Do You Need To Be A Little Mental To Launch A Successful Business? (Like I Was.)

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Haystack ad:

Andrew: Instead of telling you again how great Haystack is I invited my friends at Hashrocket to shoot this video

I got into web design at a very early age. I was always fascinated by the internet, you know, dial-up modems and all that. I brought the “Entire Idiots Guide to HTML” to reading class in elementary school.

Design is my passion, I love it. It doesn’t feel feel like a job, I can be as creative as I want. I can start with a blank canvas and make something out of nothing.

The greatest gift you can ever give me is an opportunity and that is exactly what Hashrocket gave me. The opportunity was to take some of the best programmers and developers in the world and then build a design team to match that quality. The part that I like most about being a designer at Hashrocket is definitely the ability to create an entire application from start to finish. And once the final application is done, and just seeing that experience, seeing people using the site. There is nothing more valuable then feeling like that you helped that business communicate and engage their users.

We’re at Hashrocket. Find us and other designers like us at Haystack.com

Interview:

Andrew: Hey everyone, it is Andrew Warner, founder of mixergy.com, home of the ambitious upstart. This is an interview with Christel Hyden the first person that I ever hired. The first person I ever hired anywhere, but more specific to this interview the first person I hired at Bradford and Reed. Bradford and Reed, and I have to say it slowly as it is hard to hear, was the internet company that my kid brother and I started soon after I graduated from college. We started off doing email newsletters and then we moved onto doing this and that. You are going to hear a lot of different ideas that we tried, until we found one that really worked for us. In this interview you’re going to hear how Christel and I met in high school, how I hired her, and how we started working together. How we all built the business together, what happened in the end of it. You’re going to hear about our challenges and hear about some of our big successes. I’m really proud of the work we did at Bradford and Reed. One thing, the audio at the beginning of the interview, maybe five or seven minutes, is really bad on Christel side, but once we adjusted the mike and got it to sound great. So stick with it for five to seven minutes and then you’ll hear the story of a bunch of kids who decided to started an internet company with no outside funding, no real experience, just their determination as entrepreneurs to leave their mark and to build some and that is what this story is. How bout we just tell people how we first met.

Christel :Haha, I have known you coming up on 20 years. I have known you from some of your earlier entrepreneurial efforts in high school. We both met at Brooklyn Technical High School and met in some mutual classes. At the time you were also working at your parents store, so every now and then you would have some idea or another and couldn’t be there to execute it. So I kinda helped you out there and got my foot in the door early on with some of the fund raising ideas you were doing with the class. There was that, stayed friends through college, how you got your degree in business.

Andrew: Actually let’s spend a little time on that.

Christel: You want to talk about how great you were in high school?

Andrew: Yea yea yea yea, so

Christel: Because if I were going to give a speech at your wedding it would have been about this.

Andrew: You know, we should have had you give the speech at the wedding. No, they offered it to you, but I didn’t think you realized they were offering it to you.

Christel: Just bring us all back, if you want to do it again in a year. Renew the vows, I’m ready.

Andrew: No way, I don’t want to go through all that work again. Actually here, so as you said we worked in high school. I worked at my dad’s store, but I don’t think there is much value in that, in the conversation about that, but you reminded me of that we sold bricks from the building.

Christel: Yes

Andrew: So our building was going through some sort of renovation and they were tearing.

Christel: Well it was a historic building, at least a hundred year old building, so it was a historic building with very distinctive yellow bricks.

Andrew: Yes, and they had to take some of them down and throw them in the dumpster and I had the idea that if we took some bricks and put them on a plaque that we could sell them to the alumni.

Christel: The alumni office was not enthusiastic about that.

Andre: I remember that, right.

Christel: Yea, they were not like fine, we’ll give you a table at the homecoming thing. Bud what is also important to know is that not only was he dealing in trash, but it was an engineering school, so there were metal shops and woods shops, so

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Interviewee: We’re not sending these out to some vendor this was a class project, the kids would use the lathe to make the plaques and mount the bricks. So it was very low overhead…if any. I mean we didn’t pay to make these things. I think the school even supplied the… because the kids needed to work on something anyway. I don’t know if you… did you pay to make those? I don’t think so.

Andrew: No, we really lucked out with that. That, that I asked a teacher at the school for some advice on how I can mount these bricks on plaques. And he made it into, as you said, into an assignment for his students. And he gave us a collection of plaques with bricks on it with professionaly, with professional labels it just looked great..

Interviewee: Beautiful, And they went like, they were the most. And so that was the day you had to work. And I got to go to the homecoming and sell them. And the people went crazy for them, we didn’t have enough, they sold out almost straight away. Almost straight away.

Andrew: And I couldn’t sell it because my dad had me work at the store that day and REALLY what a mistake for me to not find a way to get out of doing that work.

Interviewee: See but what an early lesson though to know. If you find someone you can trust you don’t have to actually be there all the time to do everything.

Andrew: Thats a great point. And it really did help me learn that I could pass it on to someone else, or that I could work with someone else. I don’t know if I would’ve worked with you, or anyone else on this. If I didn’t have to go work at my dad’s store.

Interviewee: Yea, No it was a forced life lesson, a forced life lesson, but a life lesson I think non-the-less. As most of them are I think, a lot of them anyway.

Andrew: And I’ve tossed away just about anything that has any kind of sentimental value because I’m much more of a functional person than a sentimental person. But I do still have one of those plaques.

Interviewee: You have one?

Andrew: I still have one, its in storage somewhere and I love it.

Interviewee: See and it was so different from every other fund raiser at the time. These people were selling M&M’s or I mean it was just The same old school fundraisers, as they always are all the time. And this was so different and so sentimental. And like I said very distinctive, and really what the alumni office which is odd for (garbled speech)… didn’t tap into is, people really do. Its a very distinctive building. you can google, look up Brooklyn Technical High School. It’s the size of a city block. Its a very distinct building its a historic building. And people didn’t understand that, the alumni had connection to the actual physical building. And the (garbled speech)

Andrew: You know what, let me suggest something here. I think it’s been a few minutes that we’ve done this interview. People have got a sense of who you are and gotten comfortable with you. Now I think it’s time to for us to put the headset on, because your not coming in clear enough. And now they’ve gotten to see you without the headset. And if they like us enough that they’re going to stick with us. Then they should see us, then they should see you with the headset.

Interviewee: Yea, right ok… fine. I’m comfortable with who I am and my co-pilot headset becuase it’s the only one that seems to work so. Fine And now you can hear me so nicely.

Andrew: Yea, now it really is coming in sharply.

Interviewee: Is it very, is it that Madonna world tour that she had, remember that? Is it reminiscent of that at all… no. Its Delta airlines circa 1989. Ok fine

Andrew: You know listen your my guest here. I got to do whatever it takes to make you feel comfortable, its one of my jobs. No it looks good…

I’ve seen people with these big dopey headsets As they want to come on to the interview with and I have to say stop right there. I got to find something. I will even find a way to ship you a new headset and not have you wear that.

Interviewee: You should see, I’ve used this in the car. When I have to make recordings in the car, or when choose to make recording in the car. Yea and everybody else has this little tiny bluetooth headset in their ear and I got… yea but like I said totally ok with it that’s fine.

Andrew: So you know what, I’m gonnna say this. That one of my best memories of those times is that everything was a business opportunity to me. I would look around and say how can I paint ads on fire-hydrants and sell them to somebody. How can I… everything… I just had to have some kind of business. And thats the only reason why when I saw a old bricks in a dumpster I saw an opportunity for business and not just old bricks in a dumpster.

Interviewee: Yep its really true. And even you were in junior achievement. Where the whole objective is to create some sort of model business. And even in that environment I remember other students kind of… They just couldn’t do it. And there were examples, I don’t know I didn’t do J.A. like you did but, people couldn’t come up with it. And you were like, dog tags or this thing and that thing. And just rolling out with, I remember being on the subway on the way home. “And what if we did this and what if we…can we run ads to do this and can we go scour the city to find abandoned properties.” Like I mean it was just idea after idea after idea.

Andrew: YES yes yes yes… Right

There was a time, there was this guy on the radio, I forget his name, who was a real estate guru. Who every week would do a show. And he was giving away a free book about how to discover property that was unclaimed. And if you went into city hall and discovered this unclaimed property and claimed it it was yours.

Its kinda like the shotgun seat on a car. Apparently if you called property and no one else did, it’s yours. But it was in a book so I believed it. And yes you and I went down to city hall to try and figure out the paperwork. And of course I brought you.

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Andrew: You were probably the smartest kid in the whole school, and I couldn’t figure out any of it, I just knew that there was a book that told me I should go to city hall from there I was hoping you could figure it out

And I don’t how we did but I remember we got into some big records room, I remember there being maps of property tracts and having to compare them to whether their property taxes were in arrears and all sorts of stuff and we never did end up with any property though, and that was another thing- learning to sort of chase these ideas, and that a lot of them aren’t going to go anywhere but they’re so much fun.

Andrew: The guy ended up in jail.

Interviewee: Stop!

Andrew: Yes.

He’s this cute old man, who, if you sent him a single tea bag because he loved to drink tea on the show, if you sent him a tea bag, a single tea bag, he would send you a nice thank you note, and he would talk up these great business books… He ended up going to jail, I forget what it was, but…

Interviewee: Real estate fraud…

Andrew: Yeah! It was some kind of real estate fraud. But I was willing to follow anybody and everybody. If you wrote a book, if you were gonna teach me how to make it I was going to. I was going to get out of whatever situation i was in as a kid.

