Andrew: Hey there, freedom fighters. My name is Andrew Warner, and I am the founder of Mixergy.com, home of the ambitious upstart. I am also the grower of beards and, boy, this beard is getting longer and longer. We’ll see how far I can go before I decide to trim it, at least, if not shave it off completely.
This interview is sponsored by Scott Edward Walker of Walker Corporate Law. I’ll tell you more about them, but frankly I don’t know why I need to and I don’t know why he’s paying me for these ads because I think most people in the startup world know him already but he’s paying me. I get to use his money to fund this business, so I’ll thank him and talk about him later on.
For now I’m going to tell you that we’re about to talk about two-way radios. You know, walkie talkies, those things that maybe you don’t pay so much attention to now that everyone’s thinking about iPhones and Androids phones. But today’s guest does pay attention to them. Brandon Ocampo is the founder of TwoWayDirect. It’s an online store that sells the most popular brands of two-way radio products. I invited him here to tell his story. Brandon thanks for coming here.
Brandon: Alright. Thanks for having me.
Andrew: You started out as a kid recycling cans. Why?
Andrew: I’m going all the way back.
Brandon: Oh yeah. Well I grew up in a middle class family. Both my parents were working hard just to put money on the table so there wasn’t really any extra money to go around for toys and stuff. And so a new toy came out. I had to buy it myself. I had my little red wagon. I’d go through the neighborhood and collect all the cans that I could. Then my mom would take me down to the local grocery store where there was a little station there that you could turn them all in and get some money. So I’d get, like, eight dollars or something for a couple bags of cans and save every dime.
Andrew: How did that store or how did that situation, how did that experience shape that you are today? I feel like there’s a connection to the person we’re about to meet and get to know in this interview.
Brandon: It definitely taught me the value of a dollar cause most of the kids I grew up with it was [??], California. A lot of the kids in Carmel had some wealthy parents. They had everything they could ever want. So when I just wanted to get a G.I. Joe or something, it cost eight dollars. I knew that it took me three weeks of recycling cans just to be able to afford that. So it definitely taught me the value of a dollar and taught me that every dollar I earned I had to make sure I spent it properly to get my maximum potential out of it. So it definitely taught me how to spend wisely and save wisely too.
Andrew: You also learned by watching your dad what you liked about the way that he worked but also what part of his work you don’t want for yourself.
Brandon: Yeah. Yeah. Both my parents started small businesses then kind of, my mom started one actually in a creative way. She didn’t want to pay for daycare for me and my sisters so she started a preschool. So it was a way for her to work from home and really have a good part of me and my sister’s life growing up raising us.
My dad, he definitely he had his own business where he was making cabinets and just being around the sawdust his back was always hurting. I saw that every day. Fortunately, he was able to have the shop at home so it was great having mom and dad around a lot right there. But, yeah, I just saw how much pain he was in.
When I was two years old he lost his finger. He cut it off on a saw. He actually ended up keeping it in a jar; I would show all the kids. At school I’d sneak it from the shop and bring it to school. Yeah, but I knew at an early age from helping him in the shop. I had asthma and just working in that environment it was hard work. And I knew that we as a family struggled for just putting food on the table and he just worked so hard. I knew that I needed to work smarter not harder, and so that was the start of kind of getting in that mind set of becoming and entrepreneur.
Andrew: Wow. And so did you start building businesses while you were still in school or did you wait till later on?
Brandon: I waited until after high school before I started doing stock trading. But at the. . .
Andrew: [??] Why stock trading? Sorry, what were you going to say?
Brandon: Oh yeah. So I would save every dime. It was actually funny. The first thing I ever bought was a police radio scanner. Yeah, like a two-way radio. It was the first thing I ever bought, and I remember it was around a little under $200. But once I graduated high school in 2001, I saved every dime and bought a really economical car.
I didn’t spend all my money on a car like all my friends were doing. They were kind of getting in debt before they even graduated high school, putting a down payment on a fancy car. I just got what I could afford so I could save the rest. And then, I didn’t know what I was going to do with that money that I had saved. I just knew I wanted to set it aside and eventually I figured out what I wanted to do.
I graduated high school in 2001 and that was right when 9/11 happened. And so as soon as 9/11 happened, everything crashed. And everyone was saying, sell, get out, get out of the stock market and everything’s hitting rock bottom. So everyone’s saying sell, get out, but I remember just hearing people say that you want to buy low and sell high. So pick your [??].
It’s hit rock bottom. Surely this could be a good opportunity here, so I bought some Sirius Satellite Radio stock at about $1.55 at the time. And there was no iPods or anything at that time. And pretty soon after Howard Stern got fined and it started becoming this huge deal, then the iPod came out. I should have invested in Apple a long time ago. But I didn’t want to take any more risks. I just thought iPod seems like something that could be good, so [??] the Satellite Radio industry, so I decided to sell at that point. Initially I had saved up about $10,000 to invest and bought it at $1.55 and ended up selling it around $8.00 a share, something like that.
Brandon: Yeah, so it was definitely stressful being in the stock market.
Andrew: At the end of your experience with it, were you up or down?
