Student’s Startup Earns $250,000, But He Wants Out Of It

Andrew: Coming up, what happens when you try to sell your Internet-based business. Today’s guest says he’s going to be very open. I’m even going to ask him about the sale price of his company just so you can learn about the whole process. Also, when you listen to his story I want you to ask yourself, if he can do all this when he was in school, why don’t other people start companies? Finally, don’t miss all the tricks that today’s guest says he’s going to be open about in this interview including how he got around people’s resistance to paying shipping, really cleaver technique there, and how he eliminated his eBay fees, kind of cleaver, kind of mischievous, all great stuff coming up so stay tuned.

First three messages; who’s the lawyer that founders in the Mixergy audience trust? Scott Edward Walker of Walker Corporate Law. Have you seen what Chris Pritchard posted on my Facebook page? His new companies and corporation pages that Scott Edward Walker helped him get. Scott Edward Walker is the lawyer that publications like Forbes trust. Go to Walkercorporatelaw.com.

Next, when my friend had to close her company’s office but still wanted to give callers the impression that all her employees work well under one roof together, what service did she use? Grasshopper. With Grasshopper everyone who works for you can have an extension. They can pick up calls on their extensions no matter where they are or what phones they use and they can transfer calls to each other back and forth with ease. Get those features and tons more at Grasshopper.com

Finally, when Dave Jackson and Dave Petrillo invented a product that keeps coffee at the perfect temperature, what platform did they use to create their online store? Shopify.com. Look at how beautiful their store looks. It’s because it’s built on Shopify. They did hundreds of thousands of dollars in sales. Shopify stores are designed to help you sell. Patrick Buckley invented an iPad case and used Shopify as his online store. Within months he sold over $1 million in cases. Get your beautiful online store at shopify.com. Here’s the program.

Hey there freedom fighters, my name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. Why would a founder who did $250,000 in revenue in his first year say he’d never start a similar business again? When he was in school Chris Brisson sold car rims online. I invited him here to talk about how he earned his first quarter million dollars, how he grew the business and why he says he’ll never sell a physical product again and maybe at the end of this interview you’ll never want to never sell a physical product again. I don’t know, we’ll see.

Today, Chris is the co-founder and CEO of CallLoop, the constant contact for voice and text which integrates with other service that your already using to send targeted voice and text messages. I saw it at a conference CallLoop is spectacular, maybe a whole interview on its own but I’ve got to find out about this business, Chris, that you started in school. So welcome, and thanks for being so open about it.

Chris: Thanks, Andrew. I’m a big fan of Mixergy, so looking forward to it.

Andrew: You know that I’ve built a healthy skepticism in my audience and when they hear someone say like me, say this guest did a quarter million in revenue, in their heads there immediately going to think something like great, that was the first year. The second year probably went out of business, that’s why Andrew’s always telling me about the first year. Well, I’m going to be open about numbers. Let’s start now. First year, quarter million, what was the second year?

Chris: Yeah, the same actually. I was in college so it wasn’t something I really put of lot of effort, energy, while I was at school but It just kind of had a life of its own and took off.

Andrew: All right, and when you sold it, we’ll tell later, I’ll dig into the details of the sale because I think there’s a lot to learn there. You made a statement about how when you go to sell an Internet based business it’s not what you imagine it’s going to be and we’ll get to that. But for now, at the time of sale can you say what the sales numbers were when you sold the business?

Chris: Yeah, I think actually the sales numbers were actually a little bit down. I was in business for three years from 2002 to 2005 and really by the tail end of it I was really sick and tired of it. So, at that point the sales numbers were down and really just kind of in a way let the business kind of go down a ways.

Andrew: Down by how much?

Chris: What?

Andrew: Down to how much?

Chris: Oh, down to how much? Good question. I think by the time I sold it, it was about $175 in gross sales in 2004, because I ended up selling it in 2005, in February 2005.

Andrew: All right. Let’s go back and see how you built this up, including how you got customers, how you got your product and how you got around some of the difficulties like people’s resistance to buying anything online or from a stranger or to paying shipping as I mentioned earlier. Starting with, one of the first businesses that you had was before you even got into double digits, before you were even 10 years old, back when you were around six or seven, you and your brother did something that I think showed some entrepreneurial hustle. Can you tell the audience about that?

Chris: Yeah, it’s kind of funny, but my dad has been an entrepreneur, owned restaurants and everything, so we were always in his restaurants and outdoors. Anyhow, he owned this restaurant in Lantana, here in Florida and it was an Italian restaurant and next door they actually had a flower shop. My brother and I, we were really young and we’d always be at the restaurant playing around and next door was a flower shop. Well, what they ended up doing was they would throw away all these flowers. You know, it’s kind of like the cliche, I was listening to Gary Vaynerchuk and him and his brothers were selling flowers way back when, it’s kind of funny. But anyhow, we would go in dumpster and pull out all these roses and all these flowers and they’d still have a little water thing in the stem and it was just awesome. So my brother and I, at the end of our street, we would take these flowers and essentially just sell them on the street corner. Instead of like, lemonade, we would sell flowers.

Andrew: Flowers out of the dumpster that you would stand out in the middle of the street and sell. Now, you were really putting yourself out there. Most kids at that age are afraid to shake adults hands, right? I remember, I must have been afraid at that age to even have a conversation with an adult, and here you are presenting something for sale. Any nervousness, anything like that that you’re remembering?

Chris: Well, yeah, because we lived at the end of the street, so there wasn’t really a lot of people that came by.

Andrew: Oh, I see. So it was more about nervousness about “What if nobody shows up, then what do I say to these people to explain that they should be buying from me?”

Chris: Yeah, I mean, I think I was six, my brother was eight, maybe we were a little bit younger, but I think it was just “Hey, let’s just throw up a stand” like everybody. I think everybody did the whole lemonade thing and we had something else. We had flowers. So, gosh, I don’t remember. I was really shy growing up, so being a six or seven year old, you just sit at the table and hope that you sell a flower or two.

Andrew: You know what, I know that I’m obsessing about this and I promise I’ll move on, but I’ve got to ask about this because even for adults, the idea of having a conversation with someone and trying to get them to buy something especially, it’s a challenge. How’d you get past it at that age? Is it that your father was an entrepreneur and you were trying to emulate him the way other boys might have emulated their fathers by pretending to shave in the mirror, or was it just that you didn’t know any better and at that age you just weren’t registering any of it out of fear?

Chris: I don’t know. My father’s always been in business and I just remember him saying, you know “Go into business for yourself” and so maybe that was just a way to show a little pride or show that “Hey I can do something or I can sell something” and that’s what we did. So I think it was just part of the nature of just kind of the next step of, or the beginning step I should say, of that.

Andrew: And this all started when you were in college in Tallahassee, this business that we’re about to get into, and you told Jeremy, our producer, that you wanted rims to pimp your ride. What kind of car were you driving?

Chris: Oh wow. So this was, I was 18 and I got a Mustang, and so, like, any 18 year old, this is actually back in 2000, so you were probably about the same age, you know, 18, 17, 18, 19, years old. This is like Fast and the Furious. Basically, you want to pimp your ride. That’s really the only cool asset you have is your car. So I was going to school and I wanted to put rims on my car. So, I remember looking on the Internet and trying to find wheels, and there is a certain type of wheel that you get for a Mustang, because any sort of Mustang fan, it’s called a Ford Motorsport Cobra R Rim, which essentially Ford would make these wheels and they’re really expensive because they came from Ford. So all these companies started to create these replica wheels. So I remember searching online and seeing the Ford Motorsport ones and going “Man, those are really, really expensive. I can’t afford that”.

So I found a wholesaler in Miami that actually created a replica wheel that looked exactly like that rim. I was like “Gosh” you know “how can I get, how can I pay wholesale prices?” They’re a wholesaler, they don’t deal with regular kids like me. I can’t go down there and get them. I’m like “What would I need to do to say I’m a wholesaler?” Well, I would probably have to be a business or something. I remember calling them up and just saying, “Hey, this is Chris with Boca Raton Tunes. I’ve got a customer, he wants the O69 17×9 polished wheel. How much is it?” and he would say “Oh, it’s $438. Come on down and bring cash.” My guess was that he probably knew it wasn’t…

Andrew: Sorry, the connection just spaced out there for a second.

Chris: Yeah.

Andrew: Let me see if I understand this. You said to yourself, “If I go into the store as a customer, as a regular person, I’m going to have to pay roughly $2,000 for these rims, but if…” Actually, is that part right?

Chris: Yeah. I mean the Ford Motorsports were selling for probably about that $1,500-2,000 range. The replicas would probably sell for $1,000. At wholesale, you can buy them for 50% off.

Andrew: OK. You called up and you pretended that you were a guy who needed to buy it wholesale because you had a customer who was going to pay you retail and that’s the way you got it at less than half the price.

