Andrew: I’ve told you about them forever, so you probably already know the names of my three sponsors, right? For example, if I asked you, who’s the lawyer who tech entrepreneurs trust because he understands the start up community. You probably know it’s Scott Edward Walker of Walker Corporate Law.
And if I asked you, where should you send your friends who want to build online stores, you’d probably tell me Shopify.com because Shopify stores are beautiful. They’re designed to sell, and Shopify makes sure that there won’t be any tech support for you to do, because they’re easy to set up.
Finally, if you have a friend who says, hey, I want a phone number, and then if somebody presses one, I want it to go to sales, and two, I want it to go to tech support cell phone number, and three, I want it to reach my home phone number, and all that stuff, where do you send them. Of course, you send them to grasshopper. com. Three great sponsors, and I’ll start with the interview.
Hey there, freedom fighters. My name is Andrew Warner. I am the founder of Mixergy. com, home of the ambitious upstart and the place where over 800 entrepreneurs have come to share their stories, tell you about their finances, how they got their first customers, how they built up, often how they sold their businesses. They do it all so that you can learn from them, so that they can get a little bit of publicity for their current projects. And, hopefully, so that you go out there and build a successful company of your own and come back here and do your own interview.
In this interview, I want to figure out how much money is there in selling sparklers for weddings. Mark Lazarchic is the founder of Wedding Day Sparklers, a supplier of wedding sparklers, sky lanterns, wooden roses, and so much more. I invited him here to talk about that business, and to find out about his new upcoming project. Actually, it’s kind of out there already. Otterology, an inventory management and planning application, that’s used in conjunction with Square, PaPal. Basically, if you’re selling in person, and have one of those iPhone devices, he’s gonna help you manage your inventory. Mark welcome.
Mark: How you doing, Andrew?
Andrew: Good. Before I even get to the revenue and ask you about that, you’re smoking on camera . . .
Andrew: Most people ask me before they say the word darn. Like, can I curse, and they say, darn. You cursed way more than all the other interviewees combined maybe. Why do you curse? You’re trying to represent your business?
Mark: Because everyone swears. It’s such a bullshit persona. People trying to put forward that you go into a meeting, and you try and keep your language clean, and this and that. Everyone drops an F-bomb. Hit your thumb with a hammer. If you don’t say ****, you’re a Mormon. That’s the only way it can be around it. So I talk down to people.
Andrew: Even though you’re selling supplies to brides?
Andrew: Do you curse with your customers?
Mark: I don’t talk to my customers on the Wedding Day Sparklers site. Thank God. They’d say it’s all a web-based site. In the emails, I end every email with, ‘We got this from here. Go relax.’
Andrew: I see. Just naturally the way you talk is the way you communicate with your customers, and with my audience.
Mark: Yeah, exactly. There’s no reason to bullshit it over, and try and act like you’re someone you’re not.
Andrew: You told me about how you learned to sell and be open like this when you were selling hot tubs. Can you tell . . .
Mark: I didn’t even tell you the story. Here, I’ll give you the story. I’m working at the state fair selling hot, which is, if anyone’s ever done that, it’s about three levels beneath hell in the job, career category, you can be doing. We’re set up next to a pork chop booth, which is spewing grease all over the hot tubs all day. I’m wiping down hot tubs with paper towels and Windex all day, and I’m dealing with state fair people, which are larger people eating food most of the time.
None of them are your clientele. I shouldn’t say none. The vast majority aren’t, and you’re hearing the question, ‘How much is this’ every 30 seconds. I’m wiping down a hot tub for about the 20th time that day. I hear behind me, ‘So how much is this?’ I spin around and I go, “Does it ****ing matter if you can’t’ afford it anyways?” And the guy looks at me and goes, “I’m a dentist with a 4,000 square foot house on a lake. Do you think I can afford it?” Without a beat, I just looked at him and I said, “Well, where the **** have you been all day?”
Andrew: [laughs] When you sell the hot tub, you’re not talking about the number of jets only, and about the electricity and the space. You also sell it by its benefits?
Mark: Yeah, it depends on the customer. If you’re talking to a single guy, he’s not buying this thing, most likely, for therapeutic measures. He’s certainly not buying it for any other reason other than he wants to get chicks into that hot tub, because, hey, they’re going to get down to two pieces of clothing, at most, when they get into the hot tub. And that’s what single guys are doing. So why not feed on that? That’s what they’re going for. You can fit three women and one guy in this tub, bro. This is the tub you want.
Andrew: Sell it as a threesome tool.
Mark: Exactly. This is a tool in the arsenal of fantasies.
Andrew: I take it you didn’t get into this because you were working, what in, you got into it, probably, from the other side, the firework side?
Mark: Yeah. Yeah. Well, I own a fireworks company. We started getting enough calls, to where I was paying attention, asking for sparklers. It was only one or two calls a month, but you’re getting one or two calls locally a month. I said, well, let’s toy with this idea. I’ll build a crappy website, put it up, and we’ll go work the wedding show that’s coming to town in a couple of months.
I spent 1200 bucks getting a booth at the wedding show. We all dressed up pretty, and go down there, and talk to 300 brides. And we sold $100 worth of sparklers. I said, well, this was the dumbest idea I’ve come up with in a long time. So I sat around, milled it around, and I said, well, let’s look at the website, turn this more into an e-commerce website. Tinker around, put the buttons on there, put in the shopping cart there, and then let’s advertise with Google ad words. So, first . . .
Andrew: Before we get into that.
Andrew: Why didn’t it work? You went to a show where there are brides. Right?
Andrew: You paid for a booth so you’re not just a guy trying to make sales while you’re walking the floor. Why didn’t it work?
