After living his dream of working at Hasbro, and a successful appearance on Shark Tank, Neal Hoffman turned to fulfill his geeky passions once again when he acquired Metallic Dice Games.
In this Q&A, we talk all about what it’s like to buy into a geek business and how Neal helping Metallic Dice Games to grow and thrive now that he’s CEO
Watch the interview above, or keep reading for the text transcription*:
*Text has been shortened and edited for readability. Check out the full video for all of the candid, uncensored banter!
Q: Tell me a little more about yourself! Who is Neal Hoffman?
A: I went to University of Michigan undergrad, and then I went to Proctor & Gamble. I found that the corporate world was not for me and I missed playing with toys and comics, and I wanted to be in that entertainment world. So I went back and got my MBA with the sole goal of getting a job at Hasbro Toys.
I called up Hasbro on the first day of getting my MBA and said, “I go to a top school. I have P&G background. I am creative. I love toys, and I’m gonna work for you this summer, and I don’t care if you pay me.” And I got an internship, worked for them, got a full-time job. I ran GI Joe and worked on Tonka. I had a great six years there.
Then my wife got promoted to Cincinnati, and I was hit with the decision of keeping my dream job or my dream wife. I kept my dream wife and went to Cincinnati.
I’m Jewish, and my wife’s Catholic. We were walking down the aisle of the store one day, and my son said, “Can I have an Elf on a Shelf?” And I said, “No, man, you’re Jewish. You could have a Mensch on a Bench.”
I fell in love with that idea, decided I would make one, and then try and launch it on Kickstarter. Fast forward eight years, and we sold over 250,000 Mensches. I was on Shark Tank, and it was great. It still is great. But after eight years, I’ve got that down, and we only launch one new item a year.
And I’m looking for something to satiate my curiosity and challenge me. I’m not that old. I’m not ready to give up and retire. So Metallic Dice Games falls perfectly into my view there. It’s a company that started off making metal dice and then expanded to resin and stone. Liquid-filled filled dice are on the front end of innovation.
It’s a really interesting opportunity. Great products, great company, profitable, so it’s not a turnaround opportunity.
The owner was looking for somebody to take it to the next level, who had some licensing background, some invention background, some mass retailer background, and everything I did on Mensch I think I can apply here at Metallic Dice Games.
Q: Were you specifically looking for a dice company when you decided to buy Metallic Dice Games?
A: Absolutely not. The opportunity just kind of came out of nowhere. A friend of mine said, “Hey, I’ve seen this listed on a business broker site, and I think it’s a good fit for you. It’s adjacent to my geekdom.
I’m a video game geek. I’m a comic book geek. I play games, but I’m not really a tabletop person, but you know, it’s so close that I can go in with authenticity into those situations and learn about it. And I’m not looking down on D&D like some people do on certain geekdoms. It’s more, “Hey, my particular geekdom means I can name the original five X-men, but I don’t necessarily know the first spells a wizard starts with, but I can learn.”
Q: What is the process for finding businesses for sale, and how did that conversation go with the founder of Metallic Dice Games?
A: There are certain sites where you can go and list your business for sale, and people looking for businesses to buy can go on, and you try and find that right match. A friend of mine was looking to buy a company and called me and said, “Hey, I think this is perfect for you. How would you like to be partners in this?”
He’s very analytical, and I said, “If you handle all the legal, the finance, and the CFO work, I’ll do all the CEO marketing and sales. And this could be a great partnership.” So the two of us went in. There’s a lot of due diligence where you’re just trying to uncover what it’s going to take to truly run this company on a day-to-day basis.
There are some interesting wrinkles with this company. They’ve had some really successful Kickstarters with elixir–the liquid core dice. And as you evaluate a business, a Kickstarter has value, of course, but it’s not necessarily a repeatable event. So, you can’t count that as revenue you’re going to guarantee every year, but you do have to account for that somehow. Valuing that company becomes kind of unique.
Three different companies were all bidding. I think we put together the most interesting, creative, thoughtful offer, and we are keeping the founder on. He’s running the product side, and I’m going to do the marketing side. We have a great relationship.
It’s a true partnership. So far, we’re in the honeymoon period. We’re six weeks in, but we’re really happy.
Q: Is it pretty typical to keep the owner on when you would acquire a business? Does it depend?
