is obviously something to think about for people who haven’t yet jumped into something at the same time. I mean, you’ve taken some pretty big risks. I mean with uh, with Wyze going after 100,000, um, when you thought you could maybe sell 10,000, that that was a big risk and it paid off partly because of the first one, right? That you decided to go with the price that just insane and, uh, exciting to people.
Bart Bradshaw: (40:52)
But I guess kind of last couple of questions. One is, as you think about our builders that are listening to this and you think about your journey, like what’s the most unique and best advice that you can give them based on your experience for whether they’re building their business, they’re already in the thick of it or they’re thinking about it, you know, how can they do that with the confidence that you, you talked about, but also looking for longterm success? There’s a couple things that come to my mind is, um, I think the number one thing is I confidence in yourself. I feel like that has been a huge lesson for me that like, I can do these really crazy things if I just like really put my mind to it. Like I can figure it out. Like, I’ll figure it. I got so lucky. I keep saying, I said to my employees all the time too is like, you are smart enough to figure this
Dave Crosby: (41:34)
out. Like figure it out. You can do it. I know you can do it. That’s kind of like a thing that they almost like mock me with by saying it back to me. Like figure it out, figure it out. Um, so like just the confidence that like when you hire outside firms, it’s really just people that like, they’re just trying to figure it out too. And you’re a smart person. You can figure it out. A lot of really tough problems. And um, that’s something I’ve really, I’ve really taken to heart. Um, the other thing that came to mind is like, first of all product is King. Like you, if you have a good product then that you start there. If your product isn’t good, then you need to go back to the drawing board because you have to make your product remarkable and different. And then once you feel good about that piece, then you just obsess over your customer.
Dave Crosby: (42:15)
Like, just listen to them. And talk to them as much as you can. Like we have hired full time employees that do nothing but sit and like talk to our customers online and try to build mass like what are the things that they want, what are the things that they are seeing that is wrong with our product and how do we take that feedback and and actually build the features they request like like adding Alexa and then showing them that we listened to them because what happens is you, you mentioned before that like we must have spent a ton of marketing. The truth is we spent almost nothing on marketing like all we do is we obsess over customers and we make a great product and we hire a PR agent to go get us articles, but then we just listen to our community and just make the product as good as we possibly can and then they just tell their friends.
Dave Crosby: (42:56)
It’s amazing. It’s amazing there. There are probably hundreds or thousands of conversations happening right now about why is cam between text messages and online that I’m not even seeing an art. The word of mouth is just insane. And that comes because we, we just relentlessly focus on the experience of our product and listening to our customers and making sure that it’s exceeding their expectations. So now when they open a $20 camera, they expect it to suck. But then when it actually works, they’re kind of blown away. And then they go back. We see it every time they go back and they order a ton more and they don’t just order our cameras now. So since then we’ve launched another camera, we’ve launched light bulbs, we’ve launched sensors, we’re coming out with a bunch of new products at the end of this year and beginning next year. And we see them once they try it and they, they’re kind of blown away by the experience.
Dave Crosby: (43:37)
They go back and they buy everything. And so it’s that longterm trust that we built that we went out on a ledge with is like we, we have these guys and this core community that just loves what we’re doing. And they’ll do anything for us. Like, if we need beta testers for a new product, we’ll put out an email and say like, Hey, we need people to test this product. We’ll have thousands of people sign up. Like instantly. Like they’re just so passionate and I’m so, it’s the same thing. Like we have done our best to be friends with our customers, but the cool thing is they have done the exact same thing back to us. Like they are friends to us and that is like the entire platform that we’re trying to build our base.
Bart Bradshaw: (44:09)
I love that. I mean you’re blowing their minds from a customer, your customer obsessed, and it’s blowing everyone’s minds in terms of the expectations that we all have for a $20 product. So they’re, they’re totally in, right? They feel like, Holy cow, the value you have given us is way more than what we’ve paid and yeah. That’s fantastic. Okay, so last question. You know, what’s next for you guys? How big like is why is going to be the next Amazon? Like what’s the future?
Dave Crosby: (44:40)
Yeah, we want to be, we want to be the next Samsung, the next Apple. The next like we are, we’re aiming as high as we can possibly get. Like we believe that our model can get us there with, with the relationship that we have with our users. And um, I always compare it to like Henry Ford. Like we did invent smart home. Henry Ford didn’t invent the car, but he just made the supply chain and the model so efficient that it was just like stupid not to buy a car with smart home. Like no one’s really figured out smart home yet. Like it’s been around for a couple of years, but it’s still not widely adopted. It’s because the prices are just way too high and the setup process is too difficult. It’s not there for the average consumer. So what we’re going to do is we’re going to start by solving smart home and be the first company to make it. So it’s, it’s stupid not to have a smart home because you can get one for one, 200 bucks with Wyze products. And then once we dominate the smart home, we’ll see what’s next. Um, like I said, we want to be huge. We want to definitely beat out just the smart home or the camera competitors that we have, but after that we have our sights set on much bigger things.
Bart Bradshaw: (45:39)
That’s really exciting and I think you have the right mindset and perspective to potentially do that. That’s, that’s really exciting. Well, Dave, thanks again for taking the time to chat with us today. It’s been awesome. Yeah, thanks so much for having me. So my producer actually bought a Wyze camera during our interview to watch. So clearly we’re very excited about Wyze. Um, builders. Go to builttostay.com for links to Wyze and Dave as well as exclusive content and go check out his amazingly cute daughter and his performances on YouTube as well.