This transcript was generated from the episode audio and may contain minor errors.
[Music]
Hey, sadist little school friends, community, listeners. What is your favorite emoji? Do you use emoji when you text? Do you use it all the time? Do you never use it?
I think my favorite is the I'm thinking face or maybe the cat with a smirk face. Of course, the croissant also comes in handy, the airplane taking off, the airplane landing. And I realized when talking about emojis that not everyone is a fan. Some people hate emojis, but here's the thing. Today's story, I think it's a pretty great story whether you love or hate emojis.
It's basically two success stories in one. It's about a guy in California who takes one idea and turns it into a successful app on the App Store, actually debuts at number one, ends up making a lot of money, but then he reinvents the whole thing and goes to a convenience store convention, which by the way, those exist, a convenience store convention in search of licensing his intellectual property on items made for sale at gas stations. Now this effort is also successful, although in a very different way. So the headline probably gives you a little preview of where we're going today. Up in smoke, stoner culture emojis roll out $10,000 a month in passive income.
Stay tuned and I'll tell you all about it. [Music]
Whether you love them, hate them, or use them exclusively to convey your thoughts and feelings online, there's no denying that emojis have infiltrated our society. Although text messages have become a major form of communication, by themselves, they often fall a little flat with words alone. The days before emoji were fraught with miscommunication and a dark period in our history. Although emojis got their start as simple punctuation-based smileys, they really hit their stride by 2016.
And that's where today's story begins. You see, 2016 was the year that Apple introduced new emojis for cheese, champagne, and tacos, among others. And at the time, a 25-year-old Eli Graham was working as a product manager for a digital marketing agency in Los Angeles, California. Like most millennials his age, Eli had an eye for trends. Always on the cutting edge of what was new, he noticed that the emoji market showed no sign of slowing.
And with the legalization of marijuana coming through the haze, it seemed like the perfect opportunity to combine the two in the form of a side hustle. Although he had some experience in design, Eli opted to hire an illustrator to bring his ideas to life. He created a new set of emojis with an edge from stoner culture and a healthy hit of parody. Basically, he created a set of emojis that looked like they were drunk, stoned, or high. Since it was 2016, they even threw in some emojis of Hillary Clinton, Bernie Sanders, and the current occupant of the White House.
In the beginning, building an app seemed like his best bet. So Eli hired a developer, Fluent and Swift, an iOS programming platform to get everything in place. And from there, he started doing what he did best, which was marketing his upcoming product. Since this was more of a niche, not to mention a federally illegal market, he reached out to people who were open about their extracurricular activities. There were quite a few different influencers on his list, but he found his most helpful ally in the OG stoner himself, Tommy Chong, of Cheech and Chong fame.
That's right, do you remember Cheech and Chong? Some listeners know exactly who I'm talking about. Others might need to go to Google or YouTube. Basically, Tommy Chong is a famous weed smoker, among other things. And in exchange for some much needed media attention from a large number of Eli's target audience, Tommy got an emoji of himself reminiscent of his smoke-filled glory days.
He also got a percentage of the profits. By May 20th, 2016, Eli's app Smokemojis was ready for the App Store. May 20th, of course, is 5/20. The original plan was to launch it on 4/20, but apparently they got high. Fortunately, with the help of his new endorsement partner, it ended up spending three whole days at number one and an Apple's top 10 for a whole week.
Anticipating a successful launch, he originally planned to sell the app for $1.99, but eventually dropped it down to $0.99. Despite the low price, as well as the commission that Apple took, the app ended up bringing in around $50,000. Now, for many people, that might have been where the story ended, but Eli had loftier goals, and he was interested in seeing if they could become more than pipe dreams. That's right, we are just getting started. So here is part two of the story.
Eli became acquainted with some toy inventors through his day job, and he was intrigued by the way that they produced their new products. They went to trade shows looking for companies hungry for the next big thing. So before we jump into that, let's cover some vocabulary. What exactly is intellectual property licensing? Well, in simple terms, a licensing agreement is a partnership.
