In this interview I want to find out how a guy who used to sell snacks at ballgames built a multimillion dollar social media business. Yes, social media business.
Dave Kerpen is the co founder of Likeable Media, an award-winning social media and word of mouth marketing firm. Also, he is the founder of Likeable Local, his new software company.
Dave Kerpen is the co founder of Likeable Media, an award-winning social media and word of mouth marketing firm. Also, he is the founder of Likeable Local, his new software company.
Andrew: Coming up: Have you ever had a job that sucked? Catch the incredible thing that today’s guest did with a job that other people would have complained about. You’re going to be inspired by that. That is what an entrepreneur does. Also, notice how many times today’s guest is surprised by my questions. And these are things you actually want to hear about. No one’s ever asked them before. Catch it in this interview. Finally, there is one thing towards the end of this interview that I worried today’s guest would ask me to edit out. I will not edit it out. Thankfully, he did not ask me to edit it out. And that’s a good thing because it’s important that you hear it. This is why I don’t edit the good stuff out. All that, and so much more, coming up.
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All right. Let’s get started.
Hey their freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. The place where literally, literally, actually using the word ‘literally’ correctly, hundreds of proven entrepreneurs have come here to tell their stories, and teach you how they built their businesses, so that you can go out there and build a successful company, yourself. In fact, most of you already have, and you’ve come back here and done your own interviews. And that’s the goal here.
In this interview I want to find out how a guy who used to sell snacks at ball games built a multimillion dollar social media business. Yes, social media business. Dave Kerpen is the co founder of Likeable Media, an award winning social media and word of mouth marketing firm. Also, he is the founder of Likeable Local, his new software company. And, piling onto this intro here, Dave, he’s also the author of Likeable Social Media: How to Delight Your Customers, Create an Irresistible Brand, and be generally amazing on FaceBook. You can hold up the book while I’m saying this. I’ll explain while you’re doing that.
Dave: This is my second book. That one’s my first book..
Andrew: And the author of, I’ve got that up here too, Likeable Business: Why Today’s Consumers Demand More, and How Leaders Can Deliver. Dave, I’m going to ask you later on why you hold up the book, because there’s a reason for it, but first let me ask you this: What was it like to earn your first million?
Dave: It was awesome. I mean, that was the real turning point for us, because we started a company without really knowing too much about business. The story behind my first company is that my wife and I were…
Andrew: Well hold on. I want to tell this. I’ve got an hour with you.
Dave: Oh, okay.
Andrew: I want to tell the story in depth.
Dave: Okay. We’ll tell that in a bit.
Andrew: You’re one of the few entrepreneurs who I’ve interviewed who remembers, and is willing to share publicly that moment when you realized that you earned your first million, so I’ve got to explore that. Where were you, and what happened?
Dave: Got it. Well first of all, there’s no hold barred, so you can ask me absolutely anything, transparency is one of my core values. Go for it. You can hit me up with things I have no idea you’re going to ask me. There’s absolutely nothing you can’t ask me.
It was awesome. When we hit our first million it was a real turning point for me. It made me feel like, “Wow! We’re actually building something substantial here. And we’re building something that’s bigger than us.” That was really the first time that I realized we were building a company that’s bigger than us.”
Andrew: Where? Do you remember? I remember actually calling up City Bank, and hearing them say the number for me. And then I called again, and again, and again, to hear it over and over. Do you remember a moment like that where you suddenly said, “Black and white, we did it.”?
Dave: [laughs] Well I can’t say that I did that over and over thing, but I’m impressed that you did that, and will admit it, also. Early on we struggled a lot with making payroll, and to sort of be at that level where we knew we weren’t going away any time soon, that was what was meaningful for us.
Andrew: Alright. And before this. Before being the guy who, as we’ll find out, was on television for being the guy who built a successful company, you were known as ‘Crunch and Munch Guy’. What did that mean?
Andrew: What did that mean?
Dave: So I had a job when I was in college, I went to school at BU and I was studying Education and Psychology at BU and I thought I wanted to be a teacher and I took a job working as a ballpark vendor at Fenway Park and then soon there after Boston Garden where the Bruins and Celtics play. And so it was a sales jobs and what a lot of people don’t know about ballpark vendors, or hawkers as they’re known is that they’re pain on commission and tips only so you sort of get paid commission based on what you sell. And it’s also a seniority based system. So you’ve got to work for years to sell like the beer or the hot dogs.
Andrew: How much do you make off of a hot dog, for example?
Dave: You typically get 18% so if you sell a $5 hot dog you make a buck. You sell a lot of hot dogs, commission plus tips you can do well. But it’s a seniority based system so like I said, you’ve got to work for years to sell the hot dogs. So my first day on the job I got assigned the lowest selling product in the building, a product called Crunch and Munch. I sold 8 boxes and I was paid the legal minimum they could pay me, I think it was $15. So I came back the second day thinking, OK well it’s fun being at the ballpark but I’d like to try and make a living out of this and I developed a little schtick and I started singing and dancing and juggling boxes and really making myself noticeable and of course, lo and behold I started selling more Crunch and Munch. The interesting thing is I had no talent. All I had was passion and a little ambition, and no fear. And I was able to build myself this sort of name as the Crunch and Munch guy. The real turning point was when the Boston Herald wrote the first article about me and that night at the game I did, probably the only smart thing I did throughout my years as the Crunch and Munch guy, because like I said I didn’t have any talent. But what I did was, somebody asked me for my autograph the day that the Boston Herald article came out. And what I did was, I said to the woman, do you mind if I borrow your sharpie for the whole game, I’ll give it back at the end of the game and I proceeded to unsolicited sign every box that I sold that night. And somehow, in one night, I had created a perception that in this building not only did you have to buy a box of Crunch and Munch from the Crunch and Munch guy but you also had to get his autograph. And literally the next day and for the next couple years I didn’t have to do it unsolicited because people would buy a box from me just to get their autograph. And I really maxed out what you could do as Crunch and Munch guy. I was on ESPN Sports Center I was making about $400, $500 dollars a game for three hours work. Really good money for a college student of course. And for me it was the first time I really fell in love with marketing, with promotion, with branding, and the things that I ended up pursuing in my career.