Brandon: Oh, I was definitely up that I bought at $1.55 and sold around $8.00.
Andrew: Was that was the only stock or did you have a few that counteracted that profit?
Brandon: Oh, yeah. Well, I did a combination between Sirius Satellite Radio and XM Satellite Radio, so . . .
Andrew: It was just those two.
Brandon: Yeah, just those two.
Andrew: I see. Okay.
Brandon: I didn’t want to mess around, but I was . . .
Andrew: How much did you end up with at the end of all that?
Brandon: Probably, because I was doing some day trading too, ended up with around $100,000, or something like that.
Brandon: Yeah. Starting with . . . [??] . . .
Brandon: So, yeah. But it was stressful because I was doing some day trading too while I was in junior college. And I’d be in class and some days I’d lose $1,000 or something. So I’d be in class, couldn’t focus. I’d run to the library right away. So I hear the train passing by.
Andrew: Where are you right now that the train is passing by?
Brandon: Oh, I’m at home. At the office, it was too loud there.
Andrew: Are you in San Diego?
Brandon: Yeah, San Diego. Thought I was in a quiet place. But no.
Andrew: No, you’re good.
Brandon: I would just run out of the classroom. People probably thought that I was insane, and wondering what I was doing. But I’d run into the library, log into my etrade account and [??] my stocks. And would kind of time the graphs and do some day trading sometimes. And some days I’d make really good and some days I’d lose really badly, but it was definitely stressful. I did that for a little bit, but for the most part just let it ride.
Andrew: But you quit when you were $100,000 up.
Andrew: Why didn’t you continue? Why didn’t you say I’m obviously very good at this? It’s stressful but if I could get to a million, which is a magic number for a lot of people, then I’ll stop. Why stop at a hundred?
Brandon: Well, my parents had always told me that there’s no get rich quick scheme. Nothing that really works that way. I knew the value of a dollar. I knew how hard it was to make even that $10,000. And I knew that I got in at a unique time. And I didn’t know a lot about stocks, but I knew that that was a big event where everything crashed. And I was forward enough to make what, but if I were to lose that, I would have just hated myself.
So it’s like, okay, I can [??] to start something down the road. I don’t know what. But the iPod is coming out soon. I know the stock is starting to go down, and so I’m going to just kind of capture what I’ve got now and then move on. That was just too stressful and not something I wanted to be doing.
Andrew: Alright. At the top of the interview, I said that you’re in the two-way radio business. You learned about it when you were in school. How did you get involved in that?
Brandon: Well I went to junior college initially back home at Monterey Peninsula College and then eventually I transferred to Cuesta College in San Luis Obispo before I ended up at San Diego State University. So when I started majoring in business at San Diego State, I had a ton of different jobs and . . . whoa, what has my computer done?
Andrew: Yeah. We restarted your computer here in the middle of the interview to get a better connection, and I’ve got to tell you, Brandon, the connection is much better but apparently something happened on your screen. What happened?
Brandon: [laughs] Spotify just opened up out of nowhere. [Laughs]
Andrew: Ah, yes, Spotify will take up a lot of resources. We can’t have that.
Brandon: But I’ve got it closed now.
Brandon: Yeah, so when I was going to San Diego State University, I had a bunch of different jobs and so I was interning at the Fox News Station in the morning. I was working for the radio station for country music, and so I just did some stuff with them. Then I was also working for this other company doing sales in the two-way radio industry, and then I was also working for the [Laydietta] record label and a bunch of different things.
But the job I had at the company where I sold two-way radios, I was working there for a while. At the time, I thought they were a great company, that this was a great opportunity.
And then after a while I started doing research on competition, and I came across this website that had our address on it where I worked, but it was a different company name.
I thought, “That’s kind of weird.” Then I called the toll free number in the marketing director’s office, and I was, like, “This is kind of weird.” And so I started just kind of looking into it more and went back to the warehouse and started seeing orders shipping out to my customers, but they were in a different company name.
So I thought it was kind of weird, and I asked the general manager about it, and I was just, like, “Hey, what’s going on here?” So he told me that they had an online based company that they hadn’t told us about. And so I was asking, you know, “Am I still getting my commissions on this, estimates for this?” He said, “No,” you know and so I was pretty upset about it, and so I kind of started getting really angry about it and asked if they’d change. They wouldn’t change and finally, after getting upset about it enough times, they ended up firing me.
And so, once they fired me, I kind of got to the point where I was, like, “Okay, well I’ve got to do something,” you know, so I decided to start my own company and that’s how it all got started.
Andrew: And so the reason they didn’t want to tell you and didn’t want to give you commissions is that they felt like this was a whole other business, you’ve got nothing to do with it? But you realized that a lot of people who were buying from you, because you made a sale, were going to repurchase . . .
Andrew: . . . from the website and cut you out, and then you wouldn’t get the commission on all those . . .
Andrew: . . . all the new business?
Brandon: So we would go out and cold-call and get companies and then, mysteriously, they would . . . the orders would end up through this other company. So I don’t want to make any . . .
Andrew: Oh, I see. You’re saying, not even the reorders, even the initial orders would end up on the website?
