Loading summary
Trung
I wanted to motorize my window shades. That's it. Equity crowdfunding, or what they call a community round. It kind of fits right after an angel round, maybe in line with the VC round. It works well when you do have some traction. A prototype concept, sales, that's where we kind of fit in. If you're chasing VCs, you don't really own your own destiny. But when it comes to equity crowdfunding, it's just like E commerce. It's direct to consumer marketing. Amazon launched something which was formerly called the Patent Neutrality program, has since rebranded to the Apex program. If you have IP instead of going to the courts, you could file a complaint with another seller or brand that's selling a product that infringes on your IP on Amazon. I'm perplexed that Instagram and the other players haven't kind of caught out on this. But if you're able to sell online, you're able to raise investment dollars online. It's not rocket science. At the end of the day.
Eric Dick
You'Re spending real money to drive traffic to your site. But the truth is 98% of that traffic leaves without ever giving you an email meta knows who they are, but you don't. Unless you use Instant. Instant helps brands identify anonymous visitors so you can send more abandonment emails, build stronger retargeting audiences, and actually recover that lost revenue. Brands like Fate, the label saw a 4.5x boost in their abandonment flows. Massco increased Shopify revenue by over 15%. Third Love, Toys R Us and the Oodie. These are all massive stores that use instant to see an average ROI lift of 11.2x. They'll even guarantee you a 4x ROI or your money back. It only takes 15 minutes to set up and you'll start seeing results fast. If you're serious about getting more out of the traffic you're already paying for, now's the time to fix it. Get 50% off your first month at instant1/dtc. That's instant.o n e dtc. Trung, welcome to the DTC podcast. We met when you came to our event last fall in Victoria, which was fantastic. Learned all about your story and we've got some really interesting things to talk about today. Some things we've never talked about on this podcast. But why don't we start with your hero's journey with Rise and sort of why you built this product. What it is. It's an interesting one.
Trung
Yeah, so I started this company over years ago. 2015 was when the idea was Conceived and then we took about three years in R&D before launching our first gen in the market. But it was a very simple problem that I was trying to solve. I wanted to motorize my window shades. That's it. So I already had my window shades installed. I didn't want to replace them with motorized shades. I got quoted about $2,000 per window and I had four windows, so too expensive. Initially I thought there was a product that I was looking for, essentially like a motorized pulley system, if you can imagine that. And turns out there wasn't. And that was kind of like the eureka moment. So, very simple problem I was trying to solve. I wanted to motorize my own shades. They had beaded chains with the loops, and I just wanted a simple motor that could, you know, pull it up and down. So did some research. The product didn't exist. And that's when I went down the rabbit hole, learned that the market was dominated by a few key players. And there was all these middlemen that required the motor itself to flow from the factory all the way to the distributor, to the window blind fabricator, to the window blind retailer, to the end consumer. And everyone has eat a margin. And that's what really drove up the price. So that's where the idea came from. And you know, as I mentioned, we spent three years in R&D before launching our first gen. And since then we've been just, you know, slow and steady going, growing the company, improving the product, and now launching into new markets.
Eric Dick
What was the hardest part of that.
Trung
R and D process, I would 100% say, because the concept was so new and we didn't have existing competitors or products on the market to really mimic or copy or learn from. It was all new IP and new technology. We developed everything from the ground up. The cadence back then was to develop one clean prototype per month, so one new 3D print design, new electronics design and try to get them to work over a year. Getting the size right, getting the components right, sourcing the right components, things like that. Because if you're looking at other consumer electronics out there, typically what a company would do is they'll buy a competitor a convenient product or a few of them, and then they'll break it down. They'll pick and choose which components and what kind of design elements they want to copy and combine to create a new product. We didn't have that because our approach is very new and novel. So that's why the R and D took a lot longer with our first gen. But the benefit with that is that we apply for a lot of IP and we protected a lot of our inventions and aspects of the product that are extremely, extremely strong today.
