Andrew: Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy.com. And even though I’m basically in the content business here at Mixergy–I’ve created interviews here since 2008–I’m not very high on content. I always feel like there’s just so much of it online. How do you make a real business around it? It just doesn’t usually compute for me.
I can see how you can advance a mission, that’s what I’m doing here at Mixergy, but a real business? It feels like software is a better way to go. So, even though I’m in it, I’m always shocked when I hear people talk about how they built a successful business that’s a media company, especially from scratch like today’s guest did.
Today’s guest is Gerard Adams. In 2011, he helped create a company called Elite Daily. Elite Daily is kind of like the Huffington Post of Generation Y. He then sold it in 2015 to DMG Media, if you know the Daily Mail, that publication, then you know the company that bought them out, and they sold for a really impressive amount of money considering how little they got in investment and how short a run they had with it. I want to find out how he did it.
I also want to find out about his current business. He is now running Fownders. It helps millennials form and grow businesses. Sometimes that means from scratch as entrepreneurs like you and I are doing. Sometimes it means by saying, “Hey, you know what? You probably shouldn’t quit your job and maybe you can be an intrepreneur,” which is an entrepreneur inside a company or a freelancer. And always it means helping millennials find what success really means to them and acting on it.
All right. We’re going to find out how he built both of those businesses and so much more thanks to two great sponsors. The first will help you hire your next great developer. It’s called Toptal. And the second is the tool that we use to get our guests on interviews like Gerard Adams here today. It’s called Acuity Scheduling. First Gerard, welcome.
Gerard: Thank you. Thanks, Andrew. Appreciate the intro.
Andrew: The day that you sold, you said you went in a back boardroom with your cofounders and did what?
Gerard: Well, we went to the back boardroom, and we basically looked at each other in the eyes and said, “Are we really doing this? Did this really happen?” I really had to make that decision if it was the right move or not. We looked at each other in the eyes and said, “We started this together. Are we going to finish it together? Is it the right move to make?” We had two options on the table. We had raised $5 million in a short period of time as another option.
We basically looked at each other and said, “Let’s go back into that boardroom and this is the right move to make. This gives us security for the company, and it’s a win for us, our investors and it’s a dream come true.” It may not be that billion-dollar number, but it’s more about the fact that we did it. We built a company that really created enough value that the likes of a billion-dollar company like the Daily Mail wanted to take it over.
So we went back in there. When we made that vote, man, it was like . . . I can’t even tell you the emotions that went through my body. It was crazy.
Andrew: What did you sell for?
Gerard: Close to $50 million.
Andrew: Close to $50 million?
Gerard: Yeah, cash.
Andrew: Wow. So I’ve heard $40 million to $50 million from Business Insider. How close to $50 million?
Gerard: Pretty close with all the incentives baked in, in the high 40s.
Andrew: I’m guessing you became a millionaire based on that deal, or were you one before? I can’t tell. I told you before we started that you had a backstory that as much as I researched, I didn’t fully get to the bottom of.
Gerard: So I had actually become a millionaire when I was 24 years old. And then interesting, that was right before the recession hit, so going into 2010 I had lost all the millions that I had saved up.
Andrew: How did you become a millionaire at 23?
Gerard: So, basically when I started my career, I started with interest in the stock market. I had an early on failure that kind of led me to the success. Basically, my first project was building an online forum called StockSpot, where people were able to come on, talk about stocks they liked and each member had a rating one to five that pretty much stole from like an eBay and I built it just so I could learn from other people who wanted to trade stocks. I could learn from them.
From just like really spamming every message board I could go on, “Come to StockSpot, talk on my platform,” little by little, I was able to build about 10,000 active users, which was a lot back then. That led me to a company, a CEO reaching out to me when I was like 19, saying, “I don’t think you understand the value of what you’ve created. I would love to advertise on here, but let me meet you.”
He was also from New Jersey. I met him. He became a mentor of mine and we built a relationship and he ended up mentoring me to become the Director of Investor Relations for his nanotechnology company. Through that year, everything I learned through digital marketing I had done for his company.
I was fascinated by the fact I was reinventing the battery with nanotechnology. Basically I said to Ron, the CEO, “Hey, let’s do our first ever demo day.” He was like, “You handle everything.” I literally got my buddy, who was a wedding DJ, to set up a stage and speakers and a mic like this, and basically I invited the media, investment bankers.
That day was the day that I actually–it was the first time I ever did a public speech, introduced the CEO and a classic demo day failure. They went to prove out this battery, hit this button, prove out that once they hit this button, that’s when the energy would be used to prove out that was it an infinite shelf-life battery and just crickets. It just didn’t work.
I thought my career was over. I was devastated. But a couple of guys came up to me and said, “Hey, kid. I’m surprised you got me in the room. Here’s my card. Call me.” At that point, I said to myself, “Man, I did get 200 people in this room. I did this company on the cover of Wired Magazine. I built like an amazing viral video for the company. I rebuilt their website. I wrote their press release. I did so much marketing.” So I was like, “There’s got to be other companies out there that will be more prepared, and I can help shine light in telling their story.”
I ended up creating an agency to do just that. I literally printed out every single small company that I could find CEO’s name, number, fax, phone number, email, and I would literally call, email, fax, send them direct mail and say, “Give me a shot.” I finally got my first client for $750. I would just over-perform for them, get them written up.
I would network with all these different bloggers and learn–I started mastering pay per click back then, how to help build out their email list. Little by little, I took it from making $750 per client to, over those next four years, becoming one of the most sought after digital marketers for small cap companies having clients pay me six figures.
Andrew: To help promote their stock, not their products, right?
Gerard: Correct. To promote their stock and their company, correct.
Andrew: And this is at the same time that you ran StockSpot?
Gerard: Yes. That was when I had StockSpot, and then I took that into a company called Wall Street Grand.
Andrew: Wait, so even though you’re moderating this community of people who are all trying to figure out which stocks to invest in, you’re also helping to promote small cap stocks, which is kind of a dangerous spot to be in, right?
