‘I’ll Tax Your Seat’

Introduction:

This week, we meet special guest Ben Knepler, who, along with his True Places co-founder Nelson Warley, came up with an idea for an outdoor chair that they believe could be a game-changer. They liked the idea so much that they quit their corporate jobs, they raised money, they borrowed money—putting their own homes at risk—they fought through the pandemic, they found a manufacturer in China, they launched on Kickstarter, they found another manufacturer in Cambodia, and then they ran smack into the brick wall of President Trump’s second-term tariffs. Or, as George Harrison almost put it, “If you try to sit, I’ll tax your … sturdy, portable, folding chair that could create a whole new category of high-end outdoor products except you’ll probably have to try to sell them in some other country … ‘cause I’m the tariff man.”

— Loren Feldman

Guests:

Ben Knepler is co-founder of True Places.

Producer:

Jess Thoubboron is founder of Blank Word.

Full Episode Transcript:

Loren Feldman:
Welcome, Ben, our special guest today. It’s great to have you here. Ben, you’ve had a very interesting journey building True Places. I want to ask, at what point have you been most excited and confident about your business, and what’s the vision that you had at that point?

Ben Knepler:
Well, Loren, thanks for having me. It’s great to talk to you. I think I’m actually—even now with the many challenges that I know we’ll talk about—I’m as excited about the opportunity and the vision of what we’re building as I was when we first made the crazy leap to leave our jobs and start True Places.

What we were seeing at that time—and this is about five years ago—is that we realized we were spending a huge amount of our time outdoors and outside with friends and with family, but not necessarily going on a huge camping trip or going to the mountains every time, although those are great too. But we were spending hours and hours every week in the situations that you can kind of describe as just outside your door. It might be in the backyard with your family around a fire pit. It might be on the sidelines of kids’ sports games. It could be in local festivals, or concerts in the park, or block parties, and the list goes on.

There are all these different situations, and people are spending a huge amount of time, and it’s really meaningful time. But when you look at what people are taking with them and using in those situations, it’s usually old, uncomfortable camping gear that wasn’t really designed for those occasions and those purposes. And once you see something, it’s really hard to unsee it. And we started digging into it more and more, trying to understand the category and the types of products that we could maybe create. But we realized that this was a huge aspect of people’s lives that is a massive behavior, but no one was really designing and creating products for this aspect of people’s lives. So that’s what we set out to do.

And the vision of creating this brand and this company that is really focused on that part of people’s lives is something that we were excited enough to start the business around, and we remain as excited about that vision. And so our first product is a portable chair, because we noticed that in all of these situations, at least in the U.S., people are mostly sitting for hours and hours, and they’re usually sitting in generally low quality, uncomfortable, old camping chairs that weren’t really designed for that situation. And so we set out to try to solve that literal pain point, but also to try to build a brand, more broadly, for these occasions and this part of people’s lives.

Loren Feldman:
Can you give me a sense of what the ultimate vision was? How big an opportunity did you perceive this to be?

Ben Knepler:
Well, I think it’s massive. When you think about the outdoor industry, it’s really dominated by what we would call the great outdoors and going hiking and mountaineering and all of those activities. But there is this huge behavior that just tends to be much closer to home. It might be the odd camping trip now and again. It’s much more frequent behavior. And it’s things that people are doing more in their everyday lives. So it doesn’t really make sense to use all of the same kind of gear and equipment for all of those different uses.

So when you think about how big these behaviors are, there’s probably 60-70 million households in the U.S. that have kids playing organized sports. The number of people who have fire pits in their backyard is enormous. And you can go down the list of all these different use cases. And when you add it all up, it’s an enormous opportunity, at least we think.

Loren Feldman:
Take us back to that crazy leap you referred to. What were you doing, how’d you get the idea, and what did it take for you to take the leap?

Ben Knepler:
I think everyone who’s started a business has their own personal reasons or story around why they started the business and why they did it then. For me, I’d been thinking about it for many years, with this idea that if I got to the end of my career, and I hadn’t tried to start something for myself from scratch, then I had a strong sense that I would regret that. But there were always all kinds of reasons why it would be a crazy, crazy leap to do, especially once you have a family and once you have kids.

