From being diluted out of first company, to passing out in the street, to waking up to $10M+ deposit after eBay acquisition

Most people still don’t know what affiliate marketing is. Well today’s guest understood it so well that he created a business that would allow anyone to start an affiliate program.

Greg Shepard is the founder of AffiliateTraction (renamed Pepperjam) which is a multinational affiliate marketing agency and was acquired by eBay.

I want to find out why he thought of himself as a failure and why he actually might have been one for a while.

Greg Shepard

Greg Shepard


Greg Shepard is the founder of AffiliateTraction (renamed Pepperjam) which is a multinational affiliate marketing agency and was acquired by eBay. He has since gone on to found BOSS Capital Partners.


Full Interview Transcript

Andrew: Hey there, freedom fighters. My name is Andrew Warner, and I interview entrepreneurs about how they built their businesses for an audience of real entrepreneurs. Joining me is a listener who’s now a first-time guest here on Mixergy. He’s a guy whose company I’ve known for a long time. It’s called Pepperjam.

See, I started out in the internet back when I thought the only thing you could do is buy ads. And then somehow I discovered affiliates and affiliates started sending me more traffic than any ad I ever bought with no risk. I could pay them only after I made money, only after I got the action that I wanted. It was amazing, revolutionary, opened my eyes. The thing is that most people still don’t even know what affiliate marketing is.

Well, joining me today is a guest who said, “You know what? Not only did I figure out affiliate marketing and it works, but I took it beyond my own company. I created . . . ” now speaking for you, Greg. Greg, somehow in his head said to himself, “I’m going to create a business that enables anyone to create an affiliate program so that they could only pay out whenever they get the action that they’re looking for. No buying ads and hoping it works, only partnering up with affiliates who send you things like customers and paying those affiliates a percentage of the sales that they drive.” That is brilliant. That is the brilliance behind Greg Shepard’s business. It is currently called Pepperjam. It has been sold and spun off and done a bunch of different things. We’re going to find out about how he launched and how he built it and why.

When I asked him for one sentence description, he said Pepperjam is a lifecycle management platform for the performance marketing industry. Why? There’s something in there that I’m not picking up that’s important to understanding the business. We’re going to find out about that and how he grew it and how he sold it. Why for a while there he thought to himself as a failure and why he might have been for a while there all thanks to two phenomenal sponsors. The first will host your website right, it’s called HostGator. And the second will do your email marketing campaign wonders, it’s called ActiveCampaign.

But, Greg, I’ll talk about those later. Good to see you here.

Greg: Thank you. Thank you. I really appreciate it.

Andrew: Do you remember the day when you sold to eBay? It feels like that was a big deal.

Greg: Oh, my God. It was the most amazing . . .

Andrew: Tell me.

Greg: Yeah, it was the most amazing thing. I have to tell you that, I mean, the story is crazy so that the transaction won four private equity awards in the Silicon Valley. So four major awards, which was the most awards they ever had in the Silicon Valley at one time for one single transaction. And it was a huge transaction and the sequence was, first, they bought my company . . .

Andrew: First, eBay bought your company?

Greg: Right. eBay bought my first company, right, AffiliateTraction.

Andrew: Okay. That’s what it was called before it became Pepperjam. Excuse me. Yes?

Greg: Right. Yeah, yeah, it was AffiliateTraction. And I remember the next morning after everything was done, I had this nightmare that it didn’t happen. And I just woke up at like three o’clock in the morning. I looked at my phone and I checked my bank balance and the money was in there and I was just like, “Oh, my God.”

Andrew: How much was in there?

Greg: It was so intense. Huh?

Andrew: How much was in there?

Greg: Oh, I can’t tell you but it was millions.

Andrew: It was millions. Tens of millions of dollars?

Greg: Over 10 million.

Andrew: Over 10 million, that’s all you’re going to say?

Greg: Yeah.

Andrew: How much in eBay . . . this was a long time ago. How much did eBay buy it for?

Greg: I’m not allowed to disclose that, but it’s over 10 million is all I’m allowed to say it. I don’t know. It’s part of this hairy deal that . . . I mean, it’s kind of an interesting story, right? So what happened was is first eBay said, “Okay, we’re going to sell these companies.” So I called the CEO of Pepperjam, who was there at the time and I said, “Hey, listen, let’s buy these companies. We’ll go out and raise capital.”

Andrew: Wait, wait, wait, you were running your company when they had Pepperjam . . . wait, you were running AffiliateTraction?

Greg: Yeah. And Pepperjam was owned by eBay. Part of all of those GSI companies, which includes Magento and True Action and, you know, ClearSaleing and it just goes on and on. So what happened was, is I said, “Let’s do that.” And he said, “Okay.” And we were working on trying to find investors. We had a meeting in the back room in New York when . . . and all this stuff was going on. It was really crazy. Because it was like this cognito meeting in the back of a hotel room. It was really, really cool. And I met with the now chairman and the lead investor on the deal, the CEO of Banneker, San Francisco-based company and Permira who’s a big PE. And they said, “Okay, let’s do the deal.”

So while that was happening, some other guy was buying it and he wanted my company too and so we were sort of . . . I was in the middle sort of like a dual spy or something. I don’t know. It was really bizarre. And then the deal closed. Well, right after that deal closed, they had to close all these other 14 companies simultaneously. They needed to spin these out at the same time they spun out PayPal because they paid 2.5 billion for these companies but they’re only buying them for 925 million. So they’re trying to cover a $1.5 billion loss. Well, they did that by spinning out PayPal at the same time. So we only had a short amount of time to do this deal.

Andrew: So I guess I’m not following this. I’m looking at Marketwired PR thing from 2016. “eBay Enterprise Marketing Solutions today announced it acquired AffiliateTraction.” That was your company?

Greg: That was my company.

Andrew: Wait, wasn’t it just a simple they acquired that company? It was more like they . . .

Greg: No, no.

Andrew: What do you mean?

Greg: It was a sequence of deals.

Andrew: Wait, they’re spinning off PayPal. While they’re spinning off PayPal and all this other stuff, they’re buying you?