Interviewee: And as a reminder, this is as a 15, 16, 17 year old.

Andrew: Yes. And now I’ve talked about this a lot, in paster interviews. One of the reasons why I wasted to be an entrepreneur was to get out of the hell that was being a kid. And for the the hell of being a kid was being a nerd, and you remember me before we officially met- was I a big freakin nerd or what? Am I exaggerating on here, or am i hitting the nail on the head?

Interviewee: Do you want me to tell the truth?

Andrew: Yes.

Interviewee: On the inside, maybe- on the outside… not so much? You were the cool, kinda had the cool metal, guy, fan thing going on in your leather jacket, in your denim jacket and your little Metallica patches, and your big sneakers, right? Yeah, but no, like, even in a big school there’s, it was a really big high school that attracted a lot of really bright students. There was the ones who were going to go into debate class, and with like, gusto, were going to be in debate class and like be there, and own it- and that was you. Um, just like I was all about Robert Jules Borders and was like, a parliamentarian. (laughing) And then there were the other twenty eight kids in the room, who were like really just waiting for those 32 minutes to pass so they could move on to something else.

Andrew: I felt that most of high school I couldn’t relate to- that most of growing up I couldn’t relate to. There was a whole of of people who.. Here’s what I remember, one time I was out in high school with some friends of mine, and all we wanted to do was score some beer. And once we got this beer, actually beer and wine coolers. And once we got it, we sat around and drank it, and we were just, sitting around and talking about how cool it is that we’re drinking beer, and I was sitting there going ‘life can’t be this crappy’. So what a big waste- I gotta find a way to get out of this. And the only way that I could, and you were talking about the way that I dressed, I was really uncomfortable with the way the I dressed, and I wanted somebody to _dress_ me. I wanted to learn how to do it, and I said if I can’t learn how to do it, I’m going to make enough money that some day in the future where I could hire someone to dress me.

Interviewee: And you sure did.

Andrew: And I did. There was one woman who I hired, I think it was as far back as college, and I don’t think I could pay her, and she felt bad for me and directed me to stores I could go. And then years and years later I went with her, and you went with me, and she bought me clothes- do you remember how much we spent on clothes, this was after..

Interviewee: Yeah, I was going to ask you, because you’d done the one post about the furniture we bought on that, and I’ve been meaning to ask, when and if you did one about the clothes.

Andrew: Never. Ok, well maybe now. Do you remember how much we spent? Do you remember anything about the clothes?

Interviewee: I remember a lot about the clothes, I don’t remember the total number, the total dollar amount that we spent. It was, it was… a lot. It was more than some people make in a year. Not, you know, Wall Street executives but, it was, it was a bit of a spree. It wasn’t the Sarah Palin Lord and Taylor thing, but it was.. um, there were 300 dollar tshirts in that pile. There were 2 or 3 hundred dollar tshirts right?

Andrew: uhh… yes. And in fact I know that there were because finally after we sold the company and moved on I gave away some of those tshirts to Goodwill, and the price tags were still on them because I didn’t wear them, and there were 300 dollar, 400 dollar tshirts. The total package cost well over 20,000 dollars. In clothes- one spree, of just suits and shirts and shoes and there were other sprees afterwards that weren’t as much, but I don’t feel bad about that because, that was my dream, that’s what I worked for. When I was going through the headaches of building a company and not being able to fund it, and living out of my parents house longer than most people should. When I was going through the ups and downs of the business, and it finally hit, I said this is what I did it for. So that I could… So that all the things I wanted as a kid, so that all the things that I wanted as a young adult, I could finally have.

Interviewee: And I’m gonna say that it made a difference. Because you did believe in it.

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Interviewee: You owned it. It wasn’t “Oh, I’m 20”…how old were you? 24, 25…years old, “To be taken seriously I better dress this way.” You were very confident. It didn’t look like a costume. It was something that, it became so much a part of your persona, almost, the suit. I mean because, they looked great, they fit great. They were well worth, I think, the money and the effort. Partly because, they became, and that’s how we saw it when we first did it—as an investment. That you were going to be, you were the face of this company, this young company run by young people. And like I said not looking like the guy who’s wearing his Bar Mitzvah suit because he thinks a tie is the way to get taken seriously, but a look that you really customized. It was a lot of tee shirts but also some great shirts and ties. But it made that impression because you were confident with it but it was because at that point you also really needed to be the guy in a suit. I think it went a long way in helping everybody take you seriously.

Andrew: Yeah, and it felt like me. I think I was the only Internet entrepreneur who was walking into work every day in a suit. But it felt like me.

Interviewee: Yep. Exactly. It was not fake at all. It was not some sort of façade. It wasn’t that “I’m going to be the different Internet entrepreneur by wearing a suit when everybody else is wearing practically pajamas to work. It really was, it was very much you and it reflected that I think really nicely.

Andrew: I don’t feel like we have enough people watching us live. I’m going to just “tweet out” to tell people to come in here and watch me live right now. Ask me anything about my past, business…

Interviewee: Or about you in high school or…

Andrew: Exactly or about me in high school right now live and then, there we go. All right, I’ll save that for when people come in. I’ll tell them to “tweet out to…”

Interviewee: So you did all that to escape all that. Did it work? Because I think high school is something I think really more or less you have to age out of.

Andrew: Yes.

Interviewee: OK

Andrew: Yes. I got to say that success in business was everything I dreamed it would be. It was…it opened doors that wouldn’t have been open. It let me become myself later on. We’ll go back and talk about history here and how we got there. But, there are things I needed to do in life, like even go out and date. That I needed to do in my own way. Not the high school way because it just wasn’t me. But I needed to do it my way and in order to do it my way I needed to almost dedicate myself to it. And I’ve talked about this publicly that there was a point in my life where I said “I’m not going to work every day. I’m not going to have any outside interests. I’m going to focus on dating. I’m learning how to date.” And you saw some of those ups and downs. And the only was I was able to do that is that I had the money to do it. The only way that I was able to really feel comfortable was that my ideas weren’t just ideas in my head was to create a business and see those ideas take off. You know so it was validating, it opened up doors. It fulfilled my sense of who I thought I would be and who I thought I was as a person. Nothing better than it. People who say that business is just business, they’re missing out on so much that comes from it. So, actually, lets go back. I was going to talk about dating. We could do a whole interview here on just dating!

Interviewee: That’s really true. Yeah. That’s really true.

Andrew: I would say this, that the plan for dating was to go to Los Angeles, right? Then I was going to go and date, and you were my mentor is this. You were at least the person I could keep texting back and forth and, it was tough as hell. But one of the proudest moments that I had was I came back from the gym, I went and I got a burger at this super healthy burger place that my personal trainer told me would buff me up if I ate there every day. He must own shares in the company. And there was this girl who was sitting there and I finished my burger and I walk over and I hit on her. I mean I started a conversation. And then I remember texting you and saying “Well, she turned me down” but saying how proud I was that I was going to ask just anybody out or at least strike a conversation. It wasn’t “hey baby how you doing?” But it was “I’m gong to go in there and I’m going to start a conversation.” And I went into it with the same beliefs, the same mentality, the same processes I went into business. I was going to set up prospects, which was basically everybody, which meant I had to talk to as many people as possible. And from there I was going to condense it down to some leads which meant that some girls who I was talking to would give me their phone numbers, and then I could follow up with them. Now some girls would give me fake phone numbers or would not take my call. But some of those leads turned into dates, which then turned into relationships. And one of them I ended up marrying. So it all worked out beautifully.

OK. So now, I’m doing more of the talking, so lets go back and give you more of a chance to talk here. Do you…so I started the company. Do you remember what the company was like in the early days—what we were doing?

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Andrew: Can you tell people?

Interviewee: Yeah. Well, in the very early days, actually, you and Michael and I were all working from home, and doing these phone calls, and FTP’ing things all around, and finally got that first little office in Queens. And you can take those pictures from my Facebook album, of some of those, right next to the hearing-aid sales center and down the hall from a podiatrist, I think. Not in any flashy place in Manhattan, but somewhere just random in Queens, within walking distance of your house, is probably how we ended up there. And then it became this really interesting sort of–not experimental, but this learning phase of, “Okay, we’re going to need more help. What sort of help do we need? How do we find them? How do we know if someone’s going to click?” And at that point–

Andrew: Well–

Interviewee: Yeah?

Andrew: Let’s go slowly here. I want to show the–

Interviewee: You want me to say exactly– All right.

Andrew: Yeah. The first time when you saw it. Because the business evolved, and we did lots of different things. But at first, what was it?

Interviewee: It was email newsletters. It was four or five email newsletters, plaintext, going out five days a week. There was Jokes, Trivia… What other ridiculous–I’m trying to–we had a Free Stuff at one point, eventually, you know, companies are trying to give things away all the time. And so they were originally written by me, and then soon thereafter we started hiring some other writers freelance to do these things, but just churning them out, and having ads in the emails. So every email had a very specific format: two paragraphs long, each paragraph no more than three or four sentences. So the question might be, “How do they get the lead in pencils?” And so you make a quick, silly joke about it. Then you, in two or three sentences, sum up how they do it, and you close with another. There were puns galore. It was all pretty corny in that way. But it was quick. It was mail bits. Everything had to be really concise. And they all followed this format, and they all had a text ad above–above or below, and then, at some point, above, below, in the middle…

Andrew: (laughs)

Interviewee: (laughs) There’s these lines of ads sort of creeping in everywhere. But that was the core thing, was just sending out these emails and building up this mailing list of plaintext, silly… We didn’t even do horoscopes then. What else was it? Trivia, Jokes…

Andrew: It was Trivi-a-Day, Joke-a-Day, Word-a-Day, which was a vocabulary word a day–

Interviewee: Oh, Word-a-Day! No wonder I blocked that out.

