Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses. I do it for an audience of entrepreneurs who probably don’t looks like today’s guests at all. I’ve never seen . . . Lior, I’ve never seen anyone who looks like you. I feel like you’ve got such a cool look, and I never would have expected you’re an entrepreneur. When I heard the company was a moving company and I heard the numbers that you guys were pulling, I didn’t believe it. So the whole thing here is kind of unbelievable, but I don’t know that the audience is going to get a full impact of it because it’s all done by audio. What do you have? Do you have dreadlocks?
Lior: These are dreadlocks. Thanks for the compliment. Yes, I don’t look like your ordinary entrepreneur but, you know, started the way it started and then I end up the way, the place I am.
Andrew: I dig it. That dreadlocks and backwards hat, an Adidas, what is it called, tracksuit, beard. If anything, people would just like be a little worried about being next to you. If they were walking past you in New York, they wouldn’t realize what you’ve done, and here’s what this guy has done. His name is Lior Rachmany. He is the founder of Dumbo Moving and Storage. He is a guy who came to New York to be a musician, ended up falling in love with a woman. Tell me if I’ve gotten any of this wrong. Here’s what I got. Fell in love with a woman whose parents were doing really well and he said, “What am I doing here? I’m like a schlub. I can’t compete with like the vision of who she . . . like what she grew up with. I got to do better.”
And then he decided, you know what, I’m going to start this company, ended up starting a moving company where, basically, day and night, he was a mover, a schlepper, moving other people’s stuff in an industry where frankly there have been movers forever. He ends up making a name for himself, Dumbo Moving and Storage. He told our producer was doing . . . well, we’ll see how much. I didn’t believe it. I said, “This guy’s scamming. Look at some of this stuff, some of the lies he told to get here. He’s lying to us, too.” And then I did some research. It turns out his numbers are there. Lior doesn’t know whether he should be here or not. I could see it in your face like, “Why do my PR people even have this? This guy’s already insulted my looks and now he’s questioning my whole business.”
All right, let me talk about who my sponsors are and we’re going to get into this. I promise, Lior, you’re going to love this interview. This interview is sponsored by two phenomenal sponsors. The first, if you need to have a website hosted like Lior did, you should go to hostgator.com, and the second, if you want a website that sells, Lior, you’re going to love this. Put your people onto this. It is ClickFunnels. It will convert all of your pages into lead magnets, into sales page. I’ll talk about those later. First, Lior, good to have you here.
Lior: Thank. Thank you. Thank you for having me. Thanks.
Andrew: What is your revenue? Annual?
Lior: The sales of 2018 was close to 25 million.
Andrew: Twenty-five million.
Andrew: For a moving company and a storage company?
Lior: Moving and storage . . . Actually, the storage is an additional almost 2 million. So the moving and storage altogether this 27 because, you know, we file separately for those two.
Andrew: Dude, there have been moving companies forever. What did you do that . . . what’s different about your moving company?
Lior: I think now it’s pretty simple to explain. Never had a background of sales, never had a background of management or admin per se. I’ve been doing this for quite some time and I started as a mover and the whole aspect was to make it better towards the mover and better towards the customer and put the sales and the admin as the third priority. It’s all at the way that the actual moving services has been presented and it’s all about . . .
Andrew: Be more specific. What’s better for the customer with your moving? And my goal here isn’t to like talk about your business in, like, a promotional way. I want to hear how you got here, but be more specific. What’s different for the customer but from you?
Lior: Transparency goes two ways. First of all, you want to give the customer some kind of security and, you know, a good feeling about the upcoming move because, you know, moving is stressful and whatnot. But transparency also comes with somewhat of responsibility of, you know, telling the customer things that they don’t necessarily expecting to hear or not necessarily want really want to hear.
Andrew: Like what?
Lior: You know, New York City have a time restriction. There’s a union, a big union for doormen and building management, you know, building closes at 4:00 or 5:00, you know, you need to bring that up. You know, you need to kind of make the awareness and prepare the customer for that, you know, in terms of the timing and in turn the price. If they want to move to be rush, if they want to move to be in two days, it might going to cost more money. And sometimes customers are not prepared to hear that, but if you pitch it correctly, the customer actually maybe appreciate that and you gain the customer’s respect towards the company. And in that way, not only the customer, you know, obviously, book with you and gain your services, at the day of the move, the customer have more legitimacy towards your company and towards you movers.
Andrew: I’m going to say this, too. I get that, but I feel like one of the things that you did better than others and one of the reasons why you’re doing as well as you are, is you took to digital in a way that other movers hadn’t. Right? Search engine optimization, Yelp understanding, etc. Let’s go back and understand where you are. First of all, your accent is from where?
Lior: Israel, Tel Aviv.
Andrew: What was it like to grow up in Tel Aviv?
Lior: Big city, big city, by the beach. You know, was tough time, tough times for many reasons. The country itself were going into some kind of turmoil, politically. I mean, we’re talking today and there were elections today again in Israel.
Andrew: So there’s constant turmoil. How did you . . . what were you like in Israel, in Tel Aviv growing up? What was it like for you?
Lior: That’s one of the many reasons why I was part of probably eager to leave and to try having a life somewhere else where the question of oppressing yourself on other people or survival mode per se, don’t want to get into that too much because I know that’s a sensitive issue for some of the listeners. But that kind of questions of existence, kill or be killed or what’s yours is mine.
