Maneesh Sethi, Founder & CEO, Pavlok
A Shock for Productivity: Maneesh Sethi Explains How to Forge Habits and Go Big
The Internet has opened historic opportunities for people willing to challenge convention. Maneesh Sethi is one of those people.
Like many, he read Tim Ferriss‘s book The 4-Hour Workweek and dreamed big. Now, he’s living that dream. Sethi runs a location-independent business providing him passive income. He’s broken free of the hours-for-dollars exchange and no longer remains tied to a specific place. He has penned four books, founded an NGO in India, and traveled to more than 30 countries.
Sethi operates a blog called Hack the System, which examines how people can improve themselves and live an incredible life.
“Hacking the system is looking for unconventional solutions to solve problems,” he says. While experimenting and writing about life improvement, Sethi has been able to move wherever he wants and earn money.
He has tips for people who, like him, want to become location-independent. One idea is simple yet provocative: put away money, and then go to a country with a low cost-of-living. “Save up $10,000 and go travel for a year,” he says.
“For example, if you’re based in the U.S. and you want to fly down to Colombia, you can get there round trip for like five hundred bucks,” he continues. “Once you’re there you won’t have to spend more than a thousand dollars a month.”
Another path to location independence is by offering your skills and services on a freelance basis. “Freelancing is a really effective way to make money from anywhere,” Sethi says.
Anything that you can do for a number of different clients is fair game, but he does say that online jobs tend to be a lot better. Potential pursuits abound: translating, web design, programming, coaching, SEO, online marketing and more.
“The third thing you can do is try to build your own kind of business, which is based upon building a following,” Sethi says. “In my case, hackthesystem.com is my website; my email list is my following.”
By marketing products and the like to his followers, Sethi generates passive income. When writing, he targets his content toward securing subscribers – that’s the lifeblood of his business. “It is a very effective way to monetize,” he says.
Hack the System is about unconventional solutions, or hacks. Sethi delves into hacks in a variety of areas — travel, exercise, business, fame and productivity.
Productivity — getting things done, staying on task, executing ideas — presents difficulty for him. The same Internet that gave his business a platform is filled with distractions, and Sethi struggles with solutions.
Well, he did. Social media once hampered his productivity, but he’s gradually uncovered good tactics to avoid those outcomes. His thoughts and efforts have culminated in the development of Sethi’s new product, Pavlok.
“I was hanging out with a friend of mine in San Francisco, and I said to him, ‘Wouldn’t it be funny if I made a dog shock collar to electrocute me every time I went on Facebook?’ And he said, ‘Let’s go to RadioShack.’
“And that’s where this idea of Pavlok came from.”
Pavlok is Sethi’s product-in-development that aims to help people boost their productivity. How? By forming habits.
Sethi describes Pavlok as a “hardware-based device that helps enforce accountability using a push and pull of negative and positive reinforcement … to make you do what you say you’ll do.”
Sethi based Pavlok on the idea that real change stems from changed habits, and that changed habits require genuine accountability. That’s why Pavlok will begin with what he calls the “drill sergeant phase.”
It’s as frightening, and effective, as it sounds. Sethi discusses the goal of working out every single day. It’s a common New Year’s resolution – just as common is people’s failure to fulfill it. Pavlok could help. “So January 1st, 2015, you put the bracelet on,” he says. “You set your commitment level — the bracelet’s stuck on you now. For the first seven days, you cannot take it off you until you’ve achieved that goal for the day. So in this case, until you’ve walked into the gym.”
Sethi thinks that actual accountability, at least at first, demands negative consequences if you fail to reach your goal.
He points to the fact that many people show up to jobs they hate, day after day. It’s not because they love those jobs; it’s because they would face fallout if they skipped a day. That’s powerful psychology at work, and Sethi believes that negative consequences can also be harnessed to get positive results.
His philosophy shows in Pavlok. “Now say you’re late for the gym,” he says, further explaining the drill sergeant phase. “The bracelet will start to vibrate and make really loud noises. It will piss you and everybody off. It will post on your Facebook wall about you failing.”
But Pavlok doesn’t stop at those ramifications. It piles on the humiliation — and the pain. “If you postpone the alarm three times, you have to pay the penalty,” Sethi says. “Depending on what you agree to originally, that penalty is either that it will charge you money, or it will lock your phone for several hours, or my particular favorite: It will post on your Facebook wall, ‘I didn’t make it to the gym on time – shock me.’ And your Facebook friends will get to electrocute you with up to 1,000 volts of electricity from across the Internet because you didn’t go to the gym.”
Yes. Sethi really is making a dog shock collar to electrocute himself every time he fails to achieve whatever goal he sets.
After the drill sergeant phase, Pavlok will switch its focus to positive reinforcement by adding a leader board, accountability partners, and rewards. That initial week is critical to forming habits, but the days that follow hold importance, too. Sethi says that “if you can get somebody to do something for 30 to 45 days, their brain changes, and they become the kind of person who does 50 sit-ups in the morning, or the kind of person who wants to run a mile in the morning.”
The product is still in the works, but Sethi has money on hand and plans to crowdfund. He thinks that it could be a ground-shifting gadget. “The device is designed to really help people transform their life for a lasting period,” he says.
Many entrepreneurs could use Pavlok — it’s a nifty idea — but you can also look to how Sethi developed the idea in the first place. What started as an idle joke about a real issue is on the verge of becoming a tangible product ready to storm the world. Sethi didn’t just laugh off the concept of a productivity shock collar. He explored it, and now he’s making it.
Ideas are the currency of entrepreneurship. Sethi uncovered his big idea in one conversation, so he knows that everyday life is rife with ideas waiting to spring alive. You can find ideas “when you see a complaint that you’re just like, ‘Why don’t they do that?’” he says. “Well, why don’t they do that? They don’t do that because you haven’t done it yet. So when you have that idea, write it down in a book and do something about it.”