A: I think there’s institutional knowledge you don’t want to lose, and theoretically, I could try and learn this from him over three months and then take over. Or you could say, “Look, I want you part of this; we’re gonna compensate you accordingly.” It’s his baby. He wants to see it succeed as well.
We structured our deal in a way that we all win. And I think it’s a smart way to do it. It wasn’t adversarial at all.
I think the fact that I founded a company before this, and it was also a very small operation I ran by myself, and the founder had a team of people working under him, but it really was his baby that he was running. I think we connected based on that and respected each other because of it.
Q: How would you say that an acquisition is different than starting your own business?
A: When starting your own company, making the first dollar is really hard. There are so many different elements that go into that.
There’s the sales side of having to find your customer and have them willing to part with their money. But then there’s the logistical side of you having to have a product, develop a package, develop a website where you could take their order, a system in which you package it up in a box and ship it to them.
All these things that you don’t think about. So, getting to that first dollar sold is really complex. It’s a lot of work, and you’ve invested sometimes thousands and thousands of dollars by the time you’ve made that first dollar. Versus, we’re in a situation where this business runs really smoothly.
We have a really nice distributor business; we have a nice website. We go direct to consumer. We are at conventions; we do custom products for folks, so we have multiple revenue streams that are all working really well.
And then my job is to say, “Okay, which ones do we wanna focus on? Which ones do we want to grow on, and how do we go from here to here? What’s the plan to do that?”
A little bit of that planning is strategic, and a little bit of that is throwing a bunch of sh*t against the wall and seeing what sticks as we go forward.
Q: Let’s say someone was interested in going this route but they don’t have much experience in acquisitions. What should they expect?
A: You know, every situation’s going to be unique.
I think what surprised me was the amount and time that goes into the due diligence. I mean, we investigated this company; we looked at all the financial numbers for the past five years. Every retailer, where’s it all coming from, what worked, what didn’t, and wanted to make sure we understood what we were getting.
And then we’re making sacrifices. We decided to take out a loan to buy this company, and my partner and I said, “Look, we’re gonna defer our income for the foreseeable future.” And so, right now, I made the decision not to get paid. So I’m a CEO that is not taking any money out, and it’s a full-time job.
We’re generating cash, so that’s not the problem. I want to pay back that money we borrowed aggressively, and mentally I just want to be debt free. And then feel like, okay, we can start really drawing out and living whatever lifestyle we’ve become accustomed to.
Then one day, maybe we’ll sell the company and retire to an island somewhere.
Q: The gaming dice niche is pretty huge. How are you differentiating Metallic Dice Games from every other option that’s out there in the market?
A: It’s a good question. There are low barriers to entry to dice, so that is the problem.
And there are a lot of other dice companies. The reason we bought this one is we have a distribution network set up. So we are in all the major gaming hobby stores. And that’s what is tough to break into, right? They only carry three to four different companies, and we’re already in, so I think that’s really what we were buying.
As I look at the market, there’s the Etsy side where people are making one-offs, and we’re not competing with that. And then across the market, you know, at your lower end, you have what I call plastic by the pound. People are just making dice and putting them in a game store. You can get any set you want for ten bucks.
Then you’ve got guys like Wyrmwood and Level Up. They are doing beautiful pieces, borderline artistic and limited runs, and they’re selling for $100-200. I think everybody wants those, right? But not everybody can afford those.
Where we fall is that mid-range of the premium dice you want but can also afford. So we’re in that $30 to $80 range. We want to have the highest quality products people are proud to have at their table. And we want to push the cutting edge of innovation; whether that is with the materials we use–for example, we’re testing out silicone dice right now. So, when you roll them, they bounce, and they’re silent, and it’s a very strange experience.
We have inclusion dice with things inside of them. We have our liquid core dice, which are literally a liquid ball that we build the dice around, and it has a snow globe effect. So we’re constantly trying to come up with new and different ways for people to have their dice.
Where I think I’m coming in with my Hasbro background is to say, “What other properties are out there that we can bring in and create partnerships with?”
That could be anything from Dungeon and Dragons, Pathfinder, Lord of the Rings, and Stranger Things, and a lot of them have partnerships, right? So we’re trying to find out, “How can we get in? How can we offer something unique that nobody else has, and how do we put that through our channels?”
