At 17-years-old, he couldn’t legally drink, vote or even sign a contract, but that didn’t stop Rahul Sood from launching a company. He just did it. He didn’t have much money, but that didn’t stop him either. He got a credit card and took out $1,500. Most people assume they need to raise venture capital to build a tech business. Rahul couldn’t get it, but he didn’t need it. His computer business, VoodooPC, was profitable from the start — and it remained profitable when he sold it to HP.
Want to know why HP (or the other giant computer makers) didn’t crush him? Because he noticed that they were outdoing each other trying to produce cheaper (and less profitable) computers, so he decided to grab the high end of the market. (His most expensive PC sold for over $50,000.) Want to know how he made money? By developing his sales abilities, skills that colleges hold in such low esteem that they refuse to even teach it. Want to know more? Listen to the full interview.
I slowed the conversation down a lot so we could get into deep details here because I want you to be able to use the lessons that Rahul worked so hard to learn, not just bliss out on hearing a success story.
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Andrew: All right. I just finished recording the interview you’re about to watch, but before I post it, I have to tell you about my three sponsors. And by the way, this is an interview with a guy, who at 17 years old, using $1500 on his credit card, built Voodoo PC into this profitable, consistently profitable PC company that he eventually sold to HP. Great story. And you’ll hear, I’ve got to thank my sponsors before I start it, but you can hear me talk about one of my sponsors, Grasshopper. I’ve opened up a Grasshopper phone number, and made myself available to people like you, to talk about your business issues with me. And it’s helped me become a better interviewer because it’s helped me ask questions that are important to you. So thank you, Grasshopper, twice. And of course, Grasshopper is the robust phone system that you can manage online. I also have to thank Shopify. I’ve been getting a lot of emails from people who used Shopify.com to create an online store. I want to know what your feedback is, so email me. Tell me about your experience with Shopify.com. For me, it seems like an easy system, within five minutes I was able to create a store with all the features that I need. But I want to know what you think of Shopify.com. Finally, RichWP, that’s where you go when you want a theme for your website that will give, what am I trying to say here? That it’s not just a clean, beautiful theme that you can get from them, but you can get a fully customizable theme. One that you can really make your own. So check out RichWP.com, and you’ll see what I’m talking about. Those are the sponsors. Here’s the interview.
Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy.com, Home of the Ambitious Upstart. And how did this guy, in 1991, the competitors in the PC industry were already in place, and this guy who I’m interviewing today, Rahul Sood, has the guts, the courage, the I don’t know what, to take them on with a high-end PC. That, and I was talking to him before the interview, the most expensive PC that he sold was over $50,000. Gives you a sense of the high-end PC nature of Voodoo PC, the company that Rahul started. I want to find out why you decided to start this company, how you did so well. I mean, you really left an impact, Rahul. How you created this passionate, passionate customer base, and then what you learned along the way that the rest of us entrepreneurs can learn from you. Oh, and one more thing, why you sold to HP?
Interviewee: Absolutely, yeah. I can go through all of that. But…
Andrew: In fact, let me start off with this one question…
Andrew: so we don’t reveal everything all at once.
Interviewee: Yes, please. Yup.
Andrew: I described Voodoo PC. Maybe I can have you give a short description of what the company was and is.
Interviewee: Sure. Voodoo was, you know, when we first started basically, was an effort by a group of people to create a finer PC. Essentially, you know, getting all of the best components, and building something that was sort of like a desktop Ferrari. You know, it’s the best way I can put it. We would focus in on every little detail that goes inside the system, including how this PC was cabled, the air flow, the cooling. You know we really wanted to make our PCs different. And you know, to give you an idea, some of the stuff that we did were things like fanless cooling systems. So we would create ultra high-performance PCs that had no fans in them. We also created liquid cooling systems. So we actually made liquid cooling a mainstream thing. And, as we came into HP, we took liquid cooling and brought it into a couple of HP systems, as well. So, and we did that because we just wanted to make PCs silent. You know? And when you look at Apple, for example, they make PCs that are very quiet, generally speaking. But when you go into the extreme high-performance PCs, with multiple video cards, and stuff like that, the fans were just ridiculously loud. So, it was just focusing on every little detail.
Andrew: Why is the sound of the fan such a big issue? I know why it bothers me, when I’m on my PC, but beyond the little bit of annoyance, why is it such a big issue that you had to take it on?
Interviewee: Well, it started off, actually, because I had a PC in my room. I used to play video games at night, and my wife hated the noise, so the fan noise, which was too much. So I think that’s basically it, you know. We have customers like me, that hate noise, and any excess noise in the room. You know, just can’t stand it. And, you know, when you look at people that do like digital audio or video, or even radiology, stuff like that, they just want to focus in on the task at hand. And they don’t want to hear any excess fan noise in the background. So, you know, just one of those things, I guess.
Interviewee: People have.
Andrew: All right. And I see a bunch of people in the chat are asking questions. I’m going to do my best to get to all your questions.
Andrew: But first, I want to understand what the original thesis was in 1991, when you came up with the business.
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Andrew: In 1991 when you came up with the business.
Interviewee: I’m going to be perfectly honest with you. You know, just like most entrepreneurs when they first start a business they don’t know really. I mean it’s more for selfish reasons than anything else. I just graduated high school, I was 17 years old you know I basically took my last 6 months in stairs so I could focus on creating a business of some sort. And you know I aspired to buy a BMW, just really selfish reasons, purely no focus whatsoever. And you know over the years just surrounded myself with incredibly smart people. It’s what I do now and what I’ve always done; always surround myself wit hpeople that are actually smarter than me and that I recognize are smarter than me and can help take a vision and turn it into something real. So when Voodoo was first started there was no big master plan to be aquired by HP or you know whoever at that time. You know the strategy only started to take place once we realized what really intrested us. So, sorry I hate yo pause you, but when we first started we were doing things like we were still bulding premium systems but we were doing things like networking and web hosting and you know all of this other garbage after a few years. And I call it garbage because it was just completly unfocused and at night we would shut down the store and all of us would play video games with each other. So you know I think that was I think the thing that tipped us off. We should do what we really like doing.
Andrew: I see. Wait this was your store that you were doing all of these different businesses in?
Interviewee: Yeah, well Voodoo basically started off as a premium work station provider for we were working in the Alberta Oil and Gas industry so we were doing work stations for like GIS and CAD and that sort of thing and also premium marketing companies and whatnot. And it was fun, like you know don’t get me wrong building high end work stations is a lot of fun but playing games was more fun. So that’s really how it all -
Andrew: Were you 17 years old?
Interviewee: Yeah I was 17 when it first started out of high school and then you know, basically when things started to get moving..You know Voodoo was essentially started in 1991, things started to get moving around 1993.
Andrew: Okay, let’s take it really slowly because I love the evolution of a business. People think that you come up with this clear idea and then over 5 years you execute it. But in reality it changes and it morphs and I love when you said to me “I’m going to be honest with you Andrew and tell you that it’s not what you expect.” I want the not what to expect story. So you’re 17 years old, you want to be a BMW, you want the usual things a 17 year olds do plus you have your own internal curiosity that makes you unique. What’s the very first thing that you do?
Interviewee: Well the very first thing when I come up with a business now or…?
Andrew: When you did back then. When you wer 17, what’s the first step?
