OLX: Why Introverted Founders Need To Be Rejected (Repeatedly)

Andrew: Coming up, how shy are you? Wait until you hear the gutsy thing that today’s guest did to deal with his shyness. Also, what does it feel like to hold up a big pivotal check from an important customer? I’m going to ask today’s guest about that half a million dollar check that changed everything for him. Also, I want to talk about what other startup sites hate to mention which is the depression that I think only people with big dreams seem to feel. All right. All that and so much more coming up. Three messages before we get started.

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Hey there, freedom fighters. My name is Andrew Warner. I’m the Founder of Mixergy.com, home of the ambitious upstart and home of about 750 entrepreneurs who’ve come here to tell you their stories, to tell you how they built their businesses and to inspire you to go out there and built your own business and hopefully when you do, you’ll do what today’s guest is doing. Come back here and tell your story.

How does a founder who nearly goes bankrupt end up building companies worth tens of millions of dollars? Fabrice Grinda founded multiple companies which we’ll talk about in this interview, including Zingy, a mobile ring tones, wallpapers and games company that he launched in 2001 and sold to Sprint a few years later. He also launched OLX, which offers free online classifieds and auctions which provides more local service on a global level than other sites. Fabrice, welcome.

Fabrice: Thank you.

Andrew: Hey, that check, we’ll get into the story of how you launched the business, how you suffered through it, thanks for being open about that, and how you turned things around. Can you talk about, do you remember that check? Do you remember holding it? Feeling it?

Fabrice: You know, it was the momentous event because we had been struggling, literally for like 2 years. I missed payrolls over the course of 2 years twenty-seven times, not in a row, including the last four and a half months in a row and it was very unclear whether or not we were going to make it. I mean, we were on the verge of business bankruptcy. I was on the verge of personal bankruptcy. I missed rent payments for 5 months. I was being evicted.

But I knew we were selling, actually it was completely unclear how much we were selling and I knew clearly what was coming. I knew a check was coming. And then the check arrives and it’s half a million dollars and I was like Oh, my God, we’re saved. We had a celebratory party with the remaining eight employees because we’ve gone from like 23 employees to eight employees over the course of that four months because we stopped paying employees. They stopped showing up for work. And I knew then we had made it. And we were going to survive.

Andrew: Unreal. And you told me that even when you sold the business for, how much did you sell it for?

Fabrice: 80 million dollars and on May 31st of 2004, actually, not to Sprint but to a publicly traded Japanese company in the same category. Sprint happened to be our biggest customer.

Andrew: And that check didn’t even feel as important or that sale didn’t feel as important as that first one to Sprint that turned around everything?

Fabrice: Well, at that point, because we’d signed every carrier after Sprint, AT&T, Nextel, Verizon, etc. it looked like we were on a path to success and things felt good already. We knew to some extent that there was going to be a successful outcome regardless when and how it took place, whereas before then, that check from Sprint changed everything because until then it was absolutely not clear after two years of sweat and tears and blood that we were actually even going to make it. We weren’t even sure we had a viable business. That was much, much more important than the ultimate [??]

Andrew: I want to hear the whole process. How you got the idea? How you suffered through it? How you built it up and got that sale? What happened afterwards in the sale? It all seemed to start somewhere around the time that you were working for McKinsey and you recognized as you were working there that it wasn’t right for you. How did you know that that wasn’t right for you and maybe you need to go out and be an entrepreneur?

Fabrice: Well the reality is that I probably new before going to McKinsey that’s McKinsey was not going to be where my personal destiny lay. I had already started playing with computers. When I was 10 I got my first PC, building a [?] in the 1980’s. When I got into college, when I was 17, I moved from Paris and Nice, where I’m from, to New York, to Princeton. I started the building a computer company where I started exporting high end computer equipment to Europe. Which, in 84 dollars, etc…

Andrew: You mean that you were just buying computers from the U.S. and selling it to who in Europe?

Fabrice: Retail stores.

Andrew: Retail stores.

Fabrice: And because I realized there was a price arbitrage and a time arbitrage where things were being released in the US much earlier and at much lower prices than in Europe. So, because he lived across the street from my grandmothers in Nice there was a great computer store, which happen to be the biggest computer store in Nice, speaking French to the owner, and I came here and started selling to him. And a few of my other friends, because the computer geeks, we have friends in the computer community, I started selling to them and that built a small business.

And so, I started to see the Internet being born in a sense. I saw Gopher, and Mosaic, and Netscape. It already felt reasonable frothy. I mean Yahoo! etc. And in ’96 graduated, I guess the top of my class, from Princeton in Economics I was considering my options. I considered joining a startup or creating my own startup, but I was 21, extraordinarily shy and introverted and socially awkward. I had never experienced managing anyone. I may start a company but it’s not most likely going to succeed. What do I go to? Essentially finishing school. The place where I’m going to learn to think more strategically to where I’m going to work on my communication skills. So I went to McKinsey, and loved my time there. Met the most interesting people I’d ever met before and they became my best friends…

Andrew: I’m sorry to interrupt, but can you explain again? Why did you go to McKinsey even though you were so entrepreneurial that you were importing computers to Europe and selling them at local stores. Why would a guy with that kind of entrepreneurial creativity go and work for McKinsey.

Fabrice: Because I felt I lacked structure. I didn’t have necessarily strategic thinking skills. I didn’t have oral ready communication skills. So the crisp art of writing a 15 page PowerPoint with one idea per page, a sentence, a title of 7 or 8 words with a title in the present where you communicated the ideas, where the conclusions at the beginning. It’s the very opposite of intellectual discourse in college. Where you’re writing these long, flowery essays, over 20 pages, where the conclusion’s at the end. It felt like, business, finishing school would improve my ability to think strategically, analytically, to manage people, to work with teams, and..

Andrew: And did it? Is it worth it?

Fabrice: So at that time I thought that if I had chosen one path and it might closed down the other paths irreversibly. And the reality is I suspect all three paths are good. After college creating my own company, whether I succeed or fail I’m going to learn a lot. If I join a startup I’m going to learn a lot, and going to McKinsey I loved the time there as well. So I suspect that there is no wrong answer and there is no wrong path, but I actually really cherished my two years there and learned a lot and met the best friends of my life. But, clearly it was not where my destiny was going to lie. I knew I was going to become an entrepreneur even going to McKinsey. I felt, I thought I was going to miss the bubble, but low and behold it lasted longer than I expected,

And so, in ’98 after two years at McKinsey I decided it was time for me to be an entrepreneur. I learned what I needed to learn. The problem is, I’m a mathematician, economist, consultant. I didn’t have an ounce of creativity in my body, and so after looking for six months of actually ideas to create, to reintermediate, to disintermediate, decided, you know what, this is not working out. Let’s look at, many other people in the world have copied ideas and proved them, adapted them, and if it works for all of these people, it could work for me. And so, what’s interesting is, the reality is, as people we live, or we depend, or we stand on the shoulders of our forefathers. We don’t reinvent calculus every time. So, when you think about it, Facebook was not the best, sorry the first social network, it happened to be the best. Google was not the first search engine, it just happened to be the best, and so on, and so forth. So I started looking for ideas that I could take from the U.S. to the rest of the world. I came up with nine business selection criteria, looked at pretty much everything, Expedia, eTrade, Netflix, Amazon, Yahoo!..

Andrew: And your idea was, you might bring one of these guys to Europe? Maybe be the eTrade of Europe. Maybe be the Amazon of Europe.

Fabrice: Exactly.

Andrew: Okay.

Fabrice: And I chose to be the eBay of Europe. So, I sold my apartment. I quite McKinsey, I sold, I mean in ’96 I had the foresight to buy $50,000 worth of shares in Amazon, Yahoo, Intel, and Microsoft so I sold all of that. That was the seed money for my first company which was called Aucland , which was an eBay former and that, I mean, the beginning was hard again but it was the bubble so people were throwing money at people with my resume raised like $6 million venture money. I had 150 employees in 5 countries. We were doing like $10 million in volume but again the bubble burst, didn’t really end up making any money from the transactions. Sold the company to my majority shareholder and started looking for what to do next.

Andrew: Sorry. Let me pause right there. I just want to make sure that I understand this because there was a lot of numbers flying there. You raised how much money?

