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Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious up start. This is the place where entrepreneurs come to tell their stories. This interview, specifically, is the untold story of the founding of Broadcast.com.
In 1989, Chris Jaeb founded a startup based on a vision. A decade later that vision sold for $5.7 billion dollars to Yahoo. Along the way, he says he made countless calls, as you’ll hear in this interview, to get others to buy into his vision. One of the people who bought in was Mark Cuban, who invested and helped grow the company. I invited Chris here to tell his story, and I also want to hear about his current project, Common Ground Kauai. Chris, welcome.
Chris: Why, thank you.
Andrew: Hey, later on in this interview, we’ll talk about how Mark Cuban came into this story, but I’m wondering if, are you ever resentful that people say that Mark Cuban is the founder, and completely write you out of the story?
Chris: Yeah, of course, there’s a little bit of that. It’s hard not to because of the way it sort of ended up. Yeah, and it being promoted in the media, and because of the way he positioned the story. But, overall, in the grand scheme of things, when you look at the way it ended up, and what the opportunity to have Broadcast.com grow the way it did, and what a freak of nature it was, and what that ended up meaning to me at the end of the day, it’s sort of, in the grand scheme of things, I really, it’s not that big of an issue.
Andrew: I want to find out what it meant to you. In fact, why don’t we talk about first what it meant to your brother. Your brother invested $2,500 in this vision of yours. What was that eventually worth to him, that investment?
Chris: It was between 850, 850,000 and a million dollars.
Andrew: Wow. That’s…
Chris: And that was not uncommon. Basically, there was about four people that invested early stages, in what was Audionet at the time, and ended up becoming Broadcast.com. My girlfriend was one of those people, too. It was just one of those one-in-a-million, home run kind of shots. You just never expect that when it happens you just cannot believe it.
Andrew: How does your life change after that one-in-a-million shot hits?
Chris: Well, to be honest with you, it’s taken a number of years to sort of reset and adjust, because the reality is that at that time, when I was developing what would become Broadcast.com, I was, you know, living on next to nothing. You know, $1200 a month, roughly. So, I was pretty much just doing what I could to survive, within the scope of trying to create a business. It really wasn’t until probably the last three or four years that I’ve gotten more comfortable with that amount of wealth, and had some feeling as to how to manage it. Really, the difficult part is how it relates to so many different things in your life. You know, how people relate to you, how you spend money, when you lose and make money. How much that means. Because when you’re living on $1200 a month, 100 bucks is a lot of money. [laughs] When you have a fair amount of wealth, and you lose because of the way a market moves or something like that, as much as a million or a half-million dollars a day, you feel that like it’s 500 times, 500,000 times a hundred bucks.
So, it’s like, it’s taken a long time for me to get comfortable with it and then to figure out my relationship with wealth and how to manage that in a way that feels right internally over time. And I don’t think you know, just because of where I came from, I don’t think it’s ever going to be. When I look at big financers, I don’t really see me being that kind of guy. I feel like I’m always going to have this more grounded sense of what money is.
Andrew: And I actually want to find out about that. About how you came to that grounded place and how CommonGroundKauai, your current project, is the expression of that. But let’s start off by just getting to know how you started and how this business that was an idea became so big. Why don’t we go back actually, really far back, before even this idea came to you. When you were working on Galt Imports. What was Galt” Where did the name Galt Imports come from?
Chris: Galt came from the lead character in Ayn Rand novel, “Atlas Shrugged”. John Galt was a fictional character that was basically a guy that took the most productive people in society and brought them together to create an environment that was really the best of the producers. You know, basically getting all of the greatest brains together in an environment where they could be most productive.
Andrew: He took them out of the mainstream environment which was becoming more and more socialist in his view and brought them into this little community, not to give away too much of the book. But why was that such an important character to you that you named your business after him?
Chris: Because of what he stood for. I mean what he stood for was productivity. And really the thing that resonated with me from the book was A is A and B is B. You know, basically you can’t make A, B and you can’t make B, A. And that sort of, that seems very simple at one level, but when you look at the way the government works, the way media works, the way the world works today when you look at the biggest business they’ve done an incredible job of manipulating the media. And to make people believe one thing is something else. And if they would stay grounded in what truth is it would be much easier for people to develop long term great relationships. And that was the fix in the mix for me was, could I create a truly productive environment that would be based on a really founded truth? And in the automobile environment that’s sort of hard to do.
Andrew: And you made an observation actually. You and your college roommate started talking and there was this observation that you made that led to the business. What was that observation?
Chris: Well, I’m not sure, what…
Andrew: I guess I’m kind of leading the witness but not very well. What I’m trying to get at is you noticed that there was, if I understand this right, well actually this was the automotive business right, Galt Imports, where you said hey there’s an opportunity here to import cars to the U. S. and because of, well you tell it.
Chris: Basically, in 1980 exchange rate between the U. S. dollar and the German Mark was, really the dollar was strong. So you could buy a lot in Germany with a dollar from America. So it was a great time to take advantage of it. A great way to take advantage of it was to buy what they called gray market cars at the time. So we started a business, just because we’d sort of been reading about these kinds of things and thinking that we could run a car business and how simple it appeared on face value. So the idea that you could buy a Mercedes for example or a Porsche in Germany for about anywhere from 10 to 15 thousand dollars less then you could buy it for in the United States. But you had to do some DOT and some additional department of transportation kind of licensing and work on it, which we did. But that’s where we got the value.
And so we ended up dealing in what they called these gray market calls. And we ended up dealing with a lot of people that were more in the gray market part of society, really. So we would, at a very young age I was getting, at 23, 24 years old, a lot of just Business 101. How to deal with banks, how to deal with customers, how to deal with sort of people that weren’t the most honest. And in some way Galt Imports was an ideal. And it was very idealistic. And in a great example of sort of something a college kid might dream up. But in the reality of business it’s sort of, it was almost very ironic that it put those ideals into the car business and made me, and was made me hope that I could actually create really high quality living and working environment in the scope of that. The reality was is I was dealing with the shadiest of people on almost every level of.
Andrew: One of your partners was a coke dealer?
Chris: Yeah, we didn’t realize it at the time but about six months in we found out our partner was an undercover coke dealer. And so when we found out that he was dealing coke, we went to the police. And the police said, “There’s not a whole lot we can do about it, because he’s protected because he’s working for the DEA.” And so after about four or five more months, we went to other people within the police department and got them to say, “OK. If we were going to fire him, at least, show up at our place of business,” so there wouldn’t be any bodily harm caused at that moment. When we fired him, it was pretty crazy. Our partner had his hands around his partner’s neck, saying, “I’m going to kill you,” right when we had the police walk in to say, “Hey, this isn’t going to work here.” We had a temporary restraining order on him, and for about three days we ended up living up at my partner’s girlfriend’s house in north Texas because we didn’t know what was going to happen next.
Andrew: Because you were thinking that maybe, this guy was going to come back and get you.
Chris: We had no idea. We just thought the worst. We knew he was dangerous and half-crazy.
Andrew: On a more business level, you had this vision that you would make a $10,000 profit for every car that you sold because of the difference in the exchange rate that you noticed. But in reality, you were making, as I understand it from your conversation with Jeremy, our producer, only $1500 per car. Why? What happened to the other $8500?
