Do you ever feel like you’re sabotaging your own success?
Jayson Gaignard says he used credit cards to build ticketscanada.com into a $3 million business. Then he did something to screw it up and ended up in deep debt.
We’ll find out how he built it up and knocked it down.
We’ll also find out about his latest company, Mastermind Talks, which connects entrepreneurs.
Jayson Gaignard, Mastermind Talks
Jayson Gaignard is the founder of Mastermind Talks, which connects entrepreneurs.
Andrew: Hey there freedom fighters, my name is Andrew Warner, I am the founder of mixurgy.com, home of the ambitious upstart. Do you ever feel like you are sabotaging your own success? Jason Gaignard says that he used credit cards to build ticketscanada.com into a three million dollar business, and then he did something to screw it up and ended up deep in debt. He says he sabotaged his own success.
I want to find out how he did it and why someone would sabotage their own success. I also want to hear about his latest business which is called Mastermind Talks which connects entrepreneurs with each other and lets them learn from each other. All this is sponsored by Walker Corporate Law. One of my fans recently said, “Andrew, I don’t care about your sponsorship with Walker Corporate Law, I want you to get into the action.” So I’m going to get into the action right now with Jason. Jason, welcome.
Jason: Thanks for having me.
Andrew: At your height, you and your girlfriend took a trip to the Bahamas, terrific. You then come home, and three weeks later you fly back. Why do you fly back?
Jason: I fell in love with the Bahamas rather quickly. I fell in love with the people of the Bahamas and while down there the first time I asked some of the locals, “If you lived in ‘paradise’ where do you go to vacation?” Some of them gave me the New York’s or San Francisco’s of the world, but a lot of them said the island of Eleuthera which was a sister island that was 15 minutes away by plane, so my wife and I, at the time girlfriend now wife, decided to go back three weeks later and I just fell in love with it.
Jason: That was actually the first place I’ve lost track of time. Lenny Kravitz lives on the island, he’s there most of the year. He walks around in flip flops and most of the locals and stuff like that. It’s a really unique place. For me being an entrepreneur, being very connected to my phone, you wake up in the morning and check your emails and stuff like that, especially if you’re an online e-commerce business, you’re looking to see how many orders you got. That was the first place I lost track of time.
Andrew: What do you mean to lose track of time?
Jason: Literally lose track of time. Like in the sense that I’ve always been connected, I’ve always known what time it was, I was always rushing against the clock.
Andrew: I see, you’re just so enjoying yourself that you’re not thinking about what you’re going to do next, you’re not worried about the future, you’re just there present with your girlfriend in this environment and you didn’t just stay there, you ended up buying something. What did you buy?
Jason: I bought some land! I bought some property down there. Again, I fell in love with the place. We were there for nine days the first time we went down there and by the fifth or sixth day I kept seeing real estate signs all over the place and I wondered what it would cost to own a piece of paradise. And it was a lot cheaper than I thought it would be. The first time I was down there I bought two properties and I’ve been back many times since.
Andrew: What’s it cost to buy land there, by water?
Jason: Ocean front, you’re looking probably about 150,000 for a lot.
Andrew: So you’re spending not a million dollars but you’re spending hundreds of thousands of dollars to buy it. Do you feel rich at that point? Do you feel like I am rich in love, I’m a guy who couldn’t date earlier in life and now I’ve got this girl who I’m really in love with. I’m a guy who can actually finally enjoy the trip that he’s on, I’ve done it. Did you feel that at all?
Jason: I definitely had the freedom of time and money and that’s something that I was blessed with in that last business. I could do what I want when I want wherever I want. I couldn’t buy a million dollar house in cash but if I wanted to buy a fancy car I could buy one in cash, that kind of stuff. I was in a very fortunate position at the time. That could ha been seen as an aha moment that I’ve “made it”, but I was building up in overtime, I just started to get in this mindset that whatever I wanted financially I could simply afford or I could find away.
Andrew: That’s a good feeling. The guy who complained earlier via email that I shouldn’t keep promoting Walker Corporate Law or talk about anything other than business, his name is Phil, I got to keep this interview on track for Phil. So what Phil would probably want to know, is about your business beginnings. One of the things that I heard is that you’re a guy who even at an early age, you delivered flyers for a lawn cutting business.
Jason: I did, I did.
Andrew: And what did you learn back then that we could apply today and would make Phil very happy that he’s learned something about this?
Jason: Well in that business, I was probably like 12, 13 at the time, like most entrepreneurs, I showed entrepreneurial traits at a young age. One thing I did, I created this flyer in Microsoft Word and I got it printed out, probably like 500 flyers and I hand delivered like 450 of them and got no responses. On the last 50 I said I’m going to write a hand written note at the bottom saying listen I’m 12 years old looking to make some extra money, and I hand delivered that batch and I got a response probably rate of probably 12 to 15 people on the last 50.
To me it really demonstrated the power of vulnerability in marketing. Especially when you’re just starting out you want to project that you’re bigger than you really are, you want that address, you want that nice fancy website, those kinds of things. But sometimes people don’t connect to that. And sometimes the authenticity really shines through, and they’ll really help in a marketing situation. I think you’re starting to see, especially with social media and stuff, you’re starting to see that transparency be very, very important, so.
Andrew: There you go, Phil. On the bottom of your Website I want you to say, “I’m a 12-year old guy trying to make it in this world…
Andrew:…Please subscribe to my newsletter.” Or, “Sign up to my Web app.” So obviously the school system is there to foster education, to make us all better. I imagine you went to school. You said I have this new passion for entrepreneurship, and they said let’s help you out here, right? Let’s make you really love school. Is that what happened?
Jayson: You definitely did do your research. I dropped out of school.
Jayson: In my last year, or just about getting into my last year I dropped out. I was a terrible student. The only thing I was good at was, like, shop class [laughs]. That was pretty much it.
Andrew: Why shop class? Actually, you know what? So much of what you’ve said about your past makes me almost feel like you are setting up a back story that shows everyone else that you deserve to be where you are today. But shop class doesn’t fit in with any of that. What’s the deal with shop class?
Jayson: I just, I was good with my hands. I mean, I guess I’m a kinesthetic learner to a certain degree. Being able to use my hands was always great, and I mean, in school I just was not engaged. I didn’t like the format of it per se. I never felt like I belonged. I skipped a lot of high school to work. I had a full-time job through high school, so sometimes I’d miss two to three weeks at a time to work. And I’d get all kinds of flack when I came back to school. So eventually when I came of age I said, you know what? School’s simply not for me, and I decided to leave.
Andrew: Did you make any money doing all this?
Jayson: I was working through school. I was making a ton of money because I was working full time making $17, $18 an hour when you’re 16, 17 working 40, 45 hours a week. It’s pretty good money when you have no overhead. [Laughs] So I was the guy with the nice car and that kind of stuff throughout high school.
Andrew: Did you save any of it or was it all spent?
Jayson: Oh, I blew it all. I mean every paycheck I got at the time was going towards my car. I’m very, I’m all in or I’m all out, one or the other. And it’s one of those things that wherever, I’d go all in my bank account follows. So first it was, I think it was, like, paint ball and it was, like, cars when I could get a car and that kind of stuff, so.
Andrew: Why do you think you’d do that? Was it because you wanted to really enjoy all these things and you couldn’t control yourself? Or, did you want attention from other people?
Jayson: I think it was a significance thing to a certain degree because I wasn’t necessarily the popular kid. I was the funny kid, but I wasn’t the popular guy. And I could buy my popularity to a certain degree by getting the nice car. And I’ve never thought about it but looking back on it I think that was definitely a strong motivator. And, yeah, it was really a way to stand out because not a lot of kids in that environment have a lot of money.
Jayson: So again, when you’re making…
Andrew: Did it work?
Jayson: I had a girlfriend. [Laughs]
Andrew: You did?
Jayson: And, yet, it did work to a degree.
Jayson: Again, I’ve always been that mindset, like, if there’s a will there’s a way. Like, anything I wanted, no matter what, even if my bank account doesn’t match it I’ll find a way.
Jayson: I’m just one of those people by nature. But I guess it worked to a certain degree. I mean, people remember me, but, yeah, I definitely could have saved some money to start a business.
Andrew: Did it create some kind of magnetism, too, you know, that when the success, I feel breeds success largely because you feel so proud of your success that you show the world this confidence, and then they want to do work with you and so on, and then they want to date you. Did you feel that that was happening to you?
Jayson: Yeah, I mean, I definitely felt the more money I spent and stuff like that, I mean, I never got into partying and that kind of stuff, because I did work so much. But it definitely felt like the more money I was kind of flashy with at the time, the more response I got from people. And it’s interesting thinking about this because it makes me wonder if that was my first taste of money, and that’s how it lead to my business, and how I would -my spending habits in that business. I’ve never thought about that.
