Outmore Living - December Newsletter

 December 2022
Before any business updates, Alex and I just wanted to wish all of our readers a very happy holiday season! We hope that you enjoy some time off with family and friends, and if you are lucky enough, that you can spend some time outdoors, sitting around a fire, dreaming of a time when your backs and butts are as warm as the fire (shameless product plug).  
 
Turning the tables back to our October Newsletter, we had three main priorities.  Fast forward to December - it's time to check-in. 
  1. Raise pre-seed financing round (will be completed by this winter) ⬜
  2. Kickoff D2C presale and B2B pilot ⬜
  3. Finalize Designs ⬜ and Sourcing ✅
Of the three key priorities we laid out in October, we have only completed 0.5/3, which in school amounts to an "F", however, in business building, Alex and I believe that we are right on track.  Identifying our factory in Vietnam was a significant achievement and will allow us to move into the final phase of the design process, sampling.  We hope to complete the design process by the end of January, at which point, we will be able to sell our product to customers via our presale and commercial contracts.  In terms of our pre-seed capital raise, we have been in talks with strategic investors and venture capital firms and are targeting early March as the date we plan to close our round.  We will give a more robust update on the raise later in the newsletter.

Company Updates - 

1) Outmore Living Wins Texas Venture Labs Investment Competition!

The Fall 2022 Texas Venture Labs Investment Competition was held on Friday, December 9th and featured the top graduate student startups on University of Texas' campus. We competed with fifteen UT-founded companies and won the top prize while being named Texas Champion! Beyond the excitement of receiving our first "big check," it was an honor to be selected by 33 judges as the top company among all the startups. Along with the $15K prize, we were awarded $1K for the top elevator pitch, an office at McCombs for next semester, a 1-year membership at Capital Factory, and $5,000 in AWS credits. 

2) Outmore Living is Patent Pending!

As of December 1, 2022, Outmore Living has two patents pending approval by The United States Patent and Trademark Office.  The two patents cover Outmore's hardware and software technology and feature 40 claims protecting our IP.  McDermott Will & Emery were incredible attorneys throughout the IP process, and Alex and I look forward to continuing to work with their firm in the future.  

3) Designs Finalized Next Month!
 

In May, Alex and I built our functional prototype in our garages.  While it proved the concept worked, it lacked the design, functionality, and simplicity that we wanted in a final product.  So Alex and I met with designers and design firms from Austin to Thailand in hopes of finding the perfect partner to bring our product to life. 

In August, we selected Corvus Engineering, and we could not be happier with our choice.  Their team designed our power bar, which will attach and detach to the front of the frame.  The power bar is the brain of our chair and will feature the battery, temperature control panel, and USB outlets.  From the power bar, the energy transfers to our heated cushions via magnetic strips connecting to the front and back cushions.  Next week we move into the sampling stage, but in the meantime, below are some images of the latest designs.  


 

Areas of Focus -

Since much of the last newsletter's priorities remain in progress, our areas of focus have not materially changed since we last checked in.  Accordingly, the focus areas for Outmore for the next couple of months are as follows -

1) Finalizing Design and Sourcing

It's exciting to be moving into the sampling stage of design.  We have worked with the Corvus team since September, and after countless meetings and emails, Alex and I cannot wait to sample the final product.  It's also a critical step where we fix any final details before moving to mass production.  Personally, I have also exceeded my engineering capabilities and am ready to touch the physical product.  

2) Kickoff D2C Presale and B2B Pilot

Once we have the final designs, we can launch the presale.  However, there is still a lot of work to launch a successful presale.  Below are some of those key deliverables:
  • Build D2C website 
  • Set pricing strategy (consumer and commercial)
  • Create a marketing plan
  • Finalize sales and margin goals
While each task is a significant lift on its own, we have been working on them for a while and feel confident that we will have them ready to go in time for our launch.  
 
3) Raise a Pre-Seed Financing Round
 

Funding conversations kicked off in October.  We have met some amazing angel investors and VC funds and are confident that we will be able to close our round in March of 2023.  In the meantime, any introductions to strong angel investors or pre-seed funds that come to mind are warmly welcomed and appreciated. Investors with a consumer focus are a plus. Also, I can share the deck with anyone receiving this note - just ping me at kevin@outmoreliving.com. 

Founder Perspectives -

Busy times! I nearly passed on this section, but instead, I thought of a critical learning that I wanted to share. Like any company, Outmore has had many ups and downs, so I wanted to share a few lessons that Alex and I recently learned.
 
Almost two months ago, I met the CEO of a well-known company in the outdoor living space while pitching my business school's board of directors on Outmore. He loved what we were building, and after a few meetings with their leadership team, their company agreed to a significant investment in Outmore.
  
Alex and I were ecstatic. Not only did we feel validated but we also knew that the capital and outdoor expertise this company would offer could propel Outmore's trajectory. We agreed to the deal and moved on to negotiating the final contract.
 
After six weeks, 99% of the deal was negotiated, however, neither side could agree on one major issue related to control. We were at an impasse, and after discussing the offer with our advisors and lawyers, we began questioning if it even made sense to partner with their company at our current stage. Then in the 11th hour, the deal fell thru.  
 
Two months spent on an eventual no-deal can feel like an eternity to an early-stage startup, and while deep down we knew it was the right decision, I'd be lying to say it didn't sting. However, as Alex and I reflected on that experience, there were a few key learnings that we took away:
  1. No deal is final until it is signed
  2. Always prepare your BATNA (best alternative to a negotiated agreement)
  3. Counsel your advisors, lawyers, and mentors who have more experience and Outmore's best interest in mind
  4. A bad deal is worse than a no-deal - trust your gut
Despite negotiating in good faith with the company the whole time, Alex and I had been preparing for the worst and never stopped having conversations with other potential investors (our BATNA).  And while it would have been great to partner with that particular company, Alex and I believe in Outmore and are willing to bet on ourselves over a bad deal.  Finally, even though it ended in a no deal, we learned a lot and will be better prepared the next time we look to partner with a strategic investor or potential customer.

Until the next newsletter...

Kevin

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