Project Startup Update Week 19 - First customers!

They say that one of the major milestones in starting a business is the getting the first customer. I guess you could say we achieved that this week (inked the deal but haven't taken payment yet). Although I initially thought that the first bite would be from a friend who would be a test customer, it turned out to be another company in the health & wellness space. This company has been operating in Beijing for a few years now, has done well in selling retail health products and recently expanded to water and air. They decided to private label a water filtration device (healthily priced at over USD 1000). Yet, amazingly, they didn't have any R&D or test results to show how well the filtration device was doing! Normally, when you certify a water purification device through an agency like the NSF (National Sanitation Foundation), you undergo rigorous testing for device quality, safety, marketing truthfulness, and most importantly, contaimination reduction claims. They didn't get this certified (it's not a requirement in China, surprise surprise), and so had no idea whether this was working or not. They had gone to a water testing company in Beijing and were not satisfied. When I pressed for details, they said that it was because the company gave them no guidance on what they should test, didn't seem to do it scientifically, and just gave them a report with no interpretation.

This was great because their experience is exactly what we are trying to address. So, I spent probably close to 20 hours either meeting with the product manager, giving them free advice about Shanghai water, different filtration systems, researching the certification process, advising on contaminants and health effects, then suggesting different courses of action. The good side effect of this is that I learned a lot in the process. Probably put together the only 6 page statement of work for a $1200 project in existence, hehe. Although it took almost 2 months, this week they finally gave the go-ahead on a fairly comprehensive water comparison testing. If we do a good job (which I'm pretty confident we can deliver), not only do we establish credibility with our testing partner that we are doing real business of a healthy size (~$1200 project), we also are building a future business partnership with this client. They've talked about selling or pushing our testing services in their retail store and we're also interested in them being the fulfillment partner for some solutions.

Today, we also had our first residential customer! It was my childhood best friend who's lived in SH for 6 years. Recently married and expecting a baby AND having just moved into a new apartment, he and his wife, had two good reasons for getting tested. Of course, even if he wasn't interested, I would have leaned on him pretty hard, since I was his best man :) I ran them through a questionnaire about their building profile, health conditions, symptoms, etc. They didn't raise any alarm bells, so I recommended a middle of the road sort of package, focusing on air particulates, VOCs (volatile organic compounds), and lead identification, which are all particularly relevant to expectant mothers. The inspection went smoothly, except that it was a little long (2 hours long). His results will be pretty baseline.

Over the next couple of weeks, we are running a friends and family special, which lets us fine tune our procedures, reports, etc, get feedback, and hopefully spread word of mouth. In exchange, friends and family get tested at near cost. I just sent out the brochure in an email on Friday, and the weekend has been pretty quiet, but hopefully there will be some nibbles in the next few days.

Last mini-milestone: we officially completed our business incorporation in HK last week! Why incorporate in HK? Setting up a wholly-foreign owned enterprise (WFOE) in China is a long, iron-bound process, and making any changes to equity ownership, etc is painful. So, many companies set up a holding company in HK and then make changes through that. The HK process only took about 2 weeks (and $1600 or so). Pretty cool feeling to have the corporate stamps and embossing tool. I went a little crazy and ran around embossing everything in sight :)