Eric Dick
Super cool. What's been the main growth or maybe in the beginning, in the first few years, what was the main growth engine? Is it the same growth engine as today?
Trung
Yes and no. So back then we did launch on a crowdfunding platform, Indiegogo and Kickstarter. And back then those platforms are very popular to get startups off the ground. And from that initial campaign we were able to raise our angel round. Angels saw the product, they loved the product and that really got us the initial traction. But since we launched back then to today, it's been definitely just E commerce. Like you're talking about Facebook ads, meta ads, Google, those are the primary channels. Now Amazon as well, those are definitely the primary channels. TikTok is another channel that we're going to be testing with a sister brand that are about to launch.
Eric Dick
Yeah, we'll, we'll dive into that. It's a product that sort of sells. It's, it's a new novel product. But it's so like the video just makes it so visually obvious what it is and it looks so good. It must, video must be a big part of the strategy on Meta.
Trung
It is today. I think back in the heyday, back in the wild, wild west, you could just launch an ad and then make a lot of money. Um, but you know, it's much different now running ads. The creatives really matter. The video, the hook. And we have, we focus heavily on video videos where customers learn about the product. And I like to say it's much different from, you know, if you're selling fashion or makeup online, very different because you could just post a picture online of a, you know, somebody posing and then a fashion item in maybe travel luggage or in beauty. But with our product, you have to see it in motion because it is one of those products that activates and moves. You have to see it in motion, you have to see the installation. You have to really learn about the type of product and really learn that this product does exist. So we do have that challenge of educating the audience, the consumer that this product does exist and educating them on what kind of problems we do solve with our technology.
Eric Dick
So with a tech heavy company like this and a product that requires education, funds become an issue. The amount your sort of war chest to go through there. So one of the things I really wanted to dive into was your strategy of equity crowdfunding where you've raised over 10 million through equity crowdfunding. Talk to me about how that works.
Trung
Yeah, so equity crowdfunding, or what they call a community round, I would say it kind of fits maybe right after an angel round, maybe in line with the VC round. I think it works well when you do have some traction, a prototype concept, sales, things like that. And that's where we kind of fit in. We had products in the market, we had sales. We are not like just like a lot of direct to consumer brands out there. A lot of them are not venture backable, if that makes sense. A lot of the VCs right now are really just into high tech AI companies and things like that. When you're dealing with physical products, a lot of VCs hate that. It's a very small niche of VCs that actually invest in that. So you're already kind of priced out because you're not a SaaS company, you're not an AI company and things like that. So I find that this kind of funding model is great to fund our R and D, our inventory and our sales and marketing efforts going forward. So I got into this probably four years ago, maybe I think three or four years ago. And it was a byproduct of what happened with our VC round. So we actually had a term sheet where we were going to raise from 2 to 4 million with 2 fill in committed another 2 million that was going to be joined by a Canadian government agency. So kind of like matching funds. And then when Covid hit, they pulled the term sheet. So it was one of those situations where I'm taking a step back. I'm like, I'm kind of really annoyed. Went through all this diligence. They're pulling term sheet. They had their reasons, like you know, we wanted to expand to commercial buildings. Commercial buildings were all on lockdown. Like no one was going to sell into commercial buildings. No one were allowed into the office space. Everyone was working from home. So I understood where they're coming from. But I also realized that if you're really chasing VCs, you're. You don't really own your own destiny, you don't have control over that. But when it comes to equity crowdfunding, it's just like E commerce. It's direct to consumer marketing. Your audience might not be consumers that buy the product, but your audience will be investors that invest in the company. So I looked at it just like that. And because we had a lot of expertise in direct to consumer and E commerce, we did the same thing. We just built a Funnel. We built the funnel, we drove traffic to the landing page, we acquired emails, we educated the investors on our company and we had a strong closing date. And that's what we've been doing for the last couple years, just to fund the company, fund the growth, fund the inventory.
