How Josh Carr Rebuilt Echo Water Into an $18M Hardware Company

TRANSCRIPT SUMMARY:

00:00 - Intro & guest welcome
01:30 - Car restoration & personal background
04:30 - Business turnaround analogy
07:00 - Visionary founder & early hydrogen water
10:30 - Restarting the company from zero
14:00 - Entrepreneur mindset & first sale excitement
17:30 - Team strategy & “mobbing” workflow
21:00 - Product explanation (hydrogen water tech)
26:30 - Scaling the business to $18M
32:00 - Product design & manufacturing challenges
38:30 - Hardware vs software future trends
45:00 - Business ideas, innovation & entrepreneurship advice

FULL TRANSCRIPT

Josh Carr (00:00)

Making a prototype is easy, mass production is hard. The strategy comes by doing two things that weren't formally connected in other.

Jeff Holman (00:08)

Welcome back everybody to the breakout CEO podcast. I'm your host Jeff Holman. And I'm here today with Josh Carr from Echo Water. Josh, it's good to reconnect with you. We know each other from outside of the podcast world. But it's fantastic to have you on the podcast today.

Josh Carr (00:23)

Yeah, I'm happy we, I guess it was kind of serendipitous that we ended up in this spot, but it was like, Hey, know, Jeff, this is going to be great.

Jeff Holman (00:31)

That's right. That's right. Somebody reached out to me and said, Hey, Josh is doing some shows and you know, would you be interested? I'm like, I know Josh, of course I'd be interested. I want to hear what Josh is up to. It's been, guess you've been in your new thing for about three years now since you're just saying you just passed the three year anniversary, right?

Josh Carr (00:47)

Yeah, so yeah, it's probably been three, three and a half years since we've talked. So fast, isn't it?

Jeff Holman (00:51)

That's fantastic.

my gosh, it does. It does. I don't want to start projecting ahead and be like, well, three years, three years, then all of a sudden, you know, the, what are those diagrams people use and they fill in the dots are like, this is how many months you have left.

Josh Carr (01:07)

yeah, there's some, there's one you can get online that has how many weeks that you're alive, you know.

Jeff Holman (01:12)

That's right. That's right. Yeah, no, that's not my that's not my thing. So but it does go fast. And I'm glad to reconnect and hear what you're doing with Echo water. So we just as a nice breaker questions though, and you were telling me before we jump into the into your business stuff, you're telling me about the cars that you're working on. So how did that come? Have you been always been into tinkering with cars?

Josh Carr (01:35)

⁓ you know, we grew up really poor. So it was, ⁓ fixed the car to survive. And, ⁓ even from a young age, you know, ⁓ and so it goes from that to now I do it to relax and I don't really have to do it. but.

I do really enjoy it. It's a nice process switch from being on sales calls and phone calls all day and working on the computer all day to just working with your hands and, you know, turning a wrench, getting your hands dirty. There's something cool about it too, of like taking something broken and old and making it work again. Really just so satisfying. think, you know, there's a symbol there for people as well. And I think that's kind of interesting. You know, we're all, we all feel.

that way a little bit.

Jeff Holman (02:28)

as individuals. Yeah, you're probably right. We've all got stuff that we could maybe tinker with and fix a little bit more. Maybe not tinker with and break it again. I don't know. Maybe.

Josh Carr (02:38)

Yeah, but you you get a lot of ⁓ wear and tear as you go down life's highway, you know and It'd be great to just have a reset, you know I told you I restored that old beetle and I saw it in a field and it's a very rare car and ⁓ Most people probably wouldn't think a beetle is rare, but by the time you get to the 60s you're importing ⁓ They're importing about a million a year into the United States

But in the 50s, they imported 2,400 of this model. so when I saw it in the field and I was like, this car has to be saved. I wasn't even looking for a project, but I knew it had to happen. And when I started, at first I thought I'll just clean it up, put a new coat of paint on it, and be ready to go. But you start taking the bad paint off, and that car had been painted 14 times. There's 14 different colors on the car. Wow. I this great picture of the hood.

where I've been sanding and it's got this like rainbow effect of all these different colors. And ⁓ like that card lives so many lives, you know, it's really just kind of fascinating. And I think we all do that same kind of thing and ⁓ something very human about it. And, you know, not giving up on the old thing and there's still value there and everything's going electric and digital and those tangible old physical things that stink and make loud noises are like

I know they're

Jeff Holman (04:05)

Yeah. Yeah. No, that's awesome. Well, it had me thinking when you mentioned it before, it had me thinking in a business context, you know, we're not necessarily trying to revive and fix really old, you know, outdated businesses, but, a lot of businesses go through that turnaround. go through that period where, where the, know, the original founders say, man, I just don't know that this is something that it's worth me putting more time and energy into. they, so they, you know, either get ready to take it to the junkyard or they get ready to.

you know, sell it to somebody else for parts. And I think if I if I'm not mistaken, your story with Echo water might follow a little bit of that same path you're coming to keep the business going, right?

Josh Carr (04:49)

Yeah, Paul, the original founder, is kind of a visionary. I think we've all known these entrepreneurs who see something coming, but maybe they see it way too early. And that's kind of how Paul is. He saw hydrogen water as a solution to the problems before there were even any clinical studies showing that it was such a powerful antioxidant and all the things that it did. He had kind of been using intuition.

kind of figured that out. about a year after he launched the business, the first study came out in nature showing the effects of hydrogen water on the body and all the benefits and how amazing it was as an antioxidant, you know, and he, ⁓ and he had kind of seen that coming, that kind of visionary thing. But after, you know, beating that drum for 10 years and trying to get people to pay attention for so long and bring awareness to it with

you know, not the degree of success that he thought it should have. ⁓ he was in a spot where he was frustrated and he, ⁓ you know, we needed to inject some new life into it. And so he'd run into some business problems and some lawsuits and some other stuff that, ⁓ put him in a tight spot and to give us the opportunity to pair up and to create a new business and tackle this thing together. And so building on all the knowledge and stuff he had, you know, that car restoration analogy, think is a good one because it's,

He'd taken it and taken the journey so far and then needed someone to come with him the rest of the way, know, to take it to the next level.

Jeff Holman (06:26)

Yeah. That would be me if I was restoring a vehicle. I've taken apart one or two things in the past. They never quite make it back together. And I'm like, Hey, is anybody know how to put this back together? I don't know if it's a, I don't know if the knowledge thing or a patient's thing or something, but it's not my forte to sit in a problem, mechanical things, unfortunately.

