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“Andrew: Before we get started, I want to tell you why I keep urging you to use KISS insights. Haven’t you noticed that one of the big ideas that keeps coming up in my interviews is the need to ask your customers and users what they want instead of imagining that you know? Now, when you add a survey to your website, isn’t it true that hardly anyone fills or your survey, and people who do fill it out aren’t necessarily your typical users? Well, what KISS insights does is give you surveys that are so easy to fill out that your users will actually complete them. Here’s a screenshot of how I use KISS insights. You can use it for free, right now. Just go to kissinsights.com. Next thing I want to show you is the phone number at the top of DNAmail.com. When you have trouble with your email and its costing your business both money and reputation, how frustrating is it? Well, who can you call at those moments? If you use DNA mail, you’ll have a phone number you can call twenty four seven. DNA mail offers complete hosted exchange, free setup, free activation, free support, and if you and your company need Google apps, they’ve got covered there too. DNAmail.com. These aren’t just sponsorships, these are tools you should use. Finally, I want you to know about shopify.com. If you already have an online store and want to increase your sales, go to shopify.com. If you have an idea for an online store, go to shopify.com. With Shopify, they’ll set up your store in minutes. You’ll get professional themes to customize your store. You’ll even get a mobile app to manage your store from anywhere. Check out shopify.com. Here’s a program.
Andrew: Hey everyone, it’s Andrew Warner, I’m the founder of mixergy.com, home of the ambitious upstart. You guys know what goes on here. Me, I stand here, I do interviews everyday using nothing but my laptop and whatever microphone I have, and if you’re watching live you understand that sometimes, that’s an issue. And Jeff Hoffman’s been watching us live, so he knows that’s an issue.Today’s interview happened because I got this email from a viewer. Let me read the email. It says:
‘Andrew, I’d like to introduce you to Jeff Hoffman, cofounder of Priceline.com, one of the first internet travel sites. After leaving Priceline, Jeff went on to serve as CEO of Youbid.com, an excess inventory retailer. Let’s see, he was also an executive producer of the film, Cabin Fever. Jeff has many interesting stories about the early days of Priceline and his take on innovation and entrepreneurship is really motivating.’
So, the first thing I thought was that I didn’t even know that Priceline had a founder, cofounder beyond Jeff Walker. What is your connection to Priceline?
Interviewee: Alright, so I’ll give you a little bit of the history. It all started with a company called Walker Digital, which was actually Jay Walker’s intellectual property company. Jay had about…
Andrew: Oh, that’s right, I think I just called him Jeff Walker. Listen to me, the facts getting wrong already twice. Yah, so Jay Walker, excuse me.
Interviewee: No problem. So Jay had Walker Digital, an intellectual property company. Jay had, I think around that time, this was like ninety six, ninety seven, already two hundred and seventy four patents to his name. Many of these were business process patents, they were business ideas, that he would look at industries and find ways to better them. And he created all these patents but what he had not done was commercialize them. So Jay started calling around to find a small team of people to turn business patents into actual companies. When we started this, so out of Walker Digital, I think at least five companies were spun off, but we actually started Priceline with three different operating pieces. We had a travel unit, we had a consumer unit, and we had a wholesale unit. So we pretty much had three CEOs of the three operating divisions when we started all of this. I was the CEO of the consumer division, which we later re titled that piece Yardsale, Priceline Yardsale. Basically, it was before EBay, you know, in the earlier days, we had a very similar process. The travel piece, when we started building the technology for all these…so here was the basic idea. The basic idea was buyer driven commerce on the internet, with a kind of the reverse auction model. What we were looking at then was the entire internet was, which it still largely is, seller driven. As a buyer, you go out, you know, think of it as a parking lot full of billboards, even though they’re kind of interactive. You drive through this lot looking at all of the billboards. You try to figure out who has the product you want, then you try to figure out if they have the price you want, do they have the color you want, can they ship it? The buyer does all the work hunting for a product. One of the process patents that we were commercializing with the launch of Priceline was buyer driven commerce where the idea was, have the buyer just tell us what they want, ‘I got a hundred bucks and I want one of these’ and we’ll go find it for you.”
“Interviewee: and staying on our path, you should see success in your future. So I was well defined about deliverables. So that they believed we were achieving something. The other part besides building a team was reference customers. Find somebody that your going to charge nothing to, right, that is going to work with you that is going to be your first reference customer. Because nobody, you know you can’t, a fatal error that a lot of people make is building products in their own conference room. I never build products in my office. I always go out send teams out to all the customers, potential customers and build products in their office, follow them around. We used to ask people if we could shadow them for a day. I’ll just send a couple of people to hang out with your for the day. They won’t speak, they’ll just carry a notepad, but we need to see a day in your life so that we can make products that make your life better. That’s how we create value. I found some customers like that and they said what do I get for that. And we said, everything that we build for free, right. And all we ask you to do, if you like it, is be a testimonial customer. So we have some team players, we add some reference customers, these early customers and they gave us credibility.
Andrew: OK. Did you sell directly to American Express. Actually, did you sell when you were 29 years old?
Interviewee: Correct, we did.
Andrew: Did you sell directly to American Express or to a company called Lifeco, I think I might have seen.
Interviewee: We sold both. So here’s what we did, Lifeco was owned by a guy that was my investor, my board member and investor. So when I need to raise money for the company, right, because we got off to a good start and by the way, when you don’t have a dime you can’t afford to build spec product. Right. It takes time to build it. So we were doing contract software for companies. Just to be pay the bills and then whatever the margin between the cost of the software and what we could charge for it, we put into developing new product. So we did things to generate revenue just to fund product development. But we still wound up needing some growth cash. So, one of our customers was this travel agency Lifeco. It was a privately held small travel agent. It was a 65 million a year travel agent. In the corporate travel business at that time. But the guy who owned it had money. So I went to him and said I need growth capital. I literally you know gonna try the angel investor route, you know I need some money here. He not only put up money, but he said I want you to help grow my company and I’ll fund yours. So we swapped stock. So, I had stock in his company and he had stock in my company. And the was the first reference customer but he was also the investor. So when the American Express people first approached me, he and I got together and ended up selling both companies to them at the same time. But it was great for me because I had an investor a reference customer and some equity in his business. Which incented me to help him win as well as myself.
Andrew: Cash deal?
Interviewee: It was a cash deal. It started out, it’s a funny thing when somebody comes and wants to acquire a company. Because, that next morning, when they said you know you guys are kind of interesting. Because we’re this little company all and all, even with the travel company combined, compared to American Express we’re nothing. I actually said to one of their executives one day, I said, I don’t get it. You have an infinite number of dollars and an infinate number of monkeys. How can I possibly be beating you. And he said, well lets take this one product. He said how long did it take you to build that, I said six months. He said what did you spend, I said $410,000. He said, we’re at the end of three years and almost seven million dollars, yours works and our’s doesn’t. And I said, well, I don’t know what to tell you. Maybe I hired better people, maybe we were much more efficient. But, for some reason, maybe we’re better, more directly connected to the customer. He said whatever the reason is that’s why were acquiring your company. Your getting products done in six months for less than a half a million that I can’t complete in three years and seven million dollars. There’s something about the way little guys like you run a business that’s far more efficient. So, when they said they wanted to buy the company, big companies like American Express usually do their acquisitions with a little cash up front and then stock over years in a payout.