Gerard: No. I didn’t use StockSpot for that. I sold StockSpot and then moved into that company Wall Street Grand that I just mentioned.
Andrew: What year did you sell StockSpot?
Gerard: That was back in probably 2007, 2008, right around then.
Andrew: Okay. Then the revenue from there was coming all from advertising?
Gerard: I hardly had any real revenue from there. The real revenue kicked in once I learned these companies need help with digital marketing, and then that’s when I built an agency and didn’t use that platform.
Andrew: What’s the name of the agency?
Gerard: Wall Street Grand.
Andrew: And then at what point did you lose all the money you were telling us about before?
Gerard: 2010, 2011, I think it was right there.
Andrew: So just before you started Elite.
Andrew: Okay. How much did you lose, and what did you do that you lost it all?
Gerard: So I ended up losing $20 million. I was up $20 million. So I basically started taking–what ended up happening was with this agency, I started not liking the industry. I started getting contacted by a ton of companies that wanted me to help them promote their stock, and I was like, like you mentioned, this is a dangerous spot to be in. I’m really great at what I do, but what I learned is like a ton of these companies fail, like 90% of them, if not more, probably 99% of them end up mismanaging money and not getting their products to market. I didn’t enjoy it. I started saying to myself, “This is not where I want to be.”
So I started actually going and visiting companies that I did think were investable that were more–I was a fundamentalist. So I would find companies that had strong balance sheets, strong revenue growth, cash, no debt. I would go and visit them. I would invest in them into the open market. I would shoot a video. I would interview the CEO. I would then talk about them similar to Warren Buffett, and I would fully disclose that I’m invested into this company, but I would hold in my disclaimer that I wouldn’t sell for six months while talking about why I invested into this company.
I did really well. Invested into a lot of gold companies, a lot of miners, and during the recession, I was doing really, really well. Then I was up $20 million into the market and invested into a TV everywhere company that had the patents for streaming content through mobile devices. I just got overly cocky thinking that I was this young, mid-20s, thought I was invincible and one day, the market just tanked.
Andrew: When you say you lost $20 million, you actually lost $20 million in cash in the bank and you put it in the business and you lost it?
Gerard: No. I had $20 million in gains in my brokerage account. There was $20 million worth of equity, and then I basically could have–
Andrew: In small cap stocks, which means–
Gerard: Midcap, yeah, more midcap.
Andrew: Small cap stocks are tremendously volatile. Just moving your money out would have reduced their value, right?
Andrew: Okay. I can’t really find enough research on that because it’s not the kind of thing that would be public unless you showed more of your–would you be willing to show the brokerage statements from that period of your life?
Gerard: I would have to probably call–I can probably call up those brokers and find that out, yeah.
Andrew: All right. So then I see where you were. I’m wondering how did you end up with money to invest in this new online publication?
Gerard: So I had to sell a lot of things. At that time, I had a couple of Bentleys. I had things that I had bought. I had bought some real estate. I ended up having to start selling a lot of my cars, selling a lot of my assets. I lost the majority of my net worth, but I still had a little bit of money. I just wasn’t a millionaire anymore. At that time, I probably had a couple hundred thousand dollars, and then I was able to sell some of those assets.
And then I basically heard a story from my mother who told me how she grew up basically losing everything. Living with my grandparents in a family of five, the apartment caught on fire. I talked about it in my TEDx Talk. I didn’t know this until this time when I had this happen to me.
She said, “We lost everything and I had to basically drop out of school at like 15 years old to go on Canal Street in New York to make a little bit of money to help provide for your grandparents, and if I was able to do that and put this roof over your heads, you better believe you better go back out there and do it again.”
That really like hit me hard and saying, “You know what? It is what it is. I lost this money. I learned a lot about my ego and saying this can happen. Money can be taken right away from you.” But one thing I still had was my passion for content, my passion for creating and digital marketing expertise. That’s when I was like, “Okay, what’s next? What can I do.”
Andrew: You talked to our producer before this interview and you said, “Look, I was looking at millennials, this new group of people who were just starting to emerge as potential audience and customers for businesses.” And you saw what when you looked at millennials? What did you notice that helped you come up with the idea for Elite Daily?
Gerard: Well, it was interesting. Right before Elite Daily, really how it started happening is when I lost all this money, I started making documentaries. You can find them on YouTube. The last one is called “College Conspiracy.” I had created this documentary–I was one of the first to expose the student loan debt crisis.
The reason being is right around that time, around that 2010, going into 2011 time, that’s when after that recession happened, I had lost my money, my father had gotten laid off and all my friends were graduating from college. I’m one of those older millennials. That right around that time, every one of my friends were literally going through the moment of graduating college, having this degree, having all this debt and couldn’t get a job, and yet they’re all paying attention to reality TV, the “Jersey Shore,” Kim Kardashian.
So I was like, “Okay, I just lost all this money. All my friends are coming to me for a job. Yet they’re the ones who had the degree, and I looked like the failure all these years. My father got laid off. This country has the largest national debt crisis in history. This is crazy.” I actually was understanding enough of the markets because of what had just happened. So I was really fascinated by the economy. I started making documentaries on the economy to educate millennials on our national debt crisis and how you don’t need to go to college.
That was when it kind of started to spark this interest in content for millennials. And then my intern who was working for me, David, I told him, “You need to become the CEO of this company, this idea,” came to me like, “I want to create a publication.” And I at first, he was like, “I want to create Elite Wall Street.” I was like, “Whoa, I just went through years of complete absolute torment, ups and downs and almost like ruining my career, like Wall Street is tainted, no way.”
He wanted to educate millennials around finance and business. I said, “We can do something much bigger. Let’s look at all the landscape of all these publications handed down to us and look at all these different verticals of the news we’re looking for in the market. Let’s create something bigger.” That’s when we all sat in a room in an apartment together and said Elite. . . and then I hit the word Daily. We were able to buy it for $9.99 and that’s like when it all kind of got started.
Andrew: You said David was his name, he was the cofounder?
Andrew: David and then that’s David Arabov–am I pronouncing his last name right?
