Hey guys! Welcome back to Products Worth Talking About — the show about disruptive physical products and the people who built them.
Today, we have the pleasure of talking to McSquares founder Anthony Franco. Anthony has a ton of experience as an entrepreneur and business owner, so you’re not going to want to miss his enlightening journey and business insights! After our conversation with Anthony, he appeared on the ABC show Shark Tank, where he sold 25% of his company’s equity to Kevin O’Leary for $300,000.
We discussed many fascinating topics with Anthony, including his journey developing McSquares, how he found the right customer base, the importance of developing new products to appeal to a greater number of people, and the qualities of a great entrepreneur. Let’s dive in.
Anthony Franco has a long history as an entrepreneur, and he founded notable tech startups, including SKYBEAM, and Effective Inc. After his success in the tech industry, he felt inclined towards developing physical products:
“I thought I’d get into something that I could potentially make big that wasn’t in tech. … I had a passion for [physical products]. … It’s really cool because you get to manifest your ideas. … You get to see it and hold it and hand it to somebody and say, ‘I made this [and] it’s cool.'” – Anthony Franco
Anthony came up with his first physical product while working at Effective Inc., a business that builds software for Fortune 100 companies. He came up with his signature whiteboard during a conversation with a salesperson:
“I was actually at a workshop. … The CEO, CFO, DPS, all the top execs were there, and we were trying to do something about their sales process and improving their sales process. [The] half-day workshop was done. We left [and we] all thought [that] we [had] solved the problem. … A saleswoman walked up to me, and she said, ‘You know, you missed a couple of things.’ And she started telling me about how the pompous executives in the room completely missed the mark.” – Anthony Franco
The salesperson that Anthony interacted with felt uncomfortable sharing her ideas during the workshop because she didn’t want to contradict her CEO’s opinions and the other executives working at her company. Anthony realized that he needed to develop a system for getting everyone to share their ideas, regardless of professional rank.
“I set out to solve the enterprise problem of getting the quiet and cerebral to speak up in meetings. How do we get those people to share? People with the best ideas are usually the least likely to share. … So that led to the first iteration of what we call the tablet, which is a handheld whiteboard. You handed [it] out [to] people, [and they] write down their ideas and then bring it up to the board to share it with everybody else.” – Anthony Franco
The first iteration of Anthony’s design was stackable whiteboard tiles. Both sides of the tile included a dry erase board, and the back was magnetic. Because this was the first physical product that Anthony developed, it took a few years to go through the design and prototype process:
“[I] started [the process] in 2013. [It] took me a couple of years to really figure out how to make a physically designed product. Started injection molding in 2015. There [were] a lot of 3D printing processes and prototyping. … We started selling really in 2016.” – Anthony Franco
It took Anthony years to get his product off the ground, but because of his determination and experience as an entrepreneur, he was eventually able to craft a lucrative and useful product.
Although McSquares is now incredibly successful, Anthony self-financed the project during its initial development stage:
“The first couple of years [were] self-finance. … [We] bought a really nice, expensive 3D printer, [and] we started 3D printing stuff ourselves. … For the first couple of years, it was a playground. … But at some point, I started running out of money. … I’m sort of lucky that I had that time to play, but [we] still had to figure out how to get people to open up their wallets.” – Anthony Franco
Anthony enjoyed developing his first physical product, but he faced financial difficulties. Fortunately, McSquares was able to raise $20,0000 on Kickstarter. They then began searching for customers by cold calling offices:
“We went through this thought exercise of how do we find companies that are in the stage of redesigning their offices or moving offices, and how do we hit them at that point? So we started chasing carpet layers and their trucks. We call it the ‘knee kicker strategy’ because that’s what they use to lay carpet, and then looking where they went and then calling that business and saying, ‘Hey, heard you’re looking for whiteboards.'” – Anthony Franco
Anthony and his team were incredibly creative in searching for clients, but their ‘knee kicker strategy’ failed to pull in customers. He thought that business offices would make up McSquares’ primary customer base, but he was wrong. He discovered from the Denver Maker Faire that schools needed his product:
“We set up at the local Denver Maker Faire, and I sold $5,000 in tablets. … And I was like, ‘Oh, teachers, why didn’t I [think of them]?’ So then we started going to some trade shows and built up an audience of schools that have just fallen in love with McSquare tablets. Now, we’re branching into dealers and reps and that kind of stuff for that product line.” – Anthony Franco
Anthony discovered that he had not tapped into the ideal customer base for his product. McSquares became a hot selling item for classes because it greatly improved student grades. The personal whiteboards forced students to participate so that they’re more engaged and involved in the classroom:
“The requirement to write something down does a couple of things. [Students] have to participate. Like if you ask people to vocalize in a room, they don’t have to. [A] lot of people can stay quiet. … This little handheld square whiteboard kind of … opened up and freed all the obstacles of sharing ideas.” – Anthony Franco
Personal whiteboards are ideal for students because their answers and ideas are less permanent than writing on a sheet of paper or turning in something electronically. It opens students up to participate in classroom discussions comfortably.
