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Here’s the program.
Hey, everyone! It’s Andrew Warner, founder of Mixergy.com, home of the ambitious upstart. I’ve got with me today someone who I’m meeting for the first time. I didn’t get to do a lot of research on him but I’m really grateful to Constantine Roussos for being here on Mixergy. We were going to schedule an interview for some point in the future, today’s guest wasn’t able to make it, and you jumped in. Thank you to Moses for introducing me to you and to my producer, at the last minute, found a way to get you on here, to Jang. Thank you, Jang, for being such an incredible producer.
What is this interview about? This is an interview with the guy who co-founded 123Refills, produced millions of dollars in revenue, and he’ll tell you why, here, he can give us a specific number about how successful the business is. We’ll going to find out about the refill business and some of the politics behind it. He went on to bid $616,000 for Music.mobi, and we’ll find out what happened in that bidding process and what happened to that business.
Today, he runs a series of websites, we’ll going to find out, actually, a little bit more about it, and I can’t really get enough information in the pre-interview. We’ll going to get more details here, I think, in the interview. We’re going to find out about some of his businesses including how he sold sheepskin boots and brought in a quarter million dollars a month as an affiliate of Zappos, find out about that. He also told us that he has half a million followers in various Twitter accounts and we’re going to find some secrets of Twitter through him.
Such a big agenda here, Constantine. I might have to pare it down as we do this interview and I’m definitely going to have to keep us both focused here to make sure that we get as much value as possible. Let’s start off with this. Before I find out about how you got into the ink refill business, and the politics even, let’s let people understand what the business is. What does it mean? I know I go into a store and I buy ink, that’s not the refill business, what is the refill business?
Interviewee: The refill business is pretty much saving you on cartridge costs. When you go buy a printer, usually most inkjet printers, the business model behind the printer companies is to sell you the printer for cheap and then make money on the cartridge. So, the printers are pretty much the lost leader. So the opportunity was refilling the cartridges and saving consumers up to 80%, plus it’s clean and it’s recycling. So, there’s a good cause attached to it as well.
Andrew: I asked you before the interview to give me specific revenue numbers here in this interview. My audience loves me when I get them real revenue numbers, and you said, ‘Andrew, I can’t,’ because?
Interviewee: Dimitris Constantinou, the founder, is going to kick my butt if I give the numbers. There’s a lot of politics involved in the printing business from the big printer companies – HP, Canon, Lexmark, Epson. Well, basically, they don’t want refills to happen because they want people to buy cartridges, that’s where they make their money. So, they always want to protect their patents or trademarks and they’re always fighting anyone that does a compatible cartridge. So, there’s always the concerns that they might go out and go against whatever we’re doing. Obviously, they want people to know that their cartridges are the best and they want to probably say that refills don’t give the best quality.
minute 5 to minute 10
Interviewee: Öthey want to probably say that refills don’t give the best quality. Whereas, we can show that it’s about 90% the same, and it really saves you a lot of money.
Andrew: I’ve really filled in cartridges, I can’t tell the difference between a refilled-in cartridge and the original except, sometimes a little bit of work to refill them. But it’s always easier because I’ve got the ink right there, all I do is just refill the ink cartridge with a squirt gun and I’m good. Right?
Interviewee: Yes. The other opportunity that Dimitris saw as well was to create stores where you can actually walk in and give your cartridges. Let’s say you don’t want to refill them or you feel uncomfortable, you just give them and we refill them for you. So, that was a good addition and value added to consumers. They don’t only have to buy online, they could also walk in the store, and it’s in eight countries, which is pretty awesome.
Andrew: Let me give people a little bit of background here. First of all, that question that I asked you before the interview and in this interview of what’s the revenue, that is the single most controversial question that I ask. My audience loves it, some of my guest loved to talk about it, but I also get some flack from my audience in the comments for asking that question and from guest. One or two of them, afterwards, have said, ‘Andrew, that’s not an appropriate question for me to answer in public.’
But, with this show here, this interaction that you and I have, if before the interview, I hear that you don’t want to say it, I’m kind of hear the bull you like Mike Wallace into revealing something about your business that you’re not happy with. If on the interview you say, ‘Andrew, I’m not happy to answer that question,’ a complete gentleman, I step aside and I’m not here to push you there either. So, I want to make it comfortable for entrepreneurs to tell their story, that’s the first thing I got to say.
Interviewee: [xx] I’ll give you the numbers for the other stuff that I do where I’m directly responsible.
Andrew: I got some of them right here and I’m going to hold you accountable to that. We want to give our audience real numbers. I’ll say it really quickly, the people who see this random crooked background behind me, it’s because we are now on day 5 of this light over here being broken. I think I figured out how to say, with the help of my audience, in Spanish how to fix that light bulb. I’m here in Buenos Aires, we’ll find out later today if I said it right and if my audience misguided me or not.
All right, let’s get into it then. Actually, let’s get into 123Refills. How did you and your partner, your co-founder, meet? What’s your relationship to him?
Interviewee: It’s funny that you ask that. I met him on the first day, I was an international student and I went to USC. They said, ‘Okay, who’s from Greece? Who’s from Cyprus, South Africa?’ Then, we were like the only Greek people there, so we bonded on the first day. He went into pre-Med, so he’s a Med student. Really, one of the smartest guys I’ve ever met, he finished pre-Med with nearly a 4.0 at USC. He got 1A minus in the whole of the four years. We hit it really well and he thought of the idea and he brought some samples from Taiwan. He asked me to help him on the computer and the Internet side, which I was pretty good at. Then I saw the opportunity, and I was like, ‘Let’s get on this together.’
Andrew: Give us examples of ink cartridges from Taiwan.
Interviewee: No, ink refills from Taiwan.
Andrew: Those little squirt gun things. He brings them back and he says, ‘How can we make a business out of this?’
Interviewee: He put them on the Internet. It was pretty awesome, I think we used GoTo or Overture back then. He put them on there and all the samples, we sold all of them. Actually, he sold all of them, and I was like, ‘Well, this is really cool. Maybe there’s a nice business here.’ I go, ‘Okay, let’s create a package,’ so we created our own kits. Eventually, we moved out of Asia; of course, we got ripped off over there. We’ve never met the distributor over there, so in the end, we decided, ‘Let’s do everything in the US so we know who we’re dealing with.’ We don’t have to fly to Asia and find someone that didn’t do a good job. So, we created our own kit called Uni-Kit, we called it Uni-Kit.
Andrew: Let me stop you there. I’ve got to dig in to the details because there’s already a lot. You write down Uni-Kit here so I can come back to Uni-Kit. When he had the original refills, where did he get them? Was this on a trip he took or did he source them online?
Interviewee: He found them and ordered a sample, and it was shipped from Asia, and it was in a box. It was fascinating to see how the Internet worked with pay per clicks. You just put a keyword in there and people would buy it, I thought it was fascinating.
Andrew: How much money were you, guys, paying at the time for a click?
Interviewee: It was heaven, it was like 10 cents. It was 10 cents per click.
Interviewee: It was 10 cents a plate.
Andrew: And what was your margin on that? What was your margin on a sale?
Interviewee: It was really good. It was really good, like we were…
Andrew: It was over ten bucks?
Interviewee: Yeah, it was right about there. Just I mean we would sell the product between the black was like ten dollars, and the color was fifteen. Black and color together was about eighteen. So we made a pretty good margin on there because the marketing was lower. But the problem began when competitors flooded the market. The Chinese flooded the market with cheaper products. The pay per clicks would become more and more expensive. From ten cents, it went up to a dollar to a dollar fifty. The big companies would bid in, so they would not let us compete. So, since I was the computer guy, I had to figure out a way to get rank in the search results. So…
Andrew: OK, let’s wait. I still have to go back to the early days.
Andrew: What was the platform that you guys hosted these ink cartridges on in the early days? What was the website built on?