Chris: It’s just a lack of being in business, of not having any previous business experience. When you’re a 23-year-old kid, you look at it like, “Oh! I can buy it for this! I can sell it for that. My margin’s going to be $8,000 plus.” And the reality was is that when you throw in. We had a 20,000 square foot warehouse. We had 30 employees. We had no prior business management experience in this area. I mean, you go right down the list, and then we got into service business. We got into body business. We got into the leasing business. We got into the parts business. [laughs] So we were basically doing a lot of things. And we didn’t know – we didn’t realize at the time that the more business we did, the more money we lost. We didn’t even really balance our checkbook until two years into the deal. And, needless to say, when you compound all that stuff and our true lack of management, we were losing money on every car we bought. And we didn’t really even know that for quite awhile. Because we were only running our business by whether we had money in the bank account or not, not whether we were actually making money or not.
Andrew: And there was one other mistake that we’ll talk about in a moment that you made. But I’ve got to give credit to the success that you had. Here you were, a guy who didn’t have a hell of a lot of experience in the car business, and you’re generating this many sales, and you could afford to hire as many people as you talked about, and add all of these different products. How did you get it to grow so big? What did you do?
Chris: It was timing, timing, timing. The reality was that it an incredible time. Dallas was going into a little bit of a boom at that time, in the early 80’s. And we had a great product at a great price. We were providing the product. The only problem was that we weren’t doing a great job of managing our costs.
Andrew: I’m sorry to interrupt, Chris, but I think I’m understanding. The core idea of actually being able to get these cars so much cheaper than they sell for in the U. .S. That’s what sustained you and allowed you to grow. Everything else might have been mistakes, might have been luck. But the core idea was solid, and that’s why you did so well?
Chris: Well, that was a big part of it. But the other part of it was that we became a service center for gray market cars and other high-quality cars. And we were actually doing great work. It just took us some time to figure out how to do it. [laughs] The customers would always keep coming back because we treated them really well. At the end of the day, yeah, a good part of it was the vision and the ability to import cars, but the majority of our business came from people that had gray market cars that wanted work done on them because they couldn’t take them to dealerships. We would bring bankers in there when we were trying to get loans, and they would look at our warehouse and see anything from the Lamborghinis and Bentleys to 1930 antique cars. And they were saying, “Oh my God. These guys are doing so much business.” But they didn’t realize, and nobody really realized, that most of the cars that were in there were in there for the second, third, or fourth time. Trying to get fixed. And the opportunity cost of that on the income statement is really significant. And that’s the piece that I personally didn’t get until many years later.
Andrew: What do you mean? If you were having to fix a car that you had fixed before, why is that a loss? You’re not charging them again?
Chris: Well, it’s a loss because the opportunity cost of working on a car that is a new customer, and creating a net positive cash flow as a result of that, as compared to. You’re right. Generally speaking, we aren’t charging them, when we’ve made a mistake, to fix the car.
Andrew: I see. I see.
Chris: Five cars that were coming in that were really using our fixed expenses and using all of our other overhead to repair a car that had been fixed before and also that versus new business is pretty substantial when you look at it on a significant volume over time.
Andrew: I see.
Chris: So what mattered, the most amazing thing or the best thing that happened to me as a result of that was really just so that two years of being in business gave me this street sense I never would have gotten from going to the best business school for ten years. I mean, to deal with all the different types of people number one and then number two just to understand really quick what works and what doesn’t, it starts to give you an intuitive sense of the kind of people you want to work with.
Andrew: What’s one thing that worked for, by the way when you lean back in your chair it makes a little squeaking sound that might sound a little too loud for people who are just listening to the MP3. I hate to say that because I want you to be comfortable and relaxed but I also want you to sound great.
Chris: That might help a little bit.
Andrew: So what’s one thing that you did right that other people can learn from, that you learned from and took with you for the rest of your business career?
Chris: The number one thing is people, people, people. You know, if you’re dealing with a customer that’s a little in a not honest environment or very truthful, is going to come back to haunt you and as much as you like to think it’s going to be different at some point in time, it’s much better to spend your time developing a new customer that’s honest, trustworthy and you can build a relationship with.
There’s so many people that were trying to cut a corner that came to us and made it very easy for us to see the people that we shouldn’t be dealing with and I think that one piece of information, if people take that throughout the course of their life and all their relationships, not only business but life in general, it makes life so much easier because it seems like unknowingly we get ourselves into these toxic relationships and in one way or another they sort of take our souls and taking our clarity of mind away. It prevents us from doing great work.
Andrew: All right. And one mistake that I mentioned earlier that I hinted at that you made was you had IRS trouble. You weren’t keeping the books. What happened with the IRS?
Chris: Basically we’ve been in the car business for about a year and a half and the IRS came in and said you haven’t paid your payroll taxes for the last ten months. And we thought at the time, oh, they’re just going to say pay this in a week or in a couple of months and we’ll work it out with some kind of a payment plan.” But the IRS agent said if you don’t pay us in ten days, we’re going to close you down. And then it made my partner and I really start thinking about what are we doing this for, you know. Is this the business we want to be in, to pay off this loan if we go get a loan to pay this back? You know, it was about $500,000 and at that point in time, needless to say, we didn’t have an extra $500,000 around.
So after a lot of thinking about it, we decided about three to six months later just to close the business down. But it really was all because it really put a stake on the ground as to why we’re doing this and then once we closed it down, it really put me in a position where because I had this it’s a payroll tax obligation, so it really makes so it’s on your personal credit report. And I couldn’t, you know, even if I went to work for another company, they were going to garnish a fair amount of my wages so it really put me in a mindset that I wanted to grow a company that could at some point pay that back rather than work for somebody and over, you know, 15 or 20 years never really be able to get enough to even pay the interests back.
Andrew: How did you feel about yourself after that, by the way?
Chris: You know, it was interesting. My father had been in the banking industry at the time, for most of his life and he had gone through a bank failure and he was really, needless to say, impacted by that. And he was really surprised because it really, for me I was 25 years old. That really didn’t even phase me because, I mean, it phased me from one standpoint because I was upset I didn’t have enough piles of cash to go forward for the next couple of months but at the end of the day it didn’t because it wasn’t, I didn’t have a million dollars going into it, really it wasn’t my money. I really didn’t feel like it hurt me that much other than my desire to pay these investors back that invested in it at some point in time.
Andrew: Did you?
Chris: Yes. Well, it was really interesting. Two of them were people that gave me loans and I paid those loans when Broadcast.com ended [??], I paid them back. It was really incredibly ironic that I could and those people were willing to wait that long and just see how it went. There was one person I owed $200,000 to that a year after Broadcast.com finally got to a point where I could generate enough return to pay him back. He got paid back and we were just sitting looking at each other and saying, I can’t believe this day really every happened. Because you never really expected it.
Andrew: The original idea for what became Broadcast.com was, it started out as a company called Cameron Communications. Cameron is your first name, Chris is the name you go by, your middle name. What was the original idea that led to the creation of Cameron Communications.
Chris: Well basically I had another business partner that was called Promotional Radios. And Promotional Radios was a business that I started that I would source palm sized basketballs and baseballs and you would go to Hong Kong, get a company to make them for a buck and a half to two bucks, and we’d sell them to professional baseball and basketball and football teams with logos on the outside. So imagine a basketball that has Dr. Pepper and the Dallas Mavericks on it, it’s an AM radio. We give it to the first 5,000 people who come in the stadium. When people got in there with those radios and they had batteries in them they couldn’t listen to the games because they were inside these metal and concrete structures that really didn’t allow a signal to transmit in there.
