When you look at a Phat Scooters, you’d think virality is standard equipment. And they are hot right now. But the president of Phat Scooters, Derrick Mains, says they struggled with the same challenges as any startup.
Derrick’s been involved with more than 150 companies in his career, some wildly successful, some … not so much. He says there are more similarities between those that make it and those that don’t than you might expect.
And he’s learned that the transition from struggling to succeeding can be instantaneous, and if you slack off before you reach that point, you never will. Derrick shares what can keep you going till that magic moment.
Rise Grind Repeat Podcast powered by EIC Agency
Hosted by Dustin Trout
Produced by Andrei Gardiola
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| Rise Grind Repeat 067 |
Derrick thank you for joining us on an episode of Rise, Grind Repeat. I’m excited for this because I mean looking at your LinkedIn it’s you’ve done a lot in startups, you know, Phat Scooters, it’s there’s the buzz is just I mean growing it’s there’s more and more people that I know that have heard about you guys and love the brand. So I’m excited to kind of just hear more about your past and the experience you have helping grow other brands and how that’s led you to, to Phat Scooters.
Absolutely. Well, it’s it’s really Thanks for having me. It’s great that you’re right down the street. makes it really easy. Yeah. We Yeah, you know, Phat Scooters is really interesting. I mean, it’s a brand that I think from its inception, it had some aspect of, I don’t know if I want to say virality it’s, it was a little bit viral, and it’s at its beginning, but it went through all the same stages that every other you know, startup has ever gone through. I mean, we’ve struggled with cash, we’ve struggled with people, you know, I mean, there’s I can’t tell you how many times I’m like, well, we make it to the end of the day. Everybody else is like waiting for five o’clock. To go drink, I’m like, will we survive? By the end of the day that it’s all gone? And you know, it’s it’s, it’s like people think you can be an overnight success. I’ve never met a single person.
Every overnight success story is a 10 year story. I mean, exactly. I mean,
it really it’s, it is about the tipping point when it eventually goes from rain to snow, right? There’s, there’s this tiny little thing that changes that somehow flips you from one to the next. And and that’s a hard moment. Because you have to you have to be able to beat us. Like we just thought we got to grind. Yep. And that grind. If you stop wanting short of it, it never happens. Yeah, you know, so you’ve just got to push to that point where eventually it takes off and and it’s not easy to do. You know, I’ve got a background in doing this. I’ve got at one point I counted 152 companies throughout my career that I’ve either consulted for been on the board of help start I have had hugely successful companies that ended up in NASDAQ exits, I’ve had companies where I raised millions of dollars 2009 that a lot of people said I was the darling of Silicon Valley, you know, raised all of this money. I was my company won a huge prestigious award in the startup space. And a year later, I ran it into a mountain that 1000 miles an hour and lost everybody’s passion, fired everybody in the whole world. I mean, I have seen it from both sides. I know what both sides feel like. And, you know, there’s a lot of similarities between both. And in the challenge a lot of times is you don’t know where that sunk cost is. Right? So it’s like, do I keep grinding? Do I keep going to a point do I keep going on? Or is there eventually a point where you have to say, Enough is enough? It’s done. Yeah. And, and that’s hard. That’s really hard for entrepreneurs to do. I mean, I’ve seen guys work on software to the point it’s like well, now there’s nine competitors You know, there’s still like, but I’m only I’m gonna get it out in September and I’m like, ‘what year?’ because we’re just keep going on and on. So but but but it is really tricky. And that’s why I think one of the most important things for me is just throughout my entire career. I’ve always sought out mentors and advisors. I’m not the guy that I’m not the smartest guy in the room. Never. Maybe right here now. No I’m just kidding.
But I’ve always sought out
the guys that were smarter than me. Yeah. And I’ve always said to them, Look, man, let me give you something. You know, I had a board of advisors at one company, I had some really prestigious folks on there. I sent them $100 check every month personal check from me, to them, and they were like, you don’t have to do this. And I’m like, Yeah, but when I do, at least at least I know you’re in the game with me. Right? When you cash that check when you have to go to the bank. This is before you could do it on your phone. I couldn’t, I couldn’t. But I you know, I’d send them that check. They’d cash it. And they would you know, as they’re cashing it, they’re going Hey, I gotta call Scott. Oh, you know what, I just had an opportunity that came up this morning. So, you know, it’s it’s really important to surround yourself with the right people. I think probably the biggest mistakes I’ve made as an entrepreneur. As a startup guy, I think I’m trying to think if in any instance, the people that I started it with, we didn’t end up hating each other, and like ready to kill you. I mean, it’s hard because the people that you start with most of the times aren’t the people you end with. Yeah. And that can be tricky to that breakup piece.
And is it usually just because your vision is the same whenever you guys start, but once you get to your 234, is that that usually direction of where you guys want to go? Just kind of I
think you just grows individual to I mean, I was a musician for years. I was in lots of bands, you know, it’s usually a check. I mean, it’s it’s the it’s the, it’s the Beatles thing. It’s always like she shows up in practice. And you’re like, well, this is about that. Because this you know, you could just see, you can see where it goes. So I mean, sometimes it’s people move, they get another job, they get a job offer it. I had a startup that failed because one of our one of our four founders got recruited by a major like top 25 software company in Silicon Valley to be their CTO. Wow, what am I gonna say? Anyone? Yeah. 500,000 hours. Your check versus $96
he’s got kids. I mean, at some point he’s gonna have to eat, you know,
ramen doesn’t last forever. Yeah, I mean, it literally does last forever. But I mean, you can’t live on that, you know, forever. So, you know, there’s lots of reasons that things go bad. I think sometimes it’s, there’s a lot of lack of communication. I think there’s a lot of lack of clarity that happens. I think there’s a lot of assumptions, you assume you’re on the right page, you assume that this is the path that you’re willing to go down. And then the reality hits, and, and it goes bad. I’ve also seen lots of times, you know, family members don’t make good partners a lot of times. Yeah, you know, because you’re stuck with it, like you got to go to thank you can’t
make that strong break. So there’s just lots of
things we all do. Personally, anytime I get involved in a startup anymore. All of all the founders equity vests, just the way that we all vest it, we might get 20 you know, if we have for the four of us started something and we’re like, okay, we’re just taking 25% I’m like, cool. We’re each gonna get half of that. And then over the next four years, at the end of each year, we all sit down and we go, okay, your percent percent, your percent your percent? Because if you don’t, you just don’t know what’s going to happen. I mean, I’ve been in companies where we’re 90% of the equity is held by dudes that we haven’t seen in three years. And we got to call their attorney to get a signature. It’s like, those that work. So a lot of it’s just that planning up front, you also have to, you have to assume that you’re going to be a success. And this is sort of what we were talking about in the lobby here. You know, it’s like, sometimes you have to make these gambles and you have to say, you know, I have no idea if this is going to work. If it does, I can see where it could go if it fails. You know what I can always I can always pick take my ball and go home. Yep. And, you know, we don’t want to get too married to that. It’s hard. Right? But you got to be able to throw that baby out the window. You have to
Yep, yeah. So um, the mentorship I mean, that’s that’s a huge commonality between other other guests that have been on plays a huge role in success and I mean, what is it about that mentorship that really helps you succeed.
