The Startup Story

Hear the startup story that most people had no idea about.

Episode 1: Jason McCann, founder of Varidesk

The Startup Story – Episode 1: Jason McCann, founder of Varidesk

You can listen to Jason's Episode in it's entirety here: https://www.thestartupstory.co/larrynamer

[00:00]
Jason McCann:
This is Jason McCann, Founder and CEO of Varidesk, and THIS is my startup story.

James McKinney: Every wildfire began with a spark. Every superhero has an origin story. And every single startup has a moment that they point to as their beginning. And every founder has a purpose that drove them in the midst of all obstacles. THAT is The Startup Story.

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James McKinney: Our startup story today is from Jason McCann, the Founder and CEO of Varidesk. Varidesk is dominating a stand-up desk space and making serious ways in the agile workspace movement. While Varidesk is a global company today, Jason's story is not one where you assume everything he has ever done has been a success.

In the span of, again not knowing a full timeline, but we're going to say eight years, you have a product, you're a little too late to market, the pog game. Then, you have the dot.com and have a flourishing business but not a profitable business, and then, you find out the dot.com phase is over. Where was your mental space at having gone through that twice in a very short period of time? And, now, you said you had a newborn, for the last one - where was your mental space during that time? Were you, like, “I'm done! I'm tired of this!” What was going on in your head?

Jason McCann: I think you lose a little bit of self-confidence in there, but I think you just mentally have to go through all of the steps of healing. I think at the end of the day, you dust off, you get back up, you go back out and do it again. I think looking at successful people - I just went out and started reading more books, and said, “I got to learn more, I got to learn from it. It is what it is, and I just have to continue to look ahead.” I knew in my mind, through hard work, a little bit of luck, and the right timing, I would just have to continue. In Asia, you row and row and row until the wind catches your sails.

[02:45]
James McKinney:
Jason's startup story is one of resilience in spite of prior defeats. What you will learn from Jason's story is that every challenge or obstacle has a key learning if you're vulnerable enough to take a hard look at yourself to discover it. Varidesk’s success is a result of Jason's ability to listen and learn. Now is your opportunity to be mentored by a founder that, within five years, has built a company with over 270 employees and ships product over 30 different countries daily. Get ready to learn. Get ready to be inspired.

[03:18]
Jason McCann:
I was born in Omaha, Nebraska, but grew up on Galveston Island. So, Texas, you got that sort of Midwest Work Ethic, with that spirit and entrepreneurism of Texas. My mom was the first entrepreneur and CEO I knew. She had her own hair salon, so I actually got to work in her hair salon. I think I was about 10 years old, and sweeping the floors, and folding towels, and being a guinea pig for people that were auditioning for jobs. But she said, “You got to kind of go out and work for another company.” I think I was about 14, she was driving me around and said, “You know, you've got to figure out your own thing here.” I was too young to work in a restaurant and wash dishes, and so there was a guy that knew a guy, and he owned a beach chair and umbrella company. I started working for him for 20 bucks a day, and eventually decided, “I'm going to open up my own beach chair an umbrella company.” I jumped right in, and that was my first business.

[04:04]
James McKinney:
Not your first business but the actual company that you worked for - were they manufacturing, or was it actually on the beach somewhere?

[04:12]
Jason McCann:
We were literally sitting down there, no sunscreen, no sunglasses, just sitting out there, running chairs and umbrellas for all the tourists on Galveston Island. We’d go down there and pop up umbrellas and chairs. Two chairs and umbrella would run for 10 bucks a day, and so I got up there early in the morning, I would dig the holes and pop up the umbrellas. And it was an awesome job, to not work for my mom, to be officially with a real job and to do that, but it was great just to work in that industry.

[04:40]
James McKinney:
Now, from a timeline, you were in your teens, so obviously before college, you made the decision you wanted to do something in that industry - what's your next step in that?

[04:50]
Jason McCann:
I thought, growing up in Galveston, that I wanted to be in the hotel restaurant industry. I thought tourism was just a cool way to make money. I had a little bit of success kind of figuring out how to rent up my own beach and buy some umbrellas and chairs. I was making a little bit of money, so I started to look for colleges. I got to go to school and do something. My parents said that, so I looked at UNLV and Cornell, and they were like, “But you have UH in Houston.” They had the Conrad Hilton College of Hotel Restaurant Management, I thought, “Okay. I love hotels, I love restaurants, I get the whole tourism industry.” That's where my college career started that chapter.

[05:24]
James McKinney:
And the school named after one of the largest hospitality companies in the world is not a bad one.

[05:30]
Jason McCann:
No, they're absolutely incredible. What a great program for me. My whole street hustle there was to graduate as fast as possible so I could start making money. I did everything, from wait tables to I was a concierge on a train that went from Houston to Galveston. That's how I could work for 40 hours on a weekend, just ride trains back and forth, street hustling and selling services of Galveston, so really, got to do a lot of different things there and experience the hospitality side of the industry. I graduated and decided I was going to go back to Galveston, I knew the gentleman that owned Yaga's, and that was about a $30-million t-shirt company, when Stussy and Massimo were sort of back in the day, little reggae theme. But, also, one of the brothers, Mike Dean owned a restaurant called Yaga’s - it’s still there in Galveston - I just walked in, met Mike, hit it off, and said, “I'll do every job in here.”, and we eventually partnered up and opened up a restaurant in Houston about a year later. That was my next business, the restaurant industry.