Interviewee: Well, I think the first step was, you know, knowing that if I don’t sell something I’m not going to be able to eat. Right? So it wasn’t like I went out and raised a bunch of money or got money from my parents. Didn’t start that way, started off with $1,500 on my Master Card and it was actually a pretty funny story because I had a $3,000 limit and I met a guy who was in the computer wholesale business who liked me and said you know you should think about building and selling these things. Because he saw me tooling around with a computer system in my dads flooring store of all places. And so I started off with $1,500 on my Master Card, I bought a bunch of parts from him, put an ad in the local paper for $85 and sold 5 systems in my first week. I have to tell you, trying to sell computer out of a flooring store, is like impoossible. So you know, it was interesting, let’s just say. And you know that’s how it started. I think any entrepreneur who goes into a business now or then should understand that you shouldn’t have a burn rate. You know you shouldn’t focus on your burn, you should actually try to build a business that has very little burn if you can. Because if you can return equity back to your investors quickly then you’re going to have a much better valuation in the long run. So, for us it was profitable day one. And it was profitable all the way up until we got bought by HP in 2006. Which is -
Andrew: Wow, that’s unusual.
Interviewee: Yeah. Yeah, it was unusual because can I just say for at least 5 years well actually for the first 3 years I didn’t pay myself anything right? I mean I was living at home, whatever, right? It wasn’t a big deal. So, but after that you know when I was like 19, 20 years old I was doing extremely well and you know I bought my first home and you know was building on the business. But, it is unusual, I think the key was just bring on the right people.
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Interviewee: The key was just bringing on the right people at the right time and growing it at a pace that was organic to our business growth.
Andrew: So, you’re starting out selling these things that you’re putting together yourself, selling them out of your dad’s store. What was the next step? And I promise I won’t go this slow throughout but this is an important period here. So, what’s the next step after that?
Interviewee: I bought a building downtown actually. It was a heritage home. It was like
years old. And I paid…
Andrew: Whoa. Hang on a second. Let me see – wait. You’re going from building these things at your dad’s store and selling them to then buying a building as the next step?
Interviewee: Yeah, but it was a cheap house, right. It was like a – it was – if anyone knows Calgary, it was three blocks south of the Calgary Tower, amazing location. And it was like a Heritage Home that was basically like the last home in this area. It was unbelievable. I bought it for $70,000.
Interviewee: And I sold it in 2005, I think, for a million bucks. So, it was just – it was unbelievable cause I paid, you know, I bought it for $70 grand, put $10 grand down. My mom and dad went through the place. My dad thought – you know he had a lot of vision. He thought it was a pretty cool thing. My mom, she was just overwhelmed with negative things to say about it. It was a disaster. So, but it was – that’s how it all started.
Andrew: Actually, I read about that. So, the business I read started in ’91 and then the Heritage House you bought in ’92 and from there you were building more systems. You were selling to the companies that we talked about. And then you realized that the most fun you’re having is when the company shuts down officially and you and your buddies who, I guess, are your co-workers are playing video games against each other?
Interviewee: Yeah, we would do silly stuff. We’d play video games. You know, there’s a story about a potato launcher that one of our techs was building in the back. And after hours we went outside and started blowing off potatoes in the neighborhood. The police came. It was interesting. So…
Andrew: You’re 18 at the time. And by the way, Newt in the audience is asking $70,000 U.S. dollar or Canadian dollars?
Interviewee: For the house?
Andrew: For the Heritage House.
Interviewee: I mean, come on, let’s face it. Look at the dollar now. Then it was $70,000 Canadian anyways. But, you know.
Andrew: Ugh. You’re blowing their minds in the audience. You’re blowing my mind. Okay. Alright. So, what do you do with this realization that you guys are enjoying video games a lot? How do you take that realization and move to the next step?
Interviewee: Well, you know, that was the thing that was – it was kind of like a natural step for us because there was a lot of interest in the quality of our build from the U.S., from the U.S. market. And so there was a site at the time called the Daily Radar. I think this was in like 1998 or 1999 or something. And there was also PC Magazine and Maximum PC. And all of these guys were interested in what we were doing. And so, I actually built the first review machine, you know, myself on my brother’s dining room table. This story has never been – I’ve never told this story because it’s kind of a small business at the time. And I built this thing on my brother’s dining room table. And I mean every detail was like immaculate. Like the fan system was amazing. The cables were folded in such a way that you would be shocked at how beautiful this was inside. And Maximum PC was completely blown away. And we got like a 10 out of 10 kick ass award in the magazine. We got a number of awards back then. And it was at that point that we just said, “Hey. This is crazy. Like we’re getting sales from the U.S., you know, high margin sales. These customers love us. Why are we doing all this other crap?” So, we had to make a decision to cut revenue from our interim savings right away. And it was over a million dollars in revenue that we decided to cut instantly. And we just said, “We’ve got to cut this because we can’t defocus our guys on this other stuff if we really want to build this brand up.”
So, we did that. We made the decision as a team to cut all that revenue. And we started focusing on gaming. And the brand started to evolve into this, you know, organic entity, you could say. It just kept going from there.
Andrew: Alright. Let me do my business nerd thing and dig into it deeper into what we just talked about here. You said you cut a million in revenue. I’ve got a couple of questions about that. The first – actually more than a couple – The first is: what was the overall revenue? What percentage is a million?
Interviewee: Oh, oh at that time. So, this is in like ’98. I think at that time it was like 25% of our revenue was cut.
Interviewee: Cut completely. And it was high margin revenue too because it was all like hosting stuff, and development and that kind of thing. So, we cut it completely. And it was a big decision, you know, when you think about that. But then when we focused in on the one area, that’s when our growth just started to go exponential. So, we were growing very quickly.
Andrew: Okay. And you talked a little bit about what that 25% was made of.
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Andrew: …you talked a little bit about what that 25% of your business was made up of. You said that you had an ISP, you were actually giving people access to the Internet and you were selling that, right?
Interviewee: Yeah, it was sort of like an affiliate thing where we did have our own high bandwidth connection to the Internet and we actually had a thing called ivoodoo.net where people would get their own email and connection to the Internet.
Honestly, it was a great business at the time, from a revenue-generation standpoint. But again, if you don’t focus on what you do best, you’ll never be successful, right? And so it became clear over time.
Andrew: Alright, and a clarification based on what Nuet in the audience is saying. He’s linking to what he thinks was the original PC that you guys created that got all this attention. Is it a wooden PC?
Interviewee: No, no. It wasn’t a wooden PC.
Andrew: Did it look wooden? Maybe I’m not reading his comment right.
Interviewee: We did make a wooden PC, by the way. It was beautiful. We made one, it’s called the Omen quite recently and it’s kind of like a kickback, retro finish on the outside of the system, but I think the first PC that got us a lot of notoriety was actually quite ugly on the outside.
It was called a wide-body chassis and it was made out of plastic. It came from Taiwan. It was brutal. But the inside was amazing. The inside, it was like popping the hood of an F-40. When you look inside one of those cars, you’re blown away by the masterpiece within.
Back then, we were focusing on the inside out and eventually we got to a point where—I mentioned earlier the liquid cooling and the fanless cooling. It got to a point where we were doing such amazing stuff that I would fly around to Korea and Taiwan and create partnerships with some of the ODMs that helped us develop this stuff.