Because of my background at Hasbro and because I was on Shark Tank and have a lot of connections from there, Shark Tank becomes a little bit of a superpower, right?
You can kind of call anybody and say, “Hey, I’d like to have a call with you.” And they’re like, “Hey, it’s a circus freak. I saw them on Shark Tank. I’ll take the call.” Which is actually, you know how you and I met, right? I called you up randomly, and you’re like, I’ll take that call.
I’ve said to the founder that I can get us any meeting. So, if you can dream it, I can do it. And we’ve had a number of these high-profile meetings already, and we’re just trying to find the right partnership.
Obviously, they take time. We work at the speed of a startup, but not everybody does.
Q: What are the big things on the horizon that you’re excited about that you can talk about?
A: On the marketing side, we’re working on a number of different partnerships with a number of big companies.
Nothing’s inked, so nothing I can officially talk about. We are filling our Kickstarter of the Elixir Dice. Once we fill that, we’ll look at doing our next Kickstarter. We don’t want to do a Kickstarter until we fill the last one. One of the reasons that you and I originally met is we are working to broaden marketing partnerships.
So, building relationships with podcasters, artists, etc. We give out affiliate links so they can make money when people get dice. That might look like finding one of the top podcasts and making custom trays for them or custom dice.
It might mean becoming the exclusive dice of a podcast, and they only use ours. There are so many people playing, and it’s such a hard category for, as you know, geeks to get paid. We’re willing to pay. So it becomes an interesting scenario. I’m excited about all of those partnerships.
Then, looking at our current line and how we can add some sizzle to the steak. Right now, we’re known for really, really high-quality products. But if you look at some of our branding and the way we market it, it doesn’t match the quality of the product yet, and I think we can get there.
I’ll use this example. We were just at PAX West, and we have a product that we call Misfit Dice. It’s a full set of seven metal dice, but they don’t match. They may be an old set we had, or they might have a scratch or unique ding. So each one is really unique. We sold those and did okay. Not great. So, I relaunched that as a blind pack, and we branded it “Adopt-a-Misfit.” The logo is now a dice goblin with a wheelbarrow of metal dice pushing it along. We put it out at PAX, and sold out in two days.
We had them at GenCon and brought the same amount to PAX thinking, “Okay, we’ll never sell more at PAX than GenCon.” But not only did it sell, it sold out in two days. It’s that kind of stuff where it’s variations on what we had, and what was cool is I watched every person open that product, and they were all delighted, right?
They got $40 worth of dice for 20 bucks and then the reveals, and it was so much fun. So, now we take that and push it through our other channels, whether it be Amazon, our distributors, or our retailers. We can take something that was very small before and turn it into something bigger.
It’s theoretically incremental, right? We’re not stealing it from another dice company, and we’re not taking it from ourselves. We’re not hurting anyone. We’re growing the category with some new thinking.
Q: It sounds like you’re using cons as a testing ground for new ideas. Did I read that right?
A: We are. It gives you a chance to talk to people and see their reactions as they’re holding products. And I think that’s really important if you want to be authentic. We’re a small company of five people; we’re all at the cons. You’re talking to us.
So, as people buy our products, they’re saying, “Hey, do you sell D6s and D20s of these?” It’s like, “Well, no, we sell full sets.” And now I’m realizing not only do we need to sell full sets, but whenever we do sets, we need to make multiples of sixes and twenties.
Now, because it’s not my natural geekdom, I didn’t know that. But, I can learn that pretty quickly and hear that from our audience and deliver that to them. Same with Misfit Dice. It was the same product at two cons. We just packaged it differently and talked about it differently, and suddenly, it went from something that was boring to something that was super fun.
Q: What is the greatest win you’ve had with Metallic Dice Games since becoming CEO and the greatest challenge that you faced?
A: I mean, the greatest win was honestly getting the company. I wanted it, and I was willing to do whatever it took to make it happen.
And then there were a couple of other bidders who felt that same way. And in that process, you don’t have visibility to the other side. You don’t know what they’re saying to the potential seller. You don’t know if your offer is the best. You don’t want to bid against yourself. And you get so wrapped up in that.
There was a time I thought we were going to lose it. There were a couple of negotiating points we didn’t see eye to eye on. And I’m a big believer that we can creatively find a solution to anything.