Andrew: And then you would cold-call, open the sale, close the sale, essentially, but not get the business, because they finished it on the site.
Brandon: Right. So I don’t know exactly how it ended it, you know, and what they were doing to get it over to that other business, but something was happening where it was being switched out of my name. And so, you know, a sales job, you live off commissions and so my . . .
Andrew: Brandon, how big a business is selling two-way radios? Frankly, if I were to work somewhere where they sold it, I would have said, “All right, kind of interesting, but it’s a mature market that’s not really growing any time soon. It was a fun job. They cheated me, maybe. It’s time for me to move on to do something else.” But you saw something that I’m not seeing as an outsider. What did you see?
Brandon: So there’s a big misconception that someone might think of when they think of walkie talkies or two-way radios.
Brandon: Most people think of two-way radios for consumer use. So that’s when you go into Best Buy or something and buy some walkie talkies to use when you go skiing or something. What this specializes in is two-way radios for business use. And so, two-way radio communication for businesses is extremely important because say for example you have a hotel. If you have a hundred employees at a hotel and they’re using cellphones for communication, say each cell phone is roughly fifty dollars per month.
That adds up pretty quick from the amount of cell phones you have. Since you’re in one site, they’re at a hotel, fixed communication on one piece of property, if they use two-way radios, they buy the equipment and they have zero monthly cost at all. So long term they end up saving a ton of money because they’re not spending all those monthly service bills for cell phones
Andrew: [??] You’re right. I keep thinking about buying those walkie talkies either for fun as kids or buying those walkie talkies for hiking, where there might not be cell reception and you want to stay in touch with your group. I get it. Alright. And so you were seeing this is a high-cost, high-profit item that companies were buying in bulk for all their people because they wanted the communication to work together all on one network.
Brandon: Exactly. Exactly.
Andrew: Got you. And so you also recognized, there’s nothing special about what this company that you worked for is doing. They have the same relationships with the manufacturers that you could get and you know the cold-calling process because you were doing it. All you had to do now is build your own site.
Brandon: Exactly. And so, at that time, once I got fired, I was trying to figure out what to do and I thought, well, why don’t I start my own business? And fortunately, since I saved the money I made in the stock market, I was kind of sitting on something I had saved so, I thought, this is a great opportunity because now I can start a website and get everything going, and be fully functional. So that’s how that all got started.
Andrew: I see. Alright, so now it’s time for you to launch a business. Before I ask you the first thing you did, let me interrupt with a promo here for Scott Edward Walker. I think this is a place where maybe, naturally I can start making my plugs for him. This is my fourth attempt here at a sponsorship within the interview as opposed to putting them before, in the pre-rolls. And the reason I thought it would make sense right now is because when starting a business that’s the time when most people seem to start thinking about the lawyer that they’re going to get for their business.
There are two ways that I’ve seen people in the startup community go. One, they go to their father’s friend, or their friend’s friend who happens to be a lawyer and they sign up with them. That’s a bad path to take because those guys don’t understand the start-up community. They don’t understand what you’re going to need if you end up going to get funding from the investors in the start-up community and so on. So that path might be super cheap, depending on the friendship you have with the lawyer, but it’s not going to be super in-touch.
The other path is to go to one of the high-end law firms, where they’re frankly gong to pawn you off to someone else. And they’re going to charge you a lot of money. Or, they’re going to try to get a big piece of your business. If that’s not the path for you, there is another way. Scott Edward Walker of Walker Corporate Law. Frankly, when he helps you when you’re starting a business I don’t think he makes any money off of the intro.
I think what he’s doing is, he is helping you with the understanding that you’re going to get to know what it’s like to work for him and then, when it’s time for you to really need a lawyer, like when you’re selling your business, giving shares to your people, etc… he’s going to be there, in your Rolodex at least, and you’ll have had a relationship that you can call on. So, Scott Edward Walker, walkercorporatelaw.com.
Check out his site. Brandon, what did you think? You’re a cold caller. You don’t have a lot of time when you’re making calls to them. Would this pitch have worked? Was I spending too much time? What can I learn from your experience before we go back to your story?
Brandon: I think that was even perfect timing, getting right into that point of the story. That, I think works a lot better than getting to the next chapter and just having a random ad about something. I really like how you incorporated it with what was relevant with the story at that time. That was great.
Andrew: Thanks. I’ll go back now and, well, maybe I’m thinking, should I go back and see how long it took me? Or maybe if I look at how long it took me, then I’ll obsess about the time next time and rush right through it. The only thing that I forgot to do was, and it’s not such big deal, but I forgot to hit this button to show his website. But I don’t think we need the visual. [??] For you, getting started meant what? What did you need in order to launch the business?
Brandon: So I needed to look bigger than I was. And so to do that I needed to everything I could to look credible. And like I had a huge operation when it was just me. I knew that to do that having a great website would help give that illusion of a big company. So I spent a bunch of money on a website to make sure, you know, that I looked like I was as big as I could possibly be. Fortunately there’s been a lot of changes since I first started my business to where now days you can make a great looking website for much, affordable price.
Andrew: How much did you spend on your website? We’re talking about 2005, right, roughly?