Eric Dick
Super cool. Is there a platform you use or is it all diy?
Trung
Yeah. So we use Dealmaker. So shout out to Dealmaker. They're like the Shopify of fundraising. We have a live raise. If you want to see our actual kind of landing page, it's invest hellorise.com and you could check it out. But basically we have a video there. We have our terms, we have all the company traction, we have our products, we have a roadmap. It's basically a website that presents the pitch deck, in a sense. And then you have an Invest now button. So instead of a buy now button like you would with an e commerce site, it's an Invest now. And then Dealmaker facilitates the entire investment transaction. It's just like how shop Shopify would on a consumer product. Obviously there is a lot of compliance because you're dealing with investors. So our offering, our deal has to be vetted by the sec, has to be qualified by the sec, FINRA has to go through it. If there's any broker dealers involved and Dealmaker themselves, they go through KYC and AML with each investor that invests. So you could even invest with a credit card, you can invest with a credit card wire ach the funds over. But Dealmaker will still go through the whole compliance aspect of things.
Eric Dick
Super cool. What's the average check size?
Trung
Two and a half grand.
Eric Dick
Two and a half grand. That's crazy. And then when it just. I'm just curious with like the targeting, are you like everyone's trying to go general with as many, you know, with their ads when they're selling a product. Is the same thing true with your ads? Are you letting your creative do the targeting? Are you targeting different communities with. With interests and lookalikes and stuff?
Trung
So we're in a very interesting place because I believe Meta just launched their kind of pmax kind of product a couple weeks ago. So that's still being kind of tinkered with. But ideally you would be targeting a lookalike audience. And one great thing about this is that if you have like, if you're an E commerce company and you have a loyal fan base or a loyal customer base, you could market to them. You could send them an email and say, hey, we're thinking about raising around Would you be interested in investing? And then you'll get kind of good data points on if they would invest. So your initial customers are going to be your early investors. Like plain and simple.
Eric Dick
Yeah, because I love the product. It's, it's, it is like I just, just from seeing it, it seems like if you guys are out there and you have blinds that have a chain, you got to just go to hellorise r y s e.com we'll throw the link both to your crowdfunding strategy and to and to the product because super cool innovation. And that's my next question with crowdfunding. Is it required often that you have a bit more of a defensible IP or something complex or electronic or can this kind of crowdfunding work for all different kinds of companies?
Trung
Short answer is that all kind of companies out there? I think there was an alcohol company in the UK, BrewDog, that raised a lot of money. There's deep tech, future tech like flying cars that raised a lot of money. I think one car company raised $120 million all through crowdfunding. It was a flying car concept. There was back then, cannabis companies are raising money. A lot of variety. You have, I would say scientific materials, like different materials to build homes. Very, very broad concepts, not just tech by the way. So a lot of consumer electronics, a lot of consumer brands raise money like 5, 10 million quite easily because they have a loyal following.
Eric Dick
Super cool. And I imagine dealing with many smaller investors. You mentioned being able to control your destiny and how that's harder with like larger VCs and equity investors and stuff like that is that one of the benefits of this crowdfunding strategy is that you know you're sending quarterly emails, you're sending reports because. But you're not having to listen to as much feedback.
Trung
I guess I think feedback's always great cause customers, they're using your product so they're always gonna give you feedback. I think the biggest benefit is that when I say control your destiny, one, you control the terms of the deal. A savvy investor is not gonna invest in a bad deal. So the terms have to be fair for the investors. So the first and foremost you don't have to give up a board seat. You could issue non voting shares. If you're a US company and you raise through a US entity, you could raise up to 5 million. If you're and under Regulation CF it could be one name on the cap table. So all the investors get jumbled into an spv and then this one name on the cap table easier to manage. But the things that people don't realize, the, the legalities of how you structure the term sheet, quote unquote, is a lot more favorable with equity property because you as the founder are making that, making those choices. You're obviously not there to scam anybody, rip anybody off with terrible terms. They have to be fair, they have to be reason, they have to be logical. And as long as they are and the investors and the community looks at your deal and they like it, they'll invest.