Do something about it. That’s the part that many grapple with, and it’s the part that apps galore and devices like Pavlok aim to aid. Willpower is hard enough to summon once. When you need to muster it again and again, it can drain you. Sometimes, it can beat you.
That’s the sad, rusty side of the coin. But turn it over and you’ll see a happy, shiny face. The idea that you can create the conditions you need to succeed. You don’t need to bank on possessing the mental discipline to stay on task at all times. Pavlok doesn’t rely on constant gung-ho. Instead of starting with changing you, it changes your situation. If you want to go to the gym every day, you don’t have to maintain a mountain of motivation. In real life, that’s not feasible. Pavlok’s negative reinforcement provides an external source of motivation: do it or else.
On his Hack the System blog, Sethi writes that “for lifestyle design, you must design systems that aid you in achieving your goals. What is a system? It’s an automatic, self-perpetuating contextual set of instructions that induce success. Rather than relying on willpower to achieve our goals, we will try to build an environment that produces our goals, naturally.”
In this line of thought, you can shift the world you’re living in so that carrots and sticks alike prod you to pursue your goals. Only once you shift your world can you shift yourself. External motivation can ingrain internal habits.
You don’t need a gadget to start doing this right now.
One way to change your environment is to change its people. “Look around and see who you’re spending your time with, because you are the average of the five people closest to you,” Sethi says. “If you spend time with people better than you, you will become better. If you spend time with people worse than you, you will become worse.”
He doesn’t mean to lump people into haphazard categories of “good” and “bad.” There’s a place for the bonds of friendship. But Sethi is clear that when it comes to specific attributes, who you’re around matters. He once lived for a month with a friend who could get things done. This rubbed off. Sethi also got better at executing his plans. Sethi, always the idea-generator, says that his friend started coming up with more ideas.
“Make sure the people you’re around are the ones pushing you, not the ones holding you back,” Sethi says.
Shifting your conditions also applies to productivity in general. Sethi generated buzz with one experiment he did in this area. “I found myself spending all my time on Facebook,” he says. It’s a problem many of us share. “So I hired a girl. Her job was to sit down next to me and every time I used Facebook, she slapped me. I tracked my productivity during that time, and [it] shot up from 28 percent to 98 percent.”
That big change stems from a big idea. Sethi didn’t need to rely only on his own self-control. He did what Pavlok intends to do. He did what any of us can do. He created a system that naturally produced his goals. That takeaway underlies much of Sethi’s thought, and it’s an idea with power no entrepreneur ought to underestimate: you can alter your environment so that it pushes you where you want to go.
- Fool-proof tactics on how to become more focused and increase your overall productivity
- How to build and successfully iterate a physical product for market
- What to do if you find yourself on national TV
- Where to go when you need funding for your idea, Sethi’s answer might surprise you!
- How making more sales can actually bankrupt your business, and Sethi’s solution
- Hacks to supercharge your crowdfunding gain and blow past your fundraising goal
Full Transcript of Podcast with Maneesh Sethi
Nathan: Hello and welcome to another episode of the Foundr Podcast. My name is Nathan Chan, and I’m coming to you live from hometown, Melbourne, Australia. I’m the host of the Foundr Podcast. And, today’s guest is a funny, hilarious guy. He just…just thinking about this episode because I usually, what happens is I do these interviews, and I do so many. To be honest, guys, sometimes it feels like a bit of a blur. I’m just doing so many. And when I’m doing these interviews, I get in the moment. I’m just picking that person’s brain, finding out how they’re doing it, just extracting as much gold as I can for you, guys.
And I’m just looking at the screen and looking at Maneesh’s name, and I’m just laughing to myself because I remember just having such a fun time speaking with him. He’s just a funny guy. So, he’s the founder of a company called Pavlok, which is a wearable device like a Fitbit, but actually, you can use it to discipline yourself by shocking yourself. You guys can hear more about the product. It’s really interesting. And he’s just a hilarious guy, but a really fascinating story around how he’s created this product. You know, he’s funded it through Kickstarter then he has raised some capital. He’s been on Shark Tank. He’s even got death threats since being on Shark Tank, crazy story. This one’s really fun. But always, as always, a ton of lessons to be learned.
So, I hope you guys enjoy this episode. If you are enjoying this podcast, please do me a favor, leave us a review. Please do let your friends know, it helps more than you can imagine. And make sure you subscribe, so you never miss an episode. All right guys, that’s it from me. I hope you have a fantastic day wherever you are and around the world. All right, now let’s jump to the show.
First question that I ask everybody that comes on is, how did you get your job?
Maneesh: Sure. Well, it’s a lot easier to become CEO if you start the company. So, I got my job by having a desire to build something new. So I, ever since I was young, I was severely ADHD. I’ve always had trouble focusing. And, I found that as I got older, I started to find, I wanted to test and find ways to improve my focus. So I started to blog, and people would vote on what I would do and where I would go, and I started doing experiments on myself to improve my productivity.
And my biggest experiment was I hired someone to follow me around. And every time I got off task, she would slap me in the face. And my…I wrote five months of work in five days. That was a wow. So, I was like, “This is amazing.”
Nathan: While that person was slapping you?
Maneesh: Yeah, the person was slapping me. So every time I would get off task, she was sat down next to me, she’s like, “Hey, Maneesh. You’re not writing. Why are you on Facebook? Hey, come on, get off Facebook. Start writing.” And so I found that having an accountability partner and having a slight amount of negative reinforcement led to a much more productive me, and in a lot of ways a lot happier me. Because she only slapped me like once in the entire week. It was more like having someone there, was like having a personal coach next to me. And I wanted to see if I could help this, like, help people also have…does that make sense to you?