Andrew: What you’re saying is the argument between Israelis and the Palestinians were just too much. You didn’t want to live under that. And it seems like you don’t want to take a position even in this conversation, but you have one.
Lior: My position is very, very left wing. But that’s not for me to say because again, there are many Israelis that gave their lives and their service to the country. I did also, but in a very minimal way, but leaving the army in a shorter term doesn’t give me the right to actually pass judgment on the policy or on the conflict. So that’s why I decided to leave the country and be able to have a different opinion. There’s no need for that, there’s another way, and especially a place like Brooklyn and New York City, you can see a Israelis and Palestinians are just fine and friendly and collaborating together with no problems.
Andrew: Did you also leave to be a musician or was it largely politics?
Lior: Well, the music that was a big part of my life was just getting more and more influential on me.
Andrew: What type of music?
Lior: As I grow up, it was more progressive rock. Something that you might call today, like a band like Tool, if any of the listeners know . . .
Lior: Tool, Tool.
Andrew: Oh, yeah, yeah.
Lior: It’s a big rock band.
Andrew: Got it. So you are playing that kind of music. Did you come to the U.S. with the idea that you were going to make it here or would just think, “Look, New York is so good for musicians that you could get by playing music and doing what you love.” Did you want to be big or just get by doing what you loved?
Lior: So the main idea was to get by knowing that I’m going to find a job as a mover because moving was kind of dominated by Israelis and from back there, I knew that somewhat, I’m going to find my way into the moving industry and that’ll be my day job and music will be a gig. And getting by with an idea that with time it’s going to be some kind of a full-time occupation. Talk to many musicians that were going back and forth from Israel to New York. And I knew that in a way, I’ll be able to find my spot in that scene as well. I’m still friends with those musicians. They’re still doing it. They’re still a hired gun for many bands. And some of them are successful. Some of them just making a living out of it, but definitely New York had a lot more opportunities than Tel Aviv.
Andrew: So for eight years, you were a mover, you met a woman, you fell in love. Am I right?
Lior: Yeah, my wife.
Andrew: She’s your wife now.
Lior: Yeah, yeah.
Andrew: And did she make you feel like, “Hey, I didn’t just marry a mover,” or did you feel that because of who you are?
Lior: Well, you know, both parents are doctors.
Lior: Yeah. Both of her parents and doctors. I come from working class, and all nice and dandy. I’m a nice guy, but at the end of the day I felt kind of uncomfortable. They’re from the Los Angeles area, send their daughter to a law school here. They come to visit their daughter. She’s already admitted . . . the bar admitted the lawyer and she is hanging around with a mover. So I decided, enough is enough, the gig life, that’s great, that’s cool. But you need something to show for and I can do better than that, not judging any of the other gig life, freelancers out there and other musicians out there. But if you want to establish a home, if you want to have your life and with more possibilities financially and maybe try to progress your life into maybe high speed of income and possibilities and maybe try to change things, maybe a day job and a career is better than being a freelancer and you’re looking for the next gig.
Andrew: So what’s the first step you took? You said, “I’m going to start a moving company” at that point?
Lior: Yeah. So I told my wife who was my girlfriend back then. I told, “Listen, I’m going to start to into looking around the how to start the establishing a moving company.” And I asked around, whatnot, still I was just the mower. I was inquiring about how much is a truck, you know, what did they do to get all the requirements in order to get all the licenses
and whatnot. So I kind of start getting everything together. I had a partner per se. And the next thing I knew I started the company.
Andrew: Wait, wait, wait. Let’s let me break this down a little bit. You say first, “The next thing I knew is I started a company.” You got licensing, that took some time, right? A little bit of money, not a lot.
Lior: Took some . . . I mean, not a lot of money. Yes, you can say that, not a lot of money, yes.
Andrew: Under 5,000.
Andrew: And then did you need to buy a truck or were you renting a truck?
Lior: The guideline is you need to buy a truck. So because you need to own a truck, you need to show proof of registration. So I bought a truck. I bought a secondhand truck. Yeah.
Andrew: So now you had a truck, you had a partner. You were personally going to do the moving, the two of you in the beginning and it’s time to get customers. You got customers from where?
Lior: The first year was Craigslist.
Andrew: How did you get customers from Craigslist? I think this is interesting.
Lior: Craigslist, you know, it’s a wild, wild west, even back then. I’m talking me about 2006, beginning of 2007, Craigslist was ads going crazy numbers by other competitors and whatnot. I mean, we decided that we already have some kind of an idea of what kind of company we are going to have. So we just put an ad out there, the guaranteed pricing, no hidden fees, no surprises based on list of items. Give us a call. I was lucky to get a really a catchy phone number and . . .
Andrew: Let me see if I remember it. It’s been a while since I saw it. I could be wrong, but it’s been like, I just happen to scroll on your site. I think it’s 718-888-8282, am I right?
Andrew: 222-8282. Okay, so instead of a triple eight, it was triple two. Yeah, that’s a clear number. All right, so you got the number from Verizon. Do you have to pay a little extra for that number?
Lior: No. So here’s the thing. So this all came kind of in all kind of magic around me took place. The day I decided to start getting the number and registering the company under a certain name. For couple of weeks before, I was contemplating what kind of names should I should I call it. Something more moving-oriented or something more family-oriented kind of a name. And I decided Dumbo just because my recordings studio was in Dumbo.
Andrew: The area in Brooklyn.