Andrew: And so I’m so curious about this self-sabotage. I feel like I am self overly protective, you know? That the idea of self-sabotage I know it’s an issue, because people in my audience tell me about it, but I always feel helpless because I don’t know how to help them, because I don’t even understand the problem.
Andrew: So take me back to this period where life is so good. You’ve got a girlfriend, which frankly, I would’ve killed for in high school. You’ve got a car…
Andrew:…which I was driving a little old huge Volvo. I might have used a better car. But I don’t get why you’d want to sabotage it. Did you think at that point feel like you’d have to sabotage it?
Jayson: No, not at that point.
Andrew: No, that point you were good.
Jayson: At that point I was good.
Jayson: And then I left school and became a mechanic. And did that for a little bit, and then I started my first business…
Andrew: Why did you become a mechanic? Why’d you go into that as opposed to starting more businesses and really beating this entrepreneur?
Jayson: Ah, because I was good with my hands. And I naturally gravitated to cars because I had money and I would do things to my car. So when I decided to leave school, that was the one thing that I kind of gravitated towards. And I did enjoy it from a certain degree because of the creativity, because I did automotive performance modifications to vehicles and stuff like that.
Jayson: So it wasn’t maintenance work, so it was enjoyable. But I definitely wasn’t rolling in money in that job. I was literally clearing probably like $550 every two weeks. I was doing that for about a year and then one day, over lunch for some crazy reason I decided to do an interesting calculation which was basically the national average life expectancy which was like 80 years at the time. And I multiplied that by 365 days. And when I took my age, which was 18, and then multiplied that by 365 days, I found out that I had lived “6500” out of the 28,000 days if you live all 80 years.
Jayson: And for me that created, for the first time in my life, a sense of urgency that I’m not going to be here forever. Because when you’re 18, you think 80 years is so far away, but when I saw it in perspective of days, that’s really changed everything for me. And that day I quit the job. It was a Thursday. And by next week, I had another job which was actually, oddly enough, in car sales. Which I enjoyed at the time, but then that kind of ventured into my first business which was a personal concierge business.
Andrew: Did you learn anything as a car salesman that Phil would be happy with? Frankly, actually, forget about Phil for a moment, but I always wanted to go into car sales, because I feel like . . .
Andrew: . . . they’re going into a war zone with the enemy, and convincing the enemy to give them money. People don’t go in there going, I love these people.
Andrew: I’ll just buy a car and give them all my money. No, they’re battling and still the car salesman can persuade them. Do you have one tip that you learned from that that I, as a salesperson, can use when I promote Walker Corporate Law or Mixergy Premium?
Jayson: In car sales, there’s a lot of downtime. That’s one thing for sure. But for me, if I’m looking back, I think one of the biggest takeaways was I was there for about a month and a half. And I became quickly one of the best salesmen there. I had the most sales . . .
Jayson: . . . during the month I was there. And really I think the reason why is because I’m a firm believer that conventional methods yield conventional results. And when people would come in, all the sales guys would attack them the same way. People had their guard up and they knew exactly how these people were going to attack. And for me, I took a different approach, and I was very kind of approachable. And I actually did the research for them.
So I was working for an Acura dealership. When people came in to buy an Acura, I knew that they were probably looking at a specific model of BMW. They’re probably looking at specific model of Honda. Those kinds of things. So what I’d do is I actually created these books which had all the research in it. Back then it was Edmonds. I don’t know if they still have it now. Which is all the reviews of cars . . .
Jayson: . . . of people who own the cars. They say, this is great or this is terrible, those kind of things. And I just hand it to them. And I say, listen, this is a great vehicle, but you’re going to do the research anyways. I’m going to make it easy for you. It’s right here. And we’ll talk about it. And because of that transparency, I think that really resonated with people. And that’s what made my job a lot easier than just kind of pitching hard.
Andrew: I see. Yeah.
Jayson: So if I look back at it, yeah, conventional methods yield conventional results. And I think that can be applied in various areas of business and life.
Andrew: Okay. And if you know that the person you’re selling is going to get some kind of ammunition, might as well hand it over to them. They’re going to get it anyway.
Jayson: A hundred percent. I mean the sales game has definitely changed. And I know Dan Pink talks about it a lot in his last book. By that I mean that the information has really shifted. And now, if you’re using cars as an example, you can go online and find out the true MSR, like the true cost that the dealer is paying for the vehicle. And you can put that on the table and be, like, I’ll pay $500 above cost. And there’s nothing the dealer can say per se.
So it’s definitely changed. So people are going to do the research regardless, so might as well be transparent and not try to hide anything.
Andrew: Okay. The concierge business. I want to spend a little bit of time on that before we go on to the ticket business . . .
Andrew: . . . which is the heart of the success and self-sabotage. But . . .
Andrew: . . . you got into personal concierge because you saw that people were wasting their time coming into your dealership to buy cars. And you said, well, if they keep coming back in doing all this research, maybe I, as a concierge, can do it for them and they pay me. And there’s big business there. What kind of concierge services beyond shopping for cars did you do for people?
Jayson: Well, that was the initial business idea was to do a car shopping service to a certain degree. But then, like most entrepreneurs, you want to be everything to everyone. So I decided to do virtually anything at an hourly rate to a certain degree. Our slogan for the business was, if it was legal, moral and would save you time, we’d take care of it.
Jayson: So we did do some car shopping stuff, but the majority of the stuff we did was, like, people’s grocery shopping. I broke up with somebody’s girlfriend once. I watered people’s trees. I hand-delivered wedding invitations in a tuxedo across, like, a 400 kilometer radius in Toronto and stuff like that. So I would do pretty much anything and everything as long as it had some kind of morality to it for $50/$60 bucks an hour. So, yeah, we did everything.
And then how that transpired into the ticket business was, from a positioning perspective, when people thought of the word concierge, they thought of hotel concierge. And when they thought of hotel concierge, they thought of concert tickets. So we started sourcing concert tickets. And we kept on going through these brokers locally. And they just charged these huge, huge fees which we, in turn, had to pass on to our customers.
And it was bothersome to me, so I started stocking our own little inventory, not thinking anything of it, just trying to save our customers some money. But over time, that inventory kept on growing and growing and growing until one point, that side of the business started to eclipse the personal concierge side. And I realized quickly in that business too that service-based businesses are very hard to scale. So when I saw the money coming in from the product side, or the ticketing side, it was an easy decision to kind of jump ship from the concierge side of the business.
Andrew: I see. When you say that they had this big margin, was it that they were buying tickets to a local game and then selling it for 20 to 30% more?
Jayson: Oh, yeah. I mean 3/400% more oftentimes.
Andrew: That’s what I figured. We’re talking huge, huge numbers.
Jayson: Huge mark-up.
Andrew: So then when you started buying it, what happens when you buy tickets expecting that your concierge customers are going to want to buy it from you, and some of them eventually just don’t get sold, what do you do with them?
Jayson: That’s the core reason why their ticket prices are so inflated. It’s because you do get . . .
Jayson: . . . quite a few losses in that business. If there’s way to kind of crack that to a certain degree, I mean, definitely that would bring down the prices substantially. What we did, which no other brokers did, really, is that we would donate them to charity. So if it was the day before the event, we would donate them to, like, the Ronald McDonald House so, you know, parents and their kids could go.
Andrew: Are there tax benefits to doing that? Am I scumbag even wondering that?
Jayson: No, no. There is and there isn’t. I didn’t really dig into it too much. I mean, we donated quite a bit and I was always terrible at keeping tax receipts. But, for me, it was always like, you know, we could keep this inventory of 50/60 tickets for a show tomorrow and maybe get $500/$1,000, you know, tomorrow somehow selling them last minute. Or we just donate them to people who would enjoy them.
Andrew: I see.
Jayson: Our motto is that we made as much money as we could. And then 24 hours, 36 hours before the event, we just donated the remainder.
Andrew: When you were in the concierge business, how did you get your customers?
Jayson: Well, initially the hard way. I hand-delivered flyers initially and got zero response. That was the first real failed marketing attempt I ever did. And from that point, the beauty of it was, because I was 18 at the time and I was in this new emerging industry, it was a great angle from a PR perspective. So I got a lot of press. I got a ton of press, thankfully. And because of that, that really helped quite a bit.
Andrew: I see.
Jayson: And then there was a lot of word-of-mouth, and a lot of just return clientele. So once we had clients that we did work with, they’d use us on a pretty regular basis.
Andrew: How do you get press as an 18-year-old concierge?
Jayson: Google. Somebody found our website. It’s one of those things, like once you get featured by one publication, you know. We had a full-page spread in the newspaper called National Post which is a national newspaper in Canada. And once we were on there, then after that, the next day, you know, a new station sees that and says, oh, we should have him on.
