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Buderflys' Shea Gerhardt: IP Issues in the World of Smart Earbuds

by Patents Integrated
May 12th 2021

The need for a comfortable, long-wearing earbud has gone up exponentially over the past year due to COVID-19. With the increase in earbud usage through Zoom meetings and podcast/audiobook listening... More

Hello and welcome to the novel and non obvious podcast where we discuss the intellectual property topics impacting the startup world. My name is Yuri Komori to the host of this podcast and founder of patents integrated Today we welcome shade Gerhard Ceo of butterflies that spelled B U D E R F L Y S. We'll be discussing I. P. Issues related to smart earbuds. Welcome jay. Thank you for having me. So I've known you for a number of years and I've watched your company evolved over those years. Can you give me the current elevator pitch for your company? We have a smart earbuds that's different than anything else in the market in that we've designed it for today's use case and for today's heavier but users, The form factor for earbuds was designed about 13, 14 years ago when we were just listening to short bursts of music on them. Since then the content we're listening to has significantly evolved over time.

And now we're listening to heavier bed listeners are using their earbuds from 5 to 6 hours per day and they're listening to things like audio books and podcasts and zoom meetings. And this is all focused on what we have termed the spoken word vertical. So we've built in your bed that you can comfortably wear for long periods of time but that has a really pristine clean listening and sound environment with the high end microphone for talking on the phone. Cool. I know that I certainly get your fatigue after like a three hour zoom meeting and that sort of things. It's really hard to keep this stuff man all day. Yeah, it's crazy. So when we started the company back, when you and I met we had done a ton of market fit research around whether or not this was a big enough problem. We know that a lot of people get that ear fatigue, that soreness you get after wearing the earbuds for 45 minutes are longer. And the reason is is because the human ear is constantly moving. We talk and chew and exercise so that friction of your ear is constantly hitting against that hard plastic, what they call a clamshell design material.

So our ear bud has a novel material design that flexes and conforms to your ear while it's moving. It also has an element of it that heats up with your body temperature so that it creates a better seal, but also is more flexible the longer you wear them. So then I know that one of the selling points for your product, which is coming out shortly and we'll talk a little bit more about that in a little bit. I know that one of the innovation around your product is that material that you're but material, can you talk a little bit about that? Yes, so we spent probably three years developing a novel material design that would fit around the electronics but also had a damping effect to sound. So one of the reasons that you get your fatigue is because the sound vibrations going through that plastic design of the current ear bud market that causes fatigue in your in your cartilage, ear cartilage. So we also wanted to have a damping effect that only made the sound go into your ear canal versus into the cartilage around your year.

So we spent a long time developing that material designing the earbuds form factor in shape to solve for this issue and it is the top complaint in the air. But industry and we have been working on the patents since 2000 and 17 for this, which that is more of our umbrella patent. We have a number of patents that were currently full filing that sort of will shore up the pillars of that strategy. Those are utility patents and then in addition to having a you know design patent work, working on the design patent and I mean I guess trademarks and so forth, that sounds pretty comprehensive as far as the types of I. P. That you've been dealing with so far, what has been your thinking regarding, you know where to spend your money especially as a early startup company. I mean I sort of would love your thoughts on this too. But I mean I think about this constantly right because getting a pattern in the end Is around $20,000.

Right? That's really expensive. It's over a long period of time. One of my catalysts in getting patents was more so around because we are capital intensive business was Marcia around the investment community because they really value I. P. Protection. I will say there, you know that we know of another like ear bud company in the space that their strategy is they specifically don't get patents. They save all their I. P. Attorney fee cash fees to copy other people's stuff. And then when they get sued that's where they spend their money, right? Is to essentially challenge other people's patterns which from a our perspective where we're going after the actual ip that we've invented because we want to protect it. That makes me mad. But it's a strategy, right? Like you just spend your money on defending stuff you've ripped off or whatever, you know copied. So that's that's a I don't know if I answered your question but that's why workers mostly investments.

Yeah. That certainly is a different sort of an approach that I wouldn't necessarily recommend for the people that are trying to take that legit business path. Talk to me a little bit about the kinds of ways in which your investor community has wanted you to get I. P. What were the kinds of questions that you were asked? What were the types of requests that you were getting from the investors, You know, I think mostly they just want to know that someone is not going to come in and copycat us, right or that we have a defensible standpoint from which to defend our product offering. And so that's what it's around I think really in in reality and business it's the two things that are going to matter the most our brand and how we establish the brand in the marketplace and that I. P. So those have been both for us. I mean the hard thing is is I would go after a lot more patents and like things like we have a really sophisticated software integration with our earbuds that we invented. No one else has done in the marketplace.