Greg: Yeah, at the same time they’re buying me. That was the first transaction. And then the second transaction after that was all of those companies, including mine being spun off into the private equities. And then following transactions was a spinoff of all of those little companies that they bought, all the 14 companies off to all these different places. So they [spun off 00:06:06] . . . it was crazy.

Andrew: And then in the end, eBay owned AffiliateTraction?

Greg: Well, first, eBay owned it then at the end Permira and Banneker owned it.

Andrew: Got it. So eBay owned just for a little bit?

Greg: Yeah, they owned it for a little bit.

Andrew: For how long are we talking about?

Greg: They owned it for like a month. So the transaction was put together with my company and my technology sort of like the minnow swallowing the whale, mine was one of the smaller companies. But it was sort of core to the whole thing. So people that . . . the investors that were buying all these companies, they said, “In order for that one business unit to work, we need to buy this company.”

Andrew: Oh, okay. Why? Why did they need you in order to make that part of their business work?

Greg: Well, it kind of started with affiliate. I was one of the first guys in the space, you know, in 1999.

Andrew: Maybe now we can go back in time and just find out about how you started out. You somehow ended up in the travel space. Actually, even before that. You were one of the early people to create a web hosting company. It was called 123 Turnkey. It was on you to figure out how to get customers. You tried a bunch of different things that didn’t work great. What’s one type of ad you remember that you thought was going to work but didn’t work great before you discovered affiliates?

Greg: Well, you know, back then, the internet wasn’t what it is today. So advertising wasn’t what it is today. And you had Overture, you had pay-per-click were some of the first ones, right? Yahoo, stuff like that. But Google wasn’t there and things weren’t the way they are now. So what we did is we resorted to hiring a sales team. And at the time I didn’t understand unit economics and, you know, all the dynamics of flow and everything like I do now. So, you know, I had a certain finite amount of money that I raised and I had $1.5 million that I had raised. Got into the company, was burning through the money really fast and it wasn’t working. I was looking at the cost of developing the websites, the cost of acquisition. And I started to sort of learn about unit economics that way without education. I just kind of started to learn it and figured out it didn’t work. So then I was like, “Okay, well, this isn’t working . . . ”

Andrew: Meaning if you’re paying a salesperson, I don’t know what, $80,000, $100,000 a year, that salesperson can’t possibly sell enough web hosting packages to pay for her salary and commission. That’s what you’re talking about. And that’s when you said, “Wait, this is not good.”

Greg: Yeah.

Andrew: And so you [inaudible 00:08:36]?

Greg: So I had to build a website and the hosting. So we started trying to sell, “Okay, we’re going to give you the website for this amount, and then you’re going to sign a contract for hosting for this amount.” Well, then that worked, but the cost of developing the website was too much. So then I started to put together a platform that actually allowed people to click and drag so that I could hire interns to come in and build the websites without me having to pay, you know, graphic designers and programmers to do it.

Andrew: Got it. So if a real estate broker said I need a website for myself, they come to you. They pay for the website which an intern can create using drag and drop and then . . . or sorry, they get the website for free which an intern can create using drag and drop so it’s simple and then they pay you monthly to host that website and you think I found it.

Greg: Yeah. So then margins shot up. Then it started work and everything started to work and we eventually drove this thing to an exit. And right before the exit, my partner got a little . . . the people involved got a little greedy and I got basically shafted out of the whole thing and lost my butt.

Andrew: How? How did you get shafted?

Greg: Dilution on the cap table.

Andrew: Wouldn’t that have happened before the sale?

Greg: It did happen before. So the sequence was things started to work. It started to go for market. We were running a process. They then went backwards on the deal, diluted the stock, recapped the company. I got taken out. You know, I trusted everybody. I didn’t know how things worked. You know, got taken out of the deal, left, then the company got sold. Yeah. So that was the order of things.

Andrew: When you were at your most bitter about that, what did you think or do that you feel in retrospect was disruptive but understandable? What was the worst thing that you did based on that?

Greg: I had a Jerry Maguire moment.

Andrew: What was that?

Greg: So there’s this palm tree that was made out of . . . it’s so embarrassing. There’s this palm tree made out of like this fabric. It was like a white palm tree. I still have it. Made out of fabric. And I grabbed the palm tree and just walked out the door with the palm tree. It was like big. It’s like six feet tall and it was like banging up against things and . . .

Andrew: Like you walked out of the office going, “This sucks. I’m taking the palm tree.”

Greg: No, I just didn’t yell or anything because I still wanted the company to work. I mean, it was a creation, you know.

Andrew: But even afterwards, you didn’t do something like hard drugs or alcohol or just like lose yourself in television to try to avoid thinking about it? No?

Greg: No. Yes, so here’s what happened. I had like a breakdown. It was in Denver. I was crossing the street. It was snowing, and I just sort of passed out. I thought I had a heart attack. And it turned out it was like a panic attack. I got taken on an ambulance. And they said, “Yeah, this is just a panic attack.” And they gave me medication for the panic attack. So at that moment, I decided, “Look, I’m going to move back to California. But before then, I’m going to go on a road trip.”

So I went on like a three-month road trip with my daughter. At that age she was about 10 at that time and drove, I mean, literally everywhere. All around the West Coast for three months. Down the Coast Highway, across the mountains, you know, and just camped everywhere I went in a rental car. Yeah. And then I went back to my parents’ house and I said, “Look, I’m going to start a company. I don’t want to take any money because this doesn’t work for me. I want to do it [on my own 00:12:12]. Can I move into your room?”

Andrew: With your daughter?

Greg: No, my daughter went back to her mom’s house. And so I moved into my old bedroom and I started off with two folding tables and two kitchen chairs. Me and my little brother who just graduated from Chico State in graphic design. And I would work so much that I wouldn’t shower for weeks. My mom would come in and say, “Look, this is disgusting.” And I was losing weight and I would just . . . like the bed was right next to the chair. I would just fall off the chair and wake up and jump back on the chair. And the thing started to work. So then I moved into an apartment.

Andrew: What’s the thing that was working?

