Robert Wang’s Instant Pot took the friction out of meal preparation—throw your ingredients in, hit the button, and then come home to a nutritious meal. Then he used Amazon to blaze a frictionless trail to selling it to the masses.
Never heard of Robert Wang? Perhaps you’ve heard of his creation, the Instant Pot? One of the greatest success stories to ever come out of the “Fulfillment by Amazon” program—in which Amazon handles fulfillment of a seller’s product in exchange for a cut—the Instant Pot might just be the perfect example of how technology has irrevocably changed the start-up game in the past decade. But let’s not get ahead of ourselves. We should introduce you to Robert Wang first.
Wang is no newbie to the start-up world. The Shanghai-born entrepreneur, who slaved away in academia before joining Canadian telecom giant Nortel in 1995, has been around this block before.
In 1999, he joined a Nortel spinoff, Saraide, which was sold to InfoSpace for $365 million. But any hope of a retirement nest egg was destroyed when the tech bubble burst; Wang hadn’t sold his shares of InfoSpace.
In 2000, he cofounded Taral Networks, a wireless messaging startup that later merged with another company to form Airwide Solutions. That’s where Wang learned a valuable lesson: don’t dilute your stake to the point of meaninglessness. He’d owned close to a third of the company out of the gate, but after raising some $45 million from outside investors, his holdings were down to just 1.6 percent. “That was a painful experience for me,” he says. “We lost control in the first rounds. So when I started Instant Pot, I did it entirely out of my own personal savings. It’s important to start without VC funding, because you keep total control.”
The seeds of Instant Brands were planted in 2008, when Wang was kicked out of Airwide in a dispute over the company’s direction. He knew it wasn’t the right time to start another tech company. He also knew that he didn’t want to start another one that sold business-to-business, or B2B. Even in an industry as large as telecom, the customer base had been too small and the purchasing cycles too long.
So what was the PhD in computer science with experience at three telecom companies to do? He decided to analyze some big trends and then put himself in the middle of them:
“I designed the Instant Pot with those three trends in mind,” he says. Consider the issue of time. The Instant Pot is really easy to use. Some of them don’t even have a start button, and you can program them in ten seconds. You pretty much push one button, and off you go. It would be hard to save more time than that. The Instant Pot also cooks more quickly than conventional methods.
How did he know it was going to be successful? Well, he researched the Crock-Pot, which was introduced in the 1940s. When women started joining the workforce in sizable numbers, it took off, becoming a very popular appliance in the 1970s. By 2004, market penetration was already over 80 percent. But—and this is a big but—slow cookers were still selling 10 to 12 million units a year. “That’s a pretty big market,” he says, “and it was pretty clear that a device similar to the slow cooker—but better—would be in high demand.”
Wang invested about $300,000 of his own money toward product development. It took eighteen months to get the product ready for market. Most Instant Pots have an assortment of buttons, but one thing Wang did was to make sure he nailed the comfort foods of most of the major ethnic groups who might want to use one: stew for Irish, rice for Asians, beans and chili for the Tex-Mex crowd.
The only problem is that he didn’t really have any money for advertising. “My motto is to create value but stay frugal,” he says. But not that frugal. Wang wasn’t selling on Amazon at first, but in brick-and-mortar grocery and specialty stores. After a store owner in Montreal said he wanted to discuss the product, Wang jumped in his car and drove the two hours from Ottawa. After a lengthy conversation, the owner bit . . . and ordered five. “Five hours to sell five units,” he laughs. “I realized that wasn’t feasible, that there had to be a better way.”
So he listed it on Amazon. He sold three units in the first week, without doing anything else. Within a month, people were writing reviews. The feedback proved extraordinary and was the source of many of the innovations the company has rolled out since. Wang had focused on building the best product and making sure they offered great customer service. And that’s how the love affair with Amazon began. “It is the perfect marketplace for us because of our focus on product and customer service,” he says. “People really read the reviews on Amazon as well as the ratings. When you get great reviews and ratings, sales go up. And when your sales crack the top one hundred, even more sales come in. And around it goes.”
Before long, Amazon Wholesale approached Wang and asked him if he wanted to just go wholesale. The company already took 15 percent on Amazon Marketplace, and that still left Instant Brands on the hook for shipping and fulfillment. When he signed on for “Fulfillment by Amazon,” it cut his shipping costs in half. He had to give some of that margin back when he took the final step to Amazon Wholesale, but volume increased by 50 percent. Recall that Wang is a computer scientist; he can do the math.
The Internet broke all the old business models. So what? We’re now building them back up again. The Internet disrupted traditional jobs and employment and marketing, but we’re seeing all sorts of new jobs, new kinds of employment, and new ways of marketing step into their place. Under “Fulfillment by Amazon,” Instant Pots get shipped straight from the factory in China to Amazon’s warehouses, and at one point, more than 90 percent of sales came through the site.6
In 2015, Wang started a Facebook group. “We’re not selling mattresses,” he says. “We’re not a suitcase either. After people buy the Instant Pot, they still need recipes and want to share their experiences.” At last count the group had more than 2 million members. In 2019, he agreed to a merger with Corelle, maker of Pyrex, and to stay on as chief innovation officer of the combined entity. And this time around, he’d kept control.