Andrew: Was the other cofounder–no, David Arabov, was he the son of Jacob the Jeweler, the guy who was in all the hip-hop videos?
Gerard: Yes. So, at that time when I started mentoring David, actually Jacob was away. David came to me for mentorship because he didn’t have, at that point in time in his life, he didn’t really have someone that was guiding him.
Andrew: Jacob was away where?
Gerard: He was incarcerated at that time?
Andrew: Incarcerated for what?
Gerard: To be honest, I don’t know the whole complete story. I think it was for something with taxes.
Andrew: All right. So his son–this is a guy, am I right that he’s the guy all the hip-hop guys are talking about?
Andrew: Here, apparently June, 2006 according to Wikipedia he was arrested on charges of money laundering and conspiracy in connection with Detroit-based black mafia family as well as for not declaring large cash purchases to the IRS, which I imagine every jeweler is probably doing, but maybe I’m cynical that way. How did his son end up being your intern?
Gerard: That story is pretty funny. Basically, I had a trainer working with me. One day my trainer comes to the gym and he’s wearing this iced out G-Shock. I’m like, “Dude, that is badass. Where do I get an iced out G-Shock?” Back then, I thought that was so cool. He was like, “Come with me. I’m going to introduce you.” His other client was Jacob’s wife, Angela, who’s one of the most amazing women I’ve ever met in my entire life.
She brought me to their store in Manhattan. When I got there, this store is unbelievable. Pharrell is on the wall, all these amazing people are on the wall. It was just a really cool experience. I met Jay-Z there. Here I go in the back and there’s this young kid, David. He’s probably like 18 at the time. Here he is like hustling me G-Shock watches. I’m like, “You’re freaking amazing.” He asked to go out and hang out.
Then I got to know his mother. His mother basically said, “David doesn’t have right now someone to really guide him. He’s going out, he’s partying.” He comes from a wealthy family, so he had the Maybach and they had that lifestyle and he saw that lifestyle and David, when I got to spend some time with David, we met up at the Gansevoort Hotel, sat down together.
And he opened up to me and said, “The only real mentor I’ve had my life other than my parents–and my father is away right now–is my basketball coach. I don’t have anyone to guide me. I want to make a name for myself. I don’t want to be in the jewelry business. I don’t want to follow in my father’s footsteps. I want to make a name for myself and I don’t know where to go.” So I said, “Show up at my office tomorrow and we’ll take it from there.”
He started coming to my office every day since then interning. Then that’s kind of how we built this relationship where he was like my little brother.
Andrew: Wow. And then the third cofounder was Jonathan Francis?
Gerard: Yeah, JSP.
Andrew: JSP. How’d you end up with JSP from Jonathan Francis?
Gerard: His name was Jonathan San Pedro. I think it’s like Jonathan Francis San Pedro. So we all knew him as JSP.
Andrew: How’d you guys connect with him?
Gerard: Well, actually, JSP worked for Jacob growing up, and JSP went to Pace University as well as David. He was a little older than David. They had also known each other from college as well. And they were good friends. So, when David was coming to me with this idea and we’re working on it, we needed someone who was a little bit more tech savvy, and JSP actually had a little bit more of the–he understood I guess you could say back then it was as basic as WordPress.
That’s how it was. He brought JSP, brought him to the office. We started all kicking it. That was it. We just decided, “Let’s do this thing.” I took a real liking to JSP. He’s probably the hardest working young man I’ve ever worked with in my entire life.
Andrew: All right. I’m going to take a moment here to tell everyone about a piece of software that I love. But when we come back, I’m going to talk about how you figured out what the subject or what the content was going to be on the site and then how you guys mastered Facebook. You guys were huge on Facebook before most people even understood it. Even Kara Swisher from Recode said she basically had to sell to Vox because they couldn’t figure out social, but Vox did and it was so hard. You guys figured it out. I want to ask you about that and I want to ask you about why you guys sold.
But first, I’ve got to tell you about this tool. You know what? Let me take it back a step and tell you about this guy, Nathan Barry. He had a company that was doing well, $5,000 a month in revenue. Then it started to struggle, $2,000 a month in revenue. He said, “Something is not working out here. I’ve got to get serious.” I said, “What did you do to get serious.” He said, “I decided I was going to make sales myself to each new customer.” He had this software that allowed people to send out emails, so he found people who needed to send out email in bulk and he started to schedule phone calls with them.
The more he talked to them, the more he realized some of the shortcomings of his software and also some of the high points that got people to say, “Yes, I will buy and sign up for your software.” By making those calls, he was actually able to grow sales and also figure out the product and turn things around. I just talked to him the other day. His site is called ConvertKit. Let me look at the up to date numbers on ConvertKit. This is where I should have my data up ahead of time. I want to tell you where his monthly revenue is as of today–$630,000 in monthly recurring revenue.
And the thing that turned it around was actually talking to his customer. A lot of times we talk about on-page SEO, off-page SEO, social, etc. But ultimately, talking to your customers will help you really understand what they want and what you need to create for them. The problem with talking to your customers, it’s hard to get them on the phone. That’s why I recommend you check out Acuity Scheduling.
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Go check them out at AcuityScheduling.com/Mixergy. They’re even going to schedule a private one-on-one consulting session if you really want to know how to do it right. Go check out the details at AcuityScheduling.com/Mixergy.
Gerard, I noticed that before the interview started, I said, “How do I describe this in one sentence?” And you said, “It’s like the Huffington Post for millennials.” You guys studied the Huffington Post when you tried to figure out how to write, how to speak to your audience and what content to create, didn’t you?
Gerard: To be honest, we were very naïve in the very beginning. We did study Huffington Post, we studied Complex. But to be honest, a lot of it in the beginning was like interviewing each other, interviewing our friends. It was a lot of like naiveté, like actually testing different things out, different verticals out.
Andrew: What’s a vertical that you were testing out in the beginning that in retrospect was just off?