Greg: So what happened was after that deal didn’t work, the website and hosting company, after that, I got shafted on that thing. Then what happened was I started to realize that everybody wanted marketing. And this is when I sort of discovered affiliate. I was like, “Oh, my God, this is amazing. You only pay when you make a sale. You only pay the amount you want to pay. And you don’t pay and cancelled orders or returns. This is like this is the future.” So I started a website selling travel insurance, foreign currency passports and visas. And I was circling traffic around. And I just started going out to, at the time, web rings and forums and what is now influencer marketing but back then.

And I started to just to market this. And then I ended up working with a friend of mine to get underwritten and we actually had our own travel insurance program. I did a deal with a couple of cruise lines that would automatically make it so people could just click a button and then they would just say, “Okay, add travel insurance.”

And I started to do really well. So I moved out of my parents’ house. The thing was just crushing. So I moved out of my parents’ house. Moved into a little apartment. That’s when I met my wife. So now I’m sleeping on an air mattress in an apartment. I’ve computers everywhere with duct tape going across the floor and I’m eating mac and cheese. I’m going to happy hour to eat free food and hotels, sneaking into hotels for breakfast to eat free food.

Andrew: Literally you do this?

Greg: Yeah, literally.

Andrew: And you were engaged or married?

Greg: I wasn’t engaged or married. I had just met my wife.

Andrew: Did she think you were a loser? “Who is this guy I’m about to go into the hotel for breakfast with him?”

Greg: Yeah, she was like, “Oh, my God.”

Andrew: She did?

Greg: Yeah, she was. She loved me though. She believed in me.

Andrew: Why? So I was talking to my mother-in-law about this about how when I wasn’t doing well financially, I didn’t think I could go out and date anyone. I felt like what are they going to see me? And frankly, I don’t have time for you because I’m trying to figure it out. And I realized that most people don’t think that way. Why do you think that your wife loved you even when you had nothing going on? You were a guy going into hotel to get food. That feels like a loser’s thing to do.

Greg: Yeah. She met me in Vegas. I asked her to marry me two weeks later. We’ve been married now 15 years.

Andrew: Wow.

Greg: And we have, you know, kids, and it’s amazing. And I got to tell you that she was really, I think, impressed with how enthusiastic I was and how focused. I’m the kind of guy like when I want to do something, I do it. I just . . .

Andrew: Like what? Give me an example beyond this work.

Greg: Well, I ran a marathon with asthma and I had never run before and I did it in six months. I ran a marathon and nine half marathons in six months. I climbed El Capitan. You know, the Castleton Tower. I’ve done the John Muir Trail, which is 250 miles twice. I’ve wrestled an alligator. I’ve done bullfighting. I [inaudible 00:15:50] with the great white sharks.

Andrew: Bullfighting?

Greg: Yeah.

Andrew: I run with the Bulls in Pamplona and that was kind of scary, even though there are a bunch of people that cushion the blow of if a bull wants to spear you. But it’s still kind of . . .

Greg: You’re just have to run faster than the guy behind you, right?

Andrew: Yeah. Right, right. And really, there are a bunch of people who want to get hit because . . . I don’t know what’s going on with them. So you’re not going to get hit. But being in a bull ring, the bull is supposed to come at you and you’ve got to hold on to the thing?

Greg: Yeah, yeah.

Andrew: No swords? You didn’t do the sword one?

Greg: No, no, I didn’t want to hurt the animal. I mean . . .

Andrew: You didn’t chop off the ears and show it to the crowd?

Greg: No. It just came after me and for about 20 minutes. It went back and forth. And then I actually started get really scared because this thing was getting really pissed off so I jumped behind the wall. And then it came out and . . . but it was 20 minutes in a bull ring with you and the bull and . . .

Andrew: Twenty minutes? I’ve seen a bullfight. I’ve got to tell you, they killed the bull, which I didn’t realize in the cartoons they never do.

Greg: Yeah, yeah.

Andrew: It doesn’t last 20 minutes. If it last 20 minutes, you’re doing a lot of showmanship while someone is distracting the bull or the bull doesn’t even know what’s going on. And then they go into it for like five minutes, maybe three. All right. So I get it. This kind of intensity, this kind of passion for life and doing outrageous things was part of what she saw even before you could express it and you eating for free at a hotel was your way of expressing that, that I’m going all in on this vision. So you went all in on this travel business. How did you shift from that into affiliates?

Greg: So the travel business gave me . . . I sold it. I sold it to Travelex.

Andrew: Okay. What was it called in Travelex?

Greg: Travelex, you know, the . . .

Andrew: Why isn’t this stuff on your LinkedIn profile? You know I like to hunt people down by looking at [this 00:17:30].

Greg: You know, there’s so much, man. It’s just so much that I don’t think people would believe. It’s like it would go on for . . . you know, I’ve done like, what, 12, so it’s kind of . . .

Andrew: I don’t see it on there.

Greg: Yeah.

Andrew: Okay, it all starts with like 1999 All right. So you sold it . . . how much was that? That’s like 100 years ago at this point. And you can tell me how much. How much was that?

Greg: What? AffiliateTraction?

Andrew: No, how much did you get for selling the travelling insurance?

Greg: Travelling insurance company? Okay, $5 million.

Andrew: Five million dollars into your pocket?

Greg: Yeah.

Andrew: Because no outside investors. Do you remember the day when that came in?

Greg: Me and another guy.

Andrew: You and another guy. So like $2.5?

Greg: Yeah. So I got two and half and then tax takes, you know, between 33% and 43%, and we ended up with like a million. And with that money I moved out. You know, got our own place and stuff. And I started working on Net Traction, which was the first iteration of AffiliateTraction, which did multi-channel marketing. So I did search, you know, display which didn’t exist at the time. It was media buying at the time. And then so I had a media desk and then affiliate. And then we started to build websites. But special, you know, websites that were optimized. And I got into that whole thing for a long time. And then I sold that piece off for nothing really. I just wanted to get rid of it. And then I’m focused on affiliate because I knew that this was the future and then I started building a platform. Behind the scenes, I was building this pretty intense platform that nobody knew even existed. It was called Unity.

Andrew: And Unity was going to be both software and a marketplace, right?

Greg: Yeah, it was supposed to . . . what I was trying to do with Unity is make it so that instead of somebody having to be in one affiliate network, they could be in all of them. And Unity would unify all of the affiliate networks’ data into one place, all of the publisher, everything would be in one place. And then . . .