So we tried to come up with a way to retransmit the signals inside the stadiums. And I met a guy from major league baseball that could sublicense me. So not only could I retransmit it with his infrastructure, these signals inside the stadiums, but I could retail my promotional radios in other areas, outside the stadium. So after looking at that for a little while it became apparent to me even though it would be great to retransmit those signals inside the stadium, the biggest market for those broadcasts especially if I could aggregate all the baseball and basketball games was outside those markets. So previous to that point I’d put together some business plans that went to major league base ball and the NBA and said, if I aggregate all the broadcast of your sport, you’d make them available inside the area would you do it? And they were saying they’d be very open to it. But then when I said if I did it and made it available in the metropolitan areas, obviously they were more interested but they were really wondering how could this kid (inaudible) network basically put a business plan together to make that happen much less actually deliver the service.
Andrew: How could you do that? What was the technology that would allow you to broadcast to a radio? What I’m trying to think of is an example of it. So if I’m a Yankee fan and I’m in Los Angeles, I could listen to your radio and pick up the New York Yankees in Los Angeles?
Chris: The question at that point in time was which is cobbling together whichever technologies were available and trying to just to make sense out of it. My idea at the time initially was to get the FCC to let me do an interactive PCS broadcast. So I used the telephone spectrum once the signal is downlinked by satellite to the metropolitan area. So essentially you would have a one way outbound broadcast from a place that aggregates all the radio backhaul fees, more or less, we would aggregate them and redistribute them to all the metropolitan areas. In the metropolitan areas we would take, it would go into the telephone, the regular cellular telephone network, and then you’d be able to choose any of the hundreds different channels almost like you were calling a phone number on your PCS thumb. But the added (inaudible) was that we would make it so you could hear ads for products and actually buy a product as part of the broadcast.
That piece still has not quite come to shape. Because I think that is one of the greatest opportunities today even as you listen to digital broadcasts. You right now can’t very easily when you hear, there’s not a targeted ad to you that you can push a button and automatically have a product sent to you. And I think that day is coming. It’s like almost like the one click thing happening but using the audio as well as the graphic piece of the radio advertising.
Andrew: How you don’t have, or at the time you didn’t have any experience in working with satellites, with the FCC, even radios, you just had this idea. How were you going to put this together? I think a lot of people would have had themselves think that idea and then said, I just can’t do it. How are you going to get the FCC to okay this, the telephone companies to go along with this, the manufacturers to create the radios you needed?
Chris: You know, it’s true. If you look at it from the way, if I was looking at it today doing it from scratch in range of hurdles you’d have to overcome. But in the back of my mind the thing that kept me in the game was the fact that my operating costs were so low. I could actually live in $1,200 a month, comfortably. I mean, if I raise $500,000 or even $50,000 I can be in business for three or four years confidently and do travel to New York, or to Washington, DC. You know these, we ended up getting an experimental license to test the distribution of the broadcast in the UHF television spectrum, for example, in Austin, Texas. But in summary, what was really made possible was the idea that if I could stay in business long enough I could learn about this enough to bring the pieces together and then package it in a way that somebody might be interested in it.
Andrew: Ah, I see, okay. What about getting the licenses from the sports teams to be able to broadcast their games?
Chris: That was another deal altogether. Because at the time, mostly, none of these rights holders had really, you know you see guys sort of do one extra step here because I was offering the system that I just described to you, the telephone network initially to people with the idea that they would give me their rights and we’d share income. But then once the internet came along it was a much easier deal for me to do, but it’s still just as difficult to sell to a rights holder. So basically I didn’t have to build this whole infrastructure of this satellite distribution and phone network and who knows whatever else.
All I had to do now was acquire broadcast rights and then figure out how to provide an audio distribution capability on the internet. And then once Real Audio Player came out the software costs even went away around the development of what it would take to distribute digital audio programming on the internet. But that said, the bottom line is I still had to go out and convince people that were sort of older guys in the radio industry that it was worthwhile for them to consider putting their programming on the internet because it could give them international distribution most fundamentally.
Andrew: Before you met Todd Wagner who eventually became one of the co- founders of Broadcast.com and introduced you to Mark Cuban, you apparently talked to 100 to 200 investors. What was their reaction when you told them what you just told us right now?
Chris: Well, I would guess about 95% of those investors had no understanding of the technology whatsoever, like zero, they were just people with money. Most of the time they would just look at me like I was totally crazy. The occasional one that was a real sort of more of a savvy guy that was technology inclined would, at least, describe to me the ways we can organize a company to do something like that. That nobody had really expressed much of an intent in any way to make an investment. So is it? Go ahead.
Andrew: I was going to ask, how did you know that you weren’t crazy? Why didn’t you say, hey you know what, this is a little nuts. Maybe, I better go back to something that I know more about.
Chris: I think there was always this thing in the back of my mind that made it really clear to me that there was a value for these broadcasts. Basically I had moved from Minnesota when I was 12 years old and now I’m, at that time I’m about 29 or 30. And I knew that I still loved listening to Minnesota Viking and football and baseball. I mean Minnesota Twins baseball games and Minnesota Viking football games. And I knew if I was a displaced fan that had that problem I knew there were hundreds of thousands or millions of other people. And the way that I was doing the math in the back of my head was saying, for each radio station it has a signal that goes around its metropolitan area.
If you look at the whole rest of the world maybe the whole rest of the world has a market that’s as big as the one that’s inside the bubble of the broadcast. So that’s the math I was doing in the back of my head and saying, there’s real numbers here and a real business here. I didn’t know how I was going to manifest that and make it real. But there was a potential and that’s what kept driving me.
Andrew: In 1994 you were introduced to Todd Wagner. How did you meet him?
Chris: My girlfriend at the time was in a course called Running from the Law. There was a teacher that was basically had set up this seminar and program that would make it so that attorneys in the area could basically come and learn about different things they could do outside the legal progressions with the skill set they developed. So she introduced me to Todd and we met and we just had a couple of hot little conversations initially because he was really interested in doing something. And then he said, before I go to, I have this tripped planned to Australia. But before I go let’s meet with Mark. And I really didn’t know Mark from anybody. And about two weeks after that, we ended up meeting with Mark at California Pizza Kitchen on Northwest Highway in Walnut Hill, and within ten minutes of me giving this pitch that I’d given 100 times, Mark said, “I’m in. I’ll do it. And I [??] got to that part of my pitch.
Andrew: You didn’t even pitch it. I mean you didn’t even ask for anything and he said I’m in.
Chris: Yeah, he… Exactly, I had never got the point where I told him what the deal was. He just said, “I’m in. We’ll do it.” And so we just started talking about other things at that point. And the about another month and a half later Mark hadn’t given me any money. Tom was out of town. I went back to Mark and said, “I got other people who want to put money and I need to know where you stand.” And at that point he gave me a check for $10 thousand and on the bottom of that check it said 2% of the company.
And at the time I didn’t even think anything of it, so I took the check. And about two weeks after that we had big contract with Team Line, which was a company that had aggregated all these broadcasts and we thought had the right to give us like almost 100 college and professional sporting events on a weekly basis. So that contract fell through when Mark…
Andrew: Actually, let’s hold off here or a moment. I want to come back to that contract, because that was significant. But let me just dig into what you’ve said so far, that I could understand it. The first observation I made as you were talking is the company launched in ’89, and ’94 is when you met Todd. How did you keep going for five years?