Yeah, I think for the most part, it is somebody that will actually tell you the truth. Your grandmother will not ask you a lie to you about how cool your app is. I mean, she just will, your friends will lie to you, your business partners will lie to you, you will lie to yourself. Mentor is somebody that’s outside that has a very limited amount of time with you. It’s just gonna shoot straight. And if they don’t shoot straight with you, you don’t want him as a mentor. Yeah, and they need to be the one that slaps you across the face and says, Listen here, dummy. This is stupid. Yeah, stop stop being stupid. And sometimes, I mean, I’m on an executive team right now where where we we occasionally will sit down with each other and be like, Hey, listen to knock it off. Yeah, because this isn’t cool. Yeah. And we all respect each other enough to go.
yeah, you know what, that was inappropriate. I shouldn’t have done that. I’m gonna change. Most of the times you have to get that from an outside. I think the problem with mentors and for instance, for me, I don’t mentor anymore. I only mentor people that work for me. And the main reason is, you know, last week I had 61 appointments on my calendar. It’s like, what when would I find that time
My wife’s on vacation this week. Do you notice where I am? I am not on vacation with my wife. Yeah, Why? I had to, I just had I had stuff going on. And I’m like, babe, I’m sorry. You know, and, and it sucks. Like, I want to be on vacation with her. I have to take care of this. So I’ve, over the years, I’ve just become so careful with my time now. Like I don’t everybody knows my office, I set 15 minute meetings, I don’t set I don’t do that our blocks do not work. I also use a method that I created in a couple of the books that I wrote, called the block tackle handoff. So every day I put two blocks on my calendar one usually is right about 9:30 and one’s about 2:30. This is this is sacred time cannot be interrupted. Yeah, a lot of fire is the only way. A lot of fire. I mean, literally if Yeah, if you knock on my door, I bet I’m running with a fire extinguisher because I just assume that you know, to these times are blocked off. And then every time that something comes at me during the day, I’m like, Okay, do I have to tackle this now? Or can I put it in my book? Or can I hand it off to somebody? Yeah, right and so I’ve become pretty efficient with that. You know, I’m also a big fan of executive assistants. I think the executive assistant went out of style for a long time. You don’t find an executive in the 70s and 80s or 90s it didn’t have any a
bright light. I don’t find why did that leave? Like why did they I
think they thought it was like that. I’m not sure if they thought it was to
the most executive assistants or
female I will tell you that I’m for instance, I just did an interview process had 44 candidates, I didn’t have a single male. Wow. 44 not a single men applied to position. I think it’s a it’s a very interesting role. It’s a very powerful role. It’s somebody that has a really unique personality. That’s like, they love to help you. They’re very much nurturing. They’re like, I want to help you like I need to get you you know, the dad is like other kid falls over it’s like, well, yeah. So I don’t know if that’s why I don’t want to be sexist about I don’t know if that’s the case. I just think it was interesting in the process with our HR team. They were like, when are the dudes come when are the dudes coming in, they just never came. But that was it was a really popular position for a long time because executives value their time they looked at their day and they said, You know what, I’m worth 500 bucks an hour, or I’m working $1,000 an hour and I’m making fundraising calls. I’m worth $8 an hour when I’m taking garbage. Yeah, so they they prioritize their tasks. And they not only created a to a to do list, they created a not to do list. And they said, these are the items. If I ever get caught doing, go to my desk, grab the mace come out, spray me. And then I’ll remember, like, it’s like that last kind of thing, right? I mean, I got it. I gotta I gotta stay away from certain things. Yeah, I can do them. Sometimes. It’s great for the CEO presidents take the garbage out, because there’s something to be said about that. Yeah.
But for the most part,
you know, you got to focus your time and your energy on very specific things. So finding people that can help you do that. That’s a virtual assistant, virtual assistant will save your life. Like even if that’s just a couple of hours a week, somebody that books, your calendar, you know, how many how many times have I tried to book a lunch with somebody and they’re like, Oh, you want to go here or here. Yeah, I hear Oh, I can’t do it to you. Oh, can we push it? I’m like,
What day? What time?
push my other media. I’m doing all these tasks that are that have to happen. They’re urgent tasks, but they aren’t the best use of my time. Yeah. And I think that’s this thing that I’m the kind of guy that doesn’t cut his own grass, because I’m like, wait, I could make 500 bucks an hour. What? I’m going to pay this guy 30 bucks an hour, because that saves me $470. I think as an entrepreneur, it’s hard when you’re doing all the things, but you’ve got to find as quickly as you can. How do you get those things out? I have two companies in the past. I paid for my out of my own salary. I paid for my EA, really, that’s like, I have a I have a person and I just pay for myself and they’re on my staff. They don’t work for them. They’re they work for me. Yeah, because they’re good enough to be able to say I’m gonna get all these things off your plate. Didn’t you know I my new APA? who just started yesterday. She was like, your anniversary is on Monday. And I’m like, What? And she’s like your wedding? Your wedding anniversary.
Like, okay, good
mental note got at her. She’s like Do you need to do anything like, not right now? But on Monday? I will be calling you and Sandy. Yeah. And you don’t know. But it’s just trying to figure out how to focus your attention on those great tasks. If you’re a creator, you should be creating. Yeah. And every time that you’re not creating is is truly lost time. And time is the most valuable resource you have. Yeah, yeah. If you have four hours a week to work on your startup, what if you had six that’s 50% more time at the probability of success? Probably doubles? Isn’t that thing?
No, I love it. It’s I try to get up early and more than a couple hours before. I mean, I’m usually up working at 4:45 but did the math the other day and I’m like, okay, that’s an extra three hours each morning. And it’s like you do that five, five days a week over two years. It’s something like 1700 hours and it’s like, what can you do with an extra seven? I mean, how much quicker Can you grow? If you have an extra 700 hours? It’s, it’s just identifying the value of that time and making sure it’s it’s as ROI positive as possible. It’s, but I think one thing that gets tough is is to your point, it’s like well, I could do that but it’s it’s not given revenue driving and even then it’s it’s I love what you said where I could mow the grass, but I could be making 500 bucks an hour and all that, like, that’s my main goal is like I can’t wait till my time and like we were growing to where it doesn’t make sense for me to mow my own grass clean our own house and and all that like it just doesn’t make sense financially. But how how do you balance the the knowing when to hire
the tool man, so I call it 1% better every day, something I’ve been teaching for 15 years, and it’s like, Look, I can’t I can’t go from here. You know, I’m not gonna win the Boston Marathon. In a couple weeks, there’s just no chance I don’t even run. So it’s like, there’s no chance that I’m gonna win the Boston Marathon. It just isn’t gonna happen. But But if winning the Boston Marathon is my goal, the way that I have to do that is by increasing but by getting better at it each day, like if I don’t run at all. Well, let me go for 100 yard run tomorrow. Yeah. And then the next day I have to say, Well, I need to go for 101 yards 102 I have to keep improving that. You know, it’s funny people don’t think that 1% is a lot But 1% better every day is 3800% better at the end of the year? Wow, that’s so if I just can take 1% of those tasks and I’m like, wait, I can get an AI calendar scheduling. I mean, there’s a couple of them out there right now. Yeah, that’s gonna save me five or 10%. I could do this. I can do this. I probably should say no to more things. My biggest mistake. I gained 120 pounds at a startup one time. Really? Yeah, I was 365 pounds. When I left that startup. I didn’t know how to say no to anything. So it was like, Oh, yeah, I can do it. Oh, yeah, I can do it. Oh, can you speak over here? Oh, can you go on this trip? Oh, can you talk to this guy? Oh, can you mentor me? Oh, can you do this? And I would get home at 1230 at night and I would get up at 430 in the morning. And I was a vegan at the time and I just ate chocolate cake and spaghetti all day long. It was just like
chocolate cake and spaghetti and like it’s vegan. It’s vegan. Yeah.