Interviewee: We used [Laughs], it wasn’t the best website. We called it InkRefillsRUs, and then we changed the name, because we were like, “OK, in the U.S., they have trademark law. And RUs, we can get sued for it. Also, I saw a guy at USC who had JacketsRUs, and he said he had problems with ToysRUs. Sounds like OK, I guess it’s kind of a similar name, the RUs, so let’s change the name. So went through a million names, and we thought, “Uni Kit, yeah, that’s great for the kit. And 123Refills is pretty awesome.”
Andrew: Why 123Refills?
Interviewee: Why that name?
Interviewee: Because it’s easy as 1-2-3. So that was…
Andrew: Was it that to rank higher in Yahoo’s directory because they sorted by alphabetical order?
Interviewee: Yeah, because the biggest obstacle to refilling was actually the process. So the key to the refilling is the manual. So basically, each cartridge is different, and it’s refilled differently. So the Bible of refilling is knowing the cartridge and how to refill it. So we always would say, “As simple as 1-2-3. Create the hole. Put the ink in the syringe, inject, and then seal, and that’s it. What three steps? As easy as 1-2-3. So it came up, “Oh, 123Refills.com. That sounds pretty good to explain everything.” But you’re right. I mean the Yahoo directory. I mean, yeah, we didn’t really think about that, to be honest with you. We kind of thought about it, but then we were like “It has to make sense with what we’re doing”.
Andrew: When you built the website, was it just basic HTML?
Interviewee: It was basic HTML, and I was the programmer. Yeah. [Laughs]
Andrew: How did you process credit cards and take in orders? What did you use for that?
Interviewee: OK. Then we moved into Yahoo, and we used PaymentTech. So we had a Yahoo Store. So that worked really well, actually. It was a bit hard in the beginning to integrate it because it was really, really complicated to integrate a Yahoo Store. But they had a lot of statistics in there. You could see trails where people would go in the shopping cart and leave. So Yahoo was where it started. And PaymentTech was the payment processing company.
Andrew: What was the…
Interviewee: But we nearly lost that. We nearly lost that. Just a little tip that I would give.
Interviewee: We tried to be, “Hey, we’re going to be international”. So we allowed processing in every single country. So our fraud rates went up. Like all these people would order, and cut like Nigeria. And what the hell do we know? It’s an order, right? So PaymentTech calls us up, and they’re like “We’re going to take away your processing, because your charge-back is really, really bad. So Dmitri was like “OK, we need to think about this. Let’s just remove these weird countries that have a high expectancy of fraud. And let’s deal with U.S.A., Canada, you know, the countries that have a lesser amount of fraud. And it worked out. That was a good strategy in hindsight. And yeah, it’s interesting because you always want to sell to everyone. But in the end, the sort of things that you’re like OK, you can’t do business if you include everyone because the payment processing company’s going to shut you off, you know, because of too many charge-backs.
Andrew: OK. Sorry, I’m making sure that the video’s caught up there. It is. OK. So basic HTML, Yahoo Store. Got your payment information. What year was this?
Interviewee: This was like 2003-2004.
Interviewee: This was like 2003-2004.
Interviewee: From what I remember.
Andrew: Alright, and even 2003-2004 there wasn’t a lot of competition in the ink refill business?
Interviewee: No, not that much, there was someone called Collins that had the trademark for universal. He coined the term universal for ink refills. Who is, it is who we partnered with because he had a really good manual and the manual is really important, and we licensed it through our product. But yeah the ink refill business was not as big as it is now. And then you know you have the other competitors like Cartridge World. There’s a few of them, but the printing industry is huge. There’s…
Andrew: Okay. Let’s talk about now how you guys, how it went from being his business to being both of your business. At what point did you guys decide, you know we’re going to partner up Constantine is going to take on a piece of this business and do some work.
Interviewee: Okay. Well we basically said, there had to be some kind of investment right because in the beginning we had samples. I thought it was great. I saw the opportunity. Dimitri is one of the smartest guys that I have met. He still is. Very hard working. He even got his MED, he is a doctor, and he just took the degree and put it in a safe. He’s like, being a doctor is not for me I’m a business guy, you know. So that’s why I always call him doctor ink. So, choosing the partnership was really really important because you have to always choose someone who complements your skills. So it, soon we figured out what the strengths are for me and him and we divided it up and then invested the money. And in regards to team building it’s always matching skill sets, who’s better at what. As opposed to trying to improve on other skill sets that you are weak at. It’s finding the right team.
Andrew: What was yours and what was his?
Interviewee: Okay. My skill sets were more on the computer side, more on the creative side. I’m always fascinated by technology and search engines. Like the whole Google thing was fascinating, Yahoo. He was more of a process guy, putting the deals together and talking to suppliers and distributors and support. And see I was not the best at support. Like, people would ask me questions and I would like lose my patience because I wasn’t that good at support. So he was like, let me handle support and you do these other things. So I would do the shipping. I started with the shipping as well shipping & handling, search engine optimization, website, that was my stuff and the other stuff was pretty much him. And I remember I would drive, I would drive to the post office. It was back then when things were not automated. I had like eighty packages to ship. People would hate me because I would be in front of the line and they would have to wait for ages to, for all my stuff to get processed. But after everything became automated and life was so much easier we expanded. We got bigger warehouses, bigger and bigger warehouses. And then it worked out pretty well.
Andrew: Okay. How much money did you guys put into the business?
Interviewee: Alright it’s. Alright it was in the mid five figures.
Andrew: Okay so…
Interviewee: And I’m giving you some good numbers.
Andrew: Thank you. Give or take fifty thousand dollars, each or total?
Interviewee: That was total. And to tell you, we lost half of it. Like I said, the order was placed in Asia and we lost half of it because only half the products were shipped and the manual was not in there. So instead of us just giving up we were like, let’s pretend that we paid twice as much for it and let’s figure out a way to do the, figure out the manual. And that is where we went into the licensing and all this other stuff. So never give up you’ve gotta be consistent and be passionate about what you are doing. And if you do have a set back you just have to figure out a better way to do things. And we thought doing it in the United States of America would be better because they’ve got a strong legal system and you can go after people. And we couldn’t locate this person we still haven’t found him. So, so yeah, so putting the money, yeah we lost half of it, half of it was gone.
Andrew: Where did the money come from?
Interviewee: It came from my pocket.
Andrew: Your, your where?
Andrew: Your where? Your father?
Interviewee: No, my pocket. My pocket. Yeah.
Andrew: Oh, your pocket. Your personal money.
Interviewee: Yeah, personal money.
Andrew: You were a young guy. How did you get personal money back then?
Interviewee: All right. Well, I was in the military, and I’m from Cyprus. Right? So I was in the military. I was a Green Beret. I was in the Commando Special Forces. It’s mandatory to be in the military in Cyprus. It’s two and a half years. And they kind of pay you and stuff. So I was an officer in there for two and a half years. Made some money there, also did the family business in Cyprus is real estate. So we did development and land development, villas and all this other stuff. So that is where my fascination with virtual real estate came in. Because traditionally, our business was property and actual physical real estate. So then I went into the whole virtual thing, virtual domains, and the stuff that I’m doing now. So that’s kind of a bit of a background for us.
Andrew: All right, we’ll come back to that. All right.
Andrew: You found an overseas supplier. You sent the money. They only gave you half of what they were supposed to. You sent the money first. Then they gave you only half of what they were supposed to, and none of the manuals. You came up with a good attitude for it. You went out there and you sold it. You decided to find people in the U.S. to be your suppliers. You said the Uni Kit was a major step. What was the Uni Kit?