Andrew: Because everyone like me, I had a greeting card business at the time. I had my own software for affiliate programs, and someone would have to get an account with me and check their data with me. And then if someone else had a different affiliate program for maybe, I don’t know, party invitations, you’d have to have an affiliate account with them. And you’re saying you wanted to unify it all?

Greg: Yeah, put it into one platform. Because front-end was managed services. So what they call now technology enabled services. So the front-end was like this managed services. And then the back-end was this technology that I had been building and I used all the money and then some on that technology stack.

Andrew: Okay. How did that work out?

Greg: Actually yesterday Pepperjam launched this platform called Ascend, which is the enhanced version of what I was building. And it is, I mean, next level. I mean, this is a whole nother world.

Andrew: Back then I wonder how did it do to combine so much when people didn’t even understand affiliate programs. And I think even on your website, you explained what an affiliate . . . yeah it is, what is an affiliate program. I think you were explaining pretty early on. So I wonder how did that do?

Greg: You know, I got to tell you this is . . . one of the most frustrating things is that I had the same experience with biotechnology because I was trying to do environmental applied biotechnology before people cared about the environment. And the problem when you’re going into what they call first mover versus second mover lookback is that you don’t have hindsight and the whole ecosystem doesn’t know. So you’re limited in your growth and what you can do to advance the tech stack based on what the ecosystem understands at that time. So, you know, at that time people were just struggling to understand what affiliate was and you’d have conversations with people and say, “Oh, yeah, you only pay for sales you make,” and they would be like, “That’s not. That’s ridiculous.” They’d hang up on you and say, “This guy is selling me a sham. There’s no way.” So it took a long time and about 2004 is when I was able to really start saying “Okay, you know, we have this.” And people started to understand it and I can start selling it at least behind the scenes.

Andrew: All right. I want to come back in a moment to this. But first let me take a second to talk about my first sponsor. It is a company called HostGator. You know HostGator, Greg? Having been in the hosting space.

Greg: Yeah. They’re a great player.

Andrew: They are. They’re one of the people who survived. There’s so many other companies that got out there and hosted websites. Bottom line, anyone out there who’s hosting a website should go over to When you do, you’re going to get a super low price for hosting that just works. I really highly recommend that middle tier the one that lets you have unlimited domains, which will allow you to do things like, Greg. Imagine all these things. Imagine when you went bullfighting, you actually got a website like Greg fights bulls. Now it becomes a thing. People can go and share it, can go and look at it and becomes like this big triumph.

I’m going to be running seven marathons on seven continents in one year this year. I got a website for it. where people can keep up with what I’m doing. They can actually see my progress and they can join in as I do it. Giving it a website makes it a thing. If you want to do that for your business, sign up for that middle tier that you’ll see when you go to because that comes with unlimited domains. They will host unlimited domains for you. So just press one button, get WordPress up there and you’re up and ready to go. Start off there. Or if you hate your hosting company, go there and they’ll migrate you.

All right. So the first thing, I’m looking at an early version of your website, from 2002. It’s one of the earlier versions. You’re basically comparing yourself to CJ, Commission Junction, LinkShare, Be Free, and a bunch of others. And you’re saying we offer more features. Basically, what you’re doing, though, is saying we’re the software solution. So if you want to host an affiliate product, we’ll host it. And we’re the people who are going to send money out, am I right?

Greg: Yeah. We were trying to compete with them at the time. And because I was trying to shift from a service model to a software model, which I did.

Andrew: And when you were a service model, what did that look like?

Greg: It was just managed services. So we were doing . . . we had tech always, but it was behind the scenes. And this is where I started to move the tech more in the forefront but I had to be careful.

Andrew: I’m sorry, Greg. I want to make sure that I follow along. I interrupt not because I’m a jerk but because I’m super curious. What you’re saying is you are managing . . . so a company would come to and say, “We want to have one of these affiliate programs. Can you run it for us?” So you’d use maybe Commission Junction software or Be Free or whatever it was, and you’d help them find affiliates. Is that right?

Greg: Right. Yeah.

Andrew: Got it. Okay. And then you were saying I didn’t want to just be the guy in the middle, I wanted to get more and more into software. And how did you do that?

Greg: So I started to . . . I ran into some problems with the networks because the affiliate networks were like, “Look you’re a competitor.” So that’s when I moved the tech back to the background and came back to the foreground and said, “No, no, we’re an agency.” And in the background, I integrated everything and built the whole tech stack. And what that did is it gave us some huge advantages over the affiliate networks. And at that time agencies started to come out. We were the first one. And the cool story is . . .

Andrew: And agencies started to come to you? Oh, yeah, go ahead.

Greg: A cool story is we were the first affiliate marketing agency. I was the first one to go global. I was the largest in the world and I was the first one to be acquired. So it’s kind of a neat story.

Andrew: And the time it you took to get acquired was 15 years.

Greg: Seventeen years.

Andrew: Seventeen years?

Greg: Yeah. The first one is hard one.

Andrew: So let’s talk about how you got customers then back then. So you were an agency. What did you do to get people who didn’t really understand what affiliates were to understand that they should hire you?

Greg: Well, what I learned is that the retail . . . if you look at the advertiser merchant industry, if you tried to do lead gen, it didn’t work because people could just say, “Oh, the lead was a bad lead. It’s not empirical.” So you end up having a lot of arguments. Travel turned out to be a problem because there’s huge latency in getting paid. They’d wait until, you know, hotel room closes down or somebody goes on a cruise or whatever to get paid. So cash flow is problem. But retail, transactions right now, the amount is empirical, no problem. But at that time, you have what I call a brand manufacturer, which is somebody who makes their product and sells it, like Skechers, right?

And then you have retailers who sell other people’s products. And so when you look at these two markets, you realize that the retailers have more mouths to feed because they still have to pay the manufacturer. So they have less margins. They have less margins, they need to not only make more, but they can pay less. So I also learned that my exit strategy was to sell to somebody that wanted to close real brands, manufactured brands. So I got away completely away from selling anybody that was in the retail space and only went with people that was a manufacturer that drove sold direct to consumers online.