So when they said that, that’s not quite like winning the lottery. You’re not just getting a big check. But it makes you think, well, what would I do tommorow. And I realize that what I do for a living in entrepenuing is all I ever wanted to do. And it became quality of life, not money. I said, look if I do that, I don’t know what I would do tommorow morning. I already have the perfect job, I can’t wait to get to work. I love what I’m doing, I’m energized by the challenges. And I love the people I work with, I hired them all personally. So I didn’t want to sell the company. So the fact that we weren’t dying to sell gave us pretty good leverage. Because we just kept saying no. In the end they came back and said alright, we’ll just do a cash deal. Because we said, we’re not doing a three year payout and we don’t really want your stock. If you want to just buy the thing buy it and in the end they did. At that point it made…
Andrew: What was the selling price back then?
Interviewee: The two combined companies was just…”
“Interviewee: So when you factor in all, if you were to clear that debt and convert it to equity, you wouldn’t have those loss. But anyway, none of that’s really the issue, I believed in the company, I still believe in the company. The issue was that the gentleman that brought me into the company who was the single largest shareholder and part of the original management buyout company was an entrepreneur in Minneapolis named Tom Petters. I had never met the guy before, he called me, flew me to Minneapolis, said I’m the largest shareholder in this YouBid thing. I think it’s a great business model, I think you can help turn it around. And after, last year he was convicted of securities fraud. His fund was shut down, he’s in a Minnesota prison now and the financing that was buying the company went with him. So, my decision wasn’t based on any loss of faith in the company. My decision was based on the investment money behind it. The guy wound up being convicted of fraud and sent to prison and he’s the guy that brought me in so it’s sort of changed the whole landscape for me.
Andrew: I see.
Interviewee: That’s not the company’s fault, he wasn’t an employee of the company or anything but it obviously had an impact on the reason I was brought there.
Andrew: Okay. I don’t know enough about what was going on there to ask the probing questions. Why don’t I just ask a basic question, what did you learn from the experience?
Interviewee: You know, the one learning you can’t really fix in the sense that, again, if I could go back in time, I probably would not have believed in this guy and trusted the guy that brought me in and put my deal together. There was no way to know-
Andrew: How could you have researched him if it took the government a long time to? How would you have been able to do it?
Interviewee: Yeah, but, you know we did exactly that. Every search you would have done on him at the time who’d never been in any trouble, never been accused of any wrongdoing, everything was clean. If you look at the people who gave money to Bernie Madoff, these were smart, respectable people. So if you would look at them and you would’ve said, you know. And same thing with this gentleman. His partners were highly reputable people, highly intelligent, respectable people. So all the due dilligence that we could do on the guy came up stellar. So you know, everybody was just kinda shocked when the government came in and said his investment fund is actually a pyramid scheme and the money he was using for this, according to the feds, is illegally gotten.
Andrew: Tell you about the issues I have when I research guests here for Myxergy. It is so easy, everyone says that everything’s available online and as you can see here I found out lots of information about you right down to the fact that at one point you had a car whose oil change cost 3,000 bucks. So there’s a lot of information that’s out there. But it’s still hard to find the right information because there is so much information and I would say this: to anyone who wants to hide anything online, just keep pumping stuff out about yourself, write stuff about yourself, get others to write stuff about you, just, really flood the internet with so much information, use all the keywords that anyone might search for your name and then when they’re looking for the stuff you don’t want them to see all they’ll end up with is all that junk. Now, it sounds to me it’s gonna make my life hell because I’ll have to spend three hours doing research instead of the two hours but I’ve gotta help my audience and give them as much information as possible. Meanwhile, I should say this, one more thing. Timothy Sikes, who is the stock guy who I interviewed here a while back, timothysikes.com, he says he’s gonna check out YouBid. I wish I would’ve just asked him beforehand. It’s gonna be too late, I don’t know what kind of research he’s gonna do but that guy is a research machine. I’ll leave it for this, it’s outside the scope of my interview. I’m gonna ask this then, let’s talk about what happens next. What’s next for you Jeff?
Interviewee: I started something called, you can look it up, it’s colorjar.com, a venture accelerator called Color Jar. What I enjoy doing now and what I wanna do is help entrepreneurs launch their businesses. So, Color Jar is not a fund and its not an incubator, it’s kind of a different concept. Nobody owned the name, I trademarked the name Venture Accelerator.
Andrew: Really?
Interviewee: Basically, we are like a SWAT team of entrepreneurs that, when we find somebody who we like and we love the idea we will help them create a business out of that idea. Similarly, some of our clients have existing businesses that they can’t break a plateau. Like, I have a client who can’t get past 20 million a year in earnings and wants to be a hundred million dollar company came to us and said how do I get to the next level? So, those are the kinds of things that we are doing with Color Jar.
Andrew: And do you invest money in return for shares in the business or are you investing time in resources and connections?
Interviewee: Typically, people are offering us an equity piece for our expertise. They’re saying, we’ll give you a piece of the business if you help me make it something big.
Andrew: I see. Okay, all right, for expertise. What else? What’s been the funnest part of all this? That’s kind of an empty question. What’s been the most challenging?”
Before again stared i want to tell u whyi keeping you urging to us kiss inside
“Interviewee: My DNA tells me that, yeah but three people still made it. Why aren’t you one of those three? I don’t focus on the other 997. So when I got there, I said I am not just going to give up, I am actually going to do this away like any other project so instead of just making a little film, I started a production company, I hired people from Universal Pictures and Paramount, they were domain experts, put some money into it, brought some, raised little money with a couple of friends and launched a professional production company. The film that we made was with a friend of mine named Eli Roth who had never directed film before. That was Eli’s first film as well. So we took a gamble on him. We funded it ourselves. The movie only cost $1.4 million total. I put it from my side, we put in maybe $500,000 of it and we raised another $500,000 and another $400,000 from two other wealthy individuals basically and we wrote, shot, produced and everyone of us acted in, Eli is in it too in this film, then we went out to see if we could get distribution and at the end we got worldwide, since then the movie was shown in 47 different countries I think and Lionsgate says now this $1.4 million film has grossed over $100 million. I think luck and timing are always part of the formula and you always take those but I think the fact that we started to apply the same entrepreneurial disciplines of financing, financial controls on the front end and of distribution, marketing and sales at the back end I think that differentiated us from your average film maker who doesn’t know anything about business. We were a team of filmmakers, artists and business people and I think that’s why we won because we are a team, it was fun, it was a blast actually.
Andrew: It sounds like it. Alright, finally let’s talk about uBid, the company that you left just a few months ago, you came into the company in September 2007 in the Cranes Chicago article that I read, you said that your goal was to make it profitable, you left at the end of last year, the company as far as I can see, lost money, you have been open here about the ups and downs, how do you consider this, what do you think of the experience that you have been?
