This is 7 years in the making
It's 2021, close to the Wooting 60HE launch campaign and I'm discussing the 2022 budget, sales forecast, and expectations for the 60HE with Erik and Jeroen. The other 2 founders of Wooting. More importantly, we're discussing what we expect is going to happen long-term with Wooting and how we're feeling in terms of what we're doing.
We've been chiseling at Wooting for about 7 years now with absolute passion and pleasure. It started with a massive bluff and absolute inexperience in 2015 building the prototype, then launching the first crowdfunding in 2016, and delivering the Wooting one in 2017.
But, as we're growing older (founders are 31-32yo) and we’re getting an increasing amount of private responsibilities, so was Wooting. What started with a relatively simple work plate, has grown a lot in complexity.
The amount of time each of us was able to afford on an increasing amount of various tasks was rapidly degrading. And the business wasn't making enough to afford a larger employee count without financial backing.
We had this one moment when we reluctantly agreed that if we couldn't make the Wooting 60HE work, we should reconsider everything, and perhaps take in a big investor, sell, or discontinue.
Man, even writing that took me 5 minutes of rewording. It's hard to accept that thought because my gut feeling knew that the 60HE was going to do better. No matter what, we got this, I've always relied on our capabilities and our customers to get through anything.
When the 60HE campaign launched in 2021, a major sigh of relief. We got it right, people placed trust in our work, and all our (long-term) investments into this were right where they should be.
The 2022 budget was all we could wish for in terms of development and the prospect of hiring. The reality developed a bit differently with longer lead times affecting sales, this major ARM development, and our risky investments in procuring integrated circuit (IC/Electronic) parts. But regardless, we delivered the first Wooting 60HE by June 2022.
And that risky IC part investment? Well, we initially got it to make sure we could have stock and a large buffer in case sales would turn out higher than forecasted. Little did I know that we'd blast through the forecast and deplete all the buffers before even having stock.
This has opened a new chapter for Wooting.
The pre-orders are a blessing for a small company like ours. We receive the funds in advance for the production, get earlier insight into sales forecast, and it starts a relationship of trust with our customers.
The goal is for pre-orders to not become backorders. Meaning, after we've made the first delivery, we can keep a continuous stock, and if we don't it's a backorder. The expected stock requirement is forecasted with the pre-order sales times a 1xx%.
The Wooting 60HE is a bit awkward with the AVR to ARM development. The production was capped by the available AVR MCU and the ARM model was a new product that opened a new line of pre-orders.
This month we're going to deliver the first Wooting 60HE ARM models, but we'll not be able to achieve stock. More pre-orders are pending and even if everything goes to plan, we'll likely already sell out the next production round before it delivers. Continuing the pre-order streak?
The next production round is already as large as I was possibly able to get it. I depleted all our IC parts and reserved massive slots with the manufacturer. How do I get in front of it?
Plan the largest productions at a scale that I could've never imagined at the soonest possible time with, basically, everything we can afford.
Yep. That decision is scary as hell!
It's difficult to get a grip on the sales forecast when you can't distinguish between a temporary hype or longer lasting trend. In general, I expect sales to decrease over time and settle somewhere until we finally do have stock. But where does it settle? What happens when we do finally have stock? I need a fortune teller.
This is why I created 2 budget/sales scenarios. One scenario is the "this is probably where we'll land" with a pessimistic view and the other is, we can keep up, positive view. I plan production from a positive view but control finances with a pessimistic view. The combination will land us somewhere, and I just hope for the best.
Well, I'm looking at daily sales and calculating forward stressing to my mind that we have to meet our sales targets for it all to succeed. Not a complaint, not a problem, not a life-ending issue, super fortunate even, but stressful nonetheless.
And this all balances on the pillar called customer trust. It means everything to me. You trust us to deliver and make it the best possible; we trust you to have patience and faith in our work. And As long as we haven't delivered your product, we haven't completed our job.
This is why we also have a cancel any time before shipment policy and communicate as often and transparently as possible. It's a bond of trust that either party can break but must work on maintaining with each other. Pre-orders amplify this relationship of trust. Does trust scale?