Chris: Basically it was just like I said. It was overhead, and going to friends and family.
Andrew: Your dad lent you money?
Chris: Yeah. My dad was the primary initial investor.
Andrew: Okay.
Chris: Then I had my brother, my girlfriend, a couple other personal friends, and that was the group that pretty much made it so that I had the resources to get to the next step.
Andrew: And the other thing is, you said Mark Cuban said that he was in that quickly in your pitch. You know have known him for a while. We all have gotten to know him better over the years. Based on your understanding of the way he thinks, why did he say he was in so quickly in your pitch? How did he know that there was something there? What did he see then?
Chris: There are two things I think he saw. Number one is I think he liked the [??] of business. I think he really, as you can see, he dabbles in a little bit of the broadcast stuff. And at the time I think he’d gone through acting school. So I think he liked the media play in it. But number two, I think he really understood the technology. And he thought, he had he resources to build the technology out pretty quickly in a way that would add value real fast.
Andrew: What was the technology; that he would have had to build out at the time? I know years later he apparently paid money to put, sorry. He invested in satellite so that you guys would have that. But at the time, what was the technology that you felt he understood that he was able to act on?
Chris: He had been in the PC integration business where they actually sold like integration services to law firms. So he understood how to take network PCs basically and he understood at the time, pretty clearly, that that’s all we would have to do to encode these digital, these M-lock signals to digital and redistribute them. So, and then to network those in a way that they could be uploaded to the Internet, it wasn’t a big step.
So the other piece was to use the satellite network to bring the feds in, but that was not a big step from a technological perspective. The big, you know, the piece that was going to add a lot of value early on was the ability to aggregate large numbers of these streams simultaneously and efficiently do that every time. And I think that’s the piece that he knew it wasn’t going to take a lot of money in the grand scheme of big money at the time, but that money done right could create a lot of value.
Andrew: So it was roughly five years that you were going after investors. Suddenly, he says, “I’m in.” And to prod him to come through with the check that he committed to, for the money he committed to investing, you said, “I have other investors.” Did you really have other investors at the time or was that just a way of creating some [??].
Chris: [??] we’re going to put cash in. But in reality I did it because I needed to know where he stood.
Andrew: You didn’t necessarily have a bunch of other investors that could have taken his spot. You just needed to push.
Chris: I didn’t have [??] but I had, but I knew I had to make a pitch to other people. And if he was, if he was out, it was going to be a different pitch.
Andrew: I see. Okay so then…
Chris: …people with the check there ready to go, but did need to see where he stood so I could figure out how to go forward.
Andrew: What was the significance of the four words that he put on the memo line of that check, 2% of the company, and he wrote that on the $10,000 check that he gave you.
Chris: You know, I [??] at the time, I really didn’t understand what that meant at the end of the day or what he intended that to mean. So fast forward four, five months later after the Real Audio players come out, after Todd and I now have been working on the business together for about three months and we’ve made a number of pitches and Todd coming to the reality from an accounting and legal perspective is that we had to quantify what 2% was. And in particular, was it dilutable or not dilutable.
And so, we went to Mark’s house on a Wednesday night, one night and we told Mark, “Hey, this is non-dilutable. It doesn’t make sense. It’s not fair at all. The other investors [??] over time.” So for about three months we kept going back to Mark’s house on Wednesday nights and just saying how can, you know, what’s fair here. After about three months, at the end of that period of time he said, “You know, guys. I’m just going to do it on my own. I don’t really need you Chris, but I’d like to have you come work with me. Todd, number one, because I know you and you have this legal and accounting background.” Here’s a CPA and an attorney which was really great fit for what the business was going to be. So that night was, for me really at the time and realized what the memo didn’t mean. The reality was I didn’t know to what degree Mark was going to commit to the company so I didn’t really know what I had gained or lost by him saying I was out.
I had other people that were going to work the company so I might [??] as well I’ll go get other people and I have all my contracts so I can do all of that and make it work. And Todd called me on the middle of the night and said, “You know what. I can put a deal together where you end up with 10% of the company and $2,500 a month and you don’t have to report to Mark. You can come in for two days a week and just train people to acquire Broadcast back.” And at the time I really didn’t think too much of that because 10% of the company that I have worked for five years and they had worked for no years time didn’t seem to make sense.
But after realizing I had a number of other ideas and what I could do with that $2,500, [??] and how much more comfortable I would be regardless of whatever happen to the 10%, I took it and felt like, you know what, I have this other idea which was electronic advertising and the idea was to take half of that $2,500 and give to a software developer to develop that and that’s what I ended up spending most of my time on at that point.
Andrew: I see. Writing a note here to come back to and follow up on some of the things that you said here. Actually, let’s go back and talk about that deal that you said fell through. That was a significant deal for you. Can you tell people who are listening to us what that deal was and then why it fell through?
Chirs: It was 90% of what we had at that point. I had like roughly 12 what I would call independent relationships with rights holders, people that agreed to give me the rights to redistribute their broadcast online or offline as long as we [??] 50% of the revenue. But TeamLine had a 900 number call in service where they had already acquired, you know, I want to say, 60 to 70% of these rights from all the Major League Baseball Teams, all the MBA teams, all the NFL teams and a bunch of the College Football and basketball teams. So if we had that agreement in place, we were in business big time.
Andrew: Because the way they work was their customer’s would dial into a 900 number and just listen into the game and they already made the deals with, they already had the broadcast rights to it via 900 number and you worked out a deal with them where you can take those same broadcasts and put them out on the internet.
Chris: Yes. And what made this to be basically, people would pay the 900 number right on those like $0.40 a minute or something like that at the time. And so those agreements were pretty good for that environment but we didn’t really know what that deal was going to go because at the time right when I had three months after I’d gotten a letter of intent from them that said if we paid them $50,000 within the next year, we would have the right to use those broadcasts, Microsoft entered then into a conversation about those exact same rights. And then they just said, “You know what, you guys are unknown. We’re going to deal with Microsoft.”
Andrew: And this is why, because of Microsoft.
Chris: Yes.
Andrew: You eventually sued them. Who won?
Chris: Yes. Basically, it was settled out of court. I don’t think it was a lot of money. I think it really prevented them from using those broadcasts in an online environment. And I think that was of value to Broadcast.com as a group.
Andrew: You say that by suing them you kept them from giving those rights to someone else who could compete with you.
Chris: Got it.
Andrew: I see. All right, what did Mark Cuban say when he found out that you had lost those rights, that they were taking it to Microsoft?
Chris: You know, basically say you don’t really have anything here at the time that I feel like has that much value. So.
Andrew: Sorry, go ahead.
Chris: So it really wasn’t until Todd came back and the Real Audio Player came out that Todd and him were hanging around in a bar one night and pretty much Mark said to Todd, “I’d like that deal again, let’s figure out a way to make it work.”
Andrew: Because now you didn’t have to create any, you didn’t have to create the technology to broadcast it. All you had to do was get the rights to do it.
Chris: Yeah, exactly. And then it was just a marketing game at that point. And a first market.
Andrew: One of the reasons why Mark Cuban gave you, or not gave you but made a deal with you that you would take 10% of the company plus $2,500 a month was that you knew how to call up and get broadcast rights. He actually said you need to come in a couple of days a week and train people to do that. How did you do it? How were you able to do that?