Interviewee: I don’t want to say a lot but I will tell you this is all obviously public information. The person that called me and asked me to come to turn around that company which is not my norm is in turn-arounds, normally I am a start up guy, but I came and looked at it and I fully believe it is a really good business model, because unlike in eBay where I am buying and selling from each other business to consumer and it is sort of [inaudible] baseline thing, we liquidate excess inventory. So I looked at the company, doing $100 million sales and losing $7 million, I said you got a cash over $100 million you should be able to streamline this thing and make a profit even though they had never done that. The guy that called me
Andrew: The company never made a profit before you came in?
Interviewee: No, ten years in a row, the question of course Andrew is how is this company alive. Right, because how do you go forty quarters losing money?
Andrew: How do you, it is one of the earliest companies on the internet, one of the earliest from that wave.
Interviewee: That’s right, I’ll tell you how. It was public twice and private twice. New owners, I think when ownership got frustrated with not making money, new people came in and so a change enough time to give another chance, so the gentleman that, I think it is a great business model, I did then and I still do now, and I believed it should be able to be streamlined to make money. And by the way from the time I started, so when I started as CEO, again it is a public company so all this information is public, the monthly burn rate for the company was $1.3 million a month, to run the company, when I left it was about $300,000. So the process of streamlining the company and preparing it to be profitable we were being very successful in that but probably I don’t want to get into, people can look it up themselves, the gentleman, so back to what I was saying, the gentleman that called me, brought me into the deal.
Andrew: Actually before we go into that, I just want to reconcile what you said with a number that I see here from Yahoo News that says it lost $7.4 million last year?
Interviewee: Right, that’s been it’s sort of consistent, I think it lost $7 million in 05, 06, 07, so that has been at that rate. And the reason for that by the way if you were to spend the time and look at it deeper, is first of all there is lot of non-cash things and second there was a lot of debt to pay off, so that is not what I am talking about is just a straight run rate, the operating cost to the company, but what you would have to do is clean up the rest of that balance sheet
Andrew: On an operating basis it was profitable if I understand right, it did have a gross profit, not a net profit.
Interviewee: Correct, it was close to break even, if not profitable on an operating basis, but not on a cash basis and especially when you have the non-cash and everything else that have a huge debt structure that it was carrying.”
“Anthony: …all that product. But what happened was to answer your question simply, it was a public company with public shareholders and the Internet bubble began to burst. And Internet stock prices started falling, and now it’s not entrepreneurial anymore it’s shareholders who get together and say “Don’t build anything new, don’t spend a dime on anything but travel.”
So the decision was taken which was stop all the other companies, the new ideas we have, we were working on, and that happened with many, many… You know if you think of some of the big Internet companies at the time like David Weatheral [sp] and CMGI, they had 96 portfolio companies, two years later I think they have four. So everybody just divested when the bubble started to burst. So it was timing.
Interviewee: OK. Anthony, Sarah in the audience is asking, “How did you meet Jay?”
Anthony: I actually met Jay to [?] the speaking circuit initially. So before all that just very quickly I had a start up, a company called “Competitive Technology”, “CTI“. The first before there was anything, before there really was heavy Internet use the travel industry if you remember was all mainframe driven and it was all supplier driven. You had to call an airline to buy a ticket or you had to call a travel agent. You could not see the flights and the choices yourself. There was no access to the reservation system. You had to have a travel agent who had those systems back then.
So my company, CTI, wrote the first desktop booking systems. We were the first ones in the industry that wrote PC- based applications that would allow a consumer to just get online and buy, you know bypass the agency of the airline system, go directly into the data and look at travel and buying your own product.
That is the company, that was the start up of mine that was acquired by American Express Travel and it exists today it’s called American Express Technologies. It’s still the technology division of AMEX. But I was deep into at that time… I guess the industry sort of appreciated that we were making some changes in the, we were disinter mediating [?] [sp] an industry.
I think I was public enemy number one for travel agents because I would go the conferences, I keynoted every travel conference in the world pretty much and they would say “Wait if you pull this stuff off we’ll all lose our jobs”, and I said “Well no you’ll find some way to create value or you’ll lose your jobs, but you have to create value to live in the value chain. And if I can replace your value by a couple of clicks, it must not have been that valuable. So find a way to figure out the knowledge based value added portion of what you do and repackage that.”
There was a long pause and they said “Wait we’re going to lose our jobs.” [laughs] And so I don’t think I got that message through to most of them. But we did get some good recognition. I got a couple of times named as one of the 20 most influential executives in the travel and tourism industry. So the recognition that our company got for pioneering those products got us on a lot of people’s radar scopes in the travel industry.
When I would go around speaking at everything from travel shows to Comdex about, you know how new, how broadband distributed computing at the time was going to disinter mediate [?] [sp] entire industries like travel and music that’s where I met Jay initially and he said “Hey you seem like a guy who knows how to actually build with this stuff instead of just talking about it”, so he was actually calling me for about a year up from the time we met until the time I actually, we actually got into the launch of Priceline.
Interviewee: All right. Let’s go back to that first company. Crain’s Chicago said that at age 29 you became a millionaire when you sold Competitive Technologies, Inc. You told us a little bit about what the business’s mission was. Can we talk about how you launched it?
Andrew: Sure. You know it’s interesting because I was briefly in corporate America. It was, I would call it a very ugly divorce. [laughs] We did not get along. I definitely was in the “Dilbert” kind of world because I was in aerospace defense. And I’m not judging the aerospace defense or any other industry. I’m telling you my DNA didn’t mix well. And I just had problems.
And I’ll tell you a really quick funny story. My ex-military boss when I was in a defense contracting company, walked me over to the window one day. In front of everybody. You saw cubicles everywhere you could see [?] and he said “I’m going to teach you a little something about business and success.” I said “All right.” He said “What do you see out there?” And I said “The parking lot.” And he said “Right.” And he said “What do you see in it?” And I said “Cars.” And he said “That’s right.” And he nodded like this was some revelation.
And he said “You know what I do at the end of the day everyday?” And I said “No.” And he said “I come over to this window and I look out in the parking lot, and what am I looking for?” And I said “Cars?” [laughs] And he said “I’ll tell you what I’m looking for. I’m looking for who’s getting the next promotion.”
And I didn’t say anything, and he said “You know how I know that?” He said “I look out there everyday and whose ever car is here last, that’s my best worker.” And I said “Wouldn’t that be the person that’s least able to do their work and they have to stay longer because they don’t know what they are doing?”
He didn’t even respond to that. He said “That’s how I know whose committed to this company because their car is the last one in the lot. That’s how you get promoted working for me.” And so he paused another minute…”
“General Transcription is simply typing information that you hear from an audio file into a document format, according to the client’s specifications. You turn audio into text.
Companies are getting more advanced with the use of the internet. Audio technologies are being utilized more and more, therefore increasing the need for typed copies of projects.