[06:27]
James McKinney:
So, being that you went to school for hospitality, restaurant falls in line with that. Now, you're doing what, I assume at the time, was your dream, right? You had gone to defer degree with this, now you own a restaurant - is this in line with your dream?

[06:40]
Jason McCann:
Well, I think that I thought at the time. Early twenties, we went up to Houston and on Richmond Avenue, so, like, the original Joe's Crab Shack was right down the street from us, the very first one - it was a great time. This is back when Hakeem Olajuwon, one of the Rockets were really hot. So, we had a run, and I went in there, knowing enough but not knowing everything, and just said, “I want to go for it.” So, we opened up a restaurant, a nightclub, and I ran it and did every single job imaginable to do that for a little over two years. It was a great chapter, didn't make a lot of money, a lot of heartache and headache, just kind of not knowing how to run businesses, but we worked really hard and had a good time. It was a great chapter. The restaurant industry is not for me. I recognize that as I was halfway through that grind.

[07:29]
James McKinney:
Or anything that's not eating, correct?

[07:32]
Jason McCann:
Yes, not eating. There was a lot of late nights, you get out there till 2:00 a.m., a lot of things happen. It's a crazy industry. But my partner, my good friend decided to sell back to the original founders, and I just said I'm going to work on MBA, or study finance, or do something else. And University of Huston, it was their early stages of their entrepreneur program at the University of Houston, so I started taking some classes, knew that I needed to personally learn more about finance and marketing - knew I didn't know it that much. As hard working as I was, I knew I had to continue to learn more, so I started working on that. And during that phase, a gentleman that used to work with me actually owed me a little bit of money, and so, he paid me back by selling pogs, those crazy little milk cap slammers.

[08:17]
James McKinney:
Cardboard poker chips, or whatever. Well, you traded them like currency, if I remember correctly. It was a big deal.

[08:22]
Jason McCann:
A big, big deal. I couldn't believe how fast he was able to sell them, so I went to him and said, “Well, let's go into business.” He started getting cargo vans and air fretting on Continental Airlines, tens of thousands of pogs. And jokingly, we’d cut them down into smaller plastic bags and sell them all over Texas, to the little kiosks, and trading card shops, and instantly it was a fun little business to get going while I was working on my Masters.

[08:50]
James McKinney:
What year was that? I remember pogs so clearly, not because I collected them.

[08:56]
Jason McCann:
I guess 1993 would be off the top of my head. Google would probably be able to tell me what year that was. We created a kid's board game because I realized I wanted to sort of control my own path of product and own the product, as opposed to just being a distributor. I was trying to understand. I didn't really understand the market that well, but I was distributing product. We were selling thousands of dollars a week of product, making a little bit of money. I went to Toys R Us store, and I bought a Monopoly game and took it apart. I’m the person who had come up with an idea to say, “Hey, I can kind of like combine tiddlywinks with pogs.” I knew a graffiti artist, and we started drawing. But if you look at a board game, I was like, “Well, it's like a book binder, and the box is made on a Heidelberg press.” - I had no idea what the heck that was years ago. I started to just deconstruct that Monopoly game, and we created a board game called ‘Nip-It’. It was kind of like tiddlywinks and pogs. We worked with the Institute For the Blind, and they actually assembled the product for us, but we bought little mouse pads and put the word ‘Nip-It on it. And, instantly, we've got our first real product that we controlled and we were now selling to all these retailers out there.

[10:01]
James McKinney:
So, we're talking, well, mid-90s for the sake of talking points, Internet wasn't a thing, so you weren't selling online. You were creating this game, and obviously, you are a businessman, so you thought, “I just have to sell this.” What was your strategy in taking this board game, trying to sell it?

[10:22]
Jason McCann:
It was literally us driving up to every store out there, that media play was the hot stores, like pre Best Buy. We would just drive in, ask the store manager if they could buy it, showing up at conventions, and just showing all these kids the game. And they would start playing it, and they would buy one, or mom would buy one. And, then, that word-of-mouth and that little bit of frenzy started to happen with us. As we were looking for companies, I was like, “Man, we are just beating our head against a wall here. There's got to be a bigger company that can help me get into a Wal-Mart or a Toys R Us - I don't know how to do it.” So, I started looking up companies that were in the toy industry, and one just happened to be in Houston, called DSi toys, on the Beltway and I-10 Katy. I just drove out there, knocked on the door, they buzzed me into a warehouse, there was a secretary at the front, the receptionist, and she said, “Well, hold on a minute. Let me see.” The president of the company walked out 15 minutes later, and he said, “I got to meet you. Show me this game that you guys created.” Rick Knight sat down with me, and he was very cool about it, but he said, “You know pogs are dead, right?” And I said, “What are you talking about? We are selling this game!”

[11:29]
James McKinney:
And you have just made this game.