It's a partnership between an intellectual property rights owner, or licensor, and an organization or entity who is authorized to use those rights, a licensee. They get those rights in exchange for an agreed payment, which is a fee or royalty. The way Eli saw it, the process seemed to be pretty easy, especially if you were a decent salesperson. So he thought, "Why not try?" To find someone to license and take his emojis to the next level, he went to the biggest trade show for something like this. It's called the American Surplus Depot.
This is, in fact, a large trade show for convenient store buyers and owners. Think about 7-Elevens, CVS, Walgreens, gift shops all over the US. That's where the buyers go to find new stuff for their stores. Eli took a rather unconventional path in making connections there. Rather than approaching people at their booth, he went through the show, walked the whole floor, and kept note of those he thought might be a good fit for his brand.
When all was said and done in the last booth packed away, he had 60 organizations on his list. And over the next couple of weeks, he cold-called or emailed each one of them. Since these were the kind of people who received a ton of pitches, he focused on delivering a few things right up front. Number one, what he was doing and why he was different. Number two, why they should work with him.
And number three, a brief document highlighting some of his emojis and his vision for them in relation to products. Out of that 60, eight got packed to him and expressed interest, and three companies ended up wanting to work with him. He started out with one of those companies and worked out a deal that would enable him to have an advance upfront, followed by monthly royalties paid out every three months. So in other words, he'd get paid some money upon signing, and then every three months, he'd get paid royalties based on the amount of product that sold. But how did he determine what the royalty fee should be?
Well, he started with some research. A big brand like Disney could ask for 20 to 25% royalty because they have so much brand equity. But someone like Eli, who was so new to the game, was obviously not gonna be able to do that. So he decided to ask for 10%. To start, his new partner wanted him to design a few cigarette lighters they could show to their distributors.
And Eli ended up with a couple of pretty lucky breaks. Before he'd begun the production process, three of their biggest clients saw the lighters he'd designed, loved the concept of them, thinking that they would sell well and pre-ordered 200,000 units right up front. 200,000 units. That enabled him to move forward with his designs much more quickly than if they tested the market with three or four and then built up his lineup as they went. These days, Eli and the licensing company he partnered with have expanded their product offerings to include apparel and key chains.
This company sells anywhere from 100,000 to $150,000 in product a month, which means that Eli receives roughly 10 to $15,000 a month in pure profit. He originally spent around $10,000 getting his app and emojis out to everyone. He then recouped his investment within the first couple of months. And everything that's been coming in since has helped him completely cover his living expenses and even pay for a new car. He still has his day job, but Eli says the best thing is he doesn't have to depend on that job.
Moving forward, he has some dope plans for new designs and is even in talks with a licensing company who works with brands like Urban Outfitters. The next time you're in 7-Eleven, keep a lookout for his smoke mochi licensed items. Well, what a crazy story. And if you have one success following a trend, like what Eli did when he started, you could say that you're a little lucky. And I would say it's not just luck, like you still had the idea, you still took action, you still made it happen.
Lots of people have ideas, they never do anything with them. But it could be fair to say there's some luck involved as well. However, if you have two completely different successes like this, like you have one idea and then you develop them in totally different ways, like what Eli did, I think you're pretty skilled. Like you might have some luck too, but you've really positioned yourself well to be lucky. And in this story, note what Eli didn't know how to do.
Like he didn't know how to make an app. So he went and figured it out. He hired somebody who did. He didn't know how licensing worked. So he did some research.
He didn't know what royalty to charge. So he did more research, figured it out. He didn't know Tommy Chong. So somehow he connected with him. I'm not sure how that happened.
The point is all this stuff he figured out as he went along. His strength was marketing and making things happen. So everything else he'd just learned as he went along. Well, I found this to be an interesting case study. I hope you enjoyed it as well.
Don't forget inspiration is good, but inspiration with action is better. Don't let your ideas go up in smoke. And today's show notes, if you want to check out his business or learn more about the process, those are at sidehustleschool.com/530, 5-3-0. Unfortunately, episode 420 has already been taken. Wherever you are in the world, I hope you do one thing today to get closer to the freedom you believe in.
One thing toward your independence, your security, whatever it is you hope to create for yourself, even just a small action. Small actions do add up over time. I'll be back tomorrow with another episode. I hope you'll join me. My name is Chris Guillebeau for Side Hustle School.