Eric Dick
Would you say most of your. Of that 10 million or more has come from customers or cold from Meta prospecting?
Trung
Cold. So not only Meta Prospecting, Meta's actually a very small channel that we're only scaling up now, but a lot of it has been newsletters. So we'll sponsor newsletters to the general public that reads up on any kind of general news and they'll find us. And like, the check sizes are like, they range. We've had check sizes as low as a thousand and as high as a million all through this kind of like public advertising.
Eric Dick
All at the same valuation, essentially.
Trung
No, no. So one thing I do that's very unique, and this is kind of like a free tip, is you want to structure it so it's enticing for the investor to invest more, and it's fair for the investors that do invest more. So someone that invests a thousand will not get the same deal as somebody invests ten thousand, fifty thousand, a hundred thousand, a million makes sense. So it's kind of like a sliding scale when it comes to the valuation. That's how we structure it to make it fair and enticing at the same time. It's kind of like if you think of E Commerce, if you sell bundles, for example, if you buy more product, you get a better deal. So very, very, very similar.
Eric Dick
I think that that makes perfect sense. And then I don't, I don't know if you want to disclose this exactly, but what is the, what has it cost to acquire that much investment? Like, what percentage of what you've ended up getting did you have to spend to acquire it?
Trung
For us, it's about 3x, just like E Commerce. So you do have to kind of bake that into the valuation. So if you're, if you think a VC will give you a fair value of a $20 million valuation, you have to pick up that 30%. So you might want to price that initially at a $30 million valuation. It's still, within reason, it's still fair because the check size is not 5 million. It's only 1,000 bucks. So that's how I structure it, because you have to account for that dilution that you're spending on the ad spend.
Eric Dick
That's a great tip as well. Let's shift gears and talk a little bit about, like, how much you guys have invested in patent and IP and talk a little bit about what you discovered, you know, some Chinese suppliers were doing to you.
Trung
Yeah. So I love talking about this because I think it's. It's one of those rare occasions that we kind of got lucky with timing. Amazon launched something which was formerly called the Amazon Patent Neutrality Program. They have since rebranded to the Apex program. And what that means is that Amazon being a dominant distribution platform, if you have ip, instead of going to the courts, you could file essentially kind of a complaint with another seller or brand that's selling a product that infringes on your IP on Amazon. Amazon will then ask you to submit kind of like a report or a summary of why they are infringing on your product. And you could get a lawyer to do that for like five grand or something. Right. But it's much cheaper than going to the courts. And then Amazon will then go to the copycat sellers. It could be five of them, could be one of them, whatever it is. And they will say, this seller has ip. This is their patent number. Please submit your IP protection that you have that gives you the right to sell this product, or please explain why you are not infringing on it. Amazon is then the judge, jury, and executioner. They make the final call. And at one point, we had like hundreds of knockoffs on Amazon and Amazon. We won the court judgment initially. So, like, right now, it was free. For us, it was just the quick report. So right now, anytime there's a copycat, we go on Amazon, we click within their brand registry, you go in, and we file a complaint, and Amazon reviews within two days.
Eric Dick
That's wild. It's funny, I just hear. I just did my interview with Kevin o' Leary and I hear him talking often about how most people have no, there's no recourse with Chinese sellers out in the wild. But on Amazon, there is this program that can be beneficial.
