On this podcast, we talk about Windmill’s “SaaS” approach to go to market, how they became successful using PR as their main marketing strategy, the incredible but exhausting story of finding a factory and prototyping, and so much more!
Since launching in 2020, Mike and his team have built one of the most exciting names in appliances since the 1950s, when window ACs first hit the mass market. The problem? Manufacturers have barely changed a thing in 70+ years.
Enter Windmill - the first company to bring "sexy" "convenient" and "air conditioner" together in a sentence - reimagining the next generation of ye olde ACs for today's modern customer with covet-worthy designs, smart (energy-efficient) technology, and an exceptional experience.
In just a few short years, Mike has scaled his business by more than 5,000%, raised $14M in capital from top VCs all over the world, and inked retail partnerships with big box stores like Walmart, Home Depot, and PC Richard & Son (thanks to a long list of relentless cold calls).
Next week, Mike and his team will launch a first-of-its-kind program to customers that rewards them for smarter energy use during times of peak heat - potentially curtailing tens of thousands of kW of energy this summer to help prevent blackouts, lower energy bills, and stop the use of dirty power plants.
This visionary approach to combining hardware and software is the breath of fresh air the AC biz has so desperately needed to clean up its act, and it can't come soon enough - as the EPA projects that the number of 90 degree days in NYC alone could triple in the next 30 years, putting the city's energy grid at major risk.
In This Conversation We Discuss:
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If you build a good product and you have a nice brand, have customer support, and you're new, you can ride that [wave] but that only lasts so long.
Welcome to Honest Ecommerce, a podcast dedicated to cutting through the BS and finding actionable advice for online store owners. I'm your host, Chase Clymer. And I believe running a direct-to-consumer brand does not have to be complicated or a guessing game.
On this podcast, we interview founders and experts who are putting in the work and creating real results.
I also share my own insights from running our top Shopify consultancy, Electric Eye. We cut the fluff in favor of facts to help you grow your Ecommerce business.
Let's get on with the show.
Hey everybody, welcome back to another episode of Honest Ecommerce. My name is Chase Clymer. I'll be your host today.
That's the first time I've ever said it in that way and I like it. You know what, maybe I'll mix it up next time.
Today, we're welcoming to the show, the CEO of Windmill, a direct-to-consumer appliance company reimagining air conditioning for modern living.
Welcome to the show, Mike Mayer.
Thank you. It's good to be here.
Oh it's gonna be a great conversation. So, quickly what products are you guys bringing to the market over there at Windmill so people can have an idea.
Yeah. so we're a modern air care brand and there's a lot of things that can fall underneath that. Our first product is a beautiful, modern, smart, easy-to-install window air conditioner.
Awesome. Awesome. So I know when I was a little kid growing up, I had a dream of being an air conditioner person and building a brand on that. So when did you realize that was your goal?
Well you could have beat us to it back…
…in the day. For me… I wasn't like you. I wasn't gonna be the HVAC expert. I don't really know
what I wanted to do. But I did always like consumer brands. I remember when I was…
I don't know. I must have been 8 or 9 years old. I wanted to start a rival to
Polo but for kids. And at the time I had imagined this minimal peach logo and I was gonna call the clothing brand “Peaches”.
That never happened. But I guess my mind was always primed to think about products: Physical products and consumer brands.
So you always had that entrepreneurial bug from a young age?
Yeah. So when I was in high school, my dad knew someone who was very techy and I convinced that person to get me a DVD burner. And I would go to Blockbuster, get the new, hottest hit. And I would burn the movie and then sell it to my friends for $10 bucks.
And then realized that was illegal and immoral and I immediately stopped doing it. But I always thought “Well hey, what opportunities exist out there and can I go get them?”And I just liked it. I like the thrill of it.
Absolutely. So where did the idea for starting a new, modern air conditioner company come from?
Yeah. So I was moving my older brother who is a co-founder and co-CEO. But at the time, this was in the summer of 2018. And we were…
I was helping him move to this small apartment in Manhattan. And we were going up. [It was] a 5- floor walk up. And [we were] moving all of his boxes and furniture. And we'd get up there and we're just sweating bullets.
It's so hot in the city in August. And we look in the window and there's
this window air conditioner. We go to turn it on and it's loud. And it's going like *thud* thud* thud*... Just clanking and making weird noises.
And there are holes in the side panels, and the thing was yellow, and we needed to figure that out. And we didn't really know what to do.
My older brother's good friend, Ryan --who's now a co-founder-= his family's been in air conditioning for decades in New York.
So we called him, and he gave us two of his technicians to install some units, they were new ones. At the time they were still pretty ugly but the experience was really great.
It was like “Wow. How do we give people that know a guy, knows a ‘Ryan’ experience because it didn't exist?” And so that was on the experience side. But also the product that he installed was top of the line and it was not that great.
It looked horrible. The sides were not particularly well-insulated and good looking. So there's a huge opportunity from both a product standpoint and a customer education and experience standpoint to innovate.
And we all had lunch after and that was it. We said “Yep. We are the people to do this one, particularly given the competitive advantage in air conditioning.”