Brandon: Yeah. About 2005.
Andrew: So how much money did you spend on the website back then?
Brandon: Twenty thousand dollars for my first phase.
Brandon: And [??] there was a lot of unique programming with mine. Because with all these radio’s there’s product’s that have to be cross compatible and so I had a bunch of different [??] filters that would cross relate to an item. So, not all websites need all those features. Since two way radios are really technical and you want to make sure everything is compatible with whatever they select with everything else.
So there’s a lot of programming stuff that had to be done but just a basic design probably would’ve cost, you know, couple thousand dollars. But since I needed all those extra features it ended up being around twenty thousand dollars. For my first phase so. Yeah, but once I got the website setup that was pretty much my store front, you know, and was selling, you know. I wanted to sell all throughout the United States so was banking on the fact that, you know, that people in Kansas or New York, you know, weren’t going to fly out and see the office. So I started going then.
I also needed to have an actual address and working with big casinos, big hotels. If you just have a P.O. Box they’re going to be kind of skeptical. So I needed a physical address, at a low cost. And I needed kind of plan for growth. So I ended up going through a company called Regus. Where you can get a virtual office for a very affordable price and then as you grow, you know, you can buy a small office and then grow into two offices and three offices but still keep the same address. And I knew if I had some big accounts, you know, I couldn’t be changing my address every couple of months.
Andrew: And the difference between using Regus as opposed to using a Mailboxes Etc. if you ever needed to have a client come into Regus. They have a physical office that will look like it’s your office. Where the receptionist will great your guest as if you’ve been working there for years. And take you into a conference room that you only have to pay for per hour.
Andrew: Mailboxes Etc. now they’re calling it the UPS Store. All you get is a box.
Brandon: Exactly. So.
Brandon: It worked out perfectly because I didn’t always have to be at the office but there’s always a receptionist there. That knew about me, knew about my business, knew how to greet people. And set up appointments if needed so it was a great, low cost, way to start my business and get it off the ground and so.
Andrew: I’m still in that. I’m in Regus, right now. I can probably go and get, I know I can get another office space. I’ve been running this business long enough that I can but I love that there’s a receptionist here. That someone makes sure that the place is stocked with coffee and.
Andrew: They do the dishes. And they greet my guests when we have them come over. It’s fantastic. So all of that, did you get your customers, though, over the phone, in person or on the web?
Brandon: So that’s where I started running into some problems
Brandon: So I thought okay, this is going to be great. I’ve got my website. I’ve got my address. I got a receptionist, you know, I’m still at a pretty low cost. And so once I started going out trying to make cold calls all these big casinos, big hotels they’re asking for referrals. Who have you worked with in the past? How long have you been in business? I’ve been in business for three days, now. And I haven’t worked with anybody. And so I basically, you know, wasn’t able to get anywhere. And so that was a major hurdle. Everywhere I called it was the same story.
Brandon: So I knew I needed a big account, too, that I could use as a referral. And so my office was in downtown San Diego. And so I thought, Okay. What’s the best, best hotel downtown, I need to get it. Omni Hotel it’s connected to the Padre Stadium. Contacted them, the director of security handles the two-way radio purchases so I begged them for the sale and he wasn’t having it.
So, at this point, the business is gone for a while and I had to deal with a lot of vendors, I had to do opening orders just to become a vendor and I used up a lot of my cash for that. I had my other monthly expenses and the website, so my money was quickly dwindling down. I was about to lose my business before it could even get off the ground.
So I had to get creative and I looked on Omni’s website for the San Diego location and I saw that there was an opening for a security guard and the Director of Security makes the call on purchases so I thought I would apply for the job. I went in, I applied and I ended up getting it; I forget what it was, may $8.50 or $9.00 an hour. I started working there and I just kind of weaseled my way into the cracks and got to know everybody and this point in time I had working there for maybe four months. I finally got employee of the month and my picture was on the wall, then I went to my boss and I said, “Okay, look here’s the situation.”
So I basically broke it down for him and I said, “I’m trying to start this business and I have been studying your system and what you use here and I think we can improve it and I can save you some money.” At that point it was hard for him to say no. I told him, “I’ve been working hard all this time.” So we worked it into the budget and then a few months later came up with an $80,000 budget and placed a big order for a new system. I was so grateful because I had just saved my business.
Andrew: So you’re first order was $80,000?
Brandon: Yeah, $80,000
Andrew: Wow, and what kind of gross margins do you make on that?
Brandon: Since there are other authorized dealers that sell these products it’s pretty competitive, so It’s a 20% margin.
Andrew: Okay, so $16,000 commission on your first sale?
Brandon: Yeah. So, I was great I can finally get started and I can do them both full time, and he said I could use them as a referral. So right away I was able to leave there and make more calls. Shortly after that, I was able to get our products on Costco.com and that was huge.
Andrew: Costco.com bought from you?
Brandon: Yeah, They had our radios on their website. I was there asking people who I worked with as well as getting a great testimonial from the Director of Security at the Omni, and I was able to hit the price points that they needed. After dealing with the manufacturer to work out the deal, because I didn’t have much money at the time to be able to fill hundreds of radios a week for the needs that they would have, I ended working out a really cool deal.