Mark: Because you get 250 brides there, and they’re scatterbrained running around everywhere. They’re looking at dresses while they’re there. They’re looking at the big tickets. They’re looking at their flowers. They’re looking at photographers.
Sparklers is a $75 order, on average. It’s not big thing. It’s an afterthought to the whole thing. It’s not a need. You’re talking maybe 1% of the brides out there are buying sparklers, so there’s 300 brides there, we got three potential customers. It’s just not a big enough market, for that much traffic coming through.
Andrew: On your website right now, weddingdaysparklers.com, and I see a sparkler. Basically, it’s got a heart on it, on a stick. You light the heart. The heart is on fire. It sparkles. It gets attention. How do brides use this thing?
Mark: They use them when they exit. When they’re exiting the reception for the big line. Instead of throwing rice, or birds here, something like that, they line up with sparklers, and it lights up the night. The pictures are amazing.
They do all sorts of pictures where they’ll pause the camera, and people will write out the word love with the glow, and the bride and groom will be there. We’ve posted probably 200 pictures on our site with all sorts of ideas you can do with them. It’s really gained in popularity, enough to where I can make money on it.
Andrew: When you say that you were in fireworks before, what does that mean?
Mark: Yeah. I own 45 temporary firework locations in Minnesota. They’re little tents that go up and sell your fireworks around July 4th. That’s me up in the state of Minnesota.
Andrew: I see. Do you do it year round?
Mark: No, jut two and a half weeks a year.
Andrew: That’s it.
Mark: That’s it. Two and a half weeks a year. We do about a million dollars in business.
Andrew: A million dollars in business in those two and a half weeks? And before you got into wedding day sparklers and now into Otterology . . .
Andrew: What were you doing the rest of the year?
Mark: I spent about two or three years sitting around doing nothing the rest of the year, just ‘cuz I could. But I got bored real fast. So then I started jumping into other things. We jumped into Halloween stores for a while. What else did we do? We did produce stands for little while, but that sucked.
I got bored after about three years of it. I worked my full-time job for the first three years of fireworks anyways. I would just take my vacation time for that two weeks, and planned it out for that.
Andrew: Wow. Did you have a hot tub and a threesome in it?
Mark: Yes, I have a hot tub but I’m married.
Andrew: I see. While you were making a million dollars a year in sales, not profits, but in sales. In two weeks, you were married at that point.
Andrew: Ah. OK.
Mark: Yeah. I’ve been married the whole time I’ve had this business going.
Andrew: All right. I bet your wife must have been happy that you were starting to move from fireworks and hot tubs, now to wedding day sparklers.
Mark: Yeah. Yeah.
Andrew: The first step into it doesn’t work out, you buy your spot, you pay your money, and you’re not moving product. Then you started to say, before I moved for a little bit of back story, that you got into ad words. How did you start, and what happened?
Mark: Yeah. Basically, what I said is, look, there’s a market here. We just can’t reach it locally big enough, and I’m not drive around the country doing wedding shows trying to figure this out. I talked with my web guy, and we set up a Google AdWords account, targeting 50 different key words to begin with, and slowly I just watched every video I could find on Google AdWords, on how to make it work. So we started off with 50 different keywords and just monitored it because Google gives you all the tools to watch your traffic. How many people are coming in, what percentage is clicking through, and then I wrote 5 different ads and just watched which ones got the clicks, which words, which phrases and everything like that, people were attracted to. I spent the first year really, just honing down the ad to the perfect ad that worked the best, paying the right amount of money and getting it out there the most. And, our first week we did $1250 in sales and I said, “Holy shit! What did I just find?” And that seemed pretty cool at the time. We changed some things and we got the sales up to about $2500 a week and then by the time we got into 2012, we did almost $400,000 in Sparkler sales in 2012.
Mark: Sparklers. I sold $400,000 worth of fucking sparklers.
Andrew: And you know what? I’m having a really good time in this interview and we’re kidding around and cursing, but I have to tell you I’m also on the page, it’s just weddingdaysparklers.com/photos, and this isn’t because I need to sell any of this or generate revenue, but I’ve got to just tell you, it looks beautiful. I mean, you can kid around about this, but it doesn’t take away from the fact that I do now see people walking down and their sparklers on both sides, but more than that, it’s those light boxes. Is that what they’re called?
Mark: The Sky Lanterns.
Andrew: Sky lanterns! I mean, we’re talking about what looks like a round bag or something or…
Mark: Like a little hot hair balloon.
Andrew: …hot air balloon! And then they’re all up in the air.
Mark: Yeah, the movie Tangled, they did the big release in the cartoon movie Tangled, of these things, and we just had a bride order 300 of these to launch at their wedding. It’s absolutely amazing to watch.
Andrew: Is that the one that I see a photo of on your site?
Mark: That’s just a stock photo.
Andrew: Oh, OK.
Andrew: Alright, I click into it, I see what you mean. Wow, wow! So, you told April, who pre-interviewed you, that at first you didn’t know what you were doing with AdWords, that you burned through a few bucks and then you figured something out. What did you get wrong and what did you figure out?
Mark: Well, the first thing I did was I let Google make all the decisions, off-the-bat. Which is wrong, because Google will charge you the most and put your ad in the wrong places. So what you have to do is, you have to start changing the amount per click you’re willing to pay. I started really low, with a really low amount, and moved it up to see where I would end up in the rankings at Google, and what time of day I would end up in the rankings, and also using Google Analytics and everything else to see what my acquisition rate was through clicks. And, you know, seriously what you find is the higher you are up in the ranks-, if you’re not the top three up in the ads, forget about it. If you’re over on the side, no one’s going to see you. It’s like being on page two of Google. So you’ve got to be in those top three. If you’re in the top three, if you’re number one, it’s twice as many clicks as number two or number three. So, it became worth the money to start shelling out for that and pay for it. And also, pick your keywords, pick the right keywords, because you can monitor all of that and see which ones are actually turning into sales and things we were finding was things like sparklers wholesale, didn’t turn into sales, because they weren’t our customers, they were fireworks guys looking for sparklers. They weren’t brides looking for them. We also target the market in just the United States, for a while I was only targeting women, but I opened it up to target men and women, because I figured why not? They’ll talk to their bride about it.