Absolutely. It's so timely that we're having this interview. I watched a fantastic thing and I'm recommending it to you and to everybody listening.
Go on YouTube. There is a video. It's called “Architect Breaks Down the 5 Most Common New York Apartments'' It talks about why there aren't air conditioners in all the New York apartments.
It's very fascinating. It's like a 15-minute video. It was very, very cool. So knowing the struggles… You just look up, and every street, it's just air-conditioners everywhere.
When I walk down the street now in the city, I can't not look up. I'll be having a conversation with friends and we'll be walking down the street and my head is always just angled upward.
And they're like “What are you doing? Stop looking at window ACs.” But I'm now primed to do so. And it's fun to see ours out there.
It's one of those products where if you're selling a toothbrush or something, you're not necessarily looking into people's bathrooms all the time.
But with a window AC, you can actually look up and see the hard work.
Yeah you can look up and visualize the opportunity.
That's the thing. Yeah. I see… I look up. When I don't see a Windmill, I'm like “Oh come on.”
And my brother is like “Well that just means the market is big enough for us to exist. We have more work to do.”
Absolutely. Alright. So you guys have this epiphany. “We're going into the air conditioner business.” What’s next? What are we doing?
So my co-founder, Ryan, has a relationship with a factory overseas. He's had that relationship for a few decades now because his family business manufactures larger scale commercial ACs.
They know what they're doing. The factory knows what they're doing. We flew over there immediately and pitched the factory owners on this idea to get them to lean in and give us some resources and really take a crack at it.
That was, I would say, step one. [It] was finding a factory that would do this for us because we didn't want to just put lipstick on a pig, change the front panel, but really the whole thing is the same.
We wanted to redesign this thing from scratch. Everything from the base pin on the bottom, to the rounded edges, to the way the airflow comes out of the machine. Really rethink every detail.
And a lot of factories wouldn't work with us. In fact a really large appliance factory flew to New York to meet with us. And there he was, very hyped on the idea, bought into the fact that we're this young, hungry team that wants to modernize this space.
And then we started talking about what we wanted to change and he just laughed at us and just said there's no way any one of us is going to do this.
We were smiling in the background because we knew we had Ryan's family’s factory to fall back on and they've done an incredible job. But that was the first step. [It] was getting someone on board.
Absolutely. So you guys are now redesigning this thing. How long does it take to get that first prototype?
Yeah. It takes a while. I think probably for some less complex products it could be quicker. But I think from the moment we flew to the factory until the moment we actually launched the thing, it was probably about a year and a half, which maybe is…
And maybe others listening to this might say “Well, that's pretty fast for an air conditioner.” And I guess it was because we had the infrastructure and the technicians and the engineers. And we had a lot of that know-how built-in.
And then it was just a matter of aligning our industrial design to what we could actually manufacture at scale.
Alright. So you guys have a prototype. You are going to go and launch this thing. What's the go-to-market strategy? How are you going to get those first customers? What was that whole playbook?
For sure. I'll say before they go-to-market, we make it seem like it's easy to get to a prototype. But we were measuring hundreds of window sills in the city, going around, doing a ton of research and measurements
And we went through rounds and rounds and rounds of prototypes for
every part of the AC: The display, the side panels, that patent pending install kit that makes it super easy to install different sized holes in the front. It took…
It was grueling. These are you know multi-hour calls with the designer, the engineers, trying to coordinate between time zones..
So I just want to just you know clear it up that it's not an easy task. And even though it was just a year and a half, it took a while.
But we did all that, we got the prototype and then how do we go to market?
Well we were going to launch full throttle in the summer of 2020 and then something called COVID-19 came around.
And that for many reasons for the world that was and is still horrible. For us as a new business it was just that. We couldn't launch. The factory was closed for 2 months we really could only you know eek out several hundred units towards the end of the summer.
So what we ended up doing was we did a pre-launch campaign. We had a lot of PR and media power behind us. And one writer saw what we were doing and loved it. And he called us “The iPhone of Air Conditioners” and that blew…
That just blew us up. And we had a really beautiful splash page with this rotating AC that looked like an Apple product which was one of our inspiration points. And our wait list just blew up.
So we had you know thousands of people on our email list and we sold through those several hundred units fairly quick.
And also because we were in the city and a lot of our customers are in the city and in the Northeast, we installed a lot of these ourselves for our first customers.
So we could see their reaction, get feedback. So when we could turn the screws and make some improvements for the real lawn twitchers in 2021
Oh that's fantastic. It definitely…
That's almost the SaaS approach of “I'm gonna onboard you onto my app so you can tell me what I haven't thought about because I'm so close to this thing.”
And we did a lot of that in the prototyping phase but really when it's… You don't know until you have 100+ of your products in real homes with real customers telling you their real opinions so you can…
You can do some of that beta work in the prototyping stage and hopefully
you do a lot of it there because we were in a sense… We were lucky because we didn't commit a lot of capital and inventory in that first year. We still had time and it is a seasonal business.
So we sold through very quickly. We got that feedback and we went right to work before we started scaling up production again for the following year. So we…
Just given the nature of our business, and when we launched, and how many we launched, we got lucky in that sense from a feedback and iteration perspective.