So I knew I couldn’t really do it alone. I needed to do it with the right people or the right person, and I knew it had to be the right idea, the right kind of opportunity and the right timing. So all of these things kind of came together. And I was catching up with someone I used to work with—Nelson, who’s my co-founder. We worked together years ago in innovation and marketing and consumer products.

Loren Feldman:
Was that a corporate job?

Ben Knepler:
Yes, we were both working at Campbell Soup Company many years ago. I was only there for a few years, but Nelson was there for almost 15 years. And I heard that he was leaving or thinking about leaving, and we were catching up because we really enjoyed working together. And we both realized that we were thinking along similar lines, and we were both thinking about a similar kind of opportunity and realizing that there was this aspect of our lives where there weren’t really brands or companies that felt relevant and were creating the kinds of products that we wanted. And so, it felt like a lot of different elements kind of clicked into place at the same time, at least enough that I left my consulting job to go all in on True Places full-time.

Loren Feldman:
When you pondered taking that leap, what was the most frightening aspect of it to you? What held you back as long as it did?

Ben Knepler:
I’m sure anyone who’s gone through this kind of journey can appreciate it. It’s an odd combination of being incredibly exhilarating and certainly the most exciting thing I’ve done myself professionally, but also the most terrifying, I think—especially from just a personal and household financial perspective. So that was probably the scariest part of it. We have three amazing kids, and the idea of giving up a comfortable kind of corporate or consulting job in order to make that leap was absolutely terrifying.

Loren Feldman:
I’m sure. What did you have to do to get over that hurdle? Did you raise money? What ultimately led to you deciding to go?

Ben Knepler:
Yeah, I think as Nelson and I talked about the opportunity more and more, we started just spending a lot of time trying to figure out whether it was going to be viable, figure out a business plan. Ultimately, we had to make the leap before—you have to make the leap before you figure everything out, which is why it’s called a leap. But we basically gave ourselves a certain amount of time. We said, “Let’s try this for a few months,” I think maybe six months at the time. And if we’re able to make the progress that we hope to, and we hit the kind of milestones that we’d put in place—which included raising some outside capital, figuring out product design, and various other aspects of the business—then we would feel good enough to keep it going.

At least, that’s what I said to my wife at the time. [Laughter] “It’ll just be six months.” Little did we know, this was literally a few months before the pandemic started. So of course, the whole world turned upside down. I would not recommend starting a physical products business during a global pandemic. Obviously, no one had global pandemic in their business plan. So from the very beginning, it’s just been a huge, huge roller coaster, and we’ve had to overcome just a lot of challenges. But you know, that’s part of the excitement of the journey.

Loren Feldman:
How did you go about designing the portable chair that ultimately became your first product?

Ben Knepler:
Neither myself nor Nelson are trained designers or engineers. We were able to do a lot of pretty good consumer research very quickly. That’s an area that we did have some background in. So we had a very good idea pretty quickly of what it was we wanted to create. And then we spent a lot of time trying to find the right designer to help us. That was really kind of the focus for many, many weeks. It would be a very big decision and an important one to be able to partner with the right person.

Fortunately, we were able to find an incredible industrial designer who’s originally from the Netherlands, but based in New York, and he was, at the time, just starting his own studio. He’d been working for a very famous industrial designer called Karim Rashid for a long time and working with some other companies. He was just starting his studio, so it actually worked out to be a really good fit. And he had some background in furniture design, as well as other kinds of related topics. And so, he was fantastic. We worked really closely with him in order to design the product, and we actually managed to get through that design process almost quicker than we thought it would take. And so at that moment, we were like, “Oh, this whole entrepreneurship thing, this isn’t so hard.”

And then the pandemic began just around that time. And we also hugely underestimated how much engineering work would be required. We thought, “Oh, we’ve designed this amazing product that hits on everything that we think”—well, not only ourselves, what we want in these moments in our life, but everyone who we’ve spoken to. And all of our consumer research points in the same direction. And we know that we’ve designed the best portable chair that there’s ever been, but then actually making that a reality, so turning from the design to a physical product, and then beyond that to one that you can produce at some kind of scale, is an enormous process that we definitely underestimated.