Andrew: Wow, so you start autographing stuff and people start to expect an autograph and want one? I’m trying to think of what can I give people and autograph it? No matter what, from now on if I sell it, if I offer it up, I’m autographing it.
Dave: I’m telling you it was unbelievable to watch it. I didn’t ever take a communications class or a business class but I feel like I put my psychology degree to work a lot. Just studying people and consumer perceptions. The fact that I was the same person that I was the day before and I was doing the same schtick I was the day before but somehow once other people saw me signing autographs there was this social proof and everybody wanted to get an autograph from the Crunch and Munch guy, it was crazy.
Andrew: That is fricking crazy. I’m starting to think maybe from now one before an interview I should send every interviewee an autograph photo of myself, just have it arrive the day before.
Dave: I’m telling you. Perception is reality and once people see you in a new light it really affects things.
Andrew: Way to create your reality. And, you founded Likeable with your wife, we’re going to talk about her. But before you even met her you were on something called Paradise Hotel.
Dave: Well, so I had briefly met Carrie [SP] before.
Andrew: Oh you did, OK.
Dave: That’s important to her because she doesn’t like anyone thinking that she watched the TV show. I’ll tell you the whole story because it’s a fun story and it’s a very sordid story.
Andrew: I like sordid stories. You’re willing to tell me a sordid story and later on I’ve got notes here, you’re going to tell me about how you and she were shouting and arguing over stuff. But first tell me the fun sordid story.
Dave: The sordid story. So, after Crunch and Munch guy I decided I had to get a real job and I took a job working in sales at Radio Disney in Boston. And I was the number one salesperson in the country for the year 2000 at Radio. And then this woman started working in my office. She dropped me to number two within three months, and so I knew I had to one, marry her, and two, go into business with her. But unfortunately, this is the sorted part, unfortunately there was one slight problem with that master plan: she was married at the time. And so she, we had a really close relationship, we were best friends, but, and I confessed, sort of, my feelings for her, but, you know, clearly we couldn’t really act upon those feelings and she ended up moving to New York to focus on trying to make her marriage work and I did what anyone with unrequited love would do.
I left Disney and went on a reality television show to find love. It was a real sleazy show called Paradise Hotel on Fox and so I was on 31 episodes of that [???] actually just coming up on the 10 year anniversary. It was sexy singles at a luxury resort and me. And, you know, interesting, really interesting, sort of sociological, psychological experiment. For me, the most interesting thing was being away from all media and people and, sort of, contacts for three full months. Right, so I had no connection to the internet, to books, to magazines, to any of my friends or family back home for a long, long time and it changed my reality. It made me feel like my reality was the game and the different people I was interacting with on the show. You know, I’m happy to talk about Paradise Hotel if you’d like, but just to finish up the sort of story with Carrie was after Paradise Hotel, I was living for a short time in Los Angeles and living as, what I call, a D- List celebrity, generously. And going…
Andrew: Even as a D-List celebrity, from what I read, and there are articles about this in the New York times even, that covered your dating life. You would walk down the street and women would come up to you.
Dave: Yeah, no, it was, right. I do have a weird media magnet thing going on with, you know, pretty much everything I do, somehow I’m fortunate enough to attract media and yeah, New York Times, People Magazine. I mean, I did a whole bunch of media. It was still D-List, though. I was partying with like, at the height, Paris Hilton and Nicole Richie but that’s still not really, that’s pretty, it’s D-List, I think.
Andrew: It’s not Andrew Warner and Mixergy, but [??]…
Dave: That’s what I’m saying.
Dave: The year I had met Carrie at Disney was the first year of American Idol.
Dave: So, amongst other things, we would discuss American Idol every day at the office . She said Tamyra Grey was going to win, I said Kelly Clarkson was going to win. We all know how that turned out. But I was living in LA, you know, about a year, year and a half later and I hadn’t talked to Carrie in a long time. I had done the show, she had moved on to New York and I was actually at the American Music Awards and I had just walked the red carpet after Ruben Studdard and Clay Aiken of season two of American Idol, and out of nowhere I just missed Carrie and just wanted to connect and so I called her up, sort of like, trying to humble brag and said, “Hey Carrie, I’m hanging out with some of the guys from American Idol, what are you up to?” and she said, “Well, actually, I’m hanging out at home and I’m [??] going through a divorce”, and I was like, bam, you know, I actually just told her a little while lie, I usually don’t tell this story, but what happens is, she loves to tell this part of the story so I realize that I’ve got to include it. I said to her, “Oh, actually, I’m gonna be in New York in three weeks, meeting with my agent”, and so I flew to New York and we started dating and really, the rest is history.
Andrew: And part of that history is you did something that I would never have the guts to do with your wedding, which is you used your wedding to really generate some sales.
Dave: Yeah, so, not necessarily sales, but certainly to cover the costs of the wedding. I mean, Carrie and I, we started dating and we both had some pretty good contacts from our years in radio sales. Carrie, at the time, was now the station manager of a radio station on Long Island and so we had this idea to get idea to get married at a baseball game and create a promotion out of the wedding in order to fund the cost of the wedding. And so what we did was we pitched the Brooklyn Cyclones, the minor league affiliate of the Mets, the concept. They thought it was a little crazy but they said, “Okay, we’ll give you a shot, let’s see if you can sell it and make it happen.” And so we created a promotion called “Our Field of Dreams” and we took over the sponsorship inventory for the game and we resold that to our wedding vendors in exchange for goods and services for the wedding. So we called up 1800flowers.com first and they ended up sponsoring our flowers, Smirnoff sponsored our alcohol, David’s Bridal sponsored our bridesmaids gowns, Entemann’s sponsored our desserts and so on and so forth. We raised 100,000 dollars in trade for an awesome, awesome wedding. We raised $20,000 for the MS society for charity. And the event was amazing because I got married to the love of my life on a baseball field in front of 500 friends and family and 5000 strangers and, for me, it was such a dream. It’s funny because I ended up in social media, I’ve always had this really sort of public personality with the reality TV and the crunch a munch guy so for me getting married in front thousands of people was awesome. And of course getting it paid for was great. But as it turns out it was a real marketing win. We generated about 20 million dollars of earned media for our wedding vendors. 1800Flowers.com had what’s still to date the top ROY [??] PR promotion they’ve ever had, they were on something like 80 TV stations.