Chris: You know, that was an interesting time in a lot of ways because it was something that, I had never been a salesperson per se. I’d been more a business development organization. And it really made me sort of step out of myself in a lot of ways understanding what the sales process was. And after really a short period of time the thing that came super clear to me was, it’s all a numbers game. And there’s low hanging fruit out there and my goal is to find low hanging fruit. Some people are going to be more willing to take a shot at whatever it is I’m offering, in this case broadcasting online, then other people are. And I need to figure out how to get to them and it was really a function of phone calls and driving people to a no.
So the more phone calls I could make and the quicker I could turn a maybe into a no and possibly a yes, rather than another phone call that really was open ended. The more that I could have more phone calls and grow my contact base and over time develop a way to make sales work. So it was really a function of not, of sort of this competitive challenging instinct to say, you know what? There’s a number of people that are out there and even though I’m getting a lot of rejections it’s going to, I am by sticking in the game going to win. Because I know that at the end of the day this thing has some value.
Andrew: How many phone calls a day would you make back then?
Chris: Between 80 and 100. And that was my test too, basically part of it was to say I have no idea who these people are, so half of those calls were just to try to figure out who the decision makers in the organization were. The other half were, okay I’ve actually maybe, got a person on the line and I could take to them, and that was where things started happening. Because when you don’t know anything about something and you’re trying to sell it, you learn real quick what people want in order to make it a viable product. So what my pitch was in that first call and what that fax looked like as an introduction. In the first call, the first fax was probably a two page fax describing all the ins and outs of what it meant. The fax three months in was one paragraph basically saying take my call and spend 10 minutes with me on the phone if you’re interested in distributing your broadcast globally and sharing in advertising revenue. So really, it’s a refinement issue that cannot help but happen when you’re basically in the battle doing the work.
Andrew: In the battle doing the work. Dozens of calls up to 100 in a day. You’re working out of a room with quotes all over the wall, right?
Chris: Yeah.
Andrew: You’re smiling, what were those quotes?
Chris: Basically they were what I used to motivate me. Because there was nobody that was doing this. There was nobody that was motivating me. It was just my belief in the fact that it could work. And there was, needless to say there was up days and down days when you’re going through not knowing if what you’re spending the last three years on and your life has any value whatsoever. So I would take quotes from you know, Edison, Emerson, Thoreau, right down the list. People that in some way were very grounded. They really were saying believe in your inner nature and yourself and trust that. And those were the things that really throughout every course of every day helped push me. You know, in some way that made me feel more alive and more real and not just like I was just talking to the sky.
Andrew: You’ve actually said that you can guarantee anyone success if they’re willing to do that.
Chris: It’s true. I would argue that if anybody has the ability to stay in the game and can make the calls and that believes in a product that they know has value, it will work. It’s just a question. Can you stand the game? And do you have the passion and the desire to make the calls? And with most people, I think it’s for a number of reasons. But the reality is that I don’t feel like that sales piece that I’m describing is an aspect a lot of people have. A lot of these ideas come from engineers, and people that are not, generally speaking, the people that enjoy being in the crowd the most. And not that I did, but you have to be willing to put yourself there to make a lot of these things work.
And that’s sort of what I had learned from other people, too. If you’re going to make a business work, the closer you are to where the money comes from, and you being able to understand how to make that financial flow happen, the better chance that you’re managing your success. If I was going to have to hire a salesperson to determine how successful I was, I was always going to be a step removed from what it was going to take to learn how to make the sale, and to understand what the customer really wanted.
Andrew: All right. You now had 10% of this new business. Your partners own 90% of it. You had a salary. You had clear marching orders. What did that first version of this new business, which then was called Audionet. What did that first version of the product look like?
Chris: The first version of the program that was being distributed was, well, the first investor version was just a sketch on a piece of paper that was showing up . . . The program signal was moving from the local rights holders, to the Internet, to the PC.
Andrew: And by the time you got Mark Cuban on as an investor, you got 10% of this business, it was already Internet-based output, right? It was no longer radios.
Chris: Well, basically, Mark came on right as the audio software became available. So when I was initially talking to Mark, I was trying to figure out how to build the software that would become the RealAudio player, or something like the Real Audio Player. But then once that happened, all we had to do was make a website and acquire the right to redistribute a signal, and then put it online. And basically use a PC to encode an analog signal, turn it into a digital, and then make it so somebody could go to a website, click on a link, and listen to a broadcast. So that was the first version. It was a rudimentary web page with a date and a time for the SMU football game to be broadcast in 1995, September or August.
Andrew: Do you remember how many different broadcasts you had back then on launch day?
Chris: On launch day, it was one. [laughs]
Andrew: It was just one broadcast? That’s all people could listen to when they went to Audionet.
Chris: It was not so much a distribution for a large fan base, because nobody knew about it, and not very many people had PCs set up with the Real Audio Player in 1995 to listen to an event. But it was really more just to prove to the rights holder that we could do it and that we were doing it. And to show others that we were trying to acquire rights from that it was real.
Andrew: How long did it take to get to, say, 30, 40, different broadcasts?
Chris: Very quick, because we had the broadcast rights. And that was why initially we were bringing in these feeds from the telephone. We didn’t have a satellite network built. So we were calling up radio stations or people in these markets and putting the phone next to a computer, basically, and digitizing an analog signal in real-time. In a way that was able to redistribute the signal and make it available. So, it went from one to probably 30 within a few months.
Andrew: Version 2, you told Jeremy our producer, that Mark rented space in Deep Elm and built satellites on the roof, and had a strong internet connection. What were those satellites for?
Chris: You can set the right satellites in the right places and acquire really large numbers of what they called the backhaul feeds for all of the broadcast radio and TV. So basically, if you had the right relationships with the people that originate these feeds – there are about five or ten of them around the country, and then there are another five or 15 of them around the world – if you hit these key nodes, and can bring in not much bandwidth for audio. For example, on six megahertz, which is the standard television broadcast bandwidth, you can bring about 200 to 300 AM-quality signals into a single location. So the cost of acquiring these feeds was practically zero. You’re basically pointing a satellite dish up into the sky. And now we could get access to really huge networks of programming. And so his ability to do that early on really made it so that we went this next step pretty quick.
Andrew: And I should say of course it’s satellite dishes that he put up on the roof, not satellites on the roof. And he put, do you know how much of his own money into it?
Chris: I would guess it was between two and three million dollars early on.
Andrew: Which is a lot for him.
Chris: Yeah, I think at the time I think he had sold Micro Solutions for near around eight, nine million. So that was a big investment not knowing what it was going to become. And that investment though made it so (inaudible) wealthy other people in (?) willing to bet on it. Yahoo, Intel, a lot of other big investors saw, wow this is a way for us to create, again, eyeballs and numbers, that they wanted to build into their business plan.
Andrew: See if he’s willing to invest in it and there’s something real here then we’re willing to invest in it. It gave people confidence.
Chris: I think them just seeing what it was. At the time Mark wasn’t really very well known. You know, this was ’95, ’96. He was successful in Dallas in his PC integration business but he hadn’t made nearly the name for himself that he has now as far as an understanding of business and technology. What he had done really, pretty unusually at the time was he was a stock picker. And he was, at the time he would take his own money, invest it in stocks and compete against these guys. I forgot the name of the magazine but it was a popular magazine at the time, and two or three years running he was making a 200 and 300% return which at the time when the market wasn’t as (?) like it was over the last ten years, was incredible. And he was, he was really great at understanding value. And he could very easily discern value at any level in an organization. And I think that’s what the investment community started to tag into, like.
