How GoSun Reached $4M in 2020 Revenue and 50,000 Customers with Solar-Powered Outdoor Products (Interview with CEO Patrick Sherwin)

Introduction and GoSun Overview

Nathan Latka

00:00Hey, folks. My guest today is Patrick Sherwin. He's helped innovate off grid independent solar solutions for cooking, cooling, phone charging, lighting, and now is developing products for water purification and shelter. All of the gosun products environment are environmentally friendly and ideal for recreation, off grid power outages, disaster relief, which would be useful right now down in Louisiana, developing countries that have minimal power infrastructure. Patrick, you ready to take us to the top?

Guest Welcome and Pre-COVID Recap

Patrick Sherwin

00:23>> Patrick Let's do this, Nathan.

Nathan Latka

00:25You last came on pre COVID, and I remember being really impressed because I'm summarizing here. So correct me if any of this is wrong, but you said your first product was gosunsport back in like 2017. Seeded that with like 1 k raised $213 on Kickstarter, took eight months to deliver it. But since then, you've been nine product launches, over 50,000 customers that have purchased at least one of your SKUs. I think you did in 2020 about

00:484,000,000 of top line revenue and grew a massive email list. Is that all correct?

Patrick Sherwin

00:52>> You're nailing it.

Nathan Latka

00:53That's amazing. Okay. So what's happened since then? Update us over the past eighteen months. Any new products?

New Products Since Last Interview

Patrick Sherwin

00:57>> Oh yeah, plenty of new products and plenty of growth. I think you mentioned briefly, we launched a water sanitation and purification system basically in response to COVID. We accelerated the development of something that we knew would be really helpful for people that are seeking more times away from home, outdoors, we're all feeling pretty trapped at home. That product is basically a kitchen sink in your backpack. It can also turn into like a camping water purification system,

01:26>> as well as a shower. So stay out longer, feel clean. We work on a coffee brewing system. So we came up with an all in one travel mug, French press, and heater. So you basically can make coffee anywhere, anytime, as long as you have a 12 volt port. We're now also working on a bunch of power kind of mobile solar generator systems, ultimately just fueling people's outdoor lives where kind of recreation and preparation kind of coincide.

GoSun Flow: Water Purification and Shower System

Nathan Latka

02:00Let's talk about that filter plus sink plus shower you won in last year. Well, year, the CES Innovation Awards, it's billed right on your website at $223 Help describe a little bit more. Why did you win that award from CES? What makes the product so unique?

Patrick Sherwin

02:13>> Yeah, I think what we ultimately do well is we combine existing technologies into a new ecosystem, so to speak. I took a USB powered pump that I found from an aquaponics system in a classroom, just this tiny little water pump. And then I combined that with a three stage water filter, which is similar to like the LifeStraw, where you can drink straight out of a stream. And so instead of hanging out next to a stream, like

02:38>> if you've ever gone backpacking, you have to make your own water or you're pumping it or you're squeezing it through a bottle, this little USB powered pump does the job of pushing the water through the filter. And then we use that same pump to run a little faucet. And the faucet has a little switch on it that then activates the power bank that comes with it. It can be run directly on solar, course, because we're gosun.

03:01>> And that whole ecosystem come together has never been seen before. And then it just happens that it turns into a really wonderful shower. And what's cool here is you're talking water conservation. So when you are off grid, you don't have to haul around huge amounts of water, whether that's in your van or your vehicle, your RV, or if you're just, like I said, backpacking, it sips on water. It uses one tenth the water consumption of a

03:26>> typical faucet. So it's kind of like the LED of water consumption.

Filter Materials and Maintenance-Free Design

Nathan Latka

03:30Now I'm curious, people are always tinkering around with the right filters to use here. You say specifically that this filter is out, I believe, 99.9% of sort of things that can be, you know, harmful to pathogens and things of that nature, harmful to humans. You chose to go with, I think, a polycarbonate filter plus nano alumina and polypropylene. I'm saying all those things like I know what I'm talking about. Have no idea what I'm talking about.

03:54I'm just reading off your website, but why are those the right materials?