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Now, do you remember any particular feedback or just something that came from a customer suggestion that you were just like “How did we not think of that?”
Well it was really around the installation when we first had our ready-to-go prototype and what we were gonna go forward with. It was horrible
We invited people to come in and install in this mock window that we had in our warehouse in the East Village. And we invited strangers to come and install this thing.
And there was a point where Ryan said to me, “We can't press go on this. People don't know how to do it. They're fumbling around with it. We're talking about installing an appliance in a window. We can't take any risks.”
So we went back to the drawing board. We went back to our industrial designers. Within a week, we had a better solution. We filed a patent on it and that's what we have today.
And that's what Wirecutter called the “the easiest AC to install”. It was because of a one-week pivot after my co-founder Ryan looked at me and said “No way we're doing this.” Which is nuts which is crazy for a hardware company to just like quickly make that turn and go with it .
And if the second iteration was messed up, we would have been screwed.
You guys found this solution, you're going… Alright. You launch it. You have a waitlist. Last year in the actual launch, what was that like? What were you using to acquire new customers? Where were you spending most of your focus for selling through these products?
Yeah last year a lot of it came from PR. Continued coverage, continued reviews…
We actually did very little social and search in the first few months of the season. We started testing into it towards the middle end of the season just so we had learnings for this year.
But we really rode on organic buzz and featured stories because we were we
were the new shiny object in a very old space and so that…
If you build a good product and you have a nice brand, have customer support, and you're new, you can ride that [wave] but that only lasts so long.
And so then we started testing at a home, social, search and that helped us this year refine where we're at now.
Absolutely. You've mentioned PR being your main strategy a few times. Now did you guys work with a team? Did you take that on internally because you had history there? How did you approach turning that into such a success?
Yeah we worked with an agency early on and I would definitely recommend that, especially for a consumer product. Trying to do something new in a category, it really really helps because you know you can do it yourself.
But we were busy with a thousand other things and we wanted to make sure we were giving the media and PR our full effort because we knew that that was going to give us that initial tidal wave.
Absolutely. PR is such an overlooked channel. And out of the countless
interviews I've done on this podcast, I think I've only heard it come up like
3 or 4 times where that was their main avenue that they went after.
Because the shiny object is direct response with paid ads and that's way
more expensive, way more tricky to crack, the thing on that.
I just think that yeah PR is such an overlooked play because it is more long tail and less guaranteed.
Totally. I will say that only gets you so far. You can't rely just on PR all the time for the rest of your business's life.
It's something to help that initial swell of demand and interest, but then you have to quickly pivot to other ways to drive efficient conversion.
Absolutely. You guys had a lot of success and you guys raised quite a bit of money. Can you talk about that whole experience?
Yeah. Extremely hard and exhausting. We are not you know web3. We're not building stuff for the metaverse which is what everyone's sort of getting all excited about from the last 6 months of conversations that I've had.
We're building a modern air care brand. and I will just say that we're more than just a window AC. That's our first product. It's our foot in the door. But we want to build a smart connected suite of air products and the window AC is just one of them.
And we've built software to help you use your AC in an energy efficient way and we're going to continue to build that out. But also a tech platform to connect other types of air products.
And so I say that, one, because I think it's important to talk about that story; but two, that's what investors are interested in. That's what our vision is.
They're not investing behind the window AC. We've been successful with that first product. But they're investing behind our full vision. And so when we're telling that story, it's different than if we were to tell the story of “We're making just a window AC.”
So I think you know if I were to give advice about fundraising it's make sure you know who you are at a higher level, and sell that vision, and sell that story, and really believe that you can get
there, and don't get stuck on just telling that, just talking about the progress of your first product.
Absolutely. The vision is way more important than the here and now.
So is there anything that I didn't ask you about that you think would resonate with our audience?
The one thing I didn't really talk about and I think is super important especially if you're starting a hardware business or you have a physical product that you're selling is don't sleep on retail.
I think maybe that is becoming tired advice at this point because I think people are realizing that direct-to-consumer only is not.. [It] may not be the way to go.
We sell a lot [in] D2C. It's our most profitable channel. But to achieve the scale and the volume that we've been able to, a lot of that was driven by Home Depot, and PC Richard, and Amazon.
So I think direct-to-consumer is super valuable and we're going to continue pushing the limit there. But it may be a good idea to think about other ways to distribute your product.
Absolutely. Now you've talked so much about this awesome air conditioner that you worked so hard on. If somebody's like “You know what, that sounds interesting.” Where should they go to check it out?
Yeah. I mean we'd love you to go directly to windmillair.com and get an AC. But you can find us in other places as well including Amazon, and Home Depot, on PC Richard and Walmart.com.
Awesome. Mike, thank you so much for coming on the show today.
Alright. I can't thank our guests enough for coming on the show and sharing their knowledge and journey with us.
We've got a lot to think about and potentially add into our own business. You can find all the links in the show notes.
Make sure you head over to honestecommerce.co to check out all the other amazing content that we have.
Make sure you subscribe, leave a review. And obviously if you're thinking about growing your business, check out our agency at electriceye.io. Until next time.