Loren Feldman:
I want to ask you about the engineering and the factory, but first, tell me about that consumer research. What were you looking to find out?

Ben Knepler:
Yeah, so we’ve done a lot of research on just the overall market side of things, and this, again, I was pretty comfortable with from my background as a consultant. You get to understand industries pretty quickly. We knew, for example, that there’d just been very little innovation in this category over time. Anything that existing companies had been doing was really trying to remove as much cost as possible, just to make the cheapest possible chair. And really, it had come from a design perspective, originally, of: How do you make something that folds up and that you can somehow sit on? That’s how the original, traditional camping chairs were created, and we knew that we wanted to take a completely different approach. How do we create a real chair and almost a real piece of furniture that people will love sitting in? And then how do we figure out how to fold it and make it really portable? So, coming at it from a completely different perspective.

But we had a lot of conversations with consumers, just trying to understand how these kinds of products fit into their lives at the moment and what it is they’re looking for. So that was kind of very basic research. We then went off and created with our industrial designer some potential directions. And then what I think was the really valuable research was being able to show some of that to consumers and getting some reactions. Because as you say, if you just ask people for a wish list, everyone will want everything. So you have to force some tradeoffs and say, “Would you rather have this or that? How important are these different things relative to one another?”

And when you think about an outdoor portable chair, there’s a basic inherent tension between how comfortable and sturdy it is and how portable it is. And so, the only innovation we’ve seen, really in the past couple of decades, was trying to create an ultra lightweight and ultra portable chair. They’re really good for going on a really long hike, but you have to assemble them like a tent. They’re only a couple of pounds. They’re really lightweight, and they fulfill on that. But the tradeoff is that they’re not really chairs, and they’re not very comfortable. They’re not particularly sturdy. And so you’re making that tradeoff based on the use case. So we were really focused on how our consumers are actually living, and what do they need in these moments with their friends and their family? And it’s a slightly different set of tradeoffs.

So once we had some designs done, we were able to go back to consumers and get some reactions and understand how people felt about them. We were able to do at least some research on: What could people be willing to pay for this kind of thing? Which is a whole other set of difficult research to do, but that’s the way that we approached it.

Loren Feldman:
I wanted to ask you about the pay issue. I mean, obviously, if it costs $10,000 to make one of the greatest outdoor chairs ever made, that’s going to be a problem. At what point did you start limiting your vision to make sure that people would be willing to pay you what it would take to build it?

Ben Knepler:
We were pretty focused on that from the very beginning, because, like you say, there’s no point creating the most amazing product that no one’s ever going to buy. And as we worked with our industrial designer and our engineering team and others, we were incredibly conscious of that. We knew that we were going to be at a premium to what most people were used to in the category, mainly because the category had just been a race to the bottom over the past 20 or 30 years. And so, when you say camping chair or portable chair to people, immediately they get an image in their mind. And they also have all of these associated thoughts around how: It’s going to be portable, and it is going to be pretty low-quality. It’s not going to last, and it’s going to be really cheap.

So we knew there were going to be inherent challenges about trying to create a better product and almost try to create a more premium segment within that market. But within that context, we were very conscious of: How can we get to the best possible product at the most affordable price points?

Loren Feldman:
You talked about how you felt pretty good when you had your design. What was the next step? Did you do the engineering first? Or did you find a factory where they would help you with the engineering?

Ben Knepler:
We knew that the engineering would be complicated. We didn’t realize how complicated it would be, but the only way that we managed to make it through is that we managed to find an incredible engineer—actually someone who I knew personally, also based in Philadelphia. But he’s just an incredible engineer. He was an undergrad at MIT, and while he was there, he co-invented Electronic Ink, which was the technology behind Kindles and e-readers. And he is just an incredible mechanical engineer as well. And so we didn’t realize how complicated the mechanical engineering and the geometry would be. You know, it’s not rocket science, but it’s actually not trivial to create an incredibly comfortable chair that can fold very compactly.