Chris: Yep.

Andrew: Got it. How did you afford a Mustang back when you were 18 years old? What did you do to earn that?

Chris: I didn’t. Fortunately, my parents hooked me up. It was a lease, but yeah, that’s another story.

Andrew: It was a brand new car. How did you get your parents to buy you a Mustang?

Chris: I don’t know. Good grades, I guess? I don’t know.

Andrew: All right. Even though they got you a car, you were still hustling to get the lowest rates on your rims.

Chris: Yeah.

Andrew: How do you do that? I always thought that if your dad bought you a car, you were just a spoiled brat, you were never going to get entrepreneurship, and you were never going to be hungry enough to come up with tactics like the ones you and I are going to talk about throughout this interview.

Chris: I think it comes down to being your true self and what you want to accomplish in your life. I grew up in Boca Raton, Florida, Del Rey Beach and Boynton Beach. It’s a different bubble. It’s a different world out here. I think my parents always instilled in me that you have to work hard. It’s easy to just say, “Oh, your parents bought that car and did this and did that.” which is a whole different story, I wish people could see exactly what happened.

Andrew: What do you mean? Exactly what did happen?

Chris: I had the car. I ended up making payments on the car in college. They gave me the car, but I had to pay for it. Just trying to make money in college, that was a whole different story.

Andrew: You mean you had to make money, this debt, this lease, hanging over your head so much that you had to keep finding ways to keep paying it and that was pressure?

Chris: Yeah. You’re 18-19 years old and you’ve got a car payment of $250 a month, which back then, was huge. You’ve got to pay for it. That’s just the deal. My parents just instilled in me that, number one, build a business, but also work hard and go after what you want. Me, I’ve just always wanted to do something big and do something on my own. I always have. I think just growing up with that entrepreneurial spirit of, you know what, no one is ever going to give you a hand out. My life, my parent’s life has always been up and down. I’ve always seen that growing up. When times are good, they’re good, but when times are bad, it’s a good catapult to keep moving up.

Andrew: How does getting your own rims at a bargain price lead to you being in this business? What’s the next step?

Chris: I got the wheels and fast forward two years later. It’s sophomore year in college and I couldn’t pay rent. Rent was $300. Back then, again, that’s a lot of money. My buddy, I’m talking to him. I was actually living in a third bedroom in my buddy’s apartment and I’m like “Gosh, how am I going to pay rent?” We started thinking “Hey, why don’t you sell your wheels that are on your car?” He’s like, “Hey, check out eBay.”, so I checked out eBay. Come to find out the wheels that were on my car were selling for $800-900 on eBay.

Andrew: Used?

Chris: No, brand-new.

Andrew: Brand-new. OK.

Chris: Brand-new wheels. The brand-new wheels were selling for that. Now, I could have sold my wheels and tires and maybe got $800-900, but then I’d actually have to go out and buy wheels and tires to put back on my car. I looked on e-Bay and brand new wheels were selling for that price. I was like, “Oh, my gosh. I bought these for this much, and they’re selling them on here for that much. You know, you could see the completed auctions, and I just realized these things were selling like crazy. That was it. I was like, “Holy crap!” I remember sitting in my buddy, Dean’s, little bedroom looking on eBay and going through the listings, and like “Oh my gosh! This is really cool!” So . . .

Andrew: So, you go to your dad, and you say, “Dad, I’ve got this idea for a business. I’m going to buy these rims at the price I bought mine for. I’ll sell it on eBay. Look at how much people are willing to pay for them on eBay.” What was your dad’s advice to you about starting a business?

Chris: Not much. I mean, he just really said, “Hey.” I said, “What do I need to do to see these? What do I need to do to be legit so I don’t go back to that guy and say hey I’m this company or whatever.” But, what do I need to do? And he said, “Well, you need to get a business license, and you need to get a sales tax license, and you need a corporation” or whatever, and I said, “OK. I’ll do that.” So, at the time I had a credit card, did that stuff, got the business license which I think in Florida was $75 or $150 and set up the business so I could legitimately get these wheels at wholesale and then start selling them.

Andrew: Was that, by the way, good advice? I mean, you’re just getting started. You don’t know if really you can pull this thing off. Should the first thing you do really be to get a business license and tax ID?

Chris: Well, you know, for an Internet business you don’t need to do that, but for buying at wholesale, when you go to wholesaler, that’s the first thing they always ask for is “fax us your business license. Fax us your sales tax license.”

Andrew: They want to make sure you’re really going to resell this and that you’re not doing what you did when you were 18, which was buying for yourself at the deep discount price.

Chris: Right, and they want to make sure that you’re a legitimate business. They can’t jut be selling it to everybody off the street, because if everybody went to them and just bought wheels at wholesale, they’re kind of nixing out their wholesale.

Andrew: OK. How did you get your business license?

Chris: I think I went online and got it through Sunbiz.org, which is Florida’s corporation thing. You needed sales tax, which essentially you sell a hard, tangible good. You have to charge tax and that stuff in the state of Florida. Now, when you sell it outside of the state, you don’t necessarily have to charge sales tax because it’s the Internet and all that type of stuff. Things have changes, I’m sure, but that was back then.

Andrew: All right. That’s one of the pains in the butt, by the way, speaking of the difficulty of selling physical stuff. You have to collect sales tax.

Chris: Yeah.

Andrew: Then you have to turn it over to the state versus, as I understand it from the course that we did here at Mixergy about taxes, as long as you don’t sell physical goods, as long as it’s juts access to online content or even software, you don’t have to collect sales tax, right?

Chris: Yeah. Basically, if you sell information or any sort of information, and your customers are in Wyoming or California, you don’t have to charge sales tax, but I think it depends on what the industry is. If you have an advertising business, and you’re selling to local advertising companies, you don’t charge sales tax, but if it’s a tangible, actual good, or I think even service, I don’t even know, but we had to charge taxes for anything . . .

Andrew: All right. We’ll leave that for the course on taxes that we have on Mixergy, and of course, people could go and should go talk to their accountants if they would rather not do the course, or even n addition to the course. All right, so you go and you do that. Now you’ve got your license. You are officially OK to get wholesale products. Where do you go to get your wholesale stuff?

Chris: When I ended up doing is I focused on just selling those wheels. It was the Cobra R replica rims, right? So, the wholesaler in Miami, and of course American Eagle Wheel, and actually had some cool guys I met down there, but essentially I would just buy the rims from them at wholesale, and actually, if I can go back to when the company started, it was like March or Spring Semester in college. I came home for the summer and really kind of bought the wheels and really started selling it. Yeah, back then, I just searched online, found who the wholesaler was, and they actually had offices or big wholesale departments all across the United States. One in North Carolina and Miami, and I just kind of found them that way. I just reached out to them, gave them the business license, and that was it. Then I could start buying it wholesale and selling it.

Andrew: So, you bought it first and then you sold it?

Chris: Yes, yes.

Andrew: Do you remember your first sale?

Chris: Yeah. I was talking to the guy about it the other day. But, yeah, the first sale was basically, I bought the wheels brand new. What happened was, at the time I was starting the business Penski Auto was going out of business. and it was attached to all the Kmarts. And so, I went to the auction. They were basically auctioning off all the equipment at these departments, and so I bought a wheel changer and a tire balancer at the auction at a super deep discount. I said, “Hey, let me package this stuff together”. Now, rather than just sell rims, now I can sell rims and tires together and make more money with selling these whole packages. Essentially, I bought that equipment, but it turned out I got the wrong equipment. One of the wheels I had I was scratching it because I bought the wrong wheel changer. So, anyhow…

Andrew: You were actually going to put this on people’s cars?

Chris: No. What we would do is we would buy the wheels, and we would buy the tires and mount them, balance them and ship them direct to the customer. So all you had to do was take them to your tire place and slap them on your car.

Andrew: I see.

Chris: So you got the whole thing.

Andrew: So that’s when you got the wrong equipment that scratched up these rims that you bought?

Chris: Right. Right. Like it was a steel tire changer instead of a high performance tire changer. So anyhow, I had those original wheels. I found used tires and put these used tires on these wheels. I put them on eBay. The wheels I got for 438 bucks. The tires I got for like 100. So I had 530 bucks into and was selling them for about $1200 on eBay. I was like, man, this is great. That was actually that summer, right after I came home from school.

Andrew: Did your customers know that they were getting used tires?

Chris: Yeah.

Andrew: They did.

Chris: It was just like, hey, here’s what it is. Here’s the wheels. Here’s the tires. They have 70% tread and voila! Again, he could go and buy them for $2000, 2500. Instead, he got brand new wheels with used tires, and you got him a good deal.

Andrew: I read also in Jeremy’s notes on your conversation on the pre- interview that you found a place that would basically spray tires and make them look like new for about 10 bucks.

