How I Built This with Guy Raz: Whisker/Litter-Robot – Brad Baxter

In this compelling episode of How I Built This, host Guy Raz delves into the entrepreneurial journey of Brad Baxter, the innovative mind behind the Litter-Robot, now rebranded as Whisker. Brad's story is a testament to perseverance, ingenuity, and the relentless pursuit of solving everyday problems.

Early Life and Career Beginnings

Brad Baxter's journey began in rural Dane County, Wisconsin, where he grew up in the 60s and 70s. Inspired by his entrepreneurial father, Brad pursued a mechanical engineering degree at the University of Wisconsin in Madison, harboring dreams of designing vehicles for one of the Big Three auto companies. Despite a rocky start in his college years, Brad secured a position at Ford Motor Company in 1989. At Ford, he worked on transitioning analog displays to digital, gaining invaluable experience in plastics and electronics—a foundation that would later prove crucial.

Brad Baxter [06:07]: "As a teenager, I spent a lot of my time drawing cars, fixing cars, fantasizing about cars... I was a real car guy."

The Birth of Litter-Robot: Identifying a Problem

Despite a promising career in the automotive industry, Brad's personal life introduced a significant challenge: maintaining a clean litter box for his cats. Frustrated by existing automated litter boxes that were inefficient and problematic, Brad sought a better solution.

Brad Baxter [14:21]: "I've got to figure out a way to keep this box clean all the time, because this is just driving me nuts."

His deep understanding of mechanical systems led him to conceptualize a sifting mechanism instead of a raking one, aiming to gently separate clumps from clean litter without breaking them apart—a common drawback of existing models.

Overcoming Early Challenges: Balancing Dual Roles

Determined to bring his vision to life, Brad launched the Litter-Robot while still working as a consultant to sustain his family. For nearly two decades, he juggled both roles, investing approximately $300,000 into the business without turning a profit. The strain of maintaining two ventures took a toll, culminating in a pivotal moment where Brad had to reassess his commitment.

Brad Baxter [02:20]: "I had kind of a come to Jesus moment because I was... not really able to make money because it was just so expensive to produce the product."

Pivoting for Sustainability: Retooling Manufacturing

Realizing the unsustainable costs of vacuum molding, Brad made the critical decision to switch to injection molding, a move that required substantial retooling but promised long-term financial viability. This shift was financed through a risky loan from a trusted supplier, underscoring Brad's commitment to his entrepreneurial dream despite mounting pressures.

Brad Baxter [39:56]: "I was able to retool the product by amortizing the cost of the tooling with one supplier and then take out a loan."

Strategic Marketing and Accelerated Growth

In 2015, with annual revenues reaching $7.5 million, Brad recognized the need for professional marketing expertise to propel Whisker's growth. Enter Jacob Zuppke, whose strategic marketing initiatives transformed the company's online presence and sales trajectory. Innovative campaigns, such as the "25 Days of Christmas," leveraged influencer partnerships and social media giveaways, exponentially increasing website traffic and doubling sales within a year.

Brad Baxter [55:54]: "We doubled our sales from 2015 to 2016."

Maintaining Quality: Choosing Local Manufacturing

Amidst growing pressures to offshore manufacturing, Brad and his team conducted a thorough cost-benefit analysis. They discovered that shipping costs negated the financial advantages of overseas production. Opting to keep manufacturing local ensured better supply chain control and quality assurance, aligning with Whisker's commitment to excellence.

Brad Baxter [57:07]: "Having more control over the supply chain... made sense to be vertically integrated."

Securing Major Investment and Scaling Up

In 2019, Whisker's valuation soared to $55 million, attracting a significant investment from Pondera Holdings. This $31 million infusion allowed Brad's father to cash out his 35% stake, providing Brad with the resources to further scale the business without burdening the company's balance sheet.

Brad Baxter [59:14]: "Through that deal, we were able to get my dad cashed out."

Innovating Beyond Hardware: Embracing Digital Integration

As Whisker evolved, Brad recognized the importance of integrating digital experiences with their hardware. The development of connected litter boxes enabled data collection on feline behavior, enhancing user engagement and product functionality. This synergy between hardware and software positioned Whisker as a leader in smart pet care solutions.

Brad Baxter [61:49]: "It's getting even more difficult now because it used to be just providing great hardware, but now we have to match it with a great digital experience."

Reflecting on the Journey: Lessons Learned

Looking back, Brad acknowledges the delicate balance between hard work and the fortunate timing that facilitated Whisker's success. While relentless effort was crucial, he also attributes his achievements to seizing opportunities during the rise of e-commerce and generating his own luck through dedicated work.

Brad Baxter [69:00]: "Timing was essential because we grew up with our business during the time that e-commerce was coming into play."

He also emphasizes the pivotal support of his wife, Margaret, who played a significant role in maintaining family stability amidst the entrepreneurial grind.

Brad Baxter [67:26]: "She filled a lot of the gaps while maintaining a professional career herself."

Transitioning Leadership: Passing the Torch

After 22 years at the helm, Brad decided to step down as CEO, recognizing that scaling the company required a different leadership approach focused on team-building and strategic collaboration. Jacob Zuppke took over the role, allowing Brad to continue contributing to product development and innovation without the constraints of daily executive responsibilities.

Brad Baxter [64:41]: "It was recognizing that the business was changing... It was more about building teams and hiring the right people."

Conclusion: A Legacy of Innovation and Resilience

Brad Baxter's entrepreneurial story with Whisker/Litter-Robot exemplifies the challenges and triumphs of building a multimillion-dollar company from a simple, yet effective idea. His journey underscores the importance of adaptability, strategic investment, and unwavering dedication to quality. As Whisker continues to innovate in the pet care industry, Brad's legacy of resilience and innovation remains a guiding force.

Brad Baxter [69:46]: "Good luck follows you when you're trying to do the right thing and what matters."

Brad's story serves as an inspiring blueprint for aspiring entrepreneurs, illustrating that with the right blend of hard work, strategic pivots, and a bit of luck, even the most unconventional ideas can lead to monumental success.