Fabrice: $63 million.

Andrew: $63 million dollars and then you said that there were millions of dollars coming in. How did you do millions of dollars in business and such a short period of time back when there was hardly anyone online?

Fabrice: Well, auctions is one of the first categories to grow in the internet alongside online travel, eTrade and ecommerce, Amazon, and with that money we first duplicated exactly the eBay [??] chart so we had everything organized by categories with category managers. So we had coins and wine and stamps, etc. and we actually created really fun TV ads which were at prices like the silver lining, etc. and these brought a relatively huge audience but by today’s comparison, when I look at the numbers of OLX, my current site and the numbers of Aucland 12 years ago, it’s shocking how small those numbers were but they seemed huge at the time and it worked reasonably well.

It was the early days when there was an early adoptor audience which allows you to do enough while [??]. I mean, Amazon was already doing hundreds of millions of revenue so it’s not the tens of billions that they’re doing today. But there was a business there.

And so the company did rather well and I sold it in late 2000 to my majority shareholder and started looking for what to do next and in the process, I met a bunch of Europeans selling mobile contents. And the first time I met them the guy was telling me he was going to sell ring tones for like $2 and I was like “This is crazy. No one is ever going to pay for them. It’s never going to work. It’s silly”. And of course 6 months later the guy’s doing $2 million a month in revenues, profitable, growing like gangbusters and so I admitted that I was wrong and I had been wrong about the idea. Also, I was thought not to judge the ideas but actually look at them more objectively.

So I’m looking at the U.S. and at that time the U.S. market was in the dark ages of mobile. We didn’t have text messaging within carriers, let alone cross-carriers. You needed to buy a $5 text messaging plan. There was no SMS billing or premium SMS. There was no [??] and the people that should have been doing this, there’s [??] doing mobile messaging, etc.

Andrew: People who should have been doing this.

Fabrice: There were companies that were ideally positioned in the market to go after this and should be. They didn’t believe in it and they had raised tons of money, etc., etc. So I’m like ‘you know what? This is an idea that I know how to [??]. Doesn’t require much capital which is good [??] available post-bubble and so I decided to [??] and bring a European and Asian idea to the U.S. market. So I moved back to the U.S. in July 2, 2001 and started building Zingy.

Andrew: I see. How did, what was it called, that was called Jamba?

Fabrice: Jamba. J-A-M-B-A. That was the inspiration actually, one of the two inspirations for Zingy.

Andrew: I see. So you were one of the two companies that you were watching develop and you said, “I’ve got to do that.”

Fabrice: Exactly.

Andrew: So how did you even launch something like this? This isn’t the kind of company that you can launch on your own, right? What do you do?

Fabrice: Well, you need a number of things. You need the contents and the content license. And so I started doing analysis of who owned the various rights and at that time we were reproducing music and music has three layers of rights. The performer’s rights, which you get from two companies, BMI and [?] which allow you to play the music publicly. The mechanical rights which is the right to these underlying music, which you get from publishing houses. And then the master license, which you get from the labels on the voice.

So at that time the labels didn’t support boards so it was all about getting the publishing rights and the performance board rights. And in the U.S. there was no database so where would we get that. So we started building or doing literally detective work to figure out who wrote which song and who they were represented by to started clearing the rights one by one.

And at the same time we started talking to the carriers and they didn’t want to deal with us so we actually hacked into the carrier delivery networks to start delivering our content. They said of course it was not doable, impossible, you can not deliver there but we found a way to deliver the content to carriers and there was a billing system so we started charging by credit card.

Andrew: What do you mean you found a way to hack into their systems so that people can get ring tones?

Fabrice: If you actually send to a phone number, the data, in a certain encrypted way it could turn into a ring tone, or a logo, etc. So we found ways into, to send messages on the AT&T and at the time, T-mobile networks. Even though the carriers didn’t support it, didn’t care about it in a way. And they didn’t have SMS gateways the way they were built later.

Andrew: How’d you find someone that could do that?

Fabrice: Hired a great CTO who had been working in mobile industry for like 10 or 15 years and we had a conversation, I realized he was fantastic and brought him over from wherever he was, I think it was Canada, to New York and we started working. And so, and on the rights side by the way, at first none of the publishers wanted to give us any of the rights. So, they were like you’re a tiny start up, we’re willing to pay per download, but we didn’t have money to pay for advances. So when they refused to give us the rights, I started, I’ll admit, we violated a lot of the copyrights in the sense that we had documented who owned them, and we, but had not actually cleared them because they did not want to give us license.

And so I started keeping track of all of them and sending them checks. Some of them were actually stupid enough to actually deposit some of my checks, in which case we had almost an implicit agreement, and some they didn’t actually cash the checks and then I got hundreds of cease and desist letters and it’s $250,000 infringement, or fee per infringement. So they were asking me for 10’s of millions. The beauty of it is you can’t even shave an egg. I had nothing. I had no money in the company, I had no personal money. There was nothing that they could take. So when these really nasty lawyers would call me, it’s like, I would reply, “This is fantastic that you would reach out at me, I’ve been trying to talk to you forever!” So just by being extraordinarily friendly they were somewhat taken aback. So I told them, “Look, I want to pay fees. I want to clear licensing. I want to pay you. I can’t obviously pay 10’s of millions of infringement fees, but I’m more than happy to make good and pay for all of the damage.” So ultimately, by starting that dialogue, and when they realized that when they sued me it would cost them more than what they could get from me, they actually decided to give me licenses. And so…

Andrew: And forgive all the debt that you were supposedly building up when you were using it without their permission.

Fabrice: Exactly.

Andrew: I see.

Fabrice: And so I paid up all the things that we owed them and we were the only ones to get licenses. Carriers, so it took two years to get the first carrier contract. Just showing, just knocking on the doors. They don’t want to sign these little companies because they we’re not going to be around. By going to CTIA, going to all of the events, knocking on their doors, showing that we were resilient, eventually I convinced one of them, Sprint, to give us a shot. And they decided that, let’s give a try to these ring tone things. They only licensed 25 of them from us. And these 25 were some of the top hip hop songs, which were the only ones that were cleared, were the ones that actually led to the half a million dollar check.

Andrew: So you’re knocking on doors, while you’re using this music that you don’t have a license to, are the carriers asking about the licenses the way that I just asked?

Fabrice: Well, we only gave the licensed music to the carriers obviously. We didn’t want to take the risk. So of course, we were indemnifying them on, for any copyright infringement given that we were the one providing the content. But because we had gotten the licenses before we actually signed the carriers, when we gave the content to the carriers we were all cleared and ready to go.

Andrew: So how did you get all of those cease and desist letters? So many of them if you weren’t yet on people’s phones.

Fabrice: Oh because we were selling them directly on Zingy.com, from the website, to the consumers. And so we were already visible, and then we signed a deal with MSN, or with Microsoft, and we started selling it on the MSN portal as well. So the combination of those two things, meant that we were somewhat visible. Some of the labels, like Loud Records, with Wu-tang clan did promotions with us, and so we became reasonably visible in that industry. I mean we were on MTV news a few times, etc. By virtue of being visible, we started getting sued.

Andrew: Oh so I see. At first you were going direct to consumer. Was that your plan all along? To stick to consumer and then you adjusted?

Fabrice: It was the plan, to go to B2C. Which was actually the way it works in Europe and in Asia. But in the U.S. the carriers were not open enough. There was no building method, etc. So ultimately we had to pivot. I mean we stayed in the same category. Instead of being B2C, we were B2B2C. And actually it was a better strategy for us, because the B2C approach would have required a lot more money. I mean, capital was not available in 2001 after the bubble burst. And etoys, and pets.com, and webvan, and all of these guys gone under, plus all of these telecom guys have gone under. Venture capital was not available.

Andrew: I see. Right. So if you’re going to go B2C, meaning business to consumer, you have to buy all of these ads to get these customers one at a time versus going business to business which is partnering with carriers, and they could bring thousands, potentially millions of customers your way.

Fabrice: Exactly. They did the marketing, we did the back ends.

Andrew: When you were dealing directly with consumers what happens when the consumer doesn’t have a phone that you support? What’d you do with that?