Patrick Sherwin

03:57>> Well, it it it's there's a million directions to go here and keep in mind, this is fresh water, not desalination. And ultimately, it's able to maintain a low head pressure, so we can still push the water at a fairly quick rate using that tiny pump. And then it's long lasting and doesn't require any maintenance. So like the LifeStraws, which are beautiful ceramic filters, they require a backflush after just about every use. With a backflush is really

04:32>> challenging, most people don't do it. It requires distilled water and therefore the filters get clogged pretty quickly. We're And not designing people to have to maintain after its usable life, which is about a thousand liters, you just replace that filter element. And it has three stages. Like I said, filters It also has an activated charcoal filter, so you can reduce any kind of flavor issues in the water.

Nathan Latka

04:59Patrick, there's lot of people listening right now that are software people that tinker around with physical products in their free time, but it's just tinkering. They never really systematize, operationalize, find a manufacturing plant, sell a couple of units, etcetera. Walk me through how you do that. Mean, how did you go from camping guy that wants like clean water out of the stream under five pounds, a thousand liter life to actually manufacturing this thing and being able

05:19to list it for $223 on your website?

Patrick Sherwin

05:22>> You know, that's a great question. I I use a lot of spreadsheets. We do a lot of evaluation. We have a bit of a formulaic process for product development and launch. And then we have a lot of great partners in Asia. We found someone making something very similar in Taiwan. We found another similar manufacturing product in China. We kind of partnered together when we would basically just ask them to refine those products to meet our more

05:50>> stringent specification. And then, we have an assembly facility in China as well, where we have all these parts and pieces come together, where we put together. We have, like you mentioned earlier, we have 10 solid unique SKUs that we assemble ourselves and manufacture more or less ourselves in China. So we're up to speed to be able to deliver.

COGS, Pricing, and Gross Margin Strategy

Nathan Latka

06:14And so what are your COGS specifically on this $223 product flow up? Like

Patrick Sherwin

06:20>> off the top of my head, it's going to be somewhere around $80. And so we try to push for margins, gross margins that are over 50%, somewhere around 60 on something like this.

Nathan Latka

06:33Is that how you figure out pricing? You always just look at your costs and then market, you you want to then optimize top line for 50 to 60% margin?

Patrick Sherwin

06:41>> Yeah, I mean, you know, whenever we go into the 50 gross margin realm and below, we need super high volume and we're not a high volume manufacturer, even though, you know, we look pretty big and we do move a thousand units. We have containers on the oceans every day. We just aren't the Coleman or the Yeti of volume. And so we have to keep our margins high.

Nathan Latka

07:05Who do you use to track like your freight? Do use any like freight forwarding or shipping planning tools?

Patrick Sherwin

07:12>> You know, we've tried and we've kind of struck out with a lot of like 3PL logistics partners. We basically have resolved to using people that we've used a bunch in the past who, they often don't have the perfect transparency of where something is, but at the end of the day, they get it to us at a pretty good rate.

Nathan Latka

07:35Now you mentioned in 2020, I believe that you passed over 50,000 unique customers. What will you pass at the end of this year?

Stainless Steel Utensil Set as Loss Leader

Patrick Sherwin

07:46>> I think it's gonna be over 100 k. We delivered Oh, wow. In the last year and a half, we delivered a product, a small product. In fact, I've got one here. A set of portable utensils. Basically,

08:00>> can instead of throwing away plastic every time you eat a carryout meal, these will fit in your wallet.

Nathan Latka

08:06Can you say dependable? Is it like tinfoil or is it sturdy?

Patrick Sherwin

08:09>> It's made out of stainless steel.

Nathan Latka

08:11Okay. It looks pretty sturdy.

Patrick Sherwin

08:14>> Yeah. You can definitely You can cut. In fact, the spoon has like a little serrated edge. So one of my designers was tired of throwing out plastic. We hate plastic.

Nathan Latka

08:24We should Would that make it through airport security?

Patrick Sherwin

08:26>> It does. And they actually love to look at it too. They're like, what is that? Yeah, I bet they look at it. We shipped 40,000 of these. So that was like a whole new And the main reason we did this was to try to get more, you know, younger customers and more of that,

08:45>> know, what are you, loss leader type of customer, you know, get a higher volume of customers that will then hopefully see our whole ecosystem and this being our entry or gateway into the gosun experience.

Nathan Latka

08:56That's really interesting. So you charge $15 for this. Do you still have 50 to 60% gross margins on this?

