You Won’t Believe What Happens Inside CrunchLabs - with President Jim Lee | CREATOR COMMERCE S1E8

0:00Jim Lee is the mastermind behind Mark Rober's Crunch Labs and in this episode he takes us behind the scenes. So we spent a year just toiling away in secret, just getting everything into place. Each product takes a year to develop. Crunch Labs, we aspire to be the best brand in the world in STEM. Getting kids, adults, everyone excited about learning. Jim shares valuable insights about creating new products. You need to have like a killer product market fit.

0:26Ian Shepherd:You need to have authenticity. Jim takes us through the product launch and scaling creative businesses. You really need to nail what you're doing and it needs to come from the heart. Like if you're overly commercial, you really need to watch out because people are smart. Audiences are very smart and they pick up on this stuff. You really don't want to miss this one. We don't measure success in number of dollars or subscribers. It's really like, is this having a meaningful impact on kids' interest in STEM?

0:58Ian Shepherd:Before we dive into today's episode, let's talk about that moment when a creator's idea becomes a real business. Mark Rober built Crunch Labs into a business with subscription boxes and a mission to transform STEM education. But if you want to sell your own products, whether it's merch, courses or something entirely different, you need a domain name that clearly says, this is my store. And that's where a.store domain name comes in. With a domain name like yourname.store, your web address tells your customers exactly where to go to buy. You're not stuck with a long generic platform link. Your.store domain name stays with you for life, regardless of where you host your shop.

1:36Ian Shepherd:Best of all, creators using a.store domain name see up to two times more organic visibility and nearly 90 % more clicks. So whether you're just getting started or building the next Crunch Labs, give your audience a link to remember. Get your.store domain name and my exclusive link in the description. Right, let's get on with the show. Today on the podcast, I'm joined by Jim Lee from Crunch Labs. Welcome to the show. Thank you. Thanks for having me, Ian. For everybody listening, what is Crunch Labs? Crunch Labs, we aspire to be the best brand in the world in STEM. So science and engineering, getting kids, adults, everyone excited about learning.

2:15we extend the mission of Mark Grover who's this phenomenal YouTuber who's built a really big brand over like a decade on YouTube and Crunch Labs is an extension of his mission and what he does and kind of allows people to have like an in-person experience and build great toys or products and more to come we can talk about it on the podcast.

2:40Ian Shepherd:Excellent and what's your role how did you get involved? Yeah, so I had actually known Mark back before YouTube was really a thing. I didn't even know like he was doing YouTube. So this was many years ago. He had under a million subscribers. We just got to know each other socially. We played soccer together for years. And like his channel just grew as as I was working at Google. And the funny thing is I actually told Google like, you got to watch out for this guy. He's doing family friendly content, getting people excited about learning and STEM and, you know, science and engineering. And at the time, like, no one paid attention to it.

3:19But now we've had the CEO of Google, Sundar Pakai, and the CEO of YouTube, they've come to Crunch Labs, this place where we film the videos, and we design the toys. And it's, it's been a fun ride ever since. And my role is, you know, when Mark was like, thinking about doing something to extend his mission um we would exchange you know like professional ideas from his world and from mine and we you know drive into soccer and back we'd talk about that and eventually it became like a consulting project for like 10 hours in my kitchen talking through like hey what would this business look like and how would we do it and what's the operating plan and even like the financial model in google sheets to this day we still use the same file in google sheets that that i created there and so i'm uh president and coo is my official title and also act as the cfo of this company in the market over youtube channel that's amazing and how long ago was that oh yeah about three i left google three and a half years ago so yeah it's been a fun ride i was minding my own business eating all the soft serve ice cream that Google has.

4:32And yeah, Mark came in and just like, he wanted to do this and I couldn't resist. Amazing.

4:39Ian Shepherd:And tell us more about the products then. Yeah. So, I mean, we have something for everyone and we develop original products and we pair it with the really great video every time. And so for kids, we have this thing called BuildBox, which is a monthly subscription box. It's a buildable project. It's premium. It's it's uh teaches like an engineering principle every single month and that's for eight to 12 year olds often even six year olds or sometimes building the the toys and telling their parents and us about angular momentum and how it works it's like really impressive um but beyond that we also have something for teens and adults and that's the hack pack which is a monthly subscription box as well, which is like a robot in a box.

5:25So you open it up, you build the toy, it works, but you can hack it and customize it. And you can get like, even professionals can hack and change the code. And we have a AI chatbot that teaches you how to code. And so kids are using this as a tool to learn that and coding robotics and kind of build a cool project every month or every other month.