And then somebody else sees that, and it’s like this snowball. So the hardest piece of press is that first one to get. But once you get the first one, then everything just comes into play. So it was based purely on luck.
Andrew: Total luck? But if they saw your website, it didn’t say I’m 18 years old.
Jayson: No, actually it did. It didn’t say I was 18 years old, but I had a picture of me in a tuxedo on the front. Probably they saw some spelling mistakes in the description on the about me page, so maybe guessed it. I’m not sure. But, yeah, I didn’t necessarily say I was 18 years old because, again, at the time, I was still trying to project that we were a bigger company. We had many employees and opening multiple offices and that kind of stuff. But I think many of them probably figured it. Like I said, once we were featured in the first one, then others followed pretty easily.
Andrew: Okay. This is, the company was called, “VIP Services, Inc.”?
Jayson: Correct, yes.
Andrew: I see from an old “About” page you say, “VIP Services, Inc. was one of the first personal concierge firms in Canada – meaning that there was very little information in the market that told me what I could expect as a personal concierge. My budding experience in this industry quickly led me to create a Mission Statement for VIP Services. VIP Services will take care of all your legal and moral-time saving tasks.” That was your Mission Statement.
Jayson: I don’t even know where you found that. [Laughs] I’m going to take a look myself. It’s been a while, it’s been a long, long time. Like I said, it’s probably full of [?].
Andrew: The way you express it now is so much clearer than what you’ve said here on the site. Here, I’ll read the Mission Statement again, “VIP Services will take care of all your legal and moral time-saving tasks.” Where today you said, “If it’s legal, ethical and moral, I will do it for you,” or something like that.
Jayson: I will show that to my wife, because my wife, like, proofreads everything I say before it goes out to the public. So I’m going to show her that, because she’s probably going to get a good chuckle.
Andrew: [Laughs] I wanted to look you up. I said, “Is this guy for real?” You know what.
Andrew: I was just talking the other night. I had some friends over for poker, at least one of them whom I interviewed, and I said, “You know, my big issue is, I can’t allow myself to get snowed like all these other interviewers who will interview some guy who says he’s a millionaire and will treat him like royalty, who’s going to teach everyone everything.”
Andrew: I’m constantly in paranoia about it. That’s why I hire researchers. That’s why I have people over to my house for poker. He said, “Really? I thought you just invited me here for fun?” I said, “No.”
Andrew: “I am here to get to know you and see if you’re a real human being or not.”
Jayson: That’s honorable because that’s a pet peeve of mine as well as when people position themselves as millionaires, and that’s such a vague term…
Jayson:…Nobody knows necessarily what.
Andrew: And then you dig in and you go, “Well, if you include the value of my real estate and my life insurance policy and the fact that how can you measure the value of love? And my wife loves me, so I’m worth a million dollars at least. All right then. Here’s my credit card. Sign me up for your Webinar about how to make a million dollars, too.
Andrew: I want to be like you. But, you know, you never know. The guy was Ned from Alto [?].
Andrew: Ned from Alto. He’s a nice guy, but I immediately said, “I’m glad you’re here for fun. I’m going to make sure you have a good time at my poker game. But I’m here for business.”
Andrew: I’ve got to make sure I don’t get snowed at work the next day. Alright. So I see how this is going. I see how you’re growing the business. Can you continue honestly to actually no, I take it back. I looked at Tickets Canada.com, the early version. The early version was just a list of links. So was that the first thing that you launched? What did you launch?
Jayson: So how it transpired is basically initially, when we made the move, when we started buying inventory we became a wholesaling company. And how the ticket industry works is there’s a retail side and there’s a wholesale side. So the retail side is those front-facing websites that you see.
Jayson: They don’t have any inventory. All they do is they share a feed. And the feed comes from brokers like us. So there’s about maybe 2,000 wholesalers across North America.
Andrew: And the wholesalers actually buy the tickets.
Jayson: They buy the tickets in bulk.
Jayson: And then they just supply what they have to this feed, and it goes across all these websites, so the E-Bays and the Stub Hubs of the world. And then when those websites sell it then we just get an order. We fill the package and send it out. So we were able to build a pretty big business with a small team, which was nice. And that’s how we started was wholesaling.
And then what happened was over time, we started…because really how the industry works is, you know, Ticket Master’s the biggest player in that space. And how it would work is, let’s say, Ticket Master sells tickets for $100, but as a ticket broker, you say, “You know what? There’s huge demand for this event. There’s only one show. You know, it’s One Direction or something like that.” Realistically, it’s all guessing. It’s almost like gambling. [Laughs] Like the stock market, but you take a good guess as to whether, you know, the demand’s going to be high or low. And from that you purchase a bulk group of tickets.
So let’s say the cost was $100, that’s the face value of the ticket, and you list them up at $200. So as long as there’s huge demand, people will buy them at $200; you make $100 profit. But over time, you know, I knew I could forecast the Ticket Master and the promoters of events would get a little smarter with all their data, as far as how to price tickets, right? Because we were making up this huge gap, and over time we were starting to get squeezed more and more on the wholesale side.
So I said, “You know what? No matter what happens on the wholesale side of the business, if you’re on the resale side you make a commission fee, no matter if the holding broker is losing money on the sale or is making money.” Stub Hub makes a flat 20%. E-Bay makes a flat fee.
Andrew: And they don’t have to buy anything. All they have to do is just affiliate links.
Jayson: Exactly, it’s an affiliate. That’s how they work. So I said let’s pivot into that business. So we still had the wholesale side of the business, but we pivoted into the retail side.
Andrew: I was doing some searches to see how you’re, I figured that kind of business if probably very SEO heavy. Or at least was SEO heavy at the time. Was it?
Jayson: Yeah, very, well, very black hat SEO. And how it would work often times is that guys would secure domain names for venues and they’d create this one page website and use very black hat SEO tactics. So they’d have hundreds of these sites. And that’s how they would use it to generate traffic or to generate sales. And it’s a very paper click heavy business as well. That was the model of the industry.
You’d acquired a customer through paper click and let’s say that customer costs, you made 50 dollars profit and that customer costs you 20 dollars to acquire, you made 30 dollars in the bank. Then you went out and you got your next customer and your next customer and that kind of stuff.
Andrew: Which area did you play in most? Was it buying ads or was it SEO black hat?
Jayson: We didn’t…a couple of different things. So because we were a wholesaler meant that we were shipping all the tickets, all the orders that were coming in, we would ship the tickets. And when we would ship the tickets, I would put in a flyer, even though it was not allowed. I would put in a flyer for our retail side of the business and say listen if you want to cut out the middle man next time, buy right from us.
We’d ship out five thousand, ten thousand orders a year. Probably more than that, but that’s how we first kind of helped. And then we did some SEO stuff. It wasn’t black hat stuff. We hired a proper firm. Just because of our domain name at the time from a positioning stand point it was a great domain name. So that helped quite a bit as well. And then we had a lot of return customers. But definitely for the most part that [??] entire ticketing business, the wholesale side was the biggest generator for us because we’d buy. Sometimes on an individual show we’d make 50, 60 thousand dollars off it.
Andrew: How would you get affiliates?
Jayson: It’s through, there’s different models, but any like a stub hub or something like that. You as the general public can go and list tickets. As a large seller basically they give you an upload feed and you just upload right to them.
Andrew: So how do you guys compete with each other? Because if there’s a Justin Bieber concert and happens to be popular, you have it. But so does every other wholesaler have it. So how do you compete and make more money than anyone else or stay alive?
Jayson: There’s a few things that we did differently, which really helped us grow really quickly. Much faster than our competitors. One of them was that we were leveraging the currency. So were based in Canada, we were buying tickets in Canadian currency. They were selling in US currency. At the time, this has to be five, six, seven years ago, there was probably a difference of 15 to 20 percent in the currency exchange.
So what all the other brokers were doing is they would sell tickets and they’d mark them up 20, 30, 40, 100 percent. What we did is we bought tickets and we sold them close to cost, and we’re banking on the fact that if they purchase, then we’d make money on the currency.
Andrew: I see.
Jayson: So for a while we were just churning tickets out faster than anybody else. And we were just making money strictly on currency. That was a really great model for us because we sold a lot of stuff really, really quickly before our competitor could even do anything about it. So that’s one kind of model. It is very much a commodity game. You have different seats, different sections, different rows, so you can price accordingly.
It’s one of those things like when you’re looking at a show and you’re trying to value a show, you see how many tickets are among the brokers and you’ll see some are underpriced and you kind of bank that if they sell theirs really quickly, getting closer to the show you’re going to be the last guy with tickets. So you’ll be able to control the market. Also another tactic that we used is that we bought more tickets than anybody else for very specific shows so that we would control the market. So we’d have tickets at the lowest price and we’d have tickets at the highest price.