Maneesh: Yeah. And so I was like, “This is incredible. Having somebody just with me during periods of focus is way easier than me trying to focus alone. What if I could help other people?” But slapping doesn’t scare. So I was like, “What if we got like a dog zapper that could make me focus every time I went on Facebook,” so that was the idea. I wrote about it a couple times. And then a Incubator, which is a hardware company that invested a little bit of money in my company, they invited me to move to Boston, in order to actually build the device in August of 2013. And so, that’s how I got my job.
Nathan: Yeah, gotcha. And, before, like, as we’ve spoken before, I interviewed you for the magazine in the early days when I first started Foundr, Hack the System. You’re pretty much just like traveling around and stuff, right? Like, you’re like a nomad, yeah? And you…maybe you’re just making money just, like, just doing money online, making money online stuff, but just kind of traveling and nomading around?
Maneesh: Yeah, so the blog, Hack the System, was where I started to do these experiments. It was a travel blog where I would let my readers vote where I went and what I did. And the tagline was, like, “Cheat codes for life: How do you solve a problem in the fastest way.” And it’s always been my mentality since I was a kid, how can I solve the problem in the fastest way. And ironically, that’s like the opposite of what my own internal metrics of success were. Because my own internal metrics of success were, how do I get myself to sit down and work on a project without getting distracted? And, I could never do that. So I would always wait till the last minute, and then the last minute I would do something, and it would be pretty good quality.
And so Hack the System was about, kind of like, how can I let…well, it was mostly about how can I travel, right? And how can I just like do what I’m doing and write about what I’m doing, but it evolved into this like experimentation platform where I started loving watching how other people would take the stuff that I would do, and translate it into their own lives. And so, ever since I grew up, I always wanted to build stuff that would help other people. But like to be honest, I really wanted to build stuff that would help me, that would help me stay focused on tasks. And that’s kind of how I got into my current job of being CEO of Pavlok.
Nathan: Yeah, I see. And before Hack the System, like, what did you…did you do like, so you obviously went to uni? Because you seem like a pretty well-educated guy. Like, you went to university or college or like you studied? Did you work full-time in corporate? Have you ever done corporate?
Maneesh: So I started Pavlok…all right, I started Hack the System when I was…here’s what happened. I was studying abroad in Florence, Italy with my university, which is Stanford University. I was studying abroad in Florence, Italy and I found out that you could just take time off from Stanford and they would just let you keep traveling. You can come back with no problems. So I decided to take two years off while I was studying abroad, and I started Hack the System during that two-year period. And so that was kind of how I got started, and it was this like in-between phase that really was nice for me. So I started there and then I kept it going as soon as…I went back for a few months, and then I kept it going.
Nathan: Yeah, got you. I see. So you never finished your degree?
Maneesh: Can I tell you something cool? Two things cool. Number one, I finished my degree three weeks ago. So, I just graduated at Stanford. I actually graduated…I actually finished my degree in 2011. I went back and finished it. And then I just didn’t file the paperwork to graduate. And then I just got, yesterday, and I haven’t told, like, my Facebook friends. I haven’t told my mom this yet. I just got accepted to Harvard University, which is in Boston where I’m based, and I’ll be doing a master’s in the Clinical Psychology program in their extension school. So I’m actually doing a lot of work on Pavlok which is about, how do we help people change their habits. And I get to do it not just with my company, but also with Harvard as well.
Nathan: Yeah. Wow, that’s really cool, dude. So you must be a pretty smart guy to get into Harvard, man.
Maneesh: I mean, another way, it’s another way to Hacking the System. And like there’s a way to get into Harvard that’s a lot easier than you’d think. It’s called the extension school, and they like…it’s a pretty powerful way to get a degree from Harvard without having to actually be doing the difficult process of Harvard. But yeah, I’ll say, I mean, I’m gonna put forward that yes, I’m a smart person, but I don’t think I’m doing anything that most people couldn’t do.
Nathan: Mm. Interesting. And, you know, most founders, once they start their company, they don’t really go back to university. Why you, man?
Maneesh: I hadn’t started my company yet. I was still just doing the blog and I really, really…
Nathan: No, no. Right now.
Maneesh: Oh. The reason that I’m going to Harvard right now is because I found that it was a thing that was…because I do a product that helps people with their psychology, that helps people with their habits, that helps people. And now we have…so basically, we’re trying to run studies on our users, and it’s pretty lame if a non-graduated person is trying to talk about how he helps people change habits and talks about, like, from a medical context. So I really wanted to run studies, and I found that instead of paying millions of dollars to do a clinical trial, why not just become a student and do it for free? So that was like…so it’s in my city, and I’m learning…it’s in my city, and it’s a lot of fun, and I get to connect with these Harvard professors and such but, you know, it’s one of those things that just happened.
Nathan: Yeah. You know that makes it a no-brainer, man. Question though, do you have product people, like, in your team that can help you with that kind of stuff?
Maneesh: With my homework?
Nathan: No, yeah, kind of. Yeah, your homework, kind of running tests, just because this is product development, right?
Maneesh: Yeah. I mean, do the people listening know what Pavlok is?
Nathan: Yeah, let’s talk about Pavlok first, yeah. Let’s do that.
Maneesh: Yeah, I mean, can you describe it? So what I currently do is I kind of took that idea of accountability and a slight amount of negative reinforcement, and I added it to a wearable device that helps you change your habits. It’s a device called Pavlok. It’s named after Ivan Pavlov, and it uses vibration as a positive reinforcer or a reward. It adds audio sounds as a reminder, and it uses a mild electric stimulus that we call a “zap” as a way to stop bad habits, a punisher or a negative reinforcer.