But because of our low volumes, they would also share in the IPs. So it was kind of a double-edged sword in many ways. That was how we led on to HP down the road, but we can talk about that when you get there.
Andrew: OK. Steve B. in the audience is just telling people to go check out your blog because that’s where they can see old pics of the PCs that you created, and I’ll link to that when I post it for people who are listening on the recorded version.
Another thing I’ve got to ask you before we move on is this: a lot of entrepreneurs that listen to me are now calling me on this Grasshopper phone number that I’ve got and telling me what their issues are, and what keeps coming up is how do you get the first customers? Now here you are, you’re a guy barely out of your teens, and you’ve got $4 million in business. Now to say I’m willing to give up a quarter of my business, it’s gutsy. But to say I’ve got the $4 million is, I think, even more interesting and we need to explore it. How did you get all this business?
Interviewee: Focusing on the customer. At the time when we were building this business, there was no such thing as Twitter and all that sort of stuff. Social networking was like having a forum, maybe, and very few people actually used the Internet. So it was really just focusing on the customer.
I am a salesman at the core, essentially. It goes through my blood, so I can pretty much sell anything. I know that when you’re selling something to someone, you have to believe in it. You have to be good at it, and you also want to make sure that what you’re selling is the truth, that you’re giving the customer a value and when they’re paying you X amount of money for it, you know that they’re getting that value.
Andrew: I understand once you get a customer, you’re focusing on that customer because you’re happy to get paid and you want it right. How do you get those original ones?
Interviewee: Good question. Word of mouth helped. PR was a big deal, so the best PR that anyone can have is a good product. You have a good product, your customers will come running to your door, because you just send out a review machine to someone, they review it and they give you good PR. So word of mouth and PR was a big deal. Very little advertising. Our advertising budget was tiny. Tiny, tiny, tiny.
Andrew: What about this? What about the idea of edge-crafting? I think that’s what it’s called where you go so far to the edge by putting so much into your PCs that it automatically becomes something that people have to talk about.
Interviewee: That’s part of it, but you don’t want to go off the edge, either. There’s a balance between coming up with something great and useful, and then just coming up with something that’s a PR story.
There’s a lot of that that happens in the industry as well. People come up with something, and sometimes I admit we’d do that, like we’d have a diamond-encrusted something laptop or whatever we’d show people as a way to get PR. But at the end of the day, it’s really about creating a product that’s good, you believe in it, and the people that are reviewing it can also vouch for.
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Interviewee: – can also vouch for it, right?
Andrew: And when you say you’ve got PR, is it you personally calling up writers who you… who are in your space and saying Can I send you my PC for you to take a look at?
Interviewee: I did. When we were first building the brand out I did all the PR. So …Absolutely. It was me calling them up, talking to them, making friends, flying around meeting them, taking them out to lunch, you know.
Andrew: How hard was it in the early days to convince them to pay attention to you?
Interviewee: Wasn’t hard. I mean, just… just by showing them what we were doing, and you know, the fact that we were from Canada was interesting I guess, so it really wasn’t hard. Just building relationships with them was not hard at all. And, you know, PR has become a big focus for us. I mean, even as of the HP aquisition like we brought in a really qualified PR team to build us a program, and we directed it. Like, we were you know, very much hands on with the PR that we did. So, yeah.
Andrew: Okay, and was the goal of your first creations to help people play video games faster? I mean once you lopped off that quarter percent, the quarter of your business, and you decided to focus on creating machines, was it creating machines that were high speed for video games?
Interviewee: It was actually creating machines that were luxory PC’s essentially. So, high speed – if they can play video games, they can do anything. So it’s about high speed, quiet, you know, unique technology, and can be used for multiple different tasks. And so many of our customers, in fact even at the time of the aquisition in 2006 we did some measuring. Only twenty five percent of our customers were gamers. Seventy five percent of them were people that wanted like a high performance system that was good. So doing things like mass video editing or radiology. Again I bring that up because we did a number of radiology work stations because they were silent and people love that. So yeah. It wasn’t just about gaming, I guess you could say, but if your PC can do gaming it can do anything. The industry is changing, by the way. The whole landscape is compeltely different now after 2008. It just got wiped, you know, sort of in a completely different direction.
Andrew: I’ve got to go back to the story but I need to take this bait and ask you for a little bit more. What do you mean, what is it like now, what are you seeing?
Interviewee: What, in the industry?
Andrew: Yes -
Interviewee: Well the focus now is, you know, two years ago people were buying systems with like multiple video cards in thier machines, they’re spending $2,000 just on graphics alone, you know and they were trying to eek out as many framerates as they could. Now it’s completely changed because the graphics preformance is very good on pretty much most systems, including our Notebooks that are coming out now. People actually focused on making systems smaller, lighter, thinner, quieter, and – and greener. Green is an amazing thing, and that’s one of the reasons we watched the PC last year called the Firebird, which was a – it is the only, you know, the highest performing PC out there that uses one fifth the power of any other high performance PC. It’s amazing and it was a combination of mobile components and desktop components.
Andrew: Great. Let’s go back then to where we left off. Let’s see. We found out about how – about who you were targeting. You know what I’m wondering is? How’d you know who to turn to to even get the case for your computer? The components, where would you even know? Today I can even google it.
Interviewee: [Laughs] Yeah, back then it was tough. You had to network with people, call around, and as you got into the industry and started buying components, you could find out where sub-suppliers were buying thier components from. It was really just – it was difficult. It’s hard to say how because I fell into the business by a guy who ran a supplier, who ran into me and said I should get into the business. He actually got me started. You know what’s funny? Actually his name is Leonard Heath and two years ago I walked into HP, Voodoo, right, our Calgary office, and Leonard got a job there and he was working in the back as a tech. And he’s the guy who got me started in the business.
Andrew: And you just randomly ran into him?
Interviewee: Randomly ran into him and he’s working at our company.
Interviewee: Yeah, crazy story!
Andrew: The other thing, when I introduced you I said that you took on the majors. Now it’s one thing to have a story like yours, some kid decides to put together computers and sells them… It’s one thing to have that happen in the 80′s, it’s one thing to have it happen back when Dell did it, but this is ’91. The industry is already established. What did you think you were gonna do? How are you gonna compete with these guys?
Interviewee: You know, it wasn’t so hard then to compete with them in terms of being local and being able to be in front of the customer. You know, at that time, because remember at the time we started there was no real vision -
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Andrew: There was no real vision of what we were doing otherthan the fact that we were a total solution provider helping customers get in touch with there technology. Over the years it became quite apparent that the industry was going downsteam. The ASP’s and the margin were going down, and the P.C. was becoming a commodity. So the challenge was, “”How do you turn a commodity into a luxury item? How does coach turn a bag into a coach bag or burberry do the same thing?”" So it was really about building a brand that was synonomis with with luxury and synonomis with quality and performance. There was nothing like it. Let’s face it in the P.C. industry it was basically “”DELL, HP, COMPACT”" and there was really nothing synonomis with luxury and high performance. “”Apple”" was great but at that time “”Apple”" was an enisa of the technology area and graphics. So it was a different space finding a neash in a commodity and turning that commodity into an actual product that went upsteam was unbelievabley against the grain. so it was very easy to compete.
Interviewee: One more thing about the early days. The first million. What was it like to make that first million dollars? You were probably still a teenager at the time, right?