Andrew: And Quote-a-Day, which was just an inspiring quote every day by email.

Interviewee: Yes. And all things that we could just find in books.

Andrew: Yes, and I still have those books at home. And the ad was–

Interviewee: So do I.

Andrew: –above the content. The first thing you saw was a text ad, and then you saw the content itself. And I remember, you were such a good writer. You weren’t a professional writer then, you were just–you’re just a great writer, and I remember one of your early trivia, that made me say, “Yes! I’ve got the perfect person for this!” had to do with, “How could coffee be decaffeinated?”

Interviewee: Oh, yeah! How could they get the caffeine out of–Yes!

Andrew: Do you remember how you explained it?

Interviewee: I remember it had to do with– Yeah, because you had me write a few things, almost as an audition. Which I already had started doing: I realized I wanted to work for you, so every email I was going to send you, just friend-to-friend, “Oh, I’m going to make them–let me see if I can make them kind of witty, and sort of catch his eye, that I could do this writing.” It had to do with, they have to steam the coffee beans in order to–it’s part of the process. And I remember comparing it to a facial for these coffee beans. And there was something about that that just absolutely tickled you, and now, 15 years later, still does.

Andrew: Yeah! “Facial for coffee beans!” Right there, you helped us visualize what was going on. And you were doing that a lot.

Interviewee: Yeah.

Andrew: And I didn’t realize that. So, even our emails back and forth were a kind of audition, saying, “I could write these mailings. I could do it.”

Interviewee: Exactly. “I could be pithy. I could be witty. Look at my little–I could toss up a one-liner here and there.” Yeah, I was definitely trying to work my way into what you had going on. I think, at the time, you were writing most of them.

Andrew: Every one of them. It was torture for me.

Interviewee: It’s such a pain! Yeah.

Andrew: You know what, actually?

Interviewee: It’s a pain for me, and I enjoy writing.

Andrew: It kind of reminds me of the work that I’m doing now. I now have to do a little bit of text before each one of these interviews, and it’s such torture.

Interviewee: (laughs)

Andrew: Today, it’s almost noon Pacific time, and I still haven’t posted today’s interview because I don’t have a quick two paragraphs to write about it. Absolute torture. I don’t know why I even bother doing it now; I should just focus on what I’m good at. But I feel like it helps. And going back to the early email newsletter business, my theory back then was, I was looking at all these different Internet companies, and they were all Web-based. And I said, “They’re focusing on the Web, but email is this huge pile of audience that’s being neglected. We could build a business there.” And I said, “With the Web, if you build a business, you have to advertise to bring people to your site today, and there’s nothing forcing them to come back to your business tomorrow. So you have to go and advertise to bring them back, and bring them back, and bring them back. But with email, once somebody joins your mailing list, you’ve got them tomorrow, unless you’ve pissed them off, and the next day, unless you’ve pissed them off, and the day after that… And so it’s just…”

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Andrew: bring them in once and keep them almost forever, versus bring them in once and advertise to keep bringing them back

interviewee:and hope that they keep coming back. and our ads at the time I think at the time were all affiliate program ads,you weren’t going out and selling ads at that point.you were just running through I don’t know, clickshare,

Andrew:no,no,no,no they were all lease selling ads.I love that part of the business.I would just see who was adverising on other newsletters and offering them a better deal. um,so people are watching this live.let me aknowledge some of them and I’ll take one of the questions here, we got covercash who says that he’s listening to us on the ustream iPhone app while he’s shopping for groceries.you got kristen walker,uh kirsten walker,why do I say that, kirsten winkler who is a friend of the show here, a big supporter,

Interviewee:you get a little nervous when you’re talking to me,really.

Andrew: you know what? Here’s what I’m thinking. Maybe at some point in the future we need to do like a like a co-hosting thing where we both co-host the interviews and you can read what people are saying live because you can actually read and I can’t.

interviewee:It’s true, along with writing,reading actually is one of my strengths it’s true,I won’t lie,I’m not going to be modest about that, it’s true.

Andrew: Writing and reading.I’m telling you my posts are full of typos,my emails are full of typos,my tweets are full of typos,and even when I read,it’s like I insert typos into my conversation,typos that weren’t there.kirsten,I’m sorry Kirsten Winkler,um, Cage Patel,and uh Dewhit N. I want to give people’s uh even though I know your first and last name,I wanna just use your twitter handles, it’s uh I want everyone else to see who you are here in the live chat, ok,so Casey Allen is saying he’s quoting you, he’s saying ” I know I wanted to work with you,andrew” ,but he wants to know why,Why did you know that you wanted to work with me?

interviewee:that’s a great question,some of it is having had that personal history,knowing that everything that he did was with complete enthusiasm,complete commitment, and just so much imagination, um like I said that, even the kids that were supposed to come up with a business couldn’t come up with it,and he couldn’t stop,couldn’t stop coming up with businesses.So just yeah,being in on something new,because I wasn’t a business major,I was a sociology major at the time I had been working for not profits,I had been working with juvenile delinquints,it was a complete,it wasn’t even in the field that I thought I was going to be working in,but I knew from having worked with him in the past that if this wan’t going to be something big that the next thing was and I’d want to be there for that and if it wasn’t,then the next thing was, and I just wanted and I still am.I still whatever I can keep a hand in,it’s always going to be an adventure, it’s going to be so much fun.and there’s something about the way that he works with people,um I’m sure this has come up in the past,sort of the relationship building,so some of it was even with that,we had this relationship and I wanted to maintain it, and I wanted to see him do that with other people.and that happened,you know as we hired the first 5 and 10 and 15 and 20 employees and then all of out advertisers, there are still people I know you are still in touch with from back then,not employees,but people who ran practically competing products who you’re friends with to this day. it’s just this tremendous dynamic personality that like I said is not what he expects you know people think that this is what an entrepreneur is so that’s what I’m gonna be, it’s just as long as a like I said,it’s going on 20 years now,it’s just that that’s who he is and to be around it is just a facinating thing.it’s really just like being in a laboratory and seeing what comes out.

Andrew: Wow,thank you,I gotta play this whenever I’m feeling down. I have to say,I did have this goal for me,I was foolish in thinking growing up that the way to succeed in business is just be independently strong, be by yourself and everyone else cannot be nearly as strong or shouldn’t be in on the action.but I was fortunate that other people saw some positive stuff in me and I clicked with that because I needed it. like I needed the confidence that you had in me to reinforce the confidence that I needed to have in myelf in order to take on some of these big risks and challenges.

interviewee:and you had a huge amount of confidence i mean to think about it’s not uncommon even for people who may go to law school and pass the bar and they still have these moments of “they’re going to see through me,people are going to realize I don’t belong here.” those sort of crises of confidence that people have especially as young professionals and I don’t remember ever seeing that in you, it was “God damn,I do belong here” no matter where it is, we’re going to show up somewhere without a meeting scheduled because you know what,I need to talk to someone about this.those moments that for a lot of people are mortifying frankly to have to be the one walking next to you in any situation,but it never was a front and there was just this confidence that you were exactly where you were supposed to be and you were going exactly where you wanted to go.and it’s unusual,but it’s you know, one of those gifts that’s another reason why I want to work there, I would’ve been insanely jealous of everyone else working there if I wasn’t involved.

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Andrew:

Interviewee: And now look at you…

Andrew: This is great… this is great… Casey Allen’s asking, “Was there ever a time when we couldn’t make payroll? If so, how tough was it?”. I know in the early days, that wasn’t an issue. I don’t think it was later on but I could be wrong. I don’t think it was an issue but…

Interviewee: no…

Andrew: … there was a time… well, there were tough times where paying the bill was hard.

Interviewee: yeah…

Andrew: Actually, no, it was more than paying <…> it wasn’t paying the bills month to month so much as I took on a lot of debt. So starting off, I took on over 70 thousand dollars of personal debt mostly credit cards to build a business. And then later on, I took a few million dollars in debt just so I can buy the servers that we needed.

That was the tough part. It wasn’t paying the payroll. It wasn’t meeting payroll. It was paying those bills, dealing with those creditors. And I have to deal with them for… I think after we sold, there were people who I didn’t have to pay who I just went to and I just dealt with them and cleared out all the debts…

Interviewee: You should get it cleared out….

Andrew: ….and part of that because it just takes forever… to finalize debt. I’m a big believer on taking on risks and leveraging a business but it’s tough to unwind it. Like I’ll give you an example… of how tough it could be. It’s been a month now since I left Sta. Monica and I’m now living in Buenos Aires. I still have to unwind obligations to like, the electric company… not that I owe them money… they owe me money… but now we have to go deal with them go back and forth and we have to go back and forth with my car insurance. And…

So ‘No’ on the payroll, ‘Yes’ on the other bills. Okay, so that’s what it was at first and I remember us just making 30 dollar sales… 60 dollar sales… small sales and then we got this big commitment from a guy who worked at Sony and he gave us a 7500 dollar check. And he said, “Go to it… buy as many ads as you can on your site for our property”… And that was huge for us…

Interviewee: Yeah, that was definitely our turning point and then… and we still have them, we have copies of all those checks around… of every… all the big exciting checks that came in after that… And that was some of the ads stuff and that’s where I think it worked out really well… that, you know… selling ads… running ads… I could care less about. Writing, reading… not your strong point. But you managed, you know, like so many of the greats… this is it’s all about like… “Things I love about Andrew Warner”. But you did that <…> even contracts and legal stuffs I took care of for you… that you knew it was important but you didn’t want to do it. “You know what, let somebody else take care…” <…> dressing yourself, you know it was important but you didn’t want to do it… It’s not a bad thing to sort of delegate, which I think is really hard especially for a lot of small business owners that you wanna be… no, not that you haven’t had your issues with micro-management in the past. But… be it of a lot of the advertising side of things, I don’t even remember that well coz I didn’t have to…. coz I knew you were on top of it, that was your passion and that’s I think one of the downfalls. I remember reading all this books together when we are trying to build this stuff up. That, the people we started business <…> and end up having to do all these things that aren’t what they love to do.