[11:30]
Jason McCann:
Yes! I've got 5,000 of these, well, about 4,800 left to sell. And he’s like, “Pogs are dead. You need to sell everything as fast as you can, and you need to come and work here.” I said, “No, no, no, I'm getting my Masters. I'm not coming here.” And I remember walking out the door, and I couldn't sell a pog to save my life - the fad had ended that fast. I called up Rick, and I wrote him a letter, and I said, “I'll do any job you have.” At that point, I said, “He was right, I was wrong.” It taught me that if somebody is smarter than you, you can learn from them. So, I said I'll come in there and work for Rick, and do any single job that man has because I have never been that wrong in my life. I just jumped in, and Rick said, “Okay, you can come here.” I worked in the warehouse, and at the time, DSi sold Ring Around the Rosie, it was a hot TV doll, and patty-cake, and they also had the Kawasaki license for keyboards and electronics – it was just a cool opportunity for me to work with Rick. I got to go to China and negotiate with factories, I learned how to sell Wal-Mart. I became a student of business and retail under the tutelage of Tom Neville and Rick Knight - it was an awesome time.

[12:39]
James McKinney:
So, going into DSi, having made this pog games - were you thinking long-term, life wise? Were you thinking, “I want to be in toys.”? What was your mindset? At that point, what your long-term career looked like?

[12:55]
Jason McCann:
I think I always loved business. I think the idea of creating cool things and building out business models intrigues me. It’s intrigued me from just reading books, like Good To Great, and all these great business model books have always intrigued me. I love the idea of business and doing business. I think when I walked in there, I was trying to learn, “How do I elevate and scale this business? How do I either sell this product to another company that has the business?”, because I couldn't quite understand how the business model worked at retail. And I was just too small to sell it to larger companies. I recognize I had some intrinsic pain points that I was going through, and I was still a student, working on my Masters. It was just one of those things that I’ve just said, but you have to be courageous. You knock on a lot of doors, you're going to learn something with every single conversation. I was very transparent and authentic. I told Rick what I knew and what I didn't know, and he obviously knew more than I did, so I said, “I've got to come learn from you.”

[13:52]
James McKinney:
That is awesome. I love that you sought out an expert in the field, to just learn under them during that season of life - that is fantastic. You learned how to buy and manufacture in China, under DSi toys - where did that lead you? I mean, obviously, we all know it. Ultimately, Varidesk is the chapter now. But what was that journey from DSi up to Varidesk?

[14:18]
Jason McCann:
DSi went through a public offering, so I got to experience from a marketing perspective and ran the boys toy line for them. Dan Flaherty, who had founded a great company called Gemmy Industries, actually looked at investing in the company, and he and I connected. I was looking at kind of going to do my own thing. Again, I was getting that, like, “What is my next chapter personally going to be for me?” And Dan said, “I've got an idea for a dot.com business - do you want to go into the dot.com business?” And on a handshake, because this is 1999, and the heyday of dot.coms, and I knew nothing about the internet or dot.com business. I said, “I got to go for it. I'm going to figure it out. I have no idea, but we're going to sell Christmas and Halloween product online.” Overnight literally, my wife and I moved to Dallas, and we started selling Christmas and Halloween product online and figured out how to do that. And at the time, I thought it was amazing. All of a sudden, I'm hiring people, and we're selling Christmas and Halloween product online, doing a couple ads out there, not knowing anything - everybody was racing! This is Pets.com, this is web - everybody running on the great race across the plains to try to figure out the dot.com craze. As I was out there, just going through the business, I realized we had built a great business, we were selling millions of dollars of product, but we weren't profitable. Suddenly, I turned into a fundraiser. I'm talking Angel Investors, Media, I'm flying all over the country, which I never had to raise money before. I'm out there, and now, fast forward nine to 12 months later, I'm in New York, I'm talking to huge bankers out there. I'm having a private meeting, and I believe it’s like the Harvard Business Club, and this gentleman comes across the table and goes, “You realize that the dot.com things are over, right?” The whole thing's going to go bust.” I said, “What are you talking about? I’ve got millions of sales.” He goes, “It's over.” Literally, it felt like I had been in this position before. I got back to Dallas and realized the dot.com thing just started to unravel - no more investors. I had not built a profitable, sustainable business model. While I was the first employee to walk in there, just like everybody, wide-eyed and excited with a little bit of capital to build this great business, I turned around, and I think I had 70 employees, and I was bust. I personally was bust. I got a newborn, the whole company gets wiped out - we just couldn't make it. We didn't build a profitable business model. So, I told myself I would never again build a model that wasn't profitable. From a business perspective, it was a huge take away from me. Although we hit bottom, I realized I just got to personally dust off. With Gemmy Industries, the same year, they had Big Mouth Big Billy Fish, and the sale has been absolutely incredible! Dan asked me just to come in and help because the business at Gemmy, it had always gone up and down, been an amazing company, and just, would I come in and help it. I came in about a year later, and just helped Dan kind of rethink and elevate Gemmy to where it is today.

[17:13]
James McKinney:
In the span of, again not knowing a full timeline, but we're going to say eight years, you have a product, you're a little too late to market, the pog game. Then, you have the dot.com and have a flourishing business but not a profitable business, and then, you find out the dot.com phase is over. Where was your mental space at having gone through that twice in a very short period of time? And, now, you said you had a newborn, for the last one - where was your mental space during that time? Were you, like, “I'm done! I'm tired of this!” What was going on in your head?