Josh Carr (06:45)

Yeah,

my brain's just wired to do it. It's like second nature. So I can take it apart and see just the pieces and know how it goes together. I could probably walk into your project and reassemble it, you know, but. ⁓ And I think that's a good analogy of the business. And it's been a lot of fun. know, Paul had accomplished so much and brought the business so far that it wasn't starting at zero.

Jeff Holman (06:56)

⁓ if I still had it.

Josh Carr (07:13)

per se, I mean, we had to start at zero revenue, just like everybody, but his depth of knowledge, the things that he'd encountered and learned, the equipment that he'd designed and developed over the years gave us a running start ⁓ for sure. And so then it was just, do we get people to pay attention to this? And, you know, how do we turn this into something for today, for modern times? So yeah, it's been a lot of fun.

Jeff Holman (07:40)

Well, I want to dig into some of the details about that. But I'm really curious if you have ⁓ some insight or even just a maybe it's even an outside perspective at this point, because it might be Paul's perspective more than yours. But I've talked with other CEOs about and some of them have done this themselves. Some have come in and rescued other companies from people who've done this. But we've talked about being ahead of the wave or being ahead of the curve. And I'm curious if you have any any perspectives in dealing with Paul as to

What is it that kind of motivates people like Paul to take real action on something when it is ahead of the curve? Is it the excitement of discovery? Is it the, you know, just the challenge of bringing something new into life that didn't exist? Do you have a perspective on that? Or is that a question? Paul, I have to answer.

Josh Carr (08:29)

No, I've done a number of startups and I've done a number that are in the, like, this has never been done before world. I get just as excited. I get excited by persuading people and by solving a problem and having that expressed as a transaction. So I tell people and I don't think people believe me, but it's absolutely true. I get just excited for that first $500 transaction as I do for a $500,000 transaction later.

It's like, how do you crack the code and how do you figure this out? ⁓ And for me, I love puzzles and I love problem solving. Maybe that's something with the cars. But I learned years ago, like I'm in my happy place as long as my brain is doing some difficult problem. Whether that be a 3000 piece puzzle at Christmas time or putting the pieces of a business together or trying to figure out how to persuade somebody or tell a story better.

It's exciting for me to just kind of solve that and figure that out. And then, you you're bringing something to life. That's such a rush, but it isn't for everyone, you know, like you have to have some tenacity. It's got like, I think other people have said, if you're willing to work 18 hours a day for six hours a day pay, then you're cut out to be an entrepreneur.

Jeff Holman (09:52)

⁓ did pay you for six? I didn't realize.

Josh Carr (09:54)

They don't.

So I don't know where that came from because you don't get paid for six. And so, you know, we were talking about this before it started. Sometimes you go very, very long time without pay and, you know, the leader eats last generally, even though they say don't do that. So you have to keep your people paid and fed and there'll be times in the business when you make these trade-offs and you do these hard things and, you know, sacrificing good for something better. So. ⁓

Jeff Holman (10:23)

Well, and I love that you I love that you bring up the transactional validation of it, right? I was I was at dinner last week with some people. And one of them was a younger business owner. He's he's earlier in his career, but he's got his own business and he's, you know, plugging away. But he he told the story of his first t shirt sale, right? He he has a brand, they provide a service to people. And and one of the things he's like, well, I'm to make some I'm going to make some t shirts. And he said I was out one day fishing.

on the river. It actually is his business is, you know, ⁓ guiding fishing tours and stuff like that. And he said, I was out on the river and all of sudden my phone made this weird noise. You know, it's like the sound of money. I'd never heard it before, but I had just launched my t-shirt sales. I just, you know, like got on a site and got hats and t-shirts or whatever. And he said that sound of that money, you know, that cha-ching, we all know what it is. Right. He's like, that was the first time I'd ever heard that money.

And I'm not sure I've ever made a sale. It had probably only been, you know, four or five years. I'm not sure I've ever made a sale that's as exciting as that very first chiching that I heard.

Josh Carr (11:30)

something about it.

Jeff Holman (11:32)

Yeah. Is that part of what drives you then? Is it kind of a close the sale or, or like, is that just validation that your idea has?

Josh Carr (11:43)

That's the measuring stick to know that you're on the right track, right? Because you're trying to solve a complex problem. It's multifaceted. ⁓ And the problem is extended across time. There's no finish line ⁓ at any point. Maybe if you sell the business. But even then, there really isn't a finish line. But how do you know that you're going in the right direction and that you're making progress towards the goal?

Like in ⁓ younger times, I worked in other jobs. I worked as a landscaper, worked as a framer, did all these like blue collar kind of jobs. And those are great because at the end of the day, you can see what you've accomplished. And in most of the things in the entrepreneurial world, and I'm sure in your world and law and everything else you're doing, podcasts, right? How do you measure that you've accomplished anything? And so I think that's the yardstick.

that says you're on the right path, you're doing something, it's working to some degree. And to sell one t-shirt, he had probably put in 800 hours of work, right? Building websites and making designs and talking to people and doing all these things. And so, he just sold a t-shirt for $20 and you do that math and he made like a quarter of a penny per hour. But it's still, it's just so exciting because...

Yeah, that's it's the yardstick.

Jeff Holman (13:08)

Well, are you still are you still able in your role today, the CEO role of Echo Water? Are you still able to chase that type of feeling? Or is your role completely different? Now that you're rebuilding this this company or have rebuilt this company, I think? ⁓ Is it is the role? Do you get some of the same satisfaction there? Or do you just find it's a different

Josh Carr (13:31)

You're never done building right and you get like certain deals that you close or opportunities that come we just We were always launching new product or always experimenting and trying new things and so it's fun just you know, we we started this way of working together that they do at Tesla and ⁓ called mobbing ⁓ it's a it's something that

It's taken from software development where you find a problem and you ⁓ get a group together to solve the problem. And in code, they're very short generally. So it's like, Hey, we have this bug, we have this thing. Let's get three sets of eyes on it and see if we can solve the problem. Yeah. It's, it's a sprint in normal software. Like people do a two week sprint where it's like, we have these goals we want to accomplish. And so over these two weeks, we're going to build against that goal and then we'll have a launch date.

and then we'll do a new sprint. A mob is more like a bug, some breaking change, some sort of thing. And then you just get intense focus around it for a brief period of time. So Tesla started doing this ⁓ with manufacturing. they, so if the assembly line, if there's some problem, they shut it down, they group forms, they solve the problem, then they go on their way.