And so what it does is it basically lets you set goals both in your app, both programming it through the motion of your hand, or getting access to a friend or loved one to help you stay accountable to your habits both with tracking, accountability, and a negative stimulus that makes sure you stick to your goals. So that was the…that’s the product. And it’s basically a way to break bad habits. It’s kind of like the core of it. And then I already forgot your question. What was your question?
Nathan: My question was, like, do you have a product person like…
Maneesh: Oh, product person.
Nathan: Because like a lot of, you know, I guess startups…like, the founder, like, it depends on the kind of founder, right? Whether you’re product person, you know, you’re marketing person, whether you are, you know, a finance person, like, but I guess my question is, do you have people in your team to help with product and can, like, can you get them to, yeah.
Maneesh: Yeah. So, hardware is kind of a different beast than most products because hardware is like seven different startups in one. It’s like you have a software team that makes an iOS app and then the software team that makes an Android app. And then you have a hardware electrical design person, and you got a mechanical engineer, then you got to have a fulfillment person, then you got to have a manufacturing person, it’s like way too many people. And the customer service and then you got to have like marketing and like…it’s like, it’s multiple startups in one.
And so why…I will say that I am definitely a product CEO. I’m definitely a vision…like, I had the vision for the company, but I’m not like the person who does, like, the sales or anything. So I want to find a perfect product person. But until today, I’m still kind of the core product person. But I do have a team that builds the product out and they definitely…like, my team and I are equal, so we’ll work together to design what we need designed. But I don’t have a product manager, if that’s what you mean.
Nathan: Yeah, gotcha. And so you started the company in 2013, you started working on this product. When did you go live with it? Because you’ve done a lot of stuff with crowdfunding, which I think is very, very smart to validate it and get essentially funds. Like, so talk to me about, you know, when you launched. And you’ve done heaps of crowdfunding campaigns, right? Like, you’re doing one right now, yeah?
Maneesh: Yeah. We’re on our third campaign right now. So I found crowdfunding to be a really powerful…I found that people who raise a lot of money from venture capitalists often destroy their business while they do so. And I didn’t want that to happen to me. Because it’s those times where you have too much money that you do stupid things. Like, Juicero is this really famous example from the present time. They made this like juicing products, a hardware device that juices your juice, and the thing is it’s as effective as just squeezing your hands together. But they spent…but it cost 700 bucks to buy it because they used the worst ever manufacturing techniques.
And so, like, with…I found that when my back is against the wall, we come up with our best ideas. So being lean can be really powerful. So I would say that like the ability of crowdfunding was that it lets us interface not with venture capitalists who are looking for return, but with customers and users who are looking to change their lives in the way that you want to help them change their lives. And crowdfunding…so we’ve done three, we’re in the middle of our third. We did Pavlock 1, which happened in October 2014. That was Pavlok, the first product that was focused on breaking bad habits. Then we launched Shock Clock, which was an iteration of a similar product called the Shock Clock, and it’s focused on helping you wake up in the morning.
And now we’re launching Pavlock 2, that’s the campaign that’s going on right now, which is really freaking cool, in my opinion. And it’s basically a hardware…it’s a behavioral change platform which lets us and other developers make apps that help you achieve your goals using both software reminders as well as hardware haptic feedback, like, vibration beacons app. And so, right now, I’m kind of trying to culminate everything I’ve been doing into like a good…like, a product that will last. That can be like my MacBook Pro. You know, like, that top-level product that I think is gonna be the thing that drives the future.
But most importantly, the first crowdfunding campaign was all about, like, learning what users care about. And every crowdfunding campaign is the same because users are gonna fund things they like, and if they don’t like it and especially they don’t understand it, they’re gonna ask questions on your crowdfunding campaign. Which means that we get the chance to kind of see those questions and modify our campaign before we actually build the product. So, I found that crowdfunding is a really, really effective way to get people to help…to get people, you know, to both explore business and to make money. Like, we did 285,000 in our first campaign, we did 343,000 in our second campaign.
I guess it’s a lot of money for pretty…and the thing about hardware is that the timing of money is really important because you have a lot of expenses on inventory. So when you get, you know, crowdfunding money…I value crowdfunding money at 1.5x the dollar amount because you get the money upfront, way before you need to actually build it. So you actually get that money, and you don’t have to pay your suppliers on day one. A lot of other people will pay their suppliers on day one, and then their customers pay them later, so that actually the more that they sell, the faster they go bankrupt, which is a fascinating concept.
Nathan: Cash flow is key, right?
Maneesh: Cash flow is far different than cash. And so cash like Indiegogo campaigns and Kickstarter campaigns let you develop…it’s the world’s best cash flow mechanism. But also, it’s just good in every way, there’s nothing bad about it. It’s all perfect.
Nathan: I agree. We did a crowdfunding campaign. We did really well. And we’re probably going to do another one, too.
Maneesh: Yeah, with Christine, right?
Nathan: Yeah, yeah, Christine helped us as well.
Nathan: So, yeah, we’re gonna do another one, probably early next year which…for a totally different product, not Foundr version 2.0, but totally different product and yeah, I believe [crosstalk 00:16:28] best ways. No, it’s gonna be another physical product. We’re getting into the physical products now, man.
Maneesh: Dude, I want to talk to you about that, maybe probably on another call. But like, we might be able to…we still got another time.
Nathan: Yeah. For sure, for sure. So I think crowdfunding is one of the best ways to validate a product and also give yourself a really good runway if it is successful. And so it’s a great launch pad to start. So, Pavlock 1, was that your launchpad? That was the first time you sold a Pavlok?