Jason McCann: I think you lose a little bit of self-confidence in there, but I think you just mentally have to go through all of the steps of healing. I think at the end of the day, you dust off, you get back up, you go back and do it again. I think looking at successful people -- I just went out and started reading more books, and said, “I got to learn more, I got to learn from it. It is what it is, and I just have to continue to look ahead.” I knew in my mind, through hard work, a little bit of luck, and the right timing, I would just have to continue. In Asia, you row and row and row until the wind catches your sails. In my mind, it was a period of rowing.

[18:33]
James McKinney:
I love that.

Jason McCann: I said, “I’m going to row and row until the wind catches my sails.” That’s what that period was. Now, I can work with Dan and build an amazing entrepreneurial company that, really, he gave birth to, but to really elevate his business and help him – that's what I did for years. I was able to invest in a couple smaller businesses with some friends of ours, and just said, “Okay, I'm going to help other entrepreneurs. I'm going to continue to get back. I'm going to keep grinding. And, then, suddenly, I walked in six years ago, and Dan is standing at a cardboard box. That elevated us to a whole another spot. I had no idea what's going to happen.

[19:12]
James McKinney:
Let's talk about that moment. You walk in and you see Dan standing at a cardboard box.

[19:17]
Jason McCann:
He is standing there, and I said, “What are you doing?” And he is, “I’ve got a back pain, and I feel better when I stand up. So, I went and talked to my doctor, and she said, “Well, Dan, you should just stand up more. We kind of laughed about that, and he said, “I have to get like a standing desk.”

[19:28]
James McKinney:
It’s like the doctor’s version of, “It hurts when I do this.” – “Well, don't do that anymore!”

[19:34]
Jason McCann:
We were just cracking up about that. He’s like, “I've got to get one!” Everybody's jumping on Google, and our assistant’s jumping on Google – we are looking for a solution for Dan. We would order desks online - we didn't invent the standing desk category. These crazy huge boxes would show up, or you'd have to clamp it to his desk, or they would cost thousands of dollars, or take 12 weeks to show up - and Dan said, “I got an idea for a product.” And Dan's pretty good at product. I said, “Hold on a minute.” I grabbed David Patton, our Head of Design, and the three of us sat there, and Dan described what became the very first Varidesk. “Could it slide out of the box not attached to my desk?” I just wanted to come right up really fast, so I can instantly be seeing David's drawing. It was just an amazing moment, to watch and be a part of, to give birth to something, not knowing how big it was ultimately going to be, but it's very cool in those moments to say, “Hey, there's that ‘Aha’ moment.” When we think we've got something on paper, now we got to go build a prototype and do the hard work. But, at least, in that moment, it’s like, “Wow! You’ve got something here that’s worth exploring!” That’s what we got to.

[20:40]
James McKinney:
At that same time, was there any part running through your head of your past stories of coming too late to market? Was there any doubt that was present as you were going through this first prototype? Having ‘Aha’ moment, but also “Uh, let me pause on this one for a second.” Was there any pause?

[20:57]
Jason McCann:
Not at that moment. It happened a little bit later on. I think, at that moment, you're in the adrenaline side of creating the business and getting the prototype ready, and focus on it. I don't over think it. I recognize Gemmy will create over a thousand consumer products a year. It’s just in the DNA of product. I recognized, “Hey, products are products - it's just like businesses. Sometimes they make it, sometimes they don't.” The odds are against you, but it's just a matter of hard work, luck, listening, and all those things. When we got the first prototypes, our team was using them, we were using them, we liked them, but I recognize that we had to go really show it outside, the four walls, to another company. And we said, “Who knows somebody inside of the workspace?” And somebody knew somebody that knew the new president at Verizon at their call center in Irving, and said, “Okay.” We can get in and have a meeting. And that was literally our first presentation was to the president of Verizon, like, just working these contacts. So, we've got our prototype, and we walk into his office. At the time, we had also Dr. Levine coined the term ‘sitting disease’ from the Mayo Clinic, and so, we've got this newspaper article that talks about sitting disease, but we don't know anything about the office furniture space. We just know that Dan feels better and that his back pain is going away. And every other product we bought out there was horrible. So, we walk in, and we're showing it to him, and the president says, “Well, I have no idea what you're showing me. I've never heard of sitting disease.” I'm like, “Okay. We're early.” He said, “Hold on. Let me get my ergonomist and my Head of HR.” And I didn't know what an ergonomist was six years ago. I leaned over to David, and he explains to me what an ergonomist is. The Head of HR walks in and the ergonomist says, “This is a great product.” He made some design recommendations to David, and the Head of HR said, “This is a huge issue that's impacting us - health and wellness matter.” As I'm sitting, I realized, at the end of the day, we're trying to create a happier, healthier, more productive workspace. The CEO cares about, and the president cares about productivity, the HR is thinking health and wellness, and recruiting and retaining talent was everybody was talking about. I'm like, “Wow! We've got great feedback there.” The second client we showed it to was The Container Store. They're located right here and compelled down the street from us - that's their headquarters. They were kind enough to give us a meeting. As I walk into their space - and they're awesome, the culture is great, and they're touring us around - I'm walking in, they already have standing desks for their employees. At that moment, I do say, “Oh my god, it's over. There's already standing desks for people. But as we started to listen to them, they said the challenge was standing desks as they can't adjust them at all, and people need to move. They just were not all built the same size. “If somebody wears different shoes, or if we transfer somebody to another location, we have to adjust the desk, and it's a very painful process. We want to buy some.” At that moment, I'm like, “Okay. We're onto something.” There's macro trend that says health and wellness is here to stay. Their company is already making standing desks furniture, but they're looking for a better solution. I’m like, “Alright. We've got something.”