Fabrice: Yeah, we would make them select a phone before we sent the contract. If they didn’t have a phone or carrier that we supported we just didn’t bill them and we told them that we didn’t bill them.

Andrew: How profitable or how successful was it when you were just going direct to consumer?

Fabrice: It was, oh, it was very, it was small. In 2001 we did maybe a couple of hundred thousand in sales. In 2002 we did a million in sales. I mean, we were minuscule and it was not profitable because of the very expensive billing costs. It was just a disastrously small operation. But it set the stage for the B2B2C play because once we had licenses and were recognized as one of the leaders in the industry, and once the carriers finally decided this was an industry or category they cared about we were one of the few choices they could come to. Even though it wasn’t an interesting business in its own right it actually the set the stage for future success.

Andrew: You said that there were so many times that you missed payroll. Do you remember one of the first times that you had that big a setback, that you couldn’t afford to pay your own employees?

Fabrice: It was probably in 2002. Because I had been trying to raise money but no one wanted to invest. I ultimately ended up raising $1.4 million but we raised it like $10,000 at a time. It was like $10,000 there, $20,000 there, etc. The first time I didn’t have any (inaudible) money and we missed payroll I just told the employees ah, something went wrong with the payroll processor. I don’t know why they didn’t process payroll. It will come in a few weeks or whatever.

Andrew: You told them the kind of thing that people say to their landlord in the ghetto. What? I sent you a check or you didn’t see it.

Fabrice: Exactly. It’s on the way. I’m not sure what happened. It happened repeatedly to the point that they started believing the bank was just incompetent as opposed to the fact that I had no money to pay them.

Andrew: By the way, $10,000 at a time. $10,000 here, $10,000 there. How were you getting so many checks that you end up with over $1 million? Where did they come from?

Fabrice: You beg and grab at every single friend you have, every friend of a friend you have, every family member you have. I’m lucky enough to have a very big family. I mean, and a few people wrote us $50,000 checks. Then one of my friends created a little fund, actually wrote a $500,000. That helped a lot.

Andrew: What kind of friend did you have at the time who had half a million dollars to invest?

Fabrice: He had been the founder, he had his own .com bubble story. His name is Stefan Patterner. He had created (inaudible)globe.com and his father is really well off and he created a little fund. He didn’t have personally half a million to invest but he had a number of people around him that were wealthy enough and they were willing to back me. I’m very grateful to have been backed by them.

Andrew: If you and I had known each other and were friends on Skype the way we are now you might have just Skyped me and said hey, Andrew. Got a moment?

Fabrice: Yeah, absolutely.

Andrew: How would you have sold me? Just like that?

A: Yeah, absolutely. Whatever it takes. I mean, that’s what it took to get the carrier contracts. The reason we got them and no one else is that whatever they wanted us to do we said yes to. We agreed to build whatever they wanted under whatever specs. Same thing with licenses. Being scrappier, working harder than anyone else was our key to success.

Andrew: Can you give me an example? Like what was your sales tactic when you were trying to get investors at a time when no one was investing? Where it felt like anything digital was just a fool’s errand.

Fabrice: Well, the good news is there were good secular trends. I mean, the self (inaudible) was exploding. The disc business was rapidly becoming (inaudible) business both in Europe and Asia so I was selling a vision of it being even bigger than that here in the future. Therefore the category was worth investing in. It made sense to be an early player and I was the right guy to do it. The combination of relevant past experience plus selling the billion dollar vision worked. There were actually comparables that had worked in the rest of the world.

Andrew: All right. You raised some money. You’re constantly saying yes to everything that the carrier says. Eventually they say yes to you. But when you’re saying yes to everything that a customer wants aren’t you in a way, I don’t know how to say it, well, aren’t you taking on too much? Aren’t you losing focus of what your project is? Aren’t you creating a mess?

Fabrice: Well, to some extent yes but I didn’t say we delivered on everything we promised. I just said we promised whatever, we said yes to whatever they wanted to get the contract. Once we were in contract and they were already, you know, half pregnant you can’t really completely, you can’t stop pregnancy. We, when they set completely unrealistic deadlines, etc. I said look, we’ll meet the deadline but of the 170 things you asked us to do let’s do the 10 most important.

Andrew: And start with that?

Fabrice: And start with that.

Andrew: What’s something that they asked you to do that you knew going in that you couldn’t do it, it didn’t make sense, but you’ll deal with it after the contract?

Fabrice: You know, I can’t even remember, but there were a lot of inane things. From supporting really [sounds like] legacy handsets to some elements of their building system that were just too complex to the way they wanted to present. The product that was maybe not already built by default and required extra development. And so we just said, we’ll deal with it later, or we’ll build it later. Ultimately, they accepted it because they were ready [??] and they had to launch and they agreed to launch internally. As long as we had the people that were the project managers internally in the [??] on our team we were OK. And so I made sure that they were happy and they seemed to be well. And then the numbers got so big when we went live that these guys became heroes in the company and all got promoted. So, the fact that we had missed 99 percent of the deadlines that they had asked us to set didn’t matter.

Andrew: As you are talking, you’re happy, you’re in a confident place, life is good, smiling. Take me to the lowest point during this time, because it couldn’t have been this easy where every trouble just felt surmountable, where you were coming up with clever solutions and didn’t worry about things. Take me to that lowest point. Let me identify with that a little bit.

Andrew: The lowest point was probably prior to launching a company. In the prior life when I was running the eBay in France and Southern Europe, I had been on the cover of every magazine, I had been a huge success. I had been regarded as “The Internet Entrepreneur” of France and bringing the internet to France. So, having reached that high summit if you want, once I sold the company for peanuts, I was really down because it felt as though, I let slip through my hands, the biggest opportunity of my life. It’s very rare in life that you’re at the right time, at the right place, with the right skills and for whatever reason, the stars had aligned.

What had been my hobby, computers, became a very large industry and I had the right skills to capitalize on it. So, the bubble passed me through and I didn’t capitalize on it. I had let that opportunity go by me and as I had pondered what the future held, all the options seemed depressing. I didn’t want to go back to McKinsey, I didn’t want to be a consultant. I didn’t want to go to business school, even though it seemed a reasonably OK way to rebound from an opportunity, but I’d given speeches at business schools. There were case studies on what I’d done in business school. I felt I had learned more in that experience of hiring and firing, raising the money, etc, that I would ever possibly learn.

And so, as I ponder my options, I decided ultimately, and it took me awhile, and I wrote myself a long-winded, depressed email in the middle of the night, weighing what I should be doing, and decided at the end of the day I didn’t become an entrepreneur to be successful, I became an entrepreneur because I liked entrepreneurship. I liked creating something out of nothing. I like building products and I like having customers and a customer base that is happy. Even though I probably let the single best opportunity of my life to succeed early slip by, it made sense for me to continue in that path because that’s what I’m built for.

Andrew: What was in that depressing email that you sent yourself?

Fabrice: It’s on my blog, actually. I think it’s called something about “The Value of Introspection.” And I’ve actually used that trick every few months. I take a step back and evaluate where I am in my personal and business life to make sure that I can tell the forest from the trees. And make sure that I [??] directionally happy and going in the right direction.

Andrew: And this is on FabriceGrinda.com, right?

Fabrice: Correct.

Andrew: But that’s before. That’s when you’re on your own, when there aren’t employees looking to you to cheer them up. When there aren’t business partners who are looking to you to get paid. When there aren’t customers who are sometimes screaming at you and employees who are feeling betrayed by you and carriers that are letting you down by being so stodgy and you’ve got every penny and every ounce of yourself invested in this business. That’s what happened when you were running a business. Talk to me about that. When were you at Zingy [SP], what was that low like?

Fabrice: You know, the problem is that even though I realized how close we were to failing, I just didn’t have time to ponder it. Because you have to be the number one cheerleader for the company. So regardless of how much anguish I felt internally, I need to be presenting the sunshine, smiley face to that side of the world, be it the customers, the clients, or the press, or the potential investors or the employees. So, it was all keeping the facade and eventually, I think, if you keep saying positive things all day long to everyone, you start to feel more positive even though you know, you have internal doubt. But it didn’t necessarily materialize, it was not expressed in any way, shape or form in the sense that you never really had time to really ponder whether or not you were really going to make it.