Gerard: Believe it or not, business, like entrepreneurship. In the very beginning, like we actually wanted it a lot to be around entrepreneurship and business and we were just–it ended up being that that wasn’t the most–that wasn’t getting highlighted. A lot of people weren’t engaging with that content. They cared more about culture, pop and entertainment, dating. Dating happen to be the number one vertical.
Andrew: Dating was the number one vertical?
Andrew: You know what? I’m looking at the dating category right now. Here are some of the headlines: “Men Admit Their Excuses to Get Girls Out of Their Bed When They’re Done Hooking Up,” “A Nice Guy and a Fuck Boy Reveal How to Go from Being His Option to His Top Choice,” “The Five Best First Date Conversation Starters to Help You Actually Get to Know Someone.” That’s the stuff. How did you even get anyone to pay attention to these articles you guys were producing to see whether they were successful or not?
Gerard: It really was Facebook. Facebook was our number one driving–
Andrew: From the beginning?
Gerard: Yeah. Very much in the beginning, we knew we needed to attack Facebook very quickly. We were lucky enough to catch that wave early on, whereas like Facebook algorithms have changed over the years. I think when we sold, it was at the height when they had made that shift and our traffic had significantly taken a hit and we saw that coming.
But in the beginning, it was like that’s where we knew who our friends were, especially David. He was very much very focused on Facebook, focusing on all the different popular people that were at different colleges and universities. He would literally in the beginning, I remember, hit up every single friend of his that was at Pace University and he like, “You have to share our articles.”
Andrew: I see. Then as you developed, it was finding the people who had the most followers and saying, “Share this article.”
Gerard: Yeah, it was definitely getting the people who had the most friends to share our articles, engage with our articles.”
Andrew: I see. And then how systematic were you about it? Did David have a spreadsheet with the names of the top people? Was it a CRM? Was it just trying to feel it out?
Gerard: In the very beginning, it wasn’t organized. It was literally–I think we had started off having an Excel, but it was literally–it was more like quantity over quality in the very beginning. It was like let’s hit up as many friends and people we know and their friends of friends and let’s get it out as much as we possibly can as much as possible on a 24-hour basis.
And then over time, we got more methodical with it and actually started looking at who were actually more influencers and how we could find more distribution partners and strategic partnerships with like the Huffington Post, with Complex, with other publications and sharing each other’s content. I think that also helped significantly.
Andrew: What did that look like when you were sharing each other’s content? What was that process? Was it that the Huffington Post on their social media accounts would post your articles and you’d do the same for them?
Gerard: Yes, but it was also some original content. We actually were able to structure deals where we would write some original content for them and we would also do different series for them. So similar to doing like our podcast, we would actually be guests on Huffington Post Live a lot of times and going on there live sharing content that way as well.
Andrew: And then what was in it for them? I get that you get a lot of promotion. What did they get out of it?
Gerard: To be honest, it was just that cross-collaboration of them getting more exposure to our audience and vice-versa. Anyone who worked for us, nobody was older than 22 years old. It was very young and we had that millennial culture. A lot of the people we started inviting to the office, we did a lot of like parties at the office and invited the media and the industry to come by. We did that with the industry to build relationships and to get them to get to know each other. We also did that with our influencers and with getting people to want to contribute for us and contribute–our contributing writing staff, we had over 2,000 contributors.
Andrew: I see.
Gerard: That was another huge factor.
Andrew: Kind of like the Huffington Post did too, where Arianna Huffington in the early days would tell everyone she met that they should be blogging on the Huffington Post. I think it was The New Yorker article about her that said that she would go see a doctor and tell the doctor that he’s got to blog on Huffington Post and gave him an account. Was it that kind of the thing, where you would give out a lot of accounts so that you have more content? Every time someone publishes content, they have an incentive to promote it?
Gerard: In the beginning, it was. We actually had a department to curate our contributors. Then we created like a leaderboard. So, depending on how many shares and how viral your articles would get, we would showcase the editors out there, the contributors out there that were at the top of that leaderboard and created a little bit of a gamification with it.
Andrew: I see. You also told our producer listicles were very big, which actually they were for a long time, for BuzzFeed, for Huffington Post and others. Do you remember how you discovered–was it just looking at the traffic and realizing anything with a number does well or was it something else?
Gerard: Yeah. We caught that wave of the listicles. It was a lot of testing and then studying. It really was. We ended up bringing like a data scientist in. I wish we did in the early days, going into like our third year, we ended up having a lot of data, studying that data, understanding the odd numbers work better than even numbers.
Really, we would even study the different words and study which articles were going more viral than others and what words and the different title tags and the different tags. We would send all that out to our contributors so they knew and they had a better opportunity to get more viral articles.
Andrew: Speaking of words, when I said the word “fuck” in the headline, I was just reading it because it happened to be here, then I looked up at you as you said it and it seemed like you were uncomfortable with that, but that seems like a word that historically done well for you and still to this day does well, right? Fuck with the U–and I usually don’t curse here, but I also don’t want to be a baby about it–with the U turned into an asterisk, right?
Gerard: Yeah, I agree. Actually, I think when I saw Tony Robbins, when I first went through his first, UPW and I saw how many fucks he says on stage, that’s when I was like, “Okay, all right, it’s not that bad.”
Andrew: It’s okay, actually. It has actually become an okay word. Not just Tony Robbins, but The Wall Street Journal recently had an article about how books with curses in the title do better recently, have been doing not better, but have been doing well recently and making it to the top of the charts, like “The Subtle Art of Not Giving a F*ck” and then there’s an asterisk, right? I keep seeing that book everywhere.
Gerard: It’s interesting to me though because when you made that–when I felt that way, I think it was less about the fuck and was more of like man, when it is your company, you care about every article. When it’s not your company anymore, I don’t even know what’s being written. You know what I mean?
Andrew: Right. And now it kind of represents you in this interview, but you didn’t write it.
Andrew: That’s where that discomfort came from. What about when you allow so many people to write on your site, but it’s your site and you care about everything? How do you come to terms with that?