Interviewee: Yeah. OK, so the first kit we got from Taiwan was just a simple kit. And then we thought, “Hey, we need to brand ourselves and create a brand”. And people always think about brand is always a lot of money to create a brand. Not really. You can create a brand yourself. You can be the brand, or you can create the brand. So we thought a lot, and we thought, “We’re going to think of a good name that reflects the brand”. The guy that had the trademark which was Carmen, which was the guy that we partnered with, which was the biggest guy selling ink refills, his kit was called a Universal Kit. So we were like, “OK, let’s call it Uni Kit, so we don’t get sued”. [Laughs] So we thought Uni Kit would be awesome. I designed, talk about bootstrapping, I designed the first kit on PhotoShop. I didn’t use Illustrator. The pictures were out of focus. It was just the worst design ever. And we put it out on the market, even though the actual box sucked because my PhotoShop skills were not that great. And we didn’t know that you should use Illustrator to do text. Anyway, we made some more money, and then we hired a specialist to do the box. And we actually still use the same logo for the Uni Kit today. If you go to the website, there’s that big circle with all the colors. The guy did an awesome job. Obviously I was not as good as he was, which goes back to the point, always hire people that are better than you in certain sections of business. And you can’t do everything yourself.
Andrew: Your website was called 123Refills.com at the time, right?
Interviewee: We had InkRefills.net. It was Ink-Refills.net. And I guess I had a passion for domain names with key words because from my experimentation, I figured out those ranked higher in the search results. If you get a lot of links linking to you they would naturally link to you as that key word. And also, it would actually give people an idea, even without visiting it, what your website was about. So again, we needed to create the brand, and we needed to create the sales. And so the brand versus sales was kind of like we had to balance it out. So that explains why we had like 20 websites for refills and cartridges, each targetting a specific demographic.
Andrew: Can you give me an example of one of the demographics and the website that went along with it?
Interviewee: OK. So in the industry, there are laser toner refills. Right? And then there are ink jet refills, which is ink. They’re two different products. So for a website, you can only put, from the research that I did, 12 key words in the title. So you would put the main companies: Epson, HP, Canon, Lexmark. Laser toner refill kits. Right? That’s the keyword. That’s the one site. The other one would be Ink Jet Refill Kits. The other one would be Ink-Jet Refill Kit, without the “s”. So we would do a super combination because the beauty of SCO, that I figured out quickly, is the combinations. It’s all in the long-tail. So you take Epson. You get all their cartridge numbers. You do all the cartridge numbers, then the key word next to it. Then change the key word around. Let’s say Canon BJ752 Ink Refill, or Ink Jet Refill, or Ink Jet Refills.
Interviewee: And you put all these combinations in, and you come up with hundreds of thousands of key words. And that’s where we sold the opportunity was in these little key words, where a few people visited a day, if you multiply that by a lot of people, then the volume is huge, as opposed to going to target the key word like “cartridge”. I mean come on. It’s like targetting the key word “music”. You know, it’s kind of tough, even though I was on the top page for “music” on Google, which was awesome.
Andrew: And you owned a domain name for each one of those combinations that you just described?
Interviewee: Yeah. We had Toner-Refill.us, InkRefills.net, Refills.us. And then we would go, and I was like, “Let’s do sub-domains”. So we had Refills.us, and I started doing sub-domains. So it was Canon.refills, HP.refills, InkJet.refills. So we went through every single combination. So back then, Google and the search results would treat sub-domains as different websites. A lot of things have changed with Google and their algorithm, like they used to rank commercial websites higher before. And then they decided to introduce AdWords, and they put extra emphasis on websites with information, like Wikipedia. And they would force advertisers to pay per click to go on the sites. So that’s where the whole link popularity became more and more prevalent because most people would not link to a commercial website, linking to products. But they would link to Wikipedia and informational websites. So we had to adjust to that, too. But if it’s something really, really specific, then Wikipedia wouldn’t have an entry, like for a specific cartridge number inkjet refill kit. You know they’re not going to have a Wikipedia entry for that. [Laughs] So that’s where you have to figure out the opportunity in everything. And there always is opportunity. You just have to dig deep inside and find it.
Andrew: OK. So now you’re mastering, and you’re loving, I could see just from the expression on your face as you’re talking about this. You’re mastering and enjoying how to get traffic online…
Andrew: from Google and other sources, I imagining, too. Why then open up stores? I know you have stores now in eight countries. Why go to stores?
Interviewee: Because there is a value for people to walk in. A lot of people see this as a tedious exercise to refill. They don’t want to get their fingers full of ink. And a lot of people want to see that it actually works. And also, there’s a value to sell accessories to cartridges, like paper, glossy paper. And that’s what we included in the stores. And then we started adding cartridges, believe it or not. We expanded, and we added other products, like MP3 watches, and cool products. And we started giving give-aways, cool give-aways, like laser pointers. People love laser pointers. So we decided if you can bundle like a refill kit with something else, you would get a free laser pointer. And people would like go insane for laser pointers. I don’t know if it’s their cats chasing the laser pointers, or their dogs, and they like laser pointers that much, but it was a good promotion. So, you know, promotions were very important, as well as the email list. The email list is probably the most valuable asset that have. I love the…
Andrew: How did you build an email list?
Interviewee: Through the customers. And we would do blasts once or twice a month. And I realized the importance of the email list when I started making a lot of money selling shoes, the AB Boots. What I would do is I was a strict affiliate. All I would do is get high on the search results on a really hot item. And all I would do is re-direct traffic to Zappos or all the other stores. The problem is, I never collected emails, and you know, all the buyers, the seller would get all the emails. So you don’t know who’s going there. And that was a problem. And once you lose the search results, unfortunately it’s not forever, and you’re guaranteed. And Google changes stuff, and the industry changes. Then all that you’re left is with emails. And if you don’t have any emails, you’re like OK. That was a big mistake that I did when I was doing the affiliate stuff, and I lost a huge opportunity to collect a lot of emails when I was generating a quarter of a million dollars a month selling these hot shoes.
Interviewee: …when I was generating a quarter of a million dollars a month selling these hot shoes, you know. For shoes…
Andrew: Was the refill business, you were collecting email addresses from everybody who bought, but only from buyers, right?
Interviewee: Yes, and buyers and people that wanted to know more about it. We had a newsletter.
Andrew: How big did the list get?
Interviewee: Tens of thousands, like it probably in the, I’m guessing right now, in the six figures, I’m guessing, the email list, all buyers.
Andrew: And they’re all buyers, buyers or people who have expressed interest in buying.
Interviewee: All, yes. Most of them are buyers. And a lot of the business is from return buyers. And again, I can’t stress it more, the emails are like the Holy Grail. So, same for musicians, and every other business out there, you need an email of interested people. And they have to be opt-in.
Andrew: OK. The first store. How did you guys open that? You don’t have any experience opening stores.
Andrew: You’re partnering up with a guy who is a 4.0 medical student, who you corrupted and brought into business. But neither one of you has experience in stores. How did you do it?
Interviewee: I think he corrupted himself. [Laughs]
Interviewee: I think when someone has a passion, you know when you’re going to college, a lot of people don’t know what they’re going to do. You kind of figure out along the way. And if you see something cool’s happening, you’re like, “OK, I like it”. And you get passionate about it. And you’re like, “Ah, med school, eh”. That’s how I saw Demitri. I saw him as, you know, he was really passionate about inks. Believe it or not, he can get passionate about ink! So the store, it just became too big to handle. Good news. And we had to have a bigger warehouse. Hence, hey, why not, since we have a warehouse, why not create the store? So that’s where it started. So we got one in downtown L.A., where all the businesses are of the high-rises. And we got foot traffic, so it was interesting. And there were also strategies that were implemented. So our competitor was Cartridge World. It’s the big competitor. Where would you open up a store? Probably next door to them, right? It’s like Guitar Center and Sam Ask. If you go here in Los Angeles, up on Sunset, they’ve got stores opposite each other. Because when one goes to one, they’ll go across to see what the other guys have. So you’re basically [Laughs] taking their traffic, too. So we just thought of a few opportunities here and there. But the first store became really organic because again, everything was online. The warehouses were getting bigger and bigger. We automated the way of shipping things, so you know, we could print the labels. So it just made sense to connect the warehouse with a physical store. So that’s what happened.