Andrew: Before the interview, you want to move your email from Godaddy to Gmail, and you’re going to have somebody do that for you. This simple forwarding is easy for most people in the audience to do blindfolded and they could probably move you completely to Google Apps in 5, maybe I’d say 20 minutes.
Andrew: So, what I’m wondering is, if you need someone else to help you with that, how did you figure out this whole Google AdWords process? What did you do to get to master it?
Mark: Being obsessive compulsive helps a lot, I don’t sleep a lot and when I jump into something I generally want to learn everything about it, which is why I don’t dive into too much tech, because if I do I’m going to want to learn everything about it so that I’m better at it than anybody else out there. So I don’t code, I don’t build web pages, I don’t do any of that because if I start I’m going to go crazy. I’ll have a stack of books next to me on how to do it and spend the next 3 weeks doing nothing but focusing on it.
Andrew: What was especially helpful when you were researching AdWords?
Mark: AdWords? The videos out there. There are videos everywhere of people teaching you how to do it for free, and you watch 20 videos and you might get one good kernel out of every single one, but it’s worth it, it’s like buying a book. Spend 20 bucks on a book and get one good point out of the entire book, it’s worth that 20 bucks.
Andrew: Was there any one place that was especially good?
Mark: Oh, I don’t know. I just looked everywhere, for everything.
Andrew: You were just really obsessed?
Mark: Yeah. Yeah. I spent a good solid week doing nothing but watching videos ,and reading everything on Google ad words, and everything that was out there about it.
Andrew: Last year, how much of your traffic came from buying ads like this?
Mark: Last year, because we got up in the Google Organic search towards the end, about half of our traffic was Google ad words. But we got up to number two or three on the Google organic in less than a year.
Mark: I hired a guy that’s really good at SEO work. Like I said, I can’t do ****, but I’ll get some smart mother****ers around me to do this stuff.
Andrew: What city are you in?
Andrew: Minneapolis. I hope some of the mother**** ers in my audience will want to work with you, reach out to you instead of being too shy to.
Mark: I hire the smart people. I’m not the smartest guy in the room for a lot of stuff, and I’m well aware of it. But I want **** done right, so I’ll pay the smart guys to do the stuff right.
Andrew: What was I going to ask you about that? I guess I’ll come back to it in a bit. No, I know what it was. Someone recently was beating me up. He said, Andrew, you know how to interview who are all purely software companies, but once you get into physical products, you don’t know jack. Said, tell me where they get the product, that’s key. Tell me about how . . . I’ll go look and see what else I got wrong in this interview. Where do you get your fireworks?
Mark: Get them from China. That’s where all the fireworks come from.
Andrew: How do you know where in China to go get them
Mark: You spend three years working at it. You buy them from distributors around the country and then you make connections with people in China. I mean I go through a distributor in the United States because it’s easier than dealing with the Chinese.
You got to be on top of it if you’re going to deal direct with them. You’ve got to be willing to go over there. You’ve got to be willing to travel, and spend a lot of time doing that stuff. I’m just not willing to do any of that. I don’t want to go to China. I don’t speak Chinese, so that’s going to work against me.
Andrew: Can you find someone who can do it all for you?
Andrew: How do you find that person?
Mark: Google search, baby. Everything’s on Google, man. If you just spend some time. Just type in the words you want. Wholesale sparklers.
Andrew: That’s what you did?
Mark: That’s all I did.
Andrew: Now if you go wholesale from someone, instead of going direct to China, how do you compete in a market that’s frictionless? Where someone can say, hey, you know what, Mark’s got great prices, but I see someone else has got even prices by five cents.
Mark: I’d make sure I’m the lowest priced guy out there.
Andrew: How do you become the lowest priced guy, if you’re buying from a middle man in the US?
Mark: I don’t need to make that much money. If you own the market, you’re going to make money. That’s all there is to it. If your goal is to make ten thousand dollars off of every client, you’re going to fail. I’d rather make a dime off of everybody, and just own the entire market. I want to own 80% by the end of this year of the wedding sparkler market in the United States.
Andrew: The way that you got your sparklers was just Googling, and talking to a bunch of people and picking the person and buying from them?
Andrew: Any issues and pitfalls that someone else is copy that model for a different product that they’re going to experience?
Mark: Like, someone get into my market?
Andrew: No, I think that they’re going to be too intimidated.
Mark: You don’t want to get into my market today.
Andrew: So let’s suppose they say, hey, you know what, mugs are a really good product. I’m going to get into to creative mugs. I need a source. I’m going to Google because that’s what Mark said. What are they going to come across? What issues?,
Mark: You’ve just got to do your homework. You just make calls. Call everybody. Email everybody. Find out what they do, or have them send you samples, so that you can see what kind of quality they have. Then beat them up on the price. There’s no reason in the world to pay what they’re asking, if you want to be the cheapest guy out there.
The guy we deal with right now, we’re not paying what we first paid. Because we’re doing so much business now, that I said, you need to give me a better deal, or I’m going to take it somewhere else. He gave me a better deal. there’s all kinds of sites out there that will hook you up with China direct factories that’ll ship you out stuff. Ali Baba is one where you can just type in a product you’re looking for, and they’ll give you 30 factories in China making that, and all the contact information for the people.