We had to invent some of the technologies around it and I want to get patents around it but especially in technology there's so many variables that people can skirt around it with that I get nervous and I'm just flushing the money down the pot. But I also feel like we have spent so much time developing this and so much money that I'd like to have at least my investors and my company to recoup that. Okay so then how is your company divided as far as the kinds of roles that you have? So your ceo your background is in marketing right? And and then you have a technical co founder that did the materials and remind us of how the product development roles are split within your company. So my core team is we have a I mean call him C. T. Oh but he is and has a PhD in material engineering and microelectronics and and manufacturing is his expertise.

Which is the hardest thing about what we're trying to do is use our proprietary material design in mass manufacturing. So we can do it all day long in a hand mold. But mass manufacturing is where we ran into a lot of the issues. Um and then we have someone who is has 30 years of experience in the ear bud headphone space. My co founder is uh she's a corporate attorney so she's actually the one who handles most of my I. P. Stuff and she also is head of operations for us. So she's really focused on growth and making sure we have the right people in the right places and we're doing right by our people and making sure that they're happy and that kind of stuff. So that's critical. And then we also have to firms that we've been working with since the beginning one is our software engineering firm who knows the hardware space and our hardware and audio tech team that knows the software space because of this integration.

Right? And I know that um I think I remember that you have a pretty strong background in the in the audio industry as well. Right? Yeah I was music and gaming and mobile space for a really long time and my one of them was with E. D. M. Which is electronic dance music where sound and sound composition and sound environments is so critical and that was where I sort of got my deeper understanding of the headphone space because that's huge in that space. Okay. And I know that you mentioned that your brand is so important in your industry. What are the different things that you are doing to promote and protect that brand? Because I know that you know on the I. P. Side you've mentioned trademarking and design patents, those kinds of things. What are the other things that you are doing to create and promote your brand? So we're going after a very small niche and we want to own that niche. Right? So no one else in the headphone space is going after this. What we've turned the spoken word vertical, I mean anyone can come in of course, but we have a significant partner.

We have probably the largest brand in the spoken word vertical who has partnered with us, the ceo of the company has invested in us. But we are also, I mean it is no joke. I mean the reason we named it butterflies is because of the butterfly effect where audiobooks and podcasts and you know, deep communications are where all that knowledge and the curious mind grows. Right? So we named the butterflies because of the butterfly effect, just like whether on one side of the world can change whether patterns on the other side of the world knowledge can affect the whole world in the same concept. Right? I would say that's even more accurate than the weather one. So that's that's where the premise of the brand came from? Because we are really trying going after this, those who have curious minds and want to grow their minds, they need access to this so they can multitask, right? We want to be the conduit to that wonderful experience, like podcasters like yourself, right?

Because I just before this we were talking about it, like I really need to listen to all of your your shows because deciding your I. P. Strategy is so expensive and so difficult and navigating that without a resource like you or your podcast, it's just hard and so I'm so thankful for you. So thank you. Yeah, and I think you're you're you're in such a great space because you've got this, you've managed to put together a team of experts around you to create your dream products. So I think you've been doing a great job of picking the team around you. Okay, so then I know that you know, in looking at your marketing and promotional materials and your website, you have a lot of really slick marketing kind of things that you're doing. So what are you doing to protect that content and maybe like the photos that you are putting up their those sorts of things. You had also mentioned one of the important things about your product is the box, like unboxing videos are going to be really important for creating further enhancing your brand in the future.

So can you tell me, can you talk a little bit about how you are creating those images as well as how you're protecting them. So I mean, I don't know if there's much you can protect them actually right now with the product, we are going into a huge photo shoot and one of our strategies is to give out those high ends photos to like the getty's of the world and everyone that wants them so they can resell them or whatever they want to do with them so that you know, you should slowly start to see us in other people's advertising, right? They need someone walking with your buddy, someone hiking with your but someone riding your bike with your budget. And so those are the type of photos that we want other people to take, right and use. I mean there's nothing you can do about it. You, I think when you're creating a brand, the most important thing is that your authentic about your mission and we are wholeheartedly all lifelong learners and curious people and so we are doing this because we love it. We also love clean, crisp sound and we want to be able to listen to a whole audiobook, listen to a whole podcast series without it hurting.

And so I think that it starts with that. I mean you keep true to your brand and never go off brand, like whatever marketing you're doing or presentations you're giving or whatever it is. You just, you make sure you stay within brand because there's a lot of temptation to be like, I mean even to us if we've had the same logo for two years, but not a ton of people have seen it, but every once in a while people are like should refresh it, you know, and like no, like no one else has seen it, you know, so the little details seem unimportant, but after a while that brand look and feel is so critical and that you are authentic in in your voice. So when you're doing, when we're doing blogs or podcasts, reviews or whatever we're doing, we stay authentic in who we are. I don't think there's a way you can protect your brand besides trademarks. Right? So we have trademark on the name, trademark on the word mark and the logo, we have trademark on our tagline, which is sound that smarter that period, you know, But besides that, I don't know do you have any ideas?