5:50Ian Shepherd:It sounds fascinating. It must take a long time to develop these products and then coincide it with a video. Yeah, it's actually really hard. Thanks for asking about that. So it's, each product takes a year to develop. So concepting, the team comes up with original ideas for videos and for products to pair up together. And that's a full year process. So at any given time we don't just have the build box line which means there's 12 in development at any given time we also have the hack pack lines so there's 12 in development there at any given time um on top of the other fun things that we're working on as well so yeah it's a quite involved process across a pretty talented team of like video people creatives you know editors script writers mark rober he's does he's very involved in the designs and the videos as well that's cool and how do you balance the entertainment and the education part like it must be quite hard something might be really fun but maybe not that entertaining or vice versa yeah that's a funny way we look at that is we don't balance it it's all entertainment it's all fun like the whole goal is just spark that initial interest and mark does that so well with the thumbnail for like a 15 ton jello pool you click it you're in in the first few minutes you're like totally sucked in but you also find that you're learning something about science and you actually enjoy it like you're interested to learn more so we just start with the fun create the spark but then we provide like these roadmaps where you can learn more if you if you'd like so here's a principle here's where you could learn more about that we open source a lot of stuff and just kind of allow you to find your passions so we create a lot of different mark has so many ideas for future videos it's not even funny there's no force that can stop his brain thinking of these great ideas so we're just not all of them are good but like 99 are are really banger good ideas so we're kind of like working as a team to just continually come up with these things and just you know more to come and how do you test them like i'm sure there are so many great ideas but it must be there must be some testing required to see whether it really lands or it's easy to build or the funds in it how do you do that yeah so we do extensive toy testing with kids and adults and beyond that we also do like extensive toy certification internationally to be sure we're like building these toys in a way that's safe and sustainable and so those things matter a lot to us um but the other part is we try to make the toys really accessible so that it's an experience that just the widest variety of people could experience and we get some really cool hacks that people do you know to to accommodate um just how certain people play or or learn and so we try to utilize that in future products as well great and can you take us back to the launch like how did you think about that you'd built these google sheets and had the discussions but then how did you sort of take that concept and and launch it yeah so we launched so we spent a year just toiling away in secret just preparing the videos, the entity, just getting everything into place.

9:26And June 2022 is when we launched publicly. And the only way we launched was through a video from Mark Grover. And he did this great kind of reveal of his secret laboratory called Crunch Labs. And this is the place. This is where the magic happens, where the videos are filmed, where the toys are developed. this is where we where we work and so from that that generated a ton of buzz because like it's a real genuine thing from him like he really wanted to do something meaningful to help kids engage with science and and so it did really well we sold out in a matter of a few days um we kind of ran into a bit of a struggle a month later when everyone were they were getting their second box.

10:16And it turned out we kind of broke the internet and Shopify. The pace of subscriptions and people signing up was like so fast. We kind of broke the thresholds of the throughput of those systems. And we had a few funny moments where we had to like, call up our fulfillment center and say, like, stop the presses. 3000 of those orders need to be stopped. Like, we need to change the box number on those and um thankfully we're able to work out those kinks from that initial launch and now we've just been able to just grow smooth and steady and really build a sustainable effort here so we can continue to make the videos and new experiences for for people

11:00Ian Shepherd:that's great i know it's been phenomenally successful um how do you gather feedback from the customers and build the community around it? Yeah, I mean, first on success is like, we don't measure success in number of dollars or subscribers. It's really like, is this having a meaningful impact on kids' interest in STEM? Are we exposing kids to STEM careers that they wouldn't otherwise get a chance to explore? And in those metrics, we actually track those and we survey people. We survey everything. Like we survey every single box and build that goes out in the videos. Like we look at the metrics on, you know, is there any issue with your build?

11:46Do we look at spare parts and any like problems we're having with that as well? We look at. Yeah, so obviously the product scores and the videos. we we ask parents did your kid have like a meaningful increase in their interest in stem as a result of you know this subscription and what they're what they're seeing and what we've seen is an increase it was like two-thirds were like absolutely yes and now it's nearly everybody as we've worked out any kinks now it's like everybody's almost everyone is saying yes there's a noticeable material change to my kids interest in this stuff. And not everyone has to become a scientist or mathematician or engineer.

