How 2 Entrepreneurs Turned an iPhone Charger Into a Million-Dollar Enterprise

Matthew Speiser

Matthew is a staff writer at Fundera. He has written extensively about ecommerce, marketing and sales, and payroll and HR solutions, but is particularly knowledgeable about merchant services. Matthew's writing has been published in Business Insider, The Fiscal Times, and NJ.com, among others. He has a degree in journalism from the University of Delaware.

Matthew Gedz’s iPhone kept dying on him.

As a proprietary trader, Gedz used his phone when he was not in the office to invest and trade remotely. If his phone died, he couldn’t earn any money. What he needed was a way to keep his phone charged all day long without having to plug it in somewhere.

While researching a solution to this issue, Gedz became familiar with a product that was just gaining traction in the market—iPhone cases that doubled as phone chargers. He decided to try a few out for himself and was underwhelmed with the results—the cases were expensive, took too long to charge, and worked unreliably.

Eventually Gedz—a 29-year-old Illinois native—started to wonder if he could develop something better. So he took his idea to Chingiz Aghayev—a neighbor in his Chicago apartment building and a self-proclaimed “serial entrepreneur.”

“When I heard Matt’s idea, that is when the magic happened,” Aghayev, 32, says.

This is the story of how Gedz and Aghayev launched Lit Mobile, a mobile accessories startup that has done almost $1 million in revenue in just over a year.

 

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Lit Wireless iPhone Battery Case. Say good bye to all the cords 🤘#iphonex #wirelesscase #batterycase #iphonexcase #iphonexlovers

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Launching an Ecommerce Business

Aghayev moved to Chicago from his native Azerbaijan when he was 18 to attend DePaul University. There he studied economics and marketing and became familiar with the concept of ecommerce—the act of buying and selling products online. By the time he was 21, he’d launched his first ecommerce store. Over the next 10 years he would launch five different ecommerce businesses selling everything from board games to 3D modeling services.

So when Gedz came to him with the idea for Lit Mobile, he already had the business mapped out in his head.

“Whenever you have a unique product idea, ecommerce is the best way to get out ahead of the curve,” Aghayev says, “I knew Matt’s idea would work perfectly for an online business.”

Thanks to his previous ecommerce ventures, Aghayev already had a vast network of designers, engineers, and manufacturers that would help them bring Gedz’s vision to market. So Aghayev walked Gedz through the process he used to launch his previous businesses. The first step? Figure out how they could make a product better than what was already on the market.

“We researched the hell out of our competitors, their product offering, and what their customers were saying about their product,” Aghayev says. “From there we created a list of the specs and features we thought our product needed to have to be better.”

The sample Gedz and Aghayev came up with was a solar-powered iPhone case charger with enough battery power to fully charge your phone twice over in as little as an hour. The phone could simply harness the sun’s energy, store it in a lithium-ion battery, and then send it wirelessly to the phone’s battery whenever you click the “On” button on the case. Aghayev and Gedz deduced that this combination of speed and power was unlike anything currently available on the market.

“There was not a single product that could do what we thought we could do,” Aghayev says. “We saw a huge opportunity.”

Once they had a draft of their product ready, Aghayev passed it along to his network of designers and engineers to draft up blueprints of how the product should look and function. They picked out the sample they liked best, then took their sample to China to interview manufacturers. Each manufacturer came back to Aghayev and Gedz with a mold of their product—a sort of physical prototype that would be used to make their product.

They selected the mold they liked the best, then signed a contract with the manufacturer that gave Aghayev and Gedz rights to the mold (so that a competitor couldn’t go and build the same product). By May of 2018, Aghayev and Gedz had received their first shipment of solar-powered iPhone case chargers from China. They launched a Shopify website and began selling them online for $80 a pop.

Lit MobileChingiz Aghayev (left) and Matthew Gedz (photos courtesy of Lit Mobile)

Sluggish Start

Aghayev believes the key to any good ecommerce business is marketing. When Lit Mobile first launched, Aghyahev hired a team of photographers and videographers to create compelling marketing collateral. He also hired a marketing agency to assist with Lit Mobile’s digital marketing efforts.

But between May and November of 2018, Lit Mobile only moved 4,000 units—while cycling through four different marketing agencies.

“We couldn’t get any traction in the market,” Aghayev says. “We thought our marketing might not be resonating or our price point wasn’t right.”

For Black Friday, Lit Mobile decided to run a special promotion—40% off all iPhone case chargers. Aghayev says they moved more units on that day than they had in the previous six months.

“With any business there are different pieces of the puzzle missing and once you find them all things start to come together,” Aghayev says. “On that day we found our last piece of the puzzle—people weren’t willing to pay more than $50 for our product. Once we learned that, sales skyrocketed.”

But success created a new issue: Aghayev estimates their monthly orders increased from 1,000 to 10,000, and Lit Mobile wasn’t equipped to accommodate that level of business. Up until that point, Agahyev and Gedz had been packaging and shipping orders themselves from a coworking space in downtown Chicago. Now Aghayev and Gedz didn’t have the time, or inventory, to send out hundreds of shipments per day.

Pretty soon the chargebacks and negative reviews started to pile up. At its worst, Aghayev says 25% of all their orders resulted in chargebacks from customers who were waiting weeks to receive their order. Aghayev and Gedz knew they had no choice but to face the music:

“We sent out an email blast to our customers explaining that our manufacturing couldn’t keep up with our growth and that is why they were all waiting so long for their orders,” Aghayev says. “And to our surprise, it worked. Our chargebacks dropped from 25% to 6%.”