And then they started doing it for every aspect of the business. And we started doing this ⁓ as well. And it's such a fun way to work because it's like, what is the biggest problem facing the business this week? Like if we could fix one thing that would make a difference, what's that one thing? And so then we'll get a small group together, you know, three to five people and they don't answer email, they don't answer phone calls. They don't do anything else for three days except work on this one problem. And it's awesome.

It's like the greatest thing in the world. Now I don't answer my email anyway. They just pile up in there. like people know, hey, they're in a mob. They'll get back to when they can. But it's like such a satisfying thing to just be able to have that deep focus and that attention with a small, tight team, all working towards the same goal, solving this problem. That's been really, really fun.

Jeff Holman (15:48)

And seeing the results, right? That's a project.

Josh Carr (15:50)

Because

you can see the results quick. It's not like the first time we did it. We just did it as an experiment. We didn't work this way. You know, we'd had the normal projects and people meeting every week to move projects forward. And so ⁓ we decided to do this. And for in three days, the team cranked out this stuff that was I was so I wasn't involved in the first one. And I was so blown away by their results. Like a

When they're presenting what they'd accomplished, I'm like, you guys realize this would have taken us two or three months. Like had we done the old process, this would have taken us two or three months and you've done it in three days. And it's unbelievable. Like the volume that was done by that small team, just being super focused. ⁓ and so that's really rewarding and it gives you some of that immediate feedback. ⁓ I think we, you know, as much time as we can spend doing those hyper productive, deep focus kinds of things. It's really great.

Now in my role, I've got, I've spread so wide across so many things, cause you've got finance and HR and like all of the different things and so many, you know, you have to keep so many balls in the air. So I don't get as much time to have deep focus and like deep engagement on a problem as I'd like to. ⁓ I think that would be my goal is like, ⁓ getting to that point where I have such competent people and process in each of these verticals that they really don't need me. ⁓

You don't need me to weigh in, don't need my buy-in or, know. ⁓

Jeff Holman (17:23)

Well, what does what does the team look like? What I mean, what what did it look like when you got into the company if there was a team? And and what does it look like look like today? And and I guess, you know, give us a little bit of background on what the company is anyway. You've mentioned the hydrogen water, tell us a little bit about what you do in the business.

Josh Carr (17:38)

Yeah,

so Paul was shutting down his business. so we, we let everybody go that was at the old business and let people reapply for jobs if they wanted to be involved going forward. And we ended up just keeping two people, two customer service people. And, and ⁓

Jeff Holman (18:01)

And

did you have customers at that time or was it really just a reset?

Josh Carr (18:04)

It was really a reset. that, you know, Paul had done it to some degree before and had some success. So he had a decent network, but we didn't have customers. All of that, I mean, the old business was closed down and all that went with that business. And so we had to kind of go and find new customers and ⁓ recreate things, build a new website and, know,

get a new headquarters, new warehouse, you know, just like, um, we bought some assets from that business. We bought some inventory and some things like that. Um, but, uh, we weren't able to get them for any better deal than you'd get them if you just bought them from the manufacturer, you know? So, um, yeah, that first month we did like took quite a bit of hustle, uh, but we did 20,000 in sales that first month. And that's not enough to,

pay everybody and keep the lights on. If you're selling software, you have high margins and you can get away with lower revenue numbers, but when you're selling a physical product, you've got to fight and claw and struggle to get like a 10 % margin after everything's said and done, wholesale and everything.

Jeff Holman (19:22)

Sometimes not even that high depending on what you're selling and what you're already selling.

Josh Carr (19:28)

Yeah. And what stage are in, right? ⁓

Jeff Holman (19:30)

Give the audience an idea of what it is you're selling and you know.

Josh Carr (19:34)

Yeah, actually I'll show you. We have a, so this is a product I invented after we launched the business, but we were selling the Echo Go Plus, which I have one here somewhere too, but I don't see it. But they're hydrogen water bottles. so hydrogen water is the antioxidant that your body's evolved to use. Normally you generate hydrogen in your gut through fermentation.

but all of our gut health is trash. And so we're not producing the hydrogen that our body needs. So there's this, your body's demand for hydrogen, especially as your age goes up and your ability to create it is here. And so we try to fill that gap. And so what we do is this bottle, you fill it with water. In the base of the bottle, it's a touch screen with an app. Let's see if, get that to focus maybe. And there's a,

hydrogen generator in the bottom. So there's two platinum coated electrodes with a proton exchange membrane in between and the oxygen, it uses electrical current to separate the water into hydrogen and oxygen. And so the oxygen comes out a little port here on the bottom and the hydrogen gets bubbled up into the water. And so your body is naturally absorbs hydrogen through the gut as it produces it with fermentation. And so we just try to deliver as much hydrogen to the gut as we can. And as you do that,

your body is able to better control inflammation. Hydrogen is the smallest, it's number one on the periodic table. And so can go anywhere in the body and the body's evolved to use it. And so it's extremely effective antioxidant. ⁓ It's also selective antioxidant. So this is a little nuance, but there's ⁓ some process in the body that requires ⁓ oxidation and it's a positive thing.

And ⁓ free radicals and oxidation are not always bad. That's why if you're talking to an expert, they'll say oxidative stress versus just oxidation. So oxidative stress is bad. That's when that oxygen is missing an electron, and it's going to steal that electron from something else that needs it. And so that's where hydrogen comes in, because it's got that free electron in its outer shell, and it wants to bind with oxygen. So it's really, really easy to do.

and they're a match made in heaven. So it works extremely well. Other things that we use as an antioxidant like vitamin C and things like that are effective, but they're not nearly as effective as hydrogen. And so it's kind of on the cutting edge. There's now about 15 to 1800 studies on hydrogen and the health benefits. But like I said, when Paul started, there weren't any. And the first study came out in 2008. So in the medical health world, 2008 is a newborn baby still.