Chris: Yeah. The whole story with what that really gets into is that selling that rim and putting on used tires that were really good tires, I could sell them for a lot more money. Rather than buying a brand new wheel, putting on brand new tires, the cost would be $1000 or $800, $900, and then selling them for $1300. It was like, man, that’s a lot more work for not a lot more money. What I ended up finding was a guy on eBay out of Sanford, Florida, which was right out of Orlando, but he would buy in bulk, like hundreds and hundreds of Pirelli tires. He would buy all of these expensive tires that were on Ferraris and Lamborghinis and just really expensive tires that were 3-400 bucks a tire. He would buy them used from Germany, and he would sell these awesome tires that were, again, selling them like tire rack, 300 bucks apiece. He would sell them for $25, $10, depending on how much tread was on there.

So I ended up driving up there and just saw this huge warehouse of all these awesome tires. Essentially I would just buy containers to put on the wheels and then sell them. And so, yeah, I would get Pirelli P Zero tires that were 2-300 bucks and I’d get them for like, 10, 15, 20 bucks.

Andrew: Do you have a girlfriend this whole time? Were you dating?

Chris: I guess this is the beginning of junior year. No, I wasn’t dating, but later I was and that kind of transitioned to that story or to the next story, I should say.

Andrew: OK. What about this? And by the way, I think it’s hard to find girls. You tell me if you found this experience. I found that it was hard to find girls to date in high school. My obsession was on stuff like you’re talking about. How low can I buy the raw equipment? How much work can I put into it? Where do I sell it? No girl in high school, in college is excited about that. They’re much more excited about the guy who can drink more, the guy who’s going to have the craziest time at the party. True?

Chris: Yeah. Yeah. Absolutely.

Andrew: So why do that? Why not say, hey, you know what? I’ve got to fit in right here. You’re only young once. What am I doing going around looking at tire prices and trying to sell tires online. Most people are going to board to death from that; I’ll do it when I’m 25, right now let’s party, let’s date.

Chris: Well, you know, I did do that. So, at the same time I was building something, going to school, building something on the side and having fun at the same time. Yeah, I mean the whole Sanford thing really came across like during the summertime. Like summertime for me was kind of like alright, we can really start to build, we had a warehouse, we had equipment, we had all this stuff going on and summertime for me was like hit it hard. Even the holidays I’d come down here and work hard and then go back up to school and I didn’t have that, I didn’t have the warehouse, I didn’t have that stuff and so, yeah, I mean I still did that stuff I really, you know, kind of on the side had this thing going on that I wanted to grow.

Andrew: You’re a better man then me or you got a better high school and college career then I did but I believe that I was meant for something better then that nonsense of just sitting around and drinking on Friday night and waiting for something to happen and I was willing to work towards it and then once I started to get a little bit of success in high school with this little side business that I had, I remember that I wasn’t able to buy cars with the cash that I made. I wasn’t able to live the great life but I was able to live a better life quickly and I’m wondering if you are to. If you had an experience like this; I remember going to a party and there was so stupid argument over who spilled whose beer and I said how much is this beer? It was like $5.00 for a couple of bottle. Here’s a 20, go buy all of us some beer and I remember looking at the kids’ excitement when I handed over the $20. It was like Oh, this is great and I thought I am the man. I’m going to be able to solve every problem in life like this. Did you have anything like that? Not necessarily buying another Mustang when you were college but of being able to enjoy the wealth that you’re accumulating?

Chris: Yeah, I mean I wouldn’t say I was accumulating wealth. I mean I was accumulating cash just to live and survive and have enough to go around but I remember, this is really cool, looking back I’m like wow that was pretty unusual but I remember being in college and my next door neighbors to our apartment and I was selling these wheels and stuff and eBay and what I’m doing because I was away at school I didn’t have the luxury of having equipment and all that stuff so what I started to do was actually just broker tires. So I found a wholesaler and they would drop ship the wheels for me, or I’m sorry, drop ship the tires for me that I was essentially sell on eBay. I remember one day it was like oh, I just made $500 yesterday. Oh my God.

And so I remember just kind of whispering it my next door neighbor girl and she’s like that’s unbelievable and I don’t think at the time it really hit me because I thought oh yeah, that’s nothing. Later in life I’ll do this and I think we all have aspirations to do huge things by the time were 30 we have to have this and all that stuff but yeah, I never really, you know, went out and went crazy and spent all this money or anything but I just remember that I was like oh wow, that’s a lot of money for a lot. People are making $40 a day being a waiter; ok this is kind of cool.

Andrew: As you were building up this business you got an order from someone who was in Puerto Rico, can you tell the audience about that?

Chris: Yeah, yeah. That was really cool. So, this was in Tallahassee and I was brokering these tires and so my tire wholesaler essentially has a huge list of all the inventory they had in their warehouses and they were actually out of Missouri and so I remember seeing these tires that were a discontinued race drag radial tire and so the sale price on it was $28.00 a piece and so I put them on eBay for like $75 and this guy sends me an email and says hey, how many of these tires do you have, I’d like to buy some. I said well, how many are you looking for and basically I think I had access to like 125 of these tires and he replies back, he goes, I want them all, how much? So I guess like 75, $76 and done deal. He ended up wiring me like $20,000, $22,000 or something and I was like this is crazy. I remember going to the bank of Wachovia at the time and just walking in the bank I’m like just really excited because I’m going to have $20,000 coming wired, what do I need to do? I’m talking to the bank I’m like you know, is it OK if there’s like, you know, there’s $20,000 coming into the bank, like, is that OK? Do I need to get a different account?

Andrew: [Laughs]

Chris: You know, what do I need to do? You know, getting all worried and she’s like, no it’s OK.

Andrew: [Laughs] We can handle $20,000.

Chris: Right.

Andrew: I’ve got you covered, sir.

Chris: Right, but that was huge. That was a lot of money back then, so anyhow they wired twenty grand, paid for the tires. The company dropped shipped it, shipped it, took care of all the logistics, and all that stuff. And essentially I was just, I brokered it, sold it for this, you know bought it from this, and they just, they took care of it. And my guess is, I never heard back from the guy, but my guess is, the company that wholesaled it, probably slapped their name on it, and, hey, you can buy from us instead of this guy, you know?

Andrew: [Laughs] So, they cut you out and never needed you again.

Chris: Exactly.

Andrew: But, you made how much money off of that deal?

Chris: I think I made, well I did make, $6500.

Andrew: Sixty five hundred dollars?

Chris: Yes. And so I remember laying, just laying in my bed and my girlfriend at the time, I was just like, I think it was later in the evening, I’m like, I just made sixty five hundred dollars, today, you know? [Laughs] And this is Junior year in college, so really that just said, you know what? -that was the beginning of the year, it might have been January. I just started going, going to school and I was like, you know what? That’s it. And essentially dropped out of college my spring semester to build this out, and to grow the business.

Andrew: Wow, I didn’t know that.

Chris: Yes.

Andrew: Did you ever go back?

Chris: And I said, I’m in a business, I’m going to build this thing and grow it and that started spring semester.

Andrew: Did you ever go back?

Chris: I did. I went back to FAU in South Florida.

Andrew: We’ll get back to how things worked out in the business. And we’ll get to how things worked out in the business in just a moment. But before we do, just knowing how it worked out, do you regret dropping out to build this business?

Chris: Not really, I mean it taught me, it taught me a lot. At the time, I -it really just set something off in my head. And going into college I was like, what am I doing here? You know, I’m doing this stuff and I was really tired of Tallahassee. I was like, man I want to get out of here. I want to move on, to do something else, while everyone was partying and partying harder than ever junior year. And I was just like, I’m done with this, let me do something worthwhile. No, I don’t think I regret it, I mean I really learned a lot about building -what I was twenty one, twenty two at the time. And I learned a lot, I made a lot of mistakes and had a lot of fun. And I just learned a lot about what it took to kind of grow something from there.

Andrew: Did you have that feeling that I admitted to earlier? That you were meant for greatness? That you weren’t meant to be just another person walking around this planet. But that there was something bigger in store for you? Did you feel that?

Chris: I still do today.

Andrew: You still do today?

Chris: Absolutely.

Andrew: And how old a guy are you now?

Chris: Thirty, just turned it.

Andrew: So, still feeling that today, and by the way, does it come from anywhere religious belief? Or, no? You’re a very rational person otherwise. But you still have this feeling that you, out of the six billion people on the planet, you and maybe a handful of others, were meant to do something bigger?

Chris: Yes.

Andrew: You do?

Chris: Absolutely.

Andrew: Is it tough to admit this publicly?