That you loved doing sales and you love making connections but <…> so many small business owners then ended up having to do legal or having to do HR or having to do facility stuff and suddenly they’re not doing the thing that they got into the business for in the first place and you managed I think really well to build the team around you that you can keep doing the things that you wanted to do and put all those other things on everybody else. So the ‘ad’ things actually it’s hard for me to remember because I never have to do it. That was your big passion.

Andrew: You know what, this brings up a good point. I think especially when you’re building a young company, you need to have people like you on-board. I couldn’t have built the business without you. I couldn’t have built the business without Michael, my brother who is developing it.

Interviewee: Yeah…

Andrew: I needed to focus on just vision and sales and you needed to do everything that went into… into that, into building the business. Like you said, you worked with the payroll company for us… you worked, you wrote and then you hired writers and then you dealt with people in HR… There’s so many things that go into building a company that when a guy comes out and says, “I’m gonna be a one man operation… I’m gonna do this thing…”. You can see that he might be taking on more of a challenge than he should. That he is taking on more responsibilities than he will have the time to live up to. There’s another thing too that there’s a motivation… I talked a little bit about this too… don’t know if I’ve done it on Mixergy but I talked about it in private.

When you started working, I got more motivated because now I had to live up to your expectations of me. Now I had to work as hard as you thought as you expected me to work. I had to… I also was motivated by your feelings of confidence in me. Same thing when I started working with Micheal. He knew that I can handle the business side of things and because he just trusted me so confidently, that I couldn’t distrust myself.

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Andrew: I couldn’t be shaky about that. I could be shaky about lots of other things. But I had an infrastructure of people around me who were so confident, two people, who were so confident in my abilities that I couldn’t help but feel just as confident. And we got, let’s see who is it? Dewitt N is D-e-w-i-t-t-n is his twitter handle for our transcribers. He’s saying, “How do we get the big contract from Sony?” The big contract from Sony came from just doing it every day. Every single day we would send out a newsletter. I would keep trying to get advertisers. And then there was this one guys who bought ads from me, who dug that I helped him out in the early days when he was just building his business, who eventually sold his business to Sony and was now running it for Sony. And, now he had Sony’s wallet, and an understanding of what my business was. And so he came to me and he bought ads from me.

It wasn’t luck so much as just being there and helping people out just like now.

I help people as much as I can by email. It gets overwhelming now but then they’ll turn around out of nowhere and they’ll introduce me to somebody who was a huge help or they’ll do something that I couldn’t get done on my own. And so that’s how we got the big Sony sale.

Alright, so that’s the newsletter business. Can you tell people about the next part of the business?

Interviewee: You want to go right into grab.com or was there something in between you wanted to talk about?

Andrew: The greeting cards.

Interviewee: Oh, the greeting cards, yeah.

Andrew: That was the biggest part of our business.

Interviewee: Yeah, yeah. Well, that originally, even when I signed on, you guys were trying to do these virtual gifts where you would basically send like a stock photography picture of, you know, flowers to send to someone. And that was sort of an early germination of the idea that I don’t think worked as well. But realizing that, the newsletter is great but people aren’t forwarding them that much, you know, unless it’s like were exceptionally well written, and even having written then, I can say a lot of them weren’t. But if we could get something that is so compelling that people want to pass it on. And being really early in the game with this whole viral marketing scene and creating either cards that people could send for occasions or realizing that birthdays only come around once a year, stupid jokes are everyday. So, it’s sort of starting out with occasions and cards that people can send but then trying to move on. And correct me if I’m wrong, from there to things. And this was early fake [sounds like Amsterdam’s] days. This is when people seeing things move on their screen and music like midi files and … you know, all of these little animated things were just huge and ridiculous. So it was, oh, I remember building them in Frontpage, these terrible, you know, a thousand smiley, you know animated gifts of smiley faces on a page. I mean they would just give you a seizure. They were not good looking but we almost in a way were trying to make them not that good looking because we didn’t want to look too slick. We didn’t want to look too produced. So, we went out of our way to make it look a little homier, a little, “Hey, look at my silly site that you can pass around going on.” And that actually built up into the much bigger side of … You know, a couple years down the line we had a whole team of flash animators and content creators that were only doing this viral stuff that worked really well because when you passed it along to other people, then y

ou had the wonderful opportunity to sign up BMG or for any of other advertising partner at different check boxes and newsletters. And that’s really where things, I think, started to really snowball and really took off.

Andrew: Yeah, that was where the real money was. That’s where the real audience was. And, I remember when we got into virtual gifts. We got into tons of things. And the reason we got into virtual gifts was I had a subscription to Businessweek and I read it religiously and there was a short story about how virtual gifts were doing well online. Some woman, she had a virtual flower store. It might even have been called virtualflowers.com. And you could just give a picture of flowers to a friend. It was like giving your friend a virtual bouquet of flowers. And the way she made her money was by linking over to a flower store.

Interviewee: Uh, huh.

Andrew: And, you want to talk about ambitious upstart. I mean we were so ambitious, we would just try anything until we got the hit. And we just kept trying these things and I saw that virtualgifts worked. So, I said, “Michael, can you copy this?” And he says, “No.” And I said, “Well, how about a stripped down version of this, an ugly stripped down simple version of this?” And he said, “yeah.” And he whipped that up in a day or two.

Interviewee: Yeah.

Andrew: And that kind of worked okay. It worked okay as a novelty for a little bit and then it got boring for people. And then we moved on to … I remember what helped us make the jump. I kept needing to come up with new stuff so the furby was big at the time. So, you could give virtual furbies. And I said, “Alright, wow.” Something that’s hot in the news right now will be more likely to get passed around. What else is hot in the news? And Friends, the TV show was big at the time. And someone had a picture of Friends in 30 years.

Interviewee: Oh, fat yeah.

Andrew: They’re like bigger. They were … It was funny.

Interviewee: It’s like Joey’s like white trash and yeah, yeah.

Andrew: Yes.. And I said “How do I make this into a virtual gift?”

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Andrew: And I said, “How do I make this into a virtual gift?” And I said, “Well, maybe you can give a framed picture of ‘Friends in 30 Years’ to your friends.” And that just took off, and I said, “All right, how do we transition that?” And then we started moving more towards that, and we took another big leap when we said, “We can’t come up with this stuff ourselves, we’ll let anyone else create their own greeting card.” And we created an affiliate program, and we created software that would allow anyone to turn any web page into their own greeting cards, and we would pay them whenever their friends sent out a greeting card. The whole mechanics of that are a little too complicated to get into here, but that’s where the real audience, the real traffic, came from.

Interviewee: Yeah.

Andrew: And the revenue came from having leads. It was lead generation. When you sent out a greeting card, we made you some kind of offer, and, if you took it, we got paid. Let’s see. Cover Cash is saying, “Millions in servers?” Yeah, I know, it’s so fricking painful.

Interviewee: Yeah, I know. (Laughs) Michael was just asking if I have a photo of the server room, and I think that’s one of the few things I don’t have a picture of, because it was huge. That was a real investment. Was it worth it?

Andrew: I don’t know if there was another way to do it at the time.

Interviewee: Yeah.

Andrew: Today, you can do it easier. Today, you don’t need to have your own servers. Today, you don’t need to have– We had our own code room. We rented a whole floor of space in Manhattan. And the only reason we rented a floor of space in Manhattan is because, in order to get Internet connection, you had to have a big amount of space. You couldn’t just walk into a room and say, “I want to plug into a wi-fi.” You had to have the infrastructure. So we rented a whole floor of space, we had to build our own code room, we housed our own servers. It was a lot of work, a lot of work.

Interviewee: And, even then, the servers still crashed. I mean, it wasn’t so out of control, I mean, we had as many servers as we needed for what we were doing, and sometimes they still weren’t enough. So it wasn’t that you guys were just so excited to go shopping for servers.

Andrew: Yeah.

Interviewee: As, actually, with grab.com it came to be where it was almost not enough, that we haven’t spent enough on them. But you’re right: back in the day, you had to do it.

Andrew: Yeah. Grab.com was a website that did online contests, and when I went on Good Morning America for that, our websites just–boom!–crashed that day.

Interviewee: Yeah.

Andrew: Let’s see, who else is asking questions. Illustration Dan: “Did you really name your company ‘Bradford & Reed’ so you can sound like a law firm?”

Interviewee: (laughs)

Andrew: Yeah. I posted it up on Mixergy. I needed a name that people would– If I called and said, “I’m calling from Bradford & Reed,” the people would take me seriously and answer my calls, and Bradford & Reed was a great name for that. Everyone always thought it was a law firm or an investment company, and they put me right through to who I needed to talk to.