Yeah, we're right on the bleeding edge. You know, if we were talking like internet technology or something, that's ancient history and no one even uses it anymore. But ⁓ yeah, we're right on the bleeding edge. And so we produce this bottle, which is the Echo Flask. And then we produce ⁓ units for the home and then whole home filtering, like really high end filters, not just like stuff you could get at the big box store, but things to eliminate all of the

the PFAS and forever chemicals and all the nasty stuff that we're now discovering is in our water, all the hormones and, you know, and I'll, we don't really know what that is doing to people other than we know the outcomes are not good in the studies that done. You look at the contaminants in the water, we have a, a tool on our website where you can check for water contamination. So you put in your address and zip code and it'll pull up the EPA data for your specific area.

and then show you how far above health guidelines you are. Because your local government cares about stuff that's going to kill you quickly, not stuff that's going to kill you in 30 years. And so people think their water's clean because it's clear, but we are learning a lot and we're learning it really fast. And as you go down the list of contaminants, it's basically like cancer, cancer, cancer, cancer. you know, in the studies they've done on this crazy thing, everyone gets cancer and on this one, everyone gets cancer. And so...

There's a lot of stuff in our water from industrial process and pollution and ⁓ sometimes natural too, just depending on what your water source is that accumulates across time. And so we try to get people to have as clean a water as they could possibly get, and then make that water as good as it can be by adding hydrogen. So it's a very natural focused, natural health kind of focus on the company. And the other thing that I think is really cool about it is

Everyone's taking supplements and vitamins and doing all these things ⁓ No one's thinking about that foundation layer. It's imagine if what's a good analogy? People had focused on Like Amazon the what goes in the box and what the box is made of but it still being delivered to your house by Pony Express right and Water is the delivery mechanism for everything else you're taking and having the right water makes everything else work better

but no one's thinking about that layer. They're like, well, I need more supplements. I need more of this, more of that. And we're like, you can improve everything you're doing. If you're trying to eat clean, it can be more effective. If you're trying to take some peptides or some vitamins or trying to reduce your blood pressure, whatever, ⁓ everything you're doing can work better if you're using the right water as the foundational layer. And so it's a really fun ⁓ project to be involved in. It's very, very cutting edge.

We're doing some cool things. I've always wanted a patent and now I've got several patents and cool. ⁓ yeah, it's, been great.

Jeff Holman (25:23)

That's awesome. Well, I'm curious, do you see yourself as a water company or a health and wellness company or a

Josh Carr (25:30)

We're

a health and wellness technology company. So, you know, it's not a software company. It's like we are hardware focused. So like when you interact with us, you're going to end up with a physical something right in your home, under the kitchen counter, in your hand, ⁓ you know, in the utility closet. But we are ⁓ a wellness technology company. So all of our ⁓ endpoints are connected to our app where all of them will be soon.

And all that data gets integrated and gets shared with your health care and with all your other things. So you would categorize this more like a whoop or an aura ring or something than you would.

Jeff Holman (26:12)

Then you would Dasani water or some some water brand. Yeah.

Josh Carr (26:14)

We don't sell a bottled water. sell a bottle that makes water.

Jeff Holman (26:19)

No, I love that. I'm curious though, what, I know you're telling me beforehand how you got into the business, but it's been three years building it from zero. Where have you been able to bring it to today?

Josh Carr (26:31)

We did 18 million last year. We haven't taken any investment or anything. So it's all been bootstrapped, which is a totally different set of challenges. We are considering fundraising this year because we've been able to create so much value and the wellness tech is trading at a high multiple. So we think we can raise money to help us accelerate into this. I feel like there's a gap in the market that we can fill. And I want to...

get to that gap before anyone else does. so, but yeah, we've just bootstrapped it all the way. And so I know we'd probably be two or three times as big if we'd raised money at the right spots. Yeah. But we weren't ready to do it.

Jeff Holman (27:15)

Well, that has its own set of challenges too, Yeah.

Josh Carr (27:20)

⁓ And you, you know, we didn't have everything in place to... We would have had to give up too much of the company ⁓ to get anything substantial. And then that hinders you from doing future rounds and going where you'd like it to go. And so now we're in a good spot where we've got all the foundational stuff in place and all the money that we would raise could just be used to accelerate. And so... ⁓

I'm well, I'm not 100 % comfortable, but I'm 90 % comfortable with where we are in fundraising now that I would like before. probably wouldn't have said yes to money. And now I say yes to the right money from the right people. yeah.

Jeff Holman (28:02)

that makes sense. that, you know, not a bad time to not be raising when the market's been ⁓ so wild, the last few years, wildly down in a lot of ways.

Josh Carr (28:11)

So

it's been kind of a chaotic time. And what's really interesting is, uh, after CES this year, I had told anyone we were going to raise money and, um, but I just started getting call after call after call from VCs. I just kept saying, how do you find us? And they'd always say the same kind of thing. Oh, we have our people, we have our research, we know what we're looking for, you know, but I probably had 30 VC meetings in January and, uh, I was,

Yeah, and I was like, how are like, how is this happening? You know, I haven't reached out to anybody. How do these people know we even exist? You know, so

Jeff Holman (28:51)

I want to hear some more about that. But before we do that, I want to maybe step back because going from zero to 18 million in a hardware based company isn't an easy thing, especially when maybe you started with some baggage or some baggage that you had to leave behind. What were some of those kind of major milestones that you hit along that path? Just a quick note about our guests. I host the Breakout CEO podcast to share behind the scenes insights from scaling businesses.

As an attorney, I see the real challenges leaders face long before success becomes public. But client stories have to stay confidential. So we invite guest CEOs to share their own moments of struggle and success. I'm so grateful to our guests and my team at Intellectual Strategies for making this show possible. Now, let's get back to the show.

Josh Carr (29:43)

I think the launching the Echo Flask, we had a different bottle that we sold before and we had a lot of Chinese knockoffs that had come into the market that really don't do what this does. But they would, there's no regulations. They make the same claims. So people would see our bottle and say, Oh, that's kind of expensive. Oh, let's go get this cheap one on Amazon. Not knowing that, you know, my biggest fear was they would think, Oh, well, hydrogen water doesn't work because they got a bottle that actually wasn't even producing hydrogen. Right.

Jeff Holman (30:13)

They got a bubbler or something.

Josh Carr (30:14)

Yeah,

something fake. so I'm like, you have a bottle with bubbles in it, you know, like sparkling water. It's not the same thing. So ⁓ in fact, hydrogen bubbles are so small, you can't even see them. You see bubbles coming up, but those are the ones that are too big where they've ⁓ combined together and they go to the top. Yes, to out gas. So ⁓

Getting this product that was so distinctly on our brand and was the launch of us being able to do the integrated app. That was a huge milestone. And at the same time, we had the Trump tariffs coming on. We moved manufacturing from China to the Philippines. And so there's all of these factors that combined at that point. That was a pretty stressful time because getting hardware right is extremely difficult. Getting software that works with the hardware is extremely difficult.