And so, we now have patents on the folding design, and the result is fantastic, but it took a huge amount of work to get there. I never imagined that my name and Nelson’s and others would be on patents for a folding chair, but again, that’s part of the journey. Once we got the engineering to a good enough point, we could really start thinking about, there’s a process called design for engineering or engineering design for manufacture, which really involves: How do you take the prototype and figure out how you’re going to be able to manufacture it at scale? So once we got close to that point, then we really started engaging our manufacturing partners.

Loren Feldman:
And how did you find that manufacturing partner?

Ben Knepler:
Again, this was a huge challenge, because it was really in the middle of the pandemic, and so we couldn’t travel to meet people. It was, again, looking back, it feels like it’s a miracle that we actually made it to market.

Loren Feldman:
Altogether, you picked a really interesting time to start a business.

Ben Knepler:
Right, exactly. It seemed like a good time when we started, but you never know. We spoke to a lot of people in the industry. It became clear immediately that the actual manufacturing and assembly of these kinds of products just doesn’t really exist in the U.S.

Loren Feldman:
At all.

Ben Knepler:
At all. I mean, there are a couple of very small shops that make kind of like old-style lawn chairs. We’ve spoken once or twice to groups that make more kind of military equipment. But basically, everyone who we’ve spoken to explained that the actual manufacturing and assembly of this kind of product—and it really varies across categories. So this isn’t a general statement across any kind of product. But for what we do, it’s a very particular combination of hard goods and soft goods.

So you have the kind of metal frame, but then the fabric and very specialized fabrics. And the way that it’s assembled requires a lot of expertise. And we’d created a more sort of premium version of what had been done before. And so when you add all of that together, you have to go to where all of the expertise and the scale of this kind of manufacturing is, which at the time was 99 percent in China. And so, it wasn’t even a question. We didn’t have any kind of choice. We had to be there. And that’s what we did. Again, I think we went through our first two production runs without ever being able to meet in person with our manufacturing partner and going to visit our factory. Nelson finally was able to go. He literally got a visa the day that the borders opened, coming out of the pandemic. But that was well after we’d done the majority of the initial work.

Loren Feldman:
Were you happy with the first run?

Ben Knepler:
We did a Kickstarter campaign when we first started, partly in order to help validate the opportunity and the market opportunity that we kind of felt strongly was there. People can say that they want all kinds of things, but it’s only when they actually have to put their own money down to buy something that you really know. And so we had done that, which gave us a little bit more time in order to work through all of the manufacturing setup.

We were pretty proud of being able to deliver that first production run, and that first batch of product to our Kickstarter backers. So we were very, very happy with that. There have definitely been some tweaks and improvements that we’ve made over the past couple of years, and now I think we’re at a point where the product is really kind of where we always wanted it to be.

Loren Feldman:
And what price did you charge on the Kickstarter?

Ben Knepler:
Well, initially, we probably underpriced the Kickstarter. One of the advantages of doing a Kickstarter is that you get those sales immediately. So it’s really like very early pre-sales and pre-orders. And then you don’t have to deliver that product for many months. So from a cash flow perspective, it’s really appealing. The flip side of that, though, is it’s a bit of a double-edged sword because—and this is what happened to us—between when we actually did our Kickstarter campaign, we got all these sales. It was fantastic. We had over $40,000 worth of sales in the first few hours of launching, which was really incredible and pointed toward the huge kind of demand for what we were doing. But between doing that initial Kickstarter campaign, which was, I think, 30 days, and when we actually did our production run and fulfilled the product, our costs skyrocketed, mostly due to the pandemic.

It’s hard to remember now, but if you remember, at the time, freight costs and shipping were about 10x of what they had been before. Our product, it’s not enormous, but it’s not tiny either, and so the shipping costs are significant. At the same time, the cost of metals—whether it’s the steel that went into the molds that we created or the aluminum that we use to actually make the frame of our chairs—all of those costs went through the roof. And so, yeah, financially, it was very, very challenging. Because we’d already sold the product at one price point, and then all of these kinds of supply-side shocks happened, mostly driven by the pandemic, exactly in between the time when we sold and when we had to fulfill.