Companies that are in need of general transcription are ones that regularly record teleseminars and focus group projects. Other types of audio that need transcribing are: videos, podcasts, web conferences and tutorials.”
“This file does not exist so I can’t transcribe, sorry
https://mixergy.com/wp-content/audio/Mixergy-uBid-Jeff-Hoffnan.mp3”
“Interviewee: Somebody else had an idea for ticketing machines. What I had to do was build a company around that, hire engineers and designers.
Andrew: Okay.
Interviewee: But, it wasn’t the first one. I can’t take credit for thinking of the idea, I just built it.
Andrew: All right. Then I see Priceline here on my list which we talked about. Black Sky Entertainment, you produced Cabin Fever and did you also act as yourself in the movie?
Interviewee: [laughs] So, here’s a . . . I’ll tell you the story and by the way there was one other in there, a company called Virtual Shopping which we did initial middle wear for the internet and for banks when companies was first trying to dial up the internet. We sold that to the Waldenburg group over in Sweden.
Andrew: Were you a founder in that company to?
Interviewee: Yes. Chairman and CEO of Virtual Shopping. Again, we wrote middle wear software that enabled traditional retailers to sell their product. Lord and Taylor was the customer. The first day they said let’s try to sell something on the internet their technology did not enable them. They had traditional mainframe inventory systems not IP protocol. So, Priceline was about the fifth start up and I had been doing this a long time and you work . . .
Someone once said to me, “What’s the secret to success on a live TV interview?” And I said, “The secret to success is while everybody else was out looking for the secret, I was working.” I was bleeding. My blood, sweat and tears was on the ground while everybody else was reading a book for the quick and easy way to get rich or whatever. I said, “How about maybe go work really hard on something.”
So, by definition when you launch these things you really . . . as an entrepreneur you’re making a life style decision as a start up person that you are going to live a life that is far less cushy and comfortable as the corporate nine to five. But, if you succeed, you risk big, but you win big. When you win you win a lot bigger than you ever will in corporate America. But, you have to sacrifice for that and you have to be willing to take that risk. So . . .
Andrew: What kind of personal sacrifices did you make along the way?
Interviewee: A lot of things that, you know, friends of yours have, going, you know everybody’s going to Cancun because they got the cash and your credit cards are all max out on your new venture and whatever it is. Of course it’s about money because you don’t have a dime because you’re spending it all on your company and you’ve borrowed from all your friends and your family. I was lucky in the sense that I sold that first company young. So, I didn’t go for the next 20 years without money. My sacrifice was with time. I worked really long hard hours and there were days I just felt like laying around for all weekend just watching football or something, but I didn’t because it doesn’t get done if you don’t do it.
I wrote on the whiteboard of one of my companies once, I wrote in giant letters, there is no they. Because people always . . . well they’ll do this or they’ll do that. And I said, “Why aren’t you they? Who are they, magical people? Why isn’t it you?” And always tell people to ask themselves, “Why not me?” Why aren’t you the one building this thing? I don’t know who you’re waiting on to do it, but they are going to do it and you’re going to see them on TV and you’re going to say, “Hey, that was my ideal” while they’re driving off in their new car. So, there is no they. It’s you, go do it. I worked very very hard and at the end, especially during the Pricline years, we went for years without because of the growth rate without really days off.
So, I just took a break from start ups for a little while. Plus after the internet bubble burst people were down in the investment community on technology and the internet. Some people want to, whatever, climb Mount Everest. There’s some gold they want to do. I had always wanted to go through the process of making an independent film. I know nothing about it. I just thought I loved the creative process and creative people and I though it would be fun to do that experience.
So, I went out to LA with the idea to produce an independent film. The odds of any independent film ever being in a theater near you or [xx], right? Everybody’s a film maker. And just like 70,000 people at every stop of American Idol, everybody’s a singer. So, you know the odds are against you. What I thought was, I just won’t spend much because I’ll probably never see . . . you know the only people that will ever see your film is your family.
But then, I think it becomes a little bit of a DNA thing for start up people. It’s sort of like one time my partner back in one of my businesses, we went to a gym and there was a racquetball course. So, we went in there and started hitting the ball around. He stopped and he said, “Why you always try to kill me?” I said, “I’m not trying to kill you.” He said, “You screamed the ball 100 miles an hour right pass my head.” And I said, “Right, because you flinched, curled up your new ball and I went.” And he’s like, “Why can’t we just hit the ball around?” And I said, “Have I hit you once?” and he said, “No, but you play to aggressively.” And he said, “Let’s just hit the ball around. So, not keep score.”
So, we started hitting the ball around for a minute and I said, “ED, stop.” And I said, “I can’t do this.” I think it’s just the DNA thing. But, I can’t just hit the ball around. I’m either going to play like I mean to be here or let’s not play at all. The same thing happened to me in the movie business. When I went out there, I said , “Well, why am I just writing off this money and saying that if only, you know, three out of a thousand homemade films ever get to a movie theater . . .”
“Interviewee: it’s sort of like the J thing. Somebody else had an idea for ticketing machines. What I had to do was build a company around that, hire engineers and designers.
Andrew: Okay.
Interviewee: But I wasn’t the first one. I can’t take credit for thinking of the idea. I just built it.
Andrew: All right. Then I see Priceline here on my list which we talked about. Black Sky Entertainment. You produced Cabin Fever and did you also act as yourself in the movie?
Interviewee: So here’s a…I’ll tell you the story. And by the way, there’s one other one in there, a company called Virtual Shopping which we did initial middleware for the Internet and for banks when companies were first trying to dial up the Internet. And we sold that to the Wallenberg group over in Sweden. And then…
Andrew: Were you a founder in that company too?
Interviewee: Yes.
Andrew: Okay.
Interviewee: Founder, chairman and CEO of Virtual Shopping. Again, we wrote middleware software that enabled traditional retailers to sell their product. Lord & Taylor was a customer. The first day they said, ‘Let’s try to sell something on the Internet,’ their technology did not enable them, right? They had traditional mainframe inventory systems not IP protocol.
So Priceline was about the fifth startup and, you know, I’ve been doing this a long time and you work…you know, someone once said to me, ‘What’s the secret to success?’ on a live TV interview. And I said, ‘The secret to success is while everybody else was out looking for the secret, I was working.’ Right? I was bleeding. My blood, sweat and tears were on the ground while everyone else was reading a book for the quick and easy way to get rich or whatever. I said, ‘Maybe, how about go work really hard on something.’
So by definition when you watch these things, you really, as an entrepreneur, you’re making a lifestyle decision as a startup person that you are going to live a life that is far less cushy and comfortable as the corporate nine to five. But if you succeed…so you know, you risk big but you win big. When you win, you win a lot bigger than you ever will in corporate America. But you have to sacrifice for that, and you have to be willing to take that risk.
Andrew: What kind of personal sacrifices did you make along the way?
Interviewee: A lot of things that, you know, friends of yours have. You know, everybody’s going to the Cancun because they got the cash, and your credit cards are all maxed out on your new venture and whatever it is. You know, later…so first it’s about money because you never have a dime because you’re spending it all on your company, and you’ve borrowed from all your friends and your family.