So luckily we have customers that are very generous to us. They know that we're on the very cutting edge of things and they were very forgiving of late deliveries and mistakes that we made and whatever. ⁓ They've ⁓ had a lot of grace with us because of that. But that was really a major, major milestone because now we own the entire production from top to bottom.

I mean, I'm paying for, I'm paying invoices for O-rings and little plastic resin beads and just all of the different components to go into it. And it's so shockingly complex. You would never dream that it could be so difficult. ⁓ But that was, that was major. This year at CES, we announced a big bottle like this size.

Jeff Holman (32:03)

Mm-hmm.

Josh Carr (32:05)

And that'll launch early summer probably. And we announced an all-in-one system that does reverse osmosis filtration and hydrogen and UV ⁓ that's designed to go under your kitchen counter. And it's a smart device that connects with the app and ⁓ really the expression of all the other things that we've been doing. ⁓ so those have been pretty major and controlling the manufacturing on all of those ⁓ makes a big difference.

Jeff Holman (32:35)

What led you with

Josh Carr (32:40)

What's

like a ⁓ flask shape like you'd have with a hole?

Jeff Holman (32:44)

I

love it. I'm you showed that because it looked more it looked more square from when I saw on screen before but I can see that now. What what led you to think that of that a that a new product design would would make a difference? Was there a problem with the old one? Were you getting feedback?

Josh Carr (32:59)

The NoDueling worked great and a lot of our customers still use it and you know our bottles have a five-year warranty and so they're just you know they'll use it till it wears out. The biggest problem was it was easy to copy and ⁓ we didn't have

Jeff Holman (33:16)

from

manufacturing and a design standpoint.

Josh Carr (33:19)

Yeah, we didn't have any design patents on it. And it was also a lot easier to manufacture. And so we had a lot of fast followers like the Chinese are great at this. And so we launched that bottle within a year and we were selling pretty well. But within a year, the market was flooded with all these cheap knockoffs and they'd even use our same brand name on Amazon and they'd use or a very, very close derivative of our brand name on Amazon.

So it was for one, I knew that in order to create the value that we wanted to create in the company, we had to be in the health technology space, not in just like, not just company that sold a Chinese bottle, right? Yeah. We had to have an integrated system.

Jeff Holman (34:11)

Did the company not have its own design before? it really?

Josh Carr (34:15)

There's our own design, ⁓ but it wasn't a design language. Like it's the difference between like an IBM clone computer and then when Apple launches the Macintosh. That's a really old reference.

Jeff Holman (34:28)

But it's got personality. This is not another brand looking. Maybe it's a white labeled product. Maybe it's not. don't know. This is new from the ground up with your own business personality added to it.

Josh Carr (34:42)

That's right. And every product that we're launching follows that same design language. And so when you see one of our products, you know, it's our product. It's not like, is that them or is that a Chinese bottle or is it? And we've had to stay on top of that. There's a lot of Chinese companies that have tried to do it. In fact, when we launched that at CES, guys would walk up with these scanners, these 3D scanners and walk around the

3D map right in front of you, right on the trade show floor. yeah, was like everything else was, it was a great product that worked great, but it wasn't specific to us. It could have been launched by any brand in the world and there would have been no distinction, right? wasn't like this was an echo.

Jeff Holman (35:35)

This wasn't even necessarily a technology play, although I imagine you've been improving the technology as you go to, but the real distinction here is the design elements.

Josh Carr (35:45)

There's

some pretty major ⁓ evolutionary jumps in the technology as well. For example, our old bottle could do three parts per million, and the part per million that you can put into hydrogen is determined by the air pressure that it's under. So that's if you want to go all the way back to your physics class, it's Henry's law, right? So in order to increase the amount of hydrogen that can be in the water, you have to increase the pressure in the water.

So our old bottle would do three parts per million, but this bottle can do eight and none of our competitors can do anything above like four or five. And so in order to do that, this bottle has to be able to hold 90 pounds of pressure, which is significant, right? If you were to pop it while it's on full pressure, I mean, it would explode. And so all of the tech that goes into that is also very hard to replicate. It's like making the bottle not leak, making the bottle not crack or explode.

people always get upset because it's health product and it's made of plastic. They're like, why isn't it made of glass? We're like, well, glass would literally explode. can't hold that much pressure. You have to be able to flex. so, ⁓ you know, even like a soda, those are round and that is really helpful for holding the pressure, but they're not holding nearly that amount or champagne bottle or anything. And when they do, they ferment and then they do explode, right? And so, ⁓

That's some of the engineering challenges and some of the technology that goes into it. And so it puts a really big moat between us and anyone that's going to try and follow or anyone that's going to try and copy. And it's distinctly ours. And, you know, if they're a fast follower knockoff company, then they can't, they can't hang with us.

Jeff Holman (37:24)

Yeah, I love it. You're speaking my language right here. you know, I

Josh Carr (37:28)

In a way, it's like the Cybertruck. Like, it's so distinctive. ⁓ It's not for everybody, but it's so distinctive, no one's going to knock it off, right? And it's so Tesla. You see it and you know the brand. Maybe you don't like it. Maybe it's not for you, whatever. But you definitely know who made it the second you see it. And I think we have a little bit of that. Now, our bigger bottle is, this is for the ladies, right? This is like...

the normal, like what you would expect to see.

Jeff Holman (38:05)

You're a new guy, especially, right? That's everybody. well.

Josh Carr (38:09)

Stanley did a billion in sales last year, think. And so I just saw that one skew. So ⁓ I think it's gone well beyond Utah. But yeah, this quite the stereotype.

Jeff Holman (38:21)

Well, so I'd like to know your thoughts. Companies like I see companies launching products all the time. And I think, okay, yeah, there's, there's cost constraints. There's, you know, market testing, all that has to go into it. But why aren't more companies creating more brand distinction for the products they're creating? Like, it seems to me that there's a lot of leverage you can buy. But it's is it just the complexity and cost?