[23:45]
James McKinney:
Was the first version, the one you took to Verizon, was that adjustable as well, or, is the adjustable version coming from your walk through a Container Store?

[23:55]
Jason McCann:
We had the adjustable version already figured out. Just like Dan's original vision and David, the way they created it - slid out of the box, put your monitor on top, and you could stand up or sit down just by grabbing the two handles. Literally, taking it right out of Dan's head and creating into a product was absolutely incredible.

[24:14]
James McKinney:
You have two walkthroughs, and there's an evolution that takes place from those two walkthroughs. Obviously, I'm assuming first sale came from the Verizon presentation. You walk through a Container Store, you get affirmation, or confirmation, that, “Okay. We have something here.”, because the standing desk market is fixed height or fixed distance. What learnings did you bring from your pog initiative and your dot.com phase? What learnings did you bring from those that helped to ensure success in Varidesk?

[24:47]
Jason McCann:
Yeah. I think, early on, my focus was really listening on the end customer, really getting that feedback so I could get the product just right. Today, I would look at it like - people have told me this story: if a small group of people loves your idea, you have an opportunity for a large group of people to really like the idea. I really wanted to focus on that small group of people in those intimate settings, could I get the feedback, because I'm there literally as a sponge, as a student asking questions, what do they like about it, what do they not like about it, so that we can get the product right. I also, in my mind, said, “All right. I've got a macro trend - do I have a trend here that's not a fad?” Health and wellness is definitely a macro trend that is not going anywhere. More and more research, even today, keeps coming out on. We've got huge strides to make in that space, but as I said, we got to see if this thing can be profitable. That's when we entered and said, “Okay. Well, how we're going to go to market with this product?” Because, as I said, if I can't go to market with it, I don't want to just build the business model. How we can actually sell it profitably, do we have something here? We had a debate: is it going to live inside a product, inside of Gemmy at the time? It's kind of an odd product for a Halloween and Christmas company. Well, we were able to nurture it inside, so it wasn't like two people in a startup, in a garage, with no money. It was, like, we were able to incubate the idea inside of another company. Because it's not always about being an entrepreneur, where you're out there on your own. You can be an entrepreneur - people coined it - where you're doing entrepreneurial things inside of an organization. Once it sort of proves itself out, then it can be spun off, and it can be a standalone entity. In my mind, I was like, “Let me work out all the kinks right now. Let me lean on the current infrastructure of the business.” And what have we got here? We went up to NeoCon, to the big trade show for the office furniture industry – awesome, big industry, never been to NeoCon, didn't know anything about furniture industry. I’m wearing jeans and t-shirts with logos on. Everybody's in a suit, which is great. So, a little bit out of place there, but we entered and won a new product innovation of the year. What they said, “Hey, the furniture industry has a list and discount. You need to have a list price, and then, you always sell it at least 50% off, and you have to sell it through a dealer.” And I'm like, ”What year is this? Nobody does this!” – “Now, this is how the whole industry works. You don't understand.” At that point, I was like, “Oh, gosh.” So, we met with some dealers, and they didn't really sell our product. They tried but didn't sell them. “Okay. Is it just not going to sell? – “We're trying to sell these.” And somebody said, “Just turn on a website.” I'm kind of in my mind going, “Okay. I'm back in the dot.com days.” And Dan was like, “Do we really want to do this again?” But we said, “Okay. Let's give it a shot. It's low risk - let's try it.” We've made plenty of mistakes in the past, so we turned on a little website instead of building out a crazy one. We spent 99 bucks, we did a 3dcart website, and we spent $100 on a Google Ad. We said, “Okay. Here's our little Google Ad - Standing Desk.” And, then, we sold one. And, then, one day, we sold two. And, then, one day, we sold three. It’s a thousand bucks. We were like, “Oh my god! This is incredible! It’s a $1,000 on a Thursday!” That's when we realized we were onto something. People started buying one at a time from us.

[28:00]
James McKinney:
And you were selling direct to consumer?