Those are all the right things. And then putting copyrights on your actual content and that kind of things. So, you know, it sounds like, you know, with your co founder too, you're definitely getting good advice. I think so I know that your product is getting ready to ship. So where are you on that? And how how has that journey been? Um 1st, I mean I am a serial entrepreneur, I love everything about being an entrepreneur. The highs and lows are extreme sir, if you're more mellow person maybe don't come an entrepreneur. But I think, I mean it's been so fun, it's so interesting, I think of it daily like a incredibly challenging puzzle and just like all puzzles. Some parts are really challenging and some parts are really thrilling. I think the last year has been incredibly hard, particularly with the pandemic, right? So there's good parts and bad parts that has happened to us as a result. I mean we had massive issues with supply chains, our strategic partner who were doing our initial marketing launch with pushback three launches because they were doing reorders or they had some other initiative that they had to push out because of the pandemic, whatever the issues were and then you know, we are navigating an international supply chain and we're a little guys, right?

So a lot of it came to me like calling them on the phone like, hey guys, I know we're little but and we're not paying you as much as everyone else, but could you just do this like let's all support the entrepreneurial world, right? You know, like it was just like a lot of slogging up the hill and I mean it would be little things like we finally get the r laugh alpha test out the door to all of our alpha testers. You know, one of our parts will be coming out of china and it would get somewhere would get stuck because the like one example, Hong kong's export facility decided to wipe down every pop package, which wasn't a rule before. So we hadn't anticipated that time or like when our speakers out of holland and it's really high end speaker system, we had to get more in for another alpha test and they were not working for, no one was in the factory. So we got one guy to go into the factory, you know, he's working home, go into the factory, pulled apart for us, ship it, he ships it not over over air, he ships it by sea, which takes a month.

We get it and it was the wrong speaker, he pulled the wrong one and I was like, this is, you're just like one thing after another happens, right? But we are launching, you know, all the product just came off the line. We opened up a pre sale and just did amazing on the pre sale were almost totally sold out. But we just had a week delay because our, our packaging company, manufacturers were amazing people. But we got bumps for another bigger company, which happens such a bummer. So we are delayed a week or so now as a result, but you keep going right now, you just keep going every day. I mean, here's my mantra is every morning, you get up and you're like, okay, if I could do anything in the world, what would I do? And it's always butterflies Right, so that's you just have to check yourself like okay, I could go back and make three times the amount of money and making right now and go back to being an executive at a big music companies and but I really love what I'm doing and I'm lucky to have the support of my husband and family and my team is incredible.

So yeah, I feel really lucky. That's great. So then let me ask you one final question, what is the one thing that you could use right now to take your company to the next level besides cash? Every entrepreneur is like, oh we just need another round of investments. Ah this is such a good question. Um the one thing is I know, I think I would like a better network, like that's the one thing like our company's coming, there were outsiders which to all big industries, the outsiders are the ones that create change and disrupt things, right? But I don't have the network of all the audio engineers in the space? I don't have the network of all the, so I'm always asking like who's this, who's this, who did this, who does this? Can you introduce me? Can you introduce me? And it would be so nice, like we're having one problem with our qualcomm chip set and just to be able to call someone and be like, have you ever done this? It didn't work. And could you, how much power did you need out of your battery? And that those kind of quick questions. It would be so helpful if I had those resources. But right now I have to research it, research and find the one person's name in the article and then find them on linkedin and be like, hey, could you ask for two of my questions?

You know? So I guess that's I want more knowledge in the end. Yeah. Knowledge and people. Just a network of people. Yeah, that's amazing. Well, I think you've come such a long way since I think we first met in 2018 or something and I can't wait to get my hands on that, that first shipment of product. I cannot wait for you to have him and Andrew producer. He needs him to. Yes, I will definitely order you on Joel. Well actually, you know, if you're all sold out then maybe I'll order the next generation for Joel. Okay, perfect. Sounds great. Well, thank you so much shade. It's been really fun talking with you. Yeah, no thanks so much for having me and thank you for your podcast. It's really helpful. I hope so. I hope it will be helpful for a lot of people like you. All entrepreneurs need it. Thank you. Okay, we hope you enjoyed this episode of the novel and non obvious podcast. Our guest today has been shared Gearhart of butterflies. The company website is B U D E R F L Y S dot com.

That's butterflies dot com. Feel free to send us comments or suggestions for startup and I. P related topics you'd like us to discuss on this podcast at info at patents integrated dot com. Our producer is Joel Davis of analog digital. Our marketing specialist is Tim Sprinkle of Layup content. Our theme music used with permission is the Workday Takata from a Life In a Day, composed by sherry slider and performed by Michelle Stanley and flute, Jeff. Look, watch around guitar and you're Australian, Joel. Here's our obligatory disclaimer. The content of this podcast is informational only and not intended to be legal advice. The novel and non obvious podcast is the production of patents integrated and all rights are reserved. See you next time. Mm hmm.

Buderflys' Shea Gerhardt: IP Issues in the World of Smart Earbuds
Buderflys' Shea Gerhardt: IP Issues in the World of Smart Earbuds
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