I was lucky in the sense that I sold that first company young so I didn’t go for, you know, the next 20 years without money. My sacrifice was in time. I worked just really long, hard hours. There were days when I was like, just felt like laying around for a whole weekend watching football or something, but I didn’t because it doesn’t get done if you don’t do it.
I wrote on the, you know, on the white board in one of my companies once. I wrote in giant letters, THERE IS NO THEY, because people are always, ‘Well, they’ll do this and they’ll do that.’ And I said, ‘Why aren’t you they? Who are they? Magical people? Why isn’t it you?’ Right? And I always tell people to ask themselves that. ‘Why not me? Why aren’t you the one building this thing?’
I don’t know who you’re waiting on to do it, but they are going to do it. And you’re going to see them on TV and you’re going to say, ‘Hey that was my idea,’ while they’re driving off in their new car. So there isn’t they. It’s you. Go do it.
I worked very, very hard and at the end, especially during the Priceline years, we went for years without, because of the growth rate, without really days off. So I just took a break from startups for a little while. Plus, after the Internet bubble burst, people were down and the investment community on technology and Internet.
And, you know, some people want to whatever, climb Mount Everest. There’s some goal they want to do. I had always wanted to go through the process of making an independent film. I know nothing about it. I just thought, ‘I love the creative process and creative people,’ and I thought it would be fun to do that experience. So I went out to L.A. with the idea to, you know, produce an independent film.
Now the odds of any independent film ever being in a theater near you are infinitesimal, right? Everybody’s a film maker. And just like if you…70,000 people at every stop of American Idol, everybody’s a singer. So you know the odds are against you. So what I thought was, ‘I just won’t spend much because I’ll probably never see…you know, the only people that’ll ever see your film is your family.’
But then, you know, I think it becomes a little bit of a DNA thing for startup people. And sort of like one time, my partner back in one of my businesses, we went to a gym and there was a racket ball court. So we went in there and started hitting the ball around. And, you know, he stopped and he said, ‘Why are you always trying to kill me?’ I said, ‘I’m not trying to kill you.’ He said, ‘You scream the ball at a hundred miles an hour right past my head.’ And I said, ‘Right because you flinch, right, curl up into a ball and I win.’ And he’s like, ‘Well, why can’t we just hit the ball around?’ And I said, ‘Have I hit you once?’ And he said, ‘No, but you play to aggressively.’ And he said, ‘Let’s just hit the ball around, so not keep score.’
So we started hitting the ball around for a minute and I said, ‘Ed, stop.’ And I said, ‘I can’t do this. I think it’s just a DNA thing. But I can’t just hit the ball around. I’m either going to play like I mean to be here or let’s not play at all.’ The same thing happened to me in the movie business. When I went out there I said, ‘Well, why am I just writing off this money and saying that if only, you know, three out of a thousand homemade films ever get to a movie theater, why am I not”
“Interviewee: I could not stand when I was being lead into battle against zero percent chance of success where we were just automatically going to die and they said, “Sorry he’s the boss.” So what I liked about having money in my pocket was freedom. I could wake up in the morning and say, “I will never have to work for a guy like that again. I will fail and I will make mistakes but I will fall on my own sword and I won’t blindly follow somebody that is completely nuts off of a cliff. So freedom is what the money came to be about knowing that I didn’t have to go back to that environment. And then the third thing which is personable-personal- but I absolutely believe that we were put on this Earth to leave more than we take so I think the true measure of success. I would hate to think in the end that they tally up the cars you bought and houses that you had. I would hope that the measure of success of any human being, and this doesn’t take money to achieve, but the measure of success is how many lives in the world were made better because you were in them. How many peoples lives did you improve along the way? It turns out that sometimes it takes money to solve problems. And I found out that I was able to make the world a better place for a lot of people because I worked hard, so that made me stop feeling guilty about making money and made me feel more motivated the next morning and I would tell my team, “You know that the harder we work, the more we sell, and the more money we make, the more people’s lives we can actually improve, so let’s get out there and do that.” It changed my outlook when I got into the charitable part of giving to others, so it was-and those are all fun. You said the fun part-that is my definition of fun. It’s a phenomenal feeling when your hard work somehow benefited somebody else’s life.
Andrew: How’d you get to do that?
Interviewee: I started my own foundation first, but I wound up working with a lot of other charitable organizations. Sometimes it takes people’s names to help just draw the attention. Sadly, you wish that people would participate and help because it’s the right thing to do, sometimes they don’t but we’ll still take the money because it benefits the kids or the people we’re trying to help. So like-I was on the board of-I became friends with people, Vander HolyField. I did-I was on the board of the Vander Holy Field Foundation We sent twenty kids a year from intercity to college ‘cause education was their way out. These kids would have never left those projects they lived in. They never would have gone to school if we hadn’t put up the money to pay for four years of college for each child. I did charity events with Elton John. He and I did some events like we did a big concert. We gave the money to juvenile dia-four different charity events all around. Pretty much around children and AIDS, but we gave money for research and housing, for people-been doing a thing recently to help rebuild New Orleans, that’s something I’ve been doing with Jude Law. So I got involved in other people’s charities that already had some attention that I could help with money and knowhow and make contributions.
Andrew: Okay. Let’s move on with the biography. Was the next company that you joined Airline Computerized Ticketing?
Interviewee: Yeah. That was-and that was a relatively quick one, I’ll tell you why. So we had this idea that maybe instead of standing in line at an airport when all you’ve got to get is a sheet of paper, a boarding pass, out of a printer, why can’t you just walk up to a printer, identify yourself and get it? Today as you know, this is how we all check in. Machines, they didn’t exist then, so we did the design for the first self-ticketing machines in the business. Here was the problem: the airlines-we patented the stuff-the airlines loved it, but the airlines were unsure if they would get consumer acceptance, so they wanted us to finance the hardware. Now it’s very-software like I’m used to doing is very capital intensive. Now I need manufacturing and distribution and service teams to put these ticketing machines in airports all over and then what if people don’t like them? It became a very capital intensive thing so we gave them-we did raise some money, we did the first ones and here’s what people would do: they would get in line, see the big line at the ticket counter, see this machine—you know, get your ticket boarding pass right here—they would walk over, identify themselves, print a boarding pass, look at it, and then they would walk over to the end of the line, get to the front and say, “Is this thing any good?” after. Completely defeating the purpose. It’s like I have a friend who sends me a text and immediately calls me to see if I got the text, so I tell him, “Are you aware that that kind of defeats the point of texting people if you call me right after?” People were unsure of the acceptance so we wound up selling the technology-not the company-selling the technology to a few airlines and just giving the investors the money back. The company did not succeed.
Andrew: And you had to share that business? I mean, you were one of the founders of the business?
Interviewee: It was not my idea. It was somebody else’s idea, but I was the CEO, so yes, I was, but I didn’t but somebody else- I built it but it’s sort of like…”
“minute 5 to minute 10
Interviewee: …and we’ll go find it for you. So the concept was to harvest consumer demand which increase their buying power. If we begin to harvest consumers across the Internet, find out what their demand is, find out where their money is, and grab their money upfront, we have a kind of reverse buying machine from the way the Internet typically operates.