[28:04]
Jason McCann:
We were selling direct to consumer. At that point, it was like, “Well, if the dealers won't sell the product, I don't believe in list and discount.” If you think about the world today of transparency and authenticity, you don't have the luxury of saying, “Hey - wink, wink - it's $2,000, but you get it for a $1,000.” It doesn't work like that. I think Jeff Bezos has proven that, or eBay, and all these other amazing transformative companies out there. But we started the business. As we started to ship out the product, I said, “Who are the best companies out there that if I had to benchmark with each of them?” And the first company I picked was Tony Hsieh from Zappos. I said, “I want a world-class customer service, I want Delivering Happiness, if you don't like your Varidesk - ship it back.” That was number one. From a transparency, I said, “We got to be transparent on our pricing. Just the way Amazon is. There's one price.” Shipping included eventually, just to keep it simple. We used to be 3.50, and $50 ship, but we said, “3.95, shipping and handling included.” We just said we're going to do it simple. But everyday value, to me, the way that Sam built Wal-Mart, the way that James Sinegal built Costco, the way the Jack Bogle built Vanguard - everyday value trumps everything else. The idea that you have to have a coupon, or 50% OFF, or whisper, whisper, you get a 50% OFF. – No, no, we're going to have just one price. If you buy a whole bunch, there may be a tiered price, but basically, one price. We said, “We want a culture like Southwest Airlines, we want a culture the way that Gemmy has built.” We said, “But we want to be profitable the way Southwest Airlines and Wal-Mart are.” If I could just cherry pick all these, and as we thought about business models, we were like, “This whole furniture industry is built like the automotive industry.” But look at what Tesla's doing. So, we said, “We're going to build our business model like Tesla. I'm going to sell direct to you. I'm going to talk to you. And if you have an issue with the price, I'm going to get better from it.” Having that direct relationship, which you can do today so cost-effectively with your fan base, I said, “If we can figure this out, then we've got something.” Once it started to work, we quickly spun it off from Gemmy and decided to make it a standalone entity.

[30:03]
James McKinney:
You dropped a bunch of names there that are people that you obviously look to for something - who's played significant roles in your life, leading to success of Varidesk? Who are the people that have really contributed to your current position here as founder and CEO of Varidesk?

[30:19]
James McCann:
Obviously, I looked at my mom being the first entrepreneur, and just watching her energy in a space, and the way that she handled employees and clients, and really understanding that client relationship from her entire career journey, and opening up multiple businesses - just watching my mom, her leadership style, and everything, had the initial impact on me. I think, from day one, just being and sitting around the dinner table, talking about hiring people and firing people, and a diverse workforce. The thing is that, in the ‘70s, it was very forward thinking versus today. So, those little things. There's a good friend of mine, Russell Denson, down in Houston, that's probably my lifeline call from a mentorship standpoint, and our paths randomly crossed at DSi toys. He's just been a great person that I can lean on and call whenever I've got a question about business and finance. He used to be the Chairman of Inc. and Fast Company Magazine, so it's great to have mentors like them, obviously, Dan, the founder of Gemmy. I think there's people in your life that come across, but, also, I think through books and learning and reading and watching YouTube videos and TED talks - I think all of those. You watch Tony Robbins, you read Awakening The Giant Within, you read these books, they bring out a part of you that helps inspire you, just like you're having a conversation with them. I go to these books about reading even the Elon Musk on. You read these stories, and it helps you understand that life is not all about the highs, it's about the grind, and the grip, and the fire that you've got to get into. I look at it, like, those stories help me and inspire me to go, “Hey, it's part of the journey. You've got to earn it.” Overnight is fifteen years of hard work for an “overnight” success. Each one of those learnings, I think from all these books and the people I've been blessed to cross paths with, has been incredible for me.

[32:06]
James McKinney:
I'm going to put you on the spot. What is with that one book that you point to, like, this has changed things for me?

[32:15]
Jason McCann:
I think Good To Great was probably the first one that I read, and I went, “Okay. That makes perfect sense to me.” The way Jim Collins framed it out. That was sort of the one I say if you're going to start with sort of a book on business, and understanding teams, and tweaking business models, and getting them right over time. I thought, for me, that book right there was probably the one that really put me on the business journey of really saying, “Okay. This is what you got to do.” From a reading standpoint, that would be the first book that I typically have gone to and recommended to young business people that just want to understand. Now, it's a little bit dated at this point, but that was sort of the first one that I go to. I just read Thrive by Arianna Huffington – unbelievable! As I think about the leadership of the future, the workspace of the future, and all that, I’ve literally just finished that one. I've just probably got twenty of those that I’ve got out to friends and recommendations of people. Again, you hit these, just like with the Delivering Happiness, you hit these books, and they just resonate with you, but Good To Great would be my first.

[33:26]
James McKinney:
That's outstanding. Let's talk about Varidesk, as we come to the end of this Varidesk story. Varidesk is thriving - actually, would you still classify it as a startup?