Chris: No, no, because I think, there’s always the struggles of the entrepreneur and it’s like you want to achieve greatness. But, you want to achieve it personally, not necessarily for all the wealth, and all the fame, and all of that type of stuff. I just want to achieve it for myself, for my family, to -you know, to build things up and build that life that I want. But the achievement is more important than the wealth, or the fame, or anything like that. And to essentially just have a real impact. To create something that people actually pay for, they see benefit, and they can enrich their lives.

Andrew: But anytime you’re not at that level of greatness, do you feel like, this just isn’t me? I’m not where I need to be, something feels off? It’s like if I were in a room full of people speaking French, I’d feel like they’re all good people, but there’s something a little bit off, I don’t belong here? Is that the feeling?

Chris: It’s easy to get down and sometimes like that, but not really, there’s definitely times when we’re like what are we working for? What am I doing? Is this the right thing? Why isn’t it moving faster? Oh, my God, look at that guy in Tech Crunch, they just did this? And like Oh, my gosh, it’s amazing, why aren’t we there yet? What’s going on? So, there’s always those doubts, but, I think comparing yourself to everybody else is like death. It’s like the easiest thing to, to get depressed. If you want to get really, really depressed? Look at Tech Crunch every single day, read all the amazing success stories of people achieving.

Andrew: Do I contribute to that to by bringing people on here to tell stories of how in two years they built a billion dollar business or whatever? Do I contribute to that feeling? Not necessarily in you, but in the world?

Chris: No, because I think at the end of the day everyone always wants to excel, to grow, but to learn. So I think there’s definitely, you have some great interviews with people that, postmortem, I love that stuff, because you build something up and you can, I was just listening to the 1:40 interview about her just kind of reflecting, six months later. You know “What did we do wrong? What did we do right?” So, yeah, I think postmortem, to me, that’s, I think-

Andrew: What did you get out of that interview with Lora Fitton of 1:40 where she talked about why she had to close down her 1:40.com, her app store for Twitter? What would you say is the one thing that she did wrong?

Chris: Gosh, well, I think Twitter as a whole sphere, not many people get apps for Twitter. Like, I never got any sort of apps for it. I always got an app for an iPhone or for Facebook, but Twitter, for me, I think one of the comments on there, one of the things that she said is “Twitter is for the boyfriend or the hated boyfriend” or something, and that was the biggest thing that I took from it.

Andrew: For me, there were two things actually. First of all, there’s so much that she did right and in that first interview we talked about it. We didn’t get into it in the postmortem on 1:40, but in the first interview where she talked about how she got 1:40 funded, you see hustle, you see a woman who had so many doors slammed in her face that she found a way to just knock those doors down and come in. And the fact that she sold her company is proof of that hustle. But what I got out of that 1:40 story were two things. It was first you build on a platform and you’re really subject to the ups and downs of that platform. It’s not so much that your destiny is in your hands anymore. It’s just that you are going for a ride in somebody else’s car, on somebody’s else’s destiny. When Twitter’s destiny was not to be an app ecosystem then she got ripped by that.

The other thing was, she said she never talked to customers to see if this is what they needed, not necessarily what they were asking for, but is this solving a problem for someone who has money to pay for that solution. And then she talked about how she figured out how to solve, how to figure out what people’s pains and frustrations are and how to make sure that they have enough money to pay for solutions and then how to come up with solutions for them.

Chris: Yeah, well there’s a good, I listen to Gary Vaynerchuk, it’s called his 1,000 Seminar, I forget what it is. But anyhow, he’s a great, phenomenal copywriter. One of the things he talks about is frustrations. Problems are markets, and its not always about what you think, the thing that you like or it’s always about what’s that problem that these people are facing. So I could sell you Advil all day, but if you don’t have a problem, you don’t have a headache, you’re not going to buy it . You’re not going to use it. So it really is what is that core problem that you’re looking to solve that people will be willing to pay for. Then you can solve it in a way better way than anybody else. So problems are markets.

Andrew: Problems are markets is a good way to say it. All right, let’s see. Let’s go back to this business. Wait, alright, here’s the problem that you had. You had a couple of problems. First, shipping on these tires was pretty freaking expensive. How much was it?

Chris: Yeah. So it was about $100-$130.

Andrew: That’s heavy.

Chris: Shipped, yeah.

Andrew: And you were looking for a way, you couldn’t get around it, right? There was no way to not pay UPS for their shipping.

Chris: Right.

Andrew: So how do you deal with a customer who when you tell him the cost of your product plus $130 shipping gets sticker shock and freaks out, how do you sell that?

Chris: Yeah. So, there were other competitors that were doing the same thing and they were all selling, no one wants to pay $100, $130 in shipping so it’s like “How do you disguise that in a way that they get free shipping?”. So at the time I was just thinking, how can I sell this better? What can I do differently? How can I be different than the other guys that are doing this? I didn’t know, and this is back in 2004, so I didn’t really know anything about selling or marketing or anything. eBay was a marketplace. You just put something there and people would buy it. So you didn’t have to worry about traffic and all that stuff that we have to worry about today. So the whole thing with the shipping was “How can I disguise it?”. So what we ended up doing was “Well, if I’m selling the tire package they had to get it mounted, they had to get it balanced and chrome valve stems to go on their new car”.

So what I ended up doing was saying “Hey, free shipping” and then when they purchased, I would call them say, “Hey, you know, the mounting and balancing was required. The mounting and balancing was 60 bucks, 20 bucks of ware, whatever. So 20 bucks because 80 bucks and then “Hey if you want to get lug nuts, that’s an extra $40.” And so essentially, you know, the mounting, balancing was required and then the lug nut they want to get anyways and then hey, off to run free (?) valves just another row of things they can’t stack on the value and so that what essentially mitigate the cost of the shipping. The mounting, balancing was free, didn’t cost us anything and the lug nuts were like, you know, 25 cents a piece. So that was a way to kind of, you know, essentially require more customers and then at the back ends, you know, recoup the cost of the . . .

Andrew: Did people freak out when you call them up and you suddenly said, “Hey, congratulation on getting this product on eBay but now you got to give us a hundred plus more dollars.”

Chris: No because, it was required, it was like, “Hey you know, you want to get it mounted.”

Andrew: And then why didn’t you tell me this online.

Chris: No, I mean, I think I had maybe a very small (?), handful of people actually say something about it.

Andrew: And what do you say, what did you say to them?

Chris: Well, we can mount it but if you don’t want it balanced, you know, then we won’t balance it. Then you have it take to the tire shop, balanced and you know all this sort of, well, whatever, I’ll just pay it.

Andrew: And could you then say, “Hey you know what, I don’t need you mount it or do any of the other stuff, just throw my wheel and my rims in to a box. I’m going to have a local guy put it on my car anyway. They will mount it though. They will balance it or do everything else.”

Chris: Well, you got four rims and you got four tires, so you have to ship eight boxes. You know eight packages and so essentially it’s the same price. Hey, we can do that.

Andrew: I see, so you found a way to just make (?).

Chris: You know, we will pay the shipping and then you have to take it to the place and then get it done. You know the other day, it’s service for them, because they just want to get it. You know because the guys are just jack it up put it on their car or just take it to the place slap it on, be done and so it’s just kind of (?).

Andrew: I listen to these interviews like keep thinking how do I bring this back to my business as I’m sure the audience is thinking the same thing. And for me here in this, I’ve decided Mixergy premium now will be videos, 25 bucks a month but if you want the audio with that that will be another 30 bucks a month and I’m not going to tell people until after they sign up.

Chris: We could do that. You know, I think.

Andrew: You don’t have to buy the audio. You can lip read, we got transcripts online.

Chris: Yeah. (?). You ever read a Janet Aerilis book? Forget to be irrational, the decoy effect.

Andrew: Yes.

Chris: We should always pull that one.

Andrew: Oh, wow. What was the decoy effect where you have two prices, one for something outrageously (?).

Chris: So, you have three prices and this is actually stuff we do for one of our product (?) similar which is essentially. You know, we have a whole decoy effect for the pricing. You know the decoy is kind of this, what they did and I think it was filmed. If you go (?) magazine but . . .

Andrew: Economist Magazine.

Chris: Economist, right. So they have three prices, they had, you know, web only was 99, you have Internet hardcopy was, you know, 49 but then web and print was 99 bucks and certain thing well. Why don’t I get just both at the same price.

Andrew: The 99 bucks

Chris: And so it just kind of steer people away from even looking at (?) seminar or whatever it was which made the low price and then move it to, you (?) because in a way, more eloquent way than I can explain it so.

Andrew: Yeah. Yeah, I remember it, it was surprising. It just keeps reminding me that when you see stupid pricing somewhere, it’s so easy to say, “Oh, those guys are so dumb, I’m so much smarter than them.” It takes a little bit more self control to stop yourself from going there and to bring yourself back and say, “Hey, how did they do that. Maybe they know something that I don’t know. What could they be thinking over here.” And in that case in the Economist ad where they are trying to sell their subscriptions. If you do take a moment and think about it, it makes more sense. They are obviously steering you towards the one option that they want you to take and if they look stupid for making it low priced compared to the other options then all the better for them.

