Make every first purchase cover what you paid to get the customer

Mark Ungerer… demand, we can go down. And we've talked earlier in this about how it's hard to go the other way. And so, it feels like this strategy served us really well as we've been growing into a new market that we've created. And certainly, if we'd raise funding, I can imagine the $100 million check hits the bank, and it's like drop the prices and get to three times as many households. And that is a strategy for sure, and it's not the path we've taken.

Michael SegalCan I just riff on that for one second? One of my favorite topics is how do you bootstrap a business like this. And it's super simple, but really hard to do, which is there's three reasons you're not going to bootstrap. One is to build the software you need engineers. That's becoming less of a thing in an AI world. You need working capital to buy all of your units before Christmas. That's really hard. Maybe for a different podcast, but I'm happy to go into it. And then there's the marketing cost and this is what every subscription marketer probably knows. And if not, you should know. Just pay back on the first order. Do whatever you humanly can to pay back on day zero, because then you have no marketing payback time.

Michael SegalWith Skylight, with a hardware business, you have the added benefit that we're selling a thing, so like a physical thing. So, we pay back every single order in the company's history, has paid back on day zero. There's no marketing acquisition cost, which means you don't have to go convince a bunch of VCs to give you $20 million just to grow, which is awesome. So, if you're doing a new subscription and it's like five bucks a month, just figure out how to make it that 60 to $70 a year upfront payment, and you're golden on your CPA and your payback time.

David BarnardThe one thing I did see in researching, and anybody who listened to this episode and wants to enter this or is just more curious, we'll see, that you did I believe some form of venture debt or inventory debt. This won't be super applicable to most of our audience. But I'm curious, just a brief overview of in a hardware business, that facility is really important, but it's not actually raising money. So, how did that work? Give me the two minute …