Although McSquares found great success in marketing to schools, their sales plummeted during the winter months:
“We’re in the slow buying season for schools. So November through February, schools just shut down and [stop] buying. … 2018 through the beginning of ’19, we were dead, but we launched stickies and tiles. And those have grown over the last year, and that’s really where the future of our product lineup is.” – Anthony Franco
McSquares was able to stay flexible and develop a new product to combat their financial difficulties during school offseasons. Anthony’s stickies and tiles became a huge success because they’re an eco-friendly alternative to sticky notes.
Even though Anthony and McSquares had to change directions several times to become profitable, their resilience and ability to pivot effectively resulted in great success. When you’re developing a product, it’s crucial that you remain flexible and can adapt to your market and customer base.
After discussing Anthony’s successful products and business, we discussed his experience as an entrepreneur. Anthony’s perspective on how someone becomes a successful entrepreneur is incredibly intriguing. He observed that being an entrepreneur is about the journey and hard work rather than money:
“It’s funny what that big check does. I have not yet had a champagne cork moment. That sounds sad, but I like to build stuff. So when you [sell your business] … you’re not building anymore. … [When I sold my businesses,] I was miserable. I got back to not being miserable by going back and building stuff. … It’s the journey. … [With] this company … I have to grind down again, but that’s where I’m comfortable.” – Anthony Franco
Anthony enjoys the arduous process of building and creating more than the financial benefits of being an entrepreneur.
We asked Anthony what his advice he would be for an aspiring entrepreneur, and we were incredibly surprised by his answer:
“Don’t do it. … The odds are stacked against us, and there … are two types of entrepreneurs: the ones that are broken and the ones that get lucky. … I’m the one that’s broken. … I had a very difficult childhood that broke me [and] allowed me to develop calluses against the fear of being humiliated. … I think that’s required to … be a successful entrepreneur. … [If] you’re like, ‘I’m gonna see if I can bring this to market,’ … and you don’t have that internal brokenness to drive you to it. Don’t do it. Don’t suffer the brain damage.” – Anthony Franco
Anthony has an incredibly original perspective on entrepreneurship. In his view, you need to have a level of brokenness to drive you forward to success (or just get super lucky). He expanded on his answer and noted that hard-working entrepreneurs don’t have the luxury of being satisfied with their work:
“Success and comfort are not compatible. … When I start to feel comfortable or happy, I get nervous. I’m like, ‘Oh, wait. … Somehow, I’m missing something like my eye blinders [are] on.’ … [Entrepreneurs] can’t be satisfied sitting there and enjoying the moment. [If] you have part of that gene, it’s why you have a shot over big companies because big companies are typically full of people that are just like, ‘I’ll get to that next week,’ or ‘We’re doing fine. Our numbers are up.'” – Anthony Franco
In Anthony’s view, you can’t become complacent or even feel satisfied with what you’ve accomplished because you need to continue striving forward to create a successful product or business. Although we don’t necessarily agree with Anthony’s view entirely, we agree that having an unquenchable drive towards bettering your products and building your company will give you an edge in competing with larger companies.
We’re so thankful to Anthony Franco for coming on our show! We enjoyed hearing the story of how he built McSquares, as well as his unique perspective on entrepreneurship. You can keep up with Anthony on Twitter, @anthonyfranco, and don’t forget to check out McSquares’ signature whiteboards and reusable sticky notes!
If you’re interested in building an excellent product-based business like Anthony, check out our business plan course. You’ll learn all about pitching to investors and starting your dream business.
We hope you found Anthony’s story fascinating and thought-provoking! We would love to hear from you if you learned something from today’s episode. Take a screenshot of the episode and share your greatest takeaways with us on Instagram, @productsworthtalkingabout. If you’re a fan of the show, make sure to subscribe on YouTube to see new episodes! Let us know what products and brands you’d like to see on the show!
Thanks for reading! Until next time—
RT and Tyler