Trung
Yeah, there was another podcast I listened to. Man, I forgot the name of the company, but it was like TRX or prx. It was those workout ropes. But they went through a very similar process with Amazon. They won, and all the Chinese knockouts got kicked off of the platform. But it's very interesting because this is something that's kind of mind blowing, but the factories and the key players in China that are copying you, they'll know that you have a patent. They'll try it. Still they get kicked off. And then the inventory that is in Amazon because you have to ship it to Amazon, to the fba, that either gets stranded, disposed of or returned and it's on the seller to eat up that cost. So they are very mindful of infringing on patents because they don't want to get stuck with inventory they can't sell. Right. So as I mentioned at one point we had like hundreds of sellers that we just, every day we just knocked them off. Now it's like one copycat every month that might pop up and we just kick them off. But it's, it's incredible. People should really look into that if they do have like patents. The Amazon Apex program is very, very, very useful.
Eric Dick
That's cool. But that's just on Amazon. It's funny, we're just in this era now, you know, we're in the tariff era. And it was just, I think over the past few days on my TikTok feed, every second ad is a Chinese manufacturer going direct to consumer on TikTok to tell me that I could buy my Birkenstocks from them for 110 of the price, even with tariffs baked in. And so it's a, it's a brand new world for that. What, what are you doing on TikTok? Talk to me about your TikTok strategy.
Trung
So initially we were going to launch our product on TikTok, but our product is like, it's got like a ring doorbell nest almost, that's a little more expensive for the TikTok type.
Eric Dick
What is the price point?
Trung
The, the rise brand itself is from 150 to 200. Right. And even if we put it on sale 20% off, it's still a little more expensive. That being said. Well, the interesting thing we did was with regards to China, we actually found the factories that were copying us and knocking us off. And the product isn't as high quality, but it's completely functional. It's very, very robust. And instead of trying to shut them down, we're like, you know what, we're just going to buy from you guys and we're going to private label it and we're going to own the distribution channel. And that's our TikTok strategy. Just launch a sister brand, sell it through TikTok, price it at, you know, 79 to 99 bucks, which is like the sweet, sweet spot for TikTok and don't compete with the Rise brand or the parent brand and then really just create a sister brand that's more. Lower price, not as robust, but does the job.
Eric Dick
If you can't beat them, monetize them.
Trung
Yeah. And because of the ip, you just own the distribution channel and that's what IP is. I think Peter Thiel said it like distribution is defensibility. You want to own that channel and you want to definitely secure. Like we're not going to, we're not, we're not going to stop factories from manufacturing your product. They're going to open like 10 factories. You're going to take years to shut them down. But you could, you could, you could choke the distribution channels.
Eric Dick
Super cool. And so what, you know, I think one of the things you took away from our event in, in Victoria was Jared, who was building out robust stuff on TikTok Live, essentially. Is that part of your strategy that you're kind of going to use going forward with this new sub brand?
Trung
Yeah. So TikTok in the UK and the US, those are the markets we're going after first. And it's definitely a strategy. TikTok Live and TikTok Shop, I think it's the, like, I, I'm perplexed that Instagram and the other players haven't kind of caught out on this. But every consumer, consumer brand always gets outreach to, from influencer or kind of creators say, hey, pay me 5,000 bucks and I'll do a post or something. Right. There's no ROI on that. Like you can't monetize that. But with TikTok Shop, the affiliate strategy, they only get paid when their content actually monetizes for you. So to me that's fair. Like you make the content, you get a commission, you build a whole affiliate army and it's low risk for the brands. And that's what I love about TikTok shop versus a lot of these creators that reach out and say they want 5, 10, $20,000 for a video that may not generate any revenue. That's pretty ridiculous in my opinion. So I stay away from that. I really just rely on affiliate model and TikTok shop really dominates with that.
Eric Dick
And again, it's, it can be directly, you know, showing the product, but it can also just be part of any TikTok influencer or TikTok creators like Life just, they could just part. You know what I mean? I think I was talking with hexcloud and they just like, they just love cooking Influencers who don't sell their product, they just use their product in their videos. And I assume with you guys, it could be a similar thing where people are just like, oh, let me open my window, check this out and do it.
Trung
Very much so. We, we had a lot of surprising, like, customers that just did videos and stuff and some of them went viral, some of them got a lot of views and whatnot. So we're happy about that.