Let’s face it, almost everything’s made in China now, so that’s where you’re going to get the majority of it anyways..
Andrew: All right. I’ve got follow-up questions of my own. Here it is, it’s from Samantha, who says, I really wish you’d dug deeper into this, talking about a physical product interview. Let’s see. Where are your source? I asked that. How does the process of shipping work for them? How are they doing it initially? How are they doing it now? What about shipping to customers, especially if you’ve got fireworks?
Mark: Jesus, don’t these people do homework?
Andrew: Samantha’s homework is to write a comment on one of my posts, and then me to do the homework.
Mark: I don’t mind. I don’t mind. I like helping people. It depends on the [snare]. If you’re buying from a wholesaler, they’re putting the stuff on a palette and sending it out to you. It’s really just that easy. If you’re talking about shipping as a retailer . . .
Andrew: As a customer?
Mark: We just use UPS. I mean we use PayPal and UPS because they sync together. So literally my orders come in on PayPal which sucks by the way. But they’re the only ones. They come in on PayPal, we click ‘print shipping label’, it goes right to the UPS shipping stuff that’s already set up with an account with UPS. We print out a label, we slap it on a box and off it goes and the UPS guy shows up at 3:30 everyday and picks up the orders. What I would tell them is, getting the product to you and getting it to customers, that’s easy. That’s the easy sh**. The hard part is, when someone orders on Wednesday, making sure their order goes out on Wednesday and that you don’t sit around on it for a week.
Andrew: What do you do to make sure that it goes out right away?
Mark: I ship every order the day it comes in.
Andrew: That sounds like an easy solution, why is that so hard?
Mark: Because people are lazy. No one wants to work. I don’t get it. We answered, for the first year I ran wedding day sparklers, all the calls went to my cell phone and I answered it 24 hours a day. I would wake up at 2:00 in the morning with someone asking me a sparkler question. And I’d just freak their sh** out that I would answer the phone at 2:00 in the morning. Or on a Saturday. And the best part is, no one expects you to answer your phone. They expect to be leaving messages. If they email me they get an email response back in five minutes so that every question gets answered while they’re ready to buy, not two days later when they’ve cooled off or found someone else.
Andrew: I see it here on the side and April told me that you were getting calls on your cell phone and answering them that early, I was wondering, for what? For like a $25, $50 sale, you were going to answer the phone at 2:00 in the morning?
Mark: F*** yeah I will. They’re a customer. They’re the people that are giving me money.
Andrew: It’s not just to get the business is it? There was something else. Why else would you do that?
Mark: They’re going to tell everybody, ‘These guys answer their phone at 2:00 in the morning.’ When a brides getting married, she has six bridesmaids with her. They’re all usually in the same group and friends and they’re all probably getting married around the same time. So now she’s telling them what a great guy I am, so now they’re going to buy from me and we send out a piece of candy in every box as well and a card that says ‘thank you.’
Andrew: I do that. I put my cell phone number up on the site and people call me and at first I worried, what if they called me at a bad time? And then I realized, one time when Livvie and I were, we were in an argument, I don’t even know about what and a call comes in and I never get a call. So I interrupted the conversation to pick up, we’re both kind of startled that my phone rang. And I took the conversation and she was surprised that someone called me, it just broke up the whole tension of the conversation, we both enjoyed it. So I pulled aside and I made a phone call. Let’s see what else. One more from Samantha. Samantha I really do love when people…
Mark: Bring it Samantha.
Andrew: Bring it Samantha. One more from Samantha. This is her comment on my interview with the guy who had candles that have diamond rings inside of them. She said, ‘Hey. Yeah, the guys doing a million dollars in sales from candles with diamond ring inside.’
Mark: What’s the purpose of the ring being inside of the candle?
Andrew: It’s like the gift in a Cracker Jack box. The idea is once the candle melts all the way down, you go in, you pull out your ring, you have a ring you wear on your finger, it’s kind of exciting. Sometimes that ring is worth way more than the price of the candle, like a few thousand bucks, sometimes its worth a few bucks but it’s either way a fun thing to talk about.
Mark: But you don’t know what’s inside of the candle at the time?
Andrew: You don’t know until you melt it all the way down.
Mark: Oh that’s great. I love that.
Andrew: Yeah. This is Justin Winter.
Mark: I love that. All right go ahead, what was the question?
Andrew: Yeah. I mean he was killing it within a year and a half I think. Final question from Samantha is, ‘What about deals on sites like Groupon and Living Social. How have they impacted sales? Have you done them?’
Mark: No I don’t do Groupon because people that buy my stuff don’t buy a second time.
Andrew: Right. So there’s no reason to discount.
Mark: Yeah exactly. I’m going to give it away, so I don’t like the Groupon deals as a business owner, unless I was doing something where I’m trying to get a lot of repeat business out of them. You’re not making any money on a Groupon deal because if its a hundred dollar item, you discount it to $50, Groupon gets $25 of it, and now you get 25 bucks off your hundred dollar item. If you’re doing sh** right, you shouldn’t have to do the Groupon deal you know? It’s a good way to get started I guess. I have a buddy that owns a theater and an empty seat isn’t worth anything so that’s a good deal for him. But for all the businesses I’ve had, it’s not a good deal; we’re not, no ones coming back right away to do business with us.
Andrew: By the way if I call up the number on the site right now, does it still go to your cell phone?
Mark: It doesn’t go to my phone any more. It changed four months ago when I took on Otterology full time to hire something and put them in charge of everything with it. But it goes to her phone which she does answer quite often.
