🎧🍌 Lessons From Selling $100 Million in Dog Collars | Ken Ehrman (Co-founder, Halo Collar)
Working for the first investor in Apple, building hardware, listening to customers, IPOing with $3 million in revenue, and meeting Charli D'Amelio
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Ken Ehrman is the co-founder and Managing Partner of Halo Collar, a smart dog collar that tracks your dog with GPS. Halo Collar uses patented technology that allows customers to instantly create up to 20 unique virtual dog fences from their phone using GPS.
Follow Ken on LinkedIn.
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In this episode, we discuss:
Working for Mike Markkula, the first investor in Apple
Building hardware and the importance of patents
Listening to customers, solving their problems, and sizing a market
Qualifying enterprise customers and selling with "calm confidence"
Early investors trying to buy 95% of his first company
Getting the US Post Office and Army to fund $15 million in R&D
Taking a company public in 1999 with $3 million in revenue
Using AI to train dog movements and make "the Apple Watch" for dogs
The crazy story of how he met his celebrity co-founder, Cesar Millan the Dog Whisperer
What happened when they met famous TikToker Charli D'Amelio
👉 Find the full episode on Apple, Spotify, and YouTube 👈
Follow The Peel on Twitter, YouTube, Instagram, and TikTok.
Thank you to Zac and Xavier at Supermix for the help with production and distribution!
Transcript
Find transcripts of all prior episodes here.
Turner: Ken, thanks for joining us today. First question, I thought it'd be really interesting for people, before we dive into the product, to go over how you got into this whole Internet of Things[1] industry and talk through the journey of how you got to where you are today.
[1] “The Internet of Things (IoT) describes the network of physical objects – “things” – that are embedded with sensors, software, and other technologies for the purpose of connecting and exchanging data with other devices and systems over the internet.” (More here)
Ken: Well, first of all, I appreciate you having me on, let's start with that. I'm an older entrepreneur – I'm over 53 – but I started this company about five years ago. But that did give me some advantages, which is that I had learned from my previous experience of starting companies and how to do this one a little bit better.
I was an engineer. I went to Stanford and, as a result of being in Silicon Valley, I wanted to be an entrepreneur. That was the path that I was on.
My first job out of college was at a company called Echelon, which was founded by Mike Markkula, one of the founders of Apple, as well as a gentleman named Ken Oshman, a legendary Silicon Valley entrepreneur. And they wanted to be the chip that would go into everything but computers.
Steve Jobs accepting a check from Mike Markkula, representing the very first outside investment in Apple: a $250,000 investment for 30% of the company.
This was back in 1985 – they were like, “Intel can do all the computers. We want to be the neuron chip inside of lights and air conditioning systems and auto – it could be anything.” It was pretty amazing what they were trying to do back then. They were really focused on having this great chip that made the device smart.
Full episode available on Apple, Spotify, and YouTube.
And that's what caught my attention, not only in their company, but I ended up taking that smart chip after working there for a year and a half, and saying to the CEO Ken Oshman, “You have the best chip but you need to use it in an application, so you can beat out people.” And he was like, “No, we just want to be the platform.” So I said, “Okay, well I'm going to leave and start my own company and, using your neuron chip as the engine, make smart RFID tags[2].”
[2] RFID stands for Radio-Frequency Identification and it is a form of wireless communication. RFID tags function as type of tracking system that uses radio frequency to search, identify, track, and communicate with items and people. (More here)
You could track these high-value assets and the idea was to make them smart. Our first applications were tracking letters for the postal service and tracking vehicles for the military. And we took that principle of high-value asset tracking and we were doing it for AVIS and Walmart. At the time, we were also applying this technology not only to rental cars, but forklift trucks and tractor trailers.
[Ken doesn’t mention this in the episode, but his first company’s name was I.D. Systems, now called PowerFleet]
Every single Walmart trailer, for example, has our technology on it. The idea there is, instead of just RFID, we monitor things like: is the trailer loaded? Or is the door open? So let's say a trailer full of goods arrives at a Walmart facility - how many hours did it sit there before someone opened it to start unloading it? Or is there a problem because this thing just got here and no one's unloading it? There were real-time alerts of important information because there could potentially be millions of dollars of inventory in these trailers that they've paid for - but if the merchandise just sits there, it’s not getting into the customer's hands.