With larger production and sales, come larger operational volumes. Thankfully, we were ahead of this and have over the last year(s) built:
- Wooting hub for customer-facing order control and information.
- Purchase order system that automatically tracks each (order's) product batch, when it can ship, and how much we have available.
- Moved all warehousing and order fulfillment to 3rd party logistics (3PL) companies.
- Automated order management, processing, and controls.
When it comes to launching crowdfunding campaigns and dealing with pre-orders, you need to take a lot more into account than what a standard eCommerce solution can offer (e.g. Shopify). Somewhat years ago we started to build our custom systems for it and now we are benefitting from that time spent.
We all work remote, so doing our fulfillment was always challenging. That's why we rely on a 3PL in the United States. In the Netherlands, we did it a while for EU/International, since we were bottlenecked with development and more often had to do bulk shipments than day-to-day. We moved all that to a 3PL this year with the prospect of having stock and increasing day-to-day shipping.
I want to grow the Wooting team, but I don't want a bunch of employees. Working as a team means there is good synergy and you're able to achieve more together than individually. When you scale teams, I imagine this grows into departments with their focus area and lots of horizontal communication.
All the while keeping decision-making a weighted average. Weight is distributed by the level of responsibility within the company. Responsibility keeps you alert but at the same time stimulates conservative decision-making. This is why I wouldn't leave all the decision-making to management and/or seniority.
Having a bunch of employees would just result in an increasingly less efficient group of people with few star people compensating for dead weight.
We're not at a scale yet that we face these exact challenges yet and if we were, then I imagine it is a balancing act between building a core team and hiring employees to fill, essentially, a time gap.
Because what I do see now is that growing the team is challenging. We are complete noobs at finding and hiring people. Learning the ropes. And everybody that works at Wooting now is a mixture of chance and events. We saw talent, scrambled a budget together, and got them into the team.
Wooting is now at 7 full-time (incl. myself), 2 part-time, and a few hour-based people. It's enough to run operations at this time, but looking towards the future, we're bottlenecked!
If we want to handle more projects at the same time while expanding operations, we need at least 2 more (skilled) full-time team members. Otherwise, we're going to snail through our projects due to prioritization shifting similar to what has happened to our magnetic wave keycaps.
That's why we now have a Looking for Team page, where you can find all our job listings.
Scaling the shopping experience
Wooting products are only available through the Wooting website, except for accessories being also available on Amazon.
We have in the past worked with several (larger) distributors/resellers, but in the end, I didn't like the workflow and all the disadvantages that came with it. We discontinued all B2B until further notice. It's a rant for another time, point is, there's only one place right now you can get Wooting products. Wooting.
Admittedly, this is not the most ideal place for everybody in every country for very practical reasons. It's also challenging for people to purchase outside their regular store or when they expect everything in the world to be available at a certain reseller. But, I fucking love it.
We can design a complete custom experience, with every order form a direct customer relationship, and have an opportunity to delight beyond a single transaction.
When it comes to scaling, other than website operational parts, the main focus is increasing conversion rate as a result of good website design. A 0.01% improvement makes an increasing amount of impact.
And there is still so much we can work on. Starting with making the entire website/store a singular experience, displaying 100% the prices you get at checkout based on country, informing you before checkout on the exact shipping options, costs, and possible VAT/Import duties, providing answers to all possible questions you might have, and language localization for growing markets.
Then it becomes increasingly important to improve the operational aspect. Can we get lower shipping rates to a growing country x, or is it at a scale we can have local inventory for shorter shipping times, can we lessen the burden of importing goods without local inventory? and so-on.
These are all aspects we're working on and you might have noticed the small changes on the website. It takes a lot of time and, remember, we're short-handed.
OK you get it
I'm looking forward to everything above, the new product development, the software improvements, and so much more details. There's just too much I could jot here but I need to end it. Time is over, private responsibilities are here, and I have absolutely no time the rest of this week.
I'm going to celebrate my birthday 😂 and I hope this wall of text was worth something, it sure was nice for me.