Andrew: Was the physical store your warehouse?
Interviewee: Huh, yes.
Andrew: Oh, OK, so you said,
Andrew: “If we have a warehouse anyway, let’s also have a front-face to the public. And let them come and buy from our warehouse.”
Interviewee: Yes. And we said, “OK, let’s have a warehouse, but have a warehouse where people can pass by and go in the store. So Demitri found a place in Downtown, which was big enough to cater as a warehouse, and also a way for a person to come in. So basically the front of the store is not that big, like all the action happens in the back, which is the warehouse. So people would walk in, they would give their cartridges. And they would say, “Hey, refill this” or “I’m looking for this”, and we would go in the back and give it to them. So that’s how the stores worked out. It worked out pretty good, actually. So it was a good decision.
Andrew: What percentage of the business comes from the store, versus the web?
Interviewee: In the beginning, obviously it was mostly from the online. As soon as we got more traction, and foot traffic, and promotions, we got businesses involved that would bring in their cartridges to be refilled. So at that moment, it became more exciting. And we got more people in the stores. To give you an exact number, it’s safe to say that, from zero, it went up considerably. And the foot traffic was good enough. And the business traffic from companies that wanted to do bulk refilling…
Interviewee: And the business traffic from companies that wanted to do bulk refilling was good to offset what I may say, help with the online sales to create a value-added, because in the end, it’s value-added. You can do both, but obviously some countries don’t have the store, and that’s the thing. You got to just choose the locations where it makes sense. And obviously, the other issue is, are those people running the stores in the other countries, are they reflecting your brand? That’s always a concern.
Andrew: Let’s talk about those stores in the other countries. You sent me, I think it was ads for 1-2-3 refills in different countries. I think I saw one in Greek. All those stores aren’t owned by the company. They’re franchises. How did you guys get into franchising your store?
Interviewee: All right, it’s a funny story. I’m not sure Demitri’s would like me to talk about it, but I think it’s funny. So, me and Demitri were trying to expand the company. So we thought ‘hey, we’re Greek. Let’s cater the Greek crowd in Los Angeles’. So, hey, where would you go? Let’s go to a Greek church, they had a big Greek event, it was like LA Festival. Thousands and thousands of people would go to this festival. So, we got a booth. So, Demitri’s dad came to visit us in Los Angeles, and he saw how we’re operating stuff, and remember, we’re in school. Two entrepreneurs working this company in school. And he’s like ‘you guys are not effective, what is this business?’ And you have to understand that my family and his family wants us to move back to our countries, right? Where, he wants to go back to Cyprus, Greece, and it was interesting. Even though his dad was not very happy with the way we operated, I think he saw the opportunity as well. It’s like I say, when I saw the opportunity, I was like ‘wow, this could be interesting’. And I think he saw that in the way that we’re operating things in that could be more efficient. So, what happened is he went back to Greece and then opened up the second store. I thought ‘hey, wasn’t your dad against this whole refill thing? And he thought it was non-effective?’ If you’re in school, and you’re a full time student, you can’t be the most effective. It was really interesting to see it, and then Demitri’s brother came in the business, and I’m from Cyprus. And he’s got family in Cyprus, so it made sense to open the next store in Cyprus. So, little steps, but they all kind of made sense.
Andrew: When his father opened up the store, did he do it without your permission? Did he just go out there and open up a store and call it 1-2-3 Refills and do the same?
Interviewee: No, no, no. I mean, it’s his dad, right? There’s always permission, it’s his family. There is a connection between Greece and the US. So, yeah, it’s connected, it’s the same brand.
Andrew: OK, and how did you go beyond the family to open up other stores? Because you guys are franchising the stores, right? It’s not all owned…
Interviewee: Yes, yes, yes. Franchising. Again, with the, we looked at competition, Demitri thought that Cartridge World could be hit, because they have a franchise and using the same kind of model. So, that is the model we kind of followed. You take a successful model and you try to make it better. So, through innovation and offering a better service and product.
Andrew: So, you do what a lot of businesses do. You say ‘if it’s working for them, we should give it a shot, maybe it will work for us’, and you jumped into franchising because of that.
Interviewee: Yeah, it’s always about opportunity recognition and finding the gaps that your competitor has and find a better way to do it and offer a better product. So, we thought we had a distinct advantage, and even though they were bigger, we thought our service was better, and the product is better. And we did have the actual refill kit that people can buy. It wasn’t just a store where you can go in and refill, because Cartridge World is mostly you go in and refill it. They didn’t have a brand and an actual kit. So, the kit was a differentiating factor.
Andrew: When someone approaches you about opening up a new franchise, …
Andrew: Öa new franchise and asks how much can they expect to make from a single store? What do you tell them?
Interviewee: Email [Dimichis] and ask him.
Interviewee: That’s what I would do.
Andrew: But that’s not, that’s not public information that’s part of your franchise material?
Interviewee: Yeah, yeah.
Andrew: It is? Or it’s not?
Interviewee: So, it anyone’s interested, they can message me, and I get them, to speak with [Dimichis]. You know, he’s the guy.
Andrew: You still own part of the business. What part of the business do you own now?
Interviewee: I’m still, I’m still in the business, soÖ obviously advising the business and, I’ve basically, again, we talk about passions, and doing what you like. I remember I launched, I won top business plan at USC, and I launched this music… social networking site in 2002 called [On Side] Performer. I thought it was gonna to work, it was a failure. Again my passion was in music, it wasn’t in ink. It was not in ink. So, so again I was like, you get to a point as an entrepreneur were you work for years and years, you build it and you’re like, ‘okay, I got to do what I’m passionate about’ and, and even though you failed before and you launched a business, that, that, was, even though you won top business plan doesn’t mean you’ll be successful. I failed in the sense of, recognizing behavioral patterns of people using social networks in 2002 when I launched it. So I, so I just moved towards my passions which is music andÖ
Andrew: Let’s focus, let’s move on to this, but before we move on to that, one last question about 123 refills. What portion of the business did you own? Can you say that?
Interviewee: I can’t disclose any percentage numbers, yet. But I am involved in the business.
Andrew: Okay, alright. So let’s, let’s leave it there, and now let’s move onto the next, the next big thing, happened while you were still involved with 123 refills and that’s this competition. You had an idea for a social network around music, this was I think, what year was this?
Interviewee: Okay, soÖ I remember clearly, I was, this was 2000. I was at USC at the entrepreneur program, and they asked us to do a business plan. I presented it to, one of the professors there, andÖ he looked at me and he said, ‘this isn’t your passion, go back and rewrite a business plan that your passionate about. Something you would otherwise do for free.’ So I was like ‘okay, it’s music’, so I thought of thisÖ business of connecting musicians, fans, in a social networking creating a marketplace. So I won top business plan at USCÖ IÖ hired a guy that became another partner in the ink business. This guy was a PhD at UCLA, a computer programmer. This guy was a, genius. He did work for, for the military of the US. Anyways so he helped me build this site, it was called On Side Performer. We launched it. I put it out there. It was a flop. Like people, I would ask people to create profiles and girls to put their pictures up. It was 2002 their like, ‘why would I put my pictures on the internet, it’s such a bad idea to put my picture on the internet, I’m a girl. What are you thinking?’ So I would have these problems and behavioral patterns and people connecting and it was a flop. I was like, ‘oh my God.’ I thought I was the greatest, winning the top business plan, you know. You know, sometimes you have to realize, sometimes the time is bad, or more importantly, you just, didn’t do your homework to know what the reality is with behaviors. So I put it in the back, you know, I was like, kind of sad that I failed, like you know, every failure, you know, youÖyou have to recognize your mistakes, so that’s why I moved on, did the ink refills stuff, started ranking stuff and I was like seeing Friendster, MySpace, and Facebook, do what they’re doing, and I was, I’d be getting really excited about it cuz ‘hey these guys were actually doing it when I didn’t’. It was awesome to see how those guys did it. And then I started putting together domains, and creating this portfolio of domains.