Maneesh: I had pre-sold alpha and beta units in order to get to the Pavlock 1. So, we started our first, like…our company has been a consistent sufferer of almost death, followed by me figuring out something to make us survive, followed by learning a lot from that experience. So, like, the first time we got our first 40 alpha units in. And I had zero…I had, like, what, $3,000 left in my bank account and I had $10,000 in obols. And I was like, “How am I gonna survive?” Okay, well, all of my advisors and mentors were telling me that I had to give out my product for free and they were like, “You haven’t even put a SKU on it. You haven’t done testing. You’re gonna go,” like, “You’re gonna get in trouble.” And I’m like, “Look, dude,” like, “If I don’t sell this, I’m gonna die. It’s irrelevant if I don’t have the ability to survive.”
And so with my back against the wall, I hosted a webinar for my alpha units, 40 of them. We did $25,000 in one night. And it made the company survive. And this has happened like three or four times where, like, when we finally built Pavlok, and we were about to ship it to our customers, like, we had made $283,000 or $284,000 on a campaign, and it’s still a lot of money. And we had spent that nine months to a year building the product. And then we’re about to ship it, and then we looked at the inventory cost and the cost to just buy the already sold product was like $130,000 or $140,000. I was like, “Oh my God. We can’t do this.” Like, “This is ridiculous. I’ve already spent that money,” right?
Nathan: So what did you do?
Maneesh: So I looked at the board…our team was like really scared because we didn’t know what to do. And we sat together, and we were like, “Wait, what happens if we take off these non-necessary components? What happens if we take off the accelerometer? What happens if we take off the battery detector?” Turns out we were able to save about $9 per unit, dropped the cost of the entire purchase order to much less than it would have been. And like that…had we raised a lot of capital, we would have just shipped the more expensive product. Instead, we had to make the decision of what really mattered. And I found out that, like, that, constraints breed creativity. So I like having constraints in all forces of life.
Nathan: Mm. Interesting. So, at what point did you go on Shark Tank? Can we just talk about that? Because that was really interesting to me. I thought it was quite funny when I saw because, you know, we’ve known each other for a while kind of, you know, we haven’t spoken in a while, but you know, we kind of just…I’ve always seen what you’re up to and you’ve kind of, I guess, seen what [crosstalk 00:19:30] Foundr and, you know, we have a great mutual friend, Daniel, and…
Maneesh: He has a tattoo of Pavlok on his side.
Nathan: Yeah, I know. I know, I know. I’d love to hear the story behind that as well but, I guess, tell me about, like, at what point was so…so well, what I really would like to understand is, you do these crowdfunding campaigns and, you know, you do, you know, Pavlock 1. You’ve got your runway, you ship out, and then do you like…do you keep selling Pavlock 1 to the public? Or, do you go back to the drawing board and you go, “Yeah, let’s do Shock Clock,” and then you sell, you do the crowdfunding campaign, you work that out, and then you go back to the drawing board, and you just keep iterating? Or do you have these like old SKUs and you sell them? Or, are you doing it literally like how Apple did where, you know, the Apple I discontinues, then we move to Lisa, you know, I mean? Like, can you talk to us about that? Because it sounds like you…
Maneesh: Yeah. And so one thing I really like about Pavlok is that it’s extremely versatile. And for readers who are listening right now, it’s like, I mean, again, it’s a product that vibrates, beeps and zaps, right? That’s what it does. And about a month into our crowdfunding campaign…so originally, it was a device that zapped you when you did something wrong. So, “If I go on Facebook, zap me. If I bite my nails, zap me.”
But then, about one month into our two-month crowdfunding campaign, we discovered that there was a litany. It’s great word, good job. There’s a litany of literature of clinical studies that have been done on the efficacy of using aversive conditioning, that’s adding a strong zap or a negative smell, while you do something bad. You ever get like really drunk on tequila, or have any of your friends gotten really drunk on tequila and then suddenly after one night, they never drink tequila again for like many years or the rest of their lives?
Nathan: Yeah, that’s me.
Maneesh: That’s…you had tequila?
Maneesh: And you feel like if you think about it, or smell it, it was like a feeling in the pit of your stomach?
Maneesh: They’re kind of like…and it’s a pit. it’s always a pit in that same part…that’s called an aversion, and it’s visible in the brain. And it’s actually an FDA approved type of way to quit bad habits. And we didn’t know about this for over a year until we were halfway through our crowdfunding campaign. And when I stumbled on this, I was like, “Holy crap. The results were insane.” Like, the one on smoking was…so normal people who are trying to quit smoking have a 5% success rate after a year if they try to quit cold-turkey. And if they used Nicorette patches or nicotine patches, do you want to guess what their success rate is? It’s higher than five, but do you want to guess what it is?
Maneesh: Seven point five percent effective. Or, my favorite ads of all time, “It’s 50% more effective than quitting cold turkey,” right? Meanwhile, this one study we stumbled on showed that five days of an electric zap while smoking a cigarette for two-packeted smokers led to 60% success rate at a year of follow-up, 60. It was insane. More than half of people quit smoking in five days. And I was like, “Holy crap.” It was all self-administered zap. It was five days of pressing the button on a machine, and this was a 1988 study, “While they smoked a cigarette. They’d have to do it for several minutes, and they couldn’t stop. They had to make it painful,” if that makes sense.
And those results were so high that it totally pivoted the company. It was like, “Okay, we have to move away from this,” like, it knows company…because we had a very poor software team. And instead, the self-administered zap is actually far more effective, “Let’s try that out.” So we did, and we found insane results. So we’re talking about quitting smoking, quitting nail biting, quitting hair picking, quitting negative foods. I stopped eating tortilla chips. There’s videos of me online zapping myself while I eat tortilla chips. I can’t even do it anymore. Things like…those things…it was so cursing. What else was the most common? Cursing was most the common.