Andrew: Let me ask you this. I’ve got to ask about this. Why 80 TV stations covered your wedding, but first, why were these companies willing to pay for your wedding? Is it because it happened to be in a baseball stadium or is it because you are a reality TV guy?
Dave: No it was, I mean I had that sort of pseudo celebrity but it was really we created a marketing promotion where we thought it would be a win win. There were 7,000 wedding programs for everyone at the game where they got sponsorship value, they had the sponsorship value of the innings, the in between innings promotions that normally the team sells that we were able to sell. And then from a PR standpoint we certainly didn’t promise them any press but we said to them, we do expect this to generate national PR and it did. And then the PR guy-
Andrew: Just anyone getting married in a ball field in the middle of a game is enough for a news program to cover?
Dave: Correct. And the sponsorship angle. We included the fact that it was a sponsored wedding and we got a little bit of negative press for that too. The NY Times wrote an article in which they were cynical about the creating a promotion around your wedding. But that only led to more press and it ended up in most of the press. CBS Early Show, ABC World News Tonight, CNBC all did very, very positive pieces which our vendors were really happy about.
Andrew: OK. And so, that led to Likeable the business how?
Dave: Well, so after the wedding literally our vendors including 1800Flowers.com and Entenmann’s said to us, this was really a great promotion, we got so much value out of this, what are you guys going to do next? And we couldn’t get married again so we said, let’s start a company instead. And we started the company. Actually the company was not called Likeable first it was called The K Buzz which eventually became Likeable. And the concept behind our company was word of mouth marketing and helping organizations generate buzz through word of mouth marketing. But what happened very quickly was as social media continued to grow, specifically when Facebook opened up beyond students tot he general public we realized that social media or digital word of mouth marketing was a much better was to do what we were doing than baseball stadium events and mall events and sort of the early days of our company and so we pivoted pretty early on to focus on social media or digital word of mouth and that’s how things really took off.
Andrew: So your wife had a daughter from a first marriage, she didn’t want to go through life without health insurance which makes sense, it’s responsible and so you made a promise to her that you were going to get, or an agreement with her that if you guys could get three clients by the end of the summer then you’d continue with this business, right?
Dave: Yeah, exactly.
Andrew: How did you get them?
Dave: So what happened was we…so after Paradise Hotel I wanted to do something really tangible and really valuable. I had been living in LA and sort of being paid to show up at malls and nightclubs and it was a remarkably empty existence.
Andrew: You get paid to go into malls and do launches in malls? What do you get paid for something like that?
Dave: I got between 5 grand and 10 grand, it was really crazy. At the height I got 10 grand to show up at the West Edmonton mall, there were 2500 people there to meet me. I was like, am I in the Beatles or something, what is this? I was just a lowly reality TV D list celebrity. Trust me, I wasn’t saying I was anything special but I –
Andrew: Did you sleep with any Hotel Paradise groupies, honestly?
Dave: I’m so happily married now.
Andrew: But before that, did you sleep with anyone you met just because of that? I’m testing this bounds of ask me anything.
Dave: You are testing it. Actually I think you’re the first person to ever ask me that in an interview. I’m going to say there was just one, one or two instances of me meeting somebody, a groupie sort of thing.
Andrew: Why, because you’re not the kind of person who is needy like me who just says, alright if anyone’s interested I’m going for it? That’s the way I was anyway before I got married for awhile there.
Dave: Yeah, you know for me, I was always a nerd and I’m still a nerd. It was just, during the Paradise Hotel days, I was sort of like a nerd who was pseudo-famous and it was a weird existence. It wasn’t necessarily an existence I was comfortable with and it wasn’t necessarily an existence I wanted to parlay into like becoming somebody I wasn’t. Like, I was never like a big dater or a big, I don’t know. I don’t think we call men the w word that we call women. It wasn’t really that sort of person so for me, you know, even as I maybe had some opportunities, it wasn’t like I really leveraged them too much.
Andrew: I see. OK. You weren’t insecure about it the way I was. For me, I was walking around with this big insecurity. Why does nobody want to throw themselves at me but they’re throwing themselves at my friend over here, all these other guys at school? I said I got to fight hard to overcome that.
You didn’t have that?
Dave: I don’t think I had that. I mean, I was always very…
Andrew: The guy who called himself a nerd is now laughing at me. I’ve overcome it, my friend.
Dave: Where were we?
Andrew: That’s a good question. So here’s the deal. Now we’re talking about how you got your first clients and somehow getting to speak at malls got you to them. And so that’s what I’m wondering.
Dave: So I had been living this existence in the post-Paradise Hotel time where I was doing really nothing substantial. And so when I moved back to New York and began dating Carrie, I put that education degree to use for the first time and I was teaching.
I was teaching in New York City for 3 years and we got married at the baseball stadium. It generated tons of buzz. And then we essentially said ‘OK. Let me see if I can get a few clients and if we can, I will leave teaching’, which was providing benefits, which was very important to have benefits for Carrie’s daughter, my now stepdaughter. And who by the way I met here when she was 10 months old so she’s really been my daughter for all intents and purposes anyway.
So that was a fun challenge. It was sort of like OK, I have the summer off. Let me see how many clients we can get this summer. As I mentioned before, we had this relationship with 1-800-Flowers post-wedding so we were able to get them on board. We signed a mall and we signed a real estate agency that was run by a friend of mine from the past. And we had those three clients and we said ‘You know what? Let’s do this ‘. And we took the leap and ultimately, you know, that’s the hardest thing for any entrepreneur, I think. It’s that initial leap. I think the more responsibility you have, the harder it is, which is why you see sort of more 21-22 year olds doing the entrepreneur thing. I think as you get older and you have mortgage and children, it becomes harder and people are very scared. It’s very, very scary but we were able to say OK, we have a few clients here. That’s enough for us to take this risk or that’s enough for us that this risk isn’t as big as it would be if we didn’t have any clients. Let’s go for it and, you know, we were able to go for it.
Andrew: And you were going to generate buzz for them. The K buzz was the company.
What kind of buzz were you going to generate for these guys?
Dave: OK. So we had some interesting first clients. The 1-800-Flowers, our first program after the wedding for 1-800-Flowers.com is funny because Jim McKinnon has become a good friend of mine. I don’t know that I’ve ever talked about this with him.