We used a business broker, and his job is to kind of protect the seller, both his time and his energy. And I was trying to get the business broker like, “Just put me in a room with this guy. If you have two entrepreneurs in a room, we can get to a solution.” And he was trying not to do that. His job is to do that. So, I feel like winning that negotiation and getting the company and getting it for a fair price where everybody was happy; everybody feels good about what we did was the win.
I think the challenge so far is trying to build a licensing program from scratch. That’s difficult. And trying to build up an asset base from scratch. That’s been kind of hard. And then conventions are a double-edged sword, right? So GenCon was fantastic because it’s all tabletop gamers.
We then went to PAX West, which means we loaded up a van and drove it 32 hours, and unpacked all of our stuff. Then we found there were, you know, 12 other dice companies there at a show that’s full of video game fans and tabletop fans, so it’s not as busy in that tabletop area. And you’re slugging it out with these other companies, trying to get your money back.
It challenged the way we thought about it. How do we want to approach this? How do we want to try and maximize our investment? And I’ll tell you what’s been cool is the whole industry is pretty tight-knit and well-intentioned, good-natured. I was talking with all of our competitors; we all met and liked each other.
It was not, “I’m gonna crush you, and I’m not talking to you.” It was walking by Wyrmwood’s booth and saying, “Your stuff’s beautiful.” And going over to, you know, Norse Foundry and saying, “Hats off to you guys. You’re doing nice work.” It wasn’t crapping on anybody else’s stuff. And the same thing; people came over to our booth from those companies and bought our products. They liked it.
So, yeah. A very supportive industry.
One of the coolest things was Gen Con and seeing all the people bringing their games and testing them out and playtesting. All the other gaming companies coming, testing out these new products and giving feedback, trying to help these people make the best game possible. It was like, yes, at the end of the day, we’re going to be competitors.
Our games are going to be on the shelf next to each other, but I want to help you and see you do the best work you can. And I thought that was just really cool to see from the industry.
Q: What advice would you have for someone interested in buying a business but is a complete newcomer to that idea and that space?
A: I would say for newcomers, don’t be a newcomer, right? It’s finding an area where you have some expertise, where you can add some value, and try to go there.
I think that’s what I’m doing with Metallic Dice. You can value the business and say, “Okay, it makes X number of dollars a year, and based on this multiple, it’s worth this.” And then I can come in and say, “But I think with my skill set, based on what I’ve done with toys, packaging, PR, I can actually take us from here, and it’ll be worth here.”
That’s what makes me uniquely qualified. This company is more valuable to me than anybody else because I think I can bring that value. So if somebody is going out looking for something, I would say think about the unique value that you can bring and that you can add. That’s the opportunity you should be looking for.
For mine, it wasn’t specifically dice; it was the gaming industry and the pop culture side. The manufacturing, the importing with China, the relationships with suppliers, Those are all things I want. And MDG fits right in there.
Q: Would you ever recommend that someone approach another company that isn’t actively selling?
A: Yeah, I mean, it’s kind of like a house, right? You knock on the door and say, “Are you selling?” Everybody’s selling for the right price, right? And you never know what that value equation is going to be. It might be worth a certain amount to you and a certain amount to somebody else.
Maybe you can make that work. I know even in Metallic Dice Games, we’ve owned this for a couple of months, we’re already looking around like, you know, you see those guys over there, they’d be a nice add to the portfolio. They might not be selling, but you know, they might be valuable to us, and we might give it a try.
So I’m a big believer in no fear, and worse comes to worst, you talk to them, they say no, but when they do sell, you know you’re first on the list.
Q: What else would you like to share, promote, or plug for Metallic Dice Games? Where can people find you?
A: I would say to your listeners, we are hungry, and we are friendly, so we want to make a partnership work, trust work, and we are willing to think about anything, right?
So if you have an idea, whether you have a show, product, or whatever it is, feel free to reach out. I will have at least one conversation with anybody about anything, and we’ll see where it goes from there. Feel free to reach on out.
Thank you so much to Neal Hoffman for sharing his acquisition experience and sage business development knowledge!
If you’re interested in partnering with Neal and Metallic Dice Games, don’t hesitate to reach out to them, or start earning money right away by joining their affiliate program.