Andrew: I was going to call. When I first interviewed Tony Hsieh before h became the famous CEO Zappos, he told me that if his customer service people are asked about a shoe that they don’t have, they will find another site online that has the shoe. I said, Tony let me put you on mute for a moment, I’m going to call your number. I called the number, I get the person on the phone. I don’t know if she tried to persuade me into different shoes or just talked to me about different shoes, but she finally did say, ‘Here, there’s one on this other site.’
Mark: That’s what we did the first year. We’d get calls all of the time on Thursday’s saying, ‘Hey we’re getting married on Saturday, can we get sparklers overnighted?’ No you can’t, it’s illegal. We’ll go onto Google and find a store by them, and direct them to the store so that they can get it. Just because it makes their day, it makes them happy. I’m not making money off of them, but they’re going to remember how this guy was kickass and helped them out.
Andrew: If they do remember that you kicked ass and helped them out, they’re not going to come back and buy from you. They might tell their friends, but they’re more likely to tell their friends, ‘This guy kicked ass, and he recommended the store down the street from me, and that’s where we bought. Go buy from them, it’s a good place.’ How does it come back to you?
Mark: It takes me five minutes. What am I out? I’m out five minutes of doing a Google search that I can do better than they can probably. If anything, I’m just doing a nice thing, and helping someone. Are you married?
Mark: OK, you went through the wedding thing with a bride then, right?
Andrew: Yeah, and we’re both such reasonable people, but it was a stressful pain in the butt.
Mark: Right, brides go crazy. If they’re calling up 48 hours before a wedding, they’re in panic mode, and they’re freaking out. They don’t know what to do. If I can spend five minutes doing a Google search and guide them in the right direction, and just calm that one thing, maybe someone does something nice for me someday or something like that. It’s just the right thing to do. If more people did the right thing, it’d be a better place.
Andrew: A lot of your business is Google. Have you tried anything else that worked or failed?
Mark: Well we’ve got Facebook ads, Bing ads, they’re on everything. We did an Amazon store, but that doesn’t do hardly anything. The Bing ads bring in traffic, just not as much. Not as many people are doing Bing and Yahoo. Amazingly though, the people that do a Bing and Yahoo ad search will spend way more time on our site, and buy more often than Google people will.
Andrew: What did you find with Facebook?
Mark: Facebook? Who knows, it doesn’t look like a lot of them buy, but we sure do have a lot of teenagers that like us on Facebook now. It’s one of those things that I just pay the money, and we get a lot of likes, and a lot of mentions, and the word’s out there. I think we have more likes than any other sparkler company on Facebook. That makes me happy, and it boosts my little ego, and it’s worth the money to pay them.
Andrew: Lou, a mutual friend of ours who introduced us, he does kickass work on Facebook. In fact, he taught a Mixergy course about how to get more Facebook likes, how to get them to convert to sales and so on. Have you done any of that? Beyond buying ads on Facebook, promoting your Facebook fan page and engaging people that way. Has that worked?
Mark: No, we haven’t done anything with that. He’s actually working on one of the other companies doing that for us. He’s taking over doing that for us on Facebook and Twitter, and everything like that. He is a master at that stuff.
Andrew: Before we get into theother stuff that you’re doing, you said that you buy ads on Facebook. What’s worked for you there? What have you learned that we can pass on to people who are watching us here?
Mark: I haven’t seen a lot in sales transforming out of it. You get a following, and at some point, people are going to see it and click on it. If anything, you’re putting your name out there, so it’s advertising, and it’s cheap advertising. Facebook is not expensive to use. We have 2,300 likes, which is silly for a sparkler company, but there’s 2,300 people out there.
I write on that page every single day a joke, or an article, or something. It pops up in their feed, and all their other friends see it, and then they like it, and everyone else. They may be 17 or 18 now, but they’re going to get married someday. So they’re going to see that, they’re going to know it’s there, and maybe it generates business in five years, six years, maybe I make them laugh. Who cares, you know? It’s not costing me a lot of money.
Andrew: You’re doing this yourself?
Mark: Yeah, I’m doing it now. Except, I’m hooking up a program now to start doing it for me. I start forgetting to do it over time. Now I’m going to hook up a program that will feed it one or two things every single day.
Andrew: Doing it daily seems like a loose suggestion.
Andrew: At the time that he showed it to me, I did get software because I couldn’t keep up with daily posts. Then Facebook didn’t show posts that were posted from other software nearly as high or as frequently as posts that were native. So, I stopped, but today, it looks like software works. I post from HootSuite, and Buffer, and it works beautifully.
Mark: I just signed up for HootSuite two days ago, so I could start using it for everything.
Andrew: Yeah, that’s great, because I know the people on the team can do it.
Andrew: What about the fireworks company? This business you were running out of tents in multiple locations.
Andrew: Are you still doing it?
Mark: Yeah, still doing it. I got a guy that runs most of it. I might actually sell it here. I had some interest from a big national company, and if they want to buy it, super. If the check’s big enough, I’ll sell anything. I’m game.
We’re focusing on other things. It runs itself now. We’ve been doing it for so long that we know how to do it. We have it so tight, it’s ridiculous. But, if someone wants to buy it, hell, check’s big enough, and you’re willing to make it one of those big ass checks with the company on either side and the balloons and confetti and everything, I’m for that.
Andrew: We talked earlier about the revenue from that being a million dollars, but when you talked to April in the pre-interview, you explained that you have to borrow a lot of money to do that. That makes sense because you have to buy your inventory and then sell it, right?
Mark: All the revenue comes in in two weeks. I learned how to manage money real well, having a business that only brought in revenue for two weeks. My problem is I start off with eight shops, then I go, well, ****, if eight worked, then we should do 16 this year. Then we do 16, well, let’s do 24. I’m constantly expanding it and getting it bigger. We bought our own warehouse. We bought trucks. We buy this.