Andrew: Yea. I’ve always been sort of an entrepreneur in many ways. As we were building up the business I would take some money and invest it in other areas as well. I made my first million when I was nineteen years old. It went to my head very quickly. I had a very nice car, a house, and all that stuff. But I lost my million dollars within a year or two. Lost all of it and then some. It was a good learning expierence. It humbled me. It got me thinking about what I was doing wrong and what I was doing right. I learned one thing for sure, when you invest in somthing, invest in yourself, what you do, and just stay focused on it! And don’t be a dick essentially.
Interviewee: Who were you a dick to?
Andrew: I don’t think I was a dick to anybody other then the fact that your a nineteen year old and you make a million dollars, you tend to think your unstopable.
Interviewee: What did you spend it on? where did you lose it?
Andrew:I lost it in a terrible investment. Let’s just put it that way.
Interviewee: Can you give us a sense of it? I’ll tell you I’ve done a couple interviews here with younger guys who’ve lost it all. Made it quickly and then lost it all. I can see sometimes when I talk to them they feel that if I made it once I can make it again. I also see this feeling that I’ve lost it. It’s never gonna happen again. I keep telling them, “”No, lots of people I’ve interviewed lots of people have turned it around Your not the only one to feel this way.”" So that’s why I want to get a little more insight into what happened.
Andrew: The best education for me on building an equity or building an asset base is also the most expensive. So by looseing that money it completely changed the way I think about investing money in the future. I lost it for a number of reasons: One I started to defocus myself from Voodoo. I was doing alot of investing in alot of publicly traded companies at the time and there was kinda a boom in Calgery with the whole “”Gold Rush”" thing. I really just lost focus on what I was doing. Once you loose that laser focus that made you sucessful in the first place, your gonna end up like I did at that time and it really changed the way I do everything now. I don’t get envolved unless I completely understand the stratagy from front to back. Unless I understand the numbers completly as well as I need to understand the management team and know them. I can say one thing is for certain if your good at somthing and you know oyur good at it follow a dream to pursue a career in that space and dont loose sight of that.
Interviewee: How did you get it back?
Andrew: How did I make the million back. Oh tha wasn’t hard.
Interviewee: Not necessarily the million, it seems like it obviously went beyound the million. How do you go from a low like that to getting back on track and building a biggeryou were in the first place?
Andrew: That was just reality setting in again you don’t eat if you don’t make a living. Back then there really was not alot of V.C. hanging around willing to trow money at anything. So it was essentially a matter of do or die. How I got it back was to refocus.
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Interviewee: …refocus everything that I was doing back on what I like to do best, which was the business, Voodoo, and focusing on the brand and building it from there.
Andrew: Fine. Getting more customers, building better machines, and so on. OK.
Andrew: All right. You mentioned people a lot and I didn’t give you an opportunity to talk that through. So, let’s talk about the first person that you hired and then build on from there.
Interviewee: Sure. First person that I hired, his name is Mike Cooley. Great guy. He’s actually a very good friend of mine. The story is, actually, I met Mike at my first job at Wilco. You guys don’t know what Wilco is, but Wilco was bought out by Wal-Mart. And I used to work in the automotive section. Mike used to work in sporting goods, which was next door. One day, we were there at night, and we were throwing BBs at each other from the sporting goods section. So, we had these BBs, and we were whipping them at each other, and Mike took a handful of BBs and threw them at me and hit a customer with the BBs. And so, I got fired for it, which is fine. I was actually, long story short, is that I got fired from the company, and then I just started Voodoo because just I love computers so much. I was all stupid stuff. We all do stupid shit when we were young, and that was my bad thing that I did. And I hired Mike. I’m like, “hey, Mike, why don’t you come work for me on this company, help me make this happen?” And so, Mike had been there on and off, like he’d been there at the beginning, helped build the company up, and then he went off and got another job at Tellis doing networking and stuff. Then he came back to Voodoo and was consulting, and now he’s started his own business, so.
Andrew: What was he doing for you?
Interviewee: Mike was actually the tech. So he was the guy, we used to have this little room in the back made out of Japanese paper, and that was like a booth that Mike would go back there and he would work on all the computers and build them in this back, Japanese paper room. He was awesome.
Andrew: All right. Who else was there, I know that you hired your brother, how…
Interviewee: Yeah. So, in ’99 I hired my brother. From ’91 to ’98 it was just basically me bringing on friends, we had a lot of good friends in the company. I hired, there was a guy named Jeff who started PureOnage. I don’t know if you heard of it before. It’s like this TV show that’s on the Internet, and anyways, he was one of the guys. There was a whole bunch of like people that I grew up with that were friends, and we all shared common interests. And then in ’99, I hired my brother, because I really wanted to focus on the product, and I knew he could focus on the business. He was studying for his MBA at the time, and he gave me an opportunity to get focused in on the product. You know, it worked great, so.
Andrew: I love working with my best friends. The best experiences I’ve had were working with people that I knew before I hired them, before we started working day to day together. But most people don’t find that, don’t have the experience that it’s easy to work with friends. Can we explore a little bit about how, why it worked for you?
Interviewee: Yeah. I think it worked for me because we’re all still fairly young and we weren’t trying to make a big career out of it at the time. I mean, when I first started, it was just me basically trying to build something for myself.
Andrew: So why were they taking you seriously? Why wouldn’t someone say, “hey, I don’t have to listen to you. You’re the guy who threw BBs at me. You didn’t even have the sense to put it into a BB gun, you were just throwing them at me. And now you’re telling me what to do? Now I have to come in on time for you?”
Interviewee: It was pretty casual. We were friends. I think the key was that, when you’re 16, 17, 18 years old, and you have an opportunity to work with computers and build them and learn something completely different, it was very easy to hire people. So, I had people all the time asking for jobs, and even now, I still get tons of resumes. I don’t know what to do with them anymore. And then eventually, when Voodoo became Voodoo, it was unbelievable the amount of interest. People would come looking for jobs just because this company is so cool.
Andrew: Let me throw a few theories out there, and you tell me if any of these resonate with your experience about why you were able to work with your friends. Part of it you just said, you were working an exciting field, and people love to be in these hot areas. Another part is, you’re a good salesman. You brought this up before. People who are are good salesman have a good, clear way of inspiring people with their mission, of bringing them into their mission. And maybe they were brought in by that sense of mission, by that sense of direction, by that salesmanship. Is there any truth to that?
Interviewee: Absolutely. I think, again, the passion comes out when you’re interested in something. And if you’re very passionate about something, it’s easy to be infectious. So, when you’re infectious, you can surround yourself with great people.
Andrew: What about this? I read an article that said that at 11 years old you got a computer…
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Andrew: …at 11 years old, you got a computer. Before you even used it, you ripped it apart, you put it back together again. You painted it red, I don’t know why red. But building computers was part of who you are.
Andrew: Was being the person in charge, being the person who inspired trust, was that also part of who you are, going back all the way to 11 or some early age?
Interviewee: You know, I think so, although when I was young, I was more of a keep to myself kind of person. I think, until I got into high school, it was people starting to see that I was different in that way. So, yeah, I think so, I think I’ve always been kind of a leader in many ways. And then over the years, you tend to hone your leadership skills, I guess. So, it’s hard to imagine when you’re that young, you can lead people properly. As I said, usually when you’re younger, things can get to your head and you can get arrogance and stuff like that. Over time, as we get older, we learn from our mistakes. And I think we become better leaders, better people, as a result. So, yeah.