[33:38]
Jason McCann:
Oh, no. We're little over five years olds, we're like a five-year-old. We just had our Christmas party. If you think about it, we started little over five years ago, with the one idea to say, “Hey, how could we take a current desk today and give you something where it could convert into a sit-stand?” We threw a desk riser. Then, we started having people say, “Hey, do you guys have anti-fatigue mats? I've been standing on concrete, I’m on wood.” At the time, we didn't. So, I went on Amazon, and I bought every single mat that was bundled with our product. We started to look, and we had to decide, “Are we going to become a channel of distribution for other people's product, or we're going to create our own?” Well, we said we're going to create our own. We've designed our own mat, started producing it, and we became one of the largest mat sellers in the world. What I realized is customers started sending me photos saying, “Hey do you have a monitor arm that would work on your product?” I didn't know anything about the monitor arm business, but we figured it out, and we created our own monitor arms, and we have a multi-million dollar monitor online. Then, clients said, “Hey, we want a full desk.” At the time, I was like, “Oh my goodness, are we really going to be in the full desk space?” And, so, we started to create manual-lift full desk. And, then, clients said, “We want electric desks.” We said, “God, there's already all these companies making electric desks!” I said, “We're a little bit like Apple - because that's another great company to benchmark against - they didn't create the whole mp3 player, but they really revolutionized it.” I said, “Okay. So, the team, look at all the desks that are out there, and let's build a better electric desk.” Now, we're one of the largest suppliers of full electronic desks in the world. Then, we started saying, “We have stand up meetings all the time - why don't we have standing conference tables?”As we started to think about the workspace of the future, we had already built flexible walls. Because we've been going through crazy growing pains, clients are walking into our space, and they're like, “Would you sell those walls?” I'm like, “We will now!” Suddenly, we created our own wall line that we just launched in the last month. We've elevated the brand from, today we have over two million people worldwide that use that original product, which is crazy to think - all from one person's pain and a cardboard box – and, now, we have hundreds of thousands of corporate clients, I think 98% of the Fortune 500. We ship in 30 countries on a daily basis. But it was all one fan at a time, one order at a time, one employee at a time. Five years ago, there were no employees, we were all volunteering time, we all had full-time jobs, to suddenly, I said, “Okay. We’ve got two employees. Now we had three. And today I've got 275. It will be a little over 300 next year.” We had about 180 employees last year. We've had tremendous growth, we operate 24 hours a day, but each of those has been listening to a customer, taking care of each order, reading those online reviews, and just grinding through it, and it all has snowballed into something amazing.

[36:24]
James McKinney:
That is an unbelievable story! Especially, going back to your walkthrough of Container Store. It is very apparent to me that thread of success in your startup journey, the Varidesk startup journey is your ability to listen. You heard Container Store talk about the challenges they had, and you thought, “Okay, our product already addresses that.” And, then, every other piece that you add to the Varidesk lineup has been in response to listening to customers and their needs - I love that.

[36:56]
Jason McCann:
I think if you really focus on your fan base - at the time, I called them customers – and as Sean started to pull together all the reviews, he said the number one word they're writing in the review is ‘love’. I'm sitting there, I'm like, “Okay. We don't have customers - we have fans.” We wanted that word-of-mouth to spread. So, “Let's take care of that fan, but let's build a career-long relationship with our fan base.”, because they're going to get promoted, they're going to start their own companies, they're going to go on their own journeys. And if they trust the relationship with us, and they know we can help them cost-effectively, and directly impact their business by having a positive influence on their culture and workspace through our products, they're going to reach out to us. And that little bit of just the way we think about our customer relationship is also the relationship with the employees. The mistakes I made in the restaurant business - I didn't hire enough people around me to help elevate it. I tried to do all the jobs myself, running around, cooking, work in the bar, and everything. And to say, now, initially and early on, to surround yourself with amazing talent that wants to learn, wants to grow, has the same values as you, is willing to work hard, wants to have a good time, but they know that we've got to work and we’ve got to stay profitable. If they can balance all of that with you on that journey, your culture improves, your team improves, they start to recruit new people for you, and the whole thing scales.

[38:19]
James McKinney:
Now, standing at - no pun intended - six years for Varidesk – is that what you thought it would be when you were at day one?

[38:27]
Jason McCann:
Oh, no, it's way bigger than I think we thought it would be. And I think, now, that we've gotten an opportunity to have such a positive impact on so many companies out there and so many people's lives, they talk about, “Hey, I've reduced my back pain.”, as we start to hear and get all that feedback, it's elevated our vision to what we can do. As we sit here and elevate our vision from, “Hey, we're just going to help you create a happier, healthier, more productive workspace.” to, now, we're creating, and really simply creating workspaces that elevate people. Because when people walk into our space now, they realize, “I don't just want the product, I want the energy. I'm trying to transform my culture. I want to recruit and retain talent.” That's what we're providing to our clients. We're creating flexible, affordable workspaces of the future that allow them to elevate their staff, their people, their teams, that have a huge impact on employee engagement, increasing their bottom line, increasing their businesses - that's what they're reaching out to us for. I had no idea that's the impact we would have. I thought we were addressing one person's back pain, but what we're helping is businesses address the pains that come along with growing. And I always say growing pains are much more fun than shrinking pain. I wake up blessed every day that we're trying to fight, to survive long term, and really for the business to thrive beyond my lifetime. So, can we foundationally do that? It takes discipline, hard work, and a lot of people sitting here, trying to figure this thing out versus shrinking pains, which I've been on the other side of. I recognize that's just a part of the growing process. I do wake up feeling very fortunate that I'm focused on growing pains right now, but by making all those mistakes in the past, of not being profitable, of not getting the right people around me, of not firing people with the wrong values - all those little things that you learn. Or, making small bets when you're doing a $100 Google Ad, versus, obviously, we invest millions with Google today, but learning on small bets versus making big bets. So, learn small. Well, it doesn't hurt too bad. And, then, you start to invest more and more as you start to learn and figure things out. I think all those things have helped us.