Andrew: Because you spent so much time pumping everyone up with this vision you kept yourself feeling any low? Don’t we all have highs and lows?

Fabrice: Yeah, absolutely. I felt lows but it wasn’t as much anguish as when you’re left alone with the future. That’s why the intermission between the first company and Zingy was actually a lower low, because I had much more time to think about it. Where as when you’re busy…

Andrew: You know what, help me think this through. Because sometimes I’ve had my moments as an entrepreneur where things weren’t working, and I would pump everyone up with how things were going to work, with the good things that were working, and there was a part of myself that still said, “you’re a fraud.” How can you possibly think that you’re someone who speaks the truth, that can be counted on, when you’re saying everything is going to be okay even when you know that, you know there’s a good chance it won’t be. How do you deal with that?

Fabrice: I think all entrepreneurs need to have a reality distortion field. Because if you can’t convince people that you are going to change the odds, you’re not going to succeed. The reality is, the five year survival rate of a start up is 5%. So 95% of companies that are started are going to fail. And you need to personally believe that you are so extraordinarily good that you have such clarity of purpose and vision, that those odds do not apply to you, and that maybe they’re closer to 50/50 or maybe even in your favor because you know what you are doing. As long as you really have that belief, yes. Are we potentially diluting ourselves or others? Absolutely. But it’s okay because the alternative is worse.

Andrew: So whenever you’re in your mind saying, “Wait a minute, I just diluted myself, and as a result I pumped up somebody else with something that may not be, you know the full picture.” Go, “Yes! You did dilute yourself. Congratulations, you are a real entrepreneur now.”

Fabrice: Exactly! And by the way, it’s also, it’s making it happen. I mean, if we actually, in that case, full transparency and honesty, is more likely to depress people and actually to lead to the negative outcome. The, through shear work focus, and actually change the probabilities. You can’t necessarily move them in your favor, but I mean you can nudge them in the right direction.

Andrew: All right. So you kept growing this business, and then you go that check at the top of the interview with Sprint, about half a million dollars, you folded up, I don’t know why by the way you didn’t make a copy of it and frame it. We talked before.

Fabrice: Yeah, me neither. But I was in a hurry to deposit it. We need this!

Andrew: I recently got check of all the half million and above, of copies of all of the half million and above checks that we had which I copied and scanned years ago which I lost track of. A friend of mine had them all. It was so beautiful to look at.

Fabrice: But do you know what’s funny? Is like, we grew so fast. So we did $5M in sales in ’03, $50M in 04′, and $200M in 05′, and so in 05′, I think in one month in January 06′ after I had left, we got like $36M in a month, and so the numbers got so big, as important and as essential as it was, it became so diminimous [sp]. All of the sudden we were settling hundreds of thousands of dollars a day.

Andrew: Wow. Because of the partnerships with the carriers?

Fabrice: Because of the partnerships with the carriers.

Andrew: It’s tough to get them, but once you get them, it just skyrockets you.

Fabrice: Well that was true then. It’s less true in a smart phone world today where your dependencies more on Apple and Google, but at that time it was the key to distribution.

Andrew: You showed the check to your #2 employee, and your #3 employee, and they said what?

Fabrice: Unfortunately, they had taken the decision to quit before. And it just so happen that their last day was the day the check arrived. I went to them like, “Guys, this is it! We are saved. I mean the future now is rosy. We’re in a path of prosperity.” But they’d been, they were both in their 40’s. Both married with kids, mortgages, kids going to college, or about to go to college. And they couldn’t deal with the highs and the lows, and the missed payroll anymore. I tried my best to convince them to stay, and nahh, they felt that they had heard that story one too many times. So they left that day, and which, frankly to their detriment. Because when we sold for $80M at nine months later, they had actually left millions on the table because they didn’t vest all of their shares. They left before they were fully vested.

Andrew: And when you were at your low, how much money on your credit cards to build up this business?

Fabrice: Oh negative $100,000, so I owed on my, I hadn’t paid rent in five months and I was $100,000 in debt on my credit cards.

Andrew: And after you sold your business, how much did you personally get from that $80M?

Fabrice: About half. I mean, $40 million but pre-tax so post-tax might have been $27 million or something like that.

Andrew: OK, and when you were at that high, having gone through the low. By the way, can I tell you the one thing that causes me trouble with my interviewees? After the interview they say Andrew, please edit out the amount of money that I said or edit out how I said that I did this thing with the contract. You just said both. You told me the amount that you got and you told me about the contracts and, you know, you told me about the deals, excuse me, you told me how you got around not having agreements for your music. Are you going to ask me to edit this? Is this going to hurt our relationship when I tell you that I can’t edit?

Fabrice: No, not at all. I believe in transparency. That’s why pretty much everything I do is documented in public on my blog and in interviews, etc. I think people need to realize first how hard it is and what you have to do to succeed. Sometimes you cut corners and that’s why the little companies have a tendency to win over the big companies because they’re not willing to take risks. Ultimately those risks actually paid off for everyone, from the music companies to the carriers and so on. In terms of how successful people are I think look, money is just a measure of, it’s a yardstick to see what you’ve done and I don’t know, it doesn’t mean anything. Whether you’ve made $27 million or $100 million or $2 million.

Andrew: It doesn’t mean anything? Like, don’t you see some connection to your, not on a good level, not in a way that your therapist would approve of, but don’t you see in some level that you connect your personal self worth with your net worth? Do you ever do that?

Fabrice: Hell no. No, absolutely not.

Andrew: You never do that?

Fabrice: Look, there’s one thing that wealth does provide which is freedom. The freedom to choose to do the projects that I want to do. The ability to invest in other entrepreneurs and to see their ideas and push them forward. Clearly the ability not to need to worry anymore about making rent or paying employees if I want (inaudible). That peace of mind is actually invaluable. But I don’t think it takes all that much money to start having that. But beyond that, no, my self worth is more driven by whether or not I feel I’m building a great company. Whether or not my customers love it, etc.

For instance I much prefer my current company, OLX, to Zingy. Just because OLX being a classified site (inaudible) for the rest of the world, we have 115 million users every month. We’re like the 20th largest site in the world. We get love letters from these users telling us how we’ve transformed their lives for the better. I mean, a woman would send us a letter saying she fell in love with her husband all over again because she was able to find a babysitter that allows her to then go on dates with her husband.

Andrew: That’s amazing.

Fabrice: Or someone who needed to find money sold her couch and she made rent. I mean, and we get these stories all the time. I feel pretty darn good about myself because our 115 million users really love the service we’re providing to them for free. In a way it’s more valuable than providing social currency to teenagers through selling them ring tones. At the same time it’s a category of the industry I much prefer. Likewise, I mean, I’ve changed the lives of a number of my employees in Zingy who have become wealthy and successful and I’ve also inspired many of those employees to become entrepreneurs.

The same thing at OLX. We have 270 employees, a number of whose life has been changed. But also in general they like to be in dynamic, fast moving environments where there is flat hierarchies and they can really contribute to making a difference in the lives of many. And last but not least inspiring other entrepreneurs. To do all that, I think, requires transparency. But my net worth is not driven or correlated with my happiness.

Andrew: Is that because you were raised outside the U.S.?

Fabrice: I’m not so sure. I mean I’m probably the most American Frenchman you’re ever going to find. I mean I speak English with an American accent. I love this country and I’m one of the most ardent proponents of capitalism there is. I’m not newly assured as you on that one, it’s just that at the end of the day as humans we want to maximize our utility which is more happiness, I think, than net worth.

Andrew: All right. I’ve got so much that I want to cover here. I want to cover OLX. I’ve got stories of the entrepreneurs you invested in. You’re a sought after angel investor who’s done a ton of investments that I want to talk to you about. But let’s just talk about why you sold Zingy first and then we’ll move on to OLX. Why sell the business when it’s doing so well?

Fabrice: Zingy violated one of my nine business selection criteria. That business selection criteria is never to be in a business where you have a risk of disintermediation [sp] and/or margin compression by your suppliers and/or your customers. Zingy had both. We had massive revenue concentration. At first there were ten carriers that kind of grew all the revenues but these carriers all merged with each other. I mean, Verizon bought Altel and T-Mobile VoiceStream and Singular and AT&T, Sprint, Nextel, and of the sudden three carriers account for 95% of the revenues and as soon as you start becoming big, meaning as soon as you hit $50 million in sales, they started squeezing us, renegotiating the contract, etc.