If you’re going to do something, do it right. Don’t put your toe in the water, jump in. You’ve got to borrow money to keep it going. Last year was the best year for not having to borrow money we’ve ever had, because we just didn’t borrow that much.
Mark: We’re just doing well. We budgeted our money well. We’re doing well. We’re able to not have to go as deep into debt.
Andrew: Because of the sparkler business, or because you didn’t expand as much?
Mark: Sparklers and because we didn’t expand as much. We finally slowed down last year.
Andrew: I did an IP search on your website to see what else does he own? I came across Renaissance Fireworks.com.
Andrew: And Fireworks to go.com
Andrew: And a couple of other sites. You’re selling fireworks online too. How effective is that?
Mark: We tried that. It was dumb. So we stopped doing it. The idea was we’d do home delivery. Made an order for $50, we’d deliver it to your house that day and do it. The problem was it just got in the way because you’d get one order a week, and now, all of a sudden Thursday, I’ve got to deliver this box out to these people.
Andrew: Oh, you mean you couldn’t use UPS? You have to send one of your guys?
Mark: Yeah. Yeah. We had to hand deliver it out.
Andrew: I see.
Mark: Couldn’t use UPS or anything like that.
Andrew: Because UPS, all right, I interrupted. UPS doesn’t ship fireworks.
Mark: They’ll ship sparklers, but not fireworks.
Andrew: I see. Google will allow you to buy ads for sparklers, but not fireworks.
Mark: No, they won’t let you buy ads for fireworks or sparklers.
Andrew: How do you buy ads?
Mark: Look at my ad. It says wedding day sparkles.
Andrew: Ah, and then do they ever catch on to that and remove it?
Mark: Every three months, we get flagged, and we’ve got to put up a new ad. I’ve written them and said, look, are you going to take down all the ads? Are you going to keep making me play this game? I’ll keep playing’ the game. I’ve got 20 websites, all designed for sparklers. I can keep changing it. They say, well, yeah, we’re going to flag everybody. I go, you’re not, so I’m going to keep doing this. I’m not going to lose money.
Andrew: They’re not able to connect one site to another by looking at the Google analytics code, or any of that? No, you just keep changing it.
Mark: Just keep changing it. Just keep moving it around. That’s what all of us are doing that are advertising on there. Every three months our ad gets flagged. We pull it down. We put up a new one.
Andrew: I see.
Mark: I wish to God I had a normal business. I could just keep it up there. It’d make me so happy.
Andrew: Wow. Unreal. What else did I want to know about that business? Oh, here’s the last question.
Andrew: How do you know what to add? What products are going to be interesting enough?
Mark: Oh, you don’t. You buy a small amount. You put it out there, and see if people buy it. We’re adding a whole line of candles. We’re going to have candles that have rings in them. We got sparkler candles, and then these color flame candles that the flame burns a different color. These big musical candles that have sparklers in the middle, and then they pop open and play music and everything.
I’ll spend $500/$1,000 bringing in some inventory, put it up on the site, and if it sells, then we keep selling it. If it doesn’t, we take it down. We put up a couple of different things that haven’t gone over. But that’s the only way you find out. They’re going to tell you. Your customers will tell you if they want it or not.
Andrew: And you just keep trying this. Have you ever bought anything and had it fail big? Do you ever go bigger than that?
Mark: No, no, no.
Andrew: You always keep it small?
Mark: Keep it small in the beginning. I tell people I like experimenting small and then going big. You can scale it up real quick, but only an idiot buys $50,000 worth of inventory in something he doesn’t even know if he has a market for, ’cause then he’s got a ****ing warehouse full of $50,000 worth of inventory that no one’s buying. You know? That’s suicide. You don’t have to buy $50,000 worth of shit. You buy $500.00 worth and see if you sell it. If you sell out, order more, people will send you more product if you buy it, they will. I promise you this.
Andrew: So, you got a sign hanging over your head, or, actually it’s just over there and the camera angle is showing . . . Says, “what’s next?”
Mark: “What’s next?”
Andrew: Why do you have that up there?
Mark: Oh, we found it in a store we took over and I liked it so much, because my philosophy of business is, once you get them going, once you get them pumping, all right, what’s next, I want to do something else, I want to try something else.
Andrew: Because, the business has just at this point, run themselves. Fireworks, same business year after year, wedding sparklers, or sparks…
Andrew: …or sparkles, excuse me, same thing year after year and so you have someone who just runs it and perpetuates what you started.
Mark: Yeah, exactly. I get it going and once I get to a certain point, I put someone in charge of it, let them run it, make it their baby, and then I go start something else.
Andrew: Alright, and in then the new product that I talked about at the beginning of the interview, where did the ideas come from?