Josh Carr (38:46)

Unbelievably

hard. look, we've put some constraints on some, ⁓ we've put artificial constraints. This is getting into like ⁓ the macro question. We manufacture nothing in the United States ⁓ and we don't even, we've been doing that for so long, we no longer even have the capability to, there's the knowledge to build the things isn't even here anymore. Like in order, we didn't want to build the product in China.

And so in order to build the product in the Philippines, we hired Chinese engineers and made them move to the Philippines. Yeah. Because they're the ones with the knowledge. They know how to do the molds. They know how to do, you know, the boards. They, they're the ones with the knowledge. It doesn't even exist in the United States anymore. it, we've completely hollowed out that world. Now we're in a, and as long as we're talking about the macro, the big picture stuff, we're in a world with AI where

Anyone who has a software business is out of business. Within a year, you'll be able to tell your AI to go copy Salesforce, make me my own version of salesforce.com. And within a few hours, it'll have cloned the entire thing and customize it exactly how your business wants without a single human involved. That is inevitable, right? So anyone in the software business right now is.

If they're not absolutely freaking out, they should be because their time is through, right? Silicon Valley has put millions upon billions upon billions into SaaS companies because they had this huge multiple and look like the gravy train would never end because you can develop at once and charge people for it a million times. But the only businesses that will be valuable in five years are people that are producing hardware. Like anyone producing software is done.

Right. Anyone that does anything with knowledge, you you talk about the legal practice. Yep. So much of the legal world is over. The part that matters that the computer can't do is the interaction with the person. Right. So salespeople, that kind of negotiation, holding somebody's hand.

Jeff Holman (40:56)

That's coming, think even in the legal world and other professions like this.

Josh Carr (41:00)

Yeah, I don't know how persuasive a bot can be when it comes to like that face to face. There's still something there, some magic there. But ⁓ all of the looking stuff up and putting documents together and writing contracts is over, right? It's like, it's over already. And so ⁓ people don't do it because it's hard. We've artificially constrained the world so that the only, in Chris Anderson's book Free, that's an old reference, but he talks about

In order to innovate, you have to be able to waste. And the only thing we had to waste were bits and storage, right? So we could waste compute, but we couldn't waste electricity. We couldn't waste any physical goods. We couldn't do anything. And we've constrained that world so much because of all, for so many reasons, but law of unintended consequences, right? The hippies hated nuclear power, so they killed that. now electricity is constrained. And oops, turns out the solution to...

If you don't want nuclear, then you have carbon and that screwed up everything else. So a lot of unintended consequences. we continued put environmental pressure and labor pressure and all of these kinds of things on manufacturing businesses so that the mess wouldn't be in our backyard. We could send it over to China and they could have a mess. Right. Right. And now we're in this spot where it's really, really difficult to produce hardware. To produce something physical is really hard.

But the people who are doing it are the people who are succeeding and the people who will continue to succeed. I watched a podcast with this guy, Montana Knife Company or something, like started out when he's a teenager making knives. Now he makes these beautiful, expensive, like ultra premium knives and they're crushing it by just manufacturing knives. Where you have, every single thing Elon is doing is with the end goal of hardware.

Even XAI is so that the hardware knows how to navigate the world and interact with people. Every single endpoint is hardware. We'll all have a droid in our home, just like on Star Wars. We'll have self-driving cars. They have SpaceX and Starlink, and now they're talking about putting data centers in space. All of it is hardware, hardware, hardware. And you look at the stocks that are doing well. I ⁓ was fortunate to buy some Corning stock earlier this year.

I guess last year, but they make the fiber optic cables because the data center behind the AI that is exploding. Trillions of dollars are flowing there now and they can't do it without fiber optics. So you look at like that's a hardware, like physical goods company and it's doing better than most of the things on the market. Right. And so, but it's really hard to do like setting up a plant to make fiber optic cable is not cheap.

It's really, really difficult and every day there's something new. And so, you know, people don't do it because it's hard. Which is why there's an opportunity there though, right? Because it's hard, people won't do it. And so it creates opportunity for someone who will.

Jeff Holman (44:12)

What does it take for someone to that? Because I think of a lot of people out there that I've talked to, know, early stage people building something in there. You're right. They're all gravitating towards software. They're like, it's, I can leverage this. I can get multiples higher than somewhere else. And, you know, it doesn't have the cash constraints by any means that hardware has. how do you, how do you foresee the, you know, people getting into hardware? Is hardware going to become cheaper or will it become more expensive or?

Josh Carr (44:39)

⁓

It should be so much cheaper than it is. And so because of those constraints, there won't be an opportunity in bits anymore. AI will kill that opportunity. So what will happen? 3D printers will get better. Rapid prototyping, manufacturing. just saw right by us here, I'm in Mapleton and our warehouse is in Spanish Fork.

And right across the highway from our warehouse, they just put in this huge facility that does metal parts. Like you upload your plan to their website, they cut out, laser cut, bend, do whatever you need it to do. It's rapid prototyping, rapid manufacturing system. And it is, it's gotta be 200,000 square feet. I mean, it's this huge facility and it's, it's all that people just uploading plans and having them rapid build and ship out this

piece of metal, a gear, ⁓ a container for something.

Jeff Holman (45:40)

pieces

even not not even not even mass production but one-off yeah

Josh Carr (45:44)

Like one you could literally order one of something

Jeff Holman (45:47)

What's that company called? ⁓

Josh Carr (45:49)

I

can't remember. I just had it up on my browser too. ⁓ I could Google it and we could edit back and act like we remembered in real time. Here, I'll just mouth it and then you just put the words out.

Jeff Holman (45:58)

That's a lot of work.

We'll dub it later.

Josh Carr (46:04)

Yeah, dub it later. they'll say something manufacturing.

Jeff Holman (46:09)

Yeah, I

if you say if you say the word if you mouth the word watermelon, you can make that into any word you want. water. Exactly.

Josh Carr (46:16)

Yeah, if you remember

the old land shark from Saturday Night Live in the 70s whenever he'd say who's at the door he just mumbled

Who? Rrrrr. okay. You don't remember Landshark? It was a spoof off of Jaws, obviously.

Jeff Holman (46:32)

Come on in. No, no,

But I should have watched more Saturday Night Live. It's good when I catch it, but I don't catch it.

Josh Carr (46:43)

Who would open

the door and get eaten in their apartment? So.

Jeff Holman (46:46)

Got it.