Gerard: I think that’s kind of what made us successful. It was like we claimed to be the voice of Generation Y. We wanted to allow everyone to have that voice, to be able to have that opinion and share it. We pissed a lot of people off, there was no doubt about it. We had nasty articles written about us. We allowed people to have the rebuttals, though. We had a really–Kaylin, she’s still with Elite Daily today, she was our Editor in Chief and she was so badass. She really, I think, managed it well by just really allowing people to share the way they felt about certain things.
Andrew: It was sexism that you guys got a lot of flak for, sexism and identity theft–not identity theft, pseudonym publishing. Sexism where you’d have posts like “21 Signs She’s Expired,” I’m reading this right out of Wikipedia, but I saw it in other places, “21 Signs She’s Expired,” number 15 was, “Three fingers fit.” Ooh, I see what that means. I probably wouldn’t have read that if I saw it ahead of time. I get that. What do you think of that, that some of the posts would get you more traffic but they were sexist or misogynistic?
Gerard: I would agree. I take ownership for it. I think that looking back, I think we definitely got caught in the game of clicks. There’s no doubt about it. I take ownership for that.
Andrew: Isn’t that okay? I kind of look back on the early days of Mixergy and I’d say whatever I wanted just to get attention. I would experiment a lot more, and I think that made Mixergy more interesting. Now being cautious because I have more to protect makes it a little–it feels cautious, less exciting. I don’t discover pockets of growth as often because of that. I don’t discover pockets of ideas because I’m not pushing against accepted ideas as much.
What do you think? It’s okay to push boundaries. It’s okay to piss people off. Frankly, this is me saying it, not you, because I’m not sexist–I think I should be a little at times, not because I want to be, not because it’s who I am, but I think I’ve got to throw that caution out the window. What do you think of that?
Gerard: I love that. I definitely agree. I agree when you push those boundaries and you’re just like free and speak what’s on your mind, speak how you feel, you can be an asshole or people will disagree with you, but it makes you who you are. The realer you are, I think today more than ever before, people respect you for that.
Andrew: Yeah. You know what? One of the sites that’s kind of following in your footsteps is The Hustle. Do you know them at all?
Gerard: Yeah. I’ve seen them.
Andrew: They did a post once about Tim Ferriss’ height. It was like this whole big thing about how tall or short is Tim Ferriss. I thought, “This is kind of an insult based on a person’s–who they were born as, as opposed to what they did.” I told the founder and he kind of laughed it off. Sure enough, Tim Ferriss now is one of the investors. So I just don’t think people are as upset as we think they are. When he got Tim Ferriss as an investor, he gave him a headlock because apparently he told a friend once, “One day I will get Tim Ferriss to invest in my company and I will give him a headlock. You watch.” He got both.
Gerard: That’s awesome.
Andrew: Right? Listicles did well for you guys. I wonder how you came up with the voice of the site and how you communicated that to your writers. What was the process for that?
Gerard: Well, we had a strong editorial team that basically, again, managed all these contributors, communicated to them daily, really sent them all of the different articles that we saw that were very popular in the news and what was going viral. We leverage Twitter and Pinterest and Reddit and just really were constantly analyzing the market and what people were talking about most, just basically through our editorial team, we had a whole staff that managed the process and then David particularly was the one who looked at every single article.
Andrew: Before it went out?
Andrew: He was then the content guy and also the promotions guy?
Gerard: So he was the one who decided every single article–I take that back, I apologize. He looked at every single article prior to going on Facebook, which was really like our number one source of traffic.
Andrew: When you say on Facebook, do you mean on your Facebook page or prior to starting this promotion machine of yours?
Gerard: Our Facebook page.
Andrew: I see. Okay. And then you guys got Andy Reis on to help you really revenue.
Andrew: How did you find him and how did he help you with revenue?
Gerard: So we had never built a publication like this. You had mentioned it in the beginning, where you said, “How do you make money with content? I never understood it.” We were in the same boat. We just wanted to create this. We felt there was a need for it. We were opening so many different tabs for so many publications to get news that we were entertained by and excited about, so we just created this, but we didn’t really understand how we were going to make money from it.
And then in the beginning, we were like, “Let’s just focus on building a community, building our audience, building our traffic, getting people that want to read Elite Daily.” Then once we started seeing that it was working and we had this traffic, we were kind of like, “Okay, now what? How are we going to really monetize this thing?”
Luckily, through a mutual relationship, a gentleman named Oliver, he knew Andy Reis. One day we just got a meeting with this company called Black Ocean that Andy Reis was a part of. We went in to meet with them. Andy just happened to really offer to basically give us that expertise, to be a mentor to us, to understand what it meant to actually turn this traffic into dollars and help us build our tech stack and what that meant.
Andrew: What does it mean? What’s the tech stack?
Gerard: Yeah. I mean basically everything behind the site, the whole backend that’s going to allow you to run advertisements on your site, know where you’re going to place those ads and then know how those are actually going to actually convert to impressions into paid, into paid advertising dollars to your platform. The server that’s going to be behind it to host all of these ads, that was something that we didn’t have any expertise in it.
Andrew: Here’s what Black Ocean’s description is in the Google search result. “Black Ocean is a technology company that builds next generation digital businesses. We look to solve real world problems through technology.” So it sounds like it’s a dev shop?
Gerard: So, basically, they were more of like an incubator at the time when we were there. They would house us. They were housing other startups. They had a couple different in house people that were developers.
Andrew: I see. So they coded up your ad delivery process and helped you think it through. Is that right?
Andrew: I see. Okay. And then do they get paid to build it or do they get paid a commission of the ads?
Gerard: They got paid a commission on the ads, and then they became an investor.
Andrew: They became–I see. How much money did you guys take on? I think the original money was put by you, according to the TechCrunch article I saw when you guys launched. You put in $30,000–actually, no, $50,000, right?
Andrew: How much money did you guys take on after that?
Gerard: Then we did a $1.5 million convertible note that was extended to about $2 million before the exit.
Andrew: That was it?
Gerard: That was it.
Andrew: The $5 million you were offered before, you didn’t take that $5 million. It was just something you were offered just before the sale. What about Black Ocean? Did they put money in too?