Andrew: OK. We talked about how you guys were fixing computers behind a screen at an office that was actually a house, a heritage house. When did you go from being this small, local guy to being the person who was up on the national stage, and how did you make that transition?
Interviewee: Yeah. So, in ’99, after we had basically started to focus in on a strategy, right. And, how does this work? Essentially, anytime I get into any business now, I go to a strategy first. I look at what the exit strategy is first. So, in ’99, we basically came up with an exit strategy. What are we going to do with this company years from now? And the goal is, when you build an exit strategy, you want the potential exit to come to you. Whether it’s, whether you go public, whether you want an acquiree to come to you, or that sort of thing. And so, we said, “we want to build this premium brand out. We want to be like the Ferrari of the computer industry, or the Mercedes Benz of the industry. And there’s a lot of companies out there, like the Chryslers, and the Fords, and whatever. Or in HP’s case, the Acura, for example, because I believe the quality is very good. But, at the time, it was like, let’s build up this quality brand that no one else has. We think that they’re going downstream on price, bulk of the industry is going downstream on price in the SPs. And we’re going upstream. So, eventually, someone is going to call us”. And that was it. You build a strategy around that, and eventually, someone did call. And in 2005 actually, Michael Dell called. He started off with, it was a call to my house, didn’t think it was really him, and it was. [laughs] So, it was actually, he e-mailed me first, and I thought it was spam, because the e-mail address that he uses is pretty funny, let’s just say. And it’s almost like, too obvious. So, he e-mailed and wanted to talk about Voodoo. And it was on Remembrance Day. In Canada, it’s a holiday, it’s November 11th, I think it is. He just wanted to talk about Voodoo, talk about the business and stuff. And I was completely amazed that he actually called, because obviously, we’re doing something right. And I ended up talking to him for at least an hour that day, after I’d gone for a ride to clear
my head and come back. And then, for the next month or so, I was talking to him every weekend, nights sometimes we would talk, which means he must be up all the time. And back and forth about what we’re doing and how we might fit with them. And it turned out that in December, I went to go see him in Austin, and it was an interesting meeting. So, he’s a nice guy, don’t get me wrong in any way. He’s a nice guy and everything, but the visions were misaligned. Their goal was to go top-line revenue, and at the time, I had mentioned to them I thought that Apple was their biggest threat. And his response to me was that Apple spends as much money on R&D as Dell does. Therefore, Dell is more profitable. That was in December of 2005. And earlier that year, Kevin Rolin had said that the i-Pod was nothing more than a fad, so once you start to see that, my goal was innovations, so our goal was to plug into an entity that could help us innovate. Because I remember earlier I mentioned to you that I used to travel to Taiwan and Korea and stuff and make partnerships with these OEMs. I didn’t want to do that anymore. We wanted scale. So, we wanted to plug into an innovation engine.
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Interviewee: …plug into an innovation engine, and Dell’s engine was not an innovation engine. The only innovation they had at the time was supply chain innovation. So it didn’t work for us.
Andrew: Why do you care? A check is a check. Why not say, “He’s not going anywhere. He has this vision for me. I’m going to feed his vision so that he writes me a bigger check. I’m going to cash it out and then let him do whatever he wants. Who knows, maybe he’s right, maybe he’s wrong. I’ve got other things to do.”
Interviewee: Brand meant a lot to me. I’ve got the brand tattooed on my leg, to give you an idea. So I got a Voodoo tattoo on me. It means more than just a check.
At the time, we were already in talks with a number of people. We had spoken to somebody at Gateway at the time. I had spoken with people at HP already at the time. And so I knew that a check wasn’t going to be the main thrust. The thrust was I wanted to see Voodoo get to this place where we could do innovation.
Andrew: For a legacy? Or for fun?
Interviewee: That’s a really good question. Fun. I mean, legacy would be great. But I enjoy every day that I get up and go to work. Right? Every day that I wake up, take a shower, now I come downstairs in my basement and work, right? I enjoy every minute of it. So I guess it’s a lot of fun when you can work in an organization that gives you that flexibility and has the ability to change the world.
Because, when you’re in an organization the size of HP, with the breadth of not just innovation but facilities internally, it’s amazing what you can do. And how you can actually affect change in the world.
Andrew: How is HP going to change the world? Isn’t HP just going to offer the best price “whatever” in the market and somehow stay in the middle where it’s profitable but not on the edge where it’s dangerous?
Interviewee: No, I don’t think so. I think that when you look at HP in terms of innovation, we have HP labs, which is all over the world. There’s one in Russia, they’re in Bristol, and Palo Alto, and there’s a lot of really cool stuff going on in labs that we do.
I have to say, even the printer business. People don’t look at printers like innovative, but man, that ink? Seriously, those cartridges. The size of the particles that it actually spits out on the page, it’s pretty amazing. You can use those things for health care applications and a number of other things as well.
So there is a lot of innovation at HP. I think the key is trying to get HP to monetize that innovation properly. That’s a challenge. I mean, it’s a big company. Sometimes we make decisions that are really good and sometimes we make decisions that are reactionary.
The nice thing about working there is I can come out and say what I feel, and they listen. In fact, we’ve had some great, great changes since Voodoo was acquired by HP. There has been a number of changes.
You look back at 2005, early 2006, and you look at the HP notebooks that were coming out then. They were basically gray, plain jane, really, really boring systems. And now you look at them and there’s been more of a focus on design. A lot of things have happened.
Andrew: But again, doesn’t that just reaffirm my statement? They’re not the leader in design. Design’s important and they’re going to offer the safe, economic design and let Apple be the design innovator.
Interviewee: That’s certainly not my goal. Being in the company, I know exactly what you’re saying. I acknowledge that Apple makes great products and they have a great ecosystem. Our goal is to take the Voodoo brand as the premium brand and be able to do stuff like that, right?
2008 changed everything. When the economy collapsed, our roadmaps completely changed, and everyone got on the defensive. Every company got on the defensive. It’s not just an HP thing; everybody did. They cut costs in certain areas, they re-strategized in some areas, but I can tell you, there’s three brands at HP.
Two of them are giant. HP and Compaq are giant. And then there’s Voodoo, and Voodoo has not yet delivered what we want it to deliver. There’s certainly an opportunity, but I can tell you that we recognize what we’re good at, and what our strengths are, and we also recognize our weaknesses.
Andrew: All right. I don’t want to get too far into that because it’s outside the scope of this interview, but I wanted to explore your ideas a little bit further. I want to understand, even more importantly, what happened between that 1999 conversation where internally you guys were plotting out where you were going to go and where you were going to exit…
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Andrew: …and the time Dell called you, what did you plan that took you to that level, where Michael Dell himself is emailing you and calling you?
Interviewee: Well, once we built out our strategy, the focus was, “Let’s cut areas of our business, let’s just focus in on the brand and build a fantastic product and get it out there.” And so really, the PR that we did was masterful.
I mean, if you look at our history, and the magazines and the sequence of events that took place, and the awards that we would win, it was unbelievable. People thought that we would never be able to do what we did and we won a number of awards multiple years in a row.
