Founder Stories: BruMate 🍺

The story of BruMate starts in Indiana where Dylan Jacob was born into a very religious household. He was homeschooled, and his parents wouldn’t let him talk to anyone outside of their homeschool group. This sheltered existence led to troubles later.

When Dylan entered public school, he wasn’t sure where he fit in. He jumped around friend groups and found himself hanging out with the wrong crowd. He was expelled twice in 8th grade. The first expulsion came for getting in a fight, and the second expulsion came when he was caught selling drugs in the school bathroom.

The second expulsion landed him in juvenile detention for 2 months during the Christmas Holidays. He was 12 years old, and he was alone in his cell over the Holidays. This absolute low moment became a pivotal turning point in his life. During his time in detention, he set goals and came up with ideas to turn around his life. He decided to focus on his education. He cleared out his friend group that was driving negativity and ended up graduating High School 8th in his class of 400 students.

The summer after juvenile detention was spent in his Grandfather’s TV repair shop. This marked the beginning of his entrepreneurial journey. Customers would bring in broken iPhones that his Grandpa had little interest in fixing and gave to Dylan to repair. Dylan watched YouTube videos on how to fix the phones and learned to repair broken screens in under an hour. He liked working with his hands but wanted to do the repairs on his own time, so he began buying broken phones on Craigslist and repairing them and selling the newly repaired phones at a profit.

Dylan had a moped that he would drive around the city to meet people from Craigslist to buy their broken phones. It was a good business, but soon the pool of broken phones being sold on Craigslist began to dry up. While he was fixing phones, he found suppliers in China that had high quality replacement screens. Most of the replacement screens on the market had dead pixels or dust under the screen, but Dylan sourced extremely high quality replacement screens. He decided to pivot the business from fixing and reselling phones to selling his high quality replacement screens.

Dylan went to a local iPhone repair shop and showed them his higher quality replacement screens. He used a screen tester he purchased to compare his screens to the screens the shop was currently using. That shop liked his pitch and signed on. By Sophomore year of High School, Dylan was supplying 8-9 local repair shops. He created an Instagram account, and Shopify, eBay, and Amazon stores for his business selling screen replacements. By Senior year, he was working with over 100 repair shops and did $100k in profit.

The next two years were stressful for Dylan. Everything appeared to be going well: he got a full ride to Purdue and landed an internship with Rolls Royce, but internally, he was depressed. He was taking a full class load and also continuing to run his iPhone screen business. He lost 20 lbs. due to the stress. He was approached by a small retail group that owned 11 repair shops which he ended up selling his company to for $100k.

Now Dylan had a bit of money but no idea what to do next. He decides to buy a house and refurbish it to resell. The entire journey is captured in this awesome Reddit thread. In short, it was a nightmare. The house had a ton of termite damage, and Dylan was working 14 hour days to repair the house. It turned into a full time job in which Dylan was trapped. He knew if he didn't fix the house, he would end up losing all of the money he had made selling his screen replacement business.

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While he is fixing up the house, Dylan comes up with the idea for his second business. He was at a tile shop trying to find something that would match the granite countertop in his kitchen. He couldn’t find anything and ended up launching his second company - Vicci Design - to address the problem. The main selling point of Vicci Design was offering the largest color selection of glass tile on the internet. This business sent Dylan to China for the first time to find a supplier of glass tile. In this business, he learned to source product. He sold it through Wayfair and Overstock where there was a built-in customer base looking for glass tile in a wide variety of colors.

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The Idea

While he was running Vicci Design, Dylan kept an idea journal where he would write down business ideas. The idea for BruMate came when Dylan turned 21 and was at his local brewery - Sun King. The brewery only sold 16 oz. beer cans, and Dylan hated that by the last quarter of his drink, his beer was warm. He looked online and couldn’t find an existing koozie that would fit 16 oz. cans.

This launched Dylan on a deep dive into the insulated drinkware industry. He studied all the brands in the industry. He noted where they were selling and who they were selling to. The two largest brands at the time - Yeti and Hydro Flask - were focused on in-store retail and didn’t have a strong direct-to-consumer presence. He thought there was an opportunity to sell drinkware direct-to-consumer. He also noted that the two brands were focused on an older consumer and geared towards hydration. Their best selling products were water bottles, tumblers, and coffee mugs. He thought there was an opportunity to sell to a younger consumer and focus on alcoholic beverages or dehydration instead of hydration. He found drinkware wholesalers to get a sense for what the margins were by comparing the wholesale price to the retail prices of his competition (spoiler alert - margins were very healthy). He also learned that the insulated drinkware category was the fastest growing housewares category at the time.

