Andrew: First three messages. Who’s the lawyer that founders in the Mixergy audience trust? Scott Edward Walker of Walker Corporate Law. Have you seen what Chris Pritchard posted on my Facebook page? His new company’s incorporation pages that Scott Edward Walker helped him get. Scott Edward Walker is the lawyer that publication like Forbes trust. Go to walkercorporatelaw.com.
Next, when my friend had to close her company’s office but still wanted to give callers the impression that all of her employees work well under one roof together what service did she use? Grasshopper. With Grasshopper everything who works for you could have an extension. They can pick up calls on their extensions no matter where they are or what phones they use. And they can transfer calls to each other back and forth with ease. Get those features and tons more at grasshopper.com.
Finally, when Dave Jackson and Dave Petrillo invented a product that keeps coffee at the perfect temperature, what platform did they use to create their online store? shopify.com. Look at how beautiful their store looks. It’s because it’s build on Shopify. They did hundreds of thousands of dollars in sales. Shopify store are designed to help you sell. Patrick Buckley invented an iPad case and used Shopify as his own line store. Within months, he sold over a million dollars in cases. Get your beautiful online store at shopify.com. Here’s the program.
Everyone, my name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart, coming to you today through ooVoo where we’re recording and connecting to do this interview. And in most my interviews I usually focus on just one founder and just one company that he built.
But today’s guest I think we need to take a little bit differently because as I look through my research on Jay Samit I see a collection of interesting stories and a variety of companies. And so I thought, instead of focusing on just one, let’s just bounce around and pick up some of the interesting stories like how he negotiated with Steve Jobs, the way that he impressed Stephen Spielberg, how he helped Ford find a new revenue model, and the selling of his first company. We’ll just keep looking through his history for all kinds of interesting stories that I think will be helpful for you the entrepreneur who’s watching us. And I also want to hear about his current company which is ooVoo, which is as I said earlier the software that we’re using to connect here today. Jay, welcome.
Jay: Hey. (?).
Andrew: Thank you for doing this. Hey, we tried recording this before using a different system and we had a bad internet connection. So I was hoping you could retell that great story about how you helped Ford find a new revenue model, and specifically how you got in the door to even get a deal with Ford.
Jay. Sure. So, a long time ago, I was a young kid at the time, in my early 20s, and to take us back to that time Japanese automakers were putting Detroit out of (?). And the Japanese products so (inaudible) the offered a bumper to bumper warrantees (?) to now-a-days. And what that basically means is when you took your car in to be repaired Toyota paid for the repair not the consumer. Well, Ford offered the same thing and there was an article in the newspaper. So because of this, Ford was now having to pay for the lack of training in their dealerships, meaning that half of all parts that were replaced were good parts being replaced (?) part. They replaced the wrong thing. It didn’t need it. And that was costing Ford $600 million a year.
So at this point I had invented and pioneered interactive video training, and (?) unheard of before. And I realized that the training could now be a profit center. If I could reduce that in half it’s $300 million. So, (?) corporate training was basically send 40 thousand pages of document (?) dealership into a profit (?). And, (?) head (?) training (?). The problem was 20 something years old sitting in Hollywood, and I don’t know anybody at Ford, let alone in Detroit or the state of Michigan, or the entire auto industry. So as any good entrepreneur, step on is how do you get your foot in the door. Because once you get your foot in the door (?) in. So, what I did is I noticed that one of the football coaches from Michigan State had just (?). And if there’s anything, I do know about the mid-West, they love their football. (?) Specifically, they love Michigan State. I put in a call, I hired this English gentlemen who knew nothing about technology, to be my head of sales and to set up the meetings. Everybody wanted to meet him and have a good conversation. They said what’s the kid here for. I had to show my little wiz bang computer and what it could do. And walked out with the business. First of all for an entrepreneur is hire the best for (?). Don’t try to think [?].
Andrew: What a great way actually to get your foot in the door. And I think you even said that he didn’t really even understand the technology. All he was there to do was open the door and get to know people.