Andrew: Did you ever find yourself envious because he had all this going for him? He had money, he had the ability to grow his wealth through investments, he understood the technology, charisma.
Chris: I guess there’s a competitive thing I think that happened with me. Personally, I always wanted to believe that I could beat him at the game, basically, whatever that meant. Whether it was financially or becoming more a better businessman at some level. But I started, my heart was never really in that same place as his was. That’s what he was about. He had a passion for the deal and the numbers and the name recognition that goes with that. My place as I have learned over time is more about, is the authenticity that comes with grounded personal development and what that could mean to community and to people who really understand organic nature. And what that means to the development of business and community within a sort of much smaller scare but in much more healthier long term environment.
Andrew: You are into personal development. You just used that phrase. I’ve noticed it throughout my research on you. Can you give me another example of how you worked on yourself so that you’d become a better person, so that you’d become the kind of person who could make 80 phone calls a day when most people couldn’t make one let alone eight and to get to eighty feels like an impossibility. What did you do to work on yourself to allow yourself to do it?
Chris: Well, one of the main things is meditation. I at the time had met a guy that had just basically said stop, breathe and see if you can watch your breath for five minutes at a time. And I just did that for like about a week and a half to two weeks. And it was just amazing how quick I started watching myself and just the way the mind works.
Andrew: You’re stopping yourself and thinking about your breath, like you’d visualize it go out and in and out?
Chris: Basically, sitting still and feeling my breath go in and out and letting all those thoughts that come through my mind come and go. And as compared to the nature of the way we live is we let, is any thought that comes into our mind it almost controls us instantaneously. And we don’t have a, we aren’t making a choice whether we want to go with that or really step a little bit further back and understand who we are in relation to that. And that piece right there, sort of you are not your thoughts basically. You are the manager of your mind and the manager of your future in relation to your personal desires and goals was a huge adjustment for me. And that really moved me away from trying to do money for money, create businesses for money’s sake, but to create businesses that would make me grow as a person and hopefully maybe someway directly or indirectly benefit others in a similar way.
Andrew: So if you and I were sitting here and you didn’t have this discipline, a thought that might come into your head is, “what if my friend from high school sees this?” And then you get carried away with that thought instead of staying focused on this conversation. Or “what if I’m not communicating this well” or “what is Andrew interrupts me because he doesn’t believe in what I’m saying.” All those thoughts you just allow now to stop and so, first of all am I picking that up right?
Chris: Spot on, you’re spot on.
Andrew: So by not having those thoughts take over your mind for moments, what happens?
Chris: Not so much not having the thoughts, know that you’re going to have the thoughts but not letting them dictate who you are. So you let those thoughts come and you let those thoughts go. And don’t feel like they’re going to overpower you because each thought has an emotional and energetic content to it whether you recognize that or not. And the more we let them control us, the more we become almost this victim of everything that comes to our mind as a result of everything we have not really accepted within our environment, and that’s where, in my mind, the toxins from media have sort of planted the seed inside this American consciousness that makes us very unknowingly sort of this consumer at all costs. And this individualness, these people that are really distracted by all theses range of ideas and media rather then being able to sit and say, “Who am I really? What is really best for me? What is it I’m really wanting to do with this life?”
Andrew: And it’s not those thoughts that you just articulated that are guiding us, it’s the thoughts of, well what’s at the other end of this click? Or, should I really buy myself a new shirt? Do I need the new iPad? Am I not doing a good job in this conversation? Am I not living up to someone else’s version of success? That’s what you’re saying.
Chris: Yeah. It’s like.
Andrew: You know what? I almost want to do like a whole series of interviews just on that because I kept hearing it come up in interviews that entrepreneurs would tell me that it’s meditation that changed their lives. And to be honest with you, Chris, I haven’t yet found a way to make those interviews, those conversations work in interviews, but I want to. It’s so powerful.
Chris: It is. Because I think that’s a major differentiating point from the way any individual can sort of gain access to who he really is and that passion that makes him thrive inside himself. In relation to all that mainstream stuff that we see come down the pike. That we almost subconsciously accept it at such a deep level that we don’t even know that that’s what it is we are. And talk about an opportunity to semi reclaim your own self. Once you have the ability to sort of know what it is that makes you tick and what has meaning in life for you and your family and your community. How much more impact and how much more do you feel in your life? Because the reality is all these distractions that we let come down the pike are really ways to prevent us from feeling who are really are and what it is we really want. Every time I think about, whether it’s the stock market or that celebrity or that thing and those things that I don’t have, or those things that are just interesting at some level, it pulls me away from my ability to feel who I am and what’s important.
Andrew: You know what I’ve got to tell you that that’s one of the best things I’ve learned, and I’m still getting better at it, but in the old days. At the beginning of this interview I had this moment where I thought, ooh Andrew you spend too much time on back story. People didn’t sign up or didn’t start listening to this interview to hear back story. They want to hear about Broadcast. Why did you spend so much time? And my mind would have just gone off on that, you would have seen me disappear, and then when I would have come back into the conversation I would have pulled you very quickly to Broadcast.com and made you feel and the audience feel a little awkward. And, what are you thinking about that? Today I know to let that thought go. What we’re you going to say?
Chris: Well, I just feel like every one of us has this mind speaking to us. You know these, and a lot of it’s from our parents, a lot of it’s from our culture, and I over time have accepted the reality that 95% of our actions and behaviors are governed by these subconscious things that come through us. And if that’s the case we’re basically running on what our parents think and what our culture thinks as compared to what we feel. And if all I can do in this life in an effort to live a more live, healthy and true life, is to go slow enough to make decisions about who I really am and what I really want, that’s the best thing I can do because the reality is I’m not even really [??] if I’m taking the other path. I’m just going down this subconscious thing that our culture is seemingly accepted unknowingly because that’s what their mom and dad did.
Andrew: OK. I can see how this kind of awareness of yourself would help you with phone calls where someone might make you feel like less of a person, like why are you even bothering to call me. Your ability to let those thoughts go and the insecurities that go along with that allows you to continue and to make more phone calls. What happened, going back to the narrative, you had this vision, you took it to someone who could help out, they partner with you and then they offered you 10% of this business? Your friends were shocked by that. Why did you allow that to happen instead of saying ‘No way’.
Chris: In a lot of [??], this meditation thing. Basically it thought me that the value to be myself is much more than what it looks like this 10% to other people. Basically, I could let go of this company, I could let go of my attachment to all that I thought this thing was going to be as a result of my involvement because I felt and still feel like I have an unlimited number of great ideas. What I have a shortage of is the time and resources to pursue them.
So this $2,500 represented complete freedom to me and it gave me the opportunity to go develop another business that I could be excited about and not be under anybody’s thumb and see what could become of it. And the value of that freedom to my way of looking at life was the most valuable thing I could get and in reality that’s what Broadcast.com became for me. Five years later when it went public, it did really well, I didn’t have to at that point in time work any more and what is the value of that when you’re 40 years old, to have the rest of your life before you and not to have to think about a 9 to 5 job.
Andrew: It’s freedom.
Chris: It’s true freedom and if you could get that at any age of your life, it’s valuable. But to have it when you’re young and you have the desire to do more things is incredible.