Big old handful of you know, noodles. It just didn’t make any sense. So I eventually had to get really good at just saying no, and I get stuff all the time, especially now that we’ve got this TV show, you know, I get I probably get 50 Instagram messages or Instagram LinkedIn messages a day. I I’m sort of rude. I respond to very, very few have one or two, you know, appreciate you
responding Yes, maybe one or
two. But if there’s an opportunity, right if it may make sense if I go Okay, is that something on my to do list or my not to do list? Yeah. Would you like to speak with me about your insurance? Oh, yeah, I bet you we can save you 5% Oh, great. Wow, you can save me $2500 a year. I’m so excited about to send you 20,000 documents. I just can’t do it. I don’t have that time. So, and maybe at some point in the future, I will have that time. I hope
if I am that means I’m stagnated. Yeah, I’m not going anymore. One of the things that I hate about about companies is and I’ve grown into companies that have been in that 100 plus million dollar revenue category, and it’s like, I love the double digit, triple digit. I want to be like that three 400 you know, I mean, I remember sending a meaning one time and they were like our objective for this year is 3% growth. I was like, I need to find a job. like everybody’s like, don’t kill yourself. The goals only 3%. This is just there’s no.
I mean, at that point,
this is risk mitigation. Yeah. And I did a lot of consulting when I worked in sustainability years ago. And I was very fortunate. Although some people looked at this as a sort of an insult. I was introduced to the sustainability conference once as, as the only environmental sustainability consultant that has worked with three of the four horsemen of the apocalypse. So at that time, I had contracts with Monsanto, ExxonMobil, and Walmart, dang. From sustainability, right? Those are not the companies you think you’re like, wow,
these guys, these are the
but I was like, hey,
that’s where I want to work at. I want to work at the place where we can get massive improvement. Yeah, by just changing the mindset and going, Hey, wait a second. What if we did it this way? That’s a great idea. Let’s implement it and it’s 100,000 gallons or 10 million pounds saved well says, hey, let’s work with, you know, Green Mountain Coffee Roasters. He’s already like, perfect. Yeah. And they’re like, hey, if we could just improve this by an eighth of a percent. No, I don’t want those numbers. I want the big, huge numbers. That requires a lot of betting. You know, I mean, we talked about this T shirt that’s like this whole TV show deal that’s going down right now. It’s so crazy, because it couldn’t happen at any other time in COVID. Yeah, COVID was the opportunity. And we just happened. I think it was March 17. The night that we heard the NBA cancelled within 24 hours, we had a pilot done. We were like, there will be no entertainment for the next year, we will produce a pilot in 24 hours. not wasting time. Yeah. And everybody’s like, Are you crazy? And I’m like, I’m crazy. And Get out of my way. Because Yeah, you know, this is this is how you have to handle opportunities. That’s why I’ve always been
not a huge fan of business plans.
Right. I mean, I think you have to have a plan. Yeah. Yeah. But but it has to be so nimble. Yeah. I’ll give you an example. Right now. We’re, we’re, we’re out in we’re talking with a lot of investors and we’re doing a lot of reorganization And we’re doing all sorts of things. And I’m looking at like the pitch deck for our company. And I think I sent it out this morning, and it was version 18. Since August 1. Yeah, that’s how many times the plans changed in the last 27 days. It’s just you have to be nimble like that. You have to be able to look at the plan. And you have to be able to say, Bruce, I think it was Bruce Lee once said, you know, the, the purpose of a goal is not to hit it, it’s just to have a direction, right? It’s like, if I’m gonna punch you in the face right now, I won’t get like, I don’t know exactly where I’m gonna hit. But as long as I go that way, I’m gonna probably make a connection. So that that’s something that you really have to think through. And you really have to make sure that you, you don’t get yourself tied up in these walls of like, Well, that doesn’t look like an opportunity. So, so I maybe I shouldn’t do that. I’ll tell you one of the stupidest things I’ve ever done in my life. was in 2009 I had a kid call me 2008 or 2009. He had an idea and chewed my ear off for like 30 minutes and I’m like, Stupid, right? And he wanted me to become really the first investor in the company and the company was called Zimride. And the idea was that people are already driving to work. why shouldn’t they drive together? They should carpool. Yeah. And I’m like, oh, okay, you know, and he’s like, yeah, it’s good for big companies. And I’m like, my mom was always like, don’t get in a car. Like, yeah, so I said, No, yeah, you know, and now John’s company was $38 billion. I think Lyft was in the last round. Yeah. So I passed on Lyft. Wow. Because it sounded like a really dumb idea at the time,
and it’s still so think about, it’s
still sort of sounds like a pretty dumb idea. But,
right. I mean, he’s got $38 billion.
So I’m gonna say, John, if you’re listening, I’m still interested in putting that cash and just evaluation back. But it is it’s like you have to keep your eye open to those opportunities.
to keep focused on what’s happening. But you also have to be able to say does that fit like you constantly have to be taking taking the puzzle? pieces and trying to put them together and go. Is there any way that this works? And and then give it a try? But then don’t be afraid to go? You know what that was dumb. Yeah. You know, we spent 20 grand on it. Well, that’s okay. Let’s just move. Yeah. Because if you don’t do that, you’re never going to see those opportunities as they arise. Yeah. And, you know, I think I’m a living testament to that most of my exits have not been, everybody tells you every investor says, well, what’s the exit look like? And I always tell them, I have no freaking clue. Because I have seen I’ve been in companies that went public. I’ve been in companies that did reverse mergers. I’ve been in companies where a company that was a million dollars acquired 100 million dollar company, I’ve sold licenses. I’ve, you know, I mean, every exit looks completely, totally different. So, you know, we all think it’s this big check. I don’t, maybe twice I’ve seen a check, a physical check. Sometimes it shares sometimes its profit interest. Sometimes it’s paid out over two years. Sometimes it’s just you clean up the debt and have those people stop calling me It never looks like what you think it is. Yeah. And if you think it’s gonna look a certain way, you’re gonna miss 99.9% of the opportunities that come up.
Yeah. Because it puts your blinders on. And I mean, going back to valuing your time, it’s how much time are you going to put into looking over the next five years? How are we going to grow and all sudden COVID hits and all that time you put in this five year plan, it’s not even there anymore. Now you got to rethink and it’s, it’s it’s having some type of direction, but not sinking too much time into into it, because it’s to your point, you got to be nimble. I mean,
and like I said, the exit doesn’t look like you think it looks almost without exception. It just looks different. It’s it’s murder. What was it? 90% or 90% successful? I think it’s something like that, or acquired or merge. You know, it’s it. I mean, there’s, I had a crazy story A few years ago, as I was consulting a company here in town, and they had a vendor that for 20 years have ever been great. All of a sudden it started going sideways. Yeah. And they were like, we’re looking for a new vendor. And I said, Well, why don’t we go over to the old vendor and find out what’s going on? And they’re like, Well, you know, they just, they suck like, drive over there? Sit down with the owner. I’m like, Dude, what’s up? 20 years good. He’s like, hey, my wife just got diagnosed with cancer, she’s gonna die. I don’t know what I’m gonna do. I can’t think about anything. He’s like, I don’t want all these people to lose their job. He’s like, I don’t know what to do. And I’m like, would you like us to just take over the business? And he’s like, yeah. And I’m like, I’ll tell you what, we’ll cover your insurance for a couple years, gets you through this. We’ll keep paying your salary for the next 24 months. We’ll just take over the business. And he’s like, cool. Literally at the table. He’s like, just have your attorney call my wife. Yeah. I mean, that’s not the exit he ever thought. No, that’s not it wasn’t even a good exit. But it was the exit he needed, right? Then he’s like, I need insurance. I need a paycheck. I need to get out from underneath the stress and I need to spend the last couple of months of my wife’s life with her. We hired him as an employee, when after she passed, waited about six months he called him was like, Hey, I appreciate what you guys did. Um, I need to get back in that game. And we’re like, come on over your VP of this and, you know, and he’s got a job. Not all of his employees had jobs. They all came up and worked for us.