Eric Dick
Did you connect with Brett Turner, the pilot house team member who is also like one of the biggest, like, tech influencers out there these days? I bet he would love your, your product. I don't know that he has the right blinds.
Trung
I spoke to him. I know he was doing a house couldn't. I didn't get his contact. I reached out to him on, on Instagram, but I don't think, I don't know if he manages or not, but if you could give me contact with him, I'll give him some free products. He could, he could definitely play around with it.
Eric Dick
I'm going to, I'm going to make that connection right after this. What's going on with. You know, you mentioned in the, in the, in the pre talk there that, that you're just rolling with the tariff situation. Talk to me about kind of what you're dealing with importing your product from China right now.
Trung
So luckily for us, when Trump was first, during his first term, he already implemented that like 25% tariff across the board from Chinese goods that wasn't removed. So during that time, our factory, the company that owns our factory in China, opened another factory in the Philippines. So we have that ability to shift production to the Philippines, if that was ever the case. I think a lot of people don't realize this, but during that time, a lot of manufacturing shifts shifted to Vietnam because of those tariffs. So that's what made Vietnam like the, one of the powerhouses in the last five, six years. Its economy is growing like haywire. But you also have to be careful that he might implement those tariffs in Vietnam and it kind of kills their economy that way. Right. So I think the Philippines is a good spot for us, but you have to diversify. At the end of the day, we might have one or two shipments coming out of China, but then if worse comes to worse and we need to shift production to the Philippines, we could do that.
Eric Dick
What's your goal with Rise Aura? What's your goal with this platform?
Trung
We want to build the brand. We want to focus on window blinds, shades, automation. So we have that one product for window shades with the beaded chains. We launched a new product for curtains for curtain rods and rails and tracks and then we're launching a product for blinds at tilt, the traditional ones. But that's kind of the focus for us. So if you think of rise, we want to be that solution people think of when they think of smart blind smart shades. That's kind of the focus of the company. We have the expertise with motorization that makes sense to us. Kind of like how Ecobee really just focused on thermostat or nanoleaf focus on cool lighting and things like that. So that's really our niche and focus. But we want to build a company. We have again, a lot of investors through the equity crowdfunding and we want to make a very favorable exit for everyone. I think we would be a great fit with a larger tech player or something in the window blind space. But we have to build out that distribution channel. We have to get a little more traction. We have to build our brand like.
Eric Dick
A Phillips or something.
Trung
Phillips, I think Phillips was, I think they got divested from ge. But okay, but yeah, you're talking about one of those larger players in the space that wants to diversify and your.
Eric Dick
Crowdfunding is always on, is that right? It's like an always on situation.
Trung
It's always on. So we do something called the regulation a in the US which allows you to raise I think up to 75 million every 12 months. So like the, like the offering is live for 12 months but we only actively market the round every three months. So there's a three month raise, three month gap, three month race is because we want, we don't want to be marketing to the same audience where they get too used to the, to the kind of like the brand and the offering and we want to change it up every quarter.
Eric Dick
What's your biggest challenge these days?
Trung
Q1 has been very interesting with what's happening with the tariffs, what's happening with the economy. I think we're not seeing the same, I don't know if this is across the board with the other brands you're speaking with. With Direct to Consumer, we're not seeing the same level of ROAS sales traction conversions as we used to see like last year and the year before. So I don't know if you've seen that across the board, but that's what we're experiencing both on the investment side as well as on the product sales side.
Eric Dick
It's almost like, yeah, conspicuous consumption is, is getting a little more hesitant in a Way. Right. People are just a little bit tighter with their purse strings maybe.
Trung
Yeah, that's what we're seeing. So that's another reason why we do want to focus on the new brand, the sister brand that's a lot like a lot more affordable and, and targeting a different audience and see how that converts.
Eric Dick
Do you think you'll have other distribution channels with that one or will you focus mainly on TikTok?