Costco has a partnership with a distributor that gets online orders from Costco and they ship directly from the big warehouse. So, we put the manufacturing of the radios in a big chunk to the distributor and basically I would look on Costco.com every morning, and I would look at the product placement of our ad, I’d call up Nate and say, “Hey Nate, you have to move us up a little bit in front of Motorola.” and he would go, “Okay, I’ll help you out.” Then our sales would go way up, just from the product placement.
Andrew: Just because you would call up and say, “Can you place us a little bit higher.”
Andrew: I thought it would be more scientific than that, that that would be AB testing it in real time, and moving you up or down based on how many sales you were making.
Andrew: I want to ask another question because, obviously I’m not in this business, so this an amateur question but I think It’s an important one. Why wouldn’t Costco just go to the manufacturer directly and cut you out?
Brandon: They could of, but I had a really close relationship with the manufacturer, so we worked the deal together from the start. Before I even gave them the contact information to the other guy and included him in the loop, really kept all that info private, so he have the incentive to work with me on it, you know, sign a complete agreement before we even got started, so.
Andrew: Costco did, or is it [inaudible] . . .
Brandon: Manufacture, the other manufacture.
Andrew: Manufacture did.
Brandon: So with that agreement, he can go around and sell to them directly, so. But with that we’re able to move forward, and he wasn’t in much of the negotiation, he was just kind of the financing behind it.
Andrew: We’re talking about the CEO of the radio company, the manufacturer.
Andrew: I see. So basically he said, look, you go do the legwork and open up Costco for us, I know that that means that you’re going be between me and Costco and you’re going to get a cut of the business.
Andrew: But you’re going to hustle in a different way than I am, and you’re going to push open that door in a way that I couldn’t do.
Andrew: Is that it?
Andrew: Wow. And because of that, you ended up with a relationship with Costco, huge customer, I see, and that helped you grow, and your supplier, the manufacturer, even floated you, I mean, how do you say this, basically gave you credit because you couldn’t afford to pay for the radios to get to Costco, and wait for Costco to pay you.
Brandon: Yeah, because I couldn’t get credit through him, you know, not 30 terms or anything like that, because I was new business, didn’t have the money or credit history to do anything like that, so yeah, he was doing cash flow, and that was part of our negotiation with him.
So basically what ended up happening was every day, you know, I wake up [inaudible] on my laptop, and call up right on the phone at Costco, they put us up [inaudible], they put us up, and we weren’t even seeing the product, it was going straight from the manufacturer to the distributor, and they were getting online orders and they were shipping it out, and so I just collect the checks every month, and it was a piece of cake, so.
Andrew: Well, it took a long time to get to that piece of cake, but once you got it it was a piece of cake.
Brandon: Yeah. So that time, yeah, life was great, I wasn’t touching any products, you know, I had my virtual office, and but I worked from home [inaudible] and then go surf, you know, during the day, come back, go see where our product was, call them back, hey, move us back up, and so, yeah, it was a good time.
Andrew: What about this, there are a couple things that I got to wonder about. First of all, are you making yourself sound bigger even with your supplier and with Costco, or are you saying, hey, I’m a one man operation, you guys are getting to talk to the CEO right here, he cares so much that he’s talking with you directly, what’s your approach?
Brandon: Manufacturer, well they were in San Diego too, the manufacturer, and so he knew I was a one man shop, just opened up. Costco had no idea, and so I was able to get our radio on Costco.com, and I just have a virtual office, and they don’t even know I’m sitting in my living room, they think that there’s tons of employees, you know, behind me and they’re just exclusive, getting to talk with the CEO of the manufacturer, and me the owner of this company, and so . . .
Andrew: So they knew you were the owner of your company, but they didn’t know you were the only employee also.
Andrew: Gotcha. All right, what about this, Motorola, you keep calling up Costco and asking to slide up above them. Motorola isn’t as fast and as hungry as you are, but they’re also not lazy and sitting back. What do they do when you start making these calls to Costco?
Brandon: So Motorola, they’re, that’s a whole other story. But, yeah, Motorola will do whatever it takes to squeeze out the little guy, you know, and eventually they did squeeze me out, because . . .
Andrew: They did.
Brandon: Yeah, but I had a good, probably a year, on Costco.com, but slowly they started lowering their price a little more, lowering it a little more, lowering it a little more, until it was too low for us to go, and then so, couldn’t go any lower, had to stay at the higher price, and they kept dropping and dropping, and then, now when someone sees two products right next to each other, same specs and everything, you know, they’re not going to buy our product, and so eventually it just kind of fizzled out, and then we got dropped.
But I was able to learn a lot, and made a lot from the deal, and I was able to get, during this time while I was still with Costco.com, got Overstock.com, you know, got a bunch of other stuff too, General Electric, and they’re still a big customer to this day. We service all their wind energy sites in the United States and Canada, and so they’d been a loyal customer since day one.
Andrew: You told Jeremy Weisz in the pre-interview, that you guys did $104,000 some months in revenue from that one customer.
Andrew: So we’re talking about really big sales.
