Under The Hood: Mike from Windmill

Welcome Mike! What's been the growth like at Windmill since launch?

The company was started by myself and my older brother, alongside our friend and 3rd co-founder Ryan in 2018. Ryan and his family have a 60-year background in air conditioning. So when we say it started in 2018, we're actually leveraging decades of experience manufacturing air conditioners. 

The idea came to us when I was helping my older brother move into New York. We got up to the apartment, and there was this super ugly, yellow, and loud window AC unit installed. Danny called Ryan, and his technicians brought in a new AC unit. Even though we knew the best possible guy to know (Ryan), the new products and that entire process of changing AC units sucked. 

So in 2018, the 3 of us decided to modernize the entire experience. Though, we only really started getting traction at the very end of 2020, which is when we made our first hire in operations & CX (which finally growing our CX team from 1 (me) to 2!).

Fast-forward to today, we’re a team of 9 people (including the 3 co-founders) with significant revenue growth and customers in every state in the country. We have product market fit & we’re excited about what's to come. 

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The growth is so rapid for this business. From $0-8 figures in basically 2 years, with still a gigantic opportunity for even more growth. Are you surprised at what an amazing company you’ve been able to build? Or are you always looking ahead and moving your goal posts? 

My expectations generally in life are probably too high. So for better or for worse, I am always moving the goalpost. But I've always dreamed of experiencing this kind of growth, so to be living it is extremely satisfying. 

And though it definitely requires a ton of luck, we’ve worked really really hard to get here, so I wouldn’t say I’m “surprised” overall. It's important to appreciate where we're at and be grateful for our progress - but that only lasts for a second: After that, it’s back to work on what’s next!

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You spoke about Product Market Fit: When did you know you had it? 

There are two moments. 

The first one was when we received raw customer feedback during our Beta Launch in 2020. We sold several hundred units during the pandemic, and the feedback was coming in with people praising how beautiful our product was, how well it functioned and how easy it was to install. Hearing that felt like we were doing something right. 

The second moment was the more scalable product market fit moment. That was in 2021 when Wirecutter called us the easiest AC they’ve ever installed and we made it into their top 5 picks. Right around that time, we also started selling via Home Depot & Amazon and started pulling great reviews in the thousands. That’s when I knew we had a chance to succeed in this category. 

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Take me back to 2018-2020: You were busy designing & manufacturing your AC unit, with no sales. How was that like? Anything you would have done differently? 

Yeah… We were spending a lot of time & money on product development. We were building an AC unit from scratch, so that was really costly & scary. But luckily for us, we had Ryan on our side and the support of his network. If we didn’t have that, we wouldn’t have gotten out of the gate. 
My only learning is that I would have had more customer interactions earlier. I was doing a ton of research by looking at things like thousands of Amazon AC reviews (sorted by negative reviews) & that was helpful - but more customer interactions would have been a great addition to that. 
I’ll give you one example: 

The AC installation experience is critical to Windmill, and we worked really hard to get that right. But we over-engineered the process. As we were getting ready to launch, we did a demo with customers and gave them the prototype + a manual. We watched them install their Windmill, and they completely flopped. Ryan looked at me and said: “We can’t sell this product” & my heart dropped.

We delayed our launch to go back to the drawing board and re-imagine that entire installation experience from hardware to the manual & eventually we got it right. That would have not happened if we brought in customers earlier. 

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Tell me about acquisition: What’s working, and how?  

Our retail efforts now play a huge part in our journey. Those relationships are not “won & done”, they’re a constant knife fight. So we’re constantly pitching why we're better and why our retailers should give us a bigger presence. The fun thing for me is that these relationships are built face-to-face and not via FB ad clicks, so I feel more in control. 

And another channel that’s worked incredibly well is PR. Thanks to Charlotte, Amanda, and the team at JBC, we’ve sold a ton of product without $1 in formal paid advertising. Forbes called us the “iPhone of Air Conditioners”, we were covered in NYT, NY Mag, Arch Digest, CoolHunting and many other outlets - that helped a lot. 