Every Avis rental car has our device in it today and we have patents on this. By the way, the first thing I did when I left to start my own company is file patents. If you have a novel idea, contact a patent attorney and get your invention on file with the patent office. To me, that's probably one of the most important things you can do when starting a tech company.
With Avis, when your car comes back to the rental facility, an RFID reader picks up the car. So instead of just saying that the car returned, it actually is linked to the computer and it gets the fuel, the odometer, any damage codes that the vehicle may have, any lights that might be on, anything that could potentially a problem – it all gets transmitted wirelessly to the computer.
So when you return your car, you can be billed accurately. For the fuel you used, you don't have to get your piece of paper and pencil it out, and say you have seven-eighths of a tank and this amount miles – all of the process is automated and accurate.
Turner: And it used to be workers at the company that were going and doing this manually, right?
Ken: Right. And they would literally get back in the car, turn it on, look at the fuel tank, judge it to the eighth of a gallon – and instead they could have been helping you with your luggage. They could have been helping answer questions. There was no value-add – it was just part of the way they collected data to send you a bill.
Turner: So as you rolled out the product and the technology evolved, you were finding new ways to cut costs for customers, increase their revenue, which obviously helps your business as well. Building on top of an evolving technology gives you an extra bonus.
Ken: Right. And it's fun to listen to the customers and see what their business problems are. Often it applies to all the trailers a d even if you get to forklifts – I imagine you're sitting there and saying, “Why would anyone want to track a forklift of all things?”
Turner: Productivity? Making sure they're active, moving around?
Ken: That seems like the natural answer. And at first, I was like, okay, productivity? There were many companies out there like Manhattan Associates and Red Prairie – that's all they focused on. They had warehouse management systems on there.
But as I dove deeper into it, what we learned was that if you walk into a Ford manufacturing plant, for example, and there are 150 forklifts in the plant – if you're a forklift driver, unless you have 150 keys in your pocket (which you don't), the keys are just left in the vehicle. It's crazy. So these really heavy vehicles, are driving around in the same building where people are walking around on their phones, not necessarily paying attention.
There could be cargo on the lifts that are blocking the driver's view, for all we know, and there's no access control. So there's no way to keep someone who's untrained or unauthorized from just getting on that truck and using it. And forklifts were the number two cause of deaths for Fortune 100 companies second to highway accidents.
And what we did is we took a smart RFID tag and linked it to the ignition and made it so you needed to give the same badge that you used to get in the building to start the truck. You can now see how many hours people are paid to drive forklifts versus how many hours they're logged in versus how many hours they're moving versus how many hours they're moving a load.
And often it's not their fault, it's just how they're allocated. You may have 10 guys assigned to shipping but only two people's worth of shipping work to do. So monitoring these assets became a really big business. And by the time I left that company, we were tracking about 600,000 to 700,000 assets for half the Fortune 500. So it was a pretty exciting company.
Turner: And you took it public too in 1999! What was that like?
Ken: That was definitely too early (chuckles). We were doing at the time, maybe $3 million a year in revenue.
Turner: Oh wow, that's like a Seed round nowadays if you're not an AI company. You might not even be able to raise a round with only $3 million in revenue.
Ken: I know, it was definitely on the early side. On the other hand, what people saw was the potential. Even back then, even though it was 1999, we were talking about how using a smart technology, linking it to the asset, controlling and managing the asset to make sure it's being used safely in efficiency, had huge potential. We were talking to all the biggest companies so I think people really bought into the concept.
What I would say was the biggest problem and the difference between that company and Halo from an entrepreneur’s standpoint is that we were always selling. And I know there's a such a saying, you should always be selling. But when you're trying to sell to Avis that you have a $300 device that you can put into a rental car that automatically collects the fuel and odometer when the customer returns, they get it – but the problem is they don't need it.
They needed cars. If they didn't buy the cars, they didn't have any revenue. Those cars needed a license plate. You can't drive around 300,000 cars without license plates. When you're in something that's new like we were, trying to convince Ford to put it on every forklift and GM to put it on every forklift and Avis to put it on every car, it is a very long sales cycle.