Andrew: How’d you get to buy so many tickets?
Jayson: Well, there are computer programs for that now. Back in the day we did it the old fashioned way. We just had multiple windows and we would buy groups of eight at a time.
Andrew: You’d just sit there on your computer with multiple browser windows open and just buy them? And you personally would do it?
Jayson: I, myself and there was like four others. I was the one who always made that final decision. So when people pulled up tickets, they’d call out what they had and I would make the quick decision whether to purchase or not.
Jayson: Yeah, we’d buy…
Andrew: Like an old school trading desk, like the New York stock exchange? I have a few tickets to Justin Bieber at a hundred dollars each, should we buy? Yes, taken.
Jayson: It was a rowdy time.
Andrew: That’s what we’re talking about. Okay. So, what about how you’re paying for it? If you are selling tens of thousands of tickets to one concert, that means you’re laying out tens of thousands of dollars to buy those tickets and you have to wait for that cash to come in. Where did that initial funding come from? It’s not the concierge business.
Jayson: No, it was all credit cards. So how it would work is we’d buy it on credit cards and, as they would sell on the back end, we would pay the credit card and just kept on buying more and more. And it just created this snowball.
Jayson: And that’s kind of how we really built the business and we kept on reinvesting everything back into the business and paying off credit cards. And as we got better relationships with our credit card companies, we kept on extending credit. And that’s how we were able to have access to a lot of credit.
Andrew: I left Bradford and Reed, my previous company, with a million miles because of all the credit card expenses. Did you get miles or any other perc for spending so much?
Jayson: I did. I don’t tell too many people about this, but every year I would cash out. In American Express specifically, they have something called airplane points. Basically I would cash them out for American Express gift cards. And the last year I did it, I had $28,000 in American Express gift cards. I’d use it for travel. I’d use it for all that kind of stuff. That was definitely a nice perc was the points, for sure.
Andrew: Okay. What’s the funnest thing that you got to buy with that?
Jayson: Well, I mean, I definitely did the whole flight stuff and that kind of stuff. I was looking to buy a massage chair. I probably have about three/four million points a year. And I was going to buy this massage chair. I never ended up pulling the trigger on it, but when I calculated what a point was worth dollar-wise, the best bang for the buck was to convert it into actual gift cards.
Jayson: And then once you have gift cards, you can use it for whatever. So . . .
Andrew: How long did it take you to make your first million dollars in sales, not profit?
Jayson: Oh, God. In sales, once we pivoted into the ticket business, we probably did a million in the first year.
Jayson: Because again we just kept on churning and growing really, really quickly. But there was a little bit of a lag between the concierge business and the ticket business.
Andrew: Concierge business. How much money does that bring in at its height?
Jayson: God, it was small. Probably $12/$15,000 a month.
Andrew: Okay. It’s all profit, but it’s all sweat equity.
Jayson: Well, so that’s revenues. There’s still costs. But I’d say maybe, profit-wise, like what I’m taking home is probably $4,000.
Andrew: Okay. And you had employees too. You had other people who were doing it, not just you?
Jayson: I did. I had employees and that was, like, with contractors and stuff like that. I tried to do as much as I could by myself because I needed the money. But, yeah, we definitely dabbled with some stuff. It wasn’t until Tickets Canada where I had a hard time hiring in the concierge business for several reasons. One of the biggest hang ups was hiring somebody who’s older than me. My first employee was 29 and I was 18/19. And that was a tough pill to swallow for me. And then in ticket business, that’s why I hired . . .
Andrew: What do you mean, tough pill? Well, why?
Jayson: Just from a doubt perspective and just a fear of maybe looking like I don’t know what I’m doing. Or hiring somebody who’s older than me, you know, somebody who’s like my parent’s age. In some cases, they were sending me applications and stuff like that. And for me, I think it really came down to people doubting me, or the fear of people judging me and stuff like that based on my age.
Jayson: And, like I said, that was probably one of the core reasons why I didn’t hire that quickly in that business. And I only ended up having one or two hires in that concierge business.
Andrew: So if you made a million in the first year, how much of that would you have taken home as net profit?
Jayson: It was pretty good. I mean, we reached a threshold where we were only doing about a million and a half per year. We were probably bringing home about $350, $400.
Jayson: But reinvesting it all, again, back into the business. And then when we doubled the business, the one thing we realized is our profit didn’t change all that much. So that was a big kind of eye opener for me.
Andrew: Why not?
Jayson: It changed a little bit, but it didn’t scale. Right. Revenues and profit scale very differently.
Jayson: Why do they scale differently?
Andrew: Yeah, why isn’t it a one-for-one growth?
Jayson: Oh, just like the cost involved. When we were doing probably a million and a half, two million dollars a year, we had a small team. There was like three of us. Very low overhead. Nothing really, really fancy there. And then when we expanded and grew, then we had more employees and we had more computers. We had Christmas parties. We had all those kind of things with people calling in sick, like, just normal stuff that you have and then also to take it to that next level we were dabbling with a lot of unconventional things.
So I hired a full time videographer to do YouTube videos. This is back in the day when YouTube was just kind of starting out. I had a content writer, a copy writer. I had a guy taking care of internet marketing and stuff like that. If we would have stayed into it, then maybe at one point in time, it would have paid off and we would have seen a big spike in our bottom line. But definitely profits and revenue scale very differently. And it seems like most businesses have this kind of thresh hold. If you pass that thresh hold then things start to change a bit.
Andrew: Alright. I’ve got coaches and people who help me become a better interviewer. And one of the things that I’ve learned is that when the story gets too high, you have to talk about the big challenge right afterwards. Or else the person feels like everything, it sounds like everything goes right for the person and no one can relate. And there’s no tension. The will hero, won’t he make a tension. So we got to this height. What do you do to sabotage it?
Jayson: There were a few things that happened, but I was never passionate about the industry. I was never passionate about the business. We sold millions of dollars in hockey tickets. I’ve never been to a hockey game. It’s tough to get behind something you don’t believe in. That was always kind of a problem. That I was always chasing the money. Then one day I calculated my actual net income that year and divided by the national average income. I realized I was making 22 times the national average income.
And for me that was like an eye opener because I’m not 22 times happier than the average male. When I was 23, 24 I had kidney complications because of stress, because of a bad business partnership. It just became clear to me that money and happiness scale very differently. And I wanted to get out. I was relatively naive at the time in business as far as like selling the business and things. For me the only way I saw out was to sabotage the business.
I knew as long as I had a plan B which was a business that took care of all my wants and needs as far as financially, I’d never follow through with plan A which was to create a business that would really light me up every day. At the time I didn’t see it as sabotage. I just saw it as me scaling down the business and having a soft landing at zero.
Andrew: Why go to zero? Before you go into the two things that happened. Why would you want to soft land to zero?
Jayson: I honestly, it’s weird, I think the psychological damage you get as an entrepreneur. For me I saw the business as a source of pain after a while. Because I was making all this money and I was unfulfilled. For me, I saw it so much as a source of pain that people who did approach me, like friends and stuff like that, who wanted to have that discussion about would you sell the business to me, those kind of things.
I didn’t even want to entertain the idea because to me my model in my head at the time was that if I sell the business to Jake or something like that and he’s going to run into the same issue I’m feeling right now two years from now and I don’t want to jeopardize our relationship. It sounds crazy, but I just thought that people were going to feel the same pain that I was feeling and that the only way for me to keep that from happening was just too slowly kill the business. I’ve had many, many conversations with a lot of entrepreneurs about this.
I had a really good peer network who weren’t too familiar with exits and that kind of stuff, but they were like, “What are you doing? You’re crazy. Sell it off or give it to somebody and then stay behind the scenes as a silent partner.” I was definitely stuck in my ways. I really wanted to scale that business downward.
Andrew: I see. It’s almost like, if I have a clunky used car and a friend of mine wants to buy it because he needs a car just to get to work and back. I wouldn’t want to sell it to him because I’d say it’s eventually going to break down on him and I don’t want to inflict this on him. The problem was you weren’t driving around in a clunky car. You were driving around in a great car, but you imagined that it was so you acted like it was.
Jayson: Yeah. And I would talk so bad about that company to people in my peer group because I didn’t want them to inquire about it. And truth be told, I knew the industry was changing and it would possibly lead into that clunky car kind of territory.
Jayson: So that was actually a great analogy. I never thought of positioning it like that, but like I said, we were getting squeezed on the wholesale side of the business for the past probably 18 months to two years. And then on the retail side of the business, there’s a lot of Philly websites out there, but the one percent own 99 percent of the market. Right? The stub hubs and that kind of stuff. So it wasn’t necessarily the easiest. The future wasn’t super bright for the company. Which is another reason as well.