Lior: Yeah. That’s basically a neighborhood called Dumbo, which means district under Manhattan bridge overpass. And I saw many, many changes and developments going on in the neighborhood. I decided, “Look, something is going on. There’s some kind of migration going into Brooklyn. And I think Dumbo is the first flagship in terms of real estate opportunities for investors and new commerce. Let me call the company Dumbo.”
And the same day that I decided to call it Dumbo and the same day that I decided to register it as Dumbo Moving, I called in Verizon and they just explained they opened a whole new set of phone numbers starting with 222, which basically the extension of downtown Brooklyn Dumbo because they need to answer all the new demand for new customers. So I asked the lady on the phone, “Can you give me something catchy because it’s for business.” She goes, “Okay, I got 222-8282. I got 222-8262.” And I chose right away those first two numbers, one of them end up to be my fax number and that was it. I didn’t have to pay anything. And I read that book . . .
Andrew: And you were in business.
Lior: And I was in business, yeah.
Andrew: You placed ads in Craigslist, but you also, from what I understand, you started scraping leads from Craigslist. You are starting to see who was posting that they were looking for movers. Who were you scraping?
Lior: So at one of the first leads that came in, first of all from Craigslist, we could have tell, I mean I could tell who was a broker and at one or the second or the third customer per se that contacted us to Craigslist. I notice that the way that the person was talking, it was a little bit more in a professional level.
Andrew: Wait, hold on. Wait, you are scraping the names of realtors and calling them and saying, “If you know someone, I could do the work?” Or who are you scraping? Who are you contacting?
Lior: So someone from Craigslist called and I picked up the phone. Even though I wasn’t supposed to be the one on the phone, the company was just beginning. I was just finishing a move, there’s nothing to do at home. And I came back to the office. You know, the so-called partner left home and I was on the phone. The phone was ringing, “Hey, listen guys, I got your text message. I got your email from my inquiry,” and I realize this is a broker. So right away when that particular brokers started talking, “Look, let’s do it like this. I’ll give you this move as a beginning for 250.” It was 2007, in any kind of respect, it is really cheap.
It was three items, right? Three, four items, right? I gave it for 250 and are still going to give you a referral fee for this. It’s not a lot, but the next move after you going to check us out, you’re going to see that, you know, we’re doing a great job. I’ll do it myself personally. Obviously, I’m the only mover. I’ll be myself personally first and the next move, I’ll give you 10%. And you know, the numbers are just going to go higher. As you know, we’re going to give the, the actual rate per move. The brokers said I like that. The next thing you know, weeks pass, we did that move, we did another move. Another broker from his firm called. It was City Habitat in New York City. And about couple of like a month to two after, I was invited to their offices to give a presentation about the company.
And that was a breaking point in a way for me. First of all, I had to put nice clothes on and somewhat of a suit and I needed to kind of present myself and the company in a professional matter. And I’m talking into, an army of brokers, a real estate brokers. You need something to shock them, to make them listen to me.
Andrew: So what did you say?
Lior: I brought in, like a good New Yorker, about a five kilos of bagels and cream cheese. I think I got their attention.
Andrew: Wait. Bagels and cream cheese, you got their attention?
Andrew: I thought something you’re going to say kilo, something like bigger. Okay. Was it?
Lior: Yeah. No, just cream cheese.
Andrew: Just cream cheese.
Lior: Bagel and cream cheese. It was 8:00 in the morning and I had about 40 to 50 brokers and a big office. Anyways, so you know, everybody looking at me and there you go. A kid from Tel Aviv, what is it that you need to tell us that we don’t know. You know, we’ve probably seen 10 moving companies come and talk here and no one really performed.
So I started introducing myself, you know, after a musician. So being on stage, being in front of people, doesn’t really frighten me. So I kind of took it, you know, pretty calmly. Explain, obviously, not necessarily telling the truth. You know, we have five trucks. We had only one truck and it looks like garbage because I have to buy it for $4,000. We have a crew of a 20 to 30 people. We had only me and one more guy and an office in Dumbo that, that again it is Dumbo, but it was my recording studio. Which, you know, we were still . . .
Andrew: Is it the place on J Street?
Lior: On J Street, you know, we will book in jobs while literally bands were playing there, because I was still making money by recording other bands. And you know, a lot of stories. Just to pitch as well, at the end everybody clap. Everybody were really much impressed, and I think what got them at the end, I told them, “Again, guys, Dumbo Moving and don’t forget, we like to move it, move it.” Everybody laugh. They thought it was funny, and I came out with this kind of slogan, you know, we like to move it, move it. My so-called partner was completely against it. He didn’t want me to put it on flyers or the trucks. Eventually, the way that the events turned, I eventually did it.
Andrew: And I see, I was on your website on the homepage for a long time. We like to move, move it.
Lior: We like to move it, move it.
Andrew: Let me take a moment to talk about my first sponsor and then I want to come back and understand what happened with you and your partner. But I think it’s kind of interesting. I liked that you were willing to say, “Look, I puffed up what we had instead of telling them we had one truck, we had five.” Right? Yeah. I like this kind of openness. Keeping it open with me like this, Lior.
Lior, imagine this. My first sponsor is a company called ClickFunnels. They believe that everybody’s an expert in something and that what you could do is build a business by selling some of your expertise. Now imagine you, Lior, you say, “You know what? We want to be all over the country.” And we are, but there’s some pockets that we’re not going to be able to compete in and we accepted they’re going to be some movers who may be in heart of Wisconsin are going to be the movers of Wisconsin. Does that sit right with you or are you getting a little frustrated? You want to be the leader everywhere.