I definitely don't remember that. Well, so it's interesting. are there, are you seeing a trend back towards hardware or do you think that you're on that? Cause we talked about the, beginning of this where, you know, Paul started this whole, this whole company probably early on the, on, on the, you know, backside of the wave maybe, or I don't know if that's the wave hadn't even shown up yet.

Josh Carr (47:08)

You hadn't even shown up yet. There wasn't even a ripple in the ocean, right? Yeah.

Jeff Holman (47:13)

So are you suggesting that people should be watching for this wave to come for hardware or it's here?

Josh Carr (47:18)

Paul did, the hardware wave is here, right? Like if you surf, the waves come in sets. So you get, you know, the set builds and then it diminishes and then you gotta wait for the new set of waves to come, right? We're in the first wave or two of that set coming in, hitting shore. you've, ⁓ Elon has been so far ahead of this with everybody and you've heard him say, making a prototype is easy, mass production is.

It's harder than anything else you'll do. It's like, it's hell to get there, right? And it is so, so difficult. ⁓ We've learned to take that for granted and ⁓ because we outsourced it to the Chinese. So you're gonna see, like, I think we'll have to have things that are a little more expensive, ⁓ but we'll, we can also have things that are much higher quality too. ⁓ But there is so much opportunity. ⁓ If you just look at,

the world around you, there's so much opportunity. I people crave like the handcrafted, they crave the real. There's so many channels on ⁓ YouTube of people doing woodworking, for example, or ⁓ metal manufacturing. And they're making these little things, and people are buying them like crazy. They're buying cutting boards and coasters and silly things, shelves, because they want something real, you know? And it connects them with the creator and all of that.

That world I think is dying too. Like the idea of being an influencer and a creator, you hear them all talking about how the AI videos are just destroying their income. ⁓ So yeah, there's so, so much opportunity ⁓ for people to start building things. Yeah.

Jeff Holman (49:06)

What's something that somebody if they were if they had been looking at this set of waves and watching it start to come in, they're like, man, I want to be in hardware, I want to I want to jump in, like, do they should they be looking to buy a business? What's something that they can revive or

Josh Carr (49:22)

Not a bad

idea. Because there's that whole generation of people that are retiring that they made something and they weathered the storm when China took, like a machine shop that repairs engines and things, Most of those, there used to be tons of those, most of those have died. There's a few that have survived by being extremely good and ⁓ narrowly focused, finding a customer. And that will have a resurgence, I think.

There will be things that will die completely. Auto repair is probably going to die completely. Robot cars will not crash, right? And I read somewhere once that like 50 % or some big number of the people that are in the hospital are there for auto related problems and accidents. And so it's like hospitals are going to go down and auto repair and paint shops and things like that are going to go down. And, you know, there'll be all of these kinds of things. But at the same time, people driving like when

they got rid of horses and wagons because of the Model T, a lot of coach builders and a lot of people that service the wagon industry went out of business, right? But what happened with horses? They got very expensive and the stuff people are, people still ride horses and someone, I've even heard people say that there's more horses in America today than there were in 1900. But no, it's a premium. It's a luxury, right? It's, uh,

you don't just buy a saddle out of pure utility, you buy a really nice saddle that says something about you. So you'll see that same thing with cars. Like I restore cars. ⁓ I think that will continue. Those older cars will become more more rare and become more and more of a premium. But that just creates an opportunity for someone to make a new ⁓ ice engine car, ⁓ no internal combustion. And it turns out making electric cars is really hard.

Dodge is getting rid of their electric, they're gonna go all electric, no one bottom. So now they're going all back to the Hemi. They want loud gas guzzling. And that might be a perfect little niche to carve out, right? Because you're gonna have self-driving cars and Teslas, and then people are like, I wanna drive the car myself, and I want it to be loud and possibly explode. That's what I want, it's gonna be cool. So there'll be opportunity in those things too. And so I would say,

One of my favorite ways to think of a business idea is to look at two things that were formerly not connected and overlap them and see there's always business opportunity where those two things overlap. I would say that. And then the other side is just taking something that ⁓ has always existed and will always exist and just doing it better than the next guy or like doing it a slightly different way. know, carpet cleaning is a great example. Anyone can do it. The equipment to get in is easy. It's going to be a

long, long time before a robot comes and cleans your carpets. And so you could create an innovative business within the carpet cleaning space just by approaching it slightly different. Could you do a subscription model? Could you do a rental model? Could you do some kind of hybrid approach where there's any myriad of ways to innovate within that business model and create something interesting. You do that for 10 years and all of a sudden you've got a great business. ⁓

But on the hardware side, taking two things, like the iPhone took 20 things that were formerly not connected and connected them, right? So it's like the phone and the iPod was how they described it. But also it had an alarm clock in it and a calculator in it and a camera in it and it just goes on and on and on. But taking any two things and combining them, ⁓ suddenly you've got a hardware business. I mean, I

Jeff Holman (53:00)

that.

Josh Carr (53:01)

We let's go right now Jeff. Let's do it with something. Let's name two things that you see in your office and let's play this game.

Jeff Holman (53:07)

Two things I see in my office. I see my water bottle. It's a it's the blender bottle that I that I'm using to two things.

Josh Carr (53:16)

Just one, name one other thing. Anything.

Jeff Holman (53:19)

Well, I'm looking at the ice pack that's sitting there on my on my shelf because I got a little tennis elbow from weightlifting.

Josh Carr (53:27)

See, right there, like, okay, could you make a water bottle that has, ⁓ you know, the inside is, you can freeze it or as an insert that goes in that can keep things cold. Could you have a collapsible water bottle that you throw in the freezer as an ice pack, then it expands and you can fill it with water. You know, could that zip up, you could make it into a slushy, you know, and then ⁓ you could just keep going down this path, right? And suddenly we've invented something.

this ice pack water bottle concept, or even down to the point, I don't know if you've seen how Amazon is delivering when you order Amazon groceries now, that comes with a frozen water bottle in there as the ice. So you get like a little bonus item to keep your groceries cold. And, ⁓ like that's a little bit of innovation. It's really kind of brilliant. And, ⁓ you know, so like we just riffed for 30 seconds and came up with four or five ideas, probably none of them any good, but, ⁓ you,

Those two things weren't combined before and now...

Jeff Holman (54:28)

45

seconds we'd get there.

Josh Carr (54:30)

Yeah, right. If we were like just played with those ideas for half hour, we may end up saying that's a dumb idea and no one should do it. Or may say, there's actually really something here. But you could just take two things that weren't formally connected and now they are. Yeah.