Andrew: Let me see if I understand it up until now. Before Priceline, he did have and launched a magazine subscription company. I remember doing business with that company years ago. What they would do is they would sign consumers up to a magazine, and instead of just charging them once and then coming back a year later and saying, “Your subscription’s over, why don’t you buy it again?” I think their model was like the electric company. They were just going to keep billing you every year over and over until you tell them to stop, or like the cable company or like any other subscription. That was the first business, I think, that he’d launched from Walker Digital. The money that he got from that business or from some 50% of that business, I believe, he used to launch Priceline. Am I understanding that right, that history?
Interviewee: Yes, that is correct. New Sub Services was Jay’s company that was a profitable company that was funding a lot of the intellectual property work. The idea was to take some of that seed money and, the same as any other entrepreneur, “Let’s take some good business ideas and commercialize them.” So, we had kind of in those early days, so when I first came, we really all are Walker Digital, there was no such thing as Priceline. So I was working at Walker Digital.
You know, Jay and I had long conversations about the fact that we sort of sorted the professional world into three groups. There were inventors, builders, and operators. Jay had a team of people that were inventors. They came up with brilliant intellectual property, but they didn’t really have the skill set or experience to build the company out of it, to commercialize. So that was sort of the group Jay ran. In the middle, the place where I lived, we had builders that’s taken idea and create a company out of it. We, in fact, launched probably five companies in a 3-year period out of Walker Digital, three of them were Priceline companies, two of them were not.
But my role there was kind of running a company to launch companies. We call this company Atlantis, it was an internal Walker Digital company, but I also was the CEO of [xx]. The idea we had was the skills that it takes as an entrepreneur to do startups is a skill set. The more startups you do, in theory, the better you get at it, and there’s a certain set of disciplines – some arts, some science – that the best startup people start to learn. So our thought was I would run this company in the middle that would create companies out of ideas. Now, once a company is up and running and hits some level of stability, the task changes. There are people that are really counted and operating and stabilizing our company, not my skill set.
So, if you notice, what we did was we had Walker Digital as inventors, we had a series of companies in the middle including Priceline.com, the travel company that took the IPO, and the builder area where we built companies. Then, if you notice, actually after the IPO, we brought on Rick Braddock, the retired CEO of Citigroup, Heidi Miller, the CFO of Citibank, Dan Schulman, who was the President of AT&T Consumer. So all of these operators that came out of the corporate world that ran large companies stepped in into phase three. That was kind of our startup model.
Andrew: I saw that once Richard Braddock came in and took over Priceline, the company just really started to take off. He started putting together deals that you, guys, [xx] before. He added credibility, just the fact the guy used to run Citibank was coming in and running Priceline seems to have helped. What do you say about that?
Interviewee: Yes. That was very much by design. We used to joke that we need some adult supervision at our startup. When you can get a guy of the caliber of Braddock off of Wall Street to come into a new company, you get market credibility in the investment world, and clearly, when you’re a public company in the stock markets. So you’re very right about that.
Andrew: You, guys, had this idea that consumers could name their own prices and you said that launched three different businesses and one of those businesses, the Consumer Division, that was the business that you are running.
Interviewee: We started it all as working on the travel piece at the early days, ’96-’97. Then we decided that we could use this buying type of model to launch two other. It’s the same product, the same bio-driven commerce with the consumer naming the price, basically. But, we actually thought we could spin our business model in the two other market. So one was consumer-to-consumer, the company that I built at that time that we call Priceline YardSale. The idea again was more of an eBay-like model, but again, we were trying to make it a little more bio-driven. The eBay model is I have to go out and find an auction to bid on and I got to go find the thing I want using search tools. What we were intending to do then was for you to say, “Hey, look, I want to buy a treadmill.””
“Interviewee: For you to say, “ Hey look, I wanna buy a treadmill. Whose got one, who wants to send it to me.” And it was all, if it was an item like that, it would immediately start from your geographical address, address in, in circles going out and try to find the person nearest you that wants to fill the order. I’ll give somebody two hundred bucks if they’ll give me their treadmill. And the idea would be your, your need, you know, your desire to purchase something that’s closer out there and the seller says, “ I’ll sell you mine for one sixty.” The next guy says, “ Fine, I’ll sell you mine for one fifty and I live closer to you, you know, I can even bring it in my truck.” So, that was the yard sale model. And the other one that we did the wholesale model it was kind of like a Costco on the Internet. It was a grocery business that we called Webhouse. And the idea there, you’ll, you’ll like this one because it was even a little bit more “out there.” [Laughs] The idea there was you might be standing, you, you, you’re gonna go the grocery store, right? And you’re going buy butter, and you may have a favorite brand of butter, but when you go on the site and click and say, “ I need butter and milk.” You get offers back. So you get one back from butter company A that says, “ I’ll give it to you for one forty, for a half pound of butter.” And butter company B [laughs] says, “ I’ll go one thirty.” And the idea is when you print off the shopping list you have to buy those specific products, but they’re electronically couponed, because whoever needed to move product in those stores that you, in the categories that you were buying, offered it to you. So, the idea was to take the same business model and keep in mind the underlying strategy of all these business models is distressed inventory. We’re not selling retail. If, if you can’t, if you can’t find an empty seat on a plane, Priceline can’t help you. What we do is we sell the empty seats in the empty hotel rooms that nobody was gonna buy anyway and they’re willing to get something
Andrew: Yeah, I’m,
Interviewee: on the same concepts.
Andrew: I love Priceline! I’m, I’m here in Buenos Aires. I wish that it had existed here; it’s one of the things that I miss back in the US. The idea that you could go to Priceline and just kind of play Priceline roulette before the weekend and let them decide where you’re end up staying. I love that!
Interviewee: [Laughs]
Andrew: The prices were incredibly low. I always end up saying, I always end up with a random place because who cares? If it doesn’t, if it doesn’t work out I’ll, I, I wouldn’t have spent that much money.
Interviewee: [Laughs]
Andrew: But let me see if I understand this: You ran Yard Sale, someone else ran the grocery business, and Jay was running Priceline.com itself right? At the time.
Interviewee: Well, well it was Price, it was called Priceline Travel. That’s why it’s a little confusing because it was originally, they were all Priceline.com. We have three units: Priceline Travel, Priceline Yard Sale, and Priceline WebHouse.
Andrew: I thought Priceline Yard Sale was its own business with a link on Priceline.com. Maybe that’s what it was.
Interviewee: Later it was. When we launched, they were all the same company. They’re all Priceline.com. We just had Priceline Yard Sale, Priceline Travel, and Priceline Webhouse. Later, when the market was pushing, by the way not the entrepreneurs, the market was saying, “ Take something public.” The, the piece that was finished first because we all worked on it initially together, so, I was there at the beginning of the Travel launch as well, was the piece Priceline Travel. And you know,
Andrew: What did you do with the Priceline Travel launch? How did you help launch that?