Lior: I mean, we want to be the leader everywhere.
Andrew: Okay. Let’s suppose that you say, there are going to be some people we’re not going to be able to beat yet. I have a plan for you, but imagine if what you said is “I know what it takes to create a moving company. You need to dominate certain keywords. You need to do certain things. You need to treat your people in a certain way. It took me a long time to go from one truck to now an army of trucks. I know what it takes. I’m going to start writing it down or I’m going to record it on camera because I’ve got a nice look to me. Right. And you get the whole thing laid down, either on paper or most likely probably video.
Then you go to ClickFunnels. You get one of their landing page templates which basically tells you how to sell this new online course of you teaching other moving companies, other people have . . . even a man in a van teaching them how to scale up and so you put . . . you fill in the template exactly as they say. The first step is asking for an email address. People who enter their email address on this page that you create using ClickFunnels in no time at all. We’ll get maybe a list of the top 10 things they need to do. We highlight the fact that you went from nothing and you built up to multimillion dollar in sales. They enter their email address, they get it.
Second page, maybe you say, “Look, for 20 bucks, I’m going to teach you the basics. We have a simple video.” Boom. They make it so easy, you just click one button, you can add that second page and then you could start collecting credit card information so people can pay for this $20 thing.
Now somebody who gives you $20 for an extra 5 bucks is likely to maybe get a little bit more, like maybe what you do is you say, I’m going to give you the contracts that work for us or I’m going to give you the agreements that we give our people one checkbox and they get to upsell. You get to upsell that and then after they’ve gone through that, you already have their credit card. They’ve maybe checked the box saying that they want the upsell product. The final page you say, you know I have $2,000 program at $2,000 course where I can teach you and work with you to help you build your business. That becomes a thing that you can start buying ads for. Start doing all kinds of promotion for at the end of this interview, maybe you start to talk about it and then you link and because you use ClickFunnels, every part of this is templated and allows you to grow.
Now for you, you might say, you know what? At some point my, my goal is to actually own this whole country. I want to be the moving company of everywhere. All these people got to know you, who got to see how you work, they’re potential people whose companies you could buy out. So yes, you make money by selling to them a plan and you get to show them how good you are, but some of them might end up selling to you and then you get to grow through acquisition.
All right, this is my vision for you. If you sign up for ClickFunnels, if my listeners signs up for click funnels, I’m going to let you try it out for free. All you have to do is go to clickfunnels.com/mixergy. ClickFunnels because one click, you get your whole funnel set up where you collect email addresses. The way you sell, the way you up sell, the whole freaking thing is set up for you beautifully. I never believed that they were going to do well. I signed up because somebody who I was a consultant forced me to sign up for them. And now I’ve had these single funnel on their site, did over $1 million for me. They gave me a whole plaque and everything. I freaking love them. ClickFunnels.com/mixergy. Lior, tell your team.
All right. Speaking of team, what happened to your so-called partner?
Lior: All right.
Andrew: Did you guys break up? How did you break up?
Lior: All right. So things picked up. First of all, one more turning point before that, we were getting leads, we were scraping leads from online, from, you know, all kinds of, you know, special moving company leads.
Andrew: What kind? Be more specific. What do you mean?
Lior: So the all kinds of like a search engine-generated leads, through real estate inquiries and whatnot. Particular, you know, particular lead provider called 123 Movers.
Andrew: And you were scraping from them or you are paying for leads from them.
Lior: Well, you paying monthly and you gaining scrapes basically. Pay monthly. And, you know, 1 out of 10 is actually something that, you know, you can work with.
Andrew: Oh, it’s not that people are going to 123 Movers are responding to one of their ads and then filling in a form and then you pay for that. It works differently?
Lior: Yeah. Well, you know, I don’t want to take things because a lot changed with them right now. You know, we necessarily we do not use them anymore. Not necessarily because they are not good. But back then in 2007, you know, it wasn’t that, you know, sure shot thing. You know, 1 out of 10 were an actual lead.
Andrew: So you weren’t scraping leads. You were buying leads from them, weren’t you? Or were you scraping?
Lior: The thing is you’re not buying because you’re paying monthly and you’re getting at list, and that at list you have to, you know, have to call everybody and at the end of the day, realize that only 1 out of 10 is an actual lead.
Andrew: Okay. All right. Got it. I see how it works. So you are calling those leads.
Lior: So calling those leads, one of the guys that answer, he ended up to be the general property manager for a big housing complex in Harlem, uptown Manhattan. We’re talking about 400 apartments. I mean, the one building was 150. The other one was 200, and I was giving him the same shtick as I was giving the brokers. Like I was on the phone, nobody was at the office. Okay, let’s go. We have five trucks, you know, we have 20 guys or whatever, whatever. He says, “Okay. Listen guys, this is going to be a big project. Maybe it’s going to be too big for you.” And I say, “Wait, give me the details and I’ll tell you if we can do it or not.” And explain, “Look, we’re renovating the whole building, this and that. And we know we need you guys every day and it’s going to be every day about 10 hours of work,” whatever, whatever.
Andrew: To help their tenants move out.
Lior: Well, the tenants going to move into temporary apartments while they’re renovating, then we have to move them back.
Andrew: Got it. That’s a big deal for you with one truck, yeah? Okay.