And we were, as they [??], I felt we had a weak negotiating hand and our margins are going to be compressed or we were going to be [??]. At the same time, the labels and the publishers all merged with each other and we ended up with 4 major labels representing 40% of our cost. And the technology was shifting under our feet. The phones were becoming more capable, all of the sudden you needed the master license or the music companies and the artists started realizing there was money in here and started asking for more money.

And so I felt that the margin structure was going to move in a negative direction because, it was something I anticipated, by the way. I knew in creating the company that it violated one of my nine business selection criteria but it was one of the few that I could do with no capital, which was a requirement in 2001.

And so despite my worries, I did it. And so I sold and I sold too early. I mean, I sold when we only had done $4 million in revenues and in [??] Q1 ’04 and I never thought we were going to do $50 million in ’04 and $200 million in ’05.

But as I learned during the bubble before, better relieve to than to late and so ultimately I sold because I didn’t love the business. I violated one of my nine business selection criteria and the option you need to have that kind of cash was actually life changing. I felt that that piece of mind meant freedom and an option to do whatever I wanted in the future was worth it and I had not take advantage in the bubble. I turned down all the offers that kept coming for Zingy in late ’03, early ’04 until an offer came that was just too big to say no to. And then I heard bankers [??] double the price and sold.

Andrew: All right. And you stayed with the business. You helped grow sales. I think you had an earn-out if I remember right.

Fabrice: I had an earn-out but we obviously exceeded all the metrics, all the numbers and I stayed for 18 more months, partially because it was fun. I mean, I’ve never been part of a publicly traded company before. I’ve been in very high grip environment, not revenue grip for that extent. We moved offices like 6 times in a year. It was absolutely amazing.

Now, the reason ultimately I left is actually I didn’t like the people I sold it to. They didn’t speak English at all. They didn’t ever say anything. They didn’t want me to keep investing in the business. We had the option to buy Shazam in the U.S. for $1 million and they said no. I wanted to buy a lot of the competitors, move into mobile TV so I think through more advanced applications and they just didn’t want to invest in the business. So it stopped being fun and started being [??] and left in November ’05. Actually, no one knew what I was going to do next.

Andrew: How did you know that OLX would be the next thing?

Fabrice: Well, I started thinking through different options and there were three that came to my mind. I was thinking of doing [??], which is a private sell site in France, like selling billions for the U.S., so Gilt basically, before Gilt was created. I considered doing Facebook for the rest of the world. Very happy I didn’t chose that because it would have been obliterated by Facebook. And I started looking at Craigslist and realized that the world was moving from paid classified to paid vertical sites like Monster or HotJobs to free horizontal classifieds sites. And that transition was already well under way in the [??]. Actually to some extent in Western Europe but it was not under way in many other countries in the rest of the world but it was only small local players with no real capital or technology that were going for it but it was worth the shot.

And obviously the economists in me loves creating liquidity or creating marketplaces like bringing liquidity to markets that are otherwise liquid because they’re too high transaction barriers made a lot of sense.

So if you’re in Buenos Aires, to put an ad in a newspaper, it’s $100. Just a lot of money in a developing country. And so of course you’re going to do it for a car, or real estate or for a job but you’re not going to do it to find a nanny. You’re not going to do it to find a roommate. And so I felt there was a unique option to create this free global marketplace, going after all the countries that Craigslist was just neglecting because it didn’t care. It didn’t want to improve. I mean, Craiglist should have. OLX should not exist. Craigslist should have been doing it. They should have been improving its product, they should have been going global, but Jim and Craig, and I love what they’ve done with Craigslist and I love the public service they provide to the community, actually have chosen not to go after this option. And I felt like “You know what? Let’s go for it. Let’s build Craigslist 2.0 or 3.0 and deploy globally.”

Andrew: And what was the business model that you imagined that you would have for OLX and how did it shape out?

Fabrice: We actually followed the same business model that we intended to do. So many of the classified sites of that time were charging $50 or $100 for an ad, and we felt that was really web 1.0 in the sense that as soon as you start charging your sort of limiting your inventory, and we wanted exhaustivity [sp]. We wanted everyone opposed in every possible category and not to limited availability of content whatever that may be. And so we chose to be on an adverting supported business model. So just Google OLX. If you’re coming to OLX you’re looking for something. So if you search for BMW 325i, red, in Union Square. Google is going to serve an ad related to that from a local car dealer and it’s going to be relevant.

And so because you come with intent, we have a 2-3% click through rate on ads, and because it’s in high valued categories like real estate, vehicles, jobs, real estate, merchandise sales and insurances. There are high CPC’s. So that combination of high CTR x high CPC leads to high CPM, and so it’s about a business model. And on top of that, we sell our own self service featured listing, and we have a few other business models. But we’re never going to charge listing fees.

Andrew: That makes sense. You told our producer, Jeremy, that one of the first things you did when you had the idea for OLX was you went to Argentina for a month. Why Argentina of all places?

Fabrice: So in a prior life I’d inspired a number called to build an eBay for Latin America which was called DeRemate, and it was late sold to another eBay of Latin America called MercadoLibre which is public and Nasdaq and called MELI. And it was a friend of mine from McKenzie who introduced me to a team of 13 people and I gave them the business plan and they said I’d agree to go and do DeRemate. And they sold that company to MercadoLibre in late 05’. And so all of the sudden this team of really smart people that I knew and respected were completely available. They understood auctions and the reality is auctions and classifieds are not too dissimilar.

They’re both market places where you a critical mass of buyers and seller’s in various categories and if anything classifieds is easier than auctions, and so I just started the CEO of DeRemate, Alec Oxenford, and we became co- founders and co-CEO’s of OLX and we also hired the, pretty much the entire tech team and early team of DeRemate and they became the core founders of OLX. Originally I would have rather built the company in the U.S., but we’d have such difficulty retaining engineers, because the U.S. unfortunately with this idiotic immigration policy forced us to actually lose most of our engineers.

We had 85 engineers in New York with Zingy, out of 120 people total, but half of them were from India and China, and when the H1B allotments went from almost 300,000 to like 30,000, when people needed to review their H1B’s, they went back in the lottery and a lot of them just didn’t get it. And so we had these amazing engineers that we had trained, that were paying hundreds of thousands a year, at least $100,000+ a year. We had to send them back home! It was so annoying that, and it was so difficult to recruit that we decided, you know what, it’s much easier, we already have a pool of 20-30-40 engineers, and by the way there is no real competition for talent down there. Let’s go and build our development center. So didn’t outsource, we actually in-sourced. Meaning these were all people we hired because employees in Argentina. So today, of the 270 employees of OLX, 200 are in Argentina and Buenos Aires.

Andrew: Can you talk a little bit about the chicken and egg problem that a business like this has? You want to get enough advertisers so you have a lot of listings will draw people, but you can’t draw people unless you have a lot of advertisers. A lot of people who are posting listings.

Fabrice: So you start by figuring out who tends to gain the most from the marketplace, and clearly there’s a short tail of seller’s who tend to gain a lot in highly valuable categories, like real estate, jobs, and cars. And these are people that in the past have been paying hundreds of dollars for postings to newspaper, etc. So we basically built a sales team in Argentina, with natives from all the various countries, so French natives, American natives, Indian natives etc. to go and reach out to all the top advertisers and the various newspapers around the world. The top advertisers on the various job, car and real estate and job sites around the world and convinced them to list in OLX. And we told them, “Look, we have no traffic, we’re completely honest and transparent here, but we’re free so it doesn’t cost you anything, and who knows? It might work.

We’re going to make it so easy for you. Whatever feed you have, and whatever format you have it, so if you have your feed for Trulia, we’ll just take it exactly in the same format. You don’t even need to change a comma. And we’ll do all the work to that.” And so, by being so easy, and willing to work with anyone, we were able to, we were able to convince a number of sellers to give us a lot of content so we had a critical mass in a number of countries and then we started advertising. We spent $50,000, so $10,000 a month for five months, in about 100 countries on Google…

Andrew: In each of 100 countries you spent $10,000 a month for five months?