And creating, theÖ this dot music thing which, which, I’m planning to launch, next year, pending I can. It’s, it’s really toughÖ
Andrew: Let’s hold off on that. Let’s talk, let’s talk for now about the domains that you owned before that. Now we’llÖ
Andrew: Ö get into what a top level domain is and why you’re so passionate and how many years you spent on that and whatÖ
Andrew: Ö that dot music means on your t-shirt too. But the domains that you were buying were for what? You were starting to learn how to rank high. You were starting to learn how to get traffic over to refills, and you decided to use that knowledge, to buy domains and do what? What was the business there?
Interviewee: Okay, soÖso the business was, ‘hey, I want to getÖ’
End of transcription.
Interviewee:…was hey, I wanna get keyword domains and rank them online. And the search results… And do a deal, an affiliate deal, through either commission junction, or some affiliate program, and then push traffic and make money with zero inventory. That was the goal.
And then, we spoke about the emails. I depended too much on google. Google and Yahoo, and search engines-it was stressful. Hey, I’m number one! Hey, I’m number 10… you’d be amazed the difference between clicks between a number one and a number 10.
And then you’d be surprised if you do pay for click on competitive terms how expensive it got-because it used to be cheap. So, I pretty much figured out the SEO thing, and it’s an ongoing process. And together with this whole social media that’s happening, you have to include everything together to create the snowball effect. You can’t just rely on one thing.
Andrew: So, it’s all about…you get a domain ranked, and then the traffic would go to the affiliate. First you get it ranked with some real content, and then you’d send it to an affiliate. Is that true?
Andrew: I see, OK.
Interviewee: I’ll throw a little secret out there on the value of keyword domains: if you do a search on, let’s say google, for the term “movie” or “music”, the chances are, you would see either movie.com or music.com being the top results. The reason is, google uses this bibliography credibility factor, they use weight.
Basically, they say, if people are linking to you as music.com, then we’ll add weight to the term “music” and “dot com”. So you get points for “music”. And the more people linking to you for the term “music” or “music.com” or “music.us” they rank you higher for that term. So that’s why generic terms work better because google and other search engines, when the spiders go through the links-which is how they rank them-they give you extra weight on how people are linking to you.
Andrew: How did you get all those people to link to you on all those different domains.
Interviewee: Ok. Again, this is [chuckles]
Andrew: I think I know what you were doing. Back then it worked, it doesn’t work any more. It’s one of those older secrets that you could share now. What were you doing?
Interviewee: Exactly. So, I’ll throw some older secrets…so, I would have a hundred music websites, I would create content on each one, and I would kind of connect them together. cnet used to do that. They had one of the top portfolios. They had news.com, tv.com, radio.com, now it’s obviously owned by CBS. So what you would do, you would create content, combine them together, and you would create this snowball effect. But then google added, hey, if the owner is the same, you add less weight.
And then, there would be this other thing called “page rank”, and you would pay to be on people’s page where they had a high page rank. A high page rank means that they had a lot of links that had weight, and google would visit that page more often, giving it a higher page rank. So the more times google passed through, they would take a snapshot of your page, or your website, and give it extra weight.
So I thought, OK, instead of paying all this money to pay for clicks, lets do some organic ranking and pay people with high page ranks to link to you with the keyword that you choose to link to you higher. That stuff does not work any more.
And there were other secrets, like if my new .gov website got a .edu website, and google gives extra emphasis on .edu, .gov, and also how old your domain was. So, if you’re a domain from 1995, like movie.com or music.com, they would give it higher emphasis because they built history on the web. So it was one of the things that they would add.
But things changed again. The model for google changed. They became public, for profit, obviously, and they wanted to make more money with pay for clicks because that was their bread and butter and if people were clicking on the organic when they were ready to buy, that wasn’t their business model.
Andrew: OK. You said that the business you owned, we can get into the revenues. Let’s start off with the sheepskin boots thing. What was the sheepskin boots business that you got into?
Interviewee: I would be making about a quarter of a million a month. I was really happy. I was like, one of the first zappos affiliates. Like, I looked at zappos when they came on. I was like…
Interviewee: ÖI had the choice to go with Ugg Australia right which was the actual Ugg boots company but then there was Zappos, and they have something really compelling that I thought was awesome. They have a 365 dayÖguarantee, and free shipping backwards and forwards, so I was like, ‘wow, that’s awesome.’ And they gave me 15% commission which was like, unheard of. And then, they would give me a bonus. By the way, things have changed and now their commission is like half as much. Cuz their, their obviously huge now and they don’t really need that many affiliates. And I wasn’t very happy when they reduced my affiliate commission. But back then it was just awesome. I got a tip, cuz I lived by a fashion school, and someone gave me a tip they said, ‘Ugg Boots are gonna be the next big thing. They’re so ugly they’re successful.’ And they were on Oprah. Pamela Anderson was wearing them. So I was like okay, let me follow my models. It was, hey, I’m gonna get Uggs.net and a bunch of other, Uggsshoes.net and I go to all these keywords to get in the domain, and I used the same strategy, and I made a killing in the search result. I spent zero dollars in marketing, like zero. And, andÖ it was, and the actual company, Deckers, they actually bought Ugg Australia from the Australians, and they wanted to campaign into suing everyone that had Ugg in their domain name. So they sued Australians, they sued everyone, that had Ugg. And they said they want their names back. And I was like, ‘wait, I’m building your brand, I’m making sales.’ And, you know I remember Tom [Fishermans] was the attorney. He was like, ‘we’re going to make our sales anyway, with or without you, so it makes no difference.’ So, so what I did is, we went through a transition phase, I got other domains like apparel.fm. I got some keywords so if you go to apparel.fm right now, it’s actually, you’d see, the Zappo’s stuff again. So I chose, so another tip is, never buy domain, with a trademark in the URL. So, I learned
the hard way. So, I thought I was doing a service for them when in actuality, though you’re selling their products, some attorney’s want, you know, they want, supposedly to protect their trademarks. And even though if you’re the exclusive seller, it makes no difference to them, and some of them might create issues with that, and they did. The Australians didn’t have this issue but Deckers, the company that bought it. And it was fascinating cuz I saw their stock, Deckers stock, go from like a dollar, it went up, skyrocketed, since the Ugg thing.
Andrew: Let’s see what the audience is saying. JamesF. I guess James [Fenza] is saying that, he used to have twitterbackground.com and Twitter asked him to give it back I guess. Told him to change the name. Dan Blank looked at apparel.fm and he’s saying that’s one keyword stuffed page. Apparently it’s as full ofÖ you stuffed it full of keywords he’s saying.
Interviewee: Yeah, I’m done with that. It’s, it’sÖthat day, those days are over. That’s what I’m saying.
Andrew: So beyond Ugg’s, was there another product that you were doing well with?
Interviewee: Okay. I usedÖokay, there used to be a promotion with BMG. Twelve CD’s for the price of one. I don’t know if you remember thatÖColumbia House.
Andrew: I used to, I had to deal with BMG. I remember going to their office in Manhattan they loved it because they wereÖ because they used to advertise in magazines like TV Guide, they couldn’t do that anymore. They started buying ads on sites like mine, we were sending them a ton of traffic. I do remember that.
Andrew: How did you send them toÖ What was your deal with them?