Andrew: Here’s the thing. You’ve got Costco. You’ve got General Electric. You’ve got Overstock. A person listening to us is going to say, this guy’s got a lot of hustle and a lot of willingness to pick up the phone. I’ve got a lot of hustle and a lot of willingness to pick up the phone.
Andrew: There’s a difference in your results and their results. What makes you so special? What did you do that the average person is going to try to make calls like you and get the Regus office and so on, is not going to do?
Brandon: It goes back to the beginning of the story, and I think all part of how I was raised, and how I was able to come up with money to even working on this business. Recycling all those cans just to get every single dollar, being fortunate enough to win in the stock market when I didn’t know what I was doing. I appreciated every dollar I had. I knew how hard it was to make all that. I knew that my parents, and how they struggled, I never wanted to back there. I never wanted to struggle for money. I knew I had to do whatever it took to survive.
Andrew: What did it take? First, of all, I get that, that that’s what was going to get you to keep making those phone calls, to have the courage to call bigger companies than you should frankly, have earned the right to have talked to, but that’s the way that you earn the right, by just doing it. I get that that keeps you going, but once you got on the phone with them, what did you say? What was your process for getting a sale from someone who was a stranger? You can’t just say, I work with Omni, there’s something else. What’s the other piece here that I’m missing?
Brandon: You really have to put yourself in the customer’s perspective, and when I was in college, Philosophy was my favorite class logic. Eventually, I dropped out of college, but that was the best class I had because I learned whole situation about if this, then this. So, I knew if could find out the customer needs, and if they said no, I would ask “Okay, why is this going to be a no”? Surely, any deal is possible to get, but if you are selling stuff for a dollar, they’re obviously going to jump on it. There’s going to be some middle ground.
There is no reason why you can’t be able to get any deal. I would find out all the no’s, and then I’d say, okay, if I can make those [inaudible] then would you go with me? So, [inaudible] they would contradict their own statement that they would go back on it. You kind of have to be a lawyer in some sort of sense, but I’d say okay. I’m going to go down your check list and get everything you want, and that’s how I got Costco. Okay, what price point are we going to need to be at? What numbers are being done there? What (inaudible) returns to, and so, that has to be factored into the price that you are choosing.
Andrew: The connection went a little bit . . . disappeared there for a moment, but what you were saying is, you would ask them why not, where most people would just accept the no and maybe try to get another phone call or be more persistent. You’d say why not. You’d get a list of the reasons why they don’t want to buy from you, and you’d say to them, if I can rectify these issues.
In other words, if I can get you the price that you are looking for, and the features that you want, and show you a testimonial from someone you respect, if I get all that would you then buy from me?
Andrew: If they say yes, and you get all that, they are not going to want to contradict themselves because you just did everything they asked of.
Andrew: We are over-simplifying it, but we’re doing it to understand your process.
Brandon: Exactly. So they had a radio that was two watt power, and they were selling it for $150 and it was Motorola brand name radio, so I’d say okay, instead of a two watt radio, what if we doubled the power [inaudible] watts, and we are going to do it for a lower price. We are going to do it for $130 a radio. If we are selling a radio that has twice the power, at a lower cost, don’t you think your customers are going to want to buy those? Yeah, I think so.
Okay, well, if I can get you a radio at that price, with those specifications, would you have any reason to say no to that? Oh, we can’t. Then I’d work with the manufacture. Okay, we’ve got to get our costs lower. What do we got to do to hit this price point and work at it like that.
Andrew: Look at this ingenuity. Look at this ability to sell. Look at all this vision. And I’m thinking to myself, “There were months when you were trapped in a security job for $9.50 an hour,” right? Didn’t you just burn inside and say, “What is happening to my life? Why am I going through this? I can’t believe this.” Did you have any of that?
Brandon: (?) I was getting depressed. I mean, the security job, I was given after a while to take over the night shift. And so working the night shift, you know, I was – there’s nothing going on in the middle of the night at the hotel. The security office has a concrete floor and desk so I would honestly turn up my radio, have it next to my head and I was sleeping on a concrete floor and I remember just thinking, “I have to make it. I can’t, there’s no way I can do this.”
I’d call home and fortunately my parents were so supportive during the entire process and backed me up when I said, “I want to drop out of college and start a business.” So I’d call them, late at night. I’m laying here on this cement floor working the night shift security. My life is terrible. I’m living off Top Ramen. I blew all my money on starting this business, put all my eggs in one basket and now what? You know, is this even going to work?
So they were definitely really encouraging through the whole process and so that definitely helped tremendously because all my friends, [all] my friends’ parents thought I was a failure. Everyone thought I was a failure and-
Andrew: Your friends thought you were a failure? Your friends’ parents thought you were a failure?
Brandon: Yeah. Friends’ parents from back home didn’t even want [their] kids hanging out with me. You know the drop out and all that. They’re like, yeah, so. I mean it was definitely tough times, you know, going through dropping out of school and starting a business and failing. [Tough times]. It definitely gave me the motivation to push forward and make sure I can’t fail, so.