Chris: Psychology, you know, it’s like, they are steering you down the path of what like where they want you to end up anyway. And it’s just a way, like I thought about pricing a lot. Last like, about a month ago, I spent three or four weeks just really focusing and thinking about pricing and psychology of this pricing and you know in flow and how you get people to upgrade this and. It’s a sign . . .

Andrew: (?) a new products.

Chris: So this is for (?).

Andrew: Yeah.

Chris: I mean, how do we price this thing and what is the best way, how do we, you know make it a frictionless process and you know, it’s a different type of sale looking at all this different models that are out there and which one is the best. That can essentially get more people in the funnel and then convert them into customers.

Andrew: All right. I’ve got a note here to come back and talk about call (?), you be open about how you figured out your pricing and some of the thought process that went into building that product, later on in this interview.

Chris: Yeah, sure.

Andrew: It’s an ongoing product so I know that you can’t be as open as you could about the tire business. But let’s get back to it in a moment and see how open you can be. Continuing on with this story, that was one issue that you had. Another issue that you had was you are a young guy just starting out in business. Every expense has to be scrutinized, and if possible, eliminated. And one of your expenses was to eBay. Every time you sold did you have to pay them something?

Chris: Yes. Any time you list a product you have to pay X amount. If you have a reserve price you are going to pay more, If you start it at a penny bid and it goes up you will pay less. So you are going to pay the listing fee, and then you are going to pay the closing price. So when somebody does buy it through Buy-It-Now, then you are going to pay that list price. Now that I think about it, I never did Buy-It-Now because I didn’t want anyone to buy it now. I wanted that listing to last as long as possible. For the ten days I wanted that listing to be out there to get as many viewers as possible, rather than somebody buying it. Because now I have to pay for the listing and then the auction is closed.

One thing we did was, and I don’t know how it is today, but putting just the phone number on the listing. You know we were talking before, this was when I was learning the beginnings of HTML with fonts, colors, equals and all this stuff. Putting the phone number in text in the header image so eBay essentially couldn’t scan the image and see that phone number is there. So I have inbound calls that would essentially convert to customers. That would bypass paying eBay fees and closing costs and all that stuff. So it was free advertisement to get more customers.

Andrew: How much money would you say you saved on that?

Chris: A lot. I’d say I got 20% of customers from phone calls, from emails and the like.

Andrew: Did all of your business come from eBay?

Chris: Yeah.

Andrew: Wow. You didn’t even have to set your own website.

Chris: Yeah, I did. I had fivestarwheels.com, Hardline Performance. Funny story I was telling Jeremy, before. The first website I went to get created, a local guy here built a competitor website. So I went down to his house, and we were sitting there talking about what to build, the website and what products I wanted to put in there. So I am looking around the room and there are these platinum records of Smashing Pumpkins. And so I look around like, wow. Who really has a platinum Smashing Pumpkins album? Not many people. Turns out, anyhow, the guy was Billy Corbin’s brother. Billy Corbin of Smashing Pumpkins, his brother built my first website. Which never really took off. Because eBay was list and go, you know. I never worried about SEO or anything way back then.

Andrew: And there isn’t much repeat business. I’ve talked to other entrepreneurs that got their start on eBay. What they would do is collect names, addresses and email addresses from their customers on eBay, and then steer them toward their own website for repeat business. But people who are buying tires today aren’t very likely to buy more tires anytime soon… right.

Chris: Yeah, on eBay you get the price shopper. The people that are going there to compete on price. You are going to get the guy that doesn’t want to spend a lot of money. You are always going to get the nickel-dimer. I’ve seen some interesting things that that people do with eBay, is always put a coupon within the order. The problem with most eBay businesses is that they don’t collect information to put into Awebber, and follow up with them, and build a list. They don’t do anything like that. So there are these huge assets, even from a joint venture perspective. If you see an eBay store that has a ton of great feedback, and they are PayPal drive, they have all those emails in PayPal that they could essentially put into iContact, and then market to them. I remember doing a joint venture with the person that had the PayPal driven business on eBay. They sold mainly springs and that type of stuff. I said hey, can you tell you customers about our wheels. We did a small joint venture, he sent out a couple hundred emails, but we got a couple of order from it. That was the beginning of Oh my god, you know these people already have these lists, they already have these customers, this was huge. This whole joint venture thing. I didn’t know what it was back then, but just uncovering these weird strategies and trying to get more customers.

Andrew: Right now the person who is listening to us is probably thinking to herself, this is a great business. All on eBay and you don’t have to really build your own website. You buy a product that is already made, you make a couple of adjustments to it, and you sell it for a higher price. Everything seems to just flow. You are in a space where people don’t know about partnerships like the one that you just described. Which means that you’ve got a lot of room for growth. But it wasn’t all that great. Even though you were making good money you call your business at one point here, somewhere in my notes on you, you called it a sweatshop.

Chris: Yeah.

Andrew: So let’s get into that. Why, even though this thing did a quarter million first year, repeated that success a second year, didn’t need to have your own website, it still wasn’t a fun business. What was it about the business that made you feel like you were working in a sweatshop?

Chris: It’s like stuff, you have to deal with things and especially big 17″, 18″, 30 pound rims, you have to store that somewhere, so we went from one warehouse, or one little small little dinky thing, moved over to a larger one and then we had a three-bay warehouse full on inventory and an office and all this sort of stuff and the place that we were at didn’t have air conditioning. So it was really, really hot and we had inventory, I had rims that were cost in my warehouse, we had tires, and then it was like “Hey you got an order in”. You had the rim, you had the tire now you had to mount it, you had to balance it, you had wrap it, you had to ship it then hope that you did a good enough job that UPS didn’t scratch it by the time it got to customer.

Andrew: And if they did scratch it and when they did scratch it I should say, not if, when, what happened?

Chris: That was the fun part. That was the best part, unfortunately, but basically they called and said “Hey, my rims are scratched”. And so I would always get UPS insurance on it and they would pay but they would pay like six months later. But I would have to pay for the shipping back to me. Once I received that we would have to unmount the tire, order a brand new rim, get the brand new rim in, put the tire back on the rim, package it up and then ship it back out and do a better job than before to hope that it gets to them non-scratched. So you’d have the cost of shipping it back, you have the cost of buying a new wheel, you have the cost of then shipping it back to them, so by the end of it you were down to like a very small profit margin and at that time, 2003, 2004, this is at the height when everybody was coming into it and so profit margins were just getting sliced.

Andrew: You describe this process where? You sent a rim out to someone, it gets scratched, UPS gives you the money for the scratch but you still have to re-do your work and get a new rim and ship that out to the client, and you (?) that to the client was still upset and he charged back. Meaning he called up his credit card company and said “I’m not paying for this”. What happened to you in that situation?

Chris: Oh yes, merchant companies my friend. You know, the wheel business is a very high-risk business, a lot of fraud in the industry, especially as an online entity, so with charge backs and with fraud, essentially our merchant company held about $8,0000, and it took about eight months to get that money back. So as a small business with a huge chunk of money getting taken away, when you have all this product out there and you don’t have anything to show for it, it’s essentially having double out the door. You know, you had cost that went out and you didn’t get the money back, and so now you’re out more than $10,000, $12,000. So it’s just like “Oh my gosh”.

Then you have to get a new merchant account so it really came to the point where it was like “Man, you know what? I’m working my tail off” and I would just stress going to the warehouse to go sit in this hot office and field calls. It was great getting orders but it was like the most dreadful thing in the world. It was like “Ugh” a new order came in, therefore I have to work, you know? Put all this stuff on there.

Andrew: Yeah.

Chris: It just came to a point where I was like “You know what, I’m done, I want to move on” and there was a way better, easier way to grow a business that’s more fun and enjoyable.

Andrew: You know what? Physical products are a pain. People are always surprised at Mixergy Premium if they email us and they say “I had this issue” or they ask for refund or even if they don’t ask for a refund but they had an issue, when we give them a refund, they’re amazed by how well we treat them. And of course we could, because I don’t have to pay for shipping back to here, I don’t have to be upset that we lost the money to ship the product out to them. All those things disappear here. I don’t have to deal with sales tax. You can afford to be better to your customers when you don’t have to ship things back and forth.

Chris: Yeah, yeah.

Andrew: What happened to your merchant account after all these charge backs and all these issues?

Chris: Well, basically it gets nixed and they hold your money…

Andrew: You mean they shut you off? They said “Sorry, no more merchant account for you Chris”.