Jeff Holman (54:44)

No, I love it. I have to say I'm a little shocked because when we started this conversation, I thought we're going to talk about hydrogen water for 45 minutes and I'm going to learn everything there is to know about hydrogen water.

Josh Carr (54:54)

Well, we probably should have. That would have been better for my business.

Jeff Holman (54:57)

your team would be like, what are doing talking about hardware? we, instead of talking about water, we talked about hardware and all the other business stuff around what you're doing. So I really appreciate you being flexible with all that.

Josh Carr (55:09)

Yeah, and if we're wrapping, I know we're into this quite a bit, probably longer than you normally go. On the business side for me, I would say, my thing of caution, hydrogen water has been amazing for me, for my arthritis and reducing inflammation. I can not recommend it enough. It's a very natural, very non-intrusive way to solve that problem. It's worth a try. The other thing that is deeply concerning to me is all the stuff in the water.

So a lot of people say, I've got a Brita, I'm good. But the Brita changes the flavor of the water. It doesn't take all the stuff that's going to kill you out of the water. I worry about the water you're drinking. And then the part no one thinks about is the steam you're inhaling in the shower. People took cold showers until just recent history. ⁓

We are breathing our skin is designed to keep bad stuff out. Our gut is designed to try to keep bad stuff out. Right. That's why like if you eat something bad, you get diarrhea just flushes it out or you puke. So, but it gets it out. Right. But your lungs are not designed to do that. And so as you're inhaling that steam and all the nasty stuff that's in there, I'm really concerned about what we're getting into our bodies. And so that would be my caution is make sure your water is as clean as you can get it. And then

Let's see if we can make it better. Let's add some hydrogen Let's do some other things to enhance that and just see what can happen with your health. That would be my message there. It's been An amazing like discovery journey for me to learn about this world It's not something that I was thinking about at all before I got involved. Yeah, but It's worth digging into so if you don't have a really great filter in your home Like that minimum get a reverse osmosis for under the kitchen sink. Yeah

Everyone's got crap in their water. I can tell you I just scraped ⁓ EPA data on 45,000 zip codes to look for contaminants and Everyone had some crazy stuff in there. So just you wouldn't even like half the stuff You can't even pronounce but you wouldn't believe what's in your

Jeff Holman (57:17)

I know if family in Idaho might might dispute you on that. claim that there's nothing more pure than than southern water.

Josh Carr (57:25)

I would love to look it up. I would love to look at it. Because everyone who tells me they've got really great water, when we look it up, then they're like, ⁓ like shocked, completely shocked.

Jeff Holman (57:36)

Well, I love it. And I love that you're just going back to what you said, because it really is the delivery system for everything else that you're doing, right? So that water is foundational to the supplements and food and the, I don't know, everything going through your body is carried around.

Josh Carr (57:51)

And it's like half of your body.

Jeff Holman (57:53)

Yeah, yeah, I love it. There's probably also an analogy we could draw out ⁓ on, you know, what are the kind of foundational delivery systems in your business? How do we purify those? How do we clean those up, get the gunk out so the business can run run

Josh Carr (58:07)

No, we're just writing a book. We're just doing it.

Jeff Holman (58:09)

There we go. Well, this has been it's been fantastic, Josh. It's been it's been a lot of fun talking with you about this. Is there anything you want to leave with the audience in terms of ⁓ either, you know, motivational tip or links and how to contact you? What's what's a good thing for them to know?

Josh Carr (58:25)

Uh, I would say, uh, you can just Google me, um, or, uh, echowater.com is our website. If you want to check out our stuff, um, Google Josh Carr superstar and I'll come up everywhere. Um, I, I think people should do stuff. Um, be an entrepreneur, try things, experiment. Um, you know, uh, I've always been an entrepreneur at heart, but I remember I was working at this big company and you get these jobs out of college and I think you've made it right.

And ⁓ they've got 10,000 employees or whatever. And there are these people there that were like stars. They'd been there since the company was founded 30 years before. And then layoffs came and those were the first people to get laid off. All of the stars, all the people you couldn't live without. And I was like, if they're vulnerable, how vulnerable am I? And everyone thinks about like they want diversified retirement account and they don't want diversified income stream. Like they're so dependent and they think they're safe because they're

with this company that's secure or whatever. And I'm like, the only way you're safe and secure is if you take care of it yourself. So I think everyone should be an entrepreneur. I think you should just go do it. I think it's the natural state of humans if ⁓ big government, big business don't get in the way is, you you go back and it's like you're trading your wool for their meat and you know, whatever it is, everyone is an entrepreneur, right? And ⁓ I think we're designed to do that and we're happier when we do. So I encourage it.

Jeff Holman (59:52)

I love it.

Josh Carr (59:53)

It's not

as scary or as risky as you think it would be.

Jeff Holman (59:56)

Well, and there are ways to there are ways to take smaller steps if you do feel like it is like test it out. You know, I'm rehabbing my foot right now from a ⁓ break from soccer. ⁓ And, know, slowly but surely I'm testing out how much weight can I put on it? Can I roll it this way? Can I do this with it? And sometimes it works fine. And other times I'm like, Nope, not that one. So

Josh Carr (1:00:17)

Yeah,

there's no wisdom in running out and doing a sprint. You can run a bunch of little experiments and figure out what you love to do, what you're good at, where the opportunity is and like create something.

Jeff Holman (1:00:20)

Right.

Yep, I love it. Well, I love I love catching up. I love what you've created. I love hearing the success. $18 million from from zero three years ago, spinning this company Echo Water backup and ⁓ and all your insights that you've shared with us and with the audience. So thank you so much for coming on the show.

Josh Carr (1:00:46)

Yeah, it's been a lot of fun. I'm glad we got synced up again.

Jeff Holman (1:00:50)

That's been pleasure. And thanks to everybody else in the audience joining us on the breakout CEO podcast. Be sure to follow or subscribe on your favorite podcast platform. And if you enjoy the show, a rating or a review goes a long way. Our mission is to promote the stories of breakout CEOs in scaling, sass, e-commerce and tech companies to equip peer CEOs with valuable perspectives and confidence.

Thanks again for joining us on this episode of The Breakout CEO. I'm Jeff Holman and I'll see you next time.

Josh Carr (1:01:26)

you

‍