Lior: Yes. So, one truck, and I’m negotiating a deal of quarter million dollars. I had no idea what I’m talking about. I had no idea what I’m saying. I don’t know what I’m committing to. I found myself couple weeks after meeting with the board of the housing complex. They are being fund by church, a little bit by the government. You know, there’s a lot of mix of money over there. Obviously, people want to make sure the money goes to the right places. At the end of the day, you know, somewhat a non-for-profit.
So I kind of try to put everything together and say the right things. I don’t know how to everyone, they chose me. Between me and about six other moving companies and about couple of months after, you know, we started the project. It allowed me enough time to hire more people and get the trucks and get the equipment. And eventually we did it. We did it successfully. We ended up doing business with them for four years.
And I mean that was a big turning point in my life. I remember the day that I went to meet the board and that same night I had a show in West Village and that was my last show because I had to make a decision, you know, if I want to take this seriously, I cannot commit myself into music anymore. And if I want to do the right thing with the business, I have to put it 100%. And while I’m putting the 100%, I also need to put 100% into building a family. You know, those three things cannot work together. There’s business and family, yes. There’s, you know, music and family, yes. But we cannot have full music career, a full entrepreneurial career and a healthy family. So that was my last show.
Andrew: So this is the time where you said, “I’m done with music. I’m now going to go on to this.”
Lior: Correct. You know, years passes by, the company’s growing every year. We are marking up 50%, 60% increase every year. As the year passes by or so-called partner is lacking and lacking more of work. The third year of our operation, 2010, I mentioned into the partner, “Look, this is a not really kosher. I’m putting in 12, 14 hours. I have no problem. I don’t want you to put those hours, right? But you need to be there, at least with your attention, if something happens. You need to come in, you know, if we both need to come in, people wants to hear that you’re also involved and you need to be available.” His answer was, “You choose to kill yourself for this company. Money is not everything in life. I’m not like you,” whatever, whatever. I let it be.
In that time, he was always trying to figure out what to do with the company’s money. And I always keep the company’s money within the company. We’re at the third year, let’s keep buying more trucks. We don’t have good credit, we cannot get leases and so we have to keep every dollar, and buy more truck and look into buy a storage. And he said, “Look, that’s too many assets. Let’s not do all of that stuff, like too much liability.” And he had more of an admin background, but I didn’t see eye to eye on this. So he decided to start collecting money like K-1 for both of us. My K-1 stayed in the company.
Andrew: What’s a K-1?
Lior: K-1, your profit as an owner, right? So let’s say your margin is 10%, and you made $1 million, it’s $100,000. Then we afterwards, so-called salaries, you know, we each one take up at the end of the year 50 and 50,000. Right? My 50,000 stayed in the company, his 50,000 went somewhere else, 2010.
Andrew: Okay. I see how this is going. How did you end up then breaking up with him?
Lior: Check this out. All right. So I had money saved. I had money saved from when I was a mover. You know, I used to drive tractor-trailers before drive cross country. So, you know, I saved some money. So I decided to invest in a property, right. And he wanted to invest with me and I said, “Look, this is something that I want to do on my own. I want to diversify. I don’t want to do it with Dumbo. And if I want to do something with Dumbo, it will be a storage facility.” He didn’t like it that much.
All right. So karma is a bitch. You don’t spit where you eat. And he didn’t treat the company well, he didn’t treat me well, so I didn’t want to invest with him on a personal level. And he build up some grudge with him. And I noticed that his behavior and pattern of approaches has been changing. So a friend of his came back from . . . For many years, we used to work together in a different moving company, came back out of nowhere out of the blue, showed up in the office every day or two. And I noticed that they’ve been hanging together a lot. And I know that the guy was in the process of opening his own moving company.
So I sniffed around a little bit and I found out that my so-called partner is a partner on a different moving company. That’s a conflict. I hired a lawyer, I got him in to court and the company back then was selling, in 2010, was selling I think $2.5 million or $3 million. So my lawyer calls his lawyer and tells them, “Listen, my partner wants your partner out, the partner’s opening another moving company without my partner’s consent. What do you guys want to do?” I say, “Okay, buy him out.” And my partner says, “Name the price.” And I said, “I’m not going name the price. Let’s go to court.”
We go to court, Supreme Court judge downtown Brooklyn. It’s me, his lawyer, my lawyer, everybody’s dressing suits beside me. When it comes to me and he said, everybody’s talking, his lawyer’s saying, “You Honor, what’s going on? You cannot push my partner out. This is aggressive takeover. It’s illegal. He cannot ban my . . . so my clients, sorry, my clients.
Andrew: Okay. I’m sorry. By the way, I’m sorry to interrupt, but I . . . how did you conclude? Because I want to get into some of the marketing stuff that you did. That’s more relevant. How did it conclude?
Lior: But yeah, same as you, you know, and I’ll do this. The judge comes to me say, “Hey, what you got to say? How much the company worth, name the price. I got to go, it’s a Friday. Yes, whatever.” And I turn look, “Judge, the company’s worth $3 million, right? Because I don’t know. It says $3 million.” “Okay, so you’re going to give him 1.5.” “No, judge.” “Why, what are you talking about?” “Well, the salary of a dispatcher is $200,000, of a branch manager is $200,000, salary of sales manager is $200,000, salary of a CEO is $200,000. He doesn’t do shit, Your Honor. So he doesn’t pay anything. I do all of this work.” $600,000 we take off what the company’s actually worth, because it’s assets and this and this is $1 million minus $600,000, the company’s actually worth half a million dollars. I’m willing to give him $250,000.” The judge looked at me, look at my lawyer says, “He should be the lawyer and not you. Go outside, get me a number.” They go outside, I sit inside, I do not do anything. They all go outside. They come, my lawyer back to me and he says, “Listen, he wants half a million dollars.” I say, okay.
