Phone Accessory Company Hits $2.5M Revenue 2015 with Noah Rasheta of iStabilizer

Noah Rasheta

In Episode #415, Nathan interviews Noah Rasheta, CEO of iStabilizer and Fotopro. Noah has learned the ins and outs of getting your product into a store like Walmart. His experience negotiating with these companies is extremely valuable, and he was able to come out with a great deal for his company and for the retailers he has worked with.

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Famous Five:

  • Favorite Book? – Drive by Dan Pink
  • What CEO do you follow? – Richard Branson
  • Favorite online tool? — Asana
  • Do you get 8 hours of sleep?— No.
  • If you could let your 20 year old self know one thing, what would it be? – Just go for it. You will figure things out as you go. Pull the trigger, and then figure it out.

Time Stamped Show Notes:

  • 01:40 – Nathan introduces Noah
  • 02:15 – Previous challenges making deals with other companies
  • 02:30 – They have gone back to sell to Walmart
    • 02:50 – Walmart originally did not want to put the product with smartphone products, but with camera products.
    • 03:30 – A year later they put the product back in the right isle.
  • 03:50 – The Walmart deal
    • 04:00 – These companies do what they want.
    • 04:10 – It took several deals and negotiations to get a good deal for both parties.
  • 04:50 – His company develops and manufactures photography accessories for smartphones.
  • 05:05 – They were featured on CBS’s “Innovation Nation”
    • 05:50 – They sold almost 1000 units within hours after that feature
  • 06:10 – They can barely keep up with demand for their products
  • 06:25 — Founded in 2010
  • 60:40 – Total revenue last year was $2.5 million
  • 07:05 – The gimbal costs about $160 to produce
  • 07:30 – Gross margin is 45%
    • 07:45 – The tricky thing is to balance profit margins for this product compared to their others
    • 08:40 – It takes a lot of negotiation
  • 09:00 – In-store margins are priced differently
  • 10:15 – Other expenses
    • 10:30 – Money on advertising through Google adwords and Facebook.
    • 10:45 – About $30 to acquire a sale
    • 11:00 – Overhead expenses
  • 11:10 – The team has decreased to 3
  • 11:35 – Managing to a zero net margin for now
  • 12:08 – Individual customers are about 50000
    • 12:30 – Include wholesale would be a lot more, near 700,000
  • 12:55 – People who reorder from the website: 3 orders over a lifetime
  • 13:25 – Average first purchase is $45
  • 13:40 – Products start at about $20
  • 13:55 – Totally self-funded
  • 14:05 – They have looked into raised capital
    • 14:25 – He doesn’t have the resources yet in terms of volume
    • 14:50 – He can’t grow that fast
    • 15:00 – He is looking to raise $400000 with an investment banker
    • 15:20 – He is willing to give a portion of equity
  • 16:05 – Connect with Noah on Facebook, Twitter, and Instagram.
  • 27:40 – The Famous Five

3 Key Points:

  1. Don’t settle for a wholesale deal that won’t benefit your company.
  2. You can keep overhead expenses down by having a smaller team size.
  3. If you have an idea, just go for it. Don’t waste time working out the tiny details.

Resources Mentioned:

  • Toptal – Nathan found his development team using TopTal for his new business Send Later. He was able to keep 100% equity and didn’t have to hire a co-founder due to quality of Toptal developers. 
  • Host Gator – The site Nathan uses to buy his domain names and hosting for cheapest price possible.
  • Freshbooks – The site Nathan uses to manage his invoices and accounts.
  • Leadpages  – The drag and drop tool Nathan uses to quickly create his webinar landing pages which convert at 35%+
  • Audible – Nathan uses Audible when he’s driving from Austin to San Antonio (1.5 hour drive) to listen to audio books.
  • Drive – Noah’s favorite business book.
  • Asana – Noah’s favorite online tool.
  • Connect with Noah on Facebook, Twitter, and Instagram.
  • Show Notes provided by Mallard Creatives.