Loren Feldman:
It sounds as if you had immediate success on Kickstarter. Did that happen organically, or did you do something smart, in terms of marketing?

Ben Knepler:
Well, you know, nothing ever just happens completely on its own. I think the Kickstarter platform was good for us, because there is some organic interest in that platform. There are people who are checking it out all the time, and they’re really excited about new innovation, and so that definitely helped. At the same time, in conjunction with that, you need to help drive some of your own demand. And so we started doing some social media advertising. And it wasn’t a huge amount, it was relatively little, but the combination of those two things really, really helped.

Loren Feldman:
So what was the next channel that you used to sell?

Ben Knepler:
Since the Kickstarter, we’ve been almost exclusively direct-to-consumer through our own website, so through trueplaces.com. And that was always our plan, for various reasons, but it was a fairly seamless transition from being able to fulfill the Kickstarter orders to starting up selling on our own website.

Loren Feldman:
Did you think about Amazon?

Ben Knepler:
Yes, we thought about it. We continue to think about it. It’s not a channel that we’ve ever done up until this point, but we debate it all the time. I think there are some very, very significant pros to doing it and very significant cons to doing it. Ultimately, we’ve landed on not doing it for now, but that could well change. It’s obviously a huge market. That’s where people go as the first place they go for any kind of product. I think over 40 percent of product searches start within Amazon. So it’s an enormous channel, an enormous market.

We didn’t think that we would be able to, at least at the very beginning, really tell the story of our brand and our product in a way that it would make sense to people in that context. Most people are searching, and then it’s really a price comparison immediately. And as I mentioned previously, the market in our category is dominated by essentially private label, traditional camping chairs. And so if that’s what people are used to, and they’re used to those price points, when they see something that is significantly more expensive, they’re not going to pay much attention to it, at least in that kind of context. And so for those and other reasons, we’ve not done it yet, but that could change.

Loren Feldman:
Before the tariffs hit, had you reached a point where you were able to produce enough of the chairs to meet the demand that’s out there?

Ben Knepler:
Well, it’s kind of a delicate balance when you’re trying to get a physical products business off of the ground and trying to—I mean, we’re still very much a startup, so cash flow is just incredibly challenging. And it takes about three months from start to finish to go through an entire production and get the product into our warehouses in the U.S. And so that’s a lot of time where you have to make a lot of outlays, in terms of cash. And so it’s kind of a delicate balance with: How much do we produce?

One of the challenges that we had at the beginning—it’s still a bit of a challenge—is that we’re a premium product, so we’re not talking about millions of units. And so we run up against minimum-order quantities, whether it’s trying to get enough of our sort of special outdoor fabric that we kind of helped co-develop. But it’s much more efficient to produce that at a much larger scale. And the same with our entire product. And so our bigger challenge has been getting through the cash situation in the context of minimum-order quantities. But given that we’ve sold out multiple times—but we try not to do that too much, because that’s obviously frustrating for consumers. So as you know, these kinds of operational factors really end up being like delicate balances.

Loren Feldman:
So as we start to talk about tariffs, can you just give me a snapshot of where the company stood, say at the beginning of the year, some sense of how big it is, and how many you were selling? Do you have employees?

Ben Knepler:
Yeah, so in terms of full-time employees, it’s just myself and Nelson. We obviously work with a lot of others, whether it’s our third-party logistics partners who run our warehouses, to others on the marketing side, and our engineering and manufacturing. And so the tariff situation is something that has been an issue for us really since we started. It’s something that I’ve been trying to raise awareness around for a couple of years, well before the current situation. I wrote a series of articles and just posted them on LinkedIn, not necessarily thinking that many people would actually read it, but more almost for cathartic reasons for myself, because it was such a terrible situation even then.

So in the first Trump administration, they instituted 25-percent tariffs on a whole variety of different kinds of products that were coming from China. And so even though we didn’t have any other option, we got caught up in that. And we had to pay a 25-percent tariff on everything that we produced and brought to the U.S., which was almost like an enormous anchor on our business, almost kind of killing our business in and of itself.