Andrew: You give him half a million dollars, you buy him out and now you’ve got a business that’s cranking out over 20 million a year in sales.
Andrew: How much profit?
Lior: The profit margin now is only 8%
Andrew: Eight percent goes down to the bottom line. So 1.6 million a year.
Andrew: Okay. Let me continue that. So one of the things that I noticed is I went back in time, by the way, congratulations. One of the things that I noticed is I went back in time was your website was like you, you are a using Citysearch in the beginning to get traffic. Like you understood if I could get a high rating on Citysearch that’s going to drive traffic to me and also help close sales. You then moved on to Yelp. What did you do to do well with Citysearch, to do well with Yelp to get leads from them back in the early days? And I know things changed.
Lior: Things changed. Citysearch were bought by another company and then that became like a spam kind of a website, not real reviewers, and the reputation was kind of disputable with other companies as well, because other companies were just posting on themselves like we are the greatest.
Andrew: Did you do that?
Lior: We didn’t do it, right, but when customers were putting bad reviews right on us, we were able to call Citysearch and remove them.
Andrew: Because you were buying ads.?
Lior: Because, yeah, because we were paying advertising.
Andrew: Got it. So because you are paying ads, when somebody gave you a negative review, you could call up Citysearch and say, “Hey, listen, this person’s being unreasonable.”
Lior: They were surprised, like, “What’s going on over here?” So then Yelp came out of nowhere and we realized this is the real deal, right? This is real algorithm and there’s no shifting around. And Yelp were new to New York. They were pretty much established in the Bay Area. They came to New York. And we will one of the first moving companies that were dominating there.
Andrew: By doing what? Dominating meaning getting a lot of reviews. How?
Lior: Getting a lot of reviews, we were moving a lot, you know, 2008, ’09, we’re talking about bloggers and the students and people are more tech savvy back then. Nowadays, almost everyone do it. But back then, 1 out of 10 were actually going along and posting things or sharing things.
Andrew: And this is because you went . . . because you were working out of Dumbo largely and the people who moved to Dumbo were the type of tech savvy people who eventually made Brooklyn more interesting and cooler.
Andrew: Got it.
Lior: You put it together. Yes.
Andrew: Were you also asking them for reviews?
Andrew: You weren’t. They just was happening because of the people you went for. No. You know what? I’ve got to say, everything that I’m seeing even in your history tells me this is not a person who was waiting for life to happen. He’s going to find a way to make it happen. So were you doing anything to influence them and tell them about Yelp and get them to review you?
Lior: So at the beginning it was a like a snowball. It just came by itself. People keep reposting and posting. We didn’t know we moved one time and a lead a reviewer, we didn’t even know what it means. And the next thing you know, Yelp contact us and it says, “Listen guys, we are moving our headquarters to Arizona. We need you guys to move our 15 staff members from New York to Arizona.” We did for them, right? So we even gained Yelp’s trust to use as movers.
Andrew: Got it.
Lior: But with time, you know, things went downhill with Yelp.
Andrew: Okay. I’m going to come back to that in a minute because when I looked you up on Yelp, your ratings are terrible on Yelp now. Let me take a moment though to talk about my second sponsor. It’s a company called HostGator. I’ll do it quickly because one of the things that I noticed when I looked at your website is your hosted on WordPress. This whole business that we’re talking about, 20 plus million dollars in sales. You’re nodding, built on WordPress. The early version of your website was not, you overcomplicated it, I think in some ways.
Lior: Yeah, correct.
Andrew: Good. Right. Then you moved to a WordPress, super simple. Anything that somebody who’s listening to me, who want . . . anyone who’s listening to him, who wants to create a quick website and one that scales, ones that grows, WordPress is super easy. It grows with you. You can build so many businesses on it and if you want a cheap, affordable, effective hosting plan, go to hostgator.com/mixergy. These guys have been around forever. With one click, you can install WordPress, you can be up and running. If you’re growing, they will even grow with you. They’ve got more than these inexpensive starter plans that you’ll see on hostgator.com/mixergy but start with them.
They’ll give you unmetered disk space, unlimited bandwidth. I don’t know how . . . you know what, Lior, they got the unmetered and unlimited. They want me to be very specific about the words. I can’t. I’m just going to say basically all the email addresses you need, all the bandwidth you need, it will scale with you. Start with the inexpensive plan and build up. They’ll make the mistake that Lior did, which is just create everything from scratch when there’s WordPress that will do it for you.
Andrew: You agree, right?
Andrew: Sounds like you have some tough issues with your website. All right.
Lior: SEO only WordPress whoever listens out. Only WordPress that’s only thing that worked for me.
Andrew: Do you do your own SEO by the way?
Lior: I’m doing, let’s say, 20% of it.
Andrew: Okay. I’m going to come back to that in a moment too. Tell me what happened to Yelp. Why is your Yelp review not great? Oh, let me, sorry. Let me close out the ad, hostgator.com/mixergy. Okay. Why, what happened to Yelp?