Interviewee: So what I didÖ finally enough it should exist on the internet. So if you go to Google right now and you type in BMG Music, I should be on the first page. The reason why I tell you, I should remove that website by the way. It’s bmg.music.us, right, and I think it’s running the same promotion as they ran three, four years ago, five years ago when I did this. And what I think what happened was they declared bankruptcy and they closed. So I’m getting a lot of emails today from people telling me, ‘hey, you reported me on my credit report, how do I remove this?’ And I’m like, ‘I’m not BMG Music, I was an affiliate.’ But people are finding me in the search results. So I’m sure if you, if you search on Google for BMG space music, your gonna see a link that say’s BMG.music and you’ll have the whole promotion on there. I mean, like I said, I did so many websites, and so many keywords and so many different industriesÖ
Andrew: How much money did you get from BMG? What was your second, well how much money did you get from BMG?
Interviewee: Well I would get paid likeÖ
End of transcription.
Interviewee: …I would get paid like 10 dollars per sale. I thought that was a pretty good sale and a good proposition.
Andrew: You got more than I did. Wow.
Interviewee: Yeah, it actually went from 7.5 to 10 or something, depending on the volume. So, that would be like tens of thousands of dollars for that one.
Andrew: Among, or total?
Interviewee: I did the same for Napster, napster.music. So, what I did is I partnered with all these brands, and I, what I did was I tried to market them across the internet for different keywords. And I never used pay-to-click. And I did that really successfully, and like I said, again, it’s in the long-tail and all the keywords. And that stuff does not matter anymore. What I did a few years ago, that’s gone. Those times are gone. So, I would not emulate what’s on those sites right now, today. That’s not going to happen. So, a lot of your viewers are right. You just got to go with what works within that time frame, and things evolve.
Andrew: Do you have a traffic technique today? What works for traffic today?
Interviewee: OK. I’ll give you some tips. You guys want to hear the tips on Twitter?
Andrew: OK, yeah. So, it sounds like Twitter is the new Google when it comes to traffic. Yeah, give us some tricks for Twitter.
Interviewee: I’ll give you some tricks on Twitter. If everyone’s on Twitter, they can go to ‘find people’ on the top right. Can you see on Twitter, it says ‘find people’? OK,. A lot of people search for ‘find people’. So, when you go to ‘find people’ and you put a search for, let’s say, SEO, right? Which is probably the most competitive term. So, when you see the results, I think I’m number 2. It should say ‘SEO Marketing PR’. That’s like my, again, I book [yours] on the profile. And again, I don’t use my names. I don’t put, user extension is Constantine. To me, that’s a waste of real estate, because those keywords matter. So, my name on there is ‘dot music web extension’. So, my keywords are ‘dot music web domain’. So, if you search for domain on ‘find people’, you’ll find my accounts. So, that’s a little trick. Your name, no one knows you, that’s the problem. And people like keywords. So, if you go to ‘find people’ and you put SEO on number 2, I get so much traffic from that.
Andrew: I get that. OK, so, whatever keywords relate to what you’re doing, create an account, stuff them full of those keywords. When people do a ‘find people’ search on Twitter, your result will come up and many of them will follow you. I’m going to say, too, that when they do a search on Google these days, Twitter accounts show up at the top of the search results very often.
Interviewee: Exactly. So, I would do this as well. Get a LinkedIn account, linkedin.com. Those guys rank high. MySpace.com, those guys rank high. Facebook.com, don’t do a group, because those don’t rank in the search results. Do a fan page or a page, and then choose the URL, and remember with Facebook, they don’t allow you to change the keywords of your title. You have one shot with it. So, Facebook, Twitter, LinkedIn, and MySpace, those rank really well in the search results. And the beauty of it, this is another beauty of it. When you do a backwards to see how many links I have to music extension. Let’s say you have 50, I’m listed 1000 times. So, if I’m listed 1000 times, and I have 55,000 followers, or if it’s on the SEO side, 75,000, it means that Google goes through their accounts as well, and finds me, and gives me extra weight. Gives my account extra weight. And that boosts your search results in Google. So, the more people that follow you, the more times Google visits you, and if you have someone that’s followed by a lot of people, and he’s following you, hey, that’s great, because that’s what you want. You want your influencers to follow you, because that increases your search results and a way for people to find you.
Andrew: How do you get those people to follow you then?
Interviewee: In the beginning?
Interviewee: All right, so, first you start with your friends, and then friends and family. And then you start writing articles, and I thought of the retweet. That was an awesome way to get traffic. So, I thought, OK, let me…
Interviewee: …I thought, OK, let me, so let’s say, for the music industry, I would search Google News, and search for a topic that people are searching, that’s trendy. So I would find a story, I used to use Trim, but then their traffic, something happened with their bandwidth, and I moved on to Bitley. And then, I created the Bitley. I’m going to read an article, and then I wrote a title that people would, like ‘how to do this’, ‘5 tips to do that’, you know, these kind of articles that people would find compelling. And then I would do the hash tag keywords and made sure that when people search they would find that. And what happened was, people would find that article, and they would retwitt it. Hey, I didn’t have to write that article. I would just find useful information that people would buy. And on my Twitter, I never write about myself like saying ‘hey, I’m going to the bathroom. Hey, I’m having lunch.’ I never write personal information. It’s all about the listeners and the followers. It’s always, how do I provide them with a cool story for them? So, the last one I put out, I’ll give you an example, which have quite a few people going through it. Let me go to my Tweets. So, the last one was, ‘be more like the porn industry. Survival tips for the music business.’ And then I hash tagged music business and music industry. So, using them kind of words makes people interested. They might search…
Andrew: Now you got. This is helpful for us. But let’s see what it means for you. Now you got all these people here. Dan Blanc is saying ‘you have 76,000 followers on SEO Marketing PR on Twitter. You got tons and tons of people on these services. How are you using it for business? What’s the goal here?
Interviewee: OK. So, again, when you have followers and you have an underlying business concept, you have to do something that works with your business concept. So, for me, the last five years I’ve been working on the .music. However, .music is types of politics. You have ICAN, you have governments, and lobbying. And to me, the underlying thing was to let me get the music committee on board, let me show there’s economic demand for it, and let me collect e-mails of people that are potential buyers in the future, but are interested in music and they’re music fans. So, that was the first framework. And again, you have to figure out the balance. Do you make money now and try to, I don’t want to say spam, but tell some people offers? Or do you build credibility, get a huge fan base, build your e-mail list, have a cause behind you, and have people tweeting on your behalf and creating an army, and make the money later? So, I’m basically investing for .music. We’ve got millions and millions of people, we’ve had over 1.3 million people in our e-mail list for the .music
Andrew: Let me see if I understand. Let me catch people up, and then I want to find out about this mailing list. Dot music is kind of like .com and .net and .org and .edu. You want to have a top level domain that’s .music that you own, that people buy domains from you. So, andrewwarner.music, if I want that in addition to andrewwarner.com, I have to pay you. And you’re smart, because you understand that if I pay you once, I’m not going to want to lose the domain. And so Constantine’s going to get a check from Andrew Warner Enterprises for the rest of his life, because I’m not going to want to give up my domain. That’s the business opportunity that you see here, right?
Interviewee: Yes, the business opportunity is that exactly. However, before people start saying that .com is king and all that stuff. Why do you need a .music or a .com? Obviously for branding, and the other thing again with keywords, .music is a keyword that will help with search results. I always see innovation, because I thought to myself, there’s other TLDs or extensions that came out, like .travel. They haven’t done that well. The problem was they were not considered that, I would say authentic, and they don’t really create some kind of value. So, when I think of innovation, I always think of, you find two dots or two distinct different industries, and then you connect them together. You would say, ‘hey, the music industry has nothing to do with domains.’ I was like ‘OK, you’re right.’ However, the opportunity exists when you connect domains and services, and then create a system where you improve search by introducing direct navigation and incorporate Google as well…
Interviewee: …and incorporate Google as well.