Andrew: I see. What about this? It sounds like what you’re also saying is that you need for some kind of shake up, some kind of urgency in your life or else you don’t perform. Does that feel right? Or, am I imagining it?
Jayson: No, you are good at what you do.
Andrew: Thank you.
Jayson: I mean, that is very accurate. And it’s funny, I was listening to the interview with Gary Vaynerchuk and Joe Polish recently, and Gary was talking about, like, two years ago he was considering sabotaging what he had. Because he wanted that whole, like, “phoenix from the ashes” moment. And it’s one of those things I’ve always realized the rapid growth of my ticketing business.
The reason why it grew so quickly is because every month I put my back up against the wall with those credit card charges. I would put, you know, $300,000, $400,000 a month on credit cards. And I didn’t have $400,000 in the bank. I was banking that I would sell inventory on the back end to pay those credit cards, and that’s how we grew so quickly. So for me every time I extended myself in business, I’ve always been able to rise to the occasion. And, honestly, success feels heavy, right? I mean, at a certain point you lose the drive for it, and there’s this lightness that comes to being a beginner again.
And there’s other factors, you know, like wanting to prove people wrong. Part of it, you know, I think subconsciously you want a great story as an entrepreneur because you hear all these incredible entrepreneurs like the Steve Jobs of the world, and that kind of stuff, that have this huge, like, rise from the ashes story. I think there’s a lot of factors, and sabotage is something that happens to a lot of entrepreneurs; whether they’re conscious of it or not. And it’s something we don’t necessarily talk about too, too much. But that’s definitely, I guess, that’s what happened in my business.
Andrew: And one of the things that caused it to happen faster than you would’ve wanted seems like was the bank. What happened with the bank?
Jayson: It was. So while we were kind of scaling downwards, I still had a full team, I still had retail stores and stuff like that. I had a hard time letting people go [Laughs] in my business. I kept people on a little too long than I should have. And what happened was I got a call one day from my merchant services provider, and my merchant services provider basically, I had a relationship with them 5,6 years; never had any problems. And they held some of my money in a reserved account.
So they considered the ticketing business a medium risk business meaning that we sell tickets and there’s a good chance that some of it comes back as charge backs. And from a merchant services providers’ perspective if you’re selling something and it’s not consumed right away there’s a risk. And the longer that time is, the more risk there is. So sometimes we’re selling tickets for events that are 3 to 6 months away.
So originally when we opened our account, they had, I think they were holding about $100,000 of our money in a reserved account. And they were taking it at a rate of, like, 10% per transaction until that account was full. So that account was full, and then we got a phone call on, like, a Friday afternoon from one of the adjusters, I guess.
And he said, you know, “Whoever assessed your account initially assessed it wrong. And because of that we have to put your account on 100% reserve.” Meaning that virtually 98% of my business is credit card transactions, every single penny that I charged through Visa, MasterCard or American Express is going into a reserved account that I can’t touch for 6 months after I close my account. So at the time I was getting married, I had a 6 month old daughter who I was still trying to adjust to, and I had this going on. And I didn’t have any backup plans.
One thing you learn as an entrepreneur is well, cash flow is a heart attack to a business, right? Your profit is like a cancer you can fine tune over time, but cash flow, if you have no cash flow you have no business. And I still had probably 15, 20 employees at the time, two retail stores, all those expenses and all that kind of stuff. And when that cash flow stops it probably lasted about six weeks.
And I wasn’t getting anywhere with the bank, and you know, I pleaded with them [Laughs] to talk with someone who could help me out. And there was no resolve until I was actually in the Bahamas getting married, and I was literally, like, six days away from being completely dry. And I threw a Hail Mary which I wrote an email to a bunch of higher-ups in TD, to the bank. [Laughs] But [Laughs]…
Andrew: They don’t care.
Jayson:…Yeah. [Laughs] Exactly. Don’t bank with them. I bank with them still, but regardless. At the end of the day I sent an email to all the execs and the person that put that 100% reserve on my account. We were able to get it resolved, and they released some of the money. But by then the damage was already done, and I already had credit card racked up and it was a bad, bad place to be. So I ended, I was hoping to end at zero sometimes in the months, you know, months in the future. However, you know, I hit rock bottom financially really quickly.
Andrew: And you had to let all these people go?
Jayson: Yeah, yeah. I had to let them go. I tried to do it, like, one by one to a certain degree. But they knew I was disconnected from that business for 8 months to a year prior to that. I mean I used to be in the business first one, I used to be at the office first one there in the morning and last one out at night. And I’d check in once a month, once every five, six weeks. Like I’d just randomly show up. I didn’t care. I didn’t care how the business did financially. I just did not want to be around it. You talk about like the importance of culture in business and that kind of stuff. The culture was so bad that I didn’t want to go. I didn’t want to be a part…
Andrew: What made it so bad?
Jayson: I think the business grew faster than my skill set and I hired a few people who were not the right fit. And because of that and my inability to fire them quickly, it was just like a cancer in the business and I just felt like I was kind of shackled to my own business to a certain degree. And it just got to a point where I had this happening, I had a revelation of how much money I was making versus how happy I was, and again, there was so much going on that I just disconnected myself from the business.
So I think many of them probably saw it coming, but in the end I ended up having to let them go. To this day, I’m not sure if they know the whole financial situation that was behind it.
Andrew: I wonder if they are going to listen to this interview and find out. I’m going to call out Nicholas Clark. I’m going to call out Cyrus Orden.
Jayson: I can’t believe, I don’t know how you do this. You are good, man.
Andrew: Research. I was also checking you out as I was reading it to see is he feeling really uncomfortable that I’m reading real people’s names or not?
Jayson: I’m amazed. This is why I love Mixergy. You go deep. I’ve been on a few other interviews and stuff like that and nobody goes like this. I didn’t know you were going to do this kind of research. That’s great. I’m glad. Like you said, you want to really make sure you have the right guests and that they’re telling the truth.
Andrew: You know what? This is the reaction that, of course, someone who had this kind of relationships go through. I’ve had people who before an interview I will say, “I can’t find a single person who worked at this company that you’re going to complain had hundreds of people working that you didn’t like. I can’t even find one person. What’s the problem?”
And they treat me like I am the inquisition trying to catch them for some kind of faith based crime. No, I’m just doing my freaking research. It’s not that hard to find out today. And so that also is telling me are they seeing that as a slight against them? That I’m actually looking into it. Are they seeing it as a point of pride that they’re on a place where someone cares enough to look into their past?
Jayson: No, I think it’s great. I want to look back into that stuff as well because I love to see how I position the marketing for that first company and stuff like that and what I can kind of learn from that. Because I did that business years ago and I haven’t looked into it since. So I think it’s great you do your research.
Andrew: Thanks. One of the hard parts for me was after leaving it I was so burned out that I didn’t say goodbye to people. I couldn’t explain to them what was going on with me because it was all on me. And I was wondering for years did these people from the Bradford and Reid days feel hated or slighted or hatred towards me or slighted by me or any of that.
And one of the nice things about having done this and talking about my past is that they will reach out from time to time. And it is such a positive pleasant experience. I don’t know if that happened to you. Did it? Where you feel like I’m just not there to even properly acknowledge why I’m leaving.
Jayson: Yeah, you know, it’s something I haven’t done. And I probably, you’re making me think about the whole closure aspect of it. I still get in touch with these people from time to time, they reach out to me or they like something on Facebook or something like that, but I’ve never had the actual conversation as to what really happened behind the scenes.
Again, I don’t think I was a hundred percent transparent with my team at the time. Which transparency is a big thing, especially with good cultures and stuff like that in business. Yeah, no, you’re definitely making me rethink those initial relationships. Because they’ve all moved on. This is a few years back now. In hindsight, I definitely could have dealt with it differently and done a much better job.
Andrew: In my experience, people do understand that and I hope that one of them finds there name in a transcript or something or that you find them and you somehow reconnect.
Andrew: I want to just touch on the feeling that you had at the low point. I don’t want to make it seem like, well everyone has these low points and we almost want to have these low points so that we can rise up above them. No they’re, from my experience anyway, they’re very painful.
Andrew: For you, what was it like?
Jayson: It was the scariest point of my life. I mean, when you go from having a business that is sometimes doing seven, eight hundred thousand dollars a month in cash flow and that’s stopping. It’s terrifying. I ended up with a quarter million dollars in cash debt with no business, no cash flow, no business ideas. I was 52 pounds heavier, well 55 pounds heavier than I am now. I was just getting married.
I had a six month old daughter so I was getting very little sleep. I was trying to adjust to that. My daughter definitely threw a wrench in things initially, and there was just a lot of change going on in my life and I definitely felt like I didn’t have control over it. So it was definitely a tough time. Transition is always difficult. They say when one door closes another one opens, but it sucks to be stuck in the hallway. While I was in the hallway, I was in a bad spot financially and health-wise and those kind of things. It was definitely a bad time.