Andrew: That’s why the audience is freedom fighters. I feel like in many ways we as entrepreneurs are freedom fighters, both for ourselves and for our customers and the people who work with us. You had that freedom, you went on to create a new business as you alluded to earlier, it was an ad based business called E-ads.
Chris: That’s right.
Andrew: How [??] to be profitable.
Chris: That was the big thing that I learned really from the car business [??] had the lower overhead the better. Because in the car business I had the big warehouse, lot of employees, [??]right down the list. Everything was really expensive from a business operational standpoint. E-ads were the almost exact opposite. My overhead was my apartment basically and my phone. So I could sit on the phone calling unlimited number of people and basically be in business indefinitely just making sales calls and in a relatively short period of time because it was more in the first pay per click advertising businesses on the net. As compared to the impression days model it was a very easy sell where you could go to, at the time I was going to ESPN, Microsoft, CBS Sportsline, and basically saying, “Rather than buying impression based advertising from this other people, just [??]the number of people I give you and you can verify where these people are coming from. So you can see what value is being created.” So it was a very simple sell.
Andrew: You were charging them only when you got a click.
Chris: Yes.
Andrew: And then how were you getting the impressions and the click that you were selling them?
Chris: Basically I would go for example if it was in the sports world, I would just go to a bunch of small websites that had a bunch of sports traffic. And so they could verify that that traffic was coming from those sites.
Andrew: And you bought it on a pay per click basis?
Chris: Basically, I would sell a click for between $0.25 and $0.50 and I would buy a click from the website for $0.05 and that was the going rate at the time. So needless to say, it didn’t take too long for kids on the internet and Asia and Russia to see what a nickel could mean if they could figure out a way to manipulate the clicks. So in a really short period of time, we had to set up a security system because we started seeing ourselves sent $1,000 checks to remote parts of Russia and China [??] I’m sure this guys that were just kids at the time that figured out a way to manipulate the system a little better.
Andrew: I had a business at the time with hundreds, maybe thousands of affiliates and I remember some of the problems there. That someone would take your check, remove the ink from it and then change the amount to something way higher. And you’re sending out all these checks it’s really hard to catch that kind of fraud.
Chris: Exactly what happened. We had the exact same kind of thing going on.
Andrew: What happened to the company?
Chris: Basically, when Broadcast.com went public it was really about the same, it was about six to eight months later, it’s when the internet bubble burst. I had about five people working at the company at the time and I just decided to close it down. To me it really didn’t have any future value because I had more than enough money (?). I just didn’t want to spend the time in that grind anymore.
Andrew: You were generating $500,000 a month in sales, gross sales.
Chris: Right, it was that year and a half, two years before the bubble burst. There are a lot of people that were just doing nothing but internet advertising. And we had been there early on and created a high quality enough network there was a pretty easy sell. I mean, you look at the overhead cost of running five people in a sales mode based on commission in a 1,500 square foot office (inaudible)….there’s almost the exactly opposite. And you’re, then you, you throw the cost of your operation and your production environment was close to zero once you built the software as you can imagine.
Andrew: Ten percent got diluted in broadcast, right?
Chris: Correct.
Andrew: When it went public, what were your shares worth?
Chris: I really have never said this number in public. So I’d rather not really say but it was less than 1% of the company. Because at the time there was, you know, some of the biggest companies had bought shares. I had an opportunity to retain my 10% if I had brought third parties in to put the additional investment in but I never did. So it was slightly less than a percent.
Andrew: Slightly less than a percent. And so by the time it sold for 5.7 it seems like you ended up with roughly half a billion dollars. No, you ended up with 50 million dollars?
Chris: It’s a ballpark, that’s a reasonable ballpark.
Andrew: Okay, I won’t press any further than that, I think I’ve got a good sense of it. And one thing that we asked you is, Jeremy did before we started the interview is, what did you learn from all this. So let me ask you now with the audience watching. What’s some of the big lessons that you took away from this?
Chris: One of the biggest lessons I got from this is never give up. Basically, if you know in your heart that something is real, you make sure your overhead’s low, but never give up. And you will make it work, as long as you put yourself in the environment and really get in the ground floor of understanding what the business is by trying hard to sell it. So never give up, get your first customer, get your second customer.
Andrew: And you’ve had five years in the wilderness where no one really seemed to believe in you. Yes your father invested in the business, but he’s your father. But you couldn’t really make things happen, couldn’t get traction for five years, and you still kept up this never give up attitude.
Chris: Yeah, it was, even though (?) never became a profitable business during those five years I was seeing major changes happen. You know, from what the business was, initially it was going to be the satellite distribution system. And every quarter I’d meet with my father and my best friend who I ran the board, and the business plan would change so much they’d say, why are we even having these meetings? This is a different business then it was last time. And that’s the reality it was, just from having done all that research the business was changing because the ability to distribute the signal and the ways it could be done was getting much less expensive as I dug deeper in. And that’s sort of what I’m saying. If you can keep your overhead low enough to do R&D for an indefinite period of time, in some point in time if you’re still there you can make pretty great opportunity, or you can make an opportunity real.
Andrew: Boy, did you make an opportunity real. So, you said in the beginning of this interview and I wrote it down so we could come back to it later is that he, meaning Mark Cuban, promoted the story differently. Why were you written out of the story? It feels like the story is two guys want to listen to their favorite sports teams when they’re away from home, they come up with this idea, they build up a business, it sells for a few billion dollars, it changes everyone’s lives. What happened?
Chris: Basically I think Mark always just wanted to be the guy that was the founder. And so I mean there was a time. I remember coming in when I was going in for those two days a week to train people that require broadcast right, and I’d go, Mark why am I not named as founder on any of these documents that I’m seeing go out? He said you will not be considered a founder because you’re only working here two days a week. And basically it was his way of saying, I’m in control here, and this is the way it’s going to be. And at the time I really didn’t care that much about it because at the time the company really, who knows where it was really going to go. As I look back on it I probably would have pushed him a little bit further, saying, hey I am the founder whether you recognize that or not. Just because I was the one that came up with the idea and started it. But even as it went through the development process I was okay with him taking the mindshare of everybody’s attention because I was coming out really good on the back end and it’s really not like I was upside that slight, it really wasn’t a big issue to me.
Andrew: So actually I looked on Mark Cuban’s site for your name, couldn’t come up with it. I looked on Google for your name before 2000 and came up with basically one thing that seemed to be related. I looked on Wikipedia, and by the way this one thing I’ll tell you is actually really cool, I’ll mention it in a moment. But I looked on Wikipedia where a lot of this story was told but there are no references, virtually no references. At least, one of the references here to Market Watch which is a good source, is to a broke link. What happened to the story online?
Chris: Good question, I’ve never really pursued that. You know, you mean as far as just a Broadcast.com story?
Andrew: No, I mean your part in the Broadcast.com story. You have a pretty unique last name. I looked you up in relation to this and I don’t come up with much, why not?
Chris: At the time my ownership interest in Broadcast.com was as part of a company called Cameron Communications. So my shareholders and I were shareholders of Cameron Communication which it became purchased by Broadcast.com.
Andrew: I see. You’re saying it was such a small portion of this new story that you weren’t going to be brought out as a guy who owned 10% in news stories and you weren’t going to be a spokesperson.
Chris: You got it. It was just a company name, nobody really associated with much.