There was this one award that was like the Oscars of the PC gaming industry, and it was called the Computer Ultimate Gaming Machine award. We won that three years in a row and the last year that we won it, we completely annihilated Dell on one of their new machines, and everyone else for that matter. We came close with a couple of the boutique companies, but the big guys, we annihilated.
That was kind of a tipping point, where they just couldn’t beat us at what we were doing. They couldn’t beat us at our game and I think they wanted to figure out why that is, like Nike has Kenneth Cole, like at the time, Chrysler had Mercedes-Benz, that kind of thing, it was that kind of thinking.
Andrew: Let’s go further into what you call your masterful PR, because that ties in with something else I said at the beginning of the interview. You had, and still do but it’s especially impressive to see this out of a small private company, you had these fanatic fans.
We talk about the way that fans love their Apples. You had that and then some. I mean, if you measure it by how much people are willing to spend, they were spending more on you—more time, more passion, more time on their computers, more time talking about you, more money. How? What was that masterful PR that you guys pulled off?
Interviewee: The masterful PR was, as I said, we’re going after the magazines and we’re building great products, but it was also building a community and being entrenched in our community—talking, engaging with the people in our community, addressing issues immediately and up front.
I think we were the only company in the PC space for sure, we were the only company that had an open forum where people could come in and bash us for our customer service or praise us, and we would immediately respond to it. So people were very impressed by that transparency. Being a fully transparent company and not hiding behind anything, or not pretending to be something that we weren’t was a big part of the PR strategy.
Andrew: And you also tapped into a passionate computer user who wasn’t being addressed by the majors—by just about anybody, right? These are hard-core gamers who needed fast systems, were willing to spend on them, and were willing to even create it themselves, build these things themselves. You tapped into that fanatic market and you gave them what they needed.
Interviewee: Yeah, we not only tapped into that, but under HP when we created Blackbird, we started to turn some of the do-it-yourselfers into people that would actually be customers. After HP came along and we created Blackbird with all of these really cool tool list technologies, we completely changed the industry again and now everyone is copying what we did.
There are companies out there that are taking all of the stuff we developed, like the tool list technology that we came up with, the removable hard drives, the liquid cooling system that we helped develop, all of that is being used in other PCs now from other companies. It’s nice to see that they’re following us, because imitation is the best form of flattery, I guess, but the good thing about being under HP is we have a lot of IP that we tied up as well in the process.
Andrew: That kind of ties in with what you said earlier about having the open forum where people can bash you for your customer service, ties in to what Jason in the chat room’s asking about. He’s saying, “As a small company, how did you deal with service, with returns, with warranties, with all the stuff that people expect from a computer manufacturer?”
Interviewee: Well, just like you would expect them to deal with it. So if you had an issue with anything that you have, how do you expect to be treated, right? I think as long as you’re treated reasonably, that your issue is addressed within a reasonable timeframe, which for me was within a day that you would at least get a call and we’d try and figure out what to do. It’s a balance.
You definitely want to bend over backwards for your customer and you don’t want to bend over forwards, I guess, right? You want to do what’s best for the customer without hurting the company.
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Interviewee: So you want to do what’s best for the customer without hurting the company. You know? And I think that’s important. Or setting a precedent.
Andrew: Did you have your own internal service people? Did you have…
Andrew: your own internal ability to turn around service requests?
Interviewee: I could walk out of my office, and go next door, and talk to the service guys right away, in case there was an issue. So, yeah.
Andrew: How many PCs did you sell at your height, before you sold to HP?
Interviewee: Oh, boy.
Interviewee: Tens of thousands, so you know, we were, our volume was high. You know, our revenues were high. Our profit was, you know, very good. We were a highly profitable PC company at the time.
Andrew: How profitable?
Interviewee: Much more profitable than your average PC company.
Andrew: Can you give us a sense of it, either in dollars. You don’t have to.
Andrew: Obviously, the exact number would only matter to your competition, or maybe to potential enemies.
Andrew: But can you give us a sense of the revenue?
Interviewee: I can’t really. I can just tell you that we were well into eight figures, basically. So you know, we were doing pretty well.
Andrew: So we’re talking about over 50 million dollars in revenues?
Interviewee: I can’t really get into the numbers because again, it was when we did the deal with HP, we kept those numbers private.
Andrew: OK. And what about net margins?
Interviewee: Net margins were fantastic.
Andrew: Over 10 percent?
Interviewee: Oh, yeah.
Andrew: Over ten. Over thirty? Can you compare them to who… Sorry, you go ahead.
Interviewee: So yeah, our net margins were definitely over, you know, the double digit range, well into them. So they were very good. They were very good.
Andrew: Do you know what your competitors’ are? I mean what the big guys, what their net margins are?
Interviewee: You know, I think typically, when you look at the big guys’ income statements at the time, I mean I think they were definitely under, in just the PC systems. I think they were under 10 percent, sort of thing. So, you know, we were doing very well at the time. But, you look at what HP does now, you bring scale to our business, you know you can see margins increasing as a result of that scale, right, because you’re buying parts at a much lower price. But yeah, our margins were very good.
Interviewee: Very healthy.
Andrew: And yeah, Covercash pulled out a great quote from you. He’s saying, “You want to bend over backwards for your customers, but not forward.” That is a great quote. Is that the first time you coined it?
Interviewee: I was just kind of talking out loud.
Andrew: I like that.
Andrew: Somebody else, please steal that line. Tweet it out, and attribute it to me. I would like to sound that impressive.
Andrew: Let’s talk a little bit about financing, about the money that went into the business. Here’s what I got so far. Seventeen year old kid takes $1500 on his Mastercard, and builds a profitable computer company.
Interviewee: And so when you say that, it’s nice to hear. But you know, again, it goes back to the team. Right? It was like I just single-handedly made this happen. I think by surrounding myself with smart people, and just hiring, you know, great, great people, we were able to do that. Right?
Andrew: But there was no other funding, right?
Andrew: Nothing. It was just a thousand five hundred dollars on your credit card.
Interviewee: Yeah. Yeah.
Andrew: And then from there, it was all profits.
Interviewee: From there it was all profits.
Andrew: OK, let’s talk. Again, let’s go even deeper into the people who you were working with. What made them so phenomenal? These are guys who were throwing bebee guns, bebees at each other. How do we? You know I’m kidding, obviously.
Interviewee: Again, it goes back to, it just goes back to the passion, right? You hire people that are interested in what you’re doing, in the particular company that you’re building. And they’ll do well. I mean, I’m involved in other companies as well, right? I mean I’m involved in the health care startup, and this investment thing that I recently started. And it was just a matter of finding the right people who love what it is that we do in that area. And, it’s become…
Andrew: People already love whatever it is that you’re doing. So, instead of instilling the passion, you’re finding people who already have it, and then you’re guiding it.