Then we started noticing that a lot of users were asking us about waking up early and that…one of my close friends told me that he put it on top of his alarm, on top of his phone, and that when he woke up in the morning he had trouble getting out of bed, but he didn’t have too much trouble just like pressing the buttons to zap himself awake. And that the zap would not come out of like the snooze cycle, you know what I’m saying.
So we took that information and from our users asking us about alarms, and specifically for my friend. I said, “Hey, let’s build a simple alarm clock app. Let’s make an app that you can set a timer, and it’s gonna zap you awake at X o’clock,” and the results were insane. We had like 30 people emailing us saying, “I used to be a night owl, but now I’m a morning person. I wake up before the alarm even goes off,” it was crazy.
And the same sentence that I just said in every one of those emails. I was like, “Holy crap. This is a big deal. Let’s release this app to more users.” And, what if we like created our product just as like a simplified alarm clock? We called it the Shock Clock. A device that tracks your sleep, wakes you up in the morning in your light stages of sleep and then makes sure you get out of bed using the electric zap plus our internal sensors that, if you need it, will make sure you do jumping jacks before the alarm turns off.
And that was where Shock Clock came from. So even though I’m gonna leave a very long explanation, my point is, we don’t have…our company’s not very good at planning ahead of time, but we’re very adaptable. So we learn from our users, and we use that information to help craft the next product and craft the next thing we do.
Nathan: Yeah, gotcha. So, to answer my question, that sounds like you’re not selling currently Pavlock 1 or Shock Clock? Or you are still?
Maneesh: We are still, yeah, we are still selling both, they’re on the website. And we just announced Pavlock 2. So we’ve sold about 50,000 units of Pavlok and Shock Clock in total, which, like, as I think about it, it’s actually pretty cool. Good job.
Nathan: Yeah, yeah, you know.
Maneesh: It sounds like…because internally during the day, right? Like, I’m always a failure, and I always hate myself. And in the middle of day, we’re never…we never have enough money. And it’s always like a self-running conversation in my head. But like, realistically, we’re doing something kind of cool and kind of crazy. And we’ve moved these 50,000 units, and people love it. People who use it get insane results. And you have to be a little bit crazy to be an early adopter of a device that’s zaps you, right? So these people are finding…but like the way that people use it is massively interesting.
But like the stories, we hear like one guy used it to stop talking to…like, stop using Bumble and stop using Tinder so he could stop dating people. So he zapped himself for five days and made himself go on the app, and he stopped doing it. Then the second person used it to get over an ex-girlfriend, which I started using it for, zapping yourself whenever you think about her. And then I have one story…and then we found another person who used it to start talking to girls. So he went to a mall for five days, and he said, “If a pretty girl walks by me,” I’m really shy I want to talk to her, “I’m gonna make myself talk to her, or else I’ll have to zap myself five times.” And by the day five, he had a girlfriend. It was so cool.
So people…all it is is, like, realistically, it’s a surprise that we made something that’s so versatile. But the zap, what it does, is a new sensory input that just knocks you aware. And that makes people able to be human in a variety of ways. So you can both stop and start memories, but start and stop dating, and that’s a really interesting thing that I still haven’t even…like hasn’t even coalesced into my understanding yet, if that makes sense. Yeah. So like I’m still learning what I probably can do.
Nathan: Before we get into the Shark Tank pace because this kind of teased up nicely, have you raised capital? You said that you don’t like to, but it sounds like you don’t own 100% of the company. Can you talk to me around that side of things?
Maneesh: Yeah, sure. So I started the company giving away 10% for $50,000. And that was how I got into the Incubator and that like was…so I raised a total of like just about half a million dollars over 2013 and 2014?
Maneesh: I think raising money makes sense if you need money to build a product. I don’t think raising money makes sense if you have a product because you should be selling first before you go raising money. So that’s why I didn’t want to raise any money since 2014. So it’s been almost three, I mean, that’s two-and-a-half years, and I haven’t raised any capital since. It took $1.2 million to make the first Pavlok. Hardware is expensive.
Nathan: Yeah, got you. And, you say you have investors?
Maneesh: Yeah, I have a bunch of investors, actually some people you might know. I have John Romaniello, Dave Asprey, my brother Ramit Sethi, Matthew Kepnes, Steve Kamb from Nerd Fitness, Sean Ogle from Location Rebel. So, a lot of my old contacts were able to help me raise capital. But I would say, you know, I mean, depending on who you are, depending on the product you’re trying to build, you have to show, you know, that you’re gonna deliver a return. So, yeah. So we’ve raised about half a million dollars. All of it was in 2013 and 2014. And, yes.
Nathan: Yes, got you. So, talk to me about Shark Tank. Like, what was the play there? Was it publicity you were looking for? Funding from one of the Sharks? Because I saw, like, you know, like, it was pretty funny, man. Like, what you did, bro.
Maneesh: Kinda funny? That’s your way to describe it.
Nathan: Well, it was funny like because I had never seen somebody kind of be like, “Yeah, now you’re out,” like, actually telling the Sharks they were out. It was interesting just like, you know, so talk to me about that, man. Because I know, you know, some stuff happened with Mark Cuban and, yeah, we won’t go into it too much. Because, you know, we’re a big fan of Mark here at Foundr.
Maneesh: Are you?
Maneesh: Oh, great. Cool.
Nathan: So, just talk to us about the Shark Tank experience. Was it worth it, was it not worth it?
Maneesh: I think in the last year, so I went live about a year ago, let me tell you the quick story, all right. They asked me to be on Shark Tank in 2014. I said “no.” They asked me again to be on Shark Tank, and I was like, “okay,” so I came in 2015 to be on Shark Tank.