Andrew: Now did they change the rules now, where just about anyone can own just about any top level domain? And my understanding is in the near future, there’s going to be an auction, and as long as you can afford to pay for that top level domain, then you can get it.
Interviewee: Not at all.
Andrew: No, what is the situation?
Interviewee: It is the biggest misconception, because I have been dealing with ICAB and flying, sponsoring events, been flying to all these countries of their… It is far from the truth. The application of $185,000 is just for them to consider you. It is nothing to do with, because you have to look at the whole infrastructure to set it up. For you to set up DNS and it costs millions and millions of dollars. There’s three companies that are pretty much the big companies that dominate everything. Like VeriSign, one’s .com, .net, .tv, there’s Affiliates that runs .org and .info, there’s New Star that runs .us and .biz. And these are like billion dollar companies, and they have the security and the infrastructure and the servers to run it. If you would like to run it by yourself, you can’t do it, because a .music or a .tld, top level domain, it doesn’t work by itself, it’s not like a domain name. Something has to make it work, so you need security, you need the domain, the DNS. You got to do, you either do it yourself, which will cost you millions of dollars to set up these systems across the world. Or you partner with one of these big companies to do it…
Andrew: Are you going to be part owner?
Interviewee: …and then… Can’t disclose that, because we’re in negotiations now with all three big companies. You have to understand that the setup is really expensive. So, for these companies to set this things up, it will cost a half million dollars just for the setup. And we’re not talking marketing, we’re not talking about all the other stuff that a business talks about. And then you got the lobbying, and then you’ve got within the music community, because I’m trying to put together the whole music community and all the stakeholders and creating a multiple stakeholder governance group, including the major labels, the indie labels, major publishers, indie publishers, the manufacturers, the musicians. And one quality, the noncommercial positions, because there’s developing countries with music, and music is cultural. And it shouldn’t be left just for the commercial people. And these are the things that ICAN is looking at, and there’s certain aspects of the application. There’s regional applications, there’s community applications, there’s open applications. And then within those certain parameters, and they have technical requirements. So, they look at your application. Can you fulfill, they look at your business plan, they look if you got money in , there’s so many things in the Applicant Guidebook. And this guidebook, the contract they’re making is taking years to put together. So, I think there’s a misconception about people saying, ‘hey, you just pay money and get the extension’. That’s so…
Andrew: That’s what I thought it was. OK, so, I’ve been misconceived, I see now the trouble. I see now why you’re putting in all this effort. And you told me before the interview that a lot of your sites are not advertising anything beyond this mission of yours. You’re just trying to get people to join the mission. When they fill in a petition, when they sign it virtually online by putting their name and e-mail address, they’re signing the petition and giving you another voice that you can use with ICAN to say ‘guys, more people want this’. But they’re also joining your mailing list, so when you have it, you can go back to them and say ‘get yourname.music or start buying one of these domains.
Interviewee: Yes, and also there’s, I’ll tell you what’s happening. In a lot of big corporations, I would actually say all of them, have been fighting these top level domain extensions. So, companies like Microsoft, IBM, Yahoo, all these big brands have been saying ‘this is a terrible idea. We have trademarks, we need to protect them. We don’t want to launch new top level domains. We think we have to do the fancy registrations, and hey, there’s no economic demand. No one wants these top level domain extensions. And is it in the public good?’ So, I have to fight the big corporations and say ‘hey,
you guys are wrong. There is economic demand. There’s bands like Rain. There’s a band called Rain, there’s actually 15 bands called Rain that are registered. There’s over ten bands called Bliss. There’s so many bands with the same name, who gets their .music?’ There’s a lot of demand.
Interviewee: …who gets their .music? There’s a lot of demand. So my role was, OK, I need to prove these big corporations wrong. I have to prove that there is a big economic demand and also I have to protect the novelties. So let’s say a company like, I don’t want to throw out big names but there’s the universals of the world, the Sony’s, are obviously against new top level domains. But there is a chance that they will exercise their market power to monopolize that section as well. And I don’t think that is in the public interest, and that’s why I’ve been fighting with ICAN to include a section that says ‘equal representation, multiple stakeholder governance, and it should represent both commercial and non-commercial.’ So, we’re going into a lot of politics, and people have to understand in the music industry, there is a lot of politics. And in the internet, there is a lot of politics, because giving someone the rights to run a .music is a pretty huge responsibility.
Andrew: What about this? Moses in the audience is saying ‘Andrew, it’s not just the top level domain. It’s a platform. Ask him to clarify it.’ What else are you doing beyond giving people a top level domain?
Interviewee: OK, so, I always ask questions to people about music. And my goal, I was at Harvard Business School and they always talk about one thing. You need to make a difference that matters. A difference that matters. You need to make a difference that matters. Well I thought to myself, how do I make a difference that matters? Well they would then talk about, you need to expand the pie. You need to create value. How do you expand the pie? And the music industry has problems with expanding the pie. So I think there’s lost opportunity in many areas in the music industry. So, I thought, the last five years have been building the platform which will power .music. Well, this platform will include, is basically a marketplace which will include sponsors, downloads, donations, and for the first time there will be bundling between merchandising that you can create, like CafePress. And ticketing. All these things. And actual bands and musicians dictate their price. They set their price.
Andrew: So you’re saying that, you’re not just going to say that Andrew Warner is a musician, you’re not just going to give Andrew Warner andrewwarner.music as a domain site. You’re also going to let me sell T-shirts, sell my music and give me lots of other things that I need to get my business of music going.
Interviewee: Yes, I’ll give you a super example, and I think that it’s not been used much. So, I’ve been using a lot of outsourcing for a lot of my projects, so my platform is run out of Europe. And there’s always ways to find good, may I say teams. So I hired a lot of my teams online. I will go to a lot of sites like getafreelancer.com. And he would bid for projects, and he would look at people’s feedback. Same with e-bay. And I thought to myself, hey, you can use these providers, you can pay them online using PayPal, you can put money in escrow accounts. Why can’t you translate this for the music industry? I’m a musician, I was recording a song, I need a cellist for a song. Where do I find a cellist? Do I go to USC? Do I go to Craigslist? So I thought this can work. Let’s say someone gets a .music account. Let’s say andrew.music, and then you say ‘OK. I’m a musician, what’s your instrument?’ ‘I am a cello player. I am from Los Angeles.’ So, let’s say I’m looking for a cello player from Los Angeles to come and record. And you say, ‘I’m Andrew, my price is $300.per session to record. And you name your price. And I say ‘OK, Andrew, I’ll deposit $300 in your account. You come and play. You record brilliant. You did your job. I give you a rating. And I pass the money to you.’ I just created value to the cello player, and I also created value in finding a cello player, because it’s so hard to find players to play for you and there’s so much opportunity. Same with parties. You want to bring a band to come play at your wedding, at a party. You can hire them. Why can’t you hire them online like you hire freelancers and pay them online? You create value, and you expand the pie. Same with like the Vick Bands. I was listening to a few cases where people would pay big bands or musicians like $50,000 to go and perform at their country. Nowadays, you can’t easily do that. You have to contact their agency. People don’t know how to do it. Wh
y can’t you do it online? Hire this person, and you do online negotiations.
Interviewee: …and you do online negotiations. So I thought this would be a great… This is just one example of the things that I’m implementing. I’m also doing sponsorships, which again, it’s a whole new set of value creation. But that one I thought had a huge, huge gap. And also ticketing. There’s Ticket Master and there’s Live Nation. But what about all the other countries where you can’t sell tickets?
Andrew: Are you too much, maybe, with all of these plans? I mean you’re going to take over every piece of the music industry, and wrap it all up in this one top-level domain. Seems like a lot.