Andrew: Were you scared?
Jayson: Was I…? So this is the thing. In hindsight it doesn’t seem like it was that bad. One thing I will take to my grave I wish I would have done was actually journal during the entire process. I wish I would have recorded it a lot more than I did because again hindsight is 20-20. So it was definitely a tough time. The whole “not being able to get out of bed in the morning”, that was me. And even if you do get out of bed, there’s no point. Your life has no purpose, no meaning.
My identity was tied to that business. My identity was tied to being somebody successful, and it was terrifying to know that the people I surrounded myself with were still successful in business. And that I could lose my friends if I didn’t hit it out of the park again with another business.
Yeah, I got a new marriage. First marriage, I just got married. I almost didn’t have enough money for the wedding last minute, like the timing of it was pretty bad. So I pulled out of it.
Andrew: What about debt? I said at the top of the interview that you ended up in debt. What kind of debt did you end up with?
Jayson: A lot of the credit card debt from that company. Once we were able to close the company and close our merchant’s service account, we were able to get some of that money back that was in the reserve account. But by then we already accumulated six months of interest on some of these credit cards.
American Express, for example, does not play around if you don’t pay your credit card bill within… If you don’t pay it by the due date, they close it down and they come after you. If you owe them quite a bit of money, interest builds up really quickly and then, yeah, those kinds of things. That’s how we really accumulated it. That was from the business.
I didn’t necessarily do the best of jobs initially, like most people when you start a business you just hit the ground running and you do things as you go along and you’re kind of flying by the seat of your pants. I didn’t necessarily do the best job protecting myself personally from the demise of the business. Should things go bad business-wise, I didn’t do a good job distancing myself from that although those credit cards were in my personal name and stuff like that. I could have done a much better job if I put some thought into it.
Andrew: And you carried that personal debt with you even after the company is done.
Andrew: Let me ask you that.
Andrew: I said earlier that Phil did not like when I did ads, but I’ve got to do some kind of ad here. So how about instead of me promoting Walker Corporate Law, I just ask you as a guy who’s now been at the high and the low do you have any legal advice that other entrepreneurs should be aware of, structuring their company, protecting themselves against the downside.
Jayson: That’s a tough idea. For me one of the biggest lessons was to have cash reserves. Cash is kind. Jim Collins in his most recent book talked about how the good to great companies, the great companies have three to ten times the cash reserves than other companies. When Bill Gates started Microsoft he had a million dollars. He had a year’s worth of payroll in the bank. That was his rule that no matter what happened in the business, he had to have a minimum of a year’s worth of payroll in the bank.
That’s something I never did. Every time money hit my bank account, I was out buying more tickets. I was out buying things personally, those kind of things. I never had money in the bank. That was definitely a learning experience. It doesn’t really tie into the legal side of things, but from the financial side as far as protecting yourself that was definitely one of the biggest lessons learned.
Jayson: Banks don’t give you money when you need it. That’s the downfall of the banks.
Andrew: Notoriously not. So if you want business advice, cash flow advise, talk to Jayson, talk to other entrepreneurs. If you want legal advice, frankly the guy to talk to is Scott Edward Walker of Walker Corporate Law. When you’re starting up your company, I think most law firms and especially Walker’s firm knows that you don’t have tons of cash in the bank and that you’re just getting started. They’ll give you a good deal when you get started because they’re basically banking on the relationship with you later on.
And when you have that kind of investment where a lawyer puts that investment in you, puts in the time early on knowing that they’re not really making that much money upfront. Use it properly. Use it to learn what you need to know, to figure out what you need to protect yourself. Those friends of yours who you’re going out for poker or drinks or just master minding with aren’t going to have all the best legal advice. You need a lawyer. I hope you talk to at least if not, and actually, I urge you all to sign up with, but at least talk to WalkerCorporateLaw.com.
Thanks, Scott for sponsoring us.
Jayson: And just on that note I just want to say that I’m a firm believer that the wisest investment is wisdom. And that’s one thing I did wish I would’ve done initially was had proper, like, chartered accountants on board with the company and proper legal advice and stuff like that. Because, again, it’s something we overlook as entrepreneurs because we’re like, “Oh, that’s an expense right now. And I’m doing so good.”
And we’re just forward focused. But everybody I know who – it’s easy to make a million dollars or a multi-million dollar company; it’s hard to keep it. And there’s one thing that really sidetracks a lot of entrepreneurs is those unknowns. And I’m a firm believer that good judgment often comes from experience, and experience often comes from bad judgment.
Jayson: So you can leverage the wisdom of others, and save yourself that pain. So who knows where I’d be with a Walker in my life? [Laughs]
Andrew: [Laughs] You know, one of my mistakes was I went with a huge law firm in New York, huge old school and they were terrific at doing things like real estate and helping us with agreements. What I was bad at was saying, “I should go out to lunch with them and ask them some questions, and have them get to know me. I’m paying them. They should be there for advice beyond the specific thing that I’m paying them for; the specific prices that I need their help with.”
I kept thinking I’m a small fish. This is a big pond. They have bigger players to talk to. They just don’t really care about me. And frankly, if they didn’t care about me I should have moved to another law firm. And if they did, I should have done, maybe, a once-a-month lunch with them, a once- a-month meeting at their office to just say, “Here’s what I’m going through. What have you seen? What’s going on in your life?” And ask them about people that they’re talking to.
Jayson: That’s a big thing for me is during that business, and I’m trying to change that now with my new business. I wasn’t on top of finances like I should have been. And simply because I was too afraid to ask. And every time I did, kind of, position and ask, the person that I hired in that field, in the financial field, would just kind of drown me with, like, legal mumbo jumbo that I couldn’t understand. And I wasn’t, kind of, driven enough to, like, dig in and be like, “Okay, I need to understand the financials and how this works, and how a balance sheet works and that kind of stuff. So I think what you said definitely there’s a lot of wisdom in that, is being willing to ask. Especially if you’re paying for these people. Again, they can save you a ton of money and a ton of pain without a doubt, so.
Andrew: I’m on your new website, “MasterMindTalks.com.” First of all, it looks great. And second, it reads well.
Andrew: I see your wife’s influence there. But the people that you have as part of this event: Tim Ferris, who just goes by the name Tim. There’s another guy to the right of him on the page just James. That’s James Altucher, Yanik Silver, Guy Kawasaki, and the founder of, “Fresh” books, the founder of so many other companies here. Mike, what’s Mike’s last name?
Jayson: Mike McDermott?
Andrew: McDermott, exactly, yeah. I interviewed him a while back, and I just forgot his last name. Fantastic people here. How do you get into this when you’re trying to pick yourself up?
Jayson: So I never thought I’d be in the events base, first and foremost. What happened was while I was in transition trying to figure out what I’d do next, somebody gave me a ticket to go see Seth Godin. And I’ve always been a huge fan of Seth’s but never had the opportunity to see him speak in person.
And the theme of his workshop that was taking place in New York, the theme of his workshop was the connection economy and how there’s huge value connecting like-minded individuals. And at the time I thought to myself there’s no group or career path as this, in other words, as isolating really as entrepreneurship. Because everybody’s working in their own little silos and those kinds of things. So I wanted to start these things called, “Master Mind Dinners” where I’d invite six to eight entrepreneurs who didn’t know each other. And I’d just help kind of facilitate connecting them.
And the first one I did I almost cancelled two hours prior, because I’m like, “Nobody’s going to see value in this. They’re going to think I wasted their time.” I had all those doubts, you know, almost like a new start-up entrepreneur would. And that was the interesting thing, too. When I was successful in my last business, people with younger businesses or who wanted to transition into business would ask me, you know, I’m scared to do this or I’m kind of afraid to do that. And I was successful at the time so I’m like, “Ah, it’s a piece of cake. Just grow some, you know, man parts and just do it.” Right? Just follow through with it.
And when I was at my lowest, I had all these fears that built up again, right? The fear of rejection and the fear of what people were going to think, and judgment and those kinds of things. And that was one of those instances where I was going to start holding these dinners, and I’m like, “People are going to think I wasted their time,” and that kind of stuff. But thankfully, I went through it and, I mean, the first dinner was incredible. The conversation lasted, like, four and a half hours, and time just flew.
Andrew: Did you structure the conversation? Or, did it just happen?
Jayson: I structure them a lot more now. Initially, all I did was I just did intros around the table, and I said, “What’s like your personal brag and your business brag?” Like, you know, “What’s something great you did in your business? And what’s something great about you personally?” And then also I had asked them, “In order for your business to jump to the next level, what’s a problem you need to solve?” So, what’s a pain in your business, in essence? And then we just did that, and then the conversation just started to flow.
Andrew: And how’d you get these people who are so incredible to care enough to come to your dinner?