Gerard: They put in some money as well, not a lot, a little around $100,000.
Andrew: I see.
Gerard: But primarily the money came in from VCs.
Andrew: What was the site built on? I was trying to figure out whether you guys built your own platform or used WordPress or something else. I can’t tell.
Gerard: Yeah. We built it on WordPress, believe it or not. Yeah.
Andrew: It seems like a really hacked–not hacked, but edited version of WordPress, right?
Gerard: Very much, yeah.
Andrew: I don’t even see the standard WordPress URL structure in here.
Gerard: Yeah. I mean, if you were to look back at version one, you would definitely notice it. Once it got to like version three, version four, it was very customized.
Andrew: I see. What kind of customizations did you do, do you remember?
Gerard: I would have to lean on our CTO at that point, Adrian Goris, who was in charge of all of that.
Gerard: But I think the biggest customization to it was the fact of now we were able to allow profiles for our contributors and be able to allow them to actually now basically kind of own their own channel within Elite Daily where they had all their articles. People can now follow the contributor and get alerted on when they were contributing certain articles.
Andrew: I see. Let me take a moment to talk about my second sponsor. Do you know Toptal?
Gerard: I do not.
Andrew: Cool. I’ll tell you then. Toptal is a network of some of the best developers out there and in the past when I talk about Toptal, I’ve told people that if they need to hire a developer, they can just contact Toptal, tell Toptal what they’re looking for and then Toptal will find the perfect developer. Often that person or team of developers even can start within a day or two. I’ve given them examples of guys like Eric Brown, who created his software using Toptal developers.
But you’re bringing up a great point. Sometimes it’s not a brand new thing from scratch that either needs to be built or needs to be improved because the team of developers you’ve hired are already working on it but they don’t have time or you don’t have enough resources to grow it. Sometimes it’s just like what you guys did. You have a WordPress site and you say I have all these requests, all these needs but WordPress will not let me do it and I’m not going to install every plugin because the plugins won’t do it. The things they do could mess up everything else that we’ve got. There are conflicts opening with plugins. There are also other issues with viruses and malware with plugins lately.
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How involved were you day to day? It seemed from that first article that I read about you guys that you were going to be the money guy and the guidance guy, but you weren’t going to run the business. Is that what happened?
Gerard: Yeah, very much. Definitely like my job was mentoring David, mentoring JSP, helping them build culture, helping them build a team, helping them with division. Then basically once we were actually building the company on a day to day basis, I wasn’t the one who was managing like the content or the tech or anything else. I was out there helping get introductions for investors, for strategic partners, for advertisers.
Andrew: I see.
Gerard: Things in that nature, helping us build our advisory board and just continuing to help David in supporting the founders. So like every week, working with them, making sure they’re really focusing on growth. In their day to day, like, “What is our vision over this next year? How are we hitting our KPIs? How are we on a month to month maintaining our growth and setting ourselves up for potentially an acquisition one day or to become the biggest millennial publication in the world?” That was the goal.
Andrew: What did you do to set yourself up for possible sale?
Gerard: Well, one, after it was finally like cleaning up our mess, like cleaning up our–we had to like restructure our docs from a legal standpoint. We had to get our accounting in order, really get our foundation really put together. And then it was–just, to be honest, it was like we saw BuzzFeed as like our biggest peer. We saw Jon Steinberg leave BuzzFeed. We knew he was going to the Daily Mail. We were just like, “What an opportunity right now. This is perfect. They’re a UK company. They want to get a footprint in the US.”
I tracked Jon down at a Morgan Stanley that he spoke at, waited for him by the door, elevator pitched him, gave him my card, got him interested in Elite Daily, then we worked one of our investors that was part of that round that knew Jon and hit him from that end as well saying, “We need to get Jon as an advisor. What can we do to incentivize him?”
And then basically got Jon to the office, got him on our advisory board and once he saw the culture and saw that it was real, really studied our analytics, started getting closer to David, working with David and the next thing you know, we envisioned this, but we never thought it would really truly happen, especially in like a very short window. It was within six months that he made the offer.
Andrew: Within six months of you meeting him or of him signing on to be an advisor?
Gerard: Within six months, yeah, pretty much of me meeting him. He became an advisor very shortly after I met him. Luckily one of our investors was buddies with him and knew him. So, that was–it really worked out.
Andrew: He was the president and COO of BuzzFeed, as you said. He went on to Mail Online and now he’s the founder of Cheddar, which is like what you guys did, but only for finance, right? Finance for millennials.
Andrew: When you guys talk to an advisor, what do you do to actually use that relationship properly? I find that a lot of people ask for advisors. They’ll get an advisor and then they won’t use that person. Maybe from time to time they’ll ask for an introduction, but that’s it. What did you do to actually work well with your advisors?
Gerard: I mean, it’s communication. I think for us, it was like we really, really communicated really well consistently about what was going on in the company. I think a lot of entrepreneur founders, I don’t know if they get so caught up in the day to day that maybe every once in a while I’ll send out a request for a contact or what not. For us, it was like we bombarded our advisors.
Gerard: We were constantly calling them, asking them questions, sending them summaries of like what we were doing, how we were doing it, where could they really help us. It was also very–it was strategy and like thinking about for us, how can we get the right advisors on board that relate to our industry so they would end up wanting to become investors into our company or be able to bring us the right partnerships or potential acquirers. Therefore, that was our real goal.
I think you want to leverage your advisors to obviously get that mentorship and learn from their experience, like from, Andy Reis was like a great also advisor to us and really helped bring real value to us and learn who to monetize, but then you also want to leverage your advisory board to set you up for growth. That can mean a big strategic partner because they had that big relationship or maybe they’re in a similar sector where they can become that acquirer for you and you want to build that relationship with the and show them that like you’re all in and that you’re continuing to grow that company so they take an interest.
Andrew: How formal was the advisor relationship with you? Was there a signed agreement? What was it?
Gerard: With Jon?
Andrew: With any one of them. Let’s talk about Jon specifically, how formal?