Nathan: Why’d you say no?
Maneesh: Like, we were gonna do it, but then we like…like, a couple of weeks before I’m just like, “We’re not ready. The product isn’t ready. It’s too early.” And so we came back and did it again, and we did the Shark Tank thing, and I should be clear, by the way, it wasn’t just me saying that. It was both Shark Tank and us, we’re like, “This is not the right time, maybe let’s talk next year.” And, I came back a year later to do the show. And so Shark Tank had been trying to get me on the show because it’s a very compelling product that could be very good for TV.
And we go to do the show, and we had done a study in 2014, I think it was 2014, maybe in early 2015, where we had taken one of that smoking study I mentioned earlier, and we reproduced it with a small pilot group of people to try to show those effects. And we had six out of eight people quit smoking in after one week of using the product. And that’s a big deal. That’s a great study that we’d done. And, about a week or two before I go on Shark Tank I get a call from my contact, and they’re like, “You’re not allowed to talk about tobacco. You can’t talk about it on a TV show,” and I’m like, “What are you talking about?” Like, “This is my study. How am I supposed to deal with this?”
So I get to the show, and I’m trying to do the show, and I talked about the old previous studies that like, we had found 21 clinical trials that made aversive conditioning, an FDA-approved type of therapy to quit addictions. And I always describe it like this, “Mark,” you ever seen Lion King?
Maneesh: So, “Mark Cuban is Mufasa, and Mr. Wonderful is Scar, and the other three are hyenas.” And so interestingly like related to this before I was on the show, Daymond John had used our product and had quit one bad habit, then he’s quit two serious bad habits since until…and I couldn’t be on the show with him because he already knew who I was. So, meanwhile, I get to the show, and if you watch it, it’s like I give my pitch and I talk about the previous studies, and Mark Cuban doesn’t like it. He would even try it. The other three, besides Mr. Wonderful, are like nodding their head, and then Mr. Wonderful is like…got his like Mr. Burnes fingers doing like that tackling thing.
And so, Mark Cuban just doesn’t like me. I think it’s because of the…I think it’s like alpha dog/alpha dog on stage. I don’t know what it was, but he’s like, “What the hell. You’re a con artist. You’re trying to use past studies as your own?” And I’m like, “Dude, like, this is how Science is done.” So Shark Tank edited the lot, and Mark Cuban didn’t like it. And then I changed the conversation in the room. So the other three, the hyenas didn’t like it. And then Mr. Wonderful’s there just like waiting because he knows it’s a good idea with a powerful possibility. And he gives me an offer that was…I asked for half a million dollars, and he offered me half a million dollars.
And I always view, like, having a partner in business, is more of a commitment than having a wife or husband. Like, I’d rather get married to the wrong person than take the wrong investor. And so I told Mr. Wonderful, “I can’t work with you because that would be just…that just wouldn’t be,” like, “It’s just not okay.” Like, “I can’t because the way that I view the world is not about making money, it’s about helping people change their habits.” And so he looks at me, and he goes, “Eff you, you a-hole, eff you.”
Nathan: But that was edited out.
Maneesh: No, I mean they bleeped it. But if you watch the episode, it’s there. I mean that’s why I was the season finale, I was the most viewed ever clip. And so, here’s what happened, man. So I posted an article about why I turned him down, and Shark Tank legal said I had to take it down. And for the last year, I haven’t been allowed to write about it at all or talk about it. And just last week, my embargo ended. So I’m finally allowed to tell the story, right?
So yeah, it’s kind of…it’s screwed up, right? And then Mark Cuban’s on TV, he was on NPR in December saying, “I hate con artists like Maneesh,” and then he was like, “From Pavlok.” And he said it again on Access Hollywood. I’m like, “Dude. It’s been 15 months. Why do you know my name? Why do you talking about my company by name?” like, that’s incredible but weird. And so, that’s my story about Shark Tank.
Nathan: Yeah, wow. Crazy. But you said also that you get death threats, man.
Maneesh: Yeah, man, I get death threats. So, the first hour after Shark Tank. Basically, 30, like it was over 30 people left a 1-star fake amazon review. It tanked the score of our product from like 4.8 stars to like 2.9 stars. It really led to like massive problems. And then we started getting death threats, like, just people who are like, “You’re so stupid,” like, it started off like just, “You’re so stupid. You should have taken the money. Mr. Wonderful said you’re stupid,” like, “Go kill yourself.” Like, okay. Those are like whatever death threats. But then they started getting really bad like, “I’m going to kill you.” And I started getting those like daily.
Nathan: That’s scary man.
Maneesh: Scary, man. Yeah, exactly. Especially because my address is like public, so like, so that became kind of annoying. I don’t know what to say about that. It’s just like I kept getting death threats and then right now, like, we were just on a repeat of Shark Tank yesterday. But, you know, what I found is really powerful, and I think it might be, you know, everyone…I don’t know. We launched that product and had we gotten super successful, we would have had probably a competitor by now.
But I think it’s also like giving us a little bit of a smoke grenade, where like people, like, there’s nobody using this app and I don’t even understand why because it’s so powerful. And it’s like, I think maybe in my long run, it’s gonna be part of the story and all that stuff, but like it was…it’s been a rough year.
Nathan: Yeah, got you, man. So do you think it’s worth it to go on shows like that or not?
Maneesh: I mean, I don’t think you should ever turn down an episode of Shark Tank, but I don’t think it’s as big a deal as people think it is. Like, that same month…okay, so six million people watched Shark Tank, and the same month, I had a small little positive snippet in the New York Times, and we did three times the amount of money from that small one-day snippet than we have done with the Shark Tank. So getting a better, getting a positive story, I don’t think Shark Tank is the end-all-be-all.