Interviewee: Yeah, you don’t want to put an ad in the paper and get some guy in off the street. The worst thing I can tell you, when you’re looking for a job, for example, a career. Never e-mail your resume out. Never just blanket e-mail a resume out, saying, looking for a job. You have to, especially in this day and age, when there’s no jobs out there, right? I mean, people are hiring, but we look for that person. So, the best way to get a job is to pinpoint the job that you’re looking for, customize your resume for that job and what you’re going to do to make a difference in that company. And that’s all we did. We used to find people just based on that. I don’t care if they went to the University of Calgary and got a degree or they got an MBA from the Worden School of Business, or whatever. I didn’t care about that. I really wanted to find out, what drives them, what makes them interesting, and what they’re good at. So…
Andrew: I could understand you could people who were passionate about inventing new computers or inventing new cooling systems. Maybe even people who were passionate about fixing the computers because there’s a challenge there. But can you really find people who are passionate in the rest of the jobs…
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Andrew: …in the rest of the jobs, like Customer Service. Who wakes up in the morning and says, “Yippee, I want to be yelled at by somebody who forgot to install a driver.”
Interviewee: Yeah, you know I think the key to the customer service part is finding people that can get ahead of the problems, and put fires out before they happen. So you have to find people that love to create solutions. You know, you don’t look for someone that likes to be on the phone and get yelled at, but you actually look for somebody who can solve problems before they happen.
Andrew: I see.
Interviewee: So it’s just a different way of hiring people, you know.
Andrew: And that’s the way the Japanese beat the American car.
Andrew: The American auto industry.
Interviewee: You know, and that’s the way we did a lot of our hiring. I mean, you know we would think, you know, proactively. How is this person going to help, you know, in this area? And help before problems occur? Or, you know, help build the sales team, or that sort of thing. You know, what drives them.
Andrew: All right. I want to talk about one other business issue, and then we’ll talk a little personal about cycling for a bit. But first, let’s talk about sales.
Andrew: Sales is one of these unsexy, under-written about, under-appreciated parts of business, but the most the most successful entrepreneurs who I’m talking to have got this passion to sell.
Andrew: Or this ability to do it. How did you develop it?
Interviewee: How do you develop the ability to sell?
Andrew: How did you personally develop your ability to sell?
Interviewee: Well, you know I used to… I read a book a long time ago. I don’t remember what it was called. It was by a guy named Joe Gerard, who was an interesting guy.
Andrew: Something like how… It was the guy who How I Turned My Life Around Through Sales. He was the auto salesman.
Interviewee: Yes, auto salesman, yeah. And I don’t remember the name of the book, but it was interesting just to hear what he used to do. He used to go out to events, and hand out his card, and remember…
Andrew: He would toss his cards up in the air, so that they would land in people’s laps.
Andrew: And they would call him.
Interviewee: Yeah, and then, you know, he would keep track of his customers. You know, when is their wife’s birthday, and well, what are the kids’ names, and stuff like that. So you can do all that sort of stuff. I mean that’s great, to build a rapport, a relationship with your customer. But again, there’s no better salesman than a good product. You know, if you have a good product, you don’t have to be a snake oil salesman. You know, you can just let the product speak for itself, and never compromise. You know, like when we were selling these premium PCs, people used to call us up for a discount. We never would compromise on that, because we knew what we had. We knew it was special. So yeah, there’s no secret to selling.
Interviewee: As long as you have…
Andrew: but there was masterful PR.
Andrew: There was reaching out to the right writers. There was talking to your customers. Some people may not consider that sales, having a forum and engaging with people. But that is a form of sales, and I’m sure if we spent another hour, I would find even more. But you’re right, it all has to happen around a good product.
Interviewee: Around a good product, exactly. It’s like you’re building a strategy around this good product. It’s funny, when we talk about the reviewers, one of the guys who used to review our PCs for “PC Gamer”, he was the head of “PC Gamer”, he was an editor, his name is Greg Vederman, he actually came to work for HP-Voodoo after the acquisition. So, we built these relationships with these people, and they loved what we did so much, and they loved the vision, that it was just nice to see. Hiring Greg and getting him on our team was awesome, while he was there. So, …
Andrew: There is one other, I see the time, and I want to make sure that we stick to the allotted time. But there is one other thing I didn’t talk about, which is, the sale of the company. And that actually will be a nice transition into cycling.
Interviewee: Sure. The sale of the company. [laughs]
Andrew: I mean, how did you and HP hook up?
Interviewee: Yep, exactly, good question. Anyone out there know who AMD is? AMD at the time was sponsoring Lance Armstrong and the Discovery team. They’re also sponsoring Ferrari. So, in fact, I have one of my Ferrari hats from one of the events that I went to. That’s Michael Schumacher’s signature there. But I had a friend who used to run the sports marketing thing at AMD, and I’d gone on a Ferrari trip, and I met Gateway there. He told me that they’re having this, I told him I wanted to meet HP. Really wanted to get in front of them to talk to them about the strategy that we had. And he said, “hey, listen. In July, which is 2 months away, we’re going to France. And we’re going to have a tour”. And so, when I asked him, “what’s that?”, and he said, “we’re going there for the Tour de France, and basically you just have to ride bike with us for 7 days. It’s a total of about 1,000 kilometers. And then, we’re going to spend a few days in Paris together. And HP, there’s going to be some HP people there”. So, I said, “OK, I’ll do it. I’d love to do it. Can you get me the invite?”, and I was begging him for an invite. He says, “can you ride a bike?” I said, “yeah, I can ride a bike.” And so, he said, “OK, I’ll let you know”. And I was completely out of shape, haven’t been on a bike since I was 8 years old, and I got a…
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Interviewee: And I got a text from him saying, “OK, get on your bike. You’re coming to France.” So, this was like a month before I had to go to France. So immediately I started working out. I went to a gym every day. We went to Seattle, and spent, basically, a month there. And I was going to the gym every day, and working out on this Life Cycle. Pathetic. I bought, you know, brand new shoes, a helmet, and you know, like a bike jersey and stuff, and went to France. And I started riding a bike there for the first time. And it was hard because I didn’t even know how to switch gears on the thing. Bottom line is, I did everything I could to get in front of HP, and ride alongside these guys, and talk to them about Voodoo. And that included like losing 30 pounds, and getting on a bike. And…
Andrew: Thirty pounds within 30 days, I believe. Right?
Interviewee: Yeah. Thirty pounds in 30 days. Unbelievable. And the ride was amazing, you know. We went there. We hung out every day, met Lance Armstrong. It was a lot of fun. It was a lot of fun. And it was well worth the journey. So that’s how it happened.
Andrew: And it sounds like you’ve got a new passion now, cycling.
Interviewee: Yeah, I love cycling. I got, you know, a couple bikes, a couple road bikes. And I cycle here, and I also live in, I have a house in Seattle, and I have one in Calgary. So I go cycling all the time in both places. Yeah.
Andrew: One of the things that I miss about living in Southern California. I could know that the weather was going to be nice on the weekend, and know that I could go for a ride whenever I wanted.
Interviewee: Yeah, yeah.
Andrew: I long for those weekends. Uh-hmm?
Interviewee: There’s a thing called a K-Track. I just saw it the other day on this show called Dragon’s Den, and it’s like a back wheel that goes on a bike that looks like something that would be on a snowmobile. So if you have snow in your area,
Interviewee: It’s kind of a thing you can add to a mountain bike. Pretty cool.
Andrew: Never heard of that.
Andrew: And actually, it is sunny here. It’s just the traffic would kill me. And then if the traffic didn’t kill me, the exhaust from the cars would just knock me out.