Our first program was they sent to us OK, so we’ve got Christmas. It is a big holiday for us. It’s officially their third biggest after Valentine’s Day and Mother’s Day. So they said Christmas is a big day but what we want to do is we want to, you’re going to laugh. It is a little interesting. They said we want you to promote our non-Christian Holiday business, OK? Namely Hanukkah and Kwanzaa. So early on we did a program for 1-800-Flowers where we did this offline to online, we showed up essentially at Senior Centers in Jewish areas and African American areas and did like events in conjunction with 1-800-Flowers to promote the fact that you could now buy these awesome floral arrangements for Kwanzaa and for Hanukkah.
You know, I think we made a little bit of an impact. I can’t say that we made a tremendous impact but it was, you know, it was an interesting program. We definitely generated buzz for them. Definitely generated some sales for them. Then we actually did one of our first campaigns for one of those first few clients that I mentioned to you we actually won an award for it. It was our first word to mouth marketing award. We did a program called the Atlas Solution and it was, I could be wrong about the year, I think it was 2008. May have been 2009 I think it was likely 2008. The economy was in the crapper and there were several levels of the economy being in the crapper. But this was a pretty bad time. And they had just done this thing called the Stimulus Package. What we did for the mall, it was called Atlas Park is we did our own stimulus package. A bunch of folks did this, but we did this pretty early on where we gave away $10,000 worth of cash in the streets of New York with a call to drive them to the shops to spend the money, to stimulate the economy. Then they could win more money as well when they were at the shops at Atlas Shops.
And then what we did that was sort of fun that generated a lot of PR was that we found an economist who agreed that if every mall in America were to do exactly what we did that there would be a sizable change in consumer confidence that could in fact fix the economy. So we challenged every mall in America to do what we were doing. It ended up being a lot of fun both as a consumer promotion and really as a PR promotion in terms of, you know, who are these crazy people? It was called the “Atlas Solution.” And in addition to it being a consumer promotion, we had a solution to the economic crisis in the U.S.
Andrew: I admire your creativity. Just the ability to come up with that. And then the nerve to push it one step further, to really take it to type is something that I don’t even know how to do. But I’m just sitting here in awe of it. I wrote a note to myself to just think about the way that you did that.
Dave: Well thank you. It’s been really, really valuable. The wedding and some of the early stuff we did because for a long time it’s been very confusing to many people. They don’t understand the space, they want to learn. There’s a lot of pretenders out there. The thing is at the end of the day we can do all the amazing things on Facebook or Twitter or Linked In for all of our clients. But you still need good ideas.
Andrew: So what’s your process for coming up with a good idea for a client?
Dave: We go through a brain storming session with the team now. Now Likeable Media has 50 employees. Early on it was the Dave and Cary show. And I’m really proud of the fact that first of all it’s not the Dave show at all. Actually it has nothing to do with the Dave show.
Andrew: I saw that. Now she’s the CEO and you’re the chairman.
Dave: Exactly. But it’s not even the Cary show. I think we’ve been fortunate enough to bring in a great team of people who can do the brain storming and come up with those big ideas.
Andrew: Do you have a few tools for doing it? I remember I talked to Shedson Mobu who taught the creativity course on Mixergy. And he said there are a few tactics that he uses to come up with creative ideas. Like, for example, to look for ideas outside of his space. And then bring them back into his space. To find two different ideas and merge them together. And in the course he taught how to do it. MixergyPremium.com if you’re not a premium member. But you’re running a business based on your ability to generate creative ideas. You’re not just leaving it to chance. Do you have a few different tactics that you can use to come up with ideas like the ones that you just shared with us?
Dave: Yes, it’s a good question. I wish I could say we had a very specific process. You know, we might have a very specific process over in Likeable Media now. And I honestly just don’t know it because I’m not really involved in the day-to-day. I know that we have an awesome creative director and a vice president of strategy, a new girl sort of involved in client brain storming sessions. And I could tell you that I’m not going to tell you our secret sauce. But the truth is the only reason I’m not going to tell you our secret sauce, because I am transparent, is that I don’t know our secret sauce.
Andrew: There isn’t one, okay. I see actually by the way and one of the things that I love is that I go to Likeable Media’s website. Then I click on “How Can We Help You?” And the first thing it says is “Social media agency of record.” And underneath it it says, “For our premium clients we don’t just insure strong social media presence. We manage your entire social media strategy, and provide full service support.” So when you shift to that what’s the first thing that you do?
Dave: Well we’ve got to really get to understand the brands. If we’re acting as a social media agency record for a company, we absolutely have to be an extension of that company. Be a true partner, not an outsource vendor. We need to spend some time at the company. We need to ask a lot of key questions. We need to really understand the brand personality in a very deep way. And sometimes companies don’t understand their brand personality in a very deep way. In which case, we need to work on that with them.
Andrew: I’m thinking of a new entrepreneur, which is relatively what you are, new especially in this space. You’re hungry to get a customer. When you finally get a customer you say oh by the way I need you to also let me into your company and also tell me about your brand and also when you don’t have one, push you to come up with one. How do you do that?
Dave: I think that it’s all about setting expectations. Clearly you can’t bring that up the day after you sign the contract. I think you have to from the very start explain what the process will be and the important steps it will take. If you don’t do that up front then you end up, as you are perhaps suggesting, with a situation where the client doesn’t understand or resents what’s going on. But the bottom line is, in order to make the relationship work it has to be a true partnership and you just have to become a true extension of the brand.
Andrew: And you sell them on that after you get the OK.
Dave: No, it needs to be part of the discussion early on.
Andrew: So it sounds like what you’re saying is you make it one of the reasons to do business with you instead of saying hey I’m sorry this is part of my process and I’m going to burden you with more work. You’re saying no, part of this process is you get us to come in here.
Andrew: What’s the first big campaign that you did online?
Dave: The first big campaign, I mean The Atlas Solution was taken online but probably the following year our second award for the Word of Mouth Marketing Association was a campaign we did for Kumblerin Farms, Chill Zone. Now Kumberlin Farms is a, where are you based again Andrew?
Andrew: I’m in San Francisco now but I grew up in New York not too far from where you taught.