It was missionary because they could live without it and that was something that really was a problem for us because even when we landed a customer – let's say we got Home Depot for example. They were like, “This thing's great. We're gonna put it on all our forklifts. We have 120 distribution centers, Ken, but we don't wanna disrupt the operation, so we're gonna do three per year.” And I'm like, “Three per year…?”
Turner: Yeah. How much revenue is three facilities a year?
Ken: About a half a million or a million for a facility. But they're like, “We're going to do three a year.” And I'm like, “You have 120 – it's gonna take 40 years at this pace!”
They didn't need it. It added value. It made them safer. It had a good ROI. But they could run their business without it.
That's where Halo came in.
What was interesting there is that we were truly disrupting an existing market. So let me just explain Halo since we haven’t talked about it yet. I went from forklifts, rental cars, and trailers to… dogs.
Basically, what happened was my niece's dog got out of their invisible fence and was run over by a car and killed. She was 11 years old and they had just adopted Ruby about a year earlier. Ruby was a rescue and they loved her more than anything. All of a sudden, something that they thought was old and reliable – the invisible fence – their dog got through it. Once she was through it, she didn't wanna get shocked coming back, so she got out onto the road and was killed – it's terrible.
We were all crying. And at the time, somewhere out of that tragedy, the bulb went off and I was like, “Oh my God, this is the perfect use of this technology that I've been trying to push on these Fortune 100 companies for 25 years now.”
People were already buying it, the invisible fence. I looked on Google and I saw that people were searching the term invisible fence 400,000 to 500,000 times a month. So when it comes to doing due diligence on the size of the market – first of all, if you look around my town, half the houses seem to have the invisible fence so there was that gut feeling of “if they have a dog, they would buy it,” at least in the suburbs. But being searched 400,000 to 500,000 times a month – I was like, people aren't searching that on Google unless they're looking to buy it.
It’s basically a product for dogs where, if you want to let them out in the backyard and if you have a house, you don't have to worry about what it looks like because it’s just a wire buried underground and when your dog goes near that wire, they have a collar that detects it and beeps or shocks your dog. That’s how the invisible fence works and has worked for 30 years. And it's pretty good – unless your dog gets out and then it's a problem.
Some dogs learn that it'll hurt for a second, but then they can get out. So when I also Googled that and saw that 10 million dogs are lost every year and a million dogs are hit by a car, I thought “This is a perfect use of the technology that I've been working on since I graduated college.” So I was pretty excited, and basically took everything I learned from starting my first company and tried to do the best I could this time around.
But by the way, if you can imagine – guess what the first call I made was after I had the idea?
Turner: To your niece.
Ken: Patent attorney, patent attorney. (chuckles)
Turner: Fair. Yeah, that makes sense.
Ken: My first call, I said, “I just came up with this idea.” My niece was second, by the way, so actually that was very good.
I called my patent attorney and we had 44 patents in the RFID space, back from the original one, using a smart chip on an RFID tag, to all these other applications, whether it was rental car, forklifts – all these things that we could do using this smart technology.
So I called him and said, “Hey, I have a new one. I’m starting another company. This is what we're gonna do.” And when he heard it, he was like, “I have to invest.” And I said, “Wait a minute. I have 44 patents with you. You never once said you want to invest.” And he was like, “This one is a good idea.”
So I knew just from the reaction – and by the way, I do notice the difference – like by the time I get down the path of explaining to anybody what the forklift product is, their eyes are already glazed over.
Turner: (laughing) Were mine? Did I hang in there pretty well?
Ken: I would say you did your best to pretend you were interested!
Turner: It is interesting, but I will not lie that the Halo collar is more interesting to me personally.
Ken: And really to everybody because it's something that people use every day. People love their dogs and people want to keep them safe and they don't want them to become the statistic. So it's something everyone can relate to.
And everyone kind of understands GPS, so they can imagine that you could have a GPS map view of your property on your phone like a Google map. And then you just draw the fence around your property with your finger touching the points, download it to the collar, and all of a sudden, when your dog gets near the fence line, the collar is going to beep as if there was a wire.
Turner: Okay. And so the with old wired fence – the way that works is that when the dog is within range of it, it will go off, but if they get past it, it stops working?
Ken: It doesn't even work because it doesn't detect it anymore. It only goes about a two to three foot range.