Interviewee: It also worked really well the other way, that someone would call in, and the receptionist answered the phone. There were occasionally people who would say, “No, no, no, I know Bradford!” or, “I need to talk to Reed!” You know, sort of this–they’re trying to get through the gatekeeper– “Yeah, Mr. Reed. I met him–” So it made for a nice screening-out tool, as well, for people who didn’t know.

Andrew: Yeah, I always know that someone is a salesman who doesn’t really know me when he calls me up and says, “Hey, Andy!”

Interviewer: (laughs)

Andrew: All right, let’s see. K.C. Allen is saying, “If you were to start Bradford & Reed again, would you do anything different on the cost side, anything fundamental?” More chairs.

Both: (laugh)

Andrew: More chairs!

Interviewee: More chairs and a better wardrobe.

Andrew: The reference to the chairs is that I bought a lot of furniture, I bought a million dollars’ worth of furniture for the office, way too much on it, I spent, and, yeah, I probably wouldn’t have spent that on furniture. But I did get to keep two of the chairs from that big collection, and they’re now in storage in Santa Monica, but they’re a good reminder for me never to spend that much money again. You know, we were really lean in the early days? When things were growing fast, we lost control of the expenses, I think. But I don’t know if we could have done anything about it. We were bringing in three, four million dollars a month. The site was constantly unstable, because we were also a top-20-trafficked website. And so, we were getting hit with lots of traffic. If we went down, we were losing tons of money. So we had to just keep throwing money at servers, and money at infrastructure, to make sure that we could stay up. And we couldn’t look at all the options, because we were building our business, and our business needed to keep going. You said you don’t have a picture of the server room. Because you were too busy working to take pictures of the server room–

Interviewee: (laughs)

Andrew: –and stand in front of the new equipment to show off, online, that you bought it.

Interviewee: Yeah.

Andrew: What do you think?

Interviewee: I think, one of the things that always sticks out in my head is in that– Because it was, it was this high-growth period, and we tried to do the right thing at one point by hiring someone who really knew HR, and was really seasoned and knew what she was doing. And so, that, in and of itself: great move. She’s going to get paid a lot, but it’s going to be worth it. She’s been doing this for years. She’s going to help us manage all this growth. And what we didn’t anticipate was that she then outsourced a ton…

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Interviewee: …of the hiring to consultants, and to headhunters. And so it became– Okay, it’s fine to pay people what they’re worth to do the job that they’re going to do, and we did that a lot. But when we’re paying her to, basically, pay other people to do this stuff, then it becomes, suddenly, double, triple, quadruple the cost that we thought it was going to be. I mean, it got to where, every employee we brought in, we were paying so much! And I won’t say it wasn’t worth it, because the employees we got we retained, and they were valuable, and they were exceptionally good at what they did. But this layered sort of payment system of bringing everyone in, where we could have–I think that’s one of the places where we could have definitely– And we were, we were busy, and we were stressed out, and I think we could have cut that relationship off a lot sooner than we did. But it was also, you know, “But then what are we going to do? That I’m going to do more of the hiring? Or that I’m going to manage these headhunters?” And so, yeah, it became sort of like, “We don’t like it, but we’re going to have to put up with it, and let’s cut this off as soon as we can.” But, other than that, I was thinking about this when I was on my way over here to do this, that even the most significant things we did ended up being the least costly. And I mean, someone’s been working really, really hard, and we know that he’s a huge Kiss fan, and Kiss is coming to New York City, we’re going to buy him tickets and send him to the concert. You know, the bonuses? Whatever. The salary? Whatever. But these things that– Someone’s home sick, and I mean really home sick, not just hung over. This was the day of Urbanfetch and Kozmo.com. We’re going to send over to their house some soup, some medicine, some magazines, some movies. Those things that were so low in the cost spectrum but that ended up–

And that’s why we did have great retention, and that’s why we still are friends and have relationships with people that worked with us: those things, that really were so low-cost, ended up having the biggest impact. I remember, I think we were doing an audit, and the CFO had to work late. It was either his wedding anniversary or Valentine’s Day. You know what? You thank him, you make sure he knows that you’re grateful for what he’s doing, and you send his wife a dozen roses. You know, it was that sort of–not just being lean but being really thoughtful, and bringing, I think, almost an old-business perspective to it: that, granted, it’s a new-media company, but we’re doing it Dale Carnegie style. We are going to really build the relationships. We are going to make sure people know that we’re going to work them 12 hours a day, but we’re going to recognize that they’re people. And we’re going to recognize that they are individual people, and try to do those little– It’s the same as any relationship management. Remember when you went through this whole dating-experimentation phase? I’m sure you were great at it, because it’s the same exact thing as you had been doing with your employees: just listening to them and seeing who they are, and, “What do they like to do?” and, “How can we, when they’re not doing this 12 hours a day for us, make the other 12 hours of their day as valuable as possible?” And, like I said, no $100,000 parties where we’re inviting everyone from Yahoo! over to do belly shots off of– You know, it really was, “Let’s all have hot dogs and beer after work someday.” So, being really lean, and being really personal. And so, yeah, costwise, I think just those months when they were growing so fast, and even if we knew we were spending too much on somebody, it was just– it wasn’t a runaway train, because we had it under control, but there were no other options at the time.

Andrew: You know, you’re right about the HR thing. We ended up with great people, but whenever somebody was bad, that was really damaging.

Interviewee: Yeah.

Andrew: We got the best hires–well, maybe I can’t say that, but I wish that we could have hired everyone through friends and friends-of-friends.

Interviewee: Yes!

Andrew: You know? That if we could keep it that close, that we could have known somebody for two years, or maybe even for a decade, before we hired them, then I think it would have been a lot easier to continue working with them. Especially in technology, because maybe if we own a store and we bring in a buddy of ours, or a bar, and we bring in a buddy of ours to work with us who knows us for a year, he’s not going to be able to work with us as boss and employee, and that whole relationship is tough. But in technology I think people are pretty rational, their egos are in check, they’re thinking more clearly. And if you know them for a year, you know what their abilities are, you know what their temperament is, and you get to continue the relationship you had with them.

Interviewee: Yeah. But with our friends, and with the outside people we hired, it’s also and one of the mistakes that we made occasionally was not being really cognizant of the culture that we had built, and saying, okay, this person is really qualified, we need these qualifications right now, let’s just bring them in, you know, even if maybe our gut is saying they may not fit in. And we did the same thing with one of the very first people that got hired, whoever that guy was. Who was that man? That man who sat across from me–

Andrew: Yes.

Interview: Right? Who was– You know, it was that same thing: you’d known him for years, maybe we felt like he wasn’t so great for it, but he was kind of qualified to do it, and it just blew–I mean, it was terrible, it was just a– And then you’re in the position of having to let somebody go who you know.

Andrew: And I should have done it, maybe, in some cases, faster. With him, I think we had an understanding. He was checking his stock quotes at work.

Interviewee: (laughs)

Andrew: And so it was kind of an easy decision for me, and it was easy for me to go and have that conversation with him. But–

Interviewee: Yeah.

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Andrew: I should have done it maybe, in some cases faster. With him, I think, we had an understanding. He was checking his stock quotes at work and so it was kind of an easy decision for me. And it was easy for me to go and have that conversation with him. But, I see now entrepreneurs blog a lot and go to events a lot and I can understand the value of it, because when they broaden their network online and broaden it when they go offline and make conversation with people and get to know them for a long time. They build relationships that will make hiring better and easier and cheaper in the future and will also bring in people who they can work with for a long time. I did an interview with Mark Jeffery who is CTO at Mahallo with Jason Calicanis, who is a tuff guy to work with, Jason is, but they knew each other for a while and I think it made it easier for them to get started in business together, to build . . . to launch and build Mahallo

Interviewee: Oh, yeah. I don’t think that we could’ve . . . If you would have hired me based on a New York Times ad, It would have never worked the same because it was the same. I spoke your language, we could do a short hand, I could understand where you were coming from, you know. And, I could know when we were going through these learning phases, like you had to learn to give constructive criticism. You know, that it was a little easier to take because, ok, you know, I know how he is and I know this is going to be a short thing he’s going to learn it, he going to get good at it, its going to be done. verses, you know, being just some other boss. And I agree, if could’ve done every bit of hiring at six-degrees-of-separation that really would have been ideal, that would have been really, really nice.

Andrew: Yeah, It takes a while for anyone to get into a company, to get into the grove of things, to understand who their boss is, to understand what their work environment is like. And when your a start up you don’t have that kind of time to train people. You don’t have that kind of time to pass on the culture.

Interviewee: Yeah, and it was hard . . . I don’t know? Do you think this made it easier or harder? A lot of the people that worked for us this was actually their first job, this was like their first real job. Which meant, ether we had the chance to mold them a little bit and make it seem like this is how all work places are. Our expectation are not unreasonable because for all you know this is what jobs are. But, on the other hand they also had no … they didn’t have that work skill, that office skill. I’m thinking of people who would ask for a raise because they were tired of having a roommate and had too much student loan debt.

Andrew: Talk about this a little bit because you saw this more than I did. People who work at dynamic companies very often are in their first job and so they don’t have experience with bosses, with expectations. So, what was that like?