Lior: Okay. Yelp,. pretty much easy math. Yelp is an IPO company. It became an IPO company in the middle of our so-called relationship with Yelp. Yelp also grew significantly there. They have right now, you know, in moving industry, you know, maybe 200 times more than what it was in 2008, and the math is pretty simple. They need to show profit. And if you have a company back then in 2012, let’s say company with 40 trucks, Dumbo Moving 40 trucks 2012 having 5-star reviews and 300 reviews in total. Why would any other company will come and advertise in Yelp where you have such a big shot, where they have only 5 trucks and doing 20 reviews. Maybe it’s 5-stars, there’s 20 reviews.
It didn’t work for Yelp. Yelp needed to make for the big fishes a little harder to stick around in the game and the smaller and newer companies more appealing. Therefore, and you can check it yourself. Any new company that are coming into Yelp, if you get with your first time reviewer and you put a five-star review, it will stick at the new company. If you’re first time reviewer and put a good review about Dumbo, it will never stick. They only want . . .
Andrew: Because they wanted the new people to have a chance to compete against the existing people who had a lot of ratings. Otherwise, why would any of those new people care to be in Yelp? Got it. Okay. What about buying ads versus not? Was that becoming an issue for you?
Lior: Buying ads at Yelp?
Andrew: Yes. I’m hearing from friends that people who buy ads have an advantage. People who don’t don’t, but I don’t understand the full impact.
Lior: There we go. That’s how it goes. First of all, integrity is important for us. If a company, any vendor that we do business with does not see eye to eye with the very basic rules of honor. This is ours, this is our data, right. Company, customers went online, they put their time into praise Dumbo Moving. It needs the stay there, everybody else needs to read it, the same as you share, you know, the so called bad reviews, and if you choose not to do so, there’s no need for us to promote your business and pay you advertising. Not to mention that the advertising per se doesn’t add up when it comes to our large budgets on Google AdWords and whatnot because the Yelp advertisement, their model is very limited. You cannot pay more than $3,000 a month or something like that. So in terms of honesty and integrity, if we’re going to say wait, Yelp is filtering our review, let’s paid them money so they’re not going to filter our review. At the end of the day, we’re feeding the beast, and I decided not to do that.
Andrew: Wait, you’re comfortable saying to client, we have five trucks when you have one truck, but you’re not comfortable buying ads on Yelp if it means that people are . . . you’re not comfortable buying ads on Yelp?
Lior: Not comfortable buying ads at Yelp just because Yelp is this destroying businesses.
Andrew: But they’re not destroying the businesses that buy ads from them. Why not just continue to do business and say, you know what, yeah, this is a greater problem.
Lior: It’s not plain and simple. It’s not plain and simple. I think it was Anthony Bourdain, or one of the chefs out there, said that Yelp are actually killing the craftsmen. They crippling the craftsmanship of the entrepreneurs out there and other business owners. Yelp allowed giving stage to spoiled and uneducated or somewhat calling themselves educated youngsters out there to run their mouth and have no filters on that while businesses’ hands are tied and they cannot defend themselves, and there’s many aspects.
You look at the so-called malpractice for doctors, you know, why would 25-year-old students be able to pass judgments? Students for literature are able to pass judgment on a physician, right, and cause a lack of traffic for that physician, right. So in the same way, a chef that’s running their own business in a restaurant goes to a ramen store and ramen supposed to be served in a certain temperature, which is not really hot.
Andrew: Wait, you’re saying look, the average customer does not know what they need, so why should they get to rate?
Lior: That’s what one way . . .
Andrew: One of the things.
Lior: One of the things you say, but the other thing to say is if Yelp is a full on full reviews, real customers, don’t make a hierarchy who gets to be filtered and who not.
Andrew: Okay, so I get that. Here’s the part that I see then that you did shift to search engine optimization. I went to Ahrefs they’re . . . Actually, I thought they were a partner of ours. Apparently they’re not. Apparently, I’m just a customer. There is, and we’re using them as a research. I went in, you’re really good about getting yourself into articles that will then link back to you articles. Like what did movers find that’s strange in people’s homes? Guess what, Lior from Dumbo Moving, he’s got an opinion. He’s seen some stuff. Right. What to do to avoid anxiety about moving. Lior’s got opinions about that. He’s been in the moving industry forever. Right? You’ve got . . . that seems like part of your strategy that’s working.
Lior: Yeah, correct.
Andrew: Tell me what I should be understanding about how you do SEO and how you do content marketing.
Lior: So content marketing is key. Obviously, Yelp and Yelp reviews and any kind of reviews you’re gathering content, but that goes to another website. But if you have your name on let’s say 20 or 30 websites that then link back into your website then the bouncing and the amount of transaction that happened to that, you know, viewer or the algorithm or the Google spider, the way that they say it.
Andrew: I get it, yes, yes.
Lior: It makes your ranking higher.
Andrew: And so what’s your strategy? You’re doing 20% SEO. Of the SEO you’re personally are doing, what is your strategy?
Lior: So I read the reports and I make the decisions. First of all, where can we really put our names out there, some websites are not rated as well.
Andrew: What reports? What do you use for reports?
Lior: So we have people, we outsource people for an SEO company out in Europe. They give you the report. They tell me, “Listen, Lior, this is where we should put our efforts more on this website and try to get a link here, or try to put our name here and this article and whatnot and this is what we need to do about it.” And then I do, I do my ones and twos, you know, I decide, listen, okay, this worth it. This is not worth it. At the end of the day, too many transactions and spamming your name around is not that well. You have to do it in a certain way and that’s . . .