[40:33]
James McKinney:
There are people out there that will hear your story and think, “Man, I just can't wait until I'm a 100-million-dollar organization!” I think there's naiveness to that, thinking that there's no challenges that come with running a 100-million-dollar organization. Obviously, Varidesk is bigger than that. But what keeps you up at night now? Six years, massive organization, shipping 30 countries globally daily - what are the things that keep you up now?

[41:06]
Jason McCann:
Well, I think because I'm a little more balanced, and I probably would have been in my past, I don't know that I'm kept up like that. I do try to get seven or eight hours sleep, and I do wake up fairly early.

[41:18]
James McKinney:
Wait, didn't you read Unleash The Power Within? Four hours, Jason! Four hours!

[41:21]
Jason McCann:
Read Thrive, and you'll go back to seven or eight hours of sleep. Arianna's probably got it right. I think, for me personally, it's growing pains. It’s about continuing to get the foundation of the people right. I wake up every day recognizing that today it might be 275 families that are counting on the decisions that I make, it might be all the FedEx drivers that are delivering my product, it's our fan base that's relying on us to deliver it so they can impact their organizations - I don't take that very lightly. I take that very, very seriously. I recognize that it starts with me, and so, the decisions I make are going to have an impact on everybody's lives around me. It's not just my family, it's about everybody's family that is on this journey with me. I don't take that lightly. That's probably the thing I always focus on. It’s the pillars of, “Is the product right? Is the business profitable? Do we stay in the course of what we said, and the guardrails of the business that we set up? Do I have the people that are on this journey with me, or do I need to usher them off? Who is going to scale with me, who's not?” And on the competitive side, there's always people that are drafting you - that's how the world works unfortunately. You recognize that. We are taking care of the customers, so if I've got those things right, I think everything will balance out. It's kind of those four things. But I do recognize the decisions I make impact a lot of people.

[42:44]
James McKinney:
I love that what you just mentioned right there - the 275 families. It's not just the employees, it's their families, and their kids, and I love that. Thank YOU for having that perspective - I love that mindset. There is a weight that comes with it. I think a lot of people, when they're early on in the startup, it is just about, “How do we solve this problem, how do we grow, grow, grow?” They don't think about the people that come along with it. I love that you have that heart, to just think of those 275 families - that is fantastic! What do the next three years look like for Varidesk? Or is three years too short?

[43:10]
Jason McCann:
I mentally still wake up broke every day. I recognize that you do start at zero every single day, and that we haven't shipped anything until it's shipped, and the client ultimately pays for it. So, I do recognize that there’s that on a micro-level. As I elevate up to 30,000 feet, we did buy a standing desk company for kids in January, called Stand2Learn, from Dr. Benden, out in Texas A&M. We pay royalties to A&M, we recognize that kids is a huge opportunity for us to give back. We've also donated almost $2 million with the product this year. Next year, we’ll donate close to $5 million with the product to nonprofit organizations, startups, to help them get started in creating active workspace - it's a great way for us to give back. As we elevate up, I recognize that there's so many great companies out there. And every entrepreneur I talked to, I recognize the future is very, very bright - all we have to do is take care of our customer, one order at a time, help to have a positive impact on their business. I think there's a tremendous opportunity for us to continue growing, to continue to reimagine the work space of the future. Because to me, it's about flexibility and change. We don't know what it's going to be, but I guarantee you it's not going to be what it is today. And if we can continue to evolve our product on the product roadmap, to come out with new things that help clients and customers, I think we're going to be very successful.

[44:30]
James McKinney:
When I hear Jason's story, I know I'm inspired to keep moving forward, regardless of my own professional failures. Just last year, I had to shut down a mobile technology startup that had launched over five years ago. Can I grieve the process for the next 12 months and carry the guilt of the money I received from friends and family that did not gain any return for them? – Yeah. I mean, I guess, sure I could. But I'm not going to. Like Jason, to use his words, I'm going to keep rowing until the wind catches my sails. And I'm going to surround myself by other people that are just as motivated to do big things and chase big dreams. In fact, Jason is still driven to help other entrepreneurs that are starting up and wants to share a unique opportunity for The Startup Story listeners.

[45:15]
Jason McCann:
Many of you out there may be a Varidesk user today, and I would just say, here at Varidesk, our goal is to really help clients reimagine their workspace, and we've been really simply creating work spaces that elevate people. We would love your help! If you've got an awesome story, and you are already a user of Varidesk, and you would share that story with us, we would love to hear from you. We love the photos and videos from our fans out there. And, also, as we elevate our brand, we start to help clients reimagine their workspace, through full electric desks, through walls, through LED lights, standing conference tables.

If you need those services, all you have to do is go to varidesk.com/startupstory, and you can reach out to us, and we'll give you free design services. We can help you think about your workspace of the future because we know that workspace ultimately matters.
If you can help us share our story, we'd love to help you think about your workspace of the future, and we really, really appreciate it.

[46:08]
James McKinney:
I hope you'll take Jason up on his offer and visit varidesk.com/startupstory.
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