Chris: Yeah, essentially. Then you have to go out and get a new merchant. What they do, and this is just because of customer charging back or, you know, fraudulent transactions. It’s nothing that we do wrong, it’s just, that is, it’s a high risk industry, you know merchant wants to play their game and so any sort of like charge back, you get. They are just like telling enough to one day saying, “Thanks, but find somebody else.” And so, I remember, it was like, “Oh, my gosh, they shut it down” and we are using PayPal at the time. So we went straight over to PayPal, a 100% and then in meantime we got another merchant account. But, you know, you’re paying such a high [??] interest rate that you know, I didn’t really know my metrics or numbers or anything like that but looking back on it, it’s like, “Wow, we’re probably in our cost with everything with merchant fees and that type of stuff. We were probably were making a lot of money. You know cause it [??] up so quick. So, we had just got another merchant account. You know, which took up month or so to get.

Andrew: Earlier when you said, when you describe the process of shipping the product out, you said, “You get the wheel, you get the rim, you did . . .” It was only you or largely you, wasn’t it?

Chris: Yeah, yeah.

Andrew: You doing this stuff that you’re describing, you’re not pointing a finger towards the team of employees and saying, “Guys, we got a new order, take care of it.”

Chris: No.

Andrew: Why didn’t you hire people?

Chris: I think pride, you know. I think, it was just pride really.

Andrew: Tell me about the pride because a lot of people take pride in having a big staff and telling everyone about how many people work for them. In your case, your pride was different. How did you express your pride?

Chris: Yeah, I think, it was just, you know, through hard work that I had to do it personally and you know, I go through the pain. I don’t know, I think it was just, you know, I had to do with myself, you know, that type of mentality which is truly changed now. It’s like wow, man. [??] only would have known back then what I know now. You know, I would have hired people for eight bucks an hour to go do this hard work, you know, one, two, three days a week and then guess what, that ought to be a lot easier business and to grow to work with. But I think, it was just, you know, being stubborn and wanting to do all my self and, you know, I think, again a lot of us struggle with that, building a business now. So if you want trying to do everything yourself, you don’t want to bring anybody else but you know, the freedom comes in when you can kind of, you can pass the delegate, the task, different things that you get done. There is freedom in that, rather than you trying to like slave away and trying to do everything yourself. And then it becomes frustrating to give up.

Andrew: What else did you learn that if you can go back and talk to your younger self, you would tell yourself?

Chris: Yeah, hire people.

Andrew: For anything that you can get someone else to do better or just as well you take hire other people to do it, so that you can focus on the business, the higher level stuff, the future of the company. What else did you learn?

Chris: You know, financials, you know, worry about the money, you know, that was definitely something that I just didn’t really think about too much.

Andrew: What do you mean, what did the issues with the financials considering that you are clearing buying . . .

Chris: It’s just how much money, you make this month. I don’t know.

Andrew: You didn’t know that.

Chris: No, until the end of the year, you know, it wasn’t like, “Hey, you know, month over month, you know, here is what you’re doing. Here are your expenses but just having an ongoing monthly P and L.” What part of your business is working well, what products are selling well? What’s the health of your business? Are you losing money? Are you making money? What can you do differently and you knew nothing, cause I though it was like, I though I had to do it, you know. But I didn’t realize. Oh, my gosh [??] hire somebody but I did you know later and it cost me with penalties and like crap you have to deal with but financials is a huge one just knowing, are you making money or not.

Andrew: How do you do that? How would you have done it back then, hired a bookkeeper?

Chris: Yeah, I heard a bookkeeper.

Andrew: You eventually did.

Chris: I did, yeah.

Andrew: OK.

Chris: She wasn’t great but. Yeah, I hired book keeper to get somebody, you know, going [??] and find somebody to handle that part of your business.

Andrew: And would you trust them with your number, would you trust them to see how many orders you got today and put them all into QuickBooks or whatever software, you want to use?

Chris: Yeah, I mean, you know, looking back on it, you know, they just kind of threw stuff on paper. They didn’t really know the insides of the business and what this was or even cared to ask me, “Hey, what was this transaction, why did this happen?” You know, in mixing personal with business can be very devastating, so don’t do that.

Andrew: How did you do that?

Chris: What’s that?

Andrew: How did you mix personal with business?

Chris: You just do, you know, “Hey, I’ve got money on business accounts, I’ll go and [??] tonight and pay through their [??]” Completely separate that.

Andrew: What happens when you do that, if you say, “I’m going to go out with friends tonight and I got money in my business account, I’ll take my business MasterCard and use that to pay for dinner. What happened to you?

Chris: Just financial stress. I didn’t have any money in the personal account because I was using everything on the business account because, hey, that’s where the money was. Even for like tax purposes, nothing really devastating happened, but just trying to, even when going to sell the business, how much money was actually spent that was core to the business? How much money was actually brought into the business, that type of stuff, and it’s not a good way, if you’re building something to sell it, you can’t mix personal and business together.

Andrew: Let me say this to anyone in the audience who is having any issues with their books, I had issues with my books even at Mixergy. Back at Bradford and Reed we had a bookkeeper and a CFO, and the operation was huge. Here, we found that the company was fairly small. Mixergy is just a small operation here, so I didn’t have a bookkeeper and a CFO. What I did have is lots of $25 orders, and that’s a lot to keep up with; $25 orders, and then you have these small expenses for online software and so on, and the books were just in disarray. I invested Indinero, and as a result I asked the founder of Indinero if she knew someone who could help me, or maybe she emailed me something that made me reach out to her and say, “I could use help with my books.” They found me a bookkeeper who is freaking spectacular. Within days within the end of each month I now know how much revenue came in, I know where the money went out, I know how much I’m paying for all these contractors who are working at Mixergy. It’s fan- frickin-tastic.

Chris: Yeah.

Andrew: I would say this to anyone in the audience who has listened this far in, email Indinero. Tell them you’re a personal friend of mine, and that you need a bookkeeper, and ask them to introduce you to a bookkeeper. Don’t even say, “I heard it on Mixergy.” Say, “I’m a friend of Andrew’s. Can you help me out?” If you’re having trouble, do that, and if not them, find somebody. I personally hate talking to an individual to do my books the way that you did unless I hire them full time, because what happens if that individual stinks? I don’t have any backup. What happens if that guy flakes out? What happens if she just doesn’t know something? Who does she go and ask? You know, I like an operation on something like this.

Chris: Right.

Andrew: Anyway, so they found me a bookkeeper as part of . . .

Chris: And you can get someone for pretty inexpensive, you know.

Andrew: Right!

Chris: To me, it was like, “Oh my gosh, it’s going to be so expensive to get somebody to do my books because they’re all these transactions going on,” but all that stuff is downloadable today, and they can just pop it into their program and categorize it very quickly.

Andrew: Yeah. It is inexpensive, which is fine because if you outsource it for a few hundred bucks, you’ve got control over your business, but it’s hard to find someone who’s good, I think.

Chris: Yeah.

Andrew: All right, let’s talk about selling the business. You wanted to sell your business from the start, or did it only happen later on when you got burned out staying in the sweat shop?

Chris: Yeah, I mean honestly I really did get burned out, and there was a moment where it was either get out of the business and go do something else, and that’s what I did. I actually went to go work for a company called Value Rich, and I worked for them. At the time I was starting to sell the business, but I remember I was sitting in the book store, and Bill Rancic, who was The Apprentice’s first winner, wrote a book. I remember reading in his book where he talked about he had a yacht cleaning business, and the biggest mistake he made was not selling his business, because he didn’t think that it was an asset. That was a pivotal time, because I was thinking the same thing, “What am I going to do? Can I sell this thing?” I didn’t even think about selling it. I was just like, “Oh my gosh! I could sell this! Holy crap!” So, that’s what I did. So, thank you, Bill Rancic, for that. But . . .

Andrew: So, just reading that book gave you one thought, which was . . .

Chris: . . . So I ended up . . .

Andrew: . . . Sorry, the [??] is going a little bit funky here. Let’s give it a moment. There you go.

Chris: . . . finding a business broker, and . . .

Andrew: Is the connection back?

Chris: Yes.

Andrew: OK, great. So jut reading that book by Bill Rancic put a thought in your head, “Hey, I don’t have to let this thing unwind. I don’t have to have it be around my neck like a noose here. I can sell it.” That’s where the idea came from? You didn’t know before, it just didn’t occur to you before that?

Chris: No, not at all. Not at all. I didn’t even think you could do something. I mean, I’m sure you could do it, but I didn’t really think about, “Ah, man. Who wants to buy my business?” You know, you’ve got to do this, you’ve got to do that. So, yeah, just reading that book it was like, “That’s it.”

Andrew: How do you now go about selling this business?

