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<p data-name="Leo Koenig of WooSports"><span class="overidecolr">Koenig</span><span><a data-m="2900" class="thewords">So this is the Woo. Uh, it’s a small device that packs a lot of technology into a small waterproof and ruggedized package. And essentially what it does is quantify your action sport sessions. So if you're a snowboarder or a kiteboarder, a wakeboarder or whatever it is, with that device you can measure how good you are, you can see how high you jump, how far you jump, how much air time you had, how many rotations you hit.</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="24300" class="thewords">It shows Gs? So a bobsledder could stick this in his bobsled?</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="27100" class="thewords">A bobsledder data stick this on his bobsled. There's many other applications that you can think of if you get a little creative, where G-forces and impact are involved. But —</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="36700" class="thewords">So that's interesting. Are there going to be like hacker sessions of people to try to figure out different ways of using the Woo? You've already done all the work engineering, right?</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="44900" class="thewords">Well, we've done the engineering work on the hardware platform. We've done a lot of back-end work on the software side of things.</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="49400" class="thewords">Oh, here, actually, I'm going to see if I can get my high-tech camera... So what are these equations back here? Leo's not just a pretty face here, guys.</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="61100" class="thewords">These equations essentially describe how we think about calibration of the sensors right now. So you see gain and offset here as two variables in this equation, and if you take three positions with your x acceleration, y acceleration, z acceleration, and variables before those, if you take three of those equation systems in three different [positions] of the sensor, you can solve it, and then you have a very accurate calibration of both offset and gain in three-dimensional space.</a></span></p>
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<p><span><a data-m="89100" class="thewords">So this is our iOS app. We have a couple of different things we can do in here. First of all, you can check the activity around you. So people in your network or the whole community that had sessions, we see a list of different sessions here. And for example, Patrick, one of our engineers, had a big, big session yesterday in more than 40 knots of wind.</a></span></p>
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<p><span><a data-m="111000" class="thewords">And he jumped 12.4 meters high. So I can check his session, see all the details — highest jumps —</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="116800" class="thewords">So there was a hang time of eight seconds.</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="118200" class="thewords">Eight seconds in the air, yup.</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="119600" class="thewords">Whoa.</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="120200" class="thewords">Completely from takeoff to landing, which is a long, long time. We have a list of jumps. So we can see what jumps were done at which time. There's a full timestamp in the system that is synced with GMT.</a></span></p>
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<p><span><a data-m="135500" class="thewords">Most importantly, and what Patrick cares most about, is the leaderboards. So he can now check where he ranks up in the global leaderboard, and right now he is leading the pack of all of us with his 12.4-meter jump that he had yesterday. So that's what gets him the most excited.</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="151100" class="thewords">You're not going to let him keep that title.</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="153600" class="thewords">Oh no, no no no, there's no way.</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="155900" class="thewords">I should note that it’s probably 25 mile an hour winds today, and in the interest of business, Leo is still here doing business, and not out there taking the big jumps.</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="167300" class="thewords">Exactly. That should be a sign of appreciation right here. [laughter]</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="170800" class="thewords">When does this thing ship?</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="172100" class="thewords">Right now we're looking to before Christmas. So we have parts in here that are fully coming from our production lines, working on the last few issues that you always have with manufacturing. But we're on track to ship it by Christmas, and of course we already have a lot of our distribution. So we have arrangements with a big kiteboarding manufacturer, Best Kiteboarding, and we have a rolling forecast with them over six months that they commit to already have the first two purchase orders for November and December in-house.</a></span></p>
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<p><span><a data-m="202200" class="thewords">They're ten percent down paid already, and so very committed numbers, and we're very much looking forward to get the product out there.</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="208500" class="thewords">And can people go to you directly as well?</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="211200" class="thewords">Yeah, of course. I mean we see a lot of virality in the market. In kiteboarding or in any action sports, it’s a very tightknit community, so people will learn about this very quickly, and they're going to ask, "Where can I get it?" Right?</a></span></p>
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<p><span><a data-m="221000" class="thewords">And WooSports.com is the answer to that.</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="223300" class="thewords">Leo, I'm an investor. I want to see return on my money. That means you gotta sell for $1 billion to GoPro. Hear that, GoPro?</a></span></p>
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<p><span><a data-m="232800" class="thewords">How about sales? Purchase orders.</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="234700" class="thewords">First of all, I have to disappoint you. We're going to buy [you out]. [laughter] Then we can sell.</a></span></p>
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<p><span><a data-m="240500" class="thewords">No, so in terms of purchase orders, the arrangement there is that, again, we have a six months rolling forecast that guarantees certain quantities going forward. They're committed numbers from our distributor, Best Kiteboarding, and they trickle all the way down to our manufacturer, so they can build their inventory.</a></span></p>
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<p><span><a data-m="256900" class="thewords">The payment terms are rather favorable in that sense, that we get paid at FOB from our distributors. So they take all the risk at FOB, which allows us to almost have a negative operating cycle, and no working capital needs for that arrangement per se, and we have healthy net profits on units. So of every unit that we sell through the retail channel and distribution channel, we roughly have a net profit of $40-50, depending on the country where we're selling in.</a></span></p>
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<p><span><a data-m="283500" class="thewords">And if we sell direct, we have $110 of net profit per unit. And we're looking to sell 2,600 units this year alone.</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="293300" class="thewords">Okay. And you're the only thing like this that I know of. Is that correct?</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="298600" class="thewords">Yeah, we're definitely the only thing like this, in kiteboarding, but in action sports as a whole. So we have the first mover advantage, and we have, of course, tons and tons of interest on the market. And something we've learned is that this is not necessarily something like a FitBit that you have to convince people to buy. People are going to want to buy this, because if there's a competition going on at your local beach, you don't want to miss out on that, right?</a></span></p>