We’ve been looking for many years, but finally last year, we found a viable alternative to manufacturing and assembly in China, which was a new partner in Cambodia. So for the best part of the last year, we’ve been moving our manufacturing from China to Cambodia. So we’re now actually in the middle of our very first production run with our new factory in Cambodia, which is exciting but also incredibly stressful, given the current situation.

Loren Feldman:
It sounds like it took a long time to move to the Cambodian factory. What did that entail?

Ben Knepler:
I think most people—and there’s no reason why most people would know what really goes into manufacturing anything—and again, a lot of variations across different categories. But it’s actually a very kind of complex process, part of which involves, before you can actually make anything, you have to make all of the equipment and the tools and the molds that you use in order to make the product.

So in order to produce, you have all this—it’s called tooling. It’s essentially all of the tools and equipment that the factory uses in order to produce your product, and it’s incredibly expensive. We’ve had to invest in that, and that was all residing at our previous factory. So we had to figure out how to get hold of all of that. And we own it, but it’s complicated to actually get it out of the previous factory, and get that moved, not just out of the factory, but out of the country and to Cambodia.

Loren Feldman:
Why is that complicated?

Ben Knepler:
It’s just a lot of equipment that is not that easy to physically move, and your existing factory has very little incentive to help you with that. And so, it just takes time. And in the meantime, it’s literally the lowest priority on anyone else’s list, except for us, right? So that’s complicated.

Also, there’s a lot of knowledge and expertise that has been built up through the relationship with any factory that you work with, but through their experience of actually making your product multiple times. And so through the course of three or four manufacturing runs, every time we make little improvements and little tweaks and our manufacturing partners gain more knowledge of what the potential issues are and how to solve them. And so now, when you move your manufacturing elsewhere, you’re almost starting all of that up from scratch.

Loren Feldman:
Were the economics of manufacturing in Cambodia pretty similar to those in China?

Ben Knepler:
Yes, not exactly the same. It’s hard to fully explain unless you’ve actually been there, just the scale of the infrastructure and the scale of expertise and interconnected supply networks that really exist in China. And so nowhere else can fully sort of compete with that. But it’s at least sort of good enough for us.

Loren Feldman:
The tariff on you in China would have been at least 145 percent, maybe more?

Ben Knepler:
Correct, yeah.

Loren Feldman:
Give me a quick breakdown of the evolution in Cambodia, because, I guess over the past month or so, since April 2, so-called Liberation Day, this has evolved.

Ben Knepler:
So before April 2, and going back many, many years, including when we made the decision last year in order to move our manufacturing, there was zero tariff on goods coming from Cambodia. So that was absolutely no part of the decision here. We thought we were getting back to more of a free trade situation. On April 2—and I don’t think I’ll ever forget trying to squint at the TV, trying to see what was written on the cardboard that President Trump was holding up—but it said “Cambodia, 49 percent.” So, at 49 percent, it’s just not viable for us. We literally can’t afford to bring our own products into our home market, which is kind of an absurd situation.

The week after April 2, there was an announcement that there’s a reduction for 90 days on most countries outside of China, down to a 10 percent tariff. To be clear, that’s still difficult as well. But obviously, compared to 49 percent, we’re able to make it work. And so the night of April 2, we instructed our factory to stop production. We literally couldn’t afford to bring that product into the U.S.

Loren Feldman:
On that first run that you’ve referred to?

Ben Knepler:
Yes. I mean, we’ve paid for some of it, but from just a financial perspective, we literally couldn’t afford to finish that run and bring it into the U.S. A week later, when this sort of 90-day window opened up, we got back on the phone to the factory and instructed them to resume. So as you can imagine, it’s not like they can just stop and start any second. They have to plan out their operations a lot as well, and they’re under a lot of pressure. So we’ve probably lost at least 10 to 20 days from this process, which was already kind of behind where we really wanted it to be. But we are at least able to complete this production and hopefully get that product here within the 90-day window.