Dave: OK, cool. So Kumberlin Farms is all over the Northeast, specifically New England Massachusetts, Rhode Island, New Hampshire, New York, and now actually down in the mid-Atlantic coast in Florida. So, it’s a convenience store but they’re traditionally conservative, they were owned by Gulf. They’re a big fairly conservative company. They did have one product called the Chill Zone which is a frozen beverage product that teenagers absolutely love… Let’s just say if you’re not a teenager you’re probably not a big fan. So, we created their first social media presence was for Chill Zone, we created a Facebook page for them, we populated it with some content and we sort of found some initial influencers that liked the Chill Zone. We very quickly realized how popular it was when we got to 20,000 likes without any real advertising and support. We got to 20,000 likes and then our idea was to create a promotion where everybody would win something. We said to the 20,000 likers if you can get to 50,000, fans, because actually it was fans back then and not likers, we’re going to give you a free Chill Zone. Now it’s a 79 cent product. So, clearly by driving them into the stores to pick up their free Chill Zone we knew that we would drive incremental business. The kids got really excited and they shared the page on their own and they got really into this idea and they got to 50,000 fans and then they got to 75,000 fans and then they got to 100,000 fans within several weeks. Then we had the free Chill Zone day and it was unbelievable, unbelievable. I mean, there are pictures of just wall to wall people. They ended up having a 50% sales lift over their previous day the year prior. So unbelievable, measurable sales results from a promotion that was executed entirely on Facebook.
Andrew: Unbelievable and I can see now why you would want to play more online. Where you can grow this and also where the technology was still fairly new and people didn’t have a social media agency at record.
Dave: The whole thing about social media is so many people get confused by all the technologies and all the tools. Yes, there are a lot of technologies and there are a lot of tools and a lot of platforms and it’s our job to study all of these platforms and be on top of them. But, when it comes down to it it’s still more about word or mouth and scale, and good ideas. Any business that is worth anything understands how powerful word of mouth is and now with social media you can really create word-of-mouth marketing programs at scale.
Andrew: And there still were times, though, where you guys couldn’t make payroll and you and Carrie[SP] would fight, you told Jeremy, our producer who pre-interviewed you. What’s one thing you guys fought about?
Dave: Well, we fought about payroll and about, you know, putting our own money in.
Andrew: She wanted to put your own cash in?
Dave: I wanted to put it our own…
Andrew: And she was against it. How do you deal with that?
Dave: She was more conservative. And, you know, it was really hard. I mean, husband and wife, early on we definitely had our share of arguments. I found that we brought arguments from home to work, we brought arguments from work home and it was a real challenge. I think any guy that’s ever been in a relationship knows that the only real way to win is to eventually to give in to your wife and if she happens to be your business partner then, you know, you give into your business partner and, luckily for me, I have a wonderful business partner, happens to be my wife, and I’ve gotten better over time at compromise. And a compromise is so, so important if your business partner is your wife or not…
Andrew: So, how do you guys compromise on this? You want to put money in, she doesn’t want to put your own money in and so do you put a little money in it? No, she doesn’t want to put any.
Dave: She typically, you know, basically she wins. It’s full on compromise. I think what we ended up doing a couple times is we didn’t want to let people go. We certainly didn’t want to let people go but we said if we’re not going to put our money in, you know, they might have to skip a payroll, for instance and then get caught up when we…
Andrew: And you did skip payroll? And people stuck with you?
Dave: We did. A couple times and people stuck with us. They knew the money was coming because we had receivables. You know, we might have 200,000 in receivables but sometimes big companies just take a while to pay. They take 60 days, 90 days. Well, how do you make the company run during that time? Those were some early challenges until we could really understand the cash flow and the financial cycles of our business.
Andrew: Well, let me ask you this. I say at the top of the interviews, I call my audience freedom fighters. Partially because early interviewees, when I ask them what’s the best part of having made it they would say freedom to do whatever you want, but other entrepreneurs have said, even along the way, the freedom to be able to take your company in a direction you believe in on your own is one of the reasons they’re entrepreneurs. And here, you have that but you’re slapped down or you’re restricted. Does it make you feel like, this isn’t what I signed up for, this isn’t the life I want for myself? I’m out of here!
Dave: I mean, there some challenging times early on, but I am huge fan of the freedom you just said and the flexibility. I mean, looking back I would never work for anyone again and for us it was actually more about freedom of lifestyle. Right? Because we’ve ended up growing a really sizable business I’m really proud of and hopefully I’m going to do the same for the second business, but early on we just started the company because we wanted to have more time with our daughter and now two daughters. And so, one of the amazing things about having a business that both of us really enjoyed was we could just come home and see the kids, go visit them at school. I have a running bet with both of my children that I need to be the parent that visits their class more than any other parent, every single year and so far I’ve done it.
Andrew: And they’re good with that?
Dave: I’m sorry?
Andrew: They’re happy about having their parents come in?
Dave: Oh yea, exactly. They’re not sick of me yet. When they’re in high school forget about it but for now it still works really well and it’s a real joy for me. I mean, I’m my fourth graders class dad. It’s rare that even teacher use the word class dad because they’re so you know who’s going to be the class mom this year. Well, every year, I’d be like, “Hello, you know, class parent” and I finally got the job and it’s awesome. I love that stuff. No matter how busy I am, I’m able to make decisions about how I spend my time and you can not have that unless you are an entrepreneur.
Andrew: That is important in freedom and still at some point you taught. I don’t understand how the guy that can hawk [SP] at baseball games and get kicked out at one time because people were paying more attention to you than the ball players. How a guy like that,who has an entrepreneurial spirit in him teach in Queens and Brooklyn. Why did you become a math teacher for three years?