Mark: Yeah, OK, the idea came from, so we do the fire work tents in the middle of the parking lot. We have no access to data lines, phone lines, not even power most of the time. So we’ve been running generators [??] on our little shitty, cassie old cash registers, and then you have to rent wireless credit card machines with a merchant account, you know they bend you over, these merchant accounts, for these wireless machines. They go down all the time and everything sucks. So we’ve been doing this for years, we have no inventory control whatsoever, everything’s done in notebooks, it’s just a ****ing mess, but you know, we’re doing well enough where we can handle the losses, and we’re getting through theft and everything else. Two years ago, we stumble across a square, which is credit card receiving through iPads and iPhones. You know, a couple of the readers, we bring them into the iPads and we started dicking around and setting up the account, and we’re like, “holy shit!” we can plan a sell right here on this iPad, this is great, it works in the parking lot and we don’t need cash registers or credit card machines, because it is all in one. The iPad will last all day in power, so we don’t need the generators anymore, this the dream. Then all the sudden I find there’s this CSV report that you can download of all your sales. So I started downloading the CSV reports and trying to figure out how I can use this to manage my inventory. Problem being we do 40,000 transactions in 2 weeks. A CSV report with 40,000 transactions is roughly 7 miles long, so you can’t see it, you can’t really make it anything, you can try dinking around with excel to make it work, and then finally I said, “you know what? I’m going to go find me some nerds and pay them money to.” And then I said, “look, all the information is right here, we can make this into an inventory system.” And they said, “Yeah, I think we can.” So they sat down and for 2 months pondered it out, and all the sudden we had inventory tracking on an iPad, and we they were 4th generation so I could see my sales, I could see what percentage to sell through my product, I could see my profit and losses, I could see my product and all the different locations, so I knew where they were for inventory. Well, we ran it through 2011, worked like a charm, so for 2011 through 2012, we rewrote the code, built a better user interface on it, so it looked a little better because ours real ugly, because we didn’t care, put it together. In 2012, we were up 33% in sales, while the rest of the country was down. We were all over inventory wise, we were able to move stuff around, I could tell you everything that was going on at every tent, every moment, at all my locations.
Andrew: How did it save you? Do you have an example?
Mark: Yeah, I have 45 locations. They don’t all sell the same shit, because they’re in different parts of town, different income levels buy different types of fireworks.
Andrew: What do rich people buy?
Mark: Rich people buy assortments because they don’t care about the money, they just want to grab a box and go.
Andrew: Gotcha. And poor people?
Mark: Poor people buy small novelties, so they can get a lot for their money. So instead of sending out 45 blanket orders of fireworks to every location, we can go okay this is in a rich neighborhood, send them more assortments, because based on the sales they did 45% sales of assortments. That’s what they need more of, they were running out of it last year and it was costing us money. The other thing is, I know where all of my product is, so if site 31 is running out of sparklers, I can go, “hey, site number 42, yeah we can do an online transfer and they can go pick it up themselves and do it all.” I literally sat at my kitchen table, running a million dollar in 2 week business. Just dotting and things, I could call up my employees when they had a big sale, because I could see it, and I could go, “hey! great job on that sale!” and they were just like, “holy shit! this guy can see everything we are doing, at all times.” And also, it’d help for theft. If you had a bad crew in there, you could see that their numbers are not coming in right. They’re 80% credit card to 20% cash. That’s not how it’s supposed to be, so I can show up, I have their inventory on an iPad and I can do a spot inventory check, and if it’s off I can get rid of their asses and get some people in that are honest.
Andrew: So how do you know that other people are capable, I know you’ve packaged this up as software that you can make available to others who are using square as their payment processor and people can go to Otterology.com to see it, but how do you know if there are enough people who are, who have multiple stores, who need this kind of inventory, who have lots of product and that they’re, how do you know that there are other people who have this problem?
Mark: You don’t even need to have multiple stores, even if you have one store, if you’re Bob’s Hotdog Cart down in Boston, don’t you want know what you’re actually selling? Don’t you want to know where your money is? Because I know I thought I was making money on this product, but I’m actually making money on this product, and you guys should push that a little bit harder. Most people don’t know where they’re making money in their business, you know, they’re just happy that they have more money at the end of the month than they started with in the beginning, but you know, we’re giving this thing away at $40 a month. For $40 a month, what are you kidding me? $40 a month and you know everything about your business. You can tweak it, adjust it, and manage it better. Plus, at the end of the year, by the end of this year, we’ll have this thing so tweaked out that you can just go click, download, and download your stuff to QuickBooks or an excel spreadsheet, so that your accountant isn’t looking at a pile of receipts, trying to figure out all your bullshit, that you can’t figure out. You just go click, go, bing, bam, boom. Cheaper than a bookkeeper, cheaper than an accountant, and businesses need to know this stuff, they need to know where they’re making their money, how they’re making their money, and where it’s going.
Andrew: And you’re going to reach people the same way that you reach them in the sparkler business, online and Google?
Mark: We’re doing Google AdWords and we got Lou doing the Facebook thing, Twitter thing, and it’s got to be organic in the beginning because, we don’t have any money. So you know, we’ve got to get this thing growing organically, you know, we’re walking around right now with a tin cup, shaking it to everybody to get this thing going. Tech guys are expensive, don’t get into software man, they make more money than I do, you know we’ve got to get it out there organically, and just get the people going. There’s 2.5 million Square users out there, 8 million PayPal businesses and another 500,000 other guys, and none of them have the tools they need to make this shit work, or if they do have the tools, they’re paying way too much for them.
Andrew: Are you talking to them now to figure out which features they want most, to figure out if they understand the process that you’ve put together?
Mark: Yeah, that’s what we’re doing with the beta test right now, is just feedback. What I’m telling everyone right now is, sign up for beta, I’ll let you use the fucking thing for a year, okay, for free. Just tell me. Tell me what you like, what you don’t like, what you’d want to see, because we’ll put it in, because we have got a room full of nerds and we’re not feeding them until they get everything done, so we’ll get it done. Just tell us what to do.
Andrew: Do you ever feel a little bit like when you were selling sparklers, that you could be the king of the mountain because the other guy just didn’t know enough? But once you get into software, there’s this world of silicon, valley entrepreneurs who are funded and yet money, for reasons that you can’t even begin to understand, how you’re going to deal with those people?
Mark: I got no idea what the fuck I’m doing, but you know that’s totally to my advantage, I can walk out and tell my tech guys, “build this and make it do this” and they go, “we can’t.” and I say, “wouldn’t you like to be the first guy that did?” and they go, “fuck yeah I would.” and they sit down and they figure out how to do the shit.
Andrew: What’s an example of it?