Andrew: For example?

Greg: Skechers, Forever 21, you know, companies like that, right? So if they made the product and they sold it online, that was my customer. And so I built a base of customers around that, which really did work in terms of getting to my exit.

Andrew: Who are some of the lesser known companies that did a lot because they were in direct marketing? Like I’m talking about people like the old camera company X10 that was out there for a long time with their affiliate program. Do you remember anyone that was doing especially well for you that’s gone?

Greg: Yeah. I mean, Toy “R” Us, Circuit City. I mean, all those guys.

Andrew: Toy “R” Us and Circuit City were affiliates of yours? They weren’t manufacturing products.

Greg: They were clients. Well, I accepted Toys “R” Us and Circuit City at the time because they were huge. It was my way to get into the manufacturers. So what I did is I said . . . I went to Toys “R” Us, I looked at the products they had and then I went and called the manufacturers. So I had the major manufacturers that sold to Toys “R” Us because I called them and said, “Hey, look Toys “R” Us sells through me. They’re selling your product. Why wouldn’t you want to work with me?”

Andrew: Got it.

Greg: And then I started to move over, right?

Andrew: And then you need affiliates to start moving that product. What did you do to get affiliates?

Greg: I used the affiliate networks. But at the time, you know, this is before the Dot-Bomb, display advertising was really expensive. So it was really hard to get people to do things on performance because they were getting ridiculous CPM fees and CPC fees.

Andrew: And just to be clear, if there was a publisher out there who would have to decide what kind of ads do I run? Of course, they’re going to take the advertiser’s going to pay up front regardless of performance and pay a lot of money and so they’d run those banner ads. Why would they take a risk on, I don’t know, some game company, that will only pay them when they sell and they have to sell? That’s the issue that you were facing.

Greg: Yeah. Until the Dot-Bomb happened. And then, you know, nobody could sell their traffic for anything so we picked up a whole lot of affiliates. And we were able to ride on that for a long time until the recession came. So remember . . .

Andrew: 2008 recession.

Greg: Yeah. I made it through both those things, right? So that’s pretty good.

Andrew: So was it hard on you because I kind of feel like the thing that affiliate marketing had is it just always worked. Every business can justify spending money on affiliate products, on direct marketing because they know that they’re only going to pay when they get a result.

Greg: It is. But this is the issue is at that point and still today people don’t quite know how to handle affiliate revenue and expenses on their books. They have budgets that are finite so they’ll shut down their program. Then they still need the return on ad spend that they’re looking for even back then. And those things become . . . they grow, right? So even if you’re doing a really good job, they ask for more and more and more. And then if you don’t achieve the four times they’ve raised the bar, then they start getting upset.

So it’s always a challenge in anything that you deal with in the realm of performance advertising in any kind of performance advertising, right? They want more, they want more for less, for less. And you know, so it’s a struggle, right? It becomes very commoditized. There’s a lot of price compression as competition comes in. And you’re also dealing with a two-sided platform. You’ve got advertisers on one side and you got publishers on the other side. And they are absolutely have a conflict of interest. Publisher wants as much as they can get, advertiser wants to spend as little as they possibly can. And you’re in the middle of that trying to make both parties and make the whole thing work.

Andrew: Yeah. And the publisher also wants to get paid for every customer they send over. But the advertiser, the person who’s paying affiliate commission wants to make sure that those are legitimate sales. Not people who are being incentivized who will then return or who are going to cause issues that way.

Greg: Right. And that ushered in a whole new generation. So it was really tough. But in 2008 when the recession happened, I was literally like days away from insolvency. I had a CFO steal a bunch of money, paid off invoices to a false company he had set up. And I was looking at spreadsheets and not the books themselves and the bank accounts. I didn’t know what’s going on. I had to move out of a big office and lay off, you know, 35 people all at once. It was horrible and moved into a barn with like six people and basically start the company over.

Andrew: With your wife?

Greg: Yeah, my wife was. No, I mean, I moved the office into a barn.

Andrew: Oh, God, I got it.

Greg: Yeah, we had to move out of our house and then move into a studio apartment that smelled like mold. We called it the cave. It was horrible.

Andrew: And get your furniture from yard sales from what I understand.

Greg: Yeah, so I would go out to yard sales . . . no, that’s how I paid myself because I couldn’t afford to pay myself and my employees. So what I did is I would go out to yard sales, get the furniture, refinish it on the patio and then go sell it at the swap meet on the weekend and that’s how I paid our living expenses.

Andrew: Wow, all right. There’s a question that comes to mind. But let me take a moment and talk about my second sponsor and then come back and ask you about it. What I want to know is what about your competition? I thought they were doing really well.

All right, second sponsor is a company called ActiveCampaign. If you’re doing email marketing, and frankly, you should, you’ve got to understand that just putting everyone in a single email list is not the right way to communicate. What you want to do is tag people based on what they’re doing. So for your business, Greg, obviously, you’re not communicating to affiliates the same way as you’re communicating to . . . what do you call the other side of that?

Greg: Advertisers.

Andrew: Advertisers.

Greg: Publishers and advertisers.

Andrew: Publishers and advertisers. Each one is different. The publisher wants to make money, the advertiser wants to spend money and get a return. Each one needs a different communication method. You don’t want to put them in the same list. You also don’t want to create two different lists. What you want to do instead is have one list and tag people based on what they’re doing so that if you start to see that people are clicking over and over to understand more about your affiliate product or about the publishing program, you know, that you could start sending them messages as if they’re publishers.

If you see that somebody has bought you, want to send a different message from somebody who hasn’t bought, all that happens with tags. The problem is it’s a pain in the butt to do that with most software or it’s super expensive and so most people don’t do it. Or what they frankly do, if they do it, is they hire a bunch of consultants to manage it.

ActiveCampaign said, “We can do all this super simple. We can make it easy for you to know when somebody clicks a link on your email what they’re doing. We can make it easy for you to customize each email based on what tags your users have. We can also make it easy for you to understand if someone is clicking through and watching the whole video on your site, maybe you want to fire off another email to them as a follow-up.”