Jayson: So that wasn’t necessarily the most – it wasn’t the smartest approach. I reached out to people cold. So I basically found a list. So a local magazine or a national magazine in Canada posts this list of, like, the top 200 companies on a yearly basis. So I would just go through that magazine and pick out people who are local, and I’d say, “Hey, you know, I’m doing a dinner with a few other of these guys. Do you want to join us?” That kind of stuff.
My response rate was abysmal because I didn’t have a relationship with them. And I was – I don’t know why I didn’t think about it more at the time. But then I started leveraging more people in my network, because I already had a great existing network. So I saw it as an opportunity as well as these dinners went on to kind of reinforce the relationships that may have kind of gone a little cold over some time.
And then I’d ask them if they had a great experience at the dinner, which they always did, I asked them if they wanted to co-host the dinner with me, and I’d invite three people; they’d invite three people, so I can kind of leverage network that way. But, yeah, initially, I reached out to people cold, and it was a terrible, terrible idea.
Andrew: That idea of co-hosting a dinner with someone else is a great idea, because then you instantly double your group.
Jayson: Exactly, absolutely, yeah.
Andrew: You didn’t charge for it.
Jayson: I didn’t, no.
Jayson: I was – for me, whenever I invite somebody to dinner or have dinner with somebody I always – they call it “pulling a Jason.” Like, I find some way to pay for the dinner. Part of it’s like a reciprocity thing, part of it is I just don’t like people paying for dinner. So for these dinners I was paying myself. So they’d cost on average $600 to $800 a dinner to host. But I saw so much value being created, I just kept on doing them. And that lead me to an opportunity to do an event.
Andrew: And then the event is where you finally started charging?
Jayson: Yes. So what happened was – obviously, we both know Tim very well. Tim is probably one of the best book marketers I know.
Andrew: How do you know Tim? How do you know him well enough that he’s going to come to your event?
Jayson: So this is how it happened. So I went to an event. He had an event called, “Opening the Kimono” three years ago now. And that event initially, that really kind of changed my model on how I view and value high-priced point events. Because that event was $10,000 for two days. And that was an event that he hosted. And it was actually geared towards authors, and I never had the intention of ever becoming an author. But at, like, $10,000 there is going to probably be some interesting people there, and I was right.
I mean, the connections I made at that event were absolutely phenomenal. And then we just crossed paths from that point forward. We had a lot of mutual friends. And what happened though was on his blog – so his last book, “The 4-Hour Chef” got banned from all the Barnes and Nobles. And so he was, I mean, when you’re Tim you have, “The 4-Hour Work Week” which is a huge hit; “The 4-Hour Body” which is a huge hit.
Everybody’s anticipating that “The 4-Hour Chef” is going to be a huge hit, so you have to kind of meet that bar. And one thing he did which was brilliant was he did these book packages. And if you bought, you know, a hundred books, he’d do a webinar. If you bought 250 books, he’d do this. If you bought 4,000 books, he had one package, if you bought 4,000 books he’d do two speak engagements. And at the time I thought of a good friend of mine who puts on these huge events in Canada and the United States where he has 2,000 to 3,000 people show up for these events, and I said this is a great opportunity for him.
So I sent him an email, and the minute I clicked send I’m like, “You know this is a great opportunity for anybody.” Because it was $84,000 for the 4,000 books, but I’m like, at $84,000 is it possible, just a stretch, but is it possible to, you know, have Tim in two major metropolitan cities and get 42 entrepreneurs to spend $1,000 to spend an hour with him? I’m like, it’s possible as like a backup plan. So I said, “You know what? I’m going to pull a trigger on it.”
So I emailed him directly and I said, “I’ll take it.” And I emailed him that morning that he posted it, and I had to come up with the money pretty much that day, because he was doing the launch. I think it launched, his book officially launched I think, November 21st. And all this happened, like, two or three days prior to that. So I had to raise money really, really quickly. And that’s when you – I was able to thankfully do that. I made three phone calls to some friends. And the first two people said, “I’ll front you the money right away.” And I’m a firm believer because of that; that you never know the value of your network until you really need it. That was the first time I’ve ever asked anybody for money.
Andrew: And they gave you what? You said it was overall $43,000. So each one of them gave you $21,500?
Jayson: I ended up going with one of them? And they gave me the full $84,000.
Andrew: Oh, $84,000. I see, okay.
Jayson: Yeah. So that, I was the proud owner of 4,000 “The 4-Hour Chef” books. [Laughs] And so I picked the date with Tim to get him to speak. And he was the first speaker I had. And then I built out an event from there.
Andrew: I see. And then how did you get people to come buy tickets? Usually people who organize events like this have a big following because of their blog. I’m thinking tech crunch.
Jayson: Yeah, I was very lucky. I tell a lot of people ignorance and confidence can go a long way when you’re an entrepreneur. I mean, I didn’t know necessarily what I was doing from a conventional perspective. You know, one of the examples is that I reached out to a few friends of mine who put on events, and they said how much could I charge for an event like this? And everybody was, like, “You can’t get more than $1,000 a ticket.” Like, it’s not going to happen.
So I said, “All right then. So I’ll charge $997.” So I charged $997 for the first few people. And then I did a simple, like, A, B test. And I said, “I wonder if I charge $3397, I wonder if anybody will buy.” And tickets were selling at the exact same rate at $3397 as they were at the $997 price forum. But the best part was is that the quality of people was better. Because for me I wanted the right people in the room.
I really saw it as a social capital play initially. Because anybody – if you’ve ever done an event there is no money in the events, basically. [Laughs] It’s very difficult to make money initially; especially on a first-time event. So I just wanted to break even and then just 100 incredible people in the room. And by raising that price point, again, it was kind of unconventional as far as for a first-time event to charge $3,000, but it definitely worked out for us initially.
Andrew: $3,000 bucks, but then did you buy ads to get people to come to it? Was there something else that you did?
Jayson: So there’s two things; there were kind of three things. So first we did do some Facebook ads. We probably spent about $5,000 on Facebook ads. So not a huge amount, and we just really leveraged the celebrity of Tim and other speakers, right? So that was the kind of nice thing is we did have some high profile speakers who had influence. So Tim, for example, a lot of people, you know, going back a year or two, a lot of people have used his image and stuff like that illegally. [Laughs]
Andrew: Yes, I’ve seen that.
Jayson: And he’s come down on them pretty hard. But thankfully, in this case, because he was speaking at the event we were able to leverage, you know, his personal brand. So we used a lot of Facebook ads towards his audience. But his audience, actually, wasn’t as receptive as we thought they would be. We had a ton of applications from his audience, but they weren’t – there were a lot of aspiring entrepreneurs. And that’s not the people I wanted in the room; that’s not the people who get the most value from that event.
So that was kind of an eye opener for me, because we had 4,200 applications, but there was a small portion of that that were people from Tim’s audience that were just not the right fit. So we did do Facebook ads initially. We did Google retargeting, which helped a little bit. The biggest thing that we did as far as moving the needle marketing wise, and it’s probably, as far as all the marketing initiatives we did, I spent the least amount of effort in this one space and it gave me the biggest return, which was I did an “influencer blast.”
So basically what I did, I actually got this from my good friend Clay Eber [sp]. Mike DelPonte [sp] used it for Soma, to launch Soma. And if you look on Tim Ferriss’s blog there’s a post there, “How to Raise $100,000 Through Kickstarter,” fantastic detailed post. And they talk about this “influencer blast” in there.
Basically how it works is I would reach out to people in my network. I’d send them to a landing page and I’d say, “Listen. Would you mind? You know I’m doing this event. If you think it would be of value to people in your network or your audience, would you mind sharing it?” Through Facebook, Twitter, so I made it really easy with the buttons and some scripts that they could use. And I sent it out to about 50 people. I know for 46, 47 of them ended up blasting it out to their networks.
So that was like the James Altucher and the Tim Ferrises. So people who are speaking or high profile people who are attending or people who are friends of mine who had a lot of influence, who weren’t able to attend or whatever the case may be, and from that one campaign we had 6,000 hits to our landing page from that one campaign. But the quality of the people who applied and signed up was, like, way better than any Facebook campaign or anything like that.
Andrew: I see.
Jayson: I think that, like, the social proof really helped in that case. So that was by far, we spent probably the least amount of energy in that marketing campaign, and it paid off the most and moved the needle by far.
Andrew: And it was people like James Altucher and the other speakers and other high profile guests who were Tweeting it out and emailing it out? Is that the kind of thing they did?
Jayson: Yeah. So Facebooking, Tweeting it out, but we did it all within a 48-hour period. Because if one speaker kind of blasts it out, it gets lost in the noise. But, you know, people like maybe you and I, we follow the same people. Right? We follow the Tim Ferris’s of the world. We follow the [??]. So within a 48 hour period, if all these people blast that they’re speaking at this event or blast that they’re supporting this event, people are going to see it. And when they see it, they’re like, holy where is this coming from. It’s kind of like, I got this from Tim as well, is he does this.