12:30Like that's not the goal is that you learn resilience. You learn how to break down problems. You learn how to try something new. And so we like survey all these questions. We, we send like a, I've got one. We send a cute little like fat Gus plushie, you know, sometimes if people give like meaningful feedback,

12:50Ian Shepherd:and how do you keep up with the changing interests and trends amongst kids i mean if i think of my own kids they're constantly looking at something new or playing with something new how do you think about that at crunch labs yeah i mean some things are timeless you know even like think about the toys you grew up with do you have a favorite you could think back and be like yeah that one that was my favorite little mechanical toy um i'm trying to think probably yes it was probably lego lego technic that was i was in that era where i was kind of using this programmable lego technic i remember it was like um a digger or something and i think it was one of the first times that you could program lego and i was all over it so yeah so we look at play patterns like how kids like you like when you were a kid playing with that how did you play with it and there's this is a science we science our way through all of this stuff and there are some like common threads over time that are just like classic but there's some other things where we do have to innovate and try new things so like for example we launched a roblox game and we've been iterating on that and trying to make it better and so kids kind of get that spark learning how to build a a rocket ship so it's called build a build a rocket versus mark rober and that's one thing we've tried in the roblox kind of like digital world and you know at the same time we're trying things to keep pace in education like science education and there's a way we could like create a nice experience for kids in middle schools to start with i think and we're doing some testing there so i think the answer is test and iterate but draw from experience and wisdom from like play patterns of what's worked well and then add the mark grobert and crunch labs twist on top of that to just like make it awesome make it a banner toy it does this other additional thing on top of the you know the prior play patterns before so that's like the recipe that we try to follow So can you tell us about up and coming collaborations or partnerships that you've been working on?

15:06Yeah, I mean, collaborations with other channels is a fun thing. Mark has his friends and so they coordinate.

15:12Ian Shepherd:Actually, just this Saturday, just a couple of days ago, the Mark Rober versus the Dude Perfect guys. Yeah, like a no rules kind of a battle bots or like a robot competition. That's a great video. We love that kind of thing. Mark does that really well. The dudes, they were, I'd say they were gentlemen, you know, through that experience. So we like that kind of thing. Other collaborations, we did something with chess.com, which, you know, you saw and we've been talking a little bit about. I think that's a great example of just a really great company doing really good, really good stuff. We come together and it helps everybody.

15:53and they're just great people and working with them has just been like just a delightful experience and then the impact of working together has been above expectations so more things like that where it's kind of like co-marketing or collaborations with other creators or businesses like that's what we're looking for as opposed to more of like we're going to spend you know more money on facebook ads and instagram ads and things like that we do some testing there but i think these collaborations and partnerships are a much

16:27Ian Shepherd:bigger thing for us i love that approach and do you see similarities in problem solving with chess and engineering oh absolutely yeah it's so like-minded um so their you know co-founder and ceo eric all the best he's just been he's he's a new friend we just met and i just like so impressed by what they've done, the way they run their business, the good that they're doing. And like the similarities with chess is a game where you need to just go out and try and you science your way, but also there's intuition. Like it was such a win-win for us to work together. Yeah. And then the resilience aspect where you need to just kind of like try things, you know, you're going to fail.

17:14And that's part of the process. Like we all fail. and sometimes that's frustrating for kids or adults but like that's the important process in science you actually push things to failure you disprove and and that's a very different way of looking at things so that's what we're trying to instill and i think that chess has that same approach you know to become really good at that game i mean one similar way that chess and our ethos at crunch labs are similar is just we want to make science fun and chess does that by default and maybe that's not for everybody but if you try and you learn it's it's one way to kind of explore something new and you know it gives that opportunity to apply fun to something that's kind of scientific logic math ish so that's a similarity as well so what's the vision what's the future of crunch labs future of crunch labs there's so much ahead we're just getting started like subscription toys was the beginning and then that brought us from kids to adults and like building robots you know as a as a monthly project um the future i think holds more in terms of education so mark actually wanted to become a teacher he was even partway getting through his credential and what he realized is that like with this platform we're able to actually change science education in a much more meaningful way.

18:41So we've actually created a pilot episode of a science class. And in conjunction with that, we added the curriculum and all the materials that a science teacher would be able to choose bits and pieces or in totality to be able to teach an actual like national standards science class on a specific topic for a couple of weeks. and we've actually been like observing the classrooms and sometimes mark comes and wears a disguise and we just see what's working well and what's not and from that we're actually drawing lessons and kind of looking at this new direction of like we think we could actually make you know maybe several more lessons and expand upon this and kind of start in that american middle schools in grades like six through eight and really create like the the most meaningful you know impactful best materials and curriculum including video and lesson plans and teacher guides and everything that's included and so we're we're leaning on educators administrators you know everyone to really help us make this like really succeed and from that we could you know go other directions so education that's one big area and another area is you know there's a few directions we could go that you know potentially adding upon what we are able to do well which is like taking a video and combining it with a really great product or like an in-person experience and so I won't go into too much detail about that but that provides a couple other directions as well that we're considering and exploring that's amazing i just love the impact that you're going to have on all of these kids you know mark's he's i've known him well and i've known him for many years and it's a genuine authentic mission he's got like this is truly he says i want to reach as many brains as possible and that's what he's doing and that's he doesn't have to work like he'd be fine he lives pretty modestly in a like a three-bedroom townhome but the time he spends on those videos and kind of the mission of this company and what we're able to do and build upon that it's it's truly a great thing and i think that we we get a lot of people kind of rooting for us and behind us and as soon as parents start to see that they're going to get this more for their kids like or they're going to get it for themselves or the teachers are going to embed this into their classes and get that spark and really like help with the exposure of STEM careers and the diversity of, you know, that's on screen, but also like in the classroom of who's getting opportunities here in terms of like STEM careers.