Turner: Oh wow. That's really small.
Ken: But it's enough. Unless your dog is able to jump three feet above the thing, which they can't, usually it's going to work. It's really just like a fence. But by the way, even real fences – people have them but they leave the gate open, their kids leave the gate open, and they usually only have it in the backyard so the dog can get out the front door or the garage door. There are so many other ways.
Again, one of the problems with a physical fence or even a wire (like an invisible fence) is if you move, you can't take it with you. What was amazing is my brother had an invisible fence – he lived in Upper Saddle River with me – and I had invisible fence. I would want to take my dog over to his house and let him out in the backyard, but they weren't compatible. What that meant was I could not let my dog out. So he would have his dog out running around the backyard, having the time of his life, and if I tried to let mine out, first of all, my wife would yell at me that it was going to run away, and inevitably it would.
62 second video on how a traditional electric fence works
Turner: So the Halo Collar is essentially about 5x cheaper than an electric fence, but probably 10x to 100x more convenient? Maybe I'm exaggerating a little bit…
Ken: What's crazy about it for me personally – I was CEO and my board would say to me frequently, “We need a consumer application.” And I would think about it; there were a lot of RFID typical consumer applications, like medical devices in hospitals, children at amusement parks, Alzheimer patients, a lot of these example applications were out there. Anytime I thought about them, it's not a no-brainer. But if you're about to buy an invisible fence and spend $2,000 to $3,000 on it, you'd be crazy to do that versus just setting it up on your phone.
It's not like at this point there's rocket science involved per se – GPS is on everything these days. Yeah, you could tell me where all the rental cars are, but no, I want to automate the return process because that's where the money is. Same thing with an invisible fence; the money is there, it's $1,500 to $2,000 minimum to get an invisible fence and it's something that every year people are buying, with or without Halo. It’s very different, like I said, to disrupt something than it is to start something where you have to convince people to buy it.
Some of the other things that I would say: I know I started with submit patents, that's one of the first things that you should do. The other really hard part of starting a company is it takes money to get there. You need to invest – the product that you're creating, the marketing strategy – whatever you are going to need, there's going to be a significant expense to get to the point where you have a differentiated product that people can understand and are willing to buy.
There's going to be this point A to point B chasm that a lot of people don't necessarily how to get through without huge dilution because there's a lot of things that cost money, especially in a hardware business. You certainly don't want to have to raise money to go buy $2 million worth of inventory. You're just getting hugely diluted just to buy inventory.
One of the things that I did originally is often times the government will fund R&D. And that did happen in my first company. So the Postal Service and the Army – remember how those were the first two applications – they wanted to use these smart tags to track the letters around the country and see where the bottlenecks were. So they were dropping mail into the postal service and seeing that it took five days to get from here to San Francisco (I’m in New Jersey, by the way) but they didn't know where the bottleneck was.
Turner: Yeah, that's a long time. It should take them a day. We've got planes!
Ken: Right, but as they could tell, it wasn't always doing that. So they said, we want to put an RFID tag in the mail to see where it's held up, to watch it traveling through the network kind of in real-time, and see where those bottlenecks were.
We found someone in the postal service who was looking to do that but didn't have a company in mind. We said, “Look, if you make them really smart, you're not going to need all these computers and these big RFID readers on every doorway. We're just going to make these smart tags.” And we ended up getting about $15 million in R&D funding from the Postal Service along the way that they paid for. And we still own the technology – that was the amazing part. They funded the R&D, but with the government, they're willing to let you own it as long as you agree that they can buy it from you license-free. So they don't have to pay a royalty when they buy it from you if they're paying for the R&D.
Turner: That's a fair trade.
Ken: Yeah, if you want to sell it to Ford or GM, go right at it. And the Army had the same types of opportunities. The first company, we really got off the ground by getting the government to fund our R&D so we didn't have to dilute ourselves raising capital.
Turner: … from those hungry VC sharks that are trying to buy a bunch of your company like me.
Ken: Right and by the way, when we would have these meetings, I remember we had our postal service device sitting there and we would say, “Look, we're gonna change the world to tracking letters.” The VCs would say, “Okay, we'll give you a few million dollars, but we want like 95% of the company, some crazy number.”