Those 2 channels alongside brand partnerships, influencer marketing and some out of home activations have been the big drivers of acquisition. It’s a pretty healthy marketing mix - not a huge facebook ads gamble. 

Although, candidly, we definitely do spend budget on paid social and paid search. Those are semi-reliable, and we’re relatively happy with their performance, which is in large part due to a great Head of Growth hire. We’re now experimenting with TV, and have made some incredible creative with an agency called Bacon and Eggs Media. 

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Let’s chat about your D2C website: Any big unlocks?

In the early days we worked with an agency called Zero who is absolutely incredible. We needed high design because our site experience had to match our product. We had a cool rotating AC animation as you scrolled down the site. That worked well for what we needed then.
But today, we’re starting to care a lot more for things like site speed - and of course, massive 3D objects certainly don’t help with that. So over the next few months, you'll see us move to a lighter website. 

We’ve also added a subscription to the site. We built an antimicrobial-protected  filter with an insert holder, with an activated carbon filter that slides into that holder. That’s a real innovation in the entire category - we’re the first to do it like this. 
And with everyone coming off of COVID and air quality being top of mind, we decided to offer that experience seamlessly via subscription. An agency called Future Holidays has greatly assisted with making the customer experience perfect for that. 

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What about the installation? Didn’t you strike a deal with Taskrabbit? 

Yes. So when you checkout, you’ll get your AC in 1-2 days if you’re in the Tri-State area. With your email order confirmation, you’ll also be informed that, should you want it, you can get extra installation help via Taskrabbit. 

We saw this as being extremely valuable to certain customers and Taskrabbit as one of the most recognizable players to offer that service. So since the beginning of Windmill, I had that in the back of my mind and kept emailing their corporate team to get a deal in place with HQ. 
In the end, it’s a very simple agreement that we have with them, and they’ve been extremely happy with the outcomes. We created a templated job which contains all the instruction details that a Tasker may need that is easily submitted by the consumer. The fun bit is that I’ve personally met some of the Taskers who’ve installed hundreds of Windmill AC units. It’s a great feedback loop. 

I do want to take the interview opportunity to say a big thank you to Taskrabbit. They’re a big part of Windmill and we’ve also done some awesome activations together - including putting up a huge mirror in Astor Place that said “You look hot, we'll keep you cool” with Windmill & Taskrabbit logos at the bottom + a QR code. I’m excited about what we’ll do together next. 

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Let’s chat about operations: How are you getting product to customers? 

We inherited a lot of good infrastructure via Ryan’s connections. Ryan’s family owns a warehouse in the East Village, the Bronx and in New Jersey. So when we first launched, I remember downloading Shopify orders, printing labels and slapping them on boxes in the East Village warehouse. 

We’ve since outgrown this - and though we still use those warehouses for some same-day deliveries in NY, we now partner with 2 3PLs, on the East & West coast. One is more heavy on retail fulfillment, and the other is more D2C. 

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What about fundraising: What's your perspective on it?

If you can bootstrap a startup, do it. But there are certain businesses where that's not feasible… Like our business. 

In the hardware space, we required a lot of capital upfront. So we did a friends and family round to kickstart our industrial design and our initial engineering R&D. That enabled us to raise a pre-seed round with angels and later a seed round with institutional investors. 

We’ll likely raise at least once more. But one thing we’re leveraging right now is the modern inventory financing instruments in D2C. That helps us scale retail partnerships with large purchase orders, without having to dilute ourselves.  

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What’s your stack? 

For CX, which is a huge part of our operation: We’re using Re:Amaze for now (but candidly, exploring Gorgias as well). We use Shipstation with one of our 3PLs. At one point we were leveraging Aftership for shipment tracking. We’ve rolled out Shoppay to enable customers to split up payments (which has been super popular). 

We then use Skio for subscription - which is fantastic. The checkout is integrated into Shopify, and customers are able to log-into their portals in a passwordless way. After that, we use Yotpo for reviews & loyalty & referrals; Klaviyo for email & SMS and finally: The G-Suite!
Google Analytics, Google Sheets, Google Slides… All that stuff gets taken for granted, and we live in it. 

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