All that stuff sounds complicated. It’s super simple. If you want to explore and see how easy it is, go check out When you do, you’re going to see a big button that will let you try this for free and sometimes you just need to taste it to understand it. And if you decide to work with them, they’ll give you your second month free. They’ll do two free one-on-one consultations so you can really get help directly and they’ll even migrate you from that email company that you really should have outgrown a long time ago. Go to

Here’s what I was wondering, Greg? Commission Junction, CJ. I thought they were doing well throughout all this.

Greg: Oh, they were. They were doing monster but everybody lost money. Everybody, you know, slipped. But, you know, they had been funded. I mean, they had a lot of backing. They had a huge head start. So they did really well. I was a little guy just trying to start from nothing, from absolutely nothing and I took no investment. This was all me. So I made it through that though. You know, I made through that, turned around the company, moved into [inaudible 00:34:28] space.

Andrew: By doing what? Like what? What did you do to help?

Greg: Well, this is where I deployed the . . . you know, the book I have coming out has this process I invented I guess called BOSS, Business Operating Support System. And that’s where I started to deploy it and really test it and it saved my company. And what it means is that you basically start documenting everything you do and you start with the exit. So I started with the exit, figuring out who I was going to sell to, what their clients look like, what their ideal profiles look like, what the ideal buyer profile look like, you know, everything around the exit strategy upfront. And then I built a strategy stack underneath that bifunctional area. And then in the first objectives and key results underneath the strategy stack in each one of those were things that had to do with reinventing affiliate. It was rethinking it. Instead of saying, you know, “We’re doing things the way everybody else did,” I said, “Let’s try everything and then track everything and see what works.” This took two years.

Andrew: So let me see if I understand. You said, “I want to sell to a specific type of company.” Did you know it was going to be eBay or did you have something else in mind?

Greg: No, I wanted it to be . . . it was going to be one of the affiliate networks or one of the big six advertising conglomerates. It’s going to be one of that.

Andrew: And so once you know that that’s what you want to sell to, how does that change which customers you go after and what you do?

Greg: Because people buy you at the highest multiples when there’s a synergy. So if you choose your buyers and you know that your ICP, your ideal customer profile is the same as theirs, then you have a natural synergy.

Andrew: So then you started to go after those customers.

Greg: Exactly. More than that, I actually said, “I want to get 10% of each one of their clients to show them that if they bought me that clients would pick up my product.”

Andrew: Because if you get 10% of their customers to use you, then they could infer that the other 90% would be good customers for your software too. Got it.

Greg: Right. So you get an acquisition, you get what they call an attachment rate. So there’s a base and then there’s attachment rate. So if they have 1,000 clients and you go to 50% attachment rate, you get 500 clients. So if they’re charging $1,000 you get . . . you know, you get the idea, right? So . . .

Andrew: So what you were saying was, “This is what I want to go after.” As a result, which customers did you need to recruit?

Greg: I needed to get those big brands.

Andrew: The big brands. What’s the one that was on your hit list?

Greg: Forever 21, which we landed. Mattel, which we landed. You know, Tractor Supply. I mean, our whole portfolio is made out of really dominant brands. Some of them more niche like MonkeySports , which is like HockeyMonkey and those sort of things. But I did it by category based on what are the biggest consumer brands in the biggest category verticals. And so I’ll go in and I got a real good base out of all these networks clients. So I proved that they could do that. Then I broke down their tech stack and I figured out what they were missing. And then I built what they were missing, which are things that they missed because they weren’t in between the network and the publisher and the advertiser. I was in-between the network, the advertiser, and the publisher. So I was able to see what they were missing but I was also . . .

Andrew: You mean your ideal acquirer, what software they were missing?

Greg: Yeah. What features and products that they were missing. Like how . . .

Andrew: So what did you discover?

Greg: I discovered that it was really clunky and it hadn’t matured at the same rate that display advertising did. You know, programmatic and all that didn’t exist. And, you know, it’s basically like a database and you’re in there, you know, filtering search results, trying to find people and sending off random emails. There’s no intelligence. The profile they had for the publisher and the advertiser was horrific. There was no compliance, no layer at all over protecting the brand. And that’s for a second company . . .

Andrew: Oh, you’re saying the other affiliate companies didn’t have that layer. So anyone could go and run a Skechers’ ad and it didn’t matter what they were doing. They’d get paid. But what Skechers and other brands needed was someone to protect their brand and not just sell their product.

Greg: Exactly. Yeah. So what I did is I started building out all those products, and I built a stack that nobody else had. And I put that on top of the network. So now they had a network in the background and our stack on the frontend. So we would do all the work in our stack and just track it through the network. So that they wouldn’t have to switch networks. And this really worked. And then we started to build up a really . . . I mean, we had a big client. We had more clients under management than Pepperjam did when they bought us.

Andrew: Okay, so tell me about Pepperjam? What was Pepperjam?

Greg: Pepperjam was an affiliate network.

Andrew: Kind of like Commission Junction, right?

Greg: Yes. Exactly the same. Yeah.

Andrew: They were little bit more into like the . . . I felt like the smart marketers were more into Pepperjam. Commission Junction became more of the safe play, right? Where Pepperjam would throw the better parties, for example.

Greg: Yeah, it’s still that way.

Andrew: It’s still that way.

Greg: Commission Junction is still old school. They still haven’t built . . . I mean, it’s still just old, clunky software. They’ve been acquired so many times and now they’re a really small company for a big company and they haven’t really done much.

Andrew: And then Pepperjam was going to be the hot guys. They would have the hot parties, better updated software you’re saying. It founded when?

Greg: Oh, geez.

Andrew: Also 1999 actually from what I could see. Pepperjam LLC, somewhere.

Greg: Yeah. But that was they were an agency at that point and they turned into a network. They were building tech at the same time I was. We just didn’t know it. [One 00:40:26] of us knew it. Yeah. They got acquired by GSI. And GSI got acquired by eBay.

Andrew: Got it. And that’s how they ended up with eBay. And then you were acquired by eBay, merged into Pepperjam, spun out 30 days later or so.