In fact, I think it’s a…I don’t think it’s actually a big deal at all. I think it’s just a marketing thing that could happen and you might as well. Like, I think that you should probably take the deal if Shark Tank wants you on the show, I think you should. But I don’t think it’s like a thing that’s the endgame. I think it’s just a part of your marketing process.
Nathan: Yeah, got you. Okay, awesome. Well, talk to me about…one thing I think you’ve done a really, really good job at is getting well-known people to use a product and get it in front of them. And like, you know, even when I watched your first crowdfunding video for Pavlok 1, which I backed. Dude, I was super impressed, you know. You got so many people. You got so much press, all these people talking. Like, it is a crazy, cool product, it’s very interesting, fascinating. But what are you doing to…are you actively networking? How hardcore? Do you have a PR agency? Doing it all yourself? Like, yeah, you do a very good job at that, man. I’ve always been very impressed.
Maneesh: Thank you. I would say the same about you. I got asked by a lot of people after my first campaign, how to make a…they were like, “Could you do a PR course or something?” And I’m like, “Look, if you want to make people…if you want to get press to talk about your product, develop something that shocks them.” And I know that’s like a funny joke, right? But like, also the word “shock” in this context, means something that’s really interesting to talk about. Because if you’re writing content about…if you’re a news reporter, you don’t want to freaking write another post about, you don’t want to write about some digital course that’s online, you know. If you’re on New York Times, you don’t want to write about that.
But if you hear about something exciting like a digital course that’s changed this person’s life, or a digital course that morphed into a story, like the…I don’t know, It’s just, it’s easy if, to me, I find it easier to come up with a shocking idea than it is to craft, I don’t know, I just find digital boring. And I find that there’s a lot of ways that people don’t look at like another way to build stuff. And it’s never been easier to invent than now. And so…but my answer is, I don’t have an answer. I think I’ve gone bad at PR in the last year.
I feel like I’ve lost my edge because, like, we had…so I have a lot of connections. And I got those connections through a few years of Hack the System, but, like, that wasn’t it. It was like one…so every Kickstarter campaign we’ve ever done has the same context. It’s like you start off on the first day, nobody buys it, or just your email list buys it. And then on the second day, nobody buys it. It’s like small amounts of sales, and I’m sad and depressed, and I’m like, “All right, well, I’m done. I’m done. I gotta go home, gonna live with my parents, eat Indian food every freaking day.” And then the third day or so, like, somebody posts about it like TechCrunch, or some…or The Verge, or some big online thing. And then it becomes this cascading snowballing effect while everybody wants to tell a story.
So like a good web…a good book to read is Ryan Holiday’s book on catch…”Trust Me, I’m Lying,” I think it’s an eBook?
Maneesh: About how to like…well, I don’t know if you know this, but he and I went to middle school together. But, kind of figuring out how to craft a story is impressive, and then being consistent about telling that story is impressive, and then finding where people will be is impressive. So like, I found it very valuable to go to Sundance Film Festival because I got like photos of like third me with like 20 celebrities, you know, at the same time. And then those like places where you might go to find those people are really powerful. Yeah, so and that’s how I see on PR front.
I’m not…And I think the world has changed in the last three years. Like, I can’t believe we’re not just doing daily Trump things, you know. Like, that stuff isn’t going viral all the time. So, you can look for what’s going on in the present moment, but like…I think that’s a really good way to look at PR, too. Like if you…inventions are great, but like looking at how it connects, like we just started a video series where it’s like, how Trump could improve his own presidency by using Pavlok, like that sort of stuff can carry into the media a lot better.
Nathan: Yeah, gotcha. Okay, awesome. Well, man, look, we have to work towards wrapping up.
Nathan: I guess final question for you is, where’s the best place that people can find out more about Pavlok? This will probably go live after your campaign. It was a bit of a backlog, but yeah, dude, this has been really fun and interesting conversation. I really appreciate your transparency, man. Like, really great openness, fascinating story, dude. And yeah, where can people find out more about say your work?
Maneesh: I’m gonna send you, I’m gonna…go to pavlok.com/foundr, with no “e.”
Maneesh: And I’ll have a page up for explaining more about it and getting context to this call.
Nathan: Gotcha. And…
Maneesh: So pavlok.com is Pavlok, P-A-V-L-O-K, It’s like Pavlov, but with a K instead of a V. And, /F-O-U-N-D-R.
Nathan: Yep, gotcha. And you’re gonna do a special discount for our user? Got a special gift? Or, what are you doing?
Maneesh: Yeah, I’m definitely gonna have a special discount for you, guys. Depends on when this goes live. We can either throw you guys our Pavlok 2, or give you guys like Pavlok 1 with a couple of accessories bands, or like a two-for-one or something like that. So I’ll know more about that when you give me a date. But yeah, you’re gonna get a special deal, special discount, and realistically, like, I’m not a sales company. I don’t give a shit about money, and that was a thing that was really disconcerting on Shark Tank. We measure our value in number of habits changed, and we have a goal of 10 million habits in 10 years.
And so, everything we care about is how do we help people achieve the goals they set for themselves. So, if you can’t afford the product, like, just shoot me an email, I’ll put my email on the page, and we’ll figure something out. Because if you’re actually willing to do, like, a little bit of effort to make yourself change your habit, I’m willing to help you as well.
Nathan: Yeah. Well, that’s amazing, man. Well, thank you so much, brother. It’s been a great conversation.
Key Resources From Our Interview With Maneesh Sethi
- Checkout Maneesh Sethi’s blog Hack The System
- Follow Maneesh Sethi on Twitter
- Learn more about Pavlok
- Connect with Maneesh Sethi on Linkedin