Chris: I forget how I learned from it, but I think in his book he talked about getting a business broker or something like that. I got a business broker, talked to a couple people locally, and I didn’t know what the heck. I thought they knew everything about the industry and you know they were the one’s that could like, you know, step up to the play and sell it and so the company I hired, the gentleman, they were not selling a business but it took about like six months to sell it.

Andrew: How you find the guy?

Chris: I went to like two to three different business brokers and just came to [??] a guy. I got to decide. He is a Google business brokers, you found some local guys. You talk to them and you said, “All right, I’ve got to pick one of these guys and have them sell it.”

Andrew: OK. You listed your business for how much?

Chris: Originally, it’s a hundred thousand and I wish I already got that much.

Andrew: Six months later you sold it for how much?

Chris: $35, 000.

Andrew: 35,000.

Chris: Yeah. It’s as much like, who I sold the business. You know, looking back like, “Wow, you spend a lot of time, you know, building that business up.” And like the other day, you know, I thought of it when I was 23, so like $35,000 is still a lot of money but then after taxes and [??], we have much left over and so, it’s like gosh, you know. When I sold it, it was a great moment but the same challenge like, “Man, you know, there is got to be better business to build on. OK. That’s not so.”

Andrew: I want to get into what this better business is in the moment but first I shall ask you this. Looking back, what could you have done to this business to make it sell for a higher price?

Chris: Automate the business.

Andrew: Automate how?

Chris: You know hiring people, growing it to a certain level, looking at where it was and saying all right, “Let me grow this thing to this amount and then this amount and show this upward projection rather than a downward trend.”

Andrew: OK.

Chris: And just build in the infrastructure for that business to grow.

Andrew: Be more specific. What kind of infrastructure would you have needed for the business to grow?

Chris: What is the advertising look like, you know, years later, I sold another business but, you know, we did a lot of that process, so. You know for doing PPC, what is that campaign that they get essentially, you know download, copy paste and then press play and that would work. You know building systems and infrastructure to it, you know, the process of when a new order comes in, you know, you do this and here is the shipping, you know, process and here is the boxes, supplies.

Andrew: As opposed to when an order came in and your business, you said, I have got to do this. I’ll figure it out and you did it yourself.

Chris: Well know, certain thing is, I knew that stuff. I had that process but I didn’t document it.

Andrew: So documenting it and giving it to other people would have helped.

Chris: Right.

Andrew: Every part of the business, the way you marketed it, the way that you shipped, the way that you handle returns, every part needed to get documented somewhere and other people needed to do it.

Chris: Yeah.

Andrew: OK.

Chris: Set a protocols, you know, what is the refund process, everything in the business. You know, I knew, what I did but I didn’t formulate it. I didn’t even put it on paper and say, “Hey if you’re buying this business, here is the operating, you know, agreement or here is the, you know, operating processes in the business and how to run it.” It’s good, anyone soon buys a business they want to know, they can step in and easily just go, “Oh, all right, I know everything I need to do.” You know I trained a guy, I trained the guy afterwards and like gosh, you know again looking back, I wish I just said, hey, here is everything you need to know. In fact all the emails are already written for you. In fact here is the phone script, in fact here are the templates for the invoices. You know, everything or you can just step in and grow the business rather than worry about, I don’t know what to do.

Andrew: All right, that’s really good advice. We’ve done, let me say this. This will be the [??] for Mixergy premium. If you go to Mixergy premium, we’ve got courses where we teach you exactly how to automate. I’ve been living this stuff like, you wouldn’t believe. Even though I planned to own this company for the rest of my life. Systemizing Mixergy has made my life so much better that I feel like, I won’t be burned out in five years, if I do this. I feel like, I was going to burn out in five days before I started systemizing and automating and documenting everything. Once I did, I was able to free myself of just trying to figure out everything as if it was done for the first time. As I systemize, I was able to hand off more than I ever imagined to other people. The fact that you’ve pre-interviewed Chris by someone other than me, you think a pre-interview process needed to be me.

How else could it be done and still deliver good product to the audience on a consistent basis with every guest, who is often a stranger. We systemize that process and when you systemize, you can get other people to help and then they improve the system. Jeremy didn’t just take the system, I created and ran with it. He kept working with guests and testing on new ideas and now the system is better and the whole business is better because of it and if you want to do the same thing for your business, I keep saying go to Mixergypremium.com take those courses on systemizing, probably the most boring courses for anyone who would never started a business and has any interest in starting a business but if you are in business, if you’re planning to start a company, the way Chris and I did, then you understand the value of them. They are invaluable for your mental stability and you know it. For your sanity, for your personal life and also in Chris’ case, for your ability to sell your business. So, all of that and so much more at MixergyPremium.com. As I told you earlier, it’s guaranteed 100% because we can take care of you. We don’t have to ship anything back and forth.. It’s all online, MixergyPremium.com.

All right. Usually, I would ask one question after I did that plug, and especially since you and I have now spent an hour on the phone together. I would ask one more question and say good-bye, but I’ve got to ask you about CallLoop because I call it at a conference a while back. I’ve heard about it from other people because you are such a freaking good hustler that you and I have talked about CallLoop more than I’ve talked about my business with anyone else. You’re a really good entrepreneur. So tell me about now the shift in mindset and how it led you to launch a different kind of business.

Chris: Yeah. So going from physical products, selling hard goods items to just thinking there’s got to be a better way. There’s got to be a better business to build, and I love the Internet. It was an Internet business. I knew nothing about selling or marketing or anything like that, and essentially after I sold that went on a journey to learn how to sell. How do you market? How do you grow a business on the Internet? It turns out I discovered direct mail and all this stuff and said, hey, a lot of guys are doing in online. I came across Yanik [sp] Silver and guys like that and really just learned how do you market a product online. And then came across information publishing.

Through that journey I really learned a lot about marketing, especially Internet marketing. CallLoop essentially came about was at the time I was working with clients launching their businesses, making… Literally, these guys went from zero to building six and seven figure businesses. I helped launch those businesses. I was a consultant, and they went on to grow their companies, but through that we were doing email marketing, we were doing press releases. We were using all these mediums. We dabbled in using voice broadcasts and text messaging.

I love automaton, and so I love email follow-ups. I was at a Rich [sp] conference. My friend, Ted Brown, a local here in south Florida. Ted Brown, he’s actually a guy you should definitely interview. He’s got a really cool business. Ted was like, you know what would be really cool? He was like, if you can have auto responders and voice broadcasts and text messaging. Holy crap! That seemed a really good idea because at the time I was doing this stuff for clients, and we were doing everything manually, sending out text messages, sending out voice broadcasts. It was just a very manual, arduous process of exporting lists and doing all of that type of stuff.

Todd had the idea. That’s really a good idea. Todd’s a friend of mine, so a week later… During that week I called a guy and like, hey, is this possible? Can we do this? The guy as like, yeah, it can be done. The problem is anything can be done.

Andrew: [laughs]

Chris: How long does it take? How much money and that type stuff? So, I called Todd, dude, it can be done. He was like, I’d love to run with this. I want to run with it. He’s like, go for it, man. That was the initial kind of inkling of it, and then it was just gosh, many…

Andrew: What would happen to these guys, these guys that you were helping out? I guess you went essentially to work for them as a consultant to help them launch their information products, right?

Chris: Yep.

Andrew: And they said, well, the way to do it is to collect email addresses and hen do a drip campaign via email, and then somewhere along the line you start selling and people eventually within that drip campaign end up buying. That’s the typical way to do it. And they said, we need to go a step beyond which is maybe, text message people. They would manually send text messages on certain days to all the people that gave them their cell phone numbers What would they text message them about? What was the reason to get the cell phone number?

Chris: Text messaging wasn’t big. This was in 2007, 20088. Texting wasn’t big at all. It was more voice broadcasting, sending a voice message about a teleseminar or an upcoming webinar or about, hey, [?] going live. Essentially, we took a brand new product, and it’s like, hey, I’ve got this product, we put it on the Internet and nothing happens. So, there’s a whole process to launching that, getting venture partners. So texting wasn’t big back then, more the voice side of it. It was that type of announcements that drive our people to events or “did you hear about” announcements, just within that process of it.

Andrew: You see, while they’re signing up for maybe a webinar where you’d ask them for their email address. You’d say, give me your phone number, too, so we can let you know. We can call you and remind you to get on the webinar.’ That was the reason to do it?

Chris: Yep.

Andrew: OK. So they give you the phone number. You would send them an automated call with, basically, someone on the phone, a recording of someone on the phone, saying, ‘Hey. This webinar is starting. It’s going to be great. It’s going to change your life,’ etc.

Chris: Yep.

Andrew: That would get them into the webinar. Then you’d follow up with them and call them to do what?

Chris: For example, if the product went live on a certain date, we would send a message prior to it going live or at the time it would go live.

Andrew: I see.