Turner: It's changed a lot! It's a little bit better now…
Ken: Right. And I'm not saying it's so easy, but you gotta find the right person.
Turner: It sounds like the government gave you about 5x more money and no dilution. That's a much better deal.
Ken: Interestingly, 9 out of 10 people at the Postal Service that we would meet with would say, “We don't need that. We're good. We're happy.” But then you find that person who wants to make change, who wants to improve things, who inside a big government organization says, “I want to make a name for myself, or I want to create something new.” An entrepreneur inside the company is who you are looking for.
Turner: How do you tell if they're really interested? Are there certain tricks that you picked up on?
Ken: Yes, I can tell you the perfect answer to that because that's a great question. Often times, they'll all say they're interested. Prospects will be like, “That sounds great!” And they would also say, “Let's do a free demo!” No… is the worst thing you can do.
I did a lot of things to try to differentiate the people who were serious from the people who weren't. One is, I often said they had to come to me. What I found at the beginning of my first company: if I wanted to go to a meeting with Ford, I would literally wake up at five in the morning, shower, put on clothes, shave (one time I missed half my mustache), get to the meeting at like 1PM, fly to Detroit, meet for 45 minutes, and then fly back. And I was like, this is ridiculous. This whole process is messed up. So at some point, I changed my approach.
I’m friends with Cesar Millan nowadays and we'll talk about him at a point, but he talks about calm confidence. It takes some calm confidence to say to Ford, “If you wanna come talk about our product, you come to me.” And that was a big distinguishing factor between the people who were just kicking tires and leading you on.
So it started with the first meeting. Were they willing to come to you versus you willing to go to them? But then the next thing would be a pilot. Everyone wanted a free pilot. That is something that is never good. It sounds great, but if they're not willing to put up $20 grand, $25 grand (I'm making these numbers up but they're not unreasonable), then they're not really seeing how it's going to transform their business.
They're like, “Maybe it will, maybe it won't. Let's see what the data shows.” And I get that! But in that Avis pilot that I was talking about where we were comparing the data, they had to pay for that. Otherwise I wasn't going to do it. And by the way, Hertz asked for free demos and I would say no because again, it just goes back to finding someone who wants to buy it as much as you want to sell it to them. If they're not even willing to pay for a demo, I would move on.
Turner: Yeah, so if you think about it as a funnel, you just kind of chop off parts of the pipeline and just really focus on the ones that are more qualified or further down the funnel.
Ken: Yep, people who really want what you have. And by the way, another thing that used to happen is scope creep. This used to kill us.
“Oh, we'd love to buy it, but we want to know the exact weight of the pallet that is on the front of a forklift.” And we're like, “Ask the forklift company. We're just tracking your access control. We can't do that.” So then the forklift company would say that's not what they do, they just sell forklifts. So we would engineer this sensor to go on the forks to detect the weight of the materials – that could take a year or two – and then they could decide that maybe it doesn't have a great ROI.
That creates a lot of problems where you have different versions for different customers. You have a version for Ford, a version for GM, a version for Chrysler, and everyone's different. Someone could call us from Ford and ask about a feature that doesn't even exist or that the customer service people don't know about.
From a scalability standpoint, you really want to have one product that accomplishes. You can always add to it, but it should be one product that your customers are using that ideally you can continue to upgrade so they're all using the latest and greatest version.
By the time I left my other company, I think we had 500 different versions of our products with different types. Walmart was still using the forklift system from like 2001. They're like, “We can still use it.” We were like, “No, there's so many things we fixed!” but it didn't matter. It was good enough.
Having one product, one platform is hard enough to get right. Uber, Lyft – it's an app. It's like one thing, and yet they still are losing money. So it obviously costs a tremendous amount to get even that one thing to the point where it's profitable. But if you make 50 things and you're a small company and you have to keep all 50 up and running, it's next to impossible.
Turner: That's actually what Steve Jobs did when he came back to Apple. You probably remember that. I forget the exact number of products, but they had a lot. Hundreds. And he just said, “No, we're just selling the iMac, the computer, and then we're gonna do a phone.” [Not in the episode, but it was actually an iPod for years before iPhone!] They had four products at one point, and now it's the most valuable company in the world. It's a pretty basic principle that lets you focus.
