So You Want to Launch a Physical Product

Even growing up in the magical early days of the internet, I always wanted to design and sell a physical product that people love. I’m guessing you’ve thought about it too. Maybe it came from awe at the industrial design of gadgets made by companies like Apple and Sony, or the fun I had with action figures and Legos as a kid. For centuries longer than we humans have spent our hours looking at screens, we’ve built and loved all types of physical tools. It’s elemental. Who hasn’t taken a second look at the chair they sit in or the mug they drink from and thought, “I feel like this could be better”?

A few years ago, I took the leap and left my tech job to design and launch a series of physical products. The products I co-created have gone on to sell hundreds of thousands of units and create profitable, growing businesses. The first was Birthdate Candles, a line of all-natural candles with a personalized scent and reading based on your birthday. We launched in 2019, and in our first year did over $4M in revenue. The second was Therapy Notebooks, a guided journal that uses evidence-based techniques to combat anxiety. Our first notebook has sold more than 100,000 copies and is available at retail stores across America. 

Traction aside, moving from the world of bits to the world of atoms has been an incredibly rewarding experience. It’s brought me some financial freedom, and I’ve learned a ton by working with factories, freight shippers, and even fragrance houses. The day-to-day is completely fascinating, and entirely different from the jobs I had as a startup employee. 

The most satisfying part is making something a customer loves. Whether it’s a friend texting me a picture of a candle they saw displayed proudly on a coffee table, or a stranger sending an email about how the gift they bought was so perfect it made their aunt burst into tears, knowing that a product I made had an impact on someone’s life is a feeling that never gets old. 

As my businesses have grown, many friends have reached out with the same question: “Should I try out selling a physical product?” One writes a music newsletter and is thinking of ways to monetize it. One has a day job at a big tech company and wants to launch a side project to make some extra cash. One had just returned from backpacking across Asia and had an idea for travel gear. 

My answer: yes—but there are a few things you’ll want to consider first.

There’s a lot to love about physical products from a business perspective. For one thing, humans ascribe more value to an object in the physical world (at least for now, in our pre-metaverse era). You might not bat an eye at buying a $30 t-shirt, a $75 skateboard, or a $120 bottle of perfume, whereas paying $4.99 for an app in the App Store feels expensive. Software is ephemeral—our brains just respond differently to an item we can hold in our hands.

In addition, a physical product business doesn't necessarily need venture scale to be profitable. Any startup employee will recognize the necessary evils of VC-funded growth: building overwrought growth models for the board meeting, having a terminal “runway” for the company in case a next fundraise doesn’t materialize. Making and selling a physical product can be more of a “lifestyle” business, with lower overhead and R&D costs, and a more direct path to profitability. That strips away some of the business-building complexity, and lets you focus relentlessly on making awesome products and delighting your customers.

All that said, building a physical product business operates by a different physics than building a tech company does. Specifically, because of the unique economics of physical product businesses, it’s not worth creating a product unless you know it can be profitable before you even launch. You need to develop and pressure-test a concept that you know has a great chance of making money from the very beginning, or it’s not worth doing. 

Here’s what I’ve learned about how to do that. Read on, future inventor…

Come up with a differentiated idea that (some) people actually want.

Brilliant product ideas don’t fall from the sky fully-formed. The best ideas start with a ripe audience and a unique observation, and take it from there. 

The easiest audience to understand is an audience of one: yourself. What is something you yourself want to buy? Is there a useful tool or object you’ve previously made for yourself? If a product idea is legitimately something you’d be interested in buying, there are almost certainly others like you who would be interested in it too.

Otherwise, broaden your horizons to those around you. Talk to friends, ask them what they’ve been buying. Walk around some stores and ask managers what’s been selling well. Browse Amazon and Etsy in categories you’re interested in, and look at what products that have a large number of reviews as a proxy for what sells well. Based on what your friends and family are talking about, or what you see on the e-commerce platforms, what’s a trend or need you feel is on the rise? 

If you’re one of the lucky few who already has access to an audience (say through an online following or community you’re a part of), or if you have a potential outside niche audience already in mind (say vintage car drivers or dachshund owners), start there and research — what do you think they would want? What do they like to buy today, and what are they lacking? 

That was our process for Birthdate Co. There’s always been a large audience of people who are into astrology, but we noticed that because of social media, astrology was growing faster than ever as a way for (mostly) young people to express their identities and relate to each other. Despite the widespread curiosity and brilliant Instagram memes, nobody had made a thoughtful physical product for those passionate about astrology. So we started with that audience in mind, and iterated until we came up with something they would love.  

Two paths that often work: either invent something new for an under-served niche, or create a best-in-class entry into a popular category in some way where it fills an unmet consumer need. As an example of serving an under-served niche, my friend Krishna invented Catalina Crunch after noticing there were no healthy, delicious cereal options for people like him living with diabetes. By creating an incredible product he himself wanted to see exist, he ended up making something that millions more have enjoyed. As an example of making a great product in an existing space, my friend Charlie’s company Strike Gently Co makes beautiful pins, blankets, and other products with edgy, distinctive designs. A blanket with a very cool design isn’t a new invention, but it fills an important need in a large category: helping the buyer express themselves creatively, or providing an awesome gift idea for a friend.

As soon as you have a concept or two, I’d recommend taking them to the next level by forming a strong opinion of what exactly your product does and why someone would want it. Famously at Amazon, Jeff Bezos asked every product leader to work backwards by writing a launch press release for the product they were working on as a way to understand clearly what benefit they were providing to the end-user. My version of this “working backwards” for physical products would be: make the storyboard or script for the ad you’d want to run on your ideal customer’s social media feed. Channel your inner Don Draper and design the ad creative that would make them want to tap through their Instagram or TikTok feed and buy it. If you can’t come up with a convincing enough fifteen-second ad, maybe the product isn’t yet exciting enough to sell well.  

Finding a compelling product concept is an unpredictable art that will take time. I’d recommend generating as many ideas as possible (no matter how dumb!), and writing them down, knowing that it might not be the first, but instead the tenth or hundredth, that feels exciting enough to pursue. 

The next step: start filtering your ideas by doing some research into margin and distribution. 

Not all margins are created equal. Pick the right category.

If you’re new to physical products, the rules of margin might not seem intuitively obvious. Books, hoodies, gadgets, and canned beverages might all seem like different flavors of the same general thing. But there are non-obvious differences that lead to big differences in margin—which can easily make or break your business. There are two main factors to keep in mind that determine your product’s profitability: product cost and pricing power.

Let’s take an example. I’m sure you’ve heard people express astonishment at the cost of bottled drinking water. The gall of Evian and Aquafina—they’re just putting filtered water in a plastic bottle and charging us a couple bucks for it! We should all be so lucky to be raking in huge profits in the water business.