Fabrice: Yes, correct. We spent $5 million total. In some countries, but we weren’t bidding for expensive keywords. We can’t afford to compete against eBay Motors for cars resale or BMW resale. But no one’s really bidding for BMW 325i red, Union Square for sale, 2007. If you do long tale bidding on millions and millions of keywords, and literally we’re buying 2 or 3 million keywords per country per language at like $.01 a click. But tracking everything such that we were optimizing our customer acquisition cost[sp] in the back end for posting, for a reply, for $1 revenue. In some countries, mostly through lack of competition, it took off. In many countries it actually didn’t work. It didn’t work at all in the U.S. It didn’t work at all in any of the developed countries.

Andrew: You said it didn’t work in the U.S.?

Fabrice: It did not work in any of the (inaudible) countries because A, there were incumbent competitors but B, advertising is a lot more expensive. $50,000 doesn’t go really that far in the US in marketing.

Andrew: I see.

Fabrice: Same thing in France or Germany. But in a few countries, like Brazil, India, Portugal, frankly across Latin America, in Pakistan, it really took off. We started focusing and reinvesting in those countries until it really came down to two countries that we were clearly focusing on, which are Brazil and India.

Andrew: Brazil and India. How do you get lock-in? If somebody comes in from Google. They see a webpage they say oh, you know what, I thought I wanted this car but it’s not really the car I want. I’ll go back to Google and I’ll keep searching. They build loyalty to Google and not to you.

Fabrice: Because in the early days we were search driven but ultimately the transaction happens on our site, not on Google. The place where you actually reach out to the person, did the transaction, you gave a rating or a comment to the seller, it’s all us. If you have a great experience you’re going to come back to us directly. By the way, if you have a problem in your transaction who do you reach out to? Well, clearly not Google. They’re not part of it.

Ultimately when we built a big enough company and we started having enough revenues we actually started building a brand. We’re now doing TV advertising and brand building in India and Brazil. We’ve run really funny and mass market TV ads across India and Brazil and now we’re a real brand there. More, much more than half our traffic now comes directly either to us or through Google but people typing our brands. Then it’s not as though they found an item that led back.

Then there are tricks. Even if a user comes through SEO and it’s not the item they want we say well, by the way, these other items might be what you’re looking for. Or maybe this item was sold or is no longer relevant. We give them opportunities to go back to our site instead of going back to Google. We give them opportunities to see related ads, to click on the next page, go to the search results, and so we try to convert them. There’s a trick to converting visiting users from Google into real users.

Andrew: You sold a chunk of the company in 2010 for how much?

Fabrice: August 3rd, 2010, the day of my birthday. It’s a complex deal because they bought out the (inaudible) VCs, they bought out the early investors, and then they bought out part of the mansion [sp] team. They also invested a lot in the company. Depending on whether or not we include the investment, it’s either $150 million or $210 million, in that range. And they bought like 70% of the company. That’s public because the people that bought us…

Andrew: You got to take a little bit of money off the table.

Fabrice: Yes.

Andrew: But you didn’t have to, so why did you?

Fabrice: I didn’t actually want to sell OLX but first of all we’re competing with a very well funded, publicly traded competitor based in Norway called Ship Stead. These guys were starting to attack our markets one by one. We realized that actually to win and win in a big way is going to take a lot of capital. Actually having someone willing to invest the hundreds of millions required to do it would be tremendously helpful.

Then simultaneously my management team had not made money before. They came to me in ’10 and they were like look, we’ve been working really hard for five years and we’d like to take some money off the table. Even though I could have said no the reality is it’s not my place to prevent others from living the opportunities and having the same opportunities for freedom that I got with Zingy. I’m like you know, I completely understand and I respect that. Even though I particularly care to sell I’m going to support you in your endeavor. The top ten employees wanted some liquidity and so I said OK, let’s do it.

Andrew: You went along with it for yourself, also?

Fabrice: Well, I mean, because it makes sense. Because once someone owns the majority of your company you’re not necessarily in charge of its destiny. If I had a stronger clarity or vision or ability to exit [sp] my shares in the future I probably wouldn’t have sold. But in light of the fact that it wasn’t quite clear how once you’re part of a bigger entity, what happens. I decided to sell the same percentage that everyone, that other employees sold. So personally it is a smaller exit than Zingy for me. Even though the transaction value is much greater than Zingy’s. And the company is much bigger than Zingy, not in revenues, but in usage traffic etc.

Andrew: You then went on to invest in other entrepreneurs as an angel investor. How many investments have you made?

Fabrice: So actually I started angel investing in ’05. It’s not as though did it…

Andrew: Oh, I see. I thought this was after.

Fabrice: No, no. I’m still co-CEO of OLX and it’s still my day job. The investments started immediately in ’05 and I’ve invested now in 102 companies since I started angel investing.

Andrew: Before we started the interview I was talking to you about the investments you have made and you told me about one person who after, I think it was a single conversation you said, “Okay I’m in.” Who was that person and what did she say to you?

Fabrice: So, before I answer the question directly. I mean, we’ve actually, over the years I’ve made a lot of mistakes angel investing. I mean I started investing six million in six companies, burning six million in six companies, and could really change the approach. So now, I actually have a real method for angel investing.

Andrew: What was it? Can you talk a little bit about the mistake you made? You invested an average of one million in six companies. What did you do wrong?

Fabrice: Well, I suppose that success breed hubris and arrogance. I was convinced that because anything I was going to touch was going to turn to gold, because clearly Zingy had turned into gold. And so, I invested a lot in them. I felt that if the teams were really good and the ideas felt good, and if I joined the board and became really involved it was going to help. The reality is, all six companies failed for reasons that were not, I mean the teams were great, the products were great, and yet in some cases maybe a competitor came from an area, sort of offering their product for free and there was no real intelligent way to pivot. So things failed for reasons beyond their control, and I realized how much luck there is really in the internet and general.

And so I changed the approach fundamentally. Also, being on the board, I realized I was being an administrative overhead for them. I was imposing reporting etc. It wasn’t value added. Since then, I invest much smaller amounts, on average I write 50k checks, they range 25 to 250k, in many more companies. Because there was that luck element to take into consideration and I’ve also defined. I only now invest in things I understand. So I only in consumer facing companies. Only in ecommerce, travel and marketplaces. And user generated content if it crosses over to these, and either new innovative ideas in the U.S. and that’s about 40% of the deals, or copies of established ideas, meaning 100 million in sales and profitable in the rest of the world. And the rest of the world is really Russia or Brazil.

Now, that being defined, because I don’t have time because it’s my day and night job. Let’s say I get 30 deals a week, of those only maybe 20 are out of the box. 10 are in that specific UGC box, 5 are interesting. We meet the 5, and then it’s a one hour meeting. Based on, do we like the idea? Do we like the business model? Do we like the market size, etc.? Do we like the entrepreneur? Do we like the product? And we expect the product to be live. And do we like the deal terms? If the answer is yes, essentially we will commit to the deal after one hour. But in that case, the company is called Quincy Apparel. A girl, Christina, came in and, the founder, and she basically told me everything I wanted to hear.

So most entrepreneurs don’t come in understanding their economics. Their customer acquisition cost, their distribution strategy, and she had, basically thought it all the way through ex ante. She had already garnered like 50k a month in sales, she had really high gross margins. She explained why she had those gross margins, what the distribution strategy was, why and how her competitors were doing, like Anne Taylor, Banana Republic, etc. were hated by women. So Quincy Apparel sells business attire on a private label basis to women. She had gone and done all these surveys at Harvard Business School and Columbia Business School. I mean, she basically had answers, and she had addressed all of the major concerns. She was extraordinarily eloquent and clear in her vision. It was just a no-brainer. It was like, this makes perfect sense to build a Warby Parker for women business apparel. And so, 30 minutes I was like, “Let’s do it.”

Andrew: Let’s see. There’s one other one that I want to talk about and then I want to get to what you did to get yourself to break free of the social shyness. Where was that in my notes? The person, who was a good salesperson…there it is. He gave a guy funds to get out of jail in 2004. Now this is through an organization support, not you directly, you were telling me.