So it wasn’t again, it wasn’t
what he thought, but it was exactly what he needed.
Yeah. No, that’s that’s really cool. I, one thing I love is I mean, I struggle with saying no to me, it’s If you say yes, you figure out how to how to make it happen, but by saying yes to more things, there’s gonna be things that pop. And to me, that’s where you can find success quicker. I mean, you don’t miss opportunities, but then you can stretch yourself too thin. How have you learned to say no better and not dwell on maybe missing opportunities and stuff? Yeah, I mean,
it’s a great, it’s a great point. And a lot of times I have introduced him to somebody else. Mm hmm. You know, I’ll be like, hey, look, actually, here’s something. One of the things that I was doing. Pre COVID was I was running this monthly executive mixer. That was called secret sauce. It was invite only you couldn’t find us anywhere you had. You had to know somebody that knows somebody to get you in the door. Yeah. On an average month, I was getting 180 people showing up for that. Everybody from, you know, the executive leadership of the pro sports teams here in town. And I would just say to them, hey, look, I can’t help you.
But I go to the front door.
Yeah, there’s an idea is say, Derek, Derek said, and they’ll go, Okay, come on in, and you’re gonna meet 100 people in that room that are gonna help you do that. And then usually at the end of the night, they come over to me with a big smile. They’re like, you don’t know. They’re like LinkedIn, I’m like, Okay, come here, and I just met this dude. And we’re gonna start a business together. And I’m like, Okay, cool. So, you know, I, I do tend to think that
you I probably do miss a lot opportunities. Right. But,
but I think
the dedication that I have to have to the vision that we have is so important that I have to try I have to try to again, that puzzle puzzle piece. I read that thing through and I go, does is there any shot? Yeah, great example. I had an insurance guy hit me up on LinkedIn about three weeks ago, hits me up and he’s like, Look, I know, starts out with I know you’re busy. Here’s why you should talk to me. And I looked at it and I’m like, and he’s like, here’s the customers I work with. like, Okay, number one, I know who all those people are. Number two, he was really succinct. He was like, here’s why you To talk to me, I sent him a text or an email and I said, I have 15 minutes, gone on the call for 15 minutes. And he realized that we had some very interesting connections. I said, let me connect with my attorney. My attorney worked with him for a little bit on some stuff. We’re actually doing some business with them. Two days ago, guy calls me out of the blue and is like, Hey, I was talking to this, Brandon do that, you know? And I’m like, so I’m looking at my Gmail. And he’s like, Hey, listen, I have a major brand that wants to sit down, have a talk with you about something you’re involved with. Are you okay with me facilitating that? And I’m like,
yeah, you know, so you do
have to, it’s almost like that puzzle piece thing. It’s, you know, sometimes it’s just being able to say, Hey, I’m not interested at this time or handing them off to somebody else in the organization. I mean, that’s why it is important to have some sort of structure. I again, I love EA’s because EA’s is are the best gatekeepers in the world. You know, you send that person to an executive assistant and that executive assistant, their number one goal is to make sure that that person never gets to you. So you have to very convincing. Yeah, you know, to make sure that you get through where they’re finally to the point where they’re like, Okay, I’m not gonna say yes, but let me put it on the agenda to talk to them and, and, you know, so I think it’s it’s creating the systems and processes around it that helps.
Yeah, no, that’s huge. I mean, that’s something we’ve been working on a ton the last I mean, couple months, I mean, that’s been the beauty of COVID I mean, things are kind of slow down, which allowed us some some breathing time to figure out our process and where I’m spending my time and auditing that and where I should be bringing on more people and then as as things started ramping back up and this last month, two months, I mean, it’s been nice to go through that and figure out the process because it’s like, we’re laughing. I mean, the last two years I mean, it’s been a lot of a lot of learning but going from or used to just show up and shoot commercials and no pre production nothing and I was joking the other day where it’s like, this is almost like too easy. Now I kind of missed the the fire drills, the missing the missing the battery and but it’s amazing how things just run so much more smoothly and then you it opens up pockets. The time so you can spend time on other things.
So I think I think some of it is and not to interrupt. But you know, one of the things that I’ve always I don’t know if you guys are familiar with this, but there’s a story. The story is called the bulls den. And it’s a story that travels around Silicon Valley. It’s been sort of legendary now for probably 20 years. And the story goes like this, there was this engineer work for a big software company, he was trying to get promoted. And every time he would get to, you know, his annual review, they would say, look, we really love your work. But the executives aren’t, they don’t, they don’t like communicating with you. They feel like you give too much details or too in the weeds. You got to try to raise the level and get more strategic. So he tried for years and just couldn’t figure it out was like, you know, it’s just pretty, he’s an engineer. His personality is like, let me give you all the details. Right. So one night about 11 o’clock, his his his son had taken the family car out with some friends supposed to be home and 11 starts raining out phone doesn’t rain, you know, the kids not home. Yeah, it’s 11:05 11:10 finally 11:15 The phone rings, he picks it up. It’s the son he goes, Dad, I’m okay. The bull is dead. The car is drivable. Can you please come to the police station? And he’s like, son, what do you what do you what are you? What is this bull and he’s like, Dad, I’m okay. The bulls dead the car is drivable come to the police station hangs up. So he jumps in the car and he’s driving there and he’s like, Listen, it’s like, I don’t know what’s going on. Yeah. And then he realized He’s like, I don’t know what’s going on. My son’s okay. He was obviously in a car accident, the cars, okay, everything’s fine. I need to go to the police. I don’t know what this thing is. But I need to go to the police station and figure this thing out. And he said, after I got there, I got to hear all the details about the bull standing in the middle of road and they hit it at 60 miles an hour, the whole entire thing. And he said, I get home and I’m laying in bed at night. And I’m like the bulls dead, like, all I needed to know was the facts. Yeah. And when I when I communicate with executives, the punch line has to be first. And when people send me an email where the punch line is first, I almost always respond. But and if I see an email, it’s like See below? I’m like, No, no, you don’t tell me what to look at.
Yeah, yeah, you know,
but but but if but if I get an email that’s like, Hey, here’s your competitor, I just saved them 26% on this, which equated to $4 million. That is probably getting a
phone call. Yeah, you know. So it’s like, give that
punch line first. So I actually have, my wife still has it someplace. It’s a little, like stuffed animal of a bowl. And she leaves it on her desk. She works for a big software company in Silicon Valley. I mean, $50 $60 billion company. She has some communication with executives. Every time she sends an email to executives, she just looks at that book. She’s like, what, what’s the punch line? I need? This is what’s happening. This is the solution. I need approval. Yes or no? It’s like, yes, no, or maybe circle. Which one? It’s like being a kid like do you like a yes or no? Cut to the chase. I don’t know, know all the details. If I hired the right people, they should be have the details worked out. And if they’re prevented presenting me a solution, then that’s probably the right. Yeah. So it’s just being succinct in that regard. too and I think that’s what I sort of look for a lot of times when people try to communicate with me. I’ve also found to I think the easiest way to communicate with with, you know, potential partners, investors, all that kind of stuff is probably Twitter. Like I really I do more dm work on Twitter than anywhere else. I don’t have the I mean, I don’t have the email addresses for a third of our clients. I can hit him up on Instagram or trailer on the DMS. I swear to you I mean, everybody knows Elon musk responds to most of his of his. A lot of people say that I was with somebody yesterday, it was like I just heard from Elon on something. He’s the electric vehicle industry and he’s like, send me dm. He respond back in like 15 minutes. I was like, yeah, here you go, man. You know,
you know, you have to recognize that the forms of community
and listen, if you think about Ilan Musk, I guarantee you he has a room full of executive assistants, I’m sure make sure nothing gets to him unless the most important Yeah, but he does do his own Twitter. Wow. Obviously our president does his own Twitter, right. I mean, come on. You can go right past the Secret Service and right into the Yeah, the White House bedroom. Yeah. So just finding that method of communication that works best to you? I think so.