Interviewee: No. I’ll tell you what the goal is. The goal is to offer options. And I’m going to say Andrew, if you don’t have a website, if you don’t invest in a programmer, if you want to get things started right now, here’s the platform. However, if you want to use other platforms, if you want to, you know, use other people…
Andrew: I don’t mean that it’s bad for the user. I think the user eventually will have all the options they want, and they can pick from them.
Andrew: But does it confuse your business to do so much?
Interviewee: Well, I’ll explain the separation. Within iCam, there’s thing called the separation between the registry and the registrar. So in actuality, .music, right, the top level domain extension, is a separate business from the platform business. They’re both different. So you know, one is, you know, your non-profit, the other one is a for-profit. So the goal is to offer options for people to opt-in in an easy manner to a platform that they could use. And again, I have to stress that iCam has delayed the process three times. So I told everyone .music was going to launch Quarter 1, 2010. It’s Quarter 1, 2010, and the ETA right now is 2011. So over the last like five years, I’ve been building this platform. Hey, might as well do something. Right? So I was building this platform for the last five years, just as a value-added. And I think the innovation comes in connecting those two. And also, I thought there was a problem in the squatting and the big key words. So for example, traditionally top level domain companies, let’s say .moby, in the case of music.moby and other domains, they would select their top names, and they would auction them out. The problem is, domainers would buy these names. What would they do? They would park these names. That creates zero value to people. It’s just creating a bunch of links, and no value. So I thought, hey, I don’t want to make all this money selling domains, and auctioning .music extensions. I want to connect the big key words with the registrar. So let’s Andrew, you’re from Argentina. You actually in Argentina right now, right?
Interviewee: So you say, “OK. I am Andrew. My genre is rock, and I’m from Argentina.” Right? You just gave me three keywords right there when you register. So, people don’t know Andrew. However, they can search. And let’s say you’re a rock musician. They can go to www.rock.music. Guess who’s going to be on rock.music? Andrew’s going to be on rock.music. Let’s say someone’s searching for Argentine music. They go to www.argentine.music. They’ll find you there. So basically, I’m taking these key words. I’m creating consistent websites and marketplaces that would benefit the registrars. So when people…
Andrew: I see. And you’re thinking back to what your big skill was throughout your career,
Andrew: which is getting traffic using key words.
Interviewee: Yes. And bringing traffic to people like Andrew in Argentina. And you know, there are people searching for music and poems. Right? But I had a meeting with one of their culture, and they’re like, “Yeah, we don’t have an online Polish center”. So my goal is to create these centers. So if you’re looking for Polish music, you can go to poland.music or polish.music, and you’ll find all the Polish music on there, the registrars of .music. And they benefit, and people can find them through discovery. And along that, yeah…
Andrew: I’m sorry. I’ll let you finish that thought, and then I’ll say what I was going to say.
Interviewee: Yeah. So I think there is no organization in the TLD space, and there’s no authentic TLD that covers across everything. Because traditionally again, it’s all about the money grab. I want to auction everything out. I want to make money in the beginning, and then sit and do nothing. That wasn’t my vision. I’m passionate about music. I’m passionate about solving an issue, and connecting the two dots together, and connecting the whole industry.
Interviewee: Öconnecting the whole industry and I think using these keywords can help, help a lot of people, via them ranking high on Google, as well as people learning how to go direct request and say, ‘hey I’mÖ’
Andrew: Are you a traffic bandit? What’s the word to describe you, what’s the phrase to describe what you do well?
Interviewee: The wordÖ I want to call it music innovation. I meanÖ you knowÖmy goal is to expand the pie, for the musicians and create new revenue sources for them. And… just show them that it’s not only about, the existing streaming and traditional models. There’s a lot of creative ways on generating revenues, and I think, there’s ways to do it. You just need the actual tools to do it, and, andÖ for fans to find you in that manner. So, connecting those dots between search, direct request, domain names, music, and demand is what I’m trying to do. So I would call it theÖ revenue generating, or may I say, value added, you know, generating machine. So the value added, you know, generating machine is what I want to Ö
Andrew: That sounds too corporate for you. I’m not.. I’m not enough of a wordsmith to come up with the right phrase here. That sounds too corporate for you but, I know that, that we need some kind of phrase here. Maybe someone in the audienceÖ
Interviewee: Okay, so… so.
Andrew: Öhas it, I’m not crazy about the words you guys are using. It’s not..
Interviewee: Alright. So my… the, the phrase..
Andrew: I’m sorry to interrupt. But we’ve got to leave it here. We’ve now spent almost two hours including the pre-interview together. And I have in a few minutes a call with my lawyer, we might have to go to the mattresses on something soÖI’m gonna have to go, but let me say this. We didn’t get to talk about music.moby. We didn’t get to talk about music.us, two of the other domains and businesses that you were in. Why don’t we tell people where they can go to find out more about you and then hopefully that will lead to information about what we didn’t hit on in this interview and maybe they can fill in the gaps. So, what’s a good place for people to go and find out more about you.
Interviewee: Okay, they can go to www.music.us. I don’t really call it a u-s cuz I think it’s a community. So music.us, music.u-s, however you want to call itÖ
Interviewee: And, I’ve got a blog, at musicmusic.com. Writing some new articles right now actually that I’m gonna put on there. So those are two places to find me but my bio’s under us, under music.us, if anyone want’s more information andÖ on Twitter, and at music extension.
Andrew: Why aren’t you on the about page on 123refills.com or 123refills.net? I couldn’t even substantiate that you really owned the business until I had a friend help me out.
Interviewee: Well againÖ
Andrew: I said, ‘we don’t know who this guy is.’
Interviewee: Yeah. Again, all the about us, it’s it’s interesting cuz like again, I’m not, there’s this saying, ‘are you in the business, or, you know, on the business.’ I’m on the business but I’m not in the business, if that makes any sense.
Andrew: Do you own more than 10% of the business?
Andrew: Do you own more than 10% of that business?
Interviewee: Yeah, it wasÖ I can’t disclose the percentage, but it was yeah, it wasÖyeah, it was considerable. It was like, in the split, kind of section.
Andrew: Oh okay, somewhere around 50/50.
Andrew: We won’t get into exactly where but were not talking about like a 2% shareholder?
Interviewee: No, no. It was not that.
Andrew: Alright. Thank you very much for coming here and doing this interview. People in the audience, they think you’re insane, they love it. They especially love when you were giving out all those tips and you were talking about all the stuff that you did to get traffic in the past. Guys, what did you think of this interview? Why don’t we steal a line from Jason Calcanis and ask you guys to rate it from 1 to 10 let’s see what people like about it. And a few people are actually asking to have you back on. Ten I’m hearing. Great stuff from Mike B. Thanks fromÖ James F. Ten from Tommy. Mike B. is sayingÖ
Interviewee: American Idol.
Andrew: Ödream big. Mike B. is saying 10. Oh look all these 10. T.P. is saying 9. More SCO I’m hearing from people. Best yet, best yet? SpeedyR1, that’s pretty good, awesome. Andrew, AndrewSG, and that guys a hard guy to please, A+ and we’ll watch again. Wow! Ten from Jerry. Wow this is good I can see why Jason Calcanis does this. I’m gonna steal more of his ideas. Thank you for doing this.
Interviewee:.I’ll give them all shirts, .music shirts for everyone.
Andrew: .music shirts for everyone who does what? Emails you.
Interviewee: We’ll find a way.
Andrew: We’ll find a way. You’re not giving away anything. Go fill out the form, get on his mailing list, maybe use your second gmail account for that one.
Interviewee: Yeah, and if they want to add me on Facebook, you guys are gonna laugh, my user name is music.music.
Andrew: Alright facebook.com/music.music. Alright thank you everyone for watching, thank you for doing the interview. Bye guys.
End of transcription.
This program was sponsored by
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[This interview was suggested by Mosses Akizian. Thanks again Mosses!]