Andrew: What is the way? What am I? What am I seeing? Like, I’m trying to put this all together. One thing that I noticed is you have a lot of articles on anything to do with the real estate. So realtor.com, absolutely. I think there was an article about the pros and cons of gun rooms. You were in there, you said, “Look, a gun room. Even for somebody who has two guns, can feel . . . make them feel really important and make them love the guns or it can be a big turnoff.” That was your thing.
Then I saw another article about, here’s one. Apartment Therapy, how to decide between flat rate and hourly movers. Obviously, this is a good fit for you. So there’s somebody who’s pitching all these sites. You have a hit list of different sites you want to be a part of. Anything that has to do with real estate, right? Especially in the areas you work in. What else? What am I not seeing here as I go through it? What’s a little bit under the surface?
Lior: So you have all kinds of trends that people are searching. And for example, I get reports, they report and I actually read them. What is the main traffic for our website. For example, what’s the keyword that people typed in. For a while, it was how much to tip the movers and then I contact my people, I said, “Listen guys, they need to make some kind of the content about the tipping and how much because that’s a big concern.” And then another one was where to get moving boxes again, packing supplies and whatnot.
The small thing that the consumer does think about and on, and when the minute is about the hit their anxiety and questioning is rising up, that’s where we supposed to hit. That moment of so-called weakness or moment of losing control, that’s where we come in as a strong brand. And we will try to use that wave in order to push in the SEO.
Andrew: And this is you doing it. So I’m actually doing the same thing. I go to Ahrefs, which I thought was a partner, but I guess I’m just a customer, which is totally fine with me. I typed in everything you’re saying. I’m trying to like replicate it, see what you’re doing. So I typed in moving and then I do see it like a list of questions like where to get boxes for moving, right. That’s the type of stuff, how to load a moving truck. You might think, which of these would our customer actually have, probably not how to load moving truck or maybe, right. And then you say, “We could do it for you.” And then you think, I need one of my writers to go and write something like that for me. Am I right?
Andrew: That’s part of it.
Lior: The stuff that you read, I usually write myself. But what I do get from the SEO guys is to find out where can we get the links? Like where, what website, what articles we can.
Andrew: Now that you know these keywords, where should you go get an article written about it?
Lior: Yup, yup.
Andrew: Got it. All right. And then, you know, I want to close this out also with this other question. I feel like a large part of your success, obviously, it’s you more than anything else, but the fact that you are in Dumbo. I had this question in my mind, how did he know that Dumbo was going to be the hot area where people wanted to move in and out of which was going to be the place that was more interesting than say Queens. And my sense is it’s because you are a mover and you’re watching the types of people who are moving. You talk about it. Why did you know?
Lior: So you see a lot of trends when you’re a mover and being a mover, I think there’s . . . you really go in into the back entrance of everybody’s life in a very literal way to say it. But you do, you come in into somebody’s privacy in the most exposed time. When you bring in guests into your house, you expect them, so prepare your house for it. When movers come in, you basically expose that, “Here, I got nothing to hide. You guys are going to see all my stuff. You see how messy I am or not messy I am. And you’re going to see how I behave during that as well.” So, you know, there’s many things . . .
Andrew: So what did you learn by moving people in Dumbo back then as opposed to moving people from other parts of New York City?
Lior: So the fact that I saw the trend of the artists moving out, the struggling artists moving out. The fact that we started to see the landlords, I started to see the landlords are, you know, talking about air rights. And what kind of city planners are signing on this and what election they should expect. If Michael Bloomberg is going to be the mayor, and then we should have here a park which end up to be the case, right. So the inside politics and the lots, variety of people I moved and between councilmen and the city officials and teachers and just artist or even the actual landlords or people that are close to the landlords and developers, I got an information. I knew that something big is happening, and just simply the fact that you keep going from city into Brooklyn, city into Brooklyn. You know what, listen, there’s a migration . . .
Andrew: Oh, you mean you’re starting to see people move from Manhattan into Brooklyn and you realize Manhattan is the hot area. Suddenly, people are moving to Brooklyn. Yeah. You know what, that happened . . . I remember going and seeing a few friends and realizing that we made a mistake by trying to meet up with them and Manhattan. Brooklyn was where we were supposed to meet up with them and that was completely changing. Usually, people in Brooklyn felt like garbage for living in Brooklyn. They felt like that to move up to Manhattan to do them a favor and then it started to change where if you move . . . if you went to hang out in Manhattan, you are not going to have as good a time. It was going to be more crowded. Brooklyn was more interesting. The people from Manhattan were almost second-class citizens to Brooklyn. That was kind of an interesting move and that’s what you notice. That’s what you built it up. You own a lot of real estate I’m imagining based on these realizations.
Lior: I own a great deal. Okay deal of real estate, yeah.
Andrew: I bet. And you own your company outright. Okay. The company is Dumbo Moving and Storage. Lior, thanks so much for being on here.
Lior: No, problem. Thanks a lot.
Andrew: I want to thank the two sponsors who made this interview happen. Hang on with me for a second. The first, if you need a website hosted, listen, Lior, go the best when it comes to SEO, the best when it comes to quickly getting started is WordPress and WordPress is hosted beautifully, inexpensively, and fast on HostGator. Go to hostgator.com/mixergy. Just sign up for them.
And the second company is one that you’re not going to instinctively think makes sense, but boy, does it. Go to ClickFunnels, it will help you sell. Lior, thanks so much for being on here. Everyone, thanks for listening.
Lior: Thanks, Andrew.