It was the beginning of 2016, and Dylan is going full speed ahead on his idea. Within a week of coming up with the idea, he found a couple of manufacturers overseas (there were no insulated drinkware manufacturers in the US), and he booked a ticket overseas to visit them. He hired someone on Upwork to take his rough pencil sketch and create a CAD mockup of the 16 oz. koozie he envisioned. He took the CAD drawing to the engineering teams at the overseas manufacturers, and they told him the product couldn’t be produced as it was drawn but suggested changes that would allow it to be manufactured. He names the newly developed product the Hopsulator; short for hops insulator. The company name is an afterthought and he lands on the name Kryo as a nod to the cold beverages his products unlock.

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The launch

Dylan’s first launch was a total failure. He launched an Indiegogo campaign in April of 2016 aiming to raise $5,000. Instead, he raises only $1,025. You can find the original Indiegogo campaign here. Dylan realized that the companies with successful Kickstarter and Indiegogo campaigns didn’t actually need the money to launch. They had $20k+ production budgets that they could pour into optimizing their campaigns. These companies used the fundraising platforms as a marketing channel rather than a true fundraising channel.

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Dylan decided to pivot to his own website. He knew a little bit about Facebook ads (barely) and knew Google ads well enough from his previous businesses. He created a one page landing page describing the product and what it did. He paid a designer to photoshop the CAD model product into peoples’ hands. He drove traffic to the page through Google and Facebook. He didn’t take pre-orders but instead captured emails. He found out pretty quickly that people were interested in the product. He surveyed his newly acquired email list on Survey Monkey to refine the product based on their feedback.

Dylan went to Sun King, the brewery where he came up with the idea, asking to sell the Hopsulator on the showroom floor. Sun King committed to a small order of 200 units with their logo on it. To fund the business, he got a home equity line of credit on his now renovated house.

Dylan's first PO for the Hopsulator was 1,000 units. 200 went to Sun King, and the rest he sold on social media. He was running paid ads on Facebook which he was learning about how to run on Reddit. He knew the first product wasn’t perfect, but he pitched the early adopters on a 50% discount on the next version of the product if they purchased the first version. His goal was to get feedback on the product from customers as quickly as possible.

While Dylan is getting ready for the launch of the Hopsulator, he is on a beach in Florida and gets a ticket for having an open bottle of wine on the beach. This sparks the idea for his second product, the Winesulator, a 25 oz insulated container in the shape of a wine bottle that would hold an entire bottle of wine. He follows a similar playbook to the Hopsulator and creates a CAD drawing and a landing page for the new product. The feedback on the Winesulator is incredibly positive. He collects 7,000 emails and again surveys his list with Survey Monkey on product design (colors etc.) His first Facebook post about the Winesulator went somewhat viral and got 5,000 comments. He realizes that 95% of the commenters are women, and that they were a huge underserved market for drinkware. He uses this information to tailor his marketing towards women. The unique colors he chooses help to differentiate from Yeti who only sold stainless steel drinkware at the time.

For the launch of the Winesulator, Dylan decides to take pre-orders. He launches pre-orders on Black Friday, and from Black Friday to December 9th, he gets $270k worth of pre-orders to pay for his first production run of the Winesulator. He airships the orders in and rents a U-Haul to pick them up and unload them himself into a newly rented warehouse. Over a two-day period, he ships out 7,000 orders. The delivery truck driver tells him that he is shipping out more orders than the nearby Urban Outfitters distribution center. Dylan knows he is on to something.

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Scaling

For the first year of business, Dylan used the pre-order model to maintain cash flow. This would give him cash up front to pay for his purchase orders. He would air freight the orders in, but there was still a long lag between a customer's purchase, and the product's fulfillment.

In August of 2017, the business hit $1M in sales for the year. At this time Dylan also gets hit with a $100k lawsuit for trademark infringement. He is using the name Kryo and was sued by a company called Kryogenix that did special effects for raves. Instead of fighting the lawsuit, he changes the company name to BruMate. The idea was that his company was a drinking buddy, and Dylan played around with different variations of those words until landing on BruMate. He came up with the new name in 3-4 weeks while the lawsuit was being handled.

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At this point it’s still a one man show. Dylan is doing Facebook ads himself, doing customer service and finance himself, and for shipping he would have friends come over and give them beer and pizza to help him ship things out.