And there’s still a lot of uncertainty, obviously, around what will happen after that 90 days. But even then, it’s not 100 percent clear whether the 90 days ends when ships leave port or whether you actually have to bring it into the U.S. within the 90 days. And what happens if there’s, essentially, a huge traffic jam off the coast? So there’s a lot of uncertainty that is still creating a lot of stress, and then we’re still left with the question of: What’s going to happen after the 90 days? And it’s just an incredibly frustrating situation that was bad enough last summer when I wrote those original articles and I could see that it was going to get worse. I couldn’t imagine that it would get this much worse. I could also see that most people don’t really understand, I mean, multiple things: They don’t understand what a tariff is. They don’t realize that it’s just a tax. They don’t understand who pays it and when they pay that.

Loren Feldman:
That’s because there’s been some, I would say, deliberate misinformation about that to suggest that it’s paid by the country where the goods are made.

Ben Knepler:
Correct. People have been told for multiple years by the politicians that we’re putting a tariff on China or on Canada, whatever it is. And it makes it sound like it’s a parking ticket that you’re getting someone else to pay. But the U.S. government has a lot of power, but it doesn’t have the power to tax anyone except its own citizens or people who are doing something in the U.S. So the tariff is paid when you bring the product into the U.S., and that’s mostly done by businesses, whether it’s finished goods or inputs to domestic production.

People certainly don’t understand the broader effects. And it gets very complicated. I mean, economists will disagree about exactly what’s going to happen, but understandably, most people aren’t thinking about international trade. If you try to talk about any of this to someone at a party, I mean, their eyes are going to glaze over. No one really wants to talk about this, but there’s a lot of misunderstanding that exists, and people don’t understand why you can’t just make it in America.

Loren Feldman:
Did you take another look at that last year, when you went to Cambodia? Was there a thought that maybe the economics had changed, if there were going to be tariffs? Maybe it became feasible here?

Ben Knepler:
Yeah, the thing is, it’s not really about the economics. It just doesn’t exist. We haven’t found any —putting aside how much it would cost—sort of viable factories that are making anything like what we’re doing. And so, it’s really not even an option. We would love to, all else equal, but it’s really not an option.

Loren Feldman:
Do you have inventory available for sale now?

Ben Knepler:
So we have a very small amount of inventory left, but we’ve already opened pre-orders for our new inventory, so we’re able to sell now. It’s for delivery in June, probably late June. But we’re taking those pre-orders, and we’ve been communicating that these are at pre-tariff prices. So, we’re going to absorb that 10 percent, at least during pre-orders. And then, after that, there’s probably going to have to be some price changes.

Loren Feldman:
What is the price you’re charging now?

Ben Knepler:
So a single chair is $149, and if you buy two or more chairs, it’s $129 for each chair. And so at the moment, the pre-orders come with either free accessories—so there’s a cup holder and a phone holder that you can put on either side—or a carrying bag upgrade. We have a couple of different kinds of carrying bags, both of which are fantastic. So we’re offering one of those for free with every chair that’s pre-ordered as well.

Loren Feldman:
And how many chairs are you expecting?

Ben Knepler:
Our current production is just under a couple of thousand chairs. So, not many. The idea is, our original intention was we would do a small run, and then, once we get through this first production run with our new partner, we can start ramping up.

Loren Feldman:
Have you contemplated what your options would be if those so-called reciprocal tariffs went back into effect at 49 percent or something like that? Would you have options, at that point?

Ben Knepler:
Well, I think there are two main options. The first that everyone sort of naturally thinks of is, “Well, just raise your prices.” That’s not really an option for us, partly because of the scale of the tariff. So there’s no way that we would be willing or want to raise our prices commensurate with that. And, really, people aren’t willing to pay that.

But actually, a bigger issue is that we can only raise our prices once we have the inventory to sell, and we can’t afford the tariff payment in order to bring the product into the U.S. So, you know, a tariff is a tax. It’s a tax on imports. But unlike, say, a corporate income tax, it’s not assessed on the income of the business at the end of the year. It’s assessed on the cost of the product that you bring in, and you have to pay it when you bring it into the port, into the U.S. And so, we literally can’t afford to pay those taxes at 49 percent in order to bring our product into the country. So we don’t even really have the option, even if we were willing to, of raising prices.