Gerard: Very formal. We definitely made sure to get a formal advisory agreement. Typical advisor agreement for us was about 0.25 to a half a percent. If it was somebody like extremely–we did one advisory deal that we kind of regretted and bought back its shares with Jonathan Cheban, who was Kim Kardashian’s best friend. I believe he was a little bit more than a percent. We ended up buying back those shares. We would leverage our advisor shares to get–
Andrew: You would be specific with them about what you need them to do?
Gerard: Yeah. With Jonathan, it was like, “We really want to be able to get Kim Kardashian to share our content. We really want to be able to get in front of different celebrities that want to be ambassadors for Elite Daily and just sharing our content, you know. We ended up getting a lot of his friends to share the content.
Andrew: All right. Finally, the sale–why did you guys decide to sell instead of raise more money and keep on growing?
Gerard: So we wanted to–well, let me reframe that. I wanted to not sell. I didn’t want to sell. I wanted to hold on to what we had. That’s mainly because Jon Steinberg was valuing us based upon revenue. I felt we were just scratching the surface. This was like our third year. We were focusing so much on building our traffic, continuing our growth. We had revenue coming in, but we really didn’t hit our trajectory yet. I felt that if we went one more year, we would have been more profitable.
So I didn’t want to sell. I was basically also looking at the comps in the industry. BuzzFeed at the time I believe was valued at like $800 million. All these other really big publications were valued at hundreds of millions, if not in the billions. I just felt like we were undercutting ourselves. But I initially went to go to do a raise in Silicon Valley. We met with a lot of SF VCs, but they started calling our lead, Greycroft.
We just felt like they were beating us down and the reason was is they knew that we only had like a three-month runway, so they were trying to invest at a really super low valuation that–so, we were like stuck in a really tough position and that’s when I like went really hard before the last board meeting to make a decision.
I went to some of my initial mentors in life that are successful and they decided they wanted to back us. They decided they would come in for $5 million with a $1 million kill switch. We had that come through last minute, like right in that board meeting. But Alan Patricof himself was in that meeting and all of our investors. I gave a speech on why I believed that we shouldn’t take this acquisition.
But then I took my two partners outside of that conference room, sat down with David and JSP like I mentioned earlier and I said, “Guys, I did everything I could to give us another option on the table, but David, you’re day in and day out, you know this business better than anybody else. What do you think?”
Same thing with JSP, they said, “Look, Gerard, we respect the fact that you raised that $5 million, but we truly believe that Facebook is going to change these algorithms and it’s going to hurt our traffic significantly and then where will be at. This deal gives security to 200 employees we have back at that office. It’s a huge win for us. We haven’t raised a lot of money. It’s a win for our investors and us. This is a dream come true for us. We did it.” That’s when I was like, “All right. We started this thing together. We’re going to finish it together.”
We went and went back into that room and made the votes, cried and the rest was history at that point. We ended up celebrating at night at PH-D in New York in the penthouse and then threw a huge party with the team and threw a party at the office. Then we weren’t able to talk about it. So, for a couple weeks, I went through like a depression because it was like “Shit,” the what-ifs start kicking in, like, “What if we didn’t sell? What if? What if?”
One of the investors that was coming in for the $5 million was like, “You’re an idiot. You should have held. This was the opportunity of a lifetime.” It was stressful to know. But then like a couple buddies growing up and my parents and everybody was like, “You always want to jump out of a plane without a parachute, but you did it.”
That’s when I really got humbled and was able to take care of my family and do certain things I dreamt up and now do what I’m doing now, which I feel like if that didn’t happen, I really don’t think I would have found my purpose in life. I really started asking myself really tough questions after that sale of like, “Why? Why did this happen to me? Why did I have this success?”
Looking back from like the young guy who was all after money when I was very young and like learning about stocks and then losing it all and then having to deal with that recession and my parents losing their job, all my friends can’t get any jobs to like pivoting and figuring out how to leverage what I was passionate about with content.
Then like mentoring, it was tough to mentor David when he was 18 years old, 19 years old into a CEO. Then going all the way up to the point we’re managing 200 employees, we battled, we had arguments. We bonded. It was a journey–learning how to fire people, hire people, keep the culture, scale the business. It was so much fun, but crazy stressful. I started asking those questions like, “Wow, this was such an unbelievable journey.”
A lot of people want me to go and talk about this exit. They don’t understand the 14 years it took me to get here and now it’s like I finally felt like a weight was a little off my shoulder. I started thinking about like my purpose in life and how I can truly leverage this to make more impact for this millennial generation.
Andrew: That’s why you founded Fownders?
Gerard: Correct. Yes.
Andrew: Fownders is spelled F-O-W-N-D-E-R-S, right?
Gerard: It is.
Gerard: I just wanted to teach people to like own it, own who you are, own what you’ve been through and just like take ownership of what you want out of life, take ownership of your destiny, take ownership of like–don’t make excuses for your past and what you’ve been through. Own it. That’s part of your story. It’s part of your journey. Own it. And then becoming a founder, I want people to take ownership in owning, taking ownership of their life, their business, their career, their craft.
Andrew: When you started it, it was you trying to kind of give back and teach some of what you’ve learned, but was it supposed to be an incubator at the beginning?
Gerard: Yeah. So it was. It was a little bit–I was speaking at Drapers University. I was amazed by this ecosystem over there. We built Elite Daily at that Black Ocean and that seeing that kind of incubator, how that set us up. For me, I felt like so many millennials were following me on social media, sending me questions, sending me emails to mentor them, asking me about how I did it.
So many of them were hitting me up with the fact that they didn’t feel college was for them and I’ve been there. I’m like, “Damn, where do you go?” If you don’t want to go to college and you do want to learn how to start a business or you do want to learn how to learn the skills, how to like be able to build a career, where do you go nowadays? Definitely for me in the area I grew up, there’s nothing. There’s nowhere to really truly go.
I remember for me it was like my parents’ basement. And then it was like a lot of people today, you work at a Starbucks, a coffee shop, an apartment maybe. But there’s really no place for me around New Jersey that you can go and collaborate and rub shoulders with other passionate, ambitious young people, men and women like sharing ideas and working together.