Interviewee: I helped design the actual systems piece of it. So, I was pretty focused on the technology piece, what is the engine. So working with Jay and the original group, which was a guy named Jesse Figgs, ok? It was a small group in the beginning whose, you know, all got together and said, “ lets design this travel purchasing system.” So, my focus was not on the sales side, my focus was on the technology side helping to design the actual system, realizing that you can’t build a system where it actually contacts an airline [laughs] and says, “hey can we send this guy to Denver, can you find him a seat?” Its gotta be all rules based and automated. So, it was a relatively sophisticated kind of algorithm that drove the purchasing decisions based on rules set, set by each airline and hotel. So, I was part of the design of that at the launch of the company. And, and the company went public after only eleven months. So, Jay, Jay started as CEO of the whole thing but we were only months into it when Rick came on because we were, when you think about it, a company going public after eleven months of operation which would never happen these days, the IPO takes six months to plan. So, we’re only five months in and we already have investment bankers in the house. So, we, we, went to the, you know, to the street credible management very early in the process.
Andrew: Now, Yard Sale closed ten months after launch. What happened there? You kind of hinted at it but maybe we could go a little more directly.
Interviewee: You know, actually, and hindsight is completely worthless, but [laughs] I probably would have spun that off. I might have even taken it out personally myself with like a management buyout because that piece the business made sense. We really wanted to grow it but what happened was when we started after the travel piece, when we started to launch of Yard Sale and Webhouse, webhouse to be honest was losing, spending a lot of money to build it. It cost a lot more. I think we spent, you know, five hundred, excuse me, five million dollars launching this Yard Sale piece and hoping to a hundred and two hundred million on the grocery piece because we were buying all that product. But what happened was to,”
“minute 20 to minute 25
Interviewee: …So, he paused another minute and he said, “So, what did you learn?” I said, “I’m going to buy two cars and just leave one in the parking lot.” He turned and looked at me and he just walked off, and he said, “I suppose you thought that was funny.” I said, “Honestly, I kind of did think that was funny.” He said, “You’ve learned nothing about business here.” I said, “I guess not,” and I just walked away.
That was my experience. I was like, “Wow!” If I’m in an environment where I’m going to be judged strictly by what time I drive out, it just drove me nuts. I quit one day, and I quit cold turkey, and I talk about this when I speak to entrepreneurs around the world pretty frequently. It’s really hard to do it the part time way. It’s a tough battle, because reality says I got to pay my mortgage. But the other reality says, “If you were working on this full time, you’d actually to be able to launch your company.”
I took the hard rock. I quit cold turkey my job, woke up the next morning, I had no health insurance, no paycheck, no food in the cupboard. You know, there’s a good side to that, right? There’s no better motivator than hunger pretty much. You open your cupboard and you think, “Geez, I should have waited, at least, until I bought groceries before I quit.” If you don’t create value today, you don’t eat. That’s a good motivator.
So when I went out, I was trying to think of two things – one, an industry that I might be able to create value in and two, a business model to follow. I know this sounds a little silly but this is way before the Internet, it was just software. The model that I was most jealous of was hit records. You go in the studio, one day I was listening to the song and I said, “That song was three minutes and 58 seconds long, and that guy made millions of a four minute worth of work.” Plus, he doesn’t have to go back like a consultant and sing it again every time someone wants to hear it.
You go in the studio, you record four minutes worth of value, and then every time someone wants to buy it, you make a cheap copy of it and send it again. So I said, “I got to figure out how to do that.” I don’t know music, so there’s got to be a way to do that in the early days of the software industry. If you remember, back in the days of products like Lotus and BC CALC and some of the early software or games, some of the early software millionaires were people that basically had that model. A product once that gets used or sold over and over again.
So, I was trying to find applications that I could sell over and over again and it’s just hard. I started looking at industries that I thought had a good model for. I stumbled into the travel industry, by the way. But, I’ll sort of cut through the chains of the story. I realized, one day, looking at that industry, that if I had a desktop product that enabled you to access all of the same travel information that a professional travel agent or someone in the airline could, I could probably sell a seat license. Everybody that wants it on their computer I could sell it to them, but I could sell them an annual contract. So, that’s really where the company took off when I found a way to build one so many and then generate a service fee on top of it when I found a product that fit that model.
Andrew: So now, you found the model, how did you get started with it?
Interviewee: Another piece of advice that we give to entrepreneurs, there’s two things. One is you have to build the team, which is really hard when you don’t have a dime to pay them. So, that’s another whole discussion, but how do you convince good people to work for you when they could get a big salary somewhere else, working for a stable company, and you’re a startup? So selling the entrepreneurial lifestyle is a tough one, but you are never as smart as you think you are and you cannot do this yourself. You, absolutely, the best team wins. Making that long list, you know, my list of weaknesses dwarfs the list of the few things I know how to do well. So I always go and find all those positions, surround myself with much smarter, much stronger people in all the areas I don’t know. So, building a team was one of the things you needed to get started.
Andrew: How did you convince the early people to join your team when there wasn’t enough groceries in your fridge to keep you going?
Interviewee: I understand this, a lot of it has to do with your own passion. That’s why early customers do business with you, that’s why employees do business with you when you really believe. But I will say that I was, early on, pretty sensitive to the fact that success is a milestone-driven event. Instead of saying, “Come on, we’ll try this, we’ll see how it goes.” I laid out milestones. I said, “Look, I know you’re taking a risk, so I’ll tell you what, in 90 days, we’ll have this done. If we don’t, then you can leave and you didn’t ruin your career.” In 120 days, at this time, the six-month point, I laid out milestones where if I show them the whole path, I could convince them, “If we do all these things, we’re on our way. We’re all going to be successful, and you’re going to achieve your dreams.”
So, you lay out a path from where you are to what their goal is, not just yours, to every individual team player’s goal, then you go backwards from that goal, step by step. That way, you can sell them a program that as long as we are making steps and staying on our path, you should see success in your future.”
“Jeff Hoffnan:30.00 – The two combined companies was worth just north of a hundred million dollars.
Andrew Warner: Was your business ,CTI , was that 10% of it ?
Jeff Hoffnan: It was more than that, but that’s really all I am supposed to share
Andrew Warner:ok
Jeff Hoffnan: But It was more than 10% but our confidentiality agreement is that I am not supposed to quote more than that number , but I can tell you it was much more than that.
Andrew Warner: How long do you stay on board afterwards?