So that’s one path, which isn’t really an option. I think our only other viable option in that scenario—which, again, is really tough, because we’re a U.S. business. We do everything in the U.S., except just the manufacturing and assembly of the product. We do everything from design, engineering, all the way through to distribution and advertising and customer service and warehousing and fulfillment. We do all of that here in the U.S.. We’d probably have to start selling in other markets outside of the U.S. So instead of shipping our product to the U.S., we could start shipping it elsewhere. That would be very complicated.

Loren Feldman:
You’d have to duplicate all those services you just described.

Ben Knepler:
Correct. We don’t currently—I mean, technically, we accept orders from Canada, but the shipping is very expensive. But we don’t really operate in any other markets outside the U.S. We always had it in our longer-term vision of the company that we would expand internationally. We weren’t thinking about that for many years, and we weren’t thinking about that as a replacement for the U.S. It would be in addition to it. And so, obviously, it’d be very difficult for us. It would also be a shame for consumers in the U.S. to not have access to our products. And I think that you’re going to start seeing that across all different kinds of products and different categories over the next few months.

Loren Feldman:
I think you said at the beginning of this conversation that you remain as excited about the business as you’ve ever been. Given what you just described, does that mean you are committed to making this work? And if you can’t bring the chairs into the U.S., you will find a way to sell them elsewhere?

Ben Knepler:
I certainly hope so. I mean, the business needs to be financially viable. Back to what we talked about at the very beginning. Starting a business and running a start-up is terrifying from a personal financial perspective. And if Nelson and I are not able to sustain that and make it work, then we won’t be able to. So it’s something that we’re exploring.

Loren Feldman:
How are you financing the manufacturing of the chairs?

Ben Knepler:
I mean, we took on a decent amount of debt in order to make the manufacturing transition from China to Cambodia happen, and so it makes it very difficult. We have some incredible angel investors who have been unbelievably supportive, but we’re really financing the current operations through a combination of debt and the cash flow from the business.

Loren Feldman:
Is that with a traditional bank?

Ben Knepler:
From a few different sources. We have a line of credit with our bank, so most of it is through there. We have a loan with one of our investors. We have some Shopify capital, which is almost like a revenue share type of arrangement. So it’s a variety of sources, but it definitely feels very precarious.

Loren Feldman:
You talked about the number of things that people in general don’t understand. I think another thing that people in general don’t understand is how routine it is for people to have to use their own homes as collateral. Is that something that you’ve had to do?

Ben Knepler:
Yes, between Nelson and myself, at least a portion of the debt, I think we’re personally liable for. And so it’s very scary. And I know I’ve spoken to other startup founders and other business owners who are in much worse situations than us, but it’s very scary, and you’re absolutely right. Most people don’t understand that situation, and don’t realize what it’s like. And that’s understandable. Why would anyone really think about this?

Loren Feldman:
Is there anything else along those lines that you’d like to call our attention to?

Ben Knepler:
Yeah, I like to say that uncertainty is kryptonite for business, or certainly for business decisions and any kind of investment decision. And this level of uncertainty that we’re seeing at the moment is off the charts. I’ve never experienced this level of uncertainty and this level of chaos, and as much as I disagree with the individual trade policies that are being implemented at the moment, even worse is all of the uncertainty that surrounds it. And so when you start a business, you get relatively comfortable with ambiguity and uncertainty and a lot of unknowns. But this is insanity. This is really ridiculous. And it’s almost impossible for anyone to plan or make any meaningful decisions around their business.

Loren Feldman:
Well, I think that’s where we’ll have to leave it, but hopefully you’ll come back at some point and tell us how this all worked out.

Ben Knepler:
I’d be happy to. It’s always great speaking to you, Loren, and thank you for all the work that you do in raising awareness around small businesses.

Loren Feldman:
I appreciate that. My thanks to Ben Knepler. Best of luck to you as you continue to figure this out.

Ben Knepler:
Thank you so much, Loren.