Patrick Sherwin

09:03>> Yeah, yeah. Wow, okay. Actually, they might be more like 70% because something like this, like we have such a volume on something like this, amount of plastic, amazing little These are like $4 and we charge like 15. So that's a healthy gross margin.

Nathan Latka

09:19And then walk me through the consumer experience. Okay. So they find it. I wanna talk about how you sold 40,000 if you use Facebook ads or how you did that. But once they find you, how do you upsell them on more expensive items or more of your product catalog?

Patrick Sherwin

09:32>> Yeah. I mean, we'll use email for the bulk of our upsells. We're starting to use more SMS as well to kind of introduce people into our sales and today's deals. And today's deals page is constantly curated with bundles and different arguments that we have in the fuel free frontier. We've definitely used a lot of Facebook and Instagram ads over the years.

Nathan Latka

09:57How much? Like how much last month on ads?

Paid Ad Spend and Return on Ad Spend

Patrick Sherwin

10:01>> I know that like in general, in 2020, we doubled down because of the pandemic. We saw the opportunity that our technology fit really well in outdoor rack and resilience. We spent around 300 ks in 2020 and that generated about 1,000,000 in revenue. So we get about a three, a little over three return on ad spend. And now I think we're still pushing pretty heavily, probably something around 75 ks a month for about 200 ks in revenue.

Revenue Outlook and Pandemic Growth

Nathan Latka

10:34And so what do think you'll finish this year with in terms of total revenue?

Patrick Sherwin

10:37>> It'll be over 5,000,000. So, you know, the pandemic wasn't just a blip in the radar for us. It was taking on a whole new diet of business, a whole new scale.

Nathan Latka

10:50So 5,000,000 revenue up from 4,000,000 a year ago, 50,000 customers up to a 100,000 mainly because of those metal utensils. You're now working on driving and expanding them. You know, community is a real moat. Would you ever launch like a, or do you already have one that I don't see on the website, a community for backpackers, hikers, people that like these sorts of products?

Facebook Community and Customer Engagement

Patrick Sherwin

11:11>> We do have a Facebook community. It's called the Facebook community kitchen, facebook.com/groups/gosun. There's like 8,000 users in there that post on a regular basis how they're using our technology. We're trying to get more people to use other technologies of ours, like our coolers and our utensils and talk more about them, what they like about them, how do they use them, how do they hack their, know, how do they add different things together to come up with

11:42>> better use cases.

Nathan Latka

11:44Yeah, here's a good one posted twenty three hours ago from Adena Travis Floyd says, she's grateful for our gosun in Louisiana after the pass of hurricane Ida. We'll be without power for a couple of weeks, according to our energy provider. While we're in cleanup phase, tired and weary will stay. We'll be having hot cooked meals, thanks to our gosun sport and our gosun fusion. And then she showed a picture of her crawfish boiled and wrapped in

12:05bacon in your oven there. So this is working nicely.

Patrick Sherwin

12:08>> That's what makes all this worth it. And I think that's the biggest thing that's changed since we talked last is, I've always been pretty big into resilience. As you marked me, I'm a camping outdoor guy and I'd love to have my wherewithals when I'm out and about. Turns out that the pandemic really drove that into everyone's psyche.

12:31>> You want to be able to be outside and be comfortable to have your services And we wanna move away from propane and fire and ice. And so gosun really provides a new way of doing this, but in fact is more convenient and better performing than the alternative.

Core SKU Count, Team Size and Product Backlog

Nathan Latka

12:51How many total SKUs do you have? Mean, I'm scrolling on the page right now, including obviously your hat and your backpack, the collapsible sink that sold out. Mean, what you probably have like 30, what is thirty, forty, 50 SKUs?

Patrick Sherwin

13:02>> Yeah. I think like core SKUs, it's about 20 that are like unique to us. Then we just combine and make bundles out of them. And if, you know, we don't really count the little accessories in that number. But you know,

Nathan Latka

13:17you still have about 10 people?

Patrick Sherwin

13:19>> We're up to about 15 now.

Nathan Latka

13:2115, okay.

Patrick Sherwin

13:22>> We've had to hire another engineer. We've got a sourcing professional now. We just, you know, and we have a huge We have an even bigger backlog development. So we have more and more products that we wanna get into the cycle and that's kind of the bottleneck.

