Sapphire’s High Tech Skateboards & Small Business Learnings
It’s pretty easy to imagine a group of 20-somethings devoting every last waking hour to Sapphire, a company whose primary product is a sleek, weight-controlled electric skateboard. Get the product in front of customers, the thinking went, and the thing would sell itself. “When I got on the board, my eyes lit up,” says CEO […]
It’s pretty easy to imagine a group of 20-somethings devoting every last waking hour to Sapphire, a company whose primary product is a sleek, weight-controlled electric skateboard. Get the product in front of customers, the thinking went, and the thing would sell itself.
“When I got on the board, my eyes lit up,” says CEO Andrew Richardson. “It’s really cool and different.”
Sapphire began as a side project from students at the University of California, Irvine, where parking is notoriously scarce. The board would seamlessly integrate into the existing skate culture and conveniently transport users the last mile from car to class. But by its December 2018 release date, the board was ready to join the microtransit revolution in which cities worldwide are piloting electric bikes, scooters, and hoverboards as the future of transportation — a market Sapphire sees itself as uniquely positioned to dominate, particularly among young people.
“Our boards focus on keeping it light and short enough to carry around,” says Brandon Frame, co-founder and president of sales and operations. “If you’re not willing to carry it with you, it’s not legitimate transportation.”
The Sapphire Team
Much of Sapphire’s youthful team, which is split between Los Angeles and Philadelphia, has known one another for years. Richardson became an entrepreneur at age 15, when he orchestrated a prolific lawn care company that courted hundreds of customers. Frame was one of the many childhood friends under Richardson’s employ. They joined Sapphire around the same time, just as the board was transitioning from interesting side project to actual business.
Then an unexpected challenge emerged. As the crew was about to ink a crucial investment deal that would allow them to grow, one of the original co-founders decided to step away from his responsibilities.
“He was going to sit on a third of the company and let us grow it for him and put no capital on the line,” Richardson explains. “Basically, he wanted sweat equity but didn’t want to put any sweat in.”
A difficult time followed as they sought to disentangle themselves from the since-departed co-founder. This meant forfeiting the investment opportunity, taking out a loan, and accepting that Sapphire’s valuation would be halved. It also entailed dissolving the original legal entity and starting anew.
That big mistake — not having a cohesive, trustworthy team motivated by the same values — was something Sapphire moved quickly to resolve in writing. To wit, the company employed the “Rolls Royce of contract lawyers” out of Philadelphia to craft language for vesting schedules, different classes of shares, and pretty much any situation that might arise during future rounds of funding. The resulting 100-page document should be totally airtight, even if it might represent an overcorrection from the hastily-assembled Google Doc it replaced.
“We approached $50k [in legal fees], and the contract is worth it,” Richardson says. “But could we have done it in a more cost-effective manner? Yeah, and we probably shouldn’t have chosen a legal firm so esteemed — small clients like us get put on the back burner when you’re dealing with a firm that size.”
There have been wins along the way, too. Sapphire smartly pursued an aggressive, grassroots social media strategy where they set a goal to reach out to 1,000 users per day. The team focused exclusively on Instagram, toiling away day after day following, commenting, and direct messaging users on the photo-driven platform to spread brand awareness. And it worked — Sapphire’s Instagram following grew from roughly 8,000 to nearly 15,000 followers in the month ahead of the board’s pre-sale, all without burning digital marketing dollars.
They soon discovered momentum begets momentum, with customers sharing pictures and videos with their Sapphire boards completely organically. A professional content creator even went as far as to offer his services free of charge in exchange for one of the boards (Sapphire happily obliged).
“When we get those messages on Instagram thanking us for creating this product, that riding it is the most fun, it feels so good,” Frame says. “We worked really hard to create that.”
Growing Their Small Business
That buzz has propelled the company to continued growth. The Sapphire team was out in force this month at CES 2020 in Las Vegas to court new investors; the conference was also an opportunity to demo the company’s forthcoming product — a sleek backpack with rechargeable lithium ion battery packs integrated into the bag’s structure. Sapphire sees the bag as a natural complement to an electronic skateboard that requires the occasional injection of juice, although it’s also handy for phones, laptops, cameras, and anything else that requires a mid-day charge.
It’s the kind of product the co-founders find indispensable as they go from store to store giving live demos to mom-and-pop skate and surf shops. Even in the age of e-commerce, they find that face-to-face interaction remains the most effective and cost-efficient sales method. Don’t believe them? Richardson offers an anecdote from a visit to a small shop outside Philadelphia.
“Just yesterday, we were at a store and the owners weren’t available, but they had 15 people working the floor, probably all between ages 18 and 24, West Chester University kids,” he says. “All of them got on our board to test it out and once the owner turned up, they all asked, ‘How many are we getting?'”