Andrew: You know what? I’m thinking about the 20,000 that you invested in the site, and I’m also thinking about this guy [Jordi Borgman] who I interviewed awhile back. Actually I did a course with him and when I looked at his website I realized, this is- I don’t think it was working at the time. I think it looked nice but if I clicked the button that is supposed to do something it would take me to a form that said, “We are going to have the boss contact you directly,” or something like, “We care so much we’re going to contact you,” but I could tell that the site wasn’t working.
And I think it’s because what he was doing was saying, “I’m just going to build a site so if anyone who I talk to is going to look at it they’ll see that I care because I’m in contact and they’ll see that it’s legit or feel like it’s a real business, but it’s not going to work because I’m not going to invest money in the business.
And I think that’s his format and I think that’s his mindset. I don’t want to speak for him. And at the time I thought, “What do I do with this? Is he a real business that I’m about to have on or not?”
Andrew: But in light of what you’re talking about, would that have worked for you? To just put up a quick website, one that might have cost you 1000 bucks where it said, “We do concierge service. If you want to buy a radio, we won’t force you to look at a website; we’ll talk to you directly.”
Brandon: Yeah. I wish and that sounds like a great idea actually. But I think for this it doesn’t because the people that order this stuff are really tech savvy and they spend a lot of time on the site before they even call and before they make a purchase and so they’re wanting to see spreadsheets, they’re wanting to see all this stuff. And they click off pretty quick, you know, if they’re not getting their technical information. So a lot of times they’re doing a lot of research before they even pick up the phone. So, yeah, it sounds like a great idea.
Andrew: I see. But, you’re saying in your business that wouldn’t have worked. You needed a website that had all the details and the functionality that you talked about earlier.
Brandon: Yeah. Yeah.
Andrew: I see. Alright. It is a different approach. I should say, go to mixergypremium.com if you want to take the course that I’m talking about where he talks about how he pre-sells. Once he gets the money from customers he says, “Alright, now I have enough money I can go and build a business.” And he did build it. You can go to guestretain.com. I don’t know if I should have because Chrome kept causing issues a moment ago. Let’s go to guestretain.com.
Andrew: -and it actually worked for him. guestretain.com. Get started. See? Join the review now. Oh, already a member login. Alright. So yeah, it’s built. It’s there. Oh, but he changed his name it looks like to WaveReview. Anyway, that’s his model that he wants to see if people buy. He wants to see if the idea works before he builds it out. You’re depressed. What got you out of it? Was it just doing so well that you got employee of the month?
Brandon: Yeah. I mean I kept working hard at my job and stuff. Did everything I could to be the best I could at the job cause I knew I, my goal is to become employee of the month. And I needed something, something like that for that extra final push. So finally, took me about four months to get it but was finally able to get it and was able to use that. But when he finally gave me that go head I mean, it turned things around. and that was the one thing that I need so.
Andrew: What kind of revenue you doing now? And by the way I don’t edit it out. I should say it to you and to everyone else. I don’t want to trick you, but I am curious what kind of revenue are you doing now?
Brandon: I think so far for this year I think we’re maybe around, like, 25 million in sales.
Andrew: Twenty-five million in sales and we’re only in October.
Brandon: Two point five.
Andrew: Two point five. Alright, 2.5 so far. So we’re talking about three million annually.
Andrew: Three million dollars and the gross revenues are gross margins are still where they were before, roughly.
Brandon: Yeah. Except for 2014 we’re starting our own product line. Actually just started it and it’s coming in about two weeks. And so our profit margin is going to go from twenty percent on average, it’s going to go up to about 60 to 80 percent.
Brandon: That starts in two weeks so I’m pretty excited.
Andrew: This all boot strapped. You didn’t get any outside funding. You’re just figuring it out and building it on your own.
Brandon: Yep. Just didn’t borrow a dime it all started from the cans that I recycled and
Andrew: Really. Literally from the cans that you invested in the market that you built. That you used to build a website that you lost a lot of money on. And that you then started on, got a deal with Omni and then built it from there.
Brandon: Yeah. And a lot of these, a lot of these hotels and casinos, these big businesses they require net 30 terms so you’d have to float them and buy the equipment in advance so it definitely takes a lot of cash flow to keep it rolling. But, I never wanted to grow out side of my capabilities so I only grew consistently, slowly to make sure if there is any little mistakes I would fix it quick instead of getting in over my head and losing it all.
So I just went slow and steady with it. And that was able [??] fund with myself and keep 100 percent of the company and not give anything up [??] with our own product line [??] in a couple of weeks. You know it should really sling shot us forward, so.
Andrew: You know, I’m doing a search here to see if you were ever on TechCrunch. You were never on TechCrunch, right?
Brandon: This is my first interview I’ve ever done.
Andrew: This is unreal. You were never on TechCrunch. You weren’t someone who people talk about. It’s one of these quiet success stories that I never would’ve found out about except for Sam Parr [SP], who’s a friend of yours, who introduced you to me. And this is the kind of story I think that’s a better model for an entrepreneur than the stories that get covered in the main stream tech media. In the startup world. How do you know Sam?