Chris: Just another medium to reach out to them, because there’s a whole theory – I don’t know if you follow Jay Abraham – but there’s a thing called the Parthenon Theory. If your business is built on one column, you have a diving board business. Let’s say you’re just using email and email goes away, people aren’t opening your emails, how are you going to communicate with people? And so it’s kind of this stacking of the multi- channel marketing. The goal is to automate it. So now as people come in, you can start to automate text, voice, teleseminars, webinars, emails, into a full communication channel, if you will.

Andrew: OK. And how effective is this? Who have you seen use this well who is not an info-marketer?

Chris: Gosh. A lot of people. And we have schools using it. They use it for their webinars, announcements. Marketing is just kind of one sliver of it, but essentially the one school, they use it for webinars. This is pretty standard, but they see about a 30% increase in attendance. Another guy saw a 50% increase in attendance. That’s very standard. The truth of the matter is when you register for a webinar you forget, and so you need some sort of a reminder mechanism that’s not via email, because you’re not checking it, but it’s your cell phone – it’s right there and you get a text. Then, hey, you gave permission to be reminded of the event, and then you attend it. But that’s just one facet of how to use it for marketing.

Andrew: Here’s what I read at the top of this interview, and basically I just read it off the notes that my researcher put in front of me. It was ‘he is the co-founder and CEO of Call-Loop, the constant contact for voice and text, which integrates with other services you’re already using to send targeted voice and text messages.’ So what are these services that you integrate with?

Chris: Yeah. So AWebber, iContacts, Constant Contact, Mild Stream, Get Response, all the major email platforms, and then…

Andrew: What does it mean that you integrate with those email platforms?

Chris: So the problem that I had originally was I was using AWebber, and I had new subscribers come in who were using 1ShoppingCart, and we had new customers coming over there. So it’s great. I can put them on email and AWebber, but I wanted to add text to it. I wanted add voice. But I wanted to automate it. I didn’t want to sit there and export it from AWebber, import it into a system.

Andrew: As soon as somebody gives you their phone number on an AWebber form when they’re signing up for AWebber email list, you want to take that phone number and add it to some database that will enable you to send them text messages or automated voice calls.

Chris: Yep. Yep.

Andrew: OK.

Chris: And so it puts them into Call Loop. So, hey, you went through an AWebber web form, now that person’s on an email list, and then, boom, you can send them a text message right away which is automated. You set that up six months ago, and, boom, you get that text.

Andrew: You’ll just say, ‘Hey. Thanks for buying.’

Chris: Right. Jermaine Gregg, he has a really cool thing. What he does after somebody buys is two days after they buy, he sends them a voice broadcast which says, ‘Hey. This is Jermaine. I want to thank you so much.’ I know you interviewed him, but I don’t know if he talked to you about that on there. Essentially he calls the customer. It’s all automated. Two days after, at 3 p.m., he says, ‘Hey. This is Jermaine.’ When they pick up, it makes it sound like an automated message, but when it goes to voicemail, he has that opportunity to say, ‘Hey,’ while moving his papers around and tickling his baby, and it makes it sound very personal.

Andrew: So it’s a different message based on whether it goes to voicemail or talks to a human being?

Chris: Yeah.

Andrew: OK. So if it goes to voicemail, it sounds like he really left you a voicemail.

Chris: Exactly.

Andrew: Complete with the rustling of papers in the background while he’s working. If you pick, it’s very clearly an automated message directly from Jermaine. Jermaine, by the way, is scheduled to do a course. He did an interview on how he built up his business. It’s a spectacular story. Then he mentioned that he wanted to talk about automation because everything he does is automated. He has found that automation religion. He set up the outline with us. He told us everything that he wants to tell the audience. I have it all here. I don’t know why he’s hesitating to do the course, though. He did all the heavy lifting, now we’ve got to get him to come.

Chris: Do you want to know why?

Andrew: Why?

Chris: A lot of people want it and they’re willing to pay a lot of money for it. Jermaine’s one of those guys I’ve been following for years. A genius, super, super smart guy. That may be why. [laughs]

Andrew: I think you might be right. I think what he found was, hey, you know it, I can sell this stuff. Why am I going to be any part, why am I going to give this away anywhere? Who knows? Or maybe, what he wants to do is first prove out his model and then come and do the course here and get our people in his system and automate the hell out of selling them. I have no idea. I’ve got to figure that out before I even have him on.

Chris: He’ll do it. He’s a good guy.

Andrew: Yeah, he is. He’s a really good guy.

Chris: Yeah.

Andrew: All right. What else do I want to know about it? I’ve got some number here that I want to follow up with you on. Where is this? You were selling something for 19 bucks a month, and I won’t even say how much revenue. What is it that you’re selling? Do you feel comfortable talking about that?

Chris: Oh, wow. Yes. This is after I sold the wheel business. We developed a marketing platform, and we would sell it for 19 bucks a month. It was the easiest business in the world. I wish I would have had it, but essentially it was creating replicated websites, and people would pay 20 bucks a month and have their own website with their face and their name and that was it. That was the business. And so the lead was captured for them. They would get the lead that came in, and it was a great business. Looking back on it, it’s like, gosh, John Rydell from Meeting Burner, that’s his business, and it’s a phenomenal, phenomenal business. No one ever cancels. Everyone keeps it. He kind of built that thing out, but yeah, that was that little business there.

Andrew: But you had a business of your own that did that, too, is what you’re saying, right, or is what you’re talking.

Chris: Yeah.

Andrew: You did, OK.

Chris: Yeah.

Andrew: And pulling in 8000 bucks a month passively because of the way that you build it up.

Chris: Yeah.

Andrew: All right. Man, there’s so much else that I could be talking to you about or digging deeper on. What’s the one thing that I missed that you think I need to include in this interview?

Chris: Hmm. I think through this whole journey it really just comes down to systemization and automaton of your business and at the end of the day providing that freedom. Today, there are so many awesome tools. We use Infusion Soft. Really, Infusion Soft drives our whole business. We use AWebber for automize and some other things, but you need to automate everything.

Andrew: Everything. Down to what? What’s one thing that you automate that really shows that you’re automating every single thing?

Chris: Email marketing, teleseminars, webinars. You want to communicate with your prospects, your customers from multiple channels, and as new people come into a sales process educate them. But you don’t have to be the one doing the webinar every night or the teleseminar every Tuesday, you can automate that stuff. Technology allows you to kind of…

Andrew: Using what? What kind of tool do you use to give people the impression that they’re watching a live webinar when it’s really recorded?

Chris: We built our own. It’s called Auto Teleseminar, and we have AutoWebinar.com which we built out, but essentially we tried this stuff because we want it. We built it because we want to be able to automate our businesses using multi channel marketing, automating all these different communication channels. From the marketing side, try and automate everything from the sales process because people take in information in different ways. People respond to email. People respond to video. Some people want to hear auditory from a teleseminar. And so, it’s reaching them from all these different channels. That’s one thing.

Automating customer service, a lot of the menial tasks that a lot of us do just because we haven’t set up a process are willing to allocate cash to that. The cool thing is when we actually spend the money to do it that allows you to spend more time on the things actually making money. So, yeah. I would say create a list of all the things that you’re doing and then put a line down the middle, say delegate or not delegate, who’s going to do the job and just try and outsource everything and automate it all. Very broad and bland but Jermaine.

Andrew: I believe it. I found that religion. I hope Jermaine will expand on it. If people want to see how to automate their text messages or their voice calls and integrate it with their shopping carts so people get automatic messages at a certain time after they buy or even automated with their email software so that their audience can get a message after they sign up for email. All they have to do is go to CallLoop.com. That’s your current business. Chris, thanks for doing this interview and being so open with your numbers and your story.

Chris: Yeah. Thanks, Andrew. As always, a killer job. I love it.

Andrew: Thank you. Are you a Mixergy fan? What kind of interviews do you like to see me do?

Chris: Yeah. Let’s see, the interviews I love to see are… I love the ones about how people are actually acquiring customers, how they’re marketing. What are the strategies they’re using? Is it all SEO? If so, how are they doing that? Are they doing PPC? I love the marketing side of it. How are you actually growing the business? How are you generating traffic? You know, the whole funding thing. We’re going through that. But at the end of the day, what’s the product you’re selling and how are you bringing in customers? Anybody who’s automating any of that, that’s what I’m really interested in and how they’re driving traffic, getting traffic and then converting customers

Andrew: There you go. If you guys watching this interview, let me know if you know any entrepreneur who is especially good at this, at talking about the way he markets his business or the way that he automates it. I’d love to do those interviews, both for myself and for Chris.

Of course, if you got anything valuable out of this interview, I hope you find a way to find Chris and say what I’m about to say right now, which is, Chris, thanks for doing this interview.

Chris: Thanks, Andrew. Appreciate it.

Andrew: You bet. Thank you all for watching.