Greg: Yeah. So we were acquired by eBay. Then there was a sequential transaction of, you know, Magento is a billion dollar deal, won four private equity awards. Really awesome thing to be a part of. We sold all these other companies. They kept Pepperjam. The last one was Magento, which was 1.6 billion. They kept Pepperjam. And then starting three years ago, I rebuilt the whole stack. And basically took Unity and AffiliateTraction and another company I sold them called AdAssured, which was a brand protection compliance company, which I sold about six months later to them. And put it all into one platform, which is now Ascend, which actually just . . . the formal press release just rolled out yesterday. And it is like epic. Like, dude, this thing is like nothing anybody has ever seen in the industry. It is seriously next level.

Andrew: I saw that you were building and I was wondering why. Why are you even still there? And I guess the sale hadn’t been that long ago. The sale was 2016, right? That means you got four years with them. You’re there till 2020.

Greg: Yeah. So it was four years ago. Yeah. So, well, it was a five-year deal, right? So it was a five-year deal. And during that timeframe in that five years I had . . . I was supposed to stay with the company but the understanding was that they would sell it because they had sold everything else off.

Andrew: You mean sell just your piece of it.

Greg: Yeah. I mean, you know, when we did the whole deal, the idea was that the private equities were going to buy all of these companies and then sell pieces off, sell off ClearSaleing, which they sold to Impact Radius and sell off Magento and sell off, you know, True Action and, you know, all these different pieces. And they did, they sold them off. But they decided to keep ours.

And so they put me to work on . . . which I was sort of like, oh, you know, I thought it was going to be . . . I didn’t think by any stretch of the imagination I was actually going to stick out the rest of my contract, but I did. So I was like, “Okay, cool. I’m going to go into this thing and I’m going to rebuild the tech stack.” Now, I’m the only senior manager from the transaction still in the company, everybody else is gone. And, you know, it just rolled out yesterday. So it was a success and it is just epic. It’s really cool. I’m pretty proud of it.

Andrew: Yeah, I can see that. I feel like a lot of times, once you sell, it feels like it’s the end of the line and you’re done. And for you, you probably wanted that. But I can see that you’re so proud of the end result that it was worth staying there. Fair to say?

Greg: Yeah, totally. I mean, when you sell your business, you have to separate yourself from the business, right? Because it’s very difficult for entrepreneurs to, you know, separate principal over position. And when it’s your baby and you built it from nothing, you know, you have to really . . . it was hard for me. I have to admit that. It was hard for me to let go and, okay, there’s a new CEO and there’s the board of directors and it’s not my thing anymore, it’s somebody else’s company. And I don’t get to make decisions and without approval and yeah, everything [inaudible 00:43:58].

But I got really excited because when they came to me, and they were like, “Look, you can build this thing, this vision that you have. We’re going to back you to build it.” And then I got sort of recharged and I was like, “Okay. Well, great. I don’t have to deal with all this stuff I used to deal with. I could be the chief strategy officer, chief technology officer. I don’t have to deal with all the finance and all the HR and all these problems all the time. I can just focus on building an epic tech stack, you know, something that would take affiliate to a whole new level.” And I built it and it’s pretty awesome. But that’s not all I do, I don’t want to just sound like an affiliate guy because now I do so much more.

Andrew: One of the things that you do is you invest in startups.

Greg: Yeah. I mean, I take early stage companies and I use combination of my experience and my system and I help them go to an exit. So I started out with them early. So I’ll give you an example. There’s a transit company out of out of San Diego and when I got . . . this is two years ago. I got involved with them. They had been earning about $5 million, about $1 million a year for five years. I got involved, it was a $3.8 million valuation and we just sold it for $40 million.

Andrew: By the way, I’m looking you up as you’re saying this because on your personal website,, I see your articles and I see your book, your upcoming book “Meet The BOSS.” I don’t see your investments on there and as I go into like AngelList, I can’t find you and I can’t see . . . why? Why are you so mysterious about what you’re investing in?

Greg: Because I only invest in things that I personally get involved in right now. So I can’t do that many because I work at Pepperjam. So this is like . . .

Andrew: You want to actually be there and work day to day. You don’t just want to find somebody who’s business you like, invest in them, and hope it becomes the next Uber.

Greg: Yeah, I don’t do that. I would never do that. They need help. I mean, I needed help and they all need help. If you’re an entrepreneur and you’re trying to start a business, there’s a lot of things you don’t know. And a lot of times intrapreneurs think they’re entrepreneurs, but it’s a whole different deal when you go outside a company and build on your own. And there’s a lot of things you need to know. And so basically, I help them avoid the pitfalls by using my own experience that I’ve had multiple times with multiple startups and investments and I help them out. And I really think about them too. I’m not just after equity, I’m a little different that way. So I don’t do that many because I just kept going on at the time.

Andrew: So can you give me another example of what you’ve done to help one of these companies you’ve invested in?

Greg: So I’ll give you that example. So this is a transit company that put together a next generation transit system that allows people to pay for trains, buses, ferries, all that kind of stuff with their iPhone, right, with Apple Pay or with a card just by tapping and that hadn’t existed. So if you have to go do public transportation, you have to go to a depot or something, buy a pass and then get on a bus. It distracts the driver. They can’t change their fare prices. They can’t change the [app 00:46:57]. You can’t reload anything. It was really old school.

So these guys who are in the industry for a really long time, built this thing up. And they invented this technology and they were great engineers, but they didn’t know how to take it to market. So what I did is I deployed BOSS for them. And I said, “Okay, look, we need to put together an exit strategy. We need to align ourselves with our buyers. We need to go out and put together all these strategy stacks and build everything out,” and we start executing according to that.

And in each one of those steps in BOSS, there’s five different steps in BOSS, we deploy different levels. And then it gets to continuous improvement at the end where you just loop back and forth and keep improving things. And we were able to get this company to an exit. So this is a situation with two really brilliant, I mean, genius level entrepreneur engineers that had just never done a startup before but had been intrapreneurs several times before and I just helped them out and got them to that point. I mean, I invested almost a million myself . . . yet me and I have a group of 12 other investors that I do deals with all over the world and we funded them and everybody returned 5 times. So it was really successful one. And I do these things . . . it’s whatever I can do with my current position. Like I have to do it at night, on the weekends, in the morning, that sort of thing.