Brandon: Sam, I knew him from Nashville kind of, one of the benefits I had having a virtually office in my handful of really good accounts. Didn’t take much to run it. It was pretty turnkey and I could really step away. I started tour managing for a while and so I worked in the music business. I moved to Nashville. So I was living in Nashville, and my business was in San Diego. I lived there on and off for [??] years. And was just kind of in cruise control. The business was going [??] just kind of doing stuff for fun. And so my girlfriend actually knew Sam prior introduced me to him and so he was telling me how he was moving out to San Francisco.
And then pretty soon after, started this business and it started taking off and we were just talking. I thought, like, man, that’s so awesome you are able to just build that up so quick, you know, and just tell me all about it and started asking me. Like, so what’s going on? How did you even get started.I told him the story and he’s, like, you need.
Andrew: Sam does that. I had him over here for scotch and he just kept hitting me with these detailed questions about how I built my old greeting card site in a way that other people never ask.
Andrew: Those kinds of questions. He’s one of the reasons I’m happy to be living in San Francisco. I don’t get, I didn’t get to see people like that when I was living in Washington, D.C.
Andrew: What do I want to; I want to close it off with two things. First, before I ask the final question. You got, this is just a quirky thing that I see in the notes. You were skateboarding and what did you do? You got…pulled…what happened?
Brandon: So when I was working for the Omni, security guards wore suits. And I was living downtown in this cheap little apartment. And my office was the virtual office downtown. It’s right next to the Omni and so, eventually I got a small office and upgraded from the virtual office. I had some equipment that I needed to program every now and then and get ready to ship it out. So, I’d bounce around on my skateboard to save money on gas because I was really trying to save money. And skateboarding in my suit down the sidewalk people would always take pictures like, only in San Diego would you see someone in a suit cruising on a skateboard.
So I was cruising down one day and this motorcycle police officer pulled up on the sidewalk and blocked me. And I was like; okay something’s going on here. So I picked up my skateboard and I went to walk around him. And he was like, “Whoa! Stop right there.” And I was like, “Sorry. Was I doing something wrong?” And he said, “Yeah. That skateboard right there.” I was like. “Oh. I didn’t know it was against the law.” And he said, “You ever hear them say skateboarding is not a crime? They say that because it is a crime!” And I laughed.
Andrew: So, you are not allowed to skateboard on the sidewalk?
Brandon: Yeah. And I said, “I apologize. I’m just using this for transportation. I’m not trying to destruct property or anything.” And then I realized he wasn’t joking. He was serious. And so he wrote me a ticket that was a couple hundred bucks.
Brandon: And so I had to walk with my skateboard the rest of the way. And then a couple weeks after that I was like, surely I’m not going to run into this guy again. I’m going to just keep doing it. And a couple weeks later, he finds me again, drives his motorcycle up on the sidewalk, “Alright, here you are again,” wrote me another ticket.
Brandon: And it was like, ah [??]
Andrew: Your parents, now that you’ve gone through all of this, how are they feeling about having stood by you? They must be proud.
Brandon: They’re really proud. One of the great feelings about having my business is my mom was there every step of the way. Same with my dad, but my mom… I needed a bookkeeper. I didn’t know much about accounting and she knew a lot about bookkeeping from starting a preschool. And so that’s what she did. She had different clients and she did bookkeeping as her profession and did it from home.
So she did all my bookkeeping, gave me the advice: here’s where you go to file your fictitious business name, you’re going to want to get a re-seller license, all that stuff. And so she walked me through all that and did all my books for me, stood by me and now, at this point, she’s on full time salary when she was working for free back then. And so it’s an awesome feeling having my mom right there handling the money part of it.
Andrew: I can imagine.
Brandon: Keeping an eye on all that, I obviously trust her more than anyone, so it’s great having her. And she’s got a secure job as she gets older and stuff, which she’s been stressed about. So it’s a good feeling. She’s able to work from home up in Carmel Valley. And so it’s a great feeling. I’m glad to have that.
Andrew: Congratulations on building this business. If people want to check it out, the website is twowaydirect.com. Do I have that right?
Brandon: Yeah and two is spelled out. T-W-O-W-A-Y-D-I-R-E-C-T dot com.
Andrew: We’ll link it up. But I know a lot of people listen away from their computers. Thank you so much for doing this. If people want to say thank you, what’s a good way for them to do it?
Brandon: Anyone out there looking to start their business, there’s a lot of easier ways to do it now. Starting a website, if you’re selling products online, I’d highly recommend bigcommerce.com. I wish they were around back when I was first starting. I could have done it a lot faster for a lot lower price. But they’re a great source if you want to build a site and just get something off the ground for really inexpensive.
Andrew: Yeah. We had the founder of the company on. Great company too. Great people there. But do you feel comfortable sharing contact information? Something for anyone who feels like they got a lot out of this interview and want to send you a thank you. Is there a way for them to do that?
Brandon: Yeah, they can email me at email@example.com or they can call 888-742-5893. Ask for me. Chat any time.
Andrew: Well, it’s great to meet you and I hope I get to see you in person. Thank for doing this interview.
Brandon: Thanks a lot. I appreciate it.
Andrew: Same here. Thank you all for being a part of it. Bye guys.