Andrew: Were you thinking of an in-person place to go? It feels like it’s gone through–I’ve seen it a bunch since you started it. It seems like you’ve been trying to figure out what it is, where to take it since the beginning, frankly, right?
Gerard: So we finally figured out the vision. For me, the number one thing was I wanted to improve–I wanted to be more like a human accelerator. For me, what I’m passionate about is when people come here with these ideas, I want to break them down as to like why. Why do you have this idea? Why do you think that this is important? What do you really truly want out of life? Why are you really truly doing this? At a time where it’s sexy to be an entrepreneur, do you even know why you want to do what you’re saying you want to do or is it just the cool thing to do?
I wanted to build a place that created serendipity, that created this personal development in these young millennials to figure out what success really meant to them. To me, to be honest, there was that uncertainty. The reason being is it’s interesting. One of my mentors introduced to me after the exit, this place called Building 20 out of MIT, have you heard of that?
Andrew: No. What is it?
Gerard: So it’s this building that believe it or not, Mark Zuckerberg, if you look up the name of his headquarters, it’s building 20 and Steve Jobs actually designed his very Apple Store around Building 20. I never even knew of it. One of my mentors told me about it. It’s basically this building, one door in, one door out. It’s an open collaborative space.
Back in I don’t remember what year it was, but back in the day, all these creative, innovative students, they didn’t know where to put them. They put them in Building 20. That’s where solar energy was invented and all these great inventions came out of there and it was because people were forced to bump into each other, forced to collaborate, forced to share their ideas and that’s how a lot of these inventions came about.
I was like, “I want to build a Building 20 in Newark.” For me, one of my biggest inspirations was the Fantasy Factory that Rob Dyrdek started. I always wanted a Fantasy Factory. For me, it’s like let’s just build this Fantasy Factory, let’s build this Building 20. Let’s build this place that can harness ideas, inspire others, help others really understand how to become the best versions of themselves and then once we’re able to build the founder, then we can start helping them learn how to truly take an idea and build a business around it. And it’s been trial and error. We’ve been testing it out.
Andrew: So if we want to be a part of it, who would be a good part of it and what’s a good way for us to become a part of it?
Gerard: So it’s an application process. What’s nice is we offer a co-live aspect to it. We own the buildings that we build Fownders in. You basically, if you want to be a part of it, go to Fownders.com. We open up an application process twice a year. Our next cohort will start in September. We’ll be marketing through the summer for people to apply.
Andrew: So if I become a part of it, first of all I have to apply and be accepted, and then once I’m in, I get a place to work, I get some guidance on my company, kind of like an incubator, I also get a place to live if I want it, am I right?
Gerard: Yeah. You’re able to get a place to live if you get accepted. I bring in world class speakers. I had some unbelievable people come here. On a daily basis, we run a workshop and there’s a program. What’s interesting is this next cohort is really going to have it special. We’re making the model now to be a little bit different as a member. We’re building a fitness center. We built a juice café.
You’re going to have the ability to have a place to live for three months, have access to the fitness, the juice café, a program where it’s meditation practices every morning, yoga, CrossFit and Navy SEAL training, and then we actually have world class mentors come in every single day and run workshops on teaching you how to build your business model, marketing, sales, how to raise capital.
Andrew: What do you pay to be a part of this? Is it with equity or cash or both?
Gerard: It could be one or the other. Up until now, it’s been very much equity based. Going into September, we’re looking to now that we actually have the facility with the fitness center, based upon the feedback we’ve gotten from the entrepreneurs in these past two cohorts, now we’re going to open it up to be a paid for model where you’ll be able to have the apartment and access to all of those amenities.
Andrew: So, if I just want to take this whole co-working space to the next level and get more than just a desk somewhere, I can go and pay to be a part of Fownders. I get a space. I get access to you, the people you bring it. We get to be fit. We get to eat right and we get to build our companies with the same kind of passion and aggression you had when you were building your business. That’s it, am I right?
Gerard: Heck yeah.
Andrew: Okay. Cool. All right. I’ve got to thank Arman Assadi for connecting us. How do you know Arman?
Gerard: Well, I interviewed him for my YouTube series called Leaders Create Leaders, where I just interview modern day leaders of our generation. Arman I got introduced to through Lewis Howes, who was on Leaders Create Leaders. I had worked with Arman a little bit in learning more about his expertise, which is copywriting.
Andrew: Yeah, he’s a great writer.
Gerard: He’s an unbelievable writer. I was starting to figure out the strategy. A lot of people were asking me ho within built my personal brand. For like 12, 13 years, all I did was build businesses and then after selling Elite Daily, I was like, “My brand actually matters. I need to start taking it serious, especially if I’m going to start getting awareness to bringing people to Newark.”
Over the past 18 months, I’ve been able to really build it and it’s been a game-changer for me. I had all this strategy, but I was like, “How do I actually bake out this strategy so I can share it with the world?” And Arman was the person I went to work with on baking out 25 videos on exactly what my strategy was to do that.
Andrew: I see. I like the guy a lot. I got to meet him her at scotch night at the office and find out a little bit about him. We stayed in touch. I’m glad he introduced me to you. For anyone who wants to check out your site, actually there are two sites, right? They can go to your personal site. It’s GerardAdams.com, am I right?
Andrew: You’ve got a site everywhere, like there’s a VisualCV site, LinkedIn, you’re actually easy to find that way, which I appreciate. If they want to check out Fownders, it’s Fownders, F-O-W-N-D-E-R-S, like put the word “own” inside of Fownders.com. I’m glad that you were here. Of course the two sponsors that I talked about are AcuityScheduling.com/Mixergy if you want to make it easier for people to talk to your customers and if you need a new developer, go check out Toptal.com/Mixergy.
Thanks, man. Thanks for doing this.
Gerard: Sweet. Absolutely. I loved it, man. This is good questions. I was super-engaged. Thank you for having me.
Andrew: You bet. Thank you all for being a part of it. Bye, everyone.