Dave: I have a lot of interests and I’m really passionate about education and about public service. I actually ran for office in New York and I decided to drop out but my master plan is to pull a Mike Bloomberg and one day have the wealth that I can run for office and not be beholden to any special interest. And so I can continue to serve. I mean that’s really the main reason that I taught. It was after Paradise Hotel I had had this real lack of tangible value to the world. And I wanted to really give value. I did love it. I loved my students. I loved inspiring them. I felt like I was leading a team. There are actually some interesting similarities between what I do as an entrepreneur and as a CEO and what I did as a teacher. But ultimately I was very dissatisfied with the bureaucracy which was the school system and some of the challenges that that provided. So that helped make it easier to leave. My first year of teaching I was a very rare union chapter leader. So essentially no one becomes a chapter leader until they have tenure typically because it involves fighting the principal and going up against the system. I was at a small school and really passionate about teachers. And I said, “Hey, I’ll be the chapter leader.” And that was a great experience because I learned a lot about rallying and leading. It was a real challenge to be a chapter leader in my first year for sure. But I actually gained some relationships with Randi Weingarten who was then the president of the United Federation of Teachers. And now she’s the president of the National Teachers Union. So you never know where those relationships will help you in the future. Even though it’s sort of ironic that now I’m a business guy, and I was once a union chapter leader it also helps to understand both perspectives.
Andrew: I get that. All right. Usually I ask the interviewees, but now I’m just going to say it. Your revenues in 2011 were $4.7 million. What was your revenue for 2012?
Dave: 2012 was actually a bit of a slowed growth year for Likeable Media. We did $5.1 million which is great certainly. And the year before $4.7 million was $2.6 million and the year before that was $1 million even, and the year before that was $400,000. So we’ve had very, very steady growth at Likeable Media. Part of the reason that our growth slowed in 2012 was that we focused on building our new company, the software company. So that took a lot of my time and energy away from growing Likeable Media.
Andrew: But how did Likeable Media go from hundreds of thousands to a million to now 4.7 million and 5.1? What was that big jump? There was a jump there that took you from hundreds to a million and from a million to 4.7?
Dave: And by the way under my wife’s leadership in 2013 we’re forecasting $7.5 million. So we’re right back on track to continued excellent growth. Hopefully I haven’t said this too early. We’re filming this interview in March.
Andrew: The early part of 2012.
Dave: Yes, yes. But I think there are really no huge secrets. The number one secret is doing right by your customers, and doing really good work.
Andrew: But how do you get customers? I guess you are a salesman. But you’re not a salesman that I expect which is you have your CRN and your funnel and your customers that you’re moving through the funnel. What’s your process for getting customers like Verizon and the ones you mentioned?
Dave: Well we started off and were very fortunate in being early movers in this base. We developed a great reputation, and that word of mouth help generate a ton of inbound business. I am a huge believer in what we teach and preach and what I’ve written about in terms of social media marketing. So we started really early on. We started a blog called, “Buzz Marketing Daily.” And my wife was like, and this was one of our arguments actually, she said, “Dave, you can’t have a blog called Buzz Marketing Daily because then you need to write every day.” I was like, “Exactly. We’re going to write every day. We’re going to be consistent. We’re going to deliver a lot of value. And then people are going to come to us.” And then lo and behold we built up a huge blog following, a huge email list, a huge Facebook fan base. I think we have 30,000 people that like us on Facebook which is more than almost any advertising agency in the world. And we actually followed our own beliefs and teachings in that if you could create the community and generate a lot of amazing content, then when folks are ready to buy you don’t have to sell them. They call you and they say they’re ready to buy. And there you go. We’ve been very blessed to have a really, really steady inbound stream of business, and that has really helped.
Andrew: Somewhere in my audience is someone who’s running a social media agency who says, “I love my customers, and I’m going to love them even more. My goal is to just build this up the way that Dave did. And then one day have a software company. But now I just need this to pay my payroll, pay myself, and they’re not making it. In your experience, people who are in that spot, why aren’t they breaking through and hitting the numbers that you are? What’s missing?
Dave: That’s a good question. I think a huge part of what we did, and this is arguably relatable not just to social media agency, or agency, but really any business, is building a team and making it about other people and about getting out of your own way. So often, you know, I recommend, there’s a good book by Michael Gerber called the E-Myth. So many small business entrepreneurs get really deep into their own business, and they’re not able to work on the business, and step out and work on the business. And, you know, what we did was fairly early on was we said, ‘We’re not going to build something really big and sustainable unless we’re able to step back, get great executers, get great people to execute the work, and step back and build a management team and build a management system.’ We began strategic planning sessions, quarterly retreats, one page strategic plan document that I got from my friend and mentor Verne Harnish, the founder of Entrepreneurs’ Organization.
Andrew: And a [??] interviewee.
Dave: Oh, awesome.
Andrew: One of the early ones, yeah, one of the first guys to come on here.
Dave: Great guy. Great book. Mastering the Rockefeller Habit is a great book for entrepreneurs. We developed some systems and processes in order to build something bigger than what we, than just the two of us, and that was really important.
Andrew: You know what, when it’s early on, I understand the need to systemize your business so you can hire someone and then hire more, but I felt ridiculous in the beginning, when it was just me, to systemize my business with the idea that one day I’ll hire people. Do you feel that?
Dave: Well, I didn’t, because I didn’t do it until after the fact.
Andrew: You waited to get someone, and then you systemized.
Dave: We probably should have done it earlier, but we didn’t. Frankly, I’ll tell you a secret here, and I don’t this has ever been revealed. We did not have a business plan or even, like, a P&L until like $800,000 in. Maybe close to a million in.
Andrew: No P&L? But don’t you have to pay taxes?
Dave: Yeah, I mean, we went back and sort of like did, you know, did a lot of catch up with accounting. I mean, it was a little crazy in the early-. . .
Andrew: Were you behind in your taxes, ever? I got you, [??].
Dave: That’s the second time you have challenged me with a good question that no one else has ever asked me, Andrew.
Andrew: And the answer is?
Dave: Yeah, you know, we were behind. I think we were actually audited in 2008. So, you know we-. . .
Andrew: It’s a guilty feeling, isn’t it?
Dave: Sure, sure. I mean, look. We were a couple of really good marketers, but not really good business people. And, we had to learn that. We had to educate ourselves, we had to trial and error. I joined Entrepreneurs’ Organization after we hit our first million, and it absolutely changed my life, it helped me become a much more sophisticated thinker and planner, and, you know, started to become fluid with financials, which was never my strong side. And, you know, we had to learn along the way, but if I could go back, I probably would have learned that stuff early on, you know. But we were too, you know, ignorance can be bliss, too.
