Entrepreneurs often start with a challenge they want to solve. They then have a vision that drives them. For Philip Petracca, it started a bit unusually with an underwhelming beer that led to the design of an innovative new product and then put him down a creative marketing path that yielded phenomenal results.
Petracca and David McDonald, co-founders of Fizzics, never understood why a craft brew from a can or bottle never tasted quite as good as it did from the tap. But what first started out as a simple curiosity led to the pair quitting their day jobs and diving into a product that they believe can change the way the masses consume beer.
They spent ten months experimenting, tinkering with chemicals and foams to try to replicate a tap-like brew from home, but any changes they made left a negative impact on the flavor profile.
“We were beer geeks, and it just wasn’t acceptable,” Petracca explained during a speech at the Rutgers Innovation and Entrepreneurship Expo on November 1.
But one night, while watching over his infant at 4 a.m., his eyes drifted to the humidifier in the room. Inspiration struck, and he took it apart and explored its process of changing water to vapor. He called McDonald, and a few hours and beers later, the two had formulated the early version of their Fizzics Micro-Foam technology, which they use to enhance the flavor, taste and mouth feel of any craft beer.
In his talk, Petracca detailed the creative strategies he used to scale the company from its first prototype producing a satisfying beer to a rapidly growing operation with models sold internationally.
His first plan of action was to crowdfund. He got the idea while at a beer festival; after doing a trial with the prototype, skeptics turned to believers, and Petracca then had the wide-eyed converts write their emails down so he could keep them updated on the state of the business.
From there, they launched a fundraising campaign on Indiegogo, the international crowdfunding platform. He made sure the page clearly explained the what, how and why of the product, and also made sure to include a snazzy video to catch people’s attention.
“Indiegogo has a complex algorithm. You have 24-48 hours to hit key metrics, and if you do, a magical thing happens: you start trending,” Petracca said. “The platforms start promoting you, and pretty soon, millions are seeing it.”
From the initial campaign alone, Fizzics raised over $250,000 in funding.
In addition to funds from the site, Petracca also devised a strategy for getting some positive write-ups in the press. He began showing up in the lobbies of tech outlets like Gizmodo and TechCrunch armed with cooler full of beer.
He quickly found that editors would overlook the fact that he didn’t have an appointment as long as he brought free beer. He showcased the product, and before long, bloggers were covering the company.
Once the word was out, it was time to develop the actual business model. In the summer of 2015, Petracca approached Brookstone, a tech-retail chain fresh out of bankruptcy, and convinced them to consider partnering with Indiegogo start-ups in order to stay on the forefront of innovation.
“They loved the idea,” Petracca said.
They ordered 8,000 units, and also made an exclusivity deal. When they started shipping in October, in 7.5 weeks, Brookstone sold $1.7 million worth of Fizzics products.
While the journey thus far had been successful, the company still faced its biggest challenge yet. They applied to appear on ABC reality series “Shark Tank,” and be one of the budding entrepreneurs who have a chance to pitch their products to a group of celebrity investors in hopes of making a deal.
Out of over 200,000 applicants, Fizzics was one of 225 businesses that made the cut.
“Shark Tank gets you in front of not only celebrity investors, but also millions of people,” Petracca said. “It’s the gift that keeps on giving: a free commercial when we had no marketing dollars to spend.”
The pair went in hoping to get $500,000 for 4% of the company. Against the odds, the pitch was a huge success, and after a few different offers from the six “sharks,” Petracca and McDonald made a deal with Mark Cuban and Lori Greiner: $2 million for 16.7% of the company.
They closed the deal, and now, Fizzics is on its way to bigger and better things. The company’s pre-money valuation has grown from $10 million to $18 million, and the Micro-Foam technology is making its way into stores in countries like Canada, Mexico, Brazil and South Africa.
“For me, the one thing I’ve learned is you have to be able to communicate the value proposition and also raise awareness in your product,” Petracca said.
Through a variety of strategies and platforms, he was able to do both, and now Fizzics is brewing up a better beer in homes across the globe.