Andrew: When “Meet The BOSS” coming out, this book with the framework?

Greg: The manuscript is supposed to come out in June and then the book is supposed to come out before fourth quarter.

Andrew: Have you sold the first copy?

Greg: I have actually . . . as part of the book, I’ve been doing interviews, right? So to run the protocol, the BOSS protocol up against the leading areas of manufacturing, military software, angel groups, incubators, accelerators. So I’ve interviewed Navy SEALs, I’ve interviewed F16 fighter pilots . . .

Andrew: What I mean is, can be the first customer of the book?

Greg: Oh, yeah.

Andrew: So can I buy it? So I was actually looking for your email.

Greg: Yeah, [inaudible 00:49:07].

Andrew: Yeah. How good it would it be if I get to be . . . first of all, I’ve been wanting to read the book. And second, I’d like to buy the first copy because how cool would it be if forever I’m the guy who bought the first copy of the book right here within the interview? So I was actually going to PayPal you money so it’s official. You got like a zillion different email addresses?

Greg: Yeah. Just the best one is greg@drapehs. It’s my last name spelled backwards.

Andrew: Oh, that’s what that is.

Greg: Yeah. Greg Shepard. Is greg@drapehs. Drapehs is just Shepard spelled backwards.

Andrew: Drapehs. Got it. All right. And you’re letting everybody know that I’m about to PayPal you. How much money do I PayPal you to get the first copy of this book?

Greg: It’s $16.95.

Andrew: $16.95. I’m going to do an up it to $17. This is going to be great.

Greg: Yeah. So it’s so it’s really cool because I’ve done all these interviews. Well, let me see, I’ve done over three years of research that the protocol has been tested. The whole the whole methodology has been tested multiple times with different businesses. It’s very exciting. I’m really excited about it. Thanks for bringing it up. I really appreciate that. I don’t want to . . . it’s not supposed to be a plug but thank you.

Andrew: No, it’s too early to plug it frankly, right? People can’t even go to Amazon and buy it. So I’m sending to you right now. I’m doing it as friends and family so that PayPal doesn’t take away any money from the transaction.

Greg: Thank you. That is so cool.

Andrew: They’re about to do a security challenge. I could do that right there. There I’m not a robot and it is official. I’m the first buyer of this book.

Greg: Awesome. Thank you.

Andrew: All right. Let me close it out with this. I kind of caught you on I think in bed right now because the kids are downstairs. It’s late at night. You said just got back from London. Where are you traveling to? What are you doing now that’s fun now you’ve sold the company?

Greg: I go all over the world. The investors are in Asia, Europe, and the United States. So I go to those countries, meet with them and look at deals.

Andrew: Oh, you mean my investors that you’re in a group with.

Greg: That I work with, yeah. The investors I work with.

Andrew: Who are these investors that you work with?

Greg: Yeah, one of them is the guy who sold Amazon Amazon Robotics. Another guy is the guy that started Globe Wireless. Two of them are bankers out of . . . one of them is a Swiss banker, the other one is a French banker. There’s one from the UK who’s a banker. And then a another entrepreneur out of Singapore and one out of Hong Kong and one out of Vietnam.

Andrew: And it’s just a team of you. You’ve decided you’re all going to look at investments together and put money in together.

Greg: Oh, my God, it’s so crazy. What happened is I did a deal with one of them and they saw what I did. So then another one came. And then I did another one and they saw what I did. So now there’s 12. It was me and one. Now there’s 12 of us. And the deals are getting bigger and more exciting and I love it and I’m having a blast. And if any entrepreneur have stuff that they are looking for funding, fire off an email, I’m happy to look at them.

Andrew: All right. Cool. I like it. And you know what? I like that we just did this casually. As you were talking, everything you say I’m researching. I’m looking it up. And sure enough, just like you kind of hinted at me before we started, you’re always in a sports jacket and a collared shirt and you’re very professional and here we are you in a t-shirt, you got this comfortable hat on. You’re in bed when we first talked. I love it. I love that I get to see you this way.

Greg: Yeah, I’m kind of embarrassed actually because I usually I don’t. I really appreciate it though.

Andrew: Good. Thanks.

Greg: I’ve got to tell you, I really enjoyed just talking to you. This is so much fun. I mean, I never get to talk about this, you know, crazy adventure. I mean, I came from nothing. I was poor, you know, and I grew up and now, I mean, I’ve been through Ferraris and Bentleys. I have a big house and all that stuff. And I got to tell you, if you’re an entrepreneur and you’re listening to this, just don’t give up. I mean, you’ll fail and that’s just part of the process. And the only failure is failure we don’t learn and keep going. If you stop, then it’s failure. But you got to keep going because you’ll make it eventually.

Andrew: I love that you told her producer, “I thought it was a failure because it took me 17 years to sell this company. Feels like everyone is turning around and selling their companies fast.”

Greg: Yeah. Now they sell them in two or three years. But, yeah, the first one . . . that’s why I help them now. You know, because I’m like, man, I feel like entrepreneurs are the future of the country, the world, all over. They really, really are. Everything comes from entrepreneurs. And they also shake loose the money from the one tenth of 1% down to and distribute it across the larger population. It shakes loose that money and that’s really important. So I support that. So even though I can retire anytime, I want to help entrepreneurs. I really do. I love it. When you get to meet these people that are just, I mean, man, you just . . . Man, I have respect for everybody listening. If you’re an entrepreneur, man, hats off.

Andrew: All right. If anyone wants to go follow up directly with Greg, it’s among like a zillion different names. This guy owns more domain names than GoDaddy. But you can find lots of different ways to reach him. I appreciate you being on here, and I want to thank the two sponsors who made this interview happen. The first will host your website right, it’s called HostGator. Check them out at The second is ActiveCampaign, check them out at Again, for email marketing, And if you do want to follow along as I run around the world, go check out You don’t literally have to run with me, you’re just kind of checking out my website. All right. Thanks so much, Greg.

Greg: Thank you so much. I appreciate it.

Andrew: Thanks. You too.

Greg: Bye.

Andrew: Thanks. Bye everyone.

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