[??] businesses, getting customers in, treating them well, doing those sorts of things, and then eventually we played a little catch up to say, ‘OK, well, now we’ve got a business here on our hands, so what can we actually do with this to make it a real business?’
Andrew: David, let me say this. I don’t edit my interviews, and the reason I say this, and the reason I’m saying this on camera is so that the audience can hear that I am committed to not editing my interviews, and also so that you know that if later on in the day if you feel guilty for having revealed this, there’s no backing out. But it’s for a reason. I think what you just said here, what you revealed is one of the most important things that has been said on Mixergy, which is entrepreneurs fall behind and stuff, and then we start to get in our own heads, feeling like we’re the only ones who ever did it. We then make it even worse and even worse and even worse and even worse, and the only way we can get out it is if we start to recognize that, hey this stuff happens to other entrepreneurs, that we are not alone. It doesn’t mean we’re crazy. It doesn’t mean we’re terrible people, doesn’t mean that we don’t have it. You have it, you did it. We make mistakes, and we overcome them. And that’s one of the most important things that you said here, and I really appreciate you being as open as you have been. We’re not saying goodbye yet. I just want to acknowledge that and not just let it pass as one more statement said on one more podcast or by some other guy on mine. This is important.
Dave: Well, it’s my pleasure, and honestly, I’m actually writing an article for Linked In on the competitive advantage of vulnerability, which is not something that’s really talked about a lot, but I have to tell you, you know for me it comes naturally. Transparency, authenticity, vulnerability are just you know concepts that really resonate with me but I think for many business people it doesn’t. I think for many business people, especially men were taught to be strong , were taught to be you know secretive, or taught to sort of you know to put up this front. When in the reality is you know what we’re all human beings we all make mistakes we’re all afraid, we’re all insecure about things and when we actually embrace that, embrace our own humanity. Stakeholders whether they’re customers, employees, investors, whoever they are they actually respect and appreciate that at times. I can’t tell you how many times an employee has said to me you know Dave I just really appreciate how honest and open you always are about everything. I just completely trust you because I know that you’re always going to be honest and like I’ll say when I screw up, I’ll say when I’m afraid you know. I was criticized a little bit actually by my wife and you know what she can lead the company however she wants now, but at some point in 2012, I said you know I’m really nervous about us you know hitting our goals this year and you know I want to be at a place where we’re going to hit our goals and I certainly would never want to lay anyone off but I’m nervous about it and she didn’t love that perhaps rightfully so because you know on the one hand you want to put your employees at ease, on the other hand it was just what I was just feeling and I don’t sense her.I think by and large the right people were ok with it and people that really weren’t ok probably weren’t the right fit at least at the time to be working for me.
Andrew: You know what I agree with everything that you just said and I’ve found entrepreneurs get vulnerable here and then they start to feel guilty about it or they start to have second thoughts and they ask me to edit. I tell them don’t and then what will often happen is the interview goes up and people love them even more for it. People want that, because that’s how we connect. I’m just gonna say one last thing and that’s my own statement. The perfect example, Steve Jobs, every product he created he wanted to get it so perfectly perfect there would not be rough edges, there would not be any flaws with it, but when he told his own personal life story he specifically picked an author who was going to put the rough edges in there, who was going to show the flaws of the person. Why? because we connect with products that are perfect we want them to be even more perfect for us and we get angry in our blogs when they’re not perfect enough. With people we connect with their imperfections. We want to get to know them through that and that’s how we remember and hook into them into their stories. Alright speaking of, this guy Nathan Latte introduced us. He even introduced me to all these fantastic people which makes me wonder what does he got? Why is everyone connecting with him?
Dave: He’s a good kid I really like him. Hopefully I’ve been helpful to him as a mentor. I think he’s really smart, a talented guy. I think you should look out for him, he’s got a company called Heo. I think he’s really going places.
Andrew: Incredible, but how does he get to meet people and then have them do favors for him, like introduce him to mixer g and then you do this interview with me. What is it about him? Have you figured that out? Have you spent this kind of time thinking about him?
Dave: I think I haven’t spent a ton of time thinking about him. I think he’s unafraid. I think being unafraid is really important or rather not necessarily being unafraid, being okay with your fear and moving through it. Right? You don’t necessarily have to be unafraid, we all have fear but saying okay I’m afraid this is scary but you know what, I’m going to accomplish my goals, I’ve got to go for it. I think Nathan definitely has a go forward attitude that not a lot of people have that’s going to make him successful.
Andrew: What’s a big inner fear that you had that you had to get over?
Dave: A big inner fear you said?
Dave: For me the biggest thing, I have a fear of failure and I have a fear of not everybody liking me which is sort of ironic I think.
Andrew: So then most people who I have met who I have talked to in the audience who said that they have a fear of failure, they don’t start their companies because they have a fear of failure. They spend endless hours perfecting their first version because they’re afraid of failure. They’re afraid of not being liked and respected. How did you get over those thoughts instead of getting tripped up by them?
Dave: I think you know, even if I’m afraid of failure… The only failure is where you don’t learn because life is full of ups and downs so….
Andrew: So when you start to get in you head I don’t want to fail, I here and fail, how do you stop yourself from getting into that endless cycle?
Dave: Because, you know, in failure, or certainly in mistakes, there will be learning and then we will iterate and get better. As a company, and as a human being, and that’s just
Andrew: Do you actively confront those negative thoughts, and say “I know I could fail, but look, if I learn something it’s going to be helpful. I know I can fail, but whatever I learn here I can take to my other business.”?
Dave: Yes, yes.
Andrew: You do?
Dave: Absolutely. Absolutely, because the failure, you know, look, I have a deep-seated fear of failure, deep-seated fear of not being liked by everyone, those are not going to go away ever. But what can go away is those fears holding me back, because what I can do is like you said, actively confront those fears, actively process and say, “I am going to succeed, in spite of how I know I feel.”
Andrew: You know I really want to keep exploring this, but I want to be fair with your time, and frankly, can anyone in the audience, in the comments, tell me if my mic is picking up my growling stomach? I worked through breakfast today, I worked through lunch today, and I’m going to keep on working. My stomach is growling, and I want to know if the mic is growling and I want to know if the mic picks it up because if it doesn’t, I don’t care and I’m not going to stop. But if it does, then maybe I’ll have a sandwich every once in a while in the morning. Let’s see, finally, first of all, let me just say this first to the audience. Very important, most important message is, if you’re not a premium member, please go out there and sign up for Mixergy Premium!