Jeff Hoffnan: So it was a three year management contract. I think I lasted like six weeks (laughs)
Andrew Warner: Really
Jeff Hoffnan : Again American Express is a wonderful company. I have employees that worked for me way back then , who still work there. They stayed there all these years because they take great care of their employees.and they love working there. That wasn’t the issue. My issue was , in any large company there is a large overhead tab chart percentage, you know what I mean, the overhead cost,What I mean by that is a large percentage of your day is spent, feeding the internal animal. People in large companies,have a tendency to believe that they work for the executives, right? Who do you work for and its like , I work for this V.P and their life is spent in pleasing that V.P. because that s what controls firing and promotions.In my business, before that , all of our time was spent focused on the customer,and I remember it was a great compliment one day,one of our other customers in the next building said, what is that guy, Lee doing here? I said what do you mean , what he is doing here? And she said , He used to work for Exon,one of our other customers, and I said he works for me and she said in all these years,I have known him, I always thought he worked for Exon. And I said ,that’s the greatest compliment, you could ever give us. He is so customer focused,that she did not realize, that he was one of our employees. We work for the customers, when I was in a small company , I used to spend all my time in the market place, and when I am in a big company, I spend all my time in internal meetings.That’s the part ,For me, I just could not do that, so I left after six weeks.that was a three year deal, and I said, you know what,structurally I cannot function in this environment, you guys can, so my best of luck.
Andrew Warner: Did you have to give up any amount by doing that?
Jeff Hoffnan: I did, I left money on the table doing that. plus , you know there was the other part, that if they let me go, I had a big severance, if they decide to let me go, so one day, I should actually tell this story, One day we were at the senior management meeting, and they said, does anyone have , any more questions? And I raised my hand, and they said, “Yes Jeff” and I said “If I take all my clothes off and run down the hall screaming , will you fire me? “ and they said,” No Jeff, we are not going to fire you”.Alright I ‘ll just leave. (laughs) . I just was looking for one more way to get fired so that I will get one more check but to be fair to them , there wasn’t. Yeah, I left money,on the table ,but it was also trading for me environmental quality of life , so that I could be in a different environment.
Andrew Warner: What percentage of the overall sale did you leave on the table when you walked away?
Jeff Hoffnan: Oh no , it wasn’t the sale, we got all the money from the sale.
Andrew Warner: Ok , so this was just a big salary that you were leaving?
Jeff Hoffnan: Yeah ,with a big bonus and incentive to stay for three years and help the company,
Andrew Warner: I see
Jeff Hoffnan: So, this was a big package deal. This was a deal from the management package,so I left a bunch of that, I could have stayed till the end of the calendar year,and taken a big bonus check. But I still did not do that,
Andrew Warner: Now we have talked about the hard part of , figuring out what the product is, selling and all that stuff, What about the fun stuff? What did you feel like when you got that cheque?
Jeff Hoffnan: You know that’s interesting because I know that there are people,who are very financially driven,That was not, I never sat and focused on money and things like that .What I focused on by the way was three things: 1. You certainly can afford things that you never cared about before . I found that a little more hollow , so I built a big house, my friends call that you know Chateau Hoffnan.It looked like a castle, then I walked and looked around it and said, Oh this was pointless,it just dint change anything,rather than it made me sort of feel bad, my friends did not live like that. And I was living in room that I never went in , and it wound up having far less meaning that I would have ever thought,The first thing that occurs to you , it dint mean much,Buying stuff is way less, much , its not the point,the point Is just knowing you could, so I stopped buying,stuff. I just liked the feeling that because I worked hard,not because I had money, but because I worked hard. and I put in the hours, Because I was up when my friends were sleeping, or you know I did work, when they were on a boat or whatever, I earned something, that part felt good but money for yourself, that dint mean a lot to me , what did mean a lot to me was two things, personally it was freedom, I had the boss I told you about, there were other instances, where in literally , I was in my cubicle, I was drawing a picture of lemmings ,walking just blindly off the cliff.and he said whats that ?and I said its , Either that or I department meeting, so that’s how I felt, I could not stand when I was led into zero percent chance of (35:00)”
Before again started a i wanna tell why keeping organic to you kiss inside.
“Interviewee: Oh yes, what I was saying was helping, I have had people that worked for me for four different companies, people who have been very loyal and whatever I am doing next they come back and say I want to work for you again, that is, anything I have been successful at has been because I have had the right team and the best people. So, for me what’s been really rewarding is be able to sit down with people that work for me and are with me and say tell me what your goals in your life, and what are you shooting for, and then being there when they achieve that and being able to help them do that. So that has been really rewarding that I have been able to help people who have been loyal to me achieve their own goals in life, it is just a really good feeling.
Andrew: Give an example of one person who you helped do that?
Interviewee: I will tell one story, this guy’s name Don, he lived in a, kind of a young black relatively recent college graduate, lived down in Florida, I met him through he was friends of another friend of mine, life was just rough. His father was a police officer, shot and killed in the line of duty, his mother was an emergency room nurse, so both his parents helped people for living, they never had a lot of money, it was him and his brother. When his father was killed his little brother got depressed he committed suicide. So this guy and his mother were just having a tough time of things. They lost their brother, her son and the father and husband, and didn’t really have any money and when I met him through somebody else, I said I think I had heard about your family on TV, he said yeah that’s us. I said can I help, he didn’t want a dime. He would not take anything. I was just trying to help if they needed, I had read that things were bad, what he wanted, he said I don’t want money, I just want a chance. And I said, a chance to do what, and he said a chance to take care of myself and mother and we build our lives. And he said I want to do that through hard work, not through hand outs, and he happened to fit, he had studied engineering in school, he happened to fit the hardware engineering job that we had in particular. So I hired him but at every opportunity I asked him are you growing, are you learning, what is working and what is not, and I adjusted the course for him. There were times I send him away to classes that I paid for because he wanted some certifications and education. There is times where I sent him on international trips because he wanted to build his experience. Now he paid me back by performing on every one of those but many years later I got a call from him and he said after he had worked for a couple of companies but we had sold it, he called one day just out of the blue years later, and he said I was thinking [inaudible] my life, he said I have a beautiful home, beautiful wife, and several kids, my mom lives in a house that I bought her, I have college funds started for the kids, he said I live in a whole different world because you opened all those doors, and I said I may have opened doors but everything that happened after you stepped in was on you. I didn’t do all that, you did all that, and he said right but you believed in me when no one else did and you gave me a chance that no one else would give me at the time. So I just thought what a win-win, right, because he appreciates that somehow I created opportunity for him, and I think he earned it all, and I wouldn’t have created the opportunity if I didn’t believe in the guy, but it was just a good all the way around, he built a good life for himself, made money which wasn’t his goal but earns to [inaudible] which was his goal, and can take care of his family now, so that’s an example what Donny did, when he called me that day out of the blue, it just really made it all worth of all the hard work he put in.
Andrew: That’s a great example. Alright, let’s leave it there. Thank you for doing the interview.
Interviewee: You bet.
Andrew: Anthony Sarah, thank you for making this introduction, if people want to connect with you Jeff, the best place to do it is at colorjar.com
Interviewee: Yep, and I am just jeff@colorjar.com.
Andrew: Jeff@colorjar.com. Alright, thank you very much, thank you all for watching.
Interviewee: Thank you Andrew
Andrew: Go use this stuff, go [inaudible] incredible company so that I can tell stories about you the way Jeff just told the story about one of the people he helped, go do it, come back, tell me about it, and I will see on the website. Bye.”
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[Thank you Anthony Cerra!]