Software Partnerships and Email List Opportunity

Nathan Latka

13:42Patrick, my big question for you is a lot of software companies struggle with distribution. I imagine there are some types of software that folks like you really love to use. Just look at your favorite apps on your phone. Have you ever looked at partnering? I mean, using your quarter million person email as partnering with software apps to drive more revenue and sort of more lock in your community into community?

Patrick Sherwin

14:01>> Yeah, we've done a little bit, but I'd love to do more and I would love to hear more of the suggestions from your community. I'm a big believer in software as a driver. I mean, I think I mentioned last time we were on Figma has been super helpful for graphic layout, Shopify, of course, for just general web sales. We do have some plugins for like communications, Attentive. We use something called ShippingEasy to help our customers make

14:30>> sure they're in tune with their orders.

14:34>> I'd love to do more and I'd love to do more on all this amazing relevant social media to get more engagement with consumers.

Nathan Latka

14:42What are your favorite like consumer apps? Like, are there like a hiking trail app or like, you know, the best way to position your thing, the direction of the sun or like, do you use any apps like that?

Patrick Sherwin

14:52>> Let me look at my phone and see what using often. Obviously,

14:58>> I love Clubhouse. I've been starting to listen in to a lot of stuff there. It's not that much related to your question.

15:06>> Just looking through here, you know, outdoorsy, Airbnb, you know, get you out and about.

Nathan Latka

15:15I just wonder what would happen, Patrick, if you emailed your full list with just a very simple question, which is, what are your favorite software apps for camping? And like, what people say. Because I bet you there's gonna be like a core five to 10. And I bet you, you could go out and either build a clone of one of those and then sell it to your community or go buy the thing, that actual thing yourself

15:35and bring it in house. Where margins could be, you know, seventy, eighty, 90% and keep fueling your business. That's what I get excited but I'm biased though. It's not a good call. It's just I'm biased to software.

Patrick Sherwin

15:47>> Hey, you guys are leading the world now, you know, the millennial, if you will, and you've got me convinced that the app life and the interconnect with tech and kind of the in crowd that who knows know, like people know what's good and they share that, And if you're aware and connected, you'll be you'll be given the good beta on the best place to go camp. So I'm all about it. So I'll definitely look into.

Famous Five Rapid Fire Questions

Nathan Latka

16:17We'll see what happens. In the meantime, though, let's wrap up with a famous five, Patrick. Number one, favorite book.

Patrick Sherwin

16:23>> Gosh, Crossing the Chasm. It's still one of my favorite books.

Nathan Latka

16:28Number two, is there a CEO you're following or studying?

Patrick Sherwin

16:32>> I continue to like Elon Musk these days. He's hot shit.

Nathan Latka

16:36Number three, what's your favorite online tool for building the business?

Patrick Sherwin

16:41>> I'd say Figma.

Nathan Latka

16:42Number four, how many hours of sleep?

Patrick Sherwin

16:45>> I try to get seven to eight.

Nathan Latka

16:47That's good.

Patrick Sherwin

16:48>> And situation, what, you're still one still one kid and 43?

16:52>> Wonderful girlfriend. Yep.

16:54>> One kid, 43, not married, but wonderful girlfriend.

Nathan Latka

16:57What last question. What do wish you knew when you were 20?

Patrick Sherwin

17:02>> I wish taking action was more important rather than watching the action. So invest, write about it, buy it and try it and burn it up. But action is really what we're genius wise.

Nathan Latka

17:22Guys, he really grew during COVID selling $15 little flatware kits that cost him $4 to make. He shipped over 40,000 of them metal utensils over the past eighteen to, we'll call it sixteen to eighteen months. Did about $4,000,000 in revenue last year, past 50,000 customers. This year he'll break $5,000,000 in revenue, over 100,000 customers, mainly selling physical products with really interesting margin profile, 60 to 70%, but a massive community, 8,000 in the Facebook group, hundred two fifty thousand

17:48on his email list. If I was a betting man, I'd say Patrick's gonna build a very successful software company inside of this community one day. Patrick, thanks for taking us to the top.

Patrick Sherwin

17:55>> Thank you, Nathan. It's a pleasure.

Nathan Latka

17:59One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday 1PM

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