Fabrice: Yes. So, my passion in general is entrepreneurship and promoting entrepreneurship and so I like creating companies, which is my day job. I like investing in entrepreneurs which is my night job. But I also give money to foreign GO’s to promote entrepreneurships, either through micro- loans or micro-donations or micro-credit or through just assistance to entrepreneurs. And these organizations or endeavor, which helps entrepreneurs in Africa and Latin America, [??] which is micro-loans in Latin America and the third one is Project Enterprise which is micro-loans in New York.

And Project Enterprise which is a company I’ve helped raise money for the Cayman and fundraise [??] I’ve given them money over the years. They do micro-loans to young entrepreneurs. So this guy came out of [??], came out with a business plan to sell incense, perfumes in the streets of New York and he needed, actually needed a loan for about $1,000. He came to see us. He was very convincing. We gave him that loan and little by little he grew the business where he had that one table with that one license to like ten tables, several employees working for him, hundreds of thousands a year. So he came to us actually for a second loan.

Andrew: Selling, I’ve seen those guys selling incense in the streets of New York.

Fabrice: And perfumes, yes.

Andrew: I just thought it was like one man operations.

Fabrice: For the most part they are and you need to be licensed. But in this case, he made it a 20 man operation.

Andrew: Just with their folding desks selling incense and perfumes?

Fabrice: Yeah. Exactly.

Andrew: Selling hundreds of thousands in revenue?

Fabrice: Yes.

Andrew: What’s his name and how do I get him to do a Mixergy interview?

Fabrice: I need to find his, he has a complex name. It’s something like Abdul Jazeem Akim. But he’s in some of my PowerPoints. I’ll find his contact information. But he’s really cool. And so he actually came to us for another loan afterwards so he could buy a van so he could move inventory from table that were not selling to table that were selling and shifting , etc. And he’s continued to do well. But he’s one of the few that have actually done well in that program.

Andrew: That’s one of the great things about entrepreneurship and doesn’t it bother you that our schools in the U.S. and other countries will not teach entrepreneurship.

Fabrice: Well, I’m not sure if you, I actually need to think this through. I think there are a lot of things you should fix in K12 education systems and actually make sure we have much better science education in general. In terms of teaching entrepreneurship per se, I’d have to think through what the best way would be, K-12 or college.

Andrew: You’re not even sure we should be teaching this stuff.

Fabrice; I’m not sure, I think we should be urging people to be critical thinkers, to have great fundamental math skills. We should be pushing engineering because the OECD average is 12% engineering degrees. The U.S. is at 6% and China is like 20% so we have a massive competitive programs and engineers which has created essentially 0 unemployment level for engineers which actually is bad because it’s limiting a lot of the companies that could be created are not being created because of lack of computer programmers and engineers in general.

So by entrepreneurship per se, I think a lot of the skills in terms of world communication skills, how to raise money, etc., can be thought but I think we have to fix the fundamentals before we get to more abstract things like that.

Andrew: All right. We’ll save that conversation for another day. But I will say this before I ask you about the final question. To everyone who’s watching, you can see the schools are obviously not teaching education but one place that is is MixergyPremium.com, where I bring on real entrepreneurs, ask them to turn on their computer screens, ask them to take screenshots, ask them to walk us through what they do so that you can follow along with them and learn with them.

So they do customer service really well. I ask them to turn on their screen and teach me how to answer customer service emails, how they process lots of emails, what they do to reduce the number of emails that come in before people even write them. If they do PR well, I ask them to teach that. Anything they do well, I ask them to turn on their computer screens, take screenshots, whatever and to teach us. It’s all available to you at MixergyPremium.com. And I hope you join. If you are, remember you get access to all of it. So go watch right now.

All right. So shyness, you’re a guy who old is it you talked to the carriers, most people would be afraid to call. You talked to lawyers who send you cease and desist letters when most of us would be afraid to respond to. You talked to all of them and you consider yourself shy?

Fabrice: At that point I was already undergoing the transformation from socially awkward and shy in the business world, to being extra confident in that environment. And I think it started happening in McKinsey because again McKinsey hires really smart people but the most successful people are not the smartest. They are actually the people that have most emotional intelligence and the ability to work with the clients, specially those who are not necessarily as smart as the consultants were. In realizing how effective and powerful it was to be extroverted to actually be interacting with a client, to be buying, to be understanding their concerns and to ease those, and to be really listening, an active listener, was extraordinarily useful.

And then of course as an entrepreneur, you are the public face of the company. You are talking to the press, you’re talking to employees, you’re recruiting, you’re raising money. And so, over the course of both the deliberate practice in terms of forcing myself to take classes on public speaking to actually doing, became rather confident and extroverted in my business life. But at that point when I was, let’s say 25 or 26, you hadn’t applied it in your personal life, so as confident and as successful as I had become, I had become that, I was not like that by default, in my business life. I was still socially awkward, shy, and introverted in my personal life. Massive fear of rejection from girls, very few friends, because I had not been social and didn’t go out at all. So I decided it was time to address.

Andrew: What did you do?

Fabrice: So, first thing I needed to do was address of rejection. And so the best way to do that is, to get rejected. And it is a quintessentially entrepreneurial thing to do because as entrepreneurs we beg, we beg and grovel for money, and in the process of begging and grovel for money, by VC’s, by angels, by friends. We try to recruit people and a lot of them don’t trust us with their future life and careers. And frankly, the process of like building a product is iterating. You just throw stuff at the wall until it sticks.

And I decided that I was going to apply the very same mechanisms to my personal life. And so, for 100 days, I decided to ask 10 girls a day out in the streets of New York. I would just randomly walk up to a girl, and as a good economist and statistician, you know document pick up line used, location, etc. and just ask her to go out and have a drink, for a drink with me that night. And in that 100 days, I got rejected 955 times. But low and behold, aid, because of the law of large numbers I still had 45 dates which was a date every other night. And then I, that process was useful in the process of how dating works, in this country, or in general which I’d never gone through before.

And at the same time, once you’ve been rejected 955 times, the 956th rejection doesn’t hurt nearly as much. And so, became much more confident in my ability to go up and talk to anyone about anything, and the consequences of putting yourself out there and failing are actually diminimous. People forget, even if they judge you, who really cares? What impact does it really fundamentally have? And so it was extraordinarily liberating to realize that I could put myself out there, and I was quaking in my boots. I mean, shaking, and I had like these big nerdy glasses, and I was awkward like to no end. And yet, I survived. And that survival turned me into a much more confident extrovert, even in my personal life.

Andrew: What pickup line worked best?

Fabrice: The second most effective pick up line was, when you’re walking in the street, in the same direction as the girl, or in the subway platform etc. is, “Hi, it seems our lives are heading in the same direction, I feel compelled to introduce myself to you.” If she smiled, or laughed, I had an opening. We started talking. And if not, in many of them would just ignore me completely, walk away, or whatever, it wouldn’t work. The actually single most successful pickup line was actually, “Hi, you seem like a great person, I’d love to buy you a drink tonight.” And, so just direct approach, and those are the ones that most likely led to a yes.

Andrew: Just straight up asking them out for a drink?

Fabrice: Exactly. Simplicity, directness worked best.

Andrew: So when you were in high school you didn’t get to date much? You were watching everyone else go out on dates and you weren’t out there at the prom, or whatever the French equivalent of a prom was?

Fabrice: We don’t have a prom in France. And I was, I mean, I was the uber nerd, the guy with the highest GPA in the school. Who spent all of his free time programming, playing video games, studying, reading, and…

Andrew: So how did that shape you? That you were the uber nerd who wasn’t getting a lot of dates?

Fabrice: You mean no dates.

Andrew: No dates.

Fabrice: Well, it definitely gave me the time to work really hard and accomplished what I needed to accomplish. Even at Princeton, I made one friend there. I didn’t have dates there either. And part of the reason was I was so fantastically good at getting A+’s, and so fantastically good at being, at building my companies and at my jobs that…and I was so fantastically bad and awful and awkward at the rest. I just, it didn’t occur to me.

Andrew: Did you say to yourself that dating not for me? Or did you say, “I’ve got to do something so that I can earn the right to date, or that I can be seen by women who will approach me and I won’t be rejected.”