If you have 500 different products, your customer service team, your R&D team, the engineers – everyone has to know a bunch of different things over a ton of different products versus if it's just, “Hey, we sell a dog collar.” It has a bunch of capabilities, but it's one product. Anyone can be an expert on it.
Ken: Focus on that disruptive idea that you came up with. More products leads to diversification, but it also leads to lack of focus.
There are more dogs than forklifts, rental cars, and trailers combined. I think it's 90 million dogs in the United States. There are more dogs than kids in San Francisco, so it's not like we don't have a huge market.
https://airmail.news/issues/2019-11-2/marking-their-territory
Since we've started the company, we've now sold close to 160,000 collars, which is over $100 million in sales total since the beginning. So we've gone from an idea to a hundred million in sales.
Turner: Yeah and especially when you think about all the different products you're kind of building around it. I remember when we met the other night, you were showing me some of the different things that you can do. What do you think this turns into over the next 10 or 20 years?
Ken: There are a lot things in the pipeline. You’ll be able to put your own voice on the collar. Right now it has Cesar making noises and whistling and all those things. So we'll get your own voice on there.
We're going to have temperature sensing, so if you leave your dog, unfortunately, in the car at 90 degrees, we're going to send you an alert, which obviously would be helpful.
I have a very important reason to want to have a solution for service dogs. When you think of service dogs today, one example I would give is for children or anyone who has seizures. They have service dogs that can detect if you're having a seizure. And then they try to make sure that you're in a safe location and get attention, but there's not really much they can actually do.
If they had Halo (and this is something that is on the roadmap), and we trained them to, for example, spin around six times, we could tell that they did that and just like the iPhone, we could call 911 and give the location. For now, to get a service dog, it could be $25,000 to $40,000 and years of training. It's very expensive and out of reach for most people. If you can literally just train a dog to call for help, it's something that could really benefit many people who need it.
You can also detect disease or sickness in your dog by monitoring their behavior. Someone came up with this idea yesterday – I gotta submit a patent before I tell you, but I'll tell you anyway. The guy said, “It would be great if you could detect if my dog had ticks. We can't detect the disease but then I thought about it – we can detect if your dog is scratching. That's a behavior. So if your dog is scratching a lot more than usual, we could say, “Hey, your dog is scratching a lot more than usual. You may want to inspect him for ticks.”
There’s another thing that we're also working on. It's something we've spent the last three years working on with the University of Texas Dallas – there's been, a class of engineering students every semester that is working on Halo. There's a motion sensor in the collar that is basically the same thing that you'd have on your Apple Watch. The Apple Watch says you’re walking, jogging, in the car, biking, swimming based on how you're moving your arms. It's all based on artificial intelligence, looking at types of motions and readings that you're going to get doing specific types of activities, and then saying, “Okay, he’s gotta be driving.”
Turner: Even the speed that the phone or the watch is traveling… if he's going 70 miles an hour, he's not running.
Ken: Right. You're looking at all that sensor data and figuring out what someone is doing. So we have been doing that same thing for dogs. The problem is the software is all tailored to people.
We've been putting the collar on dogs and having the students look at the dog and say that it’s standing, sitting, jumping, barking. And when they do that enough times and feed that data into AI software, we have now been able to tailor the data to be dog-oriented. We're going to be able to tell, when is your dog barking? Even with potty trading – is your dog about to go to the bathroom in the house? Tell him no. Unless you're watching him, you might not be able to see it. We can detect all of that.
It'll help detect illnesses. Are they drinking too much? Are they not going to the bowl and drinking enough? There are so many future elements to it because you have this smart sensor. And every collar can be updated with the latest software and add those new features. Every feature I just told you about is something we can download to even the first Halo 1s that we shipped at the end of 2020.
Another cool one that someone wanted was a dog bell. So when they get to the front door, you get a notification on your phone. Your dog is waiting there so they don't scratch the door.
Turner: We've definitely done that in the past. We've had a bell on the door and the dog would ring it. The dogs really take advantage of that.
Ken: Cesar was really involved in this, and when I say Cesar, I haven't even talked about him yet, but one of the things that when I founded Halo, I was like, “Okay, I knew the GPS was accurate enough to replace the wire, but we need a dog expert.” If you were putting this thing on trailers or rental cars or forklifts, you need an expert in that field.