21:31So we think this is an important mission. We have to really nail it.

21:36Ian Shepherd:Yeah. Yeah. That's so important. Now, if I could ask one question, is maybe there one thing that nobody knows about Crunch Labs? people don't know that it's like every three months or so we have a not allowed to do real actual work day okay so we all come to the lab we do a service project we like you know build these projects like bikes for kids and then we have like a little bit of a company meeting for like 15 20 minutes and then we eat a nice lunch and then the rest of the day we just actually play in crunch labs so like when you never really get a chance to jump in the foam pit shoot the tennis ball cannon go through the secret passageways people do skateboarding pickleball every sport imaginable it's like everything's laid out and it's really truly fun so that's a fun day at work and just the team just has a great time together no one knows about this yeah uh that's really nice I imagine every day is like that, no?

22:37Ian Shepherd:Or perhaps the kids, that's what they think. We spend a lot of time and money to make it seem that way. Yes. But the reality is, is like, people think we're playing with squirrels in Mark's backyard. Yeah. No, there's like a team working very hard. And it's a very talented and skilled team. And like our head of product, our head of creative, head of media, all these people and the teams that they run are like, they're doing something very important. and they take it they take it very seriously i'm sure yeah i i actually used to work at disney and my daughter wanted to come to the office and she really thought it would be amazing but when she was there she was very much underwhelmed by everybody sitting at their desk and working and she always wants to come with me to vidcon but what she doesn't realize is that actually it's really boring and i'm just going to be working and talking to creators all the time you know it's maybe not quite that bad like we do have nerf guns under our desks for any given moment in case something breaks out or if there's like uh you know you can't see but off to the side of me there's a giant version of the toys yes so there's a lot of like fun stuff and we play and but we work it's a balance ah yes i saw some of those open source i think the the real toys right yeah yeah we did a giant version of the hack pack turret yes that thing's scary that that is a that's like a dangerous machine we have to have two people constantly like around to be sure and we like rope it off um yeah the the small version is safe the giant version keep your distance excellent well jim thank you so much for your time today it's been really fascinating to hear you talk about crunch labs before we wrap up i just wondered have you got any advice for aspiring entrepreneurs or creators that want to enter this type of space yeah i mean i think every example is different so i don't want to offer advice but like i think the common threads are you need to have like a killer product market fit you know you need to have authenticity you really need to nail what you're doing and it needs to come from the heart like if you're overly commercial or like the whole thing is just an ad it's not a real thing like you really need to watch out because people are smart audiences are very smart and they pick up on this stuff so it's got to be like a real you know kind of mission driven you know real nice product market fit and something authentic um yeah beyond that like any creators especially that are thinking about this it it's tricky and it takes more time and people and money than you think but you can do it like i want to be encouraging and say like you can set a plan you can get started and amazon and jeff bezos say well like you just don't want to have like any one-way doors that you go through so we like to make our decisions where there's a two-way door we can try something test and iterate you know, A, B test it.

25:48And if it's not working, we can just kind of step back and go a different direction. So those are some of the important things. And then think about asymmetric risk and return profiles. And by that, what I mean is, if you have a decision in front of you that has like really low downside, but it has the potential to just completely take off and become viral and become like a really big hit. We often look at those decisions in that framework. And we like to take those asymmetric bets that have like a much outsized return possibility and doing good versus like, it's going to cost money, but it's worth the risk.

26:32Ian Shepherd:Wow. Very wise words there and great advice. Jim, thank you so much. It's been a pleasure to hear about Crunch Labs and I'm really excited to follow the journey moving forwards. Yeah, thanks Ian. It's great to talk with you and appreciate how smooth on the mic you are. It's very intimidating, but you've made this very smooth and easy for me. Thank you. No, you've been a great guest. Thanks, Jim.