2018 INC. 5000 RANK: 2
HEADQUARTERS: Boulder, CO
YEAR FOUNDED: 2010
2017 REVENUE: $168.8 Million
3-YEAR GROWTH: 71,424%
University of Colorado-Boulder philosophy professor David Barnett was accustomed to puzzling out solutions to wide-ranging problems on his own. Can you ever experience anything objectively? Is time linear?
In 2010, he began grappling with a far different, but no less universal problem: His iPhone's headphones kept getting tangled up in his pocket. His first attempt at a solution was to glue some large clothing buttons to the back of his phone and wrap his cord around them. The rig worked but it protruded significantly, and friends began joking at his expense. "Within weeks I was thinking about how to get the buttons to collapse and not look so ridiculous," Barnett says.
The lanky, sandy-haired professor visited kitchen and camping stores, and found no solution, save various space-saving products that used an accordion mechanism to collapse. He then taught himself a 3-D design software called SolidWorks and went through more than 60 rounds of models and 100 prototypes. He spent his entire savings on the endeavor--and even after 100 tries, it was tough to get the little back-of-the-phone button to expand and collapse reliably.
Then what Barnett unironically calls "a fortunate thing" occurred: His house burned down in a wildfire. An insurance payment easily covered a rebuild, but instead of replacing most of its contents, he used much of the money to make more widgets, which he'd started to call PopSockets. He bolstered the payment with about $500,000 from local investors, plus a small Kickstarter campaign in 2012, and started building a real business in Boulder to design, market, and sell the product.
Within two years, the company had a working version of what would become a PopSocket. And it wasn't long before the $10 product was gaining a cult following--the silver-dollar-size back-of-phone buttons were useful not just for cord storage, but also for gripping the device. Their colorful, trendy designs--emojis, marbles, mandalas--took off among young people in particular. They could help prop up a phone at an angle convenient for video-viewing, and prevented drops and breaks by selfie-takers. Word-of-mouth--which came easily, as the bright buttons were natural conversation starters--was all the amplification PopSockets needed. Between 2014 and 2017, the company would grow revenue by an astounding 17,423 percent, reaching $169 million in 2017.
The road to PopSockets' ubiquity was far from smooth, though. In 2014, as sales should have been ramping up, Barnett was back in the red, more than $40,000 in debt. He was counting on a large shipment of PopSockets to help move the company to the black, but when it arrived, every one was defective beyond repair.
Barnett, by this point, couldn't simply walk away and return his teaching job. He'd muddied that possibility by inserting himself into a university sexual assault investigation of one of his graduate students. Barnett felt the school had suppressed evidence in its investigation of the case, and filed a complaint against the university in August 2013.
"The university threw everything they could at me, including a good bit of dishonesty," Barnett says. (A spokesman for the university says it "provided appropriate due process throughout that case and did it in a fair and honest manner.") He was accused of retaliation against the student who lodged the complaint, and while termination proceedings against him began, he was put on paid leave--which he used to work on PopSockets.
Barnett worked late nights with his few PopSockets employees, doing inventory and getting orders shipped out. "If you know David, you know nothing fazes him," says Stacey Belcher, PopSockets' accounting manager, who has been with the company since 2014. She recalls that she and others would ask him whether they should be worried that he was being investigated. "No, we'll be fine," he'd say. "David was always OK," Belcher says.
Sure enough, just as losing his home in a wildfire provided a silver lining for Barnett, so too did the investigation. He was not found to have retaliated against the female student, but was found to have "engaged in conduct below minimum standards of professional integrity." Barnett denies having done so. Ultimately, he settled with the university, receiving a $290,000 payment for leaving his tenured position and forfeiting any potential legal claims. Again, he says he put the entire sum into PopSockets.
By the fall of 2016, the company was shipping out up to 10,000 PopSockets a day out of Boulder. In December it received 30,000 orders over a weekend. The company couldn't keep up, and had to temporarily cease taking orders online. It wasn't a good look--and it didn't feel good to be disappointing customers.
But simultaneously, it was becoming clear to Barnett and his team that the company was turning a corner. After recording $3 million in 2015 revenue, it was on track to hit almost $20 million in 2016. The following year the company improved its long-unreliable supply chain, and continued hiring rapidly in Boulder to handle the fast growth.
Barnett has focused significant effort over the past couple years on something very important to him personally: giving back. He and his colleagues had been too swamped to build a charitable arm of the company, so in January 2017, Barnett hired his buddy Michael Zakin as vice president of social impact. The company embarked the following quarter on donating a percentage of its ample profits to a nonprofit or cause. First up: four organizations that support those with Parkinson's disease. Next: the Arthritis Foundation. It has given $2.5 million in cash and goods to date.
Executives say PopSockets is still in fast-growth mode, and it is just cracking international markets: In 2017, 4 percent of sales were international; in 2018, an anticipated 10 percent will be. While the company has been free of major problems over the past two years, as it soars toward having sold 100 million PopSockets, at least one member of the team can get a bit nostalgic for the early days when Barnett's personal setbacks ended up benefiting the business.
"Anything bad that happens to him, he manages to flip it," Belcher says. "And it ends up good somehow."