Steve Jobs was often called the great handyman. He did not invent the computer’s graphical interface or the mobile phone. He improved the existing ones. And the same goes for Spencer Jan. He wasn’t the first to produce a portable fireplace, but the Solo Stove, his version, turned an entire industry upside down.
He said to me, “A lot of entrepreneurs are looking to solve a problem, to make a better mousetrap, to make something better. The best products are often iterations of earlier versions. We started out with just one stove. We didn’t have a big vision to grow.
This stove is now Solo Brands, Inc., a public company (NYSE: DTC) resulting from the acquisition of Jan’s business.
He and I recently discussed starting Solo Stove, the decision to sell part of the business to private investors, and the emotions of watching others make it work. Our entire audio conversation is embedded below. The transcript is edited for length and clarity.
Eric Bandholz: Tell us about Solo Brands.
SpencerJan: The company started in 2010 as Solo Stove. My brother Jeff and I started it with $15,000. That’s all we had. It became Solo Brands, a publicly traded holding company.
Bandholz: I was blown away by the product, a miraculously hot pan.
Jan: We are not engineers. We are do-it-yourselfers. Many entrepreneurs are looking to solve a problem – to make a better mousetrap, to make something better. The best products are often iterations of earlier versions.
Think Tesla. As innovative as it is, it’s still a car with four wheels and a steering wheel. For us, it was about tinkering and finding something that we could sell online directly to consumers.
Growing up in Canada, we camped and spent time outdoors. These are our fondest memories. We naturally thought of the camping space. We started digging. We watched a lot of YouTube videos. Camping stoves were one area where we could unleash our creativity. That’s how it started.
We started out with just one stove. It was small, light, ideal for one person. It would fit in a jar. You didn’t need an extra fingerprint. We called it Solo Stove.
We didn’t have a big vision to grow.
Bandholz: E-commerce platforms were limited in 2010.
Jan: To the right. Shopify had barely started. There was 3dcart, Volusion, a few others. Magento was there, but it was more complicated. We came across BigCommerce, which was the platform we chose. We loved BigCommerce’s pricing model. It was about $30 a month. That was it – no percentage of sales.
Bandholz: You started the business. When did you decide to expand beyond just one brand?
Jan: Here is the context. We left the company in 2019. We sold part of it to private equity investors and became board members. We went from operators to advisors – attending quarterly meetings, reviewing finances, offering support when needed.
In 2020 we sold more of the business to another private equity firm. It was a much larger valuation. We removed more chips from the table. In 2022 we still own part of the business, but in 2020 we left the board, which then consisted of the two private equity groups. They ran the show.
The strategy for an initial stock offering came from private equity owners. They explain their vision in the S-1, the filing that US companies submit to the Securities and Exchange Commission when they go public. The SEC filings are where I get my information because I’m no longer an insider. I don’t speak with them.
I’m still invested in the company as a passive investor, so hopefully it will go well. Solo Brands, Inc. is now listed on the New York Stock Exchange. The ticker is DTC.
The aggregation space – the acquisition of multiple brands – is still under development. I am an entrepreneur, however. I found momentum, growth, and cumulative effects when I focused on one thing.
Bandholz: You sold in 2019. Explain this decision to us.
Jan: In 2016, there were still only my brother and me, no employees. We didn’t have an office; we were working from home. We have used third party processors and other vendors for various tasks.
We wanted a lifestyle business, which offered a balance between careers and time for ourselves. In 2016, the company was growing beyond what we had imagined.
We have regrouped. We asked ourselves: “What are we doing? How will this company improve the quality of our lives? We concluded that if he continued to grow, we would pass the baton to someone else.
So in 2016 we started exploring a sale. But the response came back that the business was not salable since we had no employees, staff or systems. A buyer couldn’t step in and make it grow.
We spent the next three years building a business to sell. It was our priority.
In 2019, we were receiving unsolicited interest. Most of the requests came from private equity firms. They had a lot of money and gave us the highest rating.
Bandholz: What do you think of your participation in the company after having sold it?
Jan: We still believe in what we have built. People run the business – managers, CEOs, CFOs. From scrappy contractors in a garage to today, it’s mind-blowing.
I would always put my money on the business. But every potential buyer will ask, “Why are you selling if it’s so good?” Part of the answer is, “I’m not selling everything, just a majority stake. I still want some of it.
By removing a few chips from the table, we achieved financial stability, but we still have an advantage.
Bandholz: You have sold the business. You are off the board. You are rolling in money. Now what?
Jan: To be honest, it’s hard not to do anything. It’s hard to get motivated. When you’re financially free, you have to dig deep to find out what makes sense. I spent a lot of time doing this.
I love meeting nice people like you. I get a lot of satisfaction from helping others without any strings attached.
I’m trying to figure out how to help more people on a large scale. I considered creating grants, competitions or other vehicles to help entrepreneurs. That’s what I worked on.
At the moment, I don’t have any great ideas to launch another brand or another physical product. I am happy. I can regulate my time.
Bandholz: How can listeners contact you?
Jan: I’m on LinkedIn. I started a YouTube channel where I discuss e-commerce and entrepreneurship.