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<p><span><a data-m="322300" class="thewords">You want to be on the leaderboard, and you want to compete with your buddies. So we really expect there to be a very high adoption rate in many of those sports.</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="329100" class="thewords">And these are the professional kiteboarders?</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="332700" class="thewords">No, the device is pretty much for everyone.</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="335900" class="thewords">No, I'm saying there are professional kiteboarders, right?</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="337600" class="thewords">Oh yeah, yeah.</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="338200" class="thewords">And so these guys would be spending thousands of dollars on their equipment and competitions and all that kind of stuff.</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="343900" class="thewords">Well, I mean every kiteboarder that is serious about the sport — and there are estimated to be half a million in the world that are serious about the sports — more that have touched the sport, but half a million who are active in the sport. And they spend $4,000 on a set of kite gear.</a></span></p>
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<p><span><a data-m="357900" class="thewords">You need two kites, which is at least $1,500 each. You need a board, you need a wetsuit, you need a harness. And then you travel to go kiting, right? You move your lifestyle around, and you go to warm locations in the winter.</a></span></p>
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<p><span><a data-m="367300" class="thewords">So the average spend on the sport is really really high, whereas the $199 we charge for a device is more like a throw-in, right? It really enhances your experience, though. Makes it much more fun to go kiting.</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="379200" class="thewords">So is a kiteboard competition judged on artistic...? It would seem to me that every guy in the X Games should be having one of these things so they compare it on TV live. Except for I guess it’s not a radio — you only know after you unplugged.</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="395000" class="thewords">Yeah. I mean we've conceptualized a lot how we can get this data live, away from the athlete and onto the TV screen, for example, for competitions, and that's definitely the future, where I see this going — to be in the X Games, which is not only a great marketing tool, but also a great way to kind of validate your product.</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="414100" class="thewords">I would think even like Warren Miller Films or something like that, or the ski guys —</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="417800" class="thewords">Well, you know, what I'm thinking is like you watch the X Games and there's not like, "Oh, yeah, look at this guy doing this and that," he'd be like, "Yo, 6.9 meters and he stomped that landing with 3.5 Gs, hit it really hard, but goes off the next one, slides that [unintelligible] for 1.8 seconds. He held it longer than anybody before," right?</a></span></p>
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<p><span><a data-m="432900" class="thewords">So all that exciting data all of a sudden gives the sport, so to speak, a score.</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="436500" class="thewords">Well, it’s clear you could do this on a post-production basis, you know, adding it in. I think it’s sort of like the invention in poker of the camera watching the hole cards. Now everybody can feel along, and I think that's gonna be the case with Woo.</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="452100" class="thewords">Yeah.</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="452700" class="thewords">All right. Is there an official Woo noise?</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="457000" class="thewords">Woo! Maybe that? [laughter]</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="460100" class="thewords">That's what I was looking for. You're not exactly Ric Flair here, but —</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="463300" class="thewords">Oh, hey, if you want the original Woo noise, you gotta meet us out on the beach. You'll hear it all the time. [laughter]</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="467800" class="thewords">Okay, so I just saw Sally from South Africa.</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="471300" class="thewords">Yeah.</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="471800" class="thewords">And Johnny's from France —</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="473500" class="thewords">Yup.</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="473700" class="thewords">And, you know, we got an entire international team, but they're all doing math. Tell us about the team.</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="480200" class="thewords">So we actually have six different countries represented. We have France, we have Holland, the US of course, Germany, South Africa, and Zimbabwe. So I think it’s nine people, six countries.</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="492400" class="thewords">And you just got some Harvard guy, and the only reason he was able to qualify is he also is a [stud] athlete?</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="498300" class="thewords">He's pretty much the perfect [mole] that you would describe as someone who should work at Woo. He's a very passionate and enthusiastic personality per se. He's way into kiteboarding. He's always the guy who's out first and leaves the water last.</a></span></p>
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<p><span><a data-m="512700" class="thewords">But he also has a cum laude degree from Harvard, mechanical engineer, and he has a brain and a half. He's from Zimbabwe, so he's —</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="518400" class="thewords">Whoa, whoa, and your MIT Media Labs let him get away with bragging rights?</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="523800" class="thewords">I don't know, not yet. [laughter] So yeah, this is kind of a perfect mole. But yes, we are a diverse team of different nationalities that all kind of unite around this passion of, I'd say both technology and kiteboarding.</a></span></p>
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<p><span><a data-m="540000" class="thewords">And actually, entrepreneurship and kiteboarding are two somewhat related things, because you know, in both disciplines you take risks and you do things that might hit you hard, and you get out of your comfort zone, but you enjoy it.</a></span></p>
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<p><span><a data-m="551700" class="thewords">So in that sense, you know, it’s two related things, so it’s very easy to find good entrepreneurs in kiteboarding, and to, more than anything, build a really strong brand and culture around your company as well with that.</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="561300" class="thewords">And it’s all about accelerating and not crashing.</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="565000" class="thewords">That's what it’s all about. But as you will see, every now and then the crash is inevitable. [laughs]</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="569900" class="thewords">As long as you learn from the crashes.</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="571800" class="thewords">Exactly.</a></span></p>
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<p><span class="overidecolr">Danco</span><span><a data-m="572100" class="thewords">Words to live by. Thanks, Leo.</a></span></p>
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<p><span class="overidecolr">Koenig</span><span><a data-m="573800" class="thewords">Thank you.</a></span></p>
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