Yeah. I mean, I love that the the barrier to entry has come down so much in terms of trying to create your own opportunities. I mean, with social, like you just mentioned, I mean, before, you’d never have the opportunity just to slide into someone’s DMS and now it’s, it’s, but having that communication of being direct, and that’s the base I’m working on because I get I get too in the weeds. I love the the weeds and the details and all that. But I mean, as we’re trying to show the value of what we do and everything like that, it’s getting to the point and I like
videos, too. I do. I actually have a person in our office, she does she her her main job, she does a lot of other things. But her main job is every morning to find something in the office that requires a video with an executive, though seek out an executive grab them, bring him or her down and be like, hey, look, we have this new product that we’re working on. Yeah, can you say a few things and she just catches a 10 second. Some of those we publish some of them we don’t I i mean i use LinkedIn a lot. I’ve communicated with Just because of this TV show I’ve probably talked to, I bet you of the 15 brands I reached out for for product placement 10 of their CEOs responded back to me. Well, most of the times it was like a sense. I’m like, hey, my company just landed a a reality TV show. Here’s a video. Yeah. And a day later, I get a message back and they’re like, Wow, that looks freaking cool. What? Why should I care? Right? So I let him on a little bit. And I’m, I’m looking to see if maybe you want to do a collaboration on the show. And they’re like, yeah, here’s myself.
Yeah, that’s cool.
Okay, you know, but you gotta you know, I think sometimes, too, and this is, this is probably the saying no thing. I usually am going to respond to people that offer me something. I rarely am going to respond to somebody that’s wants something. They’re like, Hey, can you give me a bunch of money?
But if they respond back succinctly, and they’re like, Hey, here’s the reason I’m reaching out. I’m working with these guys. I thought maybe you might be interested. Here’s an example of how this works. And I’m like, okay, that’s something I’ll respond to. So, you know, it’s real easy to be seen as selfish and communication but you got to recognize that communicate. My mentor was a was a Dallas billionaire. And, you know, he said that communication is a bank. Right? You, you, you put you invest into a relationship, and you take things out of a relationship, but I can’t go to wells. I don’t have an account at Wells Fargo. I can’t roll over there and be like, Hey, can I get 25 grand? Yeah, I’m just gonna throw Yeah, but, but I can go to Chase and do that. Because I’m a client. Yeah. And I can go in and they can look and go, Well, you don’t have 25 grand, I know, can I get a personal loan? They’re like, yeah, sure you can. So I have to have a relationship. I have to be putting something in in order to take something out. And that’s exactly the same way even with communicating with somebody you know, I have. I mean, I love doing like the handwritten note thing. I think that’s a big deal. I like sending gifts to people. I mean, one of my favorite stories from back east I worked in television years ago, and found out this dude was a runner. This guy was trying to get to could not get to them. Went to running store. Like what’s the best shoes out there? They’re like these ones. I’m like, what’s the average size of a, you know, a barn swallow 10 and a half on my give me a pair. And I just sent him one. And I’m like, Hey, man, here’s a shoe. I heard these are the hot thing. I got what I thought was the average side. I have the receipt and the other one. Give me a call if you want it. Yep. And his assistant was like, he wants to go to lunch. Yeah, of course he does. receipts.
But I gave him something first. Yep.
I never I never asked for something without offerings. Yeah. And I think that’s an important part of printing. If you’re looking for a mentor, the people that you want to be your mentor are successful people that don’t have the time to be your mentor.
Makes sense. So just respect that. Yeah, no, that makes sense. And I love that approach. I mean, that’s the exact approach that we take when it comes to marketing. It’s everyone is running ads that’s buy, buy, buy when it’s like, provide some value. And that’s why I mean that that thing that we have in there. The cyclorama it’s you can make personalized content at scale, but it’s hitting on that interest, find out what that person wants, communicate with them and in whatever form of communication they like to communicate. In whether it’s video or written word I’ve taught whatever that is and then the sales will come that conversion rate increase increases quite a bit whenever you have that
and you can take that to an extreme I don’t know what I came up with the brand right now but it’s like liquid death Have you seen their their the bottle their canned water? All their ads are like please do not click this do not buy this product. This is not for you. Right? Oh, yeah. And they make it super hard to buy it. They’re like throughout the whole thing. It’s like they agree that you that, you know, this will probably kill you. You shouldn’t buy it. It’s too expensive. They’re like are intentionally like you do not want to be a part of this. And I have been in for CEOs offices in the last six months and every one of them has a case. They’re just like
telling me not to buy it’s so
different than I’m just like, I have to buy it because I mean they’re ridiculous about one of my favorite customer service stories just thinking about sort of crazy approaches thing you guys probably remember Dollar Shave Club, right? Oh, yeah. So when Dollar Shave Club came out, I saw the video. There were less than 10,000 views on it. So it got sent to me by a friend. who worked at YouTube? And he was old friend and he would always be looking for viral stuff. He sent me that Gangnam Style video and had three had 3000 views. Wow. Yeah. Wow. Because it would be like he would just like shoot me a text and be like, Dude, this thing’s going up. Check it out. Yeah, you know and check it out I share with people and but Dollar Shave Club I signed I was one of the first people to sign up for it. And and back then they were like, We only send it once a month. I’m like, you have a date. And this is the only day we can send you. Yeah. So they missed me the first month. So I was bummed because I was excited about it. I thought it was a cool concept. So I sent a sentiment, I sent them an email. And it was him the dude the CEO, and he responded back and I was like, Hey, man, I just want to cancel and like you guys missed me. You know, and I need razors. So yeah, I’m out, you know, so all he did was reply back with a YouTube link. I was like, What is this? So I clicked on it and it was our green Let’s stay together just a music video. Really? And I just sat there watching and I’m like, okay, just reply back on my Yeah, I’m good. Oh, wait.
He never said us. single word to me.
Wow, all he did was just send me a link to a music video. Like, go just starts out, I’m like, Damn, this is our agreement, let’s stay together. And I’m like, I get what you’re saying. That’s awesome. It’s like, hey, look, let me just sing your love song, bro. Like, let’s see if it works. And it works.
That’s for sure. So, you know, you do
have to get creative and you have to think outside the box. And I know, everybody hates saying that. But it’s true. Everybody thinks the same way. And you got to find a way that’s different.