Mark: I told them, I said, “for transfers I want to be able to put the signature on the form, right there” and that they could do it. And they go, “well there’s nothing out there that could do that.” and I’m like, “bullshit! square does it.” You know, take what they do, figure it out. And they went out and found open source something or another and put it in there so you can do a signature when you do transfers.
Andrew: What do you mean transfers? From one store to another?
Mark: Yeah, they can literally load up stuff in the back of the car, bring it over to another spot and then right there on the iPad they transfer the inventory between the stores. I don’t even have to be involved.
Mark: And they have their own codes to put it in and everything.
Andrew: Gotcha. By the way, I’ve been holding up a mug, I should say to you and the audience that comes from one of my fans, it’s from Krishna Shon [SP]. She’s a founder in Washington, D.C. who runs something called iSocial Labs, which is a social media dashboard with API access, and she sent me this because I usually hold up mugs that nothing on them, and now I get her logo instead. For free, I just want to promote the people who are in the audience and one of the things that Krishna says she likes is to hear about the hard work and persistence that entrepreneurs put in.
Andrew: You feel that way, and I feel that way from you. That you work harder than most, than your competitors, and harder than most people who have just watched you in the beginning of this interview would realize.
Andrew: What’s an example of how you go harder than others do?
Mark: When I started my fireworks business, my favorite part of it was, I set up all my meetings to meet with people to set up on sites on my lunch hour at my job. I would change my clothes, and show up there with clothes. That was the only time I was available, and I would walk around and act like, hey I’m always busy, I’m always busy, this is the only time I can meet. I worked over my lunch hour.
I’d go to work at 9:00 in the morning, I’d be done at 8:00, get home at 9:00. Spend an hour, hour and a half with the family, kiss them on the head, and I’d go to work until 2:00 in the morning. I did that for three years. My wife had to grab my on Christmas morning to bring me to the relative’s house because I was working. There’s a ton of people out there that will kick your ass if you want to do 9 to 5′s. If you want to do a 9 to 5, get a fucking job and punch a time clock. This is not the right world for you.
You’ve got to love what you do, and you’ve got to want to beat everybody. I want to beat everybody that’s in an industry against me. I want to beat them so badly. It’s the Billy Dean line, ‘I hate losing.’ I hate losing more than I like winning. That’s how I feel about every business I’m in. I am in it to be the guy in that industry. I’m the best at it, no one does it better than me, and I will out hustle all of you. My laptop never shuts. My wife could leave me, and I wouldn’t notice for three days. I’d walk around the house in a daze going what happened, there’s no coffee in my house. I mean, god bless her because she is a saint. She puts up with my shit.
Andrew: For how long?
Mark: We’ve been married for 12 years now.
Andrew: I asked Jason Calacanis once when I was on his program, how he keeps his wife from, frankly, divorcing him. Considering the guy is constantly flying all over the world. He’s constantly working, and he’s telling everyone else that they should be working five times harder. He told me what he does, is he does big dates. If he takes his wife out, he gives her such a big experience that she has something to tell her friends, something to feel is extraordinary. What do you do?
Mark: I don’t do any of that shit. I’m a terrible husband. No, when I’m there, I try to be focused on that. On my family, and on my wife, and on everything like that. I’ve taken to not working on Saturday’s now. Not working to me means I’m only answering emails, but I’m not watching videos, I’m not reading articles, I’m not writing out anything. I’ll just answer emails and text messages just on Saturday’s. So I spend the day Saturday with my family. I pay attention to them, and then at night time, I’ll close the laptop at 10:00 until she goes to bed at 11:00 or 11:30, and then I’ll open it back up. She gets an hour, an hour and a half of just me time every night.
Andrew: If people want to connect with you. What’s a good way for them to say, ‘Thank you for doing this interview’, or ‘Hey, I’m a nerd who doesn’t ever want to lose either’, or, ‘I’m tired of co-workers or my co- founders who are lazier than me, or not as driven as I am. I would like to get more of your energy.’
Mark: I’ve got a blog, I write PickMarksBrain.com., and I started it as an entrepreneur blog. I’ve had days where I write on there, I don’t want to be here. I don’t want to be at work, I want to be at home with my family right now, but the bank doesn’t give a shit that I’m having a bad day, so I’ve got to get to work today. I try to write out what it’s really like to be the boss for people. You can email me at email@example.com, or mark@serenityventuregroup, or mark@renaissancefireworks. I’ve got a whole bunch of emails. You can call me, my numbers 612-840-3240. I probably won’t answer, but you can call me and leave me a message. I answer every email I get, and I try and answer my phone when I can.
Andrew: All right. If you guys want to check out that course that I talked about earlier that Lou did. He’s one of the first course leaders on Mixergy. Go to mixergypremium.com. If you’re not a premium member, get that access. If you are, Lou’s course where he really teaches you how to really work Facebook and get more fans, and get them more engaged, and convert them into sales. It’s one of the best courses I ever did. When I did that course, I knew we were on the right track with Mixergy premium.
So go sign up if you’re not a premium member. If you are, go to mixergypremium.com and take that course. Finally, otterology.com is the new website, go check that out and see what Mark is working on. What I would do is, if you like his energy, I would bookmark him, and keep checking out the site and see the progress of it. Just keep following along, because what we’ve got is a guy who’s clearly driven, and who’s clearly a hard worker who’s building up this business. I would rather watch that than watch a sitcom develop. I would rather watch that kind of growth, than watch some other TV.
Mark: Watching fucking Lost, one of the best lines ever.
Andrew: The worst thing that sucked me in. This is way more meaningful and will have a better payoff. otterology.com.
Mark: Kick your ass for 20 years, and then you can watch some TV.
Andrew: There you go. Bye everyone.