Interviewee: I think that was. . . it was an interesting challenge be cause like I said it gave us the opportunity to build the culture. No one was coming in saying “Oh, but at my last job we would have done it this way.” We really got to start with a lot of clean slates. We were all young, but some younger in a lot of ways than others, and sort of try to navigate this and being able to have it be this teaching moment. Where that really wasn’t an example of “I want a raise because I have student loan debt” or “I think I should work at home because my commute is really hard” and sort of having people understand if their going to be successful in these roles they need to look at not so much what is going on for them but frame it as this is how it going to be better for you if we do this it going to be better for the company which is then going to be better for me. So there was a lot of interpersonal issues going on sometimes. I mean there were fights… I have had people come in my office and say “He’s touching my stuff you’re going to have to tell him to stop touching my stuff.” You know these sort of things that were just unusual and really frustrating. But, like I said, I think over all, and that is what I am asking you. In the end would I have done it differently and try to get more experienced people? I don’t think so because I’m not saying that it was like drinking the Kool-aid but it really did make it easier to gel them into what we wanted to do because they were coming into it really opened minded and really enthusiastic. Verses bringing in all of this past history or “At my last job I got to project manage this and why am I now just illustrating it.” So I think it worked to our advantage but it was a big challenge. I mean a lot of us were learning as we went. I can’t think of any big mistakes. If any mistakes it was letting things go a little longer than we should have.

Ether dysfunctional employees, difficult relationships, those sort of things that we ether didn’t have the time or the courage, I think, to face. But, there were other examples, I know we had a problematic employee where Michael and Andrew said “If we have this situation one more time then that’s it.” And that is a really easy empty threat to make to an employee and we had another situation. This employee happened to have anger management issues in an extreme way. There was another incident in the work place and Michael and Andrew were out of town and I called them and said “We’ve got this situation I sent the other employee home, this guy’s still here.” They said “Hire a security guard and when we come in tomorrow we are going to fire him” and it was that cut and dry. So for every situation that we kind of tip-toed around more than we should have, there were other ones where it was…I think in the most important ones You guys were committed and you guy really did what you said you were going to do.

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Christel: You guys were committed and you guys really did what you said you were going to do. But I don’t know, I mean, what you think you were all these young employees, how was that for you?

Andrew: I thought it was okay. I don’t have a preference for people who are older and more experienced or younger and maybe more willing to take on responsibilities for the first time. I don’t have a preference. I see the challenges involved. The challenge with someone who is starting out is that they don’t have an understanding of expectations, they don’t have an understanding that you are supposed to do what you are supposed to do. It is

not like an extension of college here. At the same time, they were willing to take on new ideas. They were willing to try new things that hadn’t been tried before. And then experienced, like you said, sometimes they will come in and say I would never touch as in my old company I had somebody to do that for me, that is beneath me. Meanwhile, you got to do everything. There is nothing beneath you when you are building a dynamic company.

Christel: And I think the added challenge was having you and Michael as the leaders because obviously so dynamic and so capable but also people wanted to be doing what you were doing. So if Michael wasn’t there, it seemed like, it was I think a fine line between meeting friends with everyone which you were, but then also maintaining network relationship and so you can go out with Michael on a Monday night but that doesn’t you get to come at noon on Tuesday.

Andrew: Yes.

Christel: But this doesn’t extend, you need to keep the workplace the workplace, and you are still going to be there, and you know what, maybe he is not coming until noon. He owns the company, that is his right. When you own your company, you do what you want to do. And so I think that was one of the real challenges [] everyone being friends and trying to draw that fine line between…yeah you guys are friends but he is going to do what he is allowed to do because this is really still his show and you still work here. I think that was one of the biggest challenges.

Andrew: I think that is a complicated message you sent. The truth is that is probably not a message that you can communicate well. You are better off….having your drinks a night before and both of you come in the next morning earlier than everyone else…not that I want to be critical of Michael on that at all. I just think you can’t set up especially in a small company two classes of people or two expectations. Everybody is going to be expected to do it all, everybody has got to be expected to come in. Let us take some of the

questions here. There is one question that I want to specifically talk to. Stergeron is asking how do you cut those lead gen deals or did you go through a network. What did those deal terms look like? Okay, here. I am going to tell you something. When you have enough time to sell big lead gen deals, here’s what you could do. This will work for me. I would work through networks with the understanding that I would then be able to go work directly with the company when it was time. And so what I would do is I would find a company that I knew is a really good fit for me. I would find the network they were working with. With the network you don’t have to sell them, you just sign up online for the lead gen deal. You sign up with the network like Linkshare or with Webber and you just start pumping in traffic to them until the company can’t help it say who is this [] who is pumping so much traffic to me, I want to get to know them. And then when they make that call to you, that is when you say, look I could do so much better for you if we cut off the middleman, that I could do so much better for you if we integrate your registration process into my site. So I am not going to send traffic to you, you are not going to be impressed by the number of hits you get, but I am going to be embed your form into my site and you are going to be impressed by the number of leads you get. And I couldn’t always find the right person at the right company to make this proposal to but if I work with an intermediary that understood that I am allowed to cut the knot when I needed to, then I could just pump a lot of traffic, get the right person to call me and then we could work out a deal. And very often that would happen. Mostly what would happen is, I would try to pump a lot of traffic to the offer and I would try to convert a lot of leads, and it wouldn’t work so. And I knew okay, this isn’t the company that I could work with. This isn’t the company that I could do business

with. But when the right company hit, I would definitely flood with them traffic until they would call me up. And where we could, we would recreate their form on our site without even getting their permission and we would flood that with traffic with our own affiliate code knowing that then we could go back to them and say, this is what we did, if you don’t want it, then don’t pay us, but if you want more of this then you have got to pay us for that and let’s continue our work.

Christel: And I remember getting into relationships exactly that way where entrustor.com comes to [] one of them where we had them… coming to us and saying ‘we are not even setting this offer to our regular affiliates’.

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Interviewee: ….regular affiliates. Here’s..we’ve got this special deal we’re going to send just to you. We’ve got that special. And it was it exactly that that we..I mean I remember for awhile the checks were coming with my name on it because you couldn’t at that time sign up as a business to be an affiliate. It was all personal affiliates. But that’s what we did. We would run..we’d say here’s this great deal or buy one get one free. It must have been for the free newsletter now that I think of it. That we would run this link and they would suddenly like Andrew said; just go whoa where did this come from. And it was where they were eventually bringing deals to us and giving us links and special offers to run. That either no one else was running or they were giving to like their top four or five affiliates to run.

Andrew: You know its also where having an email list is so helpful. When you have an email list you can send a burst of traffic all at once.

Interviewee: Ah ha.

Andrew: ..and get their attention.

Interviewee: Yeah.

Andrew: And get the respect that you need from the potential customer.

Interviewee: Yeah.

Andrew: And I thought that email was going down in value but from the interviews that I’ve done and private conversations I’ve had with people, I’m realizing that getting someone in your email list is still as powerful as it ever was. That its so hard to capture people’s attention today that if you’ve got them on your mailing list you at least have a shot at it when you send out you’re mailing list. And it’s even better than a blog.

Interviewee: Yeah.

Andrew: If I could convert Mixergy into an email list today, I probably would because there is nothing like that kind of connection that you have with someone. That repeat marketing opportunity.

Interviewee: Yeah.

Andrew: But let’s dip into some of these…

Interviewee: Although I should say, before you get to the intercession there were also the times were we’d go, yeah we’ve got three million people on this list and we’re going to send this out to…and then, and those moments of like, is the link not working. Did the emails not go out? And those, oh we’re going to flood them with traffic. No we’re not. No we’re not. And those awkward moments of like yeah, a ha, dammit, that you know, we’ve got the three million people and its going out on this day and the traffic for whatever reason wasn’t there. And having this awkward, no the emails went out. Having to run to Michael, did they go out..did they..did something happen? Is the link not working? And having those deals that also just weren’t as exciting and as mind-blowing for the ad site as we thought they were going to be. And having to..and then even then, you know what, make good on it and find a way to fix it. It’s never going to be..That’s not the end of it. OK, we’re going to give you a free one tomorrow or now we’re gonna..how can we maintain this relationship? How can we keep working on it until it works the way you want it to work?

Andrew: You know what? You’re right. I forgot about that. There are daily, daily challenges. Daily setbacks in business. You tend to think of just the big one that sets you back that you just have to get over but no, it’s every freaking week for the rest of your life. You’re going to have a big setback…

Interviewee: Yup.

Andrew: ..that you have to get over. And I saw Mixergy is for the ambitious upstart because only the ambitious upstart can get past that. If you don’t have ambition, if you’re just in it because all your friends are starting businesses or because you read an article about some kid whose an entrepreneur…

Interviewee: Yeah.

Andrew: ..and you want to be an entrepreneur too because its that easy, you’re not going to have the courage, the stamina, the interest to keep trying to find ways to get over these setbacks. And if you’re not an upstart if you’re somebody who’s given a lot in life, I think it’s hard for you to..it feels a little demeaning to have to go back to a client and say..I will..in fact, to have that initial conversation with a potential client that says, I’m going to flood you with traffic.

Interviewee: Yes.

Andrew: To be wanted to badly that it demeans them. I remember I worked on Bear Stearns and there were two kinds of people. Mostly people who worked at Bear Stearns, this was before they went out of business, back in their heyday. Mostly people who worked there were just freaking upstarts. They were willing to do anything, call anybody, cold call, show up at your son’s soccer game just to be there for you, whatever it took. There were a handful of people who weren’t. They were the guys with the nice suits and the nice jackets. And they were there because their father was in the business and they never could go anywhere. They never had the eye of the tiger.

Interviewee: Yeah.