Dylan realized he wasn’t good at Facebook ads. He was good from a conceptual standpoint. He knew how to talk about the product and the angles to use, but he wasn’t good at creating a lookalike audience and dialing in the ads and scaling efficiently. He brought in an outside freelancer who was an expert in digital marketing in October of 2017. The business does another million dollars in sales from October to December after the freelancer came on. For the first full year in business BruMate did $2M in sales. Dylan sells Vicci design to his dad at cost, and he sells the house he repaired and nets $100k. He dumps all of this money into inventory. He also rents a bigger warehouse and hires warehouse staff.

The company went from $2M in sales in 2017 to $20M in 2018, and their warehouse became the limiting factor. After their first year in business, they shifted away from the pre-order model, and they were now carrying inventory. They were quickly outgrowing warehouses and their warehouse manager was drowning in orders. In Q4 of 2017, Dylan tried a 3PL and it was an absolute disaster. Dylan’s scarred from this experience but later meets Jan Bednar the founder of ShipMonk at a Forbes 30 under 30 event. Jan convinces Dylan to test ShipMonk with 20% of BruMate’s order volume. ShipMonk does so well with that volume that Dylan eventually shifts 100% of their volume to ShipMonk.

For the first two years, in order to fund the business, Dylan used Shopify Capital loans and random people he would find on the internet that would charge 20%+ interest rates. It was expensive capital but Dylan needed it to grow the business. Finally, after 2 years in business, Dylan was able to get a $250k government loan through the SBA program. This gave him capital to purchase more inventory and fuel the growth of the business.

The goal for 2019 was to diversify the company and create a true omnichannel brand. Dylan didn’t like that he was almost 100% reliant on the Facebook ecosystem. He formed a true wholesale team. He created an Amazon strategy, and he started looking at everything holistically. He divided his customer base into three groups and developed a strategy to cater to each group. The first group was the brand loyalist that would shop on BruMate’s website and was on their email and SMS list. The second group was the touch and feel customer that wanted to see the product in person. The last group was the Amazon customer. For this customer, it doesn’t matter where they see or hear about the brand, they will buy the product on Amazon. Dylan originally thought that Amazon would just cannibalize DTC sales, but what he found was that as they scaled Amazon, they weren’t losing customers. In 2018, the business was fully reliant on the Facebook ecosystem and direct-to-consumer. 97% of sales were direct-to-consumer and 3% were wholesale (no Amazon). In 2019, 50% of sales were DTC, 30% were on Amazon, and 20% were wholesale. In 2019, they did $33M in sales. In 2020, the company did over $100M in sales and raised $20M from San Francisco Equity Partners. In 2022, the company raised another $25M.

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Playbook

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Unique approach in growing market 📈

Dylan didn’t invent the insulated drinkware market when he launched BruMate in 2016. What he did was identify a growing category with strong unit economics and then launched a differentiated product. A 16 oz koozie and 25 oz wine bottle shaped drinkware containers didnt exist before Brumate launched them. Most competing products at the time were stainless steel and Dylan differentiated through unique color offerings. While other companies were focused on physical retail, Dylan focused on direct-to-consumer. This was enough for Dylan to differentiate his product offering from the competition and ride the massive wave of growth in the category. You don’t need to create an entirely new category of product, but you must differentiate your product in the eyes of the consumer.

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Test & pivot 🧪

When Dylan’s Indiegogo campaign failed, he didn’t give up. Instead he pivoted to Facebook and his own website. This channel proved to be huge channel of growth for him and the business. Dylan also didn’t wait until his product was perfect in order to launch. Dylan knew that early adopters would be willing to put up with a less than perfect product in order to get an innovative product sooner. The customer feedback he received from actual customers was invaluable to Dylan as he developed the product. Dylan also didn't know going into launching the business that women would resonate so strongly with his product. However, when he noticed the response he was getting from women in the comments on his Winesulator ad, he quickly pivoted his strategy to capitalize on the positive response he was getting. Dylan realized that you don't need all the answers going into an ecommerce venture and the most valuable data you can get is from actual customers.

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Outsource things that aren't your zone of genius 🧠

Dylan was quick to realize that the details of running a Facebook ads account weren’t in his zone of genius. Coming up with the overarching strategy and messaging was in his zone of genius but the day to day execution was not. Realizing this, his first hire was an expert in Facebook marketing. In the early days, Dylan and the team did all of their fulfillment in house. Dylan realized that fulfillment also wasn’t in his zone of genius, and he outsourced it to Jan and the ShipMonk team. The key to succeeding as a business is determining the things that truly matter for you to do and outsourcing / hiring for everything else.

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