Yeah. And you’ve been part of I mean, as you mentioned so many different businesses, some that have grown tremendously, some that have failed. What is the the, I guess variable to success that you see? Is there any commonality between it or I mean, is it visit intercommunication? Is it marketing and what what is the difference that makes? I gotta
tell you, I think some of the companies that I’ve been involved with that I thought were going to be the most successful failed the most miserably really, and some of the ones like Phat Scooters. I gotta tell you when I first started working with fat scooters, we just recently did this series called behind the handlebars where we interviewed all the orange No employees, and pretty much every one of them said, I thought this was sort of stupid. I needed work. I knew these guys. I was like, I’ll jump in on it to help. This isn’t going anywhere. Yeah, you know, they’re like, they were scary, right? I didn’t really like it. And they’re there three years later gone. I still don’t know how the heck we got here. I unfortunately think that that it’s it’s like gambling. I mean, there’s a little bit of luck in it. You don’t know what’s gonna happen. You know, in 2007, I built a worked with another guy built an amazing brand. We created a great partnership, we got one of the biggest tech companies in the world to invest in us. And the company created software that that held money in escrow between homeowners and contractors, when they were somebody remodeling your bathroom, right and the money was held in this escrow. And we had this cool way this is before iPhones and iPads like we used Flexes our development tool and had like these really cool sliders and it was all web based and it was super cool. And and the recession hit. And we went from literally overnight. We were everybody’s Darling, all these employees getting ready to launch, we’re training 600 salespeople for one of our 600 sales people, training them on how to sell the product. And we just get a text in there or not even a text back then. I mean, back then it was like, you know, what was it the, the message on the BlackBerry? Yeah. Like it’s over goodnight. And we sold the company, we raised 10 times more than we sold the company for. We literally sold the code of the company for one 10th of the money that we had rarely. So you can imagine what the payout was for investors preferred for founders, right? That’s zero. Yeah, nothing. Yeah. And I still think that that was probably the best idea I was ever involved in. So I do think it’s, it’s about, you know, it is about traction. It is about if it’s too hard, maybe it shouldn’t happen. Yeah. You know, and I know that that’s hard to say and I know that there’s, you know, Mark Zuckerberg would argue with me, you know, on that point, but for the most part, for for every person that sort of does that crazy success and it was they just pushed through for the most part of the market doesn’t adopt quickly, you got to start questioning and saying, okay, is this the right thing? Do I need to pivot? Do I need to change my strategy? Do that 6,7,8,10,15 times. And then if you’re finally if everybody’s still like that baby is ugly, yeah, just agree that it’s ugly and chuck it out the window, like I said before,
and then how do you how do you identify that point? I mean, the opportunity cost is huge. where it’s like, what point do you say I’ve done enough like, maybe we should stop. I mean, because it could be one, one decision. That is the breaking point that makes it take off. But I mean, how do you identify that when it’s like, well, it’s so hard. It’s Yeah,
it’s so hard. I mean, some of it has to be I hate to say this, because I told you before, I’m not a feelings kind of guy. You know, I mean, some of its gut, but I think it is data. I think you just have to look at it and say you know what? We try and this this didn’t pay off the way that we thought maybe there’s an opportunity. I was great friend of mine here in town works for a big software company. She created the first social network, I mean, hands down 1990 he created it, she raised $25 million in Silicon Valley and had a home employees and I mean big name investors, all the biggest names were all part of this company. And eventually, one day she was just like, it’s not working. There’s no users. Like, it’s just not there. Wow, and shut it down. And I was in Silicon Valley with her about six or seven years ago, we were sitting at Starbucks. And this guy comes over and he’s like, Hey, are you so and so? And she’s like, Yeah, he’s like, I was one of your first investors. And, and she was like, oh, shoot, she’s right. Then I knew it. I was like, $2.5 million. I remember him putting the money in. And she’s like, and he said, I just want to come over and shake your hand and just, he’s like, you were so ahead of your time. But you were just you were five years before anybody else. And he’s like, I still every time I’m in a barbecue and somebody’s like, I was early invested in Facebook. He’s like, wait, I was doing that Facebook thing,
like way before you guys were.
So I mean, that was a great idea. social social networking was a great idea. There was not a great idea in 1998. Yeah, just didn’t Yeah, there were there wasn’t an infrastructure. We have Wi Fi like,
a song or something.
So it didn’t make
me look more like Reddit than anything else. Because I mean, people were like, Can we upload images that she’s like, what are you freaking crazy? Were you at the Library of Congress? You can upload an image to the internet dummy. You know, so I think it is some some of that. But it’s also I think, having that mentor group, those those folks that are involved, that maybe don’t have a vested interest that are willing to be honest and say, Yeah, okay,
enough. You know, I mean, there’s there’s that mentorship and that,
that perspective. And I think that’s why a lot of people like to call those people coaches. I mean, if you think about it, if you played high school football, there was probably some day where you’re like, I’m gonna be in the NFL and your coach was like, hey, let me sit you down. This is not gonna, this is not gonna happen. You need to go study because you’re not good enough to do this. There was somebody that told you that at some point, it’s hard to identify that for yourself. Yeah, but it’s a lot easier for somebody from the outside ago. You know, man, maybe this isn’t working. And, and that’s but that’s hard. I mean, I did it for a long time I was a was a venture mentor over at ASU. And I bet you 80% of the companies that I said, Let’s reevaluate this. We’re like, No, we don’t want to revive it, we’re just gonna go with it. You know, and I didn’t make it. And I just didn’t make it because they weren’t. They weren’t willing to accept the truth. And sometimes that’s the hardest thing to accept.
The reality of it is, I mean, as you mentioned, it’s your baby has spent so much time into it. And it’s like, it’s, it’s tough to swallow that pill and saying, you know, it didn’t pan out the way we planned and not so what
did you learn from it? You know, I don’t know. Yeah, I know, a couple of very, very wealthy investors. One of them told me one day he said, I don’t invest in companies at all, I invest in people, like so you gave this guy 50 grand, he’s like, oh, he’ll lose that if nothing’s done. Like, what would you give him 50 grand for? And he said, because he’s gonna learn amazing lessons with that 50 grand, and as long as I understand I’m going to lose it and keep in communication with him when it goes bad. I’m the first one that sends me a text message today it shuts down and I’m like, Hey, bro, that happens. It is what it is. Let me know what your next idea is. I gotta check here. Now cuz cuz he’s like, there is a pattern, you know, successful people, people that can grind and repeat. Even when they do fail. They usually it might not be the next one, and it might not be the next one. But somewhere in there, they’re gonna figure it out. Yeah. And those are the people you want to invest in. And I love to hear that from investors where they’re like, yeah,
But I like these guys. I like this late. I like this gal. She’s amazing. She’s gonna go places. She’s super smart. She needs to learn some things. The best. Listen, the best way to learn stuff. You know, you don’t you don’t know fire is hot till you get burned. Yeah, so the best way to learn how I mean, it’s why for years I used to I used to love to recruit people that worked like Amway or did some like MLM that they failed that I used to love them. Because they at one point, they had this incredible energy. Yeah. And they did it. They got up and they did it for four hours, and they tried it the day after day after day. And eventually it was like, it just failed. You know, but they know how to go through the motions. Yeah. And they knew that there was a point where you have to get off the train. And those are people I like, because they have that ingrained in them as long as they’re not totally destroyed. Yeah. And most of the times they’re not they lost 500,000 bucks. It’s like, but but but they have that they understand the pattern of how it works.
Yeah, they’ve gone through the process. And then that’s the biggest thing is the learning. And that’s why I mean, even when it comes to running campaigns and stuff, I mean, we always try and have some type of testing budget, and it’s like, Hey, 30% of these are gonna win 70% are gonna fail. But those three that’s gonna, it’s gonna more than fund all the failures, and we’re gonna find little pieces of nuggets and over the year, that’s how we’re gonna sometimes have growth. I mean, it’s not, it’s knowing that hey, it might fail, but it’s not so much. Oh, that that’s horrible. Didn’t work, but it’s what do we learn from that? Because even if it didn’t work, there’s something that we’re gonna learn that we can apply to something else that will then drive that ROI.