The email blast bought Lit Mobile some more time to hire a fulfillment center to manage orders and negotiate a new deal with their manufacturer for increased production.

“I guess the lesson is to just be honest with your customers,” Aghayev says.Lit MobileLit Mobile Solar Power Bank (photo courtesy of Lit Mobile)

Finding a Partner to Support Growth

Renegotiating with your manufacturer is an expensive proposition. Lit Mobile’s manufacturer required that they prepay 30% of their order upfront. Up until this point, Gedz and Aghayev had invested their own money into Lit Mobile, and put what they couldn’t afford on a business credit card. This was the first expense they didn’t have the money for.

“We needed to find an alternative method of financing,” Aghayev says. “But everywhere we went, all we got offered were loans with skyrocketing rates.”

Eventually Gedz discovered Fundera, where he was connected with senior loan specialist Alex Pagan.

“The process was so simple and Fundera was able to match us with a variety of lenders that offered us a fair rate,” Aghayev says. “Alex then walked us through which product would be best for our business, which was extremely helpful.”

Within a matter of days of contacting Fundera, Lit Mobile was able to secure a $75,000 line of credit from Kabbage. They used the money to pay off their manufacturer, allowing them to increase production and fulfill more orders faster.

“This business is really just me and Matthew, but we depend on a lot of partners to make it work,” Aghayev says. “I now consider Fundera one of those partners.”

Running a Lean Enterprise

Gedz and Aghayev are the only full-time employees of Lit Mobile for a reason—Aghayev believes ecommerce businesses need to be run as lean as possible.

To that effect, everyone who works with Lit Mobile—from designers and engineers to marketers and manufacturers—are third-party contractors hired through websites like Upwork. This way, Aghayev says he can hire the person he needs at any given moment to “put out a fire.”

“This type of business is about solving issues as they arise,” Aghayev says. “I would have to hire a lot of employees to fix all the problems that come up. I’d rather bring on someone ASAP that can fix an issue without having to commit to them long term.”

As for working in a partnership, Aghayev says transparency is key. To promote transparency, Gedz and Aghayev have set up a system where all of Gedz’s emails get forwarded to Aghayev, and all of Aghayev’s emails get forwarded to Gedz.

“This way there are no surprises,” Aghayev says.

In terms of division of labor, Gedz mainly oversees finance, customer support, and shipping logistics, while Aghayev handles marketing, manufacturing, and design. Both men work round the clock to service the needs of their business. Aghayev says he has adjusted his sleeping schedule so that he can interact with his manufacturers in China during their working hours.

Overall, Aghayev likens a business partnership to a marriage.

“We eat together, we work at night together, we travel together,” Aghayev says. “You have good days and bad days, but in the end the business is your baby, and both of us are just trying to do what is best for it.”

Eyeing Major Growth

Lit Mobile has sold 40,000 units in the past six months and is approaching $1 million in revenue. Although their wireless charging cases for the iPhone X, iPhone 8, iPhone 7, and iPhone 6 are still popular, their best seller is a product they launched on Black Friday last year—the Solar Power Bank.

This is a platform you can rest your iPhone on to charge wirelessly. It’s 20,000 milliamp lithium-ion battery can hold eight full iPhone charges. It can charge itself fully in as little as six hours, and can give your iPhone a full charge in one hour. It also comes with three USB ports to charge iPhones that cannot charge without a wire (i.e. non-iPhone X phones). In addition, the Solar Power Bank can charge Lit Mobile iPhone case chargers.

“All of our products are designed to make your day-to-day life easier,” Aghayev says. “We come up with ideas for products by interacting with our customers on social media and creating solutions to things that will help them.”

That is how Lit Mobile came up with the idea for their latest product: a solar powered camping device that can perform triple duty as an AC unit, speaker, and iPhone charger. Aghayev expects the product to launch in time for Black Friday 2019—which is when Lit Mobile expects to do a majority of their business for the year.

“The way ecommerce works, we’ll probably do as much business in Q4 as we will in all three other quarters combined,” Aghayev says.

Until then, Lit Mobile is focusing on building up inventory and breaking into the retail market. Aghayev says he is currently talking to a variety of wholesalers about getting Lit Mobile products on the shelves at various retail outlets.

By the end of 2020, Aghayev believes Lit Mobile will be a $50 million company.

“We are setting things up so that by the end of 2020 Lit Mobile will be fully self-sustainable and the only thing Matt and I need to do is hire people to replace us,” Aghayev says.

For entrepreneurs looking to launch their own venture, Aghayev has a word of advice:

“Keep testing your product and never give up,” Aghayev says. “If you know there is a market for your product or idea, you just keep testing it until you find a way to make it work.”

Editorial Note: Fundera exists to help you make better business decisions. That’s why we make sure our editorial integrity isn’t influenced by our own business. The opinions, analyses, reviews, or recommendations in this article are those of our editorial team alone. They haven’t been reviewed, approved, or otherwise endorsed by any of the companies mentioned above. Learn more about our editorial process and how we make money here.

Matthew Speiser

Matthew is a staff writer at Fundera. He has written extensively about ecommerce, marketing and sales, and payroll and HR solutions, but is particularly knowledgeable about merchant services. Matthew's writing has been published in Business Insider, The Fiscal Times, and NJ.com, among others. He has a degree in journalism from the University of Delaware.

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