Trung
TikTok, perhaps Amazon, but those, those would be the main channels we have. We have our own TikTok partners that we're working with right now, so definitely interested to see how we're going to scale there. Very confident though. Very confident.
Eric Dick
Yeah, it's a great product. It just, and it like when you see it in action, it just makes perfect sense and I could see it gaining, yeah, a lot of traction with people as they. People want. Like the smart home trend is not going anywhere.
Trung
No, no. Right. Yeah. I think LG just acquired a platform so they're entering the space themselves.
Eric Dick
Nice. Any final words or words of advice for aspiring entrepreneurs out there?
Trung
From my experience in hardware and consumer electronics, kind of. To sum it up, IP is very important. Definitely secure that ip. Leverage what's available with Amazon to protect your ip. And if you're ever looking to raise from non traditional sources like non VCs and whatnot, then definitely look into Regulation CF or Regulation A in the US for equity crowdfunding and raising from your own customers and the investor base. There's. And I think with your podcast focused on dtc, it makes sense. Like if, if you're able to sell online, you're able to raise invest investment dollars online. It's not, it's not rocket science. At the end of the day, people.
Eric Dick
Want to follow your journey. Where do you recommend they potentially reach out? Somewhere like LinkedIn.
Trung
Yeah, you can reach out on LinkedIn or follow us on our. Any of our social media handles. Hellorise, Ellorise. And yeah, you'll be able to find me there.
Eric Dick
Nice. Well, great to connect. We hooked up again at. In. In Whistler and then Ecom north coming up. When is that? That's in the fall.
Trung
September. September.
Eric Dick
September. And you'll be attending that as well. Nice. All right, well, I'm always looking for an excuse to get to Toronto to see my family, so I will see you there as well. Thanks so much for taking the time today tonight. It was super interesting.
Trung
Awesome, man, I appreciate it.
Eric Dick
Thanks so much for listening to today's episode. If you're not a subscriber to our newsletter. You can do that right now @directtoconsumeralloneword.co. i'm Eric Dick, and this has been the DTC podcast. We'll see you next time.
Podcast Summary: DTC Podcast – Ep 521: How RYSE Used Meta Ads to Raise $10M+ in Equity (Not Just Sales)
Release Date: June 30, 2025
Host: Eric Dick
Guest: Trung, Founder of RYSE
In Episode 521 of the DTC Podcast, Eric Dick welcomes Trung, the founder of RYSE, a direct-to-consumer (DTC) brand specializing in motorized window shades. Trung shares his journey of transforming a simple home improvement idea into a successful ecommerce venture.
Trung delves into the inception of RYSE, highlighting the personal motivation behind the brand.
Trung [02:08]: "I wanted to motorize my window shades. That's it."
He explains how high costs associated with existing motorized shades led him to identify a market gap. Over three years of research and development, Trung and his team created a proprietary motorized pulley system tailored for standard window shades, eliminating the need for expensive replacements.
Trung [03:32]: "The R&D process was the hardest part because the concept was so new. We developed everything from the ground up."
This intensive R&D effort resulted in strong intellectual property (IP) protections, giving RYSE a competitive edge in the market.
Initially, RYSE launched on crowdfunding platforms like Indiegogo and Kickstarter, successfully raising an angel round. This early traction paved the way for sustainable growth through traditional ecommerce channels.
Trung [04:47]: "Since we launched, it's been definitely just E-commerce. Facebook ads, Meta ads, Google, those are the primary channels."
Trung emphasizes the importance of diversifying marketing strategies, including exploring Amazon and upcoming ventures into TikTok advertising with a new sister brand.
A significant portion of RYSE’s $10M+ funding was achieved through equity crowdfunding, a strategy Trung adopted following a setback with traditional VC funding during the COVID-19 pandemic.
Trung [06:46]: "Equity crowdfunding fits right after an angel round, maybe in line with the VC round. It works well when you do have some traction, a prototype, concept, sales."