Even on the car thing, there were 2,000 makes and models of cars and Avis wanted us to be able to just plug our device in, have it figure out what car it was, and work, which by the way is not so easy. And it had to be highly secure. You needed a car expert because every car speaks its own language on the onboard diagnostics port and has different codes sometimes even within one make and model – like a hatchback could speak a different language than a regular coupe. So you needed an expert in the car computers themselves.
We knew we needed a dog expert, so that is where Cesar Millan came in, the dog whisperer.
Turner: Can you explain who he is? Some people might know, but for people who are not familiar.
Ken: He is basically the only person I could even think of that was a dog expert that people knew. I was like, who else is there? So he was the Dog Whisperer. He had a show that was on Nat Geo and is still the number one show – it's still on reruns! He would take really bad cases, like dogs that were going to have problems and go to a shelter, biting people, things like that, and fix them. He’d come in and turn them into the perfect pet.
People couldn't believe it! It was almost like magic, like David Copperfield, what he would be able to do with these dogs. If you haven't watched it, there's a reason it was the number one show for a long time because it's almost unbelievable.
And now that I've actually known him for close to five years, it is true. Unlike David Copperfield, who I don't think really can perform actual magic though I know it looks amazing, Cesar can speak dog. I mean speak dog.
I can give you story after story. We signed the D’Amelios[3], you know Charli D’Amelio who's the world's number one TikToker as an influencer, because they had four dogs. So when we first went to meet them, they don't know who he is.
[3] The D’Amelio family found much of their fame in 2020 as sisters Charli and Dixie became extremely popular on Tiktok. For a long time, Charli was the most followed account on the platform. The family also launched a venture fund called 444 Capital in 2022. (More here)
Turner: They’re like 16 years old, so they don't know Cesar.
Ken: Yeah. Hey, he's just in there. He just looks like one of our guys. So then the dogs get let into the room where Cesar’s standing around. I'm also standing around. We're all waiting. What's going to happen? These dogs are running around, jumping, going crazy.
Turner: Are they all drawn to him? Like, all the dogs just come to him?
Ken: Well, it's pretty interesting. It's crazy. So they're running around, barking, four dogs, there was food out. They were jumping on the table. Cesar surveys the situation – I wouldn't say it was longer than 10 to 15 seconds – just looking at what the dogs were doing, and he then focuses on one of them, goes over to the dog, puts it on his leash, brings it over right next to him, and the other dogs stopped what they were doing and came right over to him, sat down next to him, Indian style.
It was the craziest thing I have ever seen. He was able to figure out who the alpha dog was. He was able to convince that dog that he's the alpha dog, so he'd better come sit next to him. And then those other three dogs were like, wow, if he's doing that, we better get over there. So all that happened in like 30 seconds. And then all of a sudden there was calm and the family was amazed. And Cesar went to explain how that should be the experience every day.
Turner: How did you meet Cesar? Is there an interesting story behind how you guys connected?
Ken: So I knew I needed Cesar because he was the only dog expert I could even think of. I couldn't even come up with a second name. So I did everything I could to try to reach out to him through the internet. I called. There were some Cesar Millan training facilities. I called them, “Hey, I wanna talk to him.” They're like, “Okay, you and everyone else.” He had the sickest protection I could have imagined and I just couldn't get to him. And I really tried everything.
Then using LinkedIn, I ended up finding a person who worked at a company called Cesar's Way. He's Cesar Millan, but I didn't even know if that was even affiliated, I couldn't tell–
Turner: Yeah, I think he sells a video or a course or something that's called Cesar's Way.
Ken: Exactly, but at the time I didn't even realize it. And there was this guy who was the president of Cesar's Way. I tried to LinkedIn him and he accepted, which by the way was a huge mistake on his part because I probably called him a thousand times from that day forward. He was probably like, “Please lose my cell phone number!”.
But nonetheless, we happened to have an unusual connection in that he was the head of marketing at a company called THQ, which made video games. And one of the board members of my previous company, ID Systems, was on the board of THQ. I don't know how that happened, but that was an amazing way to break the ice, and explain who I was and why I wanted Cesar. And then, even when I finally got the guy on the phone and I had this amazing connection, he still said, “No way.”