Fabrice: No, no, neither. I actually didn’t enter the consideration side. I was like, I was extraordinarily intellectually arrogant and condescending. It was like, it was more of a, the rest of humanity is wasting their time. They’re going dancing, listening to music, drinking, and socializing, where as, they could be doing something significantly more important like learning new things, and getting A+’s, and getting ready for world conquest. And so it was not, it was not, I actually had no desire to socialize because I didn’t feel like I related to the rest of humanity.

Andrew: Interesting.

Fabrice: And what’s interesting was that people liked me at Princeton, but I had no idea where to find them. Even though later I became really close friends to fellow nerd geeks from Princeton, I actually met them at Princeton or elsewhere. And so, I was really condescending and judgmental then. And then ultimately realized, that the rest of humanity seems to value these things called friendships, and dating, and sex, and girls. So you know, there might be something there. Let’s be a little bit more humble here and let’s see what the world has to teach me. Then I realized what little I knew about the world, and how people worked, etc.

Andrew: Actually, can I ask you a personal question that I have no right to ask you, and I can’t edit it out, the answer to it.

Fabrice: Go for it.

Andrew: How old were you when you lost your virginity then?

Fabrice: 27.

Andrew: Wow, so up until then you just felt like, this is for the rest of the world, this is not me? Or you didn’t feel any sense of insecurity about that?

Fabrice: Yes. I felt some insecurity, but I was so extraordinarily good at everything else. I was like, yeah, who cares?

Andrew: Ah, you don’t have to be good at everything.

Fabrice: What happened at 27? Who was she? A very smart, Oxford, McKinsey girl who I hit it off really well with. But at that point, I’d gone through the…I did the 1000 date exercise when I was 25, and so I was already starting to understand the roles, and realize I actually didn’t really like any of those dates. The 45 dates, and so I started deciding that I didn’t go after girls that I thought wouldn’t be more likely to work for me. And ultimately found one, and then the rest is history.

Andrew: What’s the most meaningful relationship you’ve had since then?

Fabrice: Well, define meaningful? You mean longest? You mean…

Andrew: You define it.

Fabrice: I’m not sure. I’ve met a number of people I’ve felt were.. Well, actually let’s take a step back. I’ve been in love twice. Madly in love twice, and I felt potential for it a few times. For a variety of reasons it didn’t work out. I actually ran a personal regression analysis on all of the people that I’ve dated, to find what are the variables that have mattered most to in terms of maximizing potential of chemistry and love. And my current… the statistically significant results came down the three most important variables are, intellectual chemistry, as in my perception of their intelligence, it may not be in absolute measures. People have a different receptive mat, physical attraction and sexual chemistry. And now that’s what I look for in relationships because I suspect this is what maximizes, you know, absolute chemistry. But at the end of the day, as Carrie Bradshaw said, it’s all about the zsa zsa zsu, or the ja ne sais quois. So that’s what I think we’re all looking for.

Andrew: You know what? I love that you’re willing to be open about this stuff. That you’re always open about this stuff? About everything?

Fabrice: Yeah, there’s nothing, it is what it is. There’s nothing to be shy, or bad. People can judge how they want to judge, it’s the experiences I went through and I’m actually grateful for the fact that I’ve been through them because I probably wouldn’t be where I am today not been through that exercise. So, to the extent that I am the result of the experiences that I’ve had. There’s nothing to hide.

Andrew: And it didn’t shape you the way that it shaped me? I’ve talked about this in past interviews. That because I didn’t get to date much, I felt that, “I’m going to earn enough money that one day women will be more attracted to me. I’ll spend time figuring out how to have conversations with strangers. Kind of like what you did with the ten girls a day, but it was like my obsession that I needed to build a successful company so that I could get to this part of my life. I’m looking at you, you’re making a face that I’m a crazy person.

Fabrice: Yeah, no. I wanted to conquer the world. If you read my biography, biography? No my diary when I was 14 it was like, “Be president, ruler of the world by the age of 40.” I was looking at like Genghis Khan, or Augustus, or Archimedes as the role models. Not…

Andrew: And I have a little bit of that, too, and I’ve noticed that in past interviews. Do you still have it in yourself?

Fabrice: I still feel extraordinarily ambitious sometimes. So maybe, reality is in your fear with those underlying ambitions. The political process is so disappointing, and broken, and corrupting, that it’s not a path that I see for myself and actually I would argue that the best use of my time actually being an entrepreneur is promoting entrepreneurship through either the NGOs or investing in other entrepreneurs that are creating in the future. At the end of the day GDP per capita growth is driven by productivity growth which is driven by entrepreneurship. So we are the engine of growth, and the reason that the world today is the way it is, meaning we don’t actually, like, 120 years ago die at the age of 40, working 100 hours of week, not being able to travel or vacation or even ponder the meaning of life is because of all the economic growth that was brought about by the technology revolution that was brought about by the productivity revolution of the [?].

And so we are the engines of economic growth. This is the single best use I can make of my time, so even though I’m not the ruler of the world and seemingly will not be, it’s still a worthy and frankly fun aspiration and fun endeavor. In terms of the dating thing, I don’t know. At the end of the day, being a tall, reasonably good looking, successful entrepreneur it’s actually very easy to date a lot of people. I think at the end of the day the reason I wasn’t a success at it and the reason I didn’t really care to successfully date, the person I was looking for was never just someone to date. It was like, maybe, someone who was going to be my partner, as an equal, an intellectual partner who’s going to conquer the world with me and will push me to be the best that I can be and vice versa.

Andrew: And do one of the girls who you mentioned earlier fit that?

Fabrice: Could have or a number of the girls I’ve dated might have fit that but it didn’t work. But at the end of the day I hope to find that Harvard valedictorian, super model who wants to conquer the world.

Andrew: [laughs]

Fabrice: These diagrams don’t intersect very much, but there might be someone out there. [laughs]

Andrew: All right. I’m sure there is, actually. Who knows, maybe she’s out in my audience.

Fabrice: Well, based on my experience in entrepreneurship, you probably have a 95% male audience.

Andrew: Why do you think that there aren’t a lot of women in entrepreneurship?

Fabrice: A number of reasons. First of all, I suspect that there are cultural factors in the sense that parents and teachers skew women towards the liberal arts as opposed to computer science and engineering. And so there is a cultural bias to begin with. If we’d push more women to be mathematicians, engineers, et cetera, we’d already have more of a case for being entrepreneurs because today in entrepreneurship, at least as we define it, it’s driven by technology. Now, there are many female entrepreneurs, women entrepreneurs, but they’re building bakeries, restaurants, et cetera. And so it’s small business as opposed to entrepreneurship skills.

The second thing is I expect – I don’t know – maybe we’re not installing the right values in terms of how much work it is, and you need to be willing to make the sacrifices and work 100 hours a week. Some weeks I worked literally 100 hours a week for ten years.

Andrew: And still you go to bed now at 2:00 a.m.?

Fabrice: Yeah, but I stop work at like 8:00 p.m.

Andrew: So 8:00 p.m. [?]

Fabrice: It’s all free time. Yeah. Exactly. It’s reading books, going to the movies, playing tennis. I mean, writing my blog. I’m not working…

Andrew: A helicopter scheme, from what I understand.

Fabrice: Yeah, not those times.

Andrew: [laughs]

Fabrice: Things like kite surfing or play tennis.

Andrew: I wonder, by the way, who are the people walking behind you? You’re at the office now?

Fabrice: I am at the office. I have an office in New York with a whopping four people.

Andrew: OK.

Fabrice: We have finance and marketing in New York.

Andrew: All right. Well, thank you so much for doing this interview. I hope I get to meet you in person, and I can’t believe how open you are. But I appreciate it.

Fabrice: Thank you.

Andrew: And I want to say this to anyone who is watching. If you got anything out of this, first of all, check out his blog and it’s FabriceGrinda.com. Of course, we’ll link to it, but second, do what I’m about to do. I’ve got to tell you. Ever since I’ve been suggesting this to people, I’ve been cc’ed on some emails. You guys don’t need to cc me, but do connect because I see the back and forth that happens in some cases. It’s more than just worth sending a quick note to say, “Thank you” and I’m going to do it right now. Fabrice, thank you so much for doing this interview.

Fabrice: Oh, thank you. It was fun.

Andrew: All right. Thank you so much for watching. Bye.