Every lead up to his book or something like that, he’s everywhere. He’s doing interviews everywhere. He’s getting media everywhere. It’s all strategically timed within like a one week period. It’s that big spike. I was kind of taking that principle as well and I wanted to use that social influence and just do a huge blast for 48 hours.
Andrew: Okay. I’m looking to see if there’s anything else here in my notes on any computer that I want to make sure that we bring up. I think we are good. You made a profit the first time?
Jayson: We broke even.
Andrew: Broke even.
Jayson: Yeah. Initially I thought I was going to make profit. There’s a lot of hidden costs in events that you don’t know.
Andrew: What’s a big hidden one that you didn’t expect?
Jayson: What’s a what, sorry?
Andrew: What’s a big hidden expense that you didn’t expect?
Jayson: Gratuity on the servers and stuff like that.
Andrew: Oh, yes, yes.
Jayson: That was a five thousand dollar bill. I didn’t look through the contract. Again, the importance of lawyers and legal people looking over contracts. I was not aware of that initially. A few things like that, like unexpected things from the venue that really kind of caught me a little off guard. Now if I was being a little safer and a little more conscious then I probably would have caught it. But we ended up getting close to pretty much breaking even, initially.
And for me I wanted to make an incredible event because I thought if I can make the speakers evangelists of the event and I could make attendees evangelists of the event, I had three videographer crews there and if I could capture that on camera, I’d have enough social proof that I’d never have to sell the event ever again.
Andrew: I see.
Jayson: So because of that we have a ton of footage and pictures and testimonials and that kind of stuff.
Andrew: It’s one of the first things that I see when I go to Mastermindtalks.com.
Jayson: Yeah. That’s a very small snapshot.
Andrew: I think that it’s a video that plays on mute at first so that we can get scenes of the event and then we can click around and sign up. Actually I see that we can’t sign up. We can just get notified when the next one’s going on.
Andrew: Before I say goodbye, first of all I appreciate that you’re doing this and I appreciate that you notice the research that goes into this. I want to say to the audience that we have over 900 interviews available on Mixergy all, almost all, thoroughly researched. I say almost all because everyone makes mistakes and I can’t imagine that I got it all perfect. But I do know that I do, alright I’m going to say it like this.
I do a fantastic job of finding guests and researching guests and part of it is by learning from what I see from the mistakes that other people make, by constantly improving our processes here internally. We have a process for looking you up. For finding out where you get your traffic. For seeing where people talk about you. And all that’s developed over the years because I’m trying to appeal to and attracted and help out people who are real entrepreneurs. And real entrepreneurs are not going to deal with the BS, well shucks I built a business and now life is great. They want to know specifically what did you do?
They want us to go and dig deep until we find that Twitter strategy or the influencer strategy that worked great for you. And that’s what Mixergy is all about. And you can find that through interviews all, like I said, thoroughly researched or what we call courses. Again, taught by entrepreneurs, all very thoroughly researched. A lot of work goes into them. And if you’ve watched this far, I urge you to go to Mixergypremium.com.
Sign up and at least try it. If you’re not happy, you know me, Jayson knows me, everyone in this community knows me. If you’re not happy, you ask for a refund. If I don’t give you a refund, one of these guys is going to slap me upside the head. But it’s never happened and I don’t believe it ever will because I believe you’re going to be happy and I know that I will do whatever it takes to keep you that way.
Alright, Mixergypremium.com. Go sign up. Including you, Phil. Alright. So if, Jayson, people come to the site, is the goal just to get them to apply, to enter their email address? Then they get to apply later on? I feel like you’re just kind of hanging out with me, but there’s no call to action that I can give to people. There’s nothing that I can tell them to go check out if they want to be a part of your universe.
Jayson: If they sign up at the opt in there, we will notify them should spots become available. We may have spots this year. What happened with last year’s event and the word of mouth that’s happened from last year’s event, we’re in a very good position. And we’re keeping it very intimate. It’s still going to only have 120 people in attendance. And we still have a lot of the applications from last year and stuff like that and reach out to them again. So we’ll see. We’re hoping that we can sell out the event. We’re just starting to send out the invites now. The response has been great. But we’re hoping to sell out the event without doing any marketing.
Andrew: Who’s the big speaker this time?
Jayson: Guy Kawasaki is one. He’s going to be competing. And then we’re building up the speakers, the other speakers now.
Andrew: That’s the other thing you told me I didn’t know. Before we started you said, “Andrew, all the speakers are rated by the audience, who picks the best speaker, and these guys are all competitive, so they produce, because they want to win. So it’s possible that Guy Kawasaki, being the headliner, could give a presentation and lose to someone else who is not a headliner but works even harder on the presentation.
Jayson: [??] So there was a great thing about what happened in last year’s event, because the first place winner, the second place winner, and the four people tied for third, none of them were the draws for the event. They were all unknowns. And it was great from a brand perspective, because it really showed that you don’t always have to bring the big names in order to deliver massive value. But obviously …
Andrew: Who was the winner?
Jayson: His name’s Joey Coleman. He has no online influence at all, but he gave an absolutely killer talk, absolutely killer. He did a creative life course, which was amazing. He’s incredible at what he does, and everybody’s on him to kind of ramp that up, his online presence. But I don’t even think you could find that much on him.
Andrew: I see turning customers into fans in the first 100 days, that’s the one you’re talking about.
Jayson: Yeah, that’s his creative [??]
Andrew: And I see something on YouTube promoting it. Alright, Joey Coleman, congratulations to you.
Jayson: Yeah, you know, he did a fantastic job. So that was the beautiful thing about it. So yeah, I mean, we’re hoping that we can get to a position where … We’re hoping that this year we don’t always have to bring the big names, because we have enough brand equity that people know, and we built up enough trust with our audience that they know that we’ll bring people who will deliver massive value. But I had an opportunity to pull the trigger on Guy Kawasaki, and that guy just has a magnetic smile, and I’m like ‘Even if you don’t speak, I just want you in the room.’ So he’ll be at the event in June.
Andrew: What did you do with all those books? You still have them at home?
Jayson: They’re in Denver, Colorado [laughs]. I mean, I don’t know what to do with them, in all honesty. I had a friend of mine who bought a bunch of books as well. He built a fort. I’m not sure as to what to do with them yet, I still probably have about 35 hundred. But, yeah, hopefully I’ll figure something out in the near future. At the last event, I tried to give three per person, but they’re the size of, like …
Andrew: They are very big books.
Jayson: … They are very big, they are very heavy, so people didn’t want to lug them around, so unfortunately we didn’t move them that way. But hopefully we’ll find a way soon.
Andrew: Can I tell you what an obsessive person I am? I’m now looking down, looking up Joey’s information. I see DesignSymphony.com, that’s his company, right?
Andrew: Okay, hang on a sec, let me see if I can find his email address, right now, otherwise I’m going to ask you … actually, I can’t do it now. We have a format for finding people’s email addresses. We gave it out in one of the courses, so I’ll try that later. … [SS] … Barring that, can I hit you up for an introduction to him or some of the other guests?
Jayson: Absolutely, 100%.
Andrew: I would love it. Thank you so much for being on here. The website for everyone else is Mastermindtalks.com if they want to follow up, and if they do go to the conference, say hi for me. Maybe I’ll even come up to the conference. But please, let people know if you see them on Mixergy [SP] that you appreciate what they did here, and get to know them.
Cool. One of the benefits – I’m going to keep talking way too much here. But one of the benefits I’ll say is, a lot of the people who do events offer me affiliate revenue, and I say, ‘I can’t deal with affiliate revenue.’ The benefit of that to the audience is all the good will that comes from the guest to me that they can’t pay me with cash, they end up showering my audience with affection, because they say “Well, Andrew’s not going to take money, I’m so grateful to him, but here’s this guy in front of me who came to me from Andrew. I better take really good care of Andrew’s audience so that Andrew will have me back on and I’ll have all that good will coming back to me.”
Alright. I’m going to be done with all my yapping, I better actually go and do some real work here. For now, I will say, Jason, thank you so much for doing this interview.
Jayson: I really appreciate you having me, thank you very much. And thank you for all your research, again, I think it’s really honorable that you’ve been doing this for so long, so many years, and you still have this level of attention to detail. I was a big fan before, I’m an even bigger fan now.
Andrew: Thank you so much. Thank you all for being a part of it, bye guys!
Walker Corporate Law – Scott Edward Walker is the lawyer entrepreneurs turn to when they want to raise money or sell their companies, but if you’re just getting started, his firm will help you launch properly. Watch this video to learn about him.