I was like, “Listen, we have this great idea.” And he was like, “What is it?” I said, “I can't tell you.” I didn't want to say that it was replacing the invisible fence with a GPS because it didn’t exist and I didn't want to give away that idea, especially because we had just filed a patent on it.
What he said was, “Look, we're talking to Apple, we're talking to Garmin, we're talking to Fitbit, we're talking to Motorola. Why would I talk to you?” And I said, “Because I have a great idea.” And he's like, “No, that's not gonna fly.” So I was like, “Well, I'd love to tell you. Just sign an NDA. I'll tell you.” And he was like, “Well, what if Apple has that idea? I don't want you suing me when they come out with this, that it was your idea. So I'm not even going to sign an NDA.” So I wouldn't tell them and we were at a standoff.
I didn't know how to deal with it. I was like, “Okay, nice talking to you.” So then three months later, we had made progress on the product and I was like, “I'm gonna give him another run for his money. I gotta get this guy.” So I call him and he won't answer. He does not answer. I think I probably called him 150 times (chuckles).
Turner: Did he have your number saved or was it just a random number that kept calling him?
Ken: I don't know. But finally he answered and he goes, “Listen Ken.” He even knew it was me. He goes, “I was fired. I don't work there anymore. He fired everybody.” So I said, “Oh, I'm so sorry. That's so terrible.” But he gave me the name of the new guy, so then I called the new person and I was like, “I was working with the old person for the last year and a half. I don't know what happened in the transition.”
Of course, I said, “You gotta sign the NDA.” He said, “No way. I'm talking to all these other guys. No way.” Same thing, hung up. So I'm like, “All right, I can't tell these guys, especially if they're talking to potentially who could be our biggest competitors. I'm not gonna tell them the idea.”
So finally, I asked my aunt of all people, who is the number two dog person: just give me anybody. And she came up with someone who I've never talked to. Her name was Tamar Geller[4]. So I called this guy back up and I said, “Look, I'm out in California and if you don't sign the NDA, I’m meeting with Tamar Geller.”
And you know what he did? He signed the NDA.
Turner: Amazing. Leverage.
[4] Tamar Geller is a dog trainer who developed '"The Loved Dog" method of dog training and subsequently wrote several books to become a New York Times bestselling author. (More here)
Ken: So then from that day forward, we told him the idea. Cesar's whole thing was, when he heard 10 million dogs were lost and a million dogs were hit by a car, he was like, “Wow, I gotta get involved.” Right away it resonated.
He was famous for walking 50 dogs off-leash. That was one of the first viral pictures of him, he was walking 50 pit bulls off east in downtown LA and that was what precipitated his first TV show. And Halo was exactly what he was looking for once we finally cracked the ice.
We think this is the picture Ken was mentioning. (Source)
Turner: That's awesome. So it sounds like it was a product that fit really well, never giving up, and finding a third-degree connection to get in. And then also figuring out negotiating leverage of how do you convince them to even take a call with you in the first place?
Ken: You have to really be always looking at the risks and what are the real challenges, and be honest and open with what those are and deal with them. And at the same time, try to find the best possible thing that could happen for your company today and then go do it.
Even if something bad happens, which happens all the time, what's the best thing I could do to turn lemons into lemonade? In other words, I'm always thinking that no matter how bad something might be, how can we turn that into a positive or learn from it?
And that is something people always say, but you really have to be able to do it to get from an idea to a point where now, we've done, like I said, over a hundred million dollars starting with sales of a concept. We always knew it could happen, but now we had to actually make it happen, and seeing what works, what doesn't, and being nimble enough to respond to it.
Turner: Yeah. I think it's important all the time with everything in life, but it's probably a hundred times more important if you're an entrepreneur or founder.
Ken: Yeah.
Turner: This was an amazing conversation. Thank you so much for joining. We've talked about the product a bunch, but how can people order it? Do they get in stores? Do they buy it online? What's the best place to find it?
Ken: You can go to www.halocollar.com[5]
[5] Ken also shared a promo code if you want to order a caller. Use “June 2023” for $25 off, valid through July 2023.
Turner: Thank you so much Ken for coming on. This was amazing – a lot of things to think about. We'll see everybody next time!
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