Andrew: You can’t if you’re…unless you’re an upstart. Unless you’re a guys that’s coming out of nowhere. You can’t do what it takes. You can’t fight the way that they need to in order to succeed. Alright there, I’m going to get off my soap box and I’m going to take a couple of questions then we’ll just zip through the future of the business. We’ve got to do this interview again or we need to do more interviews like this. Maybe we focus in on one part of the business you and me. We just talk on that.

Interviewee: Sure.

Andrew: And I got..we got to do this again too because hopefully next time I wont be so excited to have you on here and I can calm down a little bit and let you talk more.

[laughter]

Andrew: [inaudible]

Interviewee: Story of my life.

Andrew: [inaudible]

Interviewee: You’ve got to be the only person that keeps me from talking I think.

[laughter]

Andrew: Alright, and also as people are going to see here, I’ve got the bigger microphone so….

Interviewee: Yeah, what the hell? What are you compensating for with that microphone Andrew?

Andrew: Every other mic that I had gave me trouble and Chris Darborough [sp?] heard my interviews, saw..heard the buzzing and said Andrew, get the blue snowball. So I got the blue snowball.

Interviewee: It’s like a soccer ball. That’s awesome.

Andrew: It really is. I packed this with me on the flight. I wouldn’t allow it to get out of my hands…

[laughter]

Andrew: ..because it’s so important to me. OK, Tasty is asking “at its peak, how many employees did Bradford and Reed have?” I’d say may fifty, sixty people. Well, we had an office that was built for a minimum of one hundred and twenty people.

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Andrew: We expected it to grow faster than we did. How much sales, I forgot, the number is online, it is like 30 million or so if you look at Quicksport, Neil Patel’s website. He has got one of my income statements and that will show the income, the expenses and everything else. Can it be done today. I got to tell you, people are doing more than this today. There are guys who are under the radar who don’t need attention from the big tech bloggers who are building multi-million dollar businesses in the Facebook app space, in the lead gen space, in the affiliate space. There are people who are doing this who are under the radar. We had no interest in getting attention at the time because if we got attention somebody else might copy our business. It is not that we were hiding, we weren’t in stealth mode, but didn’t need to promote it. We didn’t need to tell you exactly how we did our business. We were just doing our business. And I know that there are a lot of other people like that too. You both definitely grew up in the monetize with ad, affiliate deals area, is that still in your blood? You know, I still have to say that I don’t see people making huge money quickly by selling directly to end users. I just don’t see that yet. It seems that it is still advertising, lead gen, affiliates, even the people who supposedly are making money by selling products directly to end users, the guys who do virtual goods. If you dig deep into their business, they are not selling virtual magic wands to their users. What they are doing is they are saying to their users go sign up for this lead gen offer and then we will give you a virtual magic wand. Or by the way you can pay for it. Most people aren’t paying for it. They are going and doing lead gen. So we grew in the monetize, monetize, anyway you can because we need money because the big VCs wanted taking my phone calls. I have got a feeling that a lot of us are still in that area. Right now they take my phon

e calls because we are friends, but most people aren’t in that space, and when I come up with a business idea I don’t know how excited they would be to jump on my ideas. I think they will want a different kind of deal than I would bring to them, who knows.

Christel: Are you going to hire me first?

Andrew: If I get to hire anybody at all, yes. Think about this if that makes sense, see if we could get like, I need somebody to support me in my interview, someone who is articulate, who when I am talking to someone and I don’t know say I go, Christel, can you jump in here.

Christel: See I remember doing that even when you were doing your radio interviews. When you were promoting grab.com and you did loads of media and I remember we would do this where I would sit next to you. It was not quite [], but you would be on the phone with some DJ out in LA and it would be like 1 o’clock in the morning New York time and I would be like doing scribbling notes, or whispering to you and, as we mentioned, I can and I can write, top of the line on my resume.

Andrew: Let me say something about, we have been talking about grab.com and we [] introduce it. We got into lots of businesses. Once you build up a mailing list and a customer base, you can try lots of different businesses until you find your next hit. You can actually see this to a much bigger extent. You could see Google doing this. Everyday we go to Google.com and we interact with their stuff and they just keep tossing different ideas at us. Will they like Google docs, will they like Google Notebook, will they like some other idea that we have, some of them are going to be hits, some of them are going to be failures, but when you have a big audience, you got to keep trying to send them towards these new products and hopefully you will build one of them up into a stand alone hit of its own. And so for us, we got an email business at first, and then turned out that greeting cards was one of the ideas that hit. We tried lots of ideas. And after greeting cards hit, we needed to change our thinking I thought. Greeting cards was about bringing money in, it was about how can we bring cash in the door everyday, every month, every year, how could we be profitable, but it wasn’t about building equity necessarily. And so I said, we are paying a lot in taxes, what if we instead of taking all this money and putting in a bank and paying taxes first, what if we took a part of it and we invested it the business where we still had the asset that was worth at least the amount that we spent on but we don’t have to pay taxes on it, so for example, let me see if I come up with a simpler version of this. If you have 10 million dollars in profits, and at the end of the year all you do is put in the bank, roughly 5 million has to go to Uncle Sam, but if you take those 10 million dollars and you invested in a new website that is worth 10 million dollars or worth even 20 million dollars you don’t have give any of it to the government and so you get to keep the value. So I sa

id, let’s come up with a business that needs a lot cash at first, that we build up an asset and then we could maybe even sell that asset. And so grab.com was an idea that came to us because we were buying ads from a lot of lottery websites, free lottery type websites and we said, there is a lot of traffic coming from there.

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Andrew: We’ve got developers. We’ve got our own traffic. We can seed it. We can build it. We can seed it with our traffic and we can build up the asset and make money in the future. And we have this idea to do a billion dollar jackpot, never been done before. No one’s ever offered a billion. No one ever offered a billion dollars before us. And that’s how we got on the TV and radio shows you were talking about. And we built up an asset. It wasn’t worth as much as I thought it would be in the end…

Interviewee: Yeah.

Andrew: ..and partly it’s because the dot.com bubble burst and the other part is that I was just exhausted. I mean, when you are just..

Interviewee: Yeah.

Andrew: …when I did those interviews that you are talking about, I was so beat. I remember once just dropping my phone out of exhaustion. And I still have this CD of the interview that I was on when I dropped the phone out of exhaustion.

[laughter]

Andrew: And you can hear it. Here I am a person who craved attention from his nerdy youth….

[laughter]

Andrew: …finally getting attention on big TV shows and radio shows and I’m too beat, I’m too exhausted…

Interviewee: Yup.

Andrew: …to do anything with it. To leverage it. Did you..you noticed that right? You noticed the exhaustion?

Interviewee: Yeah.

Andrew: You were feeling it too?

Interviewee: Oh yeah. It was short of..it became this fine dust that settled on everything. That no matter how enthusiastic we were, it was going to always be with this grittiness of fatigue and exhaustion. I mean because there werent..people weren’t taking vacations and we were working. There were times, you know, we eventually got small foldout beds put in the office. And by then, sort of everybody was so over being there that nobody could even bother to use them. But there were times people laid down on the floor to just like, I just need to relax. I’ve been here for twenty four hours. I need to relax. Yeah, it was definitely..and not in the way where I look back on it unfondly. You know, I for the most part I really enjoyed every single part of it. But it is also, I think it’s the kind of thing that once you stop doing that, you look back and realize, wow I really was grinding myself down. And it, you know, I could say it was so much easier because I with friends and it was so fulfilling and, yeah. It’s a wonder that none of us, yeah. Yeah. None of us got ill or none of us, yeah, aged ourselves any more than we did. But it was really exhausting..it was really. But we pushed on, we were on such a tight timeline and then a lot of people won’t remember. This was when, who went on strike? Do you remember? We couldn’t get our..we needed to get bigger lines put in to handle the traffic. And we couldn’t do it because…

Andrew: Ah yes. It was like New York Telephone.

Interviewee: It was like Verizon or something.

Andrew: Nimex or something.

Interviewee: Yeah. It was whoever…exactly. It was whoever was the telephone company at that time. Whatever their name was. They went on not a short strike. They went on a pretty significant strike for awhile that..and by then because we were investing in publicity and a PR company and all these things that were so new to us. We had a launch date for this site what was firm and we couldn’t change it. We were buying advertising and then, everything had to grind to a halt which meant when things picked back up, it was now we were on double time to begin with and then this situation arose. And it became absolutely around the clock working to get things done. And some of it was you and I didn’t even need to be there. Our part was PR and logistics and..but it was this solidarity thing like if Michael and the programmers are going to be here all night doing this, we really need to be there too. It wasn’t acceptable to say, okay good..let me know in the morning how this is turning out. And, you know, I’ll see you later we’re going out to dinner. We really..we were there a lot of the times just because we felt like we had to be there.

Andrew: Yeah, there was a sense you had to prove that you were tough..

Interviewee: Yeah.

Andrew: ..and so you were going to keep working. And even when you weren’t working, you were going to take work home with you so that you could prove you were tough.

Interviewee: And then on the weekends you were going to need fast company and all of the, you know. It was just this constant stream of, you know, the social things I think we went to were like networking events a lot of the time. And, yeah, weekends reading the magazines about the industry. And just being this like twenty four seven. It really was like a reality show before the reality shows were that big. Like, it could have been, it was so immersive. The time, we lived within walking distance of the office and none of us commuted that far. We were just in this bubble around the office, around that workplace. That at the time like I said, like any dysfunctional relationship, it felt okay. It felt fine at the time, you know. Its only afterwards you go yeah, that’s not sustainable. And I think you learned that more than anybody else. That it’s just..it’s not sustainable long term. You can’t do it.