Trung outlines how equity crowdfunding allowed RYSE to maintain control over their destiny, circumventing the limitations often imposed by venture capitalists who prefer high-tech, scalable sectors like AI over physical products.
RYSE utilizes Dealmaker, likened to the "Shopify of fundraising," to manage their equity crowdfunding campaigns.
Trung [09:02]: "We use Dealmaker. They facilitate the entire investment transaction, ensuring compliance with SEC and FINRA regulations."
The platform enabled RYSE to present their pitch effectively, manage investor relations, and streamline the investment process, resulting in a diverse investor base with average check sizes around $2,500.
Protecting their innovative technology was crucial for RYSE. Trung highlights the advantages of Amazon's Apex Program in safeguarding their IP from counterfeiters, particularly Chinese manufacturers.
Trung [15:16]: "Amazon’s Apex program allows us to file complaints against infringing sellers efficiently. We've successfully removed hundreds of knockoffs, maintaining our product's integrity on the platform."
This program proved instrumental in minimizing competition from copycats by leveraging Amazon’s robust enforcement mechanisms, thereby preserving RYSE’s market position.
Facing challenges with high price points on TikTok, Trung strategized to launch a more affordable sister brand to tap into TikTok’s younger, price-sensitive audience.
Trung [18:23]: "We're launching a sister brand priced between $79 to $99, which is the sweet spot for TikTok, allowing us to capture a different segment without diluting the RYSE brand."
This approach includes leveraging TikTok Shop and an affiliate model, encouraging creators to earn commissions based on sales performance, thus ensuring a low-risk, high-reward collaboration for both the brand and influencers.
The imposition of tariffs under the previous U.S. administration prompted RYSE to diversify their manufacturing base beyond China to the Philippines, ensuring resilience against potential trade disruptions.
Trung [21:58]: "Our factory in China can shift production to the Philippines if tariffs escalate. Diversifying our manufacturing locations is key to maintaining our supply chain stability."
This strategic diversification safeguards RYSE against geopolitical fluctuations, ensuring uninterrupted production and distribution.
Trung outlines RYSE’s vision to become the go-to brand for smart window shades, drawing parallels with brands like Ecobee and Nanoleaf that have successfully dominated their niches. However, he acknowledges current challenges, including reduced Return on Ad Spend (ROAS) and slower sales conversions, likely influenced by broader economic uncertainties.
Trung [24:34]: "In Q1, we're seeing lower ROAS and sales traction, which aligns with the trend of consumers tightening their purse strings."
To counteract these challenges, RYSE is heavily investing in their new, more affordable sister brand to capture a broader audience.
Concluding the episode, Trung offers valuable insights for entrepreneurs, emphasizing the importance of securing IP and leveraging online platforms for both sales and fundraising.
Trung [25:52]: "From my experience in hardware and consumer electronics, IP is very important. Definitely secure that IP and leverage what's available with Amazon to protect it."
He encourages startups to explore non-traditional fundraising avenues like Regulation CF or Regulation A in the U.S. for equity crowdfunding, especially for consumer-focused brands with strong online sales capabilities.
Trung expresses confidence in RYSE’s strategic direction and highlights the continuous roll-out of innovative products in the smart home space. He underscores the significance of maintaining a robust distribution channel and building a strong, recognizable brand to ensure long-term success and a favorable exit strategy.
Trung [22:57]: "We want to build the brand. We want to focus on window blinds, shades, automation. We aim to be the solution people think of when they think of smart blinds and smart shades."
Eric Dick wraps up the conversation by reaffirming the value of Trung’s insights and his appreciation for RYSE’s innovative approach to scaling through equity crowdfunding and strategic marketing.
Key Takeaways:
For more insights and tactical strategies on scaling DTC brands, subscribe to the DTC Newsletter and stay tuned to upcoming episodes of the DTC Podcast.