I think it makes a good point, too. I mean, I look at Phat Scooters, and we struggle You know, we last year, we probably walked away from $2 million in revenue that we just couldn’t fulfill in time, the last 60 days, we’ve walked away from a half a million dollars in revenue that we just couldn’t take the orders. We’re just like, sorry, I can’t do it, you know, so I know the demands there. So I’m willing to grind it up at a totally different level. Because all I’m trying to solve I’m not trying to solve a demand problem. I’m always trying to solve a supply problem. And that supply problem requires lots of cash requires lots of people, it requires all sorts of things. Maybe this is the best way to know if the startups going to make it or not. One of my mentors once said to me, he said, Never ask a business house business, ask them how sales because if sales are great, and everything in the business is falling apart, you can fix that. Business is like we have the greatest process in the world does anybody buying it? No, but our processing horrible, and you should see how cool our offices it’s like, you’re done if people want it, and that’s why I think a lot of times even things that I still get involved in this day. It’s like I want to look for things where there’s where people are lining up, Apple, Apple did it. They faked it for a long time. I mean, a lot of people don’t remember this, but when like the first iPhone came out, I mean, they intentionally made less. They knew what the demand was. And they intentionally made less so that there would be huge lines. You know, it’s like that Soup Nazi episode of Seinfeld.
I love that
line. Because people are in line. Yeah,
it’s like, Whoa, man. What I mean, like, what are we here? For? Some? I’m not sure. Anybody know when we’re in line for Yeah, there’s someone selling soup. Oh, yeah. So I heard about the soup guy. Of course, yes, the suit. It’s like I told somebody the other day, I said, you know, when you think about an early stage company, at first, you know, it’s like, you know, have you heard of this? And then there comes a stage where it’s like, you know, oh, you haven’t heard of this? Yeah. And then there comes a stage where it’s like, wait, seriously, you haven’t heard of this?
You know, what stage are you
in? It mean, if you’re still in that stage of have you heard of this, then the grind is important. Right? Yeah. But if it starts to get to the point where people like, Oh, yeah, I’ve heard of it. Not interested. Yeah. That’s when you go Well, yeah, what’s wrong with With me, my marketing is it is it the product What is it but but there is that day I mean, we talked about it with fat scooters we we have this golf scooter first year we went to the PGA Show people would walk back past and go, nobody will ever buy. We’re like, okay, yeah, second year they walk past they’re like, the most progressive courses will buy these. This year, everybody walked up to our booth and said, our strategy for single rider golf cards this year is Wow, really, it was like a sprint. Like, yeah, we knew that that the tipping point had happened. And what did I do immediately thereafter, hired a half a dozen golf people. We didn’t do that beforehand. We were like, we have to figure out if this is a thing. Yeah. And then once we knew it was a thing. We were like, now we can deploy the resources to make sure it works.
Yeah. No, I love it. I mean, I’m learning so much. I just loved the process. You know, you’ve mentioned you’re doing a TV show with the I mean, having a pivot that’s that’s huge. I mean, since COVID has happened. I mean, what what is the next three months? Six months look like for you guys?
Yeah. So for us, I mean, we really when COVID happened, we knew that there would be a huge change. I mean, I went through I lost the business in the in the last big recession. Yeah. So I got it. I knew that feeling. I knew that watching the watching the news. You know, I remember I remember where I was standing there. I remember I literally remember the office, I remember where all the employees were. And I’m watching it. Everybody’s working. And I’m just watching the TV and watching the TV and watching the TV and I’m looking around going, Okay, do I fire him today? Is it tomorrow? Do I give him to the end of the week? How much cash do we have? You know, I mean, it was bad. So when it happened this time, we just decided to make a hard pivot. And we said, events team had to go. I mean, there was, what could you do? There’s no events, it’s over. So we took that money. And as I told you guys beforehand, we quadrupled our marketing spend. We just said, Look, everybody says you gotta you got to advertise in a downturn, everybody says that, in retrospect, we would have just marketed and so I’m like, hindsight is 22 smarter than me. I’ve said that for years. Yeah. So let’s just back with that and it worked. And then as I told you guys earlier, you know, it’s like we we decided at that moment, we were like, what are the opportunities that this just created. And the first opportunity that came to mind was, there’s no live sports. Hollywood’s gonna cancel everything. If Hollywood cancels production. That means there’s a little bit in the editing queue. But that’s gonna run out real fast. Yeah, you know, they’re editing editing is about a month ahead. If the editing gets shut down, now all that footage is just going to sit there. So we just we just realized, I mean, we sat there probably on cocktail six, and we were like, you know what, there’s not going to be any new television shows none. And you’re going to see these weird, like, tune in for the three new episodes of blackish. Right? Because they didn’t finish it. Yeah. And the third episode is gonna be a little bit like wonky, right? Because they don’t, it’s gonna be all sort of piecemeal together. So we just started making phone calls. We got a team that come in and do a sizzle reel. And we just hired a broker. I mean, I’m a big fan of hiring experts. I just caught around. I’m like, who is the guy in town that knows everybody all the networks and they’re like, this Chad. Dude, he lives in Gilbert texted me 11 o’clock at night. I’m like, we need to have a phone call, right? Yeah, call the executive producer lady. I knew it was a midnight She’s like, Derek, I’m like, something’s happening. Yeah, and and within weeks, we had three offers, you know, to do the show. So and we were able to negotiate them against each other, and create sort of an amazing sort of opportunity for ourselves to really control our destiny and, and create the TV show that we wanted to do. Not the TV show the network wanted it.
Yeah. So and is it around like, fat scares? Or what’s the cause?
The main purpose of the show is it’s, it’s, you know, from a categorical perspective, it’s a design, build, deliver show, just like an Orange County Choppers or diesel brothers. You know, it’s that sort of that cake Cake Boss me to Orange County Choppers. But interestingly, as we started to book celebrities and guests into the show, and the director has been on site, he started to realize that there’s a much cooler story that yeah, it’s cool that we can, you know, have this celebrity or this celebrity, but he’s like the, you know, we’ve when they were here, about a month and a half ago shooting, we were in a 14,000 square foot building. They showed up today we’re in a 48,000 building. Wow. And he’s like how do I make this story work? It’s like, it’s a totally different place like everybody’s there’s 1415 new employees design. What do I do with this? And I’m like, I think we’re gonna have to really explain in this story that here’s the pre COVID stuff that was shot here. COVID happened, things changed, but we continue to grow at this incredible trajectory through it. And here’s what it is in the back end. So you know that that’s been exciting to see, you know how that’s all coming together. And we’re going to shoot between now and September 26. We’re going to wrap on September 26. And try to do all six first episodes. But what we’re also the other story that’s really come about in this is what’s going on here in Arizona. Yeah, and it’s been really interesting to me that when we landed the show, we started hearing from local brands like Dick’s and apparel. We started hearing from Rockford Fosgate. You know, I got calls from the guys that like state 48 you know, all of these guys that were local, were like, Hey, man, this is a cool opportunity. You need anything. Yeah, I’m like, Well, what do you got there? Like you want some shirts? Yeah, you want to have like, you I’m gonna give you a couple grand, you know, they all sort of jumped in and we’re like, Look, this is a cool way to profile what’s going on here. This isn’t going on California. You know, this isn’t going on someplace else. I mean, Nikola is right down
the street from us.
I pass it every day in my way. I mean, we’re here.
We’re chatting with those guys right now. Maybe there’s some sort of cool thing that we can do here. Yeah, maybe there’s something we can do for the show to highlight the fact that Listen, I don’t care what anybody says Arizona is the Silicon Valley of electric vehicles. Think about it for a minute. Yeah, it was Yeah, lucid. You got Nikola, what’s the big one that’s going to cast the grass. That’s true. Anybody who hasn’t figured this out yet? I mean, there is no plate within 40 miles of here. You can hit like five electric vehicle manufacturers.
I didn’t realize that
on the west valley of
some of the coolest battery technology out there. I mean, on East Valley. I mean, there. There’s a lot of stuff going on here that nobody’s really identified yet. And we want to point out the fact that if you’re talking Evee if you’re a Evee investor, Arizona is where you got to look
and the great thing About
Evee investments is they all have one thing in common they have a B somewhere in the valuation 30 b Yeah, that’s much Tesla’s stock. What’s a $300 billion?