Andrew: You know just doing and interview with Jerry Calono [sp?] who was partners with Fred Wilson. A respected venture capitalist whose been doing this now for years. And I asked him why did you guys partner up all those years ago when you were in business together and they said I was supposed to get together with Fred Wilson and he cancelled on me and the reason he cancelled on me is why I wanted to work with him. He cancelled on me because he needed to go be with his daughter. And you can see how guys like that will make time for other parts of theirs lives, can sustain their careers…

Interviewee: Yeah.

Andrew: ..can sustain their work habits. I mean Fred Wilson has been in this business for a long time and he pumps out a blog post everyday in addition to, as I’m hearing from entrepreneurs, meeting with entrepreneurs who he doesn’t invest in just to give support and advice. And investment in companies..

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Andrew: and builds up those companies and the only way to sustain it I think is to have something else that you’re into something else that you give attention to.

Interviewee: yeah. I think it’s also important and correct me if I’m wrong, you also didn’t have very many mentors in this field. You didn’t have the kind of role model to say, “You might want to slow down, you might want to take a break.” I don’t remember you ever really having. There were piers and there were sort of colleagues and comrades and people who were in the trenches in the same way, but not anyone… ‘Cause there couldn’t have been I mean it was all new media nobody had done what you were doing, made it hard and you were so focused on doing it that it would have seemed like slacking off to go and spend a couple hours having lunch with this guy or going to meet with some one, leaving the office to go do those things I think became really challenging. And not having that kind of role model of the healthy balance of what you could do really impacted what you did as well. I think.

Andrew: yeah. Yeah. And I – I tried to too, I tried to get those mentors but they would take my calls either!

[Laughter]

Interviewee: or it was all, it was on paper, it was like the Tony Robins says that we should be doing this…-

Andrew:-did u just loose you? Give it a moment lets see if the connection comes back. Oh so we lost the connection there but we’re right back in the interview. Lets just take a couple more questions and we’ll wrap it up. Casey Allen is saying I didn’t-, I’m not talking about the big whined down, I guess he Tweeted out a question to us about when we sold it, how we sold it. So basically we sold the company in stages. we sold a big piece of it to Roslyn Resnicks’ company, who if you do a search on Nickser G you’ll get to hear how she built her company, incredible business she built from her kitchen table and then took out to the Nasdaq, she took it public. So, we sold a piece to her, we sold a piece to the guy behind MySpace, and sold it all in pieces and basically I just took off. Lets see what else we’ve got, how many employees at your peak, we took that question… do you go through network? I think we took all the big questions if I missed anything let me know. So, all that hard work… was it worth it? Why?

Interviewee: It totally, totally, two big things I think first that we really did accomplish stuff it wasn’t spinning your wheels, just took five years later wondering what it had all been for.- and that there no question that it, you know, maybe it was like boot camp, and maybe it was that baptism by fire, but there are so many lessons from that business that still – any you know I just want to let people know still I don’t work in new media any more, well not directly, I work in public health. So, I do things that try to bring the internet and new media into pubic health, but it’s not my, it’s not my profession anymore. But still being able to use the lessons we learned whether it’s doing things as quickly as you possibly can, I mean we ran on such a schedule because if you didn’t get it first someone else was going to get to it. And so I have now still, this efficiency of task, and not cutting corners, but you know not dilly dallying about things, and not finding excuses not to do them, ’cause you may as well get it done, and get it done quickly and get it done well. and just sort of that dealing with people, and dealing with new ideas, and being really comfortable with innovation and. – and being really comfortable with the fact that nine out of ten ideas that you may work really hard to develop aren’t going to go any where. I mean there was a 900 number, I didn’t even know what our 900 number was going to be but I had to look into that, at one point we were mailing physical books of trivia out to people. There are things that your going to put this effort into and they may not go anywhere, and to be really comfortable with that, and to be really comfortable with the fact the that next one might, and the next one might be huge. And I sort of see it as that – that journey instead of the destination to be sort of you know corny Hallmark Card about it. So, yeah there’s not question the lessons learned, and the relationships developed. I’ve never had a work place wh

ere people, to this day… We should all get back together, you know that kind of relationship building and being in an environment like that. On the one hand, you know, did we all make sacrifices to our personal lives, yeah I’m sure we did, but I_ there was a strong trade off and I can’t think of very much that I would have done differently. Including, I mean, the entire five or six years absolutely I would’ve done over again. And even with that I can’t think of anything major that I would have changed. Would you change anything?

Andrew: it was the best part, it was the best years of my life… no there’s, it’s just, and I don’t know if I could say that. Sounds sad to say that my, the best years of my life were ten years ago.

Interviewee: yeah. Especially when you just got married a month ago, try to be a little more…

Andrew: yeah, that’s true too and then I think about different, the best years of my business life I can say, but there are different stages in my life that were all just really fun, I just got married, I’m here in Buenas Eres; I never could have done that before. I meant I just wasn’t that kind of person. I traveled around for a while with no obligations. That was, – you could say that was the best time of my life. So it was defiantly in business the best times of my life and I hope to get even better than that in the future.

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Andrew: Would I do anything differently? I think I would do things that would help make it last longer, like…but I don’t know. You know what? I try to say things like, “What if we kept costs down? No fixed costs at all.” But you couldn’t because that’s all that was available. I think it was as best as it could have been. I think…could I have taken money out of the business? No, because there were times when the business needed it. I think it just was what it was and to try to find ways to make it even better is just foolish. You just have to say, this is it. This is it. You just have to accept you had this great period of your life, you built something incredible and that was it. Now what I wanted was a business that I could be in for the rest of my life. That I could build a legacy with. I just don’t think this was it. It wasn’t the vehicle for that. It started out as a how-do-we-keep-ourselves-going and then how do we get a great type of business. It didn’t start out as a legacy building business. Kind of like Ted Turner and TBS. TBS in the early days was just Gilligan Island reruns. It was him just struggling to get it going. It wasn’t going to be his legacy building; he had to get through that in order to build CNN and then CNN left his legacy and that’s why we all revere him now.

Interviewee: All right. Speak for yourself on revering… I like him! I like him plenty but I…

Andrew: We all love…All right. You’re right. I admire every successful entrepreneur. Let’s see. How much did you sell the company for from XXX. I’m not telling you but it wasn’t just from sales that I was happy from selling the business. What a mysterious answer I’m giving out. You know what, I can’t say. I can’t say because it’s all a “how big is your Johnson competition” and once you whip it out you know that…you know where you stand and everyone else knows where you stand so I’m not going to whip mine out.

Interviewee: Show them the microphone again! Distract them by showing the microphone. Show the microphone again. Distract by showing the microphone.

Andrew: I’m going to keep the microphone right here. Casey Allen suggesting we do a presentation at JA. I don’t know what JA is. Like your brother and my sister too.

Interviewee: Junior Achievement.

Andrew: What is it?

Interviewee: It’s got to be Junior Achievement.

Andrew: Oh, Junior Achievement. Oh, I didn’t know that. Well, introduce me to Junior Achievement. I will teach those students good. All right. So there it is. I’m so grateful to you for coming on here. We actually had a different interview scheduled for today and the guy last minute had some trouble. I keep telling people, “It’s a Skype! A video Skype interview!” Which means you do have to have Skype and yes, you do need a webcam in order to do a video interview. And so today’s interview apparently didn’t understand it was going to be on Skype and also does not have a webcam.

Interviewee: I was going to say, who were you going to interview? Your dad? Except your dad has Skype and a video…

Andrew: Yes. This is a person who actually is a big advisor to internet companies and does not have video or Skype. I don’t understand that. Like you said, even my dad…my dad’s in the schmatta business his whole life, he’s got a video camera and he’s got Skype. Thank you very much. All right…

Interviewee: When are you going to interview him? I want to see that one too.

Andrew: My dad? That’d be something.

Interviewee: If this wasn’t enough of a therapy session for you, next you bring your dad on.

Andrew: We’ll wait till the right time. Now is not the right time. Wait till somebody else needs Skype or a video camera and can’t come through on the interview. No, I’ve been wanting to do this interview with you for a long time to talk over the old days. I hope it’s valuable to people. Well if you watched us live, let me know now, was this helpful? What was the most helpful part of it? Give me feedback. I want to get better at this. If you’re watching us…if you’re watching or listening to the recorded version of this interview, I especially want to hear back from you. Come back to Mixergy, give me feedback on this. Was this helpful? You guys keep telling me that you want to hear more about me and not just the people who I’m interviewing. This is a lot about me. I invited Crystal here ostensibly to ask her about herself and her experience at Bradford and Reed but I ended up talking just…or mostly about me. So I want to know whether it was over the top. Crystal, how can people find you if they want to connect with you after this interview?

Interviewee: Oh, that’s a really good question. You know what? Let them get in touch with you and you can help us get in touch. Because I don’t even…My twitter account…that’s all…yeah.

Andrew: Do you want them to add you on twitter or is it too personal or too…

Interviewee: No. I don’t use it enough to make it worth it so…you can help. This is what you do. You’re like this relationship builder. You do that.

Andrew: All right. Then if you need to get a hold of Crystal you contact me, even if it…

Interviewee: You’re my person. You’re my middle man. Go.

Andrew: I actually get a lot of emails from people who listen to my interviews who say, “I love this guy or that guy who you had on”…