Interviewee: Yeah. [Laughs]
Andrew: Earlier, when I gave that statement, what was it, Chris Covercash is saying, that should be the title of this interview when it gets posted. And he means the “17 Year Old Builds Profitable Voodoo, with Nothing More than $1500 on His MasterCard”. I’ve got to obviously shorten that up. I might make that the subject.
Andrew: You and I, and the person who listened all the way to end of this interview, is going to know that it’s not just about that. That that’s a hook to get people to listen. The smart people who actually put in the effort and listen all the way through, will have a better story, and have a better understanding what it really takes to build a business. But I agree with Chris.
Interviewee: Yeah, yeah.
Andrew: All right. Is there anything that I missed here?
Interviewee: No, not really. I think this is great, you know. And if there’s ever a chance in the future we can talk about other ventures that I’ve involved myself in that are…
Andrew: You know, I’d love to because I actually wrote it down. And whenever people bring up certain things over and over in an interview, not that you’ve brought it up a ton of times, but I think it was three or four times, I want to ask. Do we have enough time for me to ask you about that?
Interviewee: Yeah, we can just briefly touch on it, like, you know.
Andrew: Please, let’s do it.
Interviewee: For example, the health care thing. I haven’t publicly announced the name of the company yet, but will soon. But my dad died in 2000. He died of cancer.
Andrew: Sorry to hear that.
Interviewee: Three months after we found out he had cancer. Unbelievable, right? Like he got a brain tumor.
Andrew: What kind of cancer? A brain tumor?
Interviewee: He had a brain tumor. Yeah. So he had a brain tumor in November, died in January. And the last thing I showed my dad was the first article we had in Maximum PC. The 10 out of 10, you know. I brings back a lot of emotions because he never saw Voodoo go from, you know, where it was in 2000, to where it is today. I mean he would have been, you know, extremely, extremely proud of us. But the point is, he died of cancer, and I wanted to figure out, you know, a way that we could have had more information at hand, at the time. You know, because back then you could talk to your radiologist or you could talk to your surgeon. And there was no research. There was no tools that we could use to share and collaborate information. So I got involved in this start up. That’s a very interesting start up that could change the face of medicine forever.
Andrew: You can’t tell us what they do even.
Interviewee: I will. You see that’s why I’m saying in the future, well, we can talk about it then.
Andrew: All right. I thought maybe only had to hide the name. You’re saying you even have to keep quiet what they do.
Interviewee: Yeah, yeah. I just want to keep quiet about it…
Interviewee: until things start coming out. But it is interesting, you know. We’re getting in front of, we’ll have some stuff in place where we’ll be in front of tens of thousands of doctors very soon. So it should be an interesting thing. And then the other thing that I got involved with is this thing called Bulls. It’s called bullsonwallstreet, and it’s a community that we created. Starting last year, like starting in 2009, and you know, long story short is, it started off as kind of an experiment where I was doing some research on Twitter. And I found that there was a lot of people trading stocks on Twitter. And they were using Twitter as a tool to trade stocks with. And, but what I found was…
The transcript for 1 hour 5 minutes till 1 hour 10 minutes is BELOW this line.
Interviewee: But what I found was, there was a lot of noise on the stream. So basically, people will say, “I’m buying this stock”, or “I’m selling this stock”, or “I like this stock”, or “I like that stock”. And there’s no way of knowing who’s good and who’s bad at what they do. And so, I’ve been investing for over 20 years, and I’m very, very good at it, you could say. [Laughs] Now, because I continue to build.
Andrew: You had a little set back.
Interviewee: And so, I started finding some of the best traders on Twitter, and we started this experiment. Basically in May, just to kind of give you an idea, my portfolio last year was up over 450%. By the end of the year. My overall portfolio. In May of 2008, you know I started this thing off as kind of an internal beta, and then once my portfolio hit a certain percentage, we decided to launch it as a public beta. But like one of my accounts went from $80,000 to 2.2 million with margin, as of last Friday.
Interviewee: So it’s unbelievable, you know. And it’s really just about sharing and collaborating, and doing stuff in real-time, that you could never do before. And that’s all because of Twitter.
Andrew: And I can follow along as you’re trading.
Interviewee: Yeah, you can follow along as we’re trading. You have to do your own due diligence, right? But you can start to figure out who the best traders are. And the nice thing about this site is we cut through all the noise. And we basically, as a community, are evaluating those companies, and what we like about them and what we don’t like about them.
Andrew: How is this like Howard Lindzen’s company? What was that called, StockTwit?
Interviewee: Yeah, yeah. That’s a good question. You know, I probably would still be using StockTwit, and doing my, you know, my thing on there, had I not been kicked off two weeks after I started on site. So, you know, long story short is, I got pushed into this. I didn’t want to get into another business, to be honest. I really wanted to, you know, just stop with the whole business things, and you know, focus in on the health care stuff, and continue doing what I do at HP. But I kind of got pushed into this community thing. And it’s different because, there’s a number of reasons, but basically, we are cutting through a lot of noise, and just doing a lot of really good research on the stuff that we do. So yeah.
Andrew: And what’s the website? I don’t know if it was clear enough before.
Interviewee: It’s www.bullsonwallstreet.com.
Andrew: For the transcribers, it’s bullsonwallstreet.com.
Andrew: All right. Let me think. Is there another site that you want to talk about?
Interviewee: No, that’s it, you know, that’s basically it. Yup.
Andrew: All right. Before I thank you for coming here and doing this interview, I’ve got to thank you for having this rock solid internet connection. I mean, I’m here in Buenos Aires. It turns out, and I’ve got great internet connection, turns out that the weak link isn’t me and my connection, or me being so far away from the US, it’s often the people who I interview have bad internet connections, even though they’re in the internet space.
Andrew: And here you come to me, and you’ve got this incredible connection. Like I was assuming that was because you were in HP’s offices, but it’s not. You’re in your garage, you said, right?
Interviewee: Yeah, I’m actually in my home in my basement. So I have multiple computers here. And I have a couple of cable modems that are, you know, set up in parallel.
Interviewee: So, yeah. Yeah.
Andrew: So that works. Can you swerve your computer around so we can see what’s going on there?
Interviewee: Sure. So here, I’ve got this big screen here which I…
Interviewee: You know. Right now it’s got a cartoon on it. My kid’s recording something on it. But I’ve got these two screens here. Basically this is just a work station that uses a 30-inch display, and another display beside it. And then back there I’ve got another TV up on the wall. I don’t know if you can see it, but it’s just another 37-inch display. [Laughs] And then I’ve kind of a museum of old computers there, and a lot of awards and stuff that are on the walls. So, it’s a cool office. Yeah.
Andrew: All right.
Andrew: Well, thanks. Thanks for doing the interview. Thanks for taking the tour with us, for giving us the tour.
Andrew: Thank you all for watching. I’m Andrew Warner. I love the people who listen all the way through, and I’m glad that they get to have a full understanding of what’s going on. And I’m looking forward to finding out who they are, so in the comments, or send me an email, let me know who you are, what you’re working on. I’m Andrew Warner, and looking forward to hearing from you guys.
- You’ll hear how Rahul made his first million. And how he lost it. And how he got back on track.
- You’ll learn about the 2 big decisions that took VoodooPC from small-time, local business, to a force that the major computer makers didn’t see coming. If you’ve ever committed to big moves in your business, you’ll know why this was so powerful. (The first was to kill 25% of his business. And the second was to plan to sell. Listen for details.)