Dave: You’ve got to get Premium.
Andrew: You’ve got to get Premium! We talked about Nathan Latka [SP], he is one of the Premium teachers! I bring real entrepreneurs to teach what they do best. Nathan talked about how we did social media really well, and transferred it into business, and one of the best parts of that, if you miss it, you’re going to be upset with yourself, is the end where he shows how he takes people from social media, he puts them into a webinar, and what he says in the webinar to get them to buy Heyo [SP], this product that he has that lets anyone create a website and a mobile app and so on. The way that he shows his sales tactics, and the way that he shows his actual presentation, will teach you so much about sales. And the numbers that he looks at as he does that. Go check that out, and go check out Shetsamo [SP]. I promise you’re going to love it, and I guarantee it, or your money back. Yes, I’m like- like those infomercials, money back except here there’s no shipping and handling! You sign up, you don’t like it, we’ll take care of you. I even have a phone number from Grasshopper.com, 8774Mixergy, so you can complain on the phone and get, get real results if you’re not happy. Mixergypremium.com, go sign up now, you’ll thank me. Alright, here are the two things I want to ask you before we go. First of all, the book. We wanted to hold the book on camera because, what did you learn?
Dave: Well, so my publisher said to me early on that no matter how many interviews you do, no matter how many book reviews you get, no matter how many articles you write about the book, or talk about the book, if you don’t show the cover, it’s not going to sell. And ironically, if you do show the cover, it’s going to well. I thought that was crazy, but lo and behold! When I do book reviews and interviews and what-not, articles, when I don’t have the book cover in the article, the book doesn’t sell. When the book cover is there, it’s something about a book cover that gets people excited, it sells! So you know, it’s working very, very well. I’ve got it, the book cover’s out in articles and I’ve been very, very fortunate, my first book was a New York Times best-seller, the second book has been an Amazon #1 best-seller, and you know, I’ve just been very blessed.
Andrew: Alright, the second thing I want to ask you about has to do with my own personal selfish goals. I’m looking at the ink piece on you guys with the number of employees, you had, wow my stomach is growling, 24 employees at Likable Media, my sense is that Likable the software company. What’s the name of the software company?
Dave: Likable Local.
Andrew: Likable Local, it’s probably going to grow that fast, and you’re the kind of entrepreneur that the people in my audience should probably get to work with, if only to one day learn how to build a business and have your kind of creativity in that business. So my selfish goal is, how do my people, if they’re interested in working with an entrepreneur like you, get a job with you?
Dave: Yes, so I’m really excited to be actually just hired our CTO at Likable Local, it’s a good friend of mine, he’s a senior engineer, trip advisor, and MIT- double grad from MIT, and super super smart guy. And so he’s now building out our development and technology team, so we love, we love to meet folks who are interested in being part of our vision. And they can email me, they can tweet me, I’m very, very easy to reach online, very responsive.
Andrew: What’s an email address that they can use?
Dave: My email is firstname.lastname@example.org if you want to go old-school. I do prefer Facebook or Twitter and Linked-in for communication, but if you want to go super old-school you can email me at email@example.com. And like I said, you know, the agency has had very solid growth and while I continue to grow Likable Media, but Likable Local we believe, can be a game changing company. It can be the default solution for small businesses and we can go the $500 million to $1 billion company in the next 7 years.
Andrew: If you hire somebody from audience based on this conversation that we are having right now, would you have a private conversation with them after they are hired about their business idea if they have one? I don’t mean to get hired just so that they can go out and start a business, but I mean, will there be a real connection with you where they can learn from you one on one, the way that when I worked for Paul Sobaring[sp], in college, I learned much more than I learned from actually going to college.
Dave: Yes. We have a bunch of interns right now. What I say to interns and staff people is, the best reason to work for me or for any entrepreneur that’s really driven to being human and there, is the learning experience. If I hire somebody from your audience, will I listen to them? Of course. If I hire anyone, I’ll listen to them. I have an open door policy with all of the employees of Likeable Media, all of my employees. Actually, really anyone who reaches out online, I give them 10 minutes to have a conversation with me, but certain folks that work with me have an opportunity to develop their ideas. I want to have an entrepreneurial atmosphere always at Likeable. We’re always looking for people who develop to incubate ideas within our organization. I’m not the only person who have ideas. I would to have other things come out of Likeable. Look at Twitter. Twitter came out of Odeo. It wasn’t even the idea of it, but it’s just the fact that they have an entrepreneurial culture. Maybe there is somebody listening right now that has this amazing idea that can come to work at Likeable and change the game of what Likeable is even doing. I would love that.
Andrew: Alright. For me, my suggestion is, guys, the first thing you do is, say, thank you for doing this interview which is what I’m going to do right now. Forget anything of value out of anyone on the internet, my suggestion is send a thank you. That’s how I met so many of the people who I’ve interviewed here. Starts off with a thank you for what they did, build up to a relationship and hopefully something bigger, which for me, means an interview. All right. Thank you for doing this and thank you for writing Likeable business: Why today’s consumers demand more and how leaders can deliver. As you are holding the book, I’m saying the title.
Dave: Actually, what I was going to say is that the last chapter of my book is called Gratitude. Actually, I write all about the importance of saying thank you. I write 3 or 4 handwritten thank you notes every single morning as part of my routine. It’s a really important part of the way I do business, and it’s been very, very valuable for me. That was a challenge to habitualize, but I can’t say enough about how powerful a handwritten thank you is.
Andrew: I can’t say enough about how grateful I am to you for doing this interview. Man, you are a good, frigging guest. Thank you for doing this interview.
Dave: Well, thank you. It was my pleasure. I really enjoyed it. I actually have a Passover seder to run to here now, but I’m glad to have spent the last hour of my life with you, Andrew. Look forward to getting to meet you face to face and continue our relationship. Really, if any of your listeners have any questions, comments, thoughts at all, please do email me, tweet me, Facebook me, LinkedIn with me, all that fun stuff.
Andrew: All right. Bye, Dave. Thank you all for being a part of it. Bye.