Andrew: So here’s what I saw. This is from a newsgroup from, boy I can’t see the date on this, ’94. To the world of networking, all caps, do you know any companies or individuals who are thinking about building a network that would provide consumers internet connection like the Well, Netcom, A&S or commercial computer services like CompuServe or America Online. Our company has developed a really kick ass premium service and we’re looking to partner an online services site. Remember when you could go to news groups and put messages like this out?
Chris: That is interesting. I do remember that kind of stuff going on. Basically, you know, I was just reaching out to anybody that had a network to figure out a way I get to grow the vision that we had. This is, probably before I even met Mark I would guess. What was the date on that?
Andrew: June 6, ’94.
Chris: Yeah, that would have been about three or four months before we even met. So I was just trying to, you know at the time I thought a great way to do it would be to work within the ISP network. To basically partner with one of the larger ISP’s and have them help us redistribute it.
Andrew: Unreal. Alright, let me do a quick plug. And then I want to ask you about what I brought up earlier. You have this new project that you’re working on that shows the way that you’re looking at the world and this vision, the next big vision that you have. I’m looking down at my notes here. I’ll just really quickly say to the audience that everything that we do here on Mixergy is actually really, it’s supported by Mixergypremium.com members. What Mixergypremium.com is it’s a program where proven entrepreneurs come and teach what they do best. Whether it’s now to get traffic or how to stay productive or how to turn that traffic into sales, it’s proven entrepreneurs who teach it. And the upshot of that is that we don’t have to serve two masters. We’re not here to give, to create eyeballs for advertisers. We can create quality interviews where we can actually spend an hour talking to an entrepreneur and not try to dress up the story and not try to make it more exciting then it really is just to create drama so that we can get more eyeballs.
Basically what I’m trying to say is, guys, if you’re Mixergy Premium members, thank you for doing it. You’re what pays for everything from the editing to the pre-interview process to the research that we do here. And I appreciate all the support. And if you’re not a Mixergy Premium member I hope you go to Mixerypremium.com and sign up so you can help keep this thing going. And also so that you can learn for yourself directly from proven entrepreneurs who teaches courses there. And of course it’s me here, Andrew, which means that you’re guaranteed that it’s going to work, 100% of your money back, but I believe you’ll be one of the thousands of people who are proud and happy to be members of Mixergypremium.com. Go sign up right now.
Chris, by the way as a guy who sells, give me some critique. What do you think of the way that I just pitched Mixergy Premium?
Chris: Well, I think it’s a great way to get people aware of what’s going on. Basically, I think the idea of just giving people access to this kind of information, it’s motivational. You know, there’s a number of times that I’ve given talks to small groups and it’s really interesting how when you look at someone who’s never been an entrepreneur before, that’s just thinking about a new idea of some sort, it’s sometimes the littlest of things to get people over the hump of saying, no that’s not an idea anymore, I’m actually going to go do this thing. So I love what you guys are up to.
Andrew: Thank you. The new business. Is it a business actually? Is Common Ground Kauai a for-profit business?
Chris: Yes. It started in 2007, really became more operational over the last couple of years, but yes.
Andrew: What is the vision behind it?
Chris: You know basically when I moved to Kauai it’s the most, one of the greenest, most non-polluted and clean parts of the world. You know the oceans are clean, the land here is beautiful and it hasn’t been really affected by modern development pretty much. So one of the things that really came up for me was, yeah, my kids were playing out in the yard one day and the gardeners had been spraying pesticides on the land. And my wife said, what are we doing? We shouldn’t be having the kids out there in that toxic environment, and it really never occurred to me. And then about three months later the guy next door he had found out he had lung cancer. And a lot of what was in his lungs was pesticides that he had been spraying and basically breathing on his property next door. And it sort of made me think about sustainability and really the food issues, you know, just the environment and all the things that come with it.
My background was more tech so it was really hard for me to give these thoughts much light. But as I started thinking more about it and started understanding the issues more it really started painting this picture of sort of for me what was sustainability (?) in relation to this path Western culture as bond. When you look at the path we’re on from an economic perspective, from an environmental perspective, from the food side, from the drug side, go right down the list. We’re doing things that are simply not sustainable in the long run. Maybe not in our generation but probably not in the next generation. And so it really made me think, what are the solutions, what are the answers. How can, this is a really large scale issue but how can it be addressed in a way that people can begin to feel in a real way today.
After sort of doing a lot of research and just thinking about it and going to a lot of seminars and conventions and stuff, what came to me was create an environment that’s a good model and start with the food system. Because fundamentally if you create a great food system it can be the core development opportunity for what I’m calling a next generation truly healthy sustainable community. And what do I mean by that? Because in some way we think all of our communities are sustainable in some way today. But they haven’t created this path that guarantees their future because they’re so depend on foreign oil, they’re so dependent on outside food sources, and they’re just dependent on money from the outside to survive.
And so what I envision is, if you had a really high quality local food system that was creating green jobs, that was supporting basically a range of food products that were ultimately super healthy. So now you’ve gotten rid of all the toxins in your food system, number one, you’ve got rid of the toxins in your soil. You’ve probably eliminated major disease, number one you know the top killer in the United States which right now is heart disease. And then obesity, go right down the list. Bottom line….
Andrew: Is this food that you’re selling or is it a resort? It is a combination of both?
Chris: Basically, it’s using the food story to build a community. So fundamentally what you can do there today is eat a healthy organic meal and go to a market that will have products that are related to the kinds of things that can be manufactured and created locally.
Andrew: But only if I’m in Kauai can I eat this food and have this experience.
Chris: It’s in Kilauea, Kauai, it’s on the North shore. It’s like if you come to this part of the world you will see it and find it pretty easily.
Andrew: What about this, first of all you guys have a beautiful website which, it kills me when I talk to internet entrepreneurs who are on their passion project and the website doesn’t do justice. The website is beautiful. It makes me want to actually fly out there right now. I think if people saw it they would understand what I’m talking about. But, I see here that there’s a day trip too, is it… Let me see, parties, unforgettable locations for a special day, for a wedding day… Here the part that I’m curious about, “escape and relax at your next private event”, so you allow private events on the grounds?
Chris: Yes, we’ve got 50 arcs of land that used to be a [??] plantation that we’ve sort of made this park like environment from that makes it so you can see a beautiful organic garden, walk through it, but you can also have events of all kinds, whether it is a wedding, a smaller event, or something larger. For example, last week we had 200 people in front of an outdoor stage with a band playing. The ideal is really to tell the story, not so much around events per say, but to use this venue as a way to get the message out about these ideas.
Andrew: I see, okay, all right. And, if someone in the audience comes out for a tour, which you’ve got them on Tuesdays through Sundays at 10am, can they see you, can they come over and shake your hand and on a more business level, be inspired by you directly?
Chris: I do talk to people who want to come up and learn more about this. Yeah, that’s fundamental what this is, to create model that other people can connect with, so I would be glad to talk to others who are interested.
Andrew: All right and of course we are going to connect people to the site right from within this interview, but I’ll get the URL, it’s cgkauai.net, right?
Chris: Right, got it.
Andrew: All right. Thank you so much for doing this interview and I hope people whether they can come out and see you in person or maybe even find you online, you’re on Twitter, I know that I’ve been following you on Twitter, just Chris Jaeb, I hope they find Twitter, in person, or some other way to say what I’m about to say, which is thank you for doing this interview.
Chris: Thank you. I appreciate it. Thanks for setting it up. It’s been a joy.
Andrew: Thanks, Chris. Thank you all for being a part of it. Bye.