Thank you. Elon, I bought an E 200. I bought it. Thank you for everything you’ve done for me.
I owe you a cocktail, I will buy Grimes
new album, you can name your baby after the my latitude, longitude coordinates. I don’t care. Just do whatever you got to do, man. But there’s something happening here. And I don’t think we think about tech. We think about Silicon Valley. We think about software. I don’t think anybody’s really thinking about the fact that there’s hardcore electric vehicle hardware manufacturing occurring right here in Arizona, that potentially $800 billion industry by 2007.
Yeah, I mean, how do you think of Arizona in general, just as a business hub, I mean, it’s more and more Doordash they just made their headquarters here in Tempe Town Lake. I mean, there’s more and more and more businesses moving here. I mean, it’s I so we, similar to what you guys are doing on one COVID Hey, Buddy and I got a kind of a business news segment go and called Entreprenews. But part of what has come up in a couple episodes is the fact that there are tons of people and tons of business moving here. And I had mentioned that it could to me, I think it could be the next like Silicon Valley. I mean, I think it could I think
the challenge, the biggest challenge that we have is a lack of investors. All the investors. I mean, I’m not pigeonhole everybody. But for the most part, it’s hard to raise money in Arizona, it’s hard to raise money in Arizona, because because most people are real estate investors. That’s where they made their fortune. So it’s tricky. And we’re I have found success though, is in in not, I used to do software companies now do product companies, product companies are a lot easier when I can walk in and I can be like, here’s what it is I need to buy 1000 of them and they cost 12 bucks each, somebody goes so
we get 1000 of these and I’m like yeah, they’re like okay, yeah, and then I’ve I’ve learned how to use debt. I used to always raise equity financing. I don’t use equity. I use debt financing. I use venture debt almost exclusively. Venture debt guys are the easiest guys in To raise money on if you have inventory or assets or, or machinery or anything like that, they’ll give you pretty much anything you want. Now, their interest rates are crazy. Usually they’re like two points a month. That’s expensive money. But if I need the money to grow, do I want to give up equity? It’s like, I’m not trying to be a profit. Yeah, I’m gonna try to make a profit in the next No, yeah, looking to make a profit. So finding those sources of capital that are different. Yeah, that’s a way to grow because you don’t have to give up equity. You know, for the most part, like venture that’s not personally guaranteed. So if it does go bad, just like, well, dude, yeah, here’s the key, drop in the mail and send it to him.
If my venture debt guys are listening.
But but it isn’t just thinking about things differently, recognizing that there’s different ways and there’s so many cool opportunities now for startups, companies like Clearbank is an incredible opportunity. Most people don’t know about clearbank. But Clearbank is a lending platform that as long as you have online sales, they literally tap into the back end of your online sales. They look at it and they make you an offer. And they’re like, hey, look, we’ll give you a 300 grand. And we’ll take 20% of your sales for the next, you know, the hundred and 25 days in order to in order to pay it back. Again, the interest rates might be more than your they’re definitely more than what you’re gonna pay for a car.
But it’s cheaper than equity in the long run. I mean, it’s a
my last company sold in 2017. I was the founder of it. When it sold, I was below the check cutting range. There’s a $200 limit that the attorneys wouldn’t cut checks below. I was the founder. I was below the chair. Yeah. Talk about dilution. I had .027%. That goes nine rounds of funding. Wow. Yeah. I mean, I had common shares. Everybody else had preferred shares preferred got first rights and that liquidation by the time it was done, dude, I couldn’t have I couldn’t have went to a decent dinner. Yeah, so so I try to preserve equity as long as I possibly can. And one of the ways that I’ve done that is with that, and there’s a lot it’s a totally different class of investors. There’s lots of guys around town where I’m like, Hey, man, can I borrow from 50 grand, I’ll pay you back in a year. And I’ll give you, you know, 2% a month on your money. Yeah, like, Okay. Those are retired folks that are like, hey, yeah, I got 50 grand in my checking account. They might as well make money. Yeah. Right. And they’re like, hey, if I can make, you know, 12% 15% interest on it, I’m happy to do that. So that’s been a new thing for me. I’ve only done that my last four or five companies, but I’ve seen the cap tables been a lot better.
A lot better learning. Like I said, learning I mean, going through the process. No, I love all of it. And as we kind of kind of wrap up, I mean, would love to hear I mean, you’ve been through so many different businesses, you have so much wisdom and knowledge, I mean,
wisdom and knowledge.
But for for someone that’s starting a business or kind of in that that startup mode, I mean, what’s the biggest piece of advice that you’d give give anyone? Yeah, I do
think it’s about making sure the idea has legs, testing it as much as you possibly can. You know, we talked a little bit about the you know how things have changed. With Instagram and Twitter in this communication, but if you’re building products, 3d printing is like the future. Yeah, I mean, you can try anything for for next to nothing. I mean, you can come up with a couple hundred bucks, you can try a product out, you can put it out there, you can launch a Kickstarter, you can do all of these things that I just didn’t have the opportunity to do back in my days. And I got to tell you, there’s a lot of things that I would have done that I guarantee if I put them on quickstart Kickstarter, and it would have raised like, 200 bucks in the first day. And I’d have been like, well, this one, I’m not quitting my job. I mean, you can test stuff now. That’s true. You almost know if you’re going to be a success or not. And, and that allows you as an entrepreneur to maybe not have to invest everything into this idea. It’s like, what’s the two or three? Um, what’s the guy here in town with the shaker I’m talking about makes this cocktail shaker.
He’s an he’s a designer. He does all sorts
of product design for everybody else. came up with a couple ideas. He threw him on Kickstarter. texted me one night. He’s like, dude, did you see what happened? I’m like, No, and he sends me a link. It was live for like, less than a day. It’s $300,000 raised now on this cocktail shaker. I was like, This is insane. And then I bought for the cocktail shakers, cuz I’m like, that’s a cool idea. But he also had other
campaigns running the same time that I don’t think the
opportunity cost, it might be something that’s like, Wow, I didn’t realize how big of an idea this is. And now you shift where you’re spending your time to focus more or less. I mean, that’s it is what
capitalism is all about, right? Money flows to those who have innovative new and creative ideas. Again, yeah, you can push and there are times to push, particularly if you know, like, if you just see it, right, you got that vision, and you’re like, I know, this is gonna be a success. But be honest with yourself, have other people’s opinions. You know, that’s why so many companies never raise money that way. It’s like 80% of startups never are able to get outside investment. And if you can’t raise outside investment, that’s probably a sign that it might not be such a good idea. Now John Zimmer excluded from left, right. He didn’t work with me, but you figured it out, bro. So yeah, but I mean that that’s important to know somebody needs to validate that idea. That’s not you or your grandmother. Your mother or your sister, somebody’s got to validate it and be able to say, you know what, this is pretty good. And you should probably I’m willing to put something behind this either time or money to help make it work. And that’s usually an indicator of success. Yeah. But again, you never know what success looks like to me. I have I had a company years ago that I consulted with that got a licensing opportunity and other companies like hey, we want to we want to buy it. We want to license it and he was just adamant. Absolutely not. I’m gonna be the next billionaire. Yeah, I’m like to like, take the money.
Yeah, take the money and then think of something new and not and use the funds to start something else. Absolutely. Now well, I appreciate the time. I mean, if anyone wants to reach out or find you guys at
No, don’t don’t try to buy nothing. We’re not selling anything. Go away. I’m trying to do that liquid. Go to PhatScooters.com and not watch This Rotting Fat Television Show on Crackle Plus launches in January. Don’t do it. Please save us the trouble.
Love it. Pretty You say at the time, absolutely. Thank you. Thank you.