Jay: Absolutely. And a good sales person doesn’t need to be a sales engineer. You can back up with that. What you need when you start off as an entrepreneur is relationship. People that have been in the industry. I looked at common in internet ads today. And I look at all these young companies that hire bright people that understand their technology. But they don’t hire somebody that’s been taking people to the Olympics for the past 20 years or the Super Bowl. Or had past relationships with brands in Samo’s in Madison Ave. And when you’re looking at an industry that spends its 130 billion dollars a year. There’s established patterns in relationship.
Andrew: There’s another story that I was hoping you can tell. Which is when Jeremy, our producer asked you what was one of your biggest challenges. You told him about this space shuttle incident. Do you know their story.
Jay: Yeah, absolutely. At the beginning of my career when I was working on. I was one of the pioneers at a thing called a laser distant. A 12 inch platter that a video wanted a computer. Amazing, it would never be smaller. One of the places that we show cased this was at museums in the world today. And I was very fortunate to get the contract to do America’s Billion for world’s care. Which is theme of the world’s care (?). And this was in the 1980’s. And we were going to absolutely kill it. Because we were going to show case of building a space shuttle. What could be more glamorous, more future, more world care with value than building a space shuttle. And so we’re building for Billion doing all of our stuff. And time makes me forget the dates. But a couple weeks or months before the opening, the space shuttle disaster. Blew up. So the decision was to get all the vendors together and basically said skip this world’s fair. And that was the end of it. I was the young company in my 20’s. Needed this (?) as with most projects who spend all of your money and get paid on delivery. So this could put me out of business. Went to this meeting with all the giant corporate sponsors. Why make this thing go away?
I sat there very young and eager. Waiting my turn. With a little paper bag sitting on the table. And everybody said their piece of why things could go. And when it came my turn, I think I have a solution to our problem. No one looked at me with any seriousness. And I took out the paper bag, it browns flat. I said this for Billion dedicated irrelevant. It end up being the most attended for Billion the world’s fare. A true entrepreneur takes lemons and makes lemonade. Really what I’ve noticed in my career is your biggest challenges and obstacles are always the biggest (?). Cause if everything’s going fine, nobody needs a new idea. If you’re not with a company that’s making a fortune, they don’t need new business. If you’re not with a company that has problems, they’re open to almost anything. And that’s where change. People said everything that I know isn’t working, why not I give them and buy a check.
Andrew: I see, so you want to look for places where there are problems. You want to work with companies that have problems. Because that’s where they’re going to be most open to you. As opposed to what most people might do, which is run away from those companies that have problems. Just to try to keep from getting destroyed by them. You’re saying there’s an opportunity there.
Jay: Yeah, everybody chases the home coming queen to try to get her to the prom.
Andrew: Yeah.
Jay: (________) Even if he goes, she doesn’t go along with you let’s say. Focus where no one else is focused in. And you’ll find a much more rewarding career.
Andrew: Earlier on, and by the way this was at Jasmine multimedia, these stories. Right?
Jay: Yeah.
Andrew: Before Jasmine, and maybe, actually there was some time where your car was going to be repossessed. Is that before Jasmine or in the early days of Jasmine Multimedia, the company you launched in the 80’s?
Jay: They’re all against the Jasmine, yeah. No, when I went into this field I had this vision that someday we’d have video on a computer like we do on today. I didn’t realize someday would take 20 years. And this was before BC’s were chasing anything in this space. Most BC’s were looking for system wide. And so like many (?) truly believe in your dream and you go up there and you pursue it in spite of any obstacles. By the way, many companies are ruined by having access to too much capital too fast. They spend like drunken sailors and then they don’t know how to (?). Not having access to capital made us innovate even more because the difference between the next innovation and my kids eating macaroni and cheese for the rest of their lives, highly motivated.
Andrew: Yeah, that. So what happened to the company in the late 90’s? Mid to late 90’s?
Jay: In the mid 90’s I (?) on our hit video games. We morphed into being one of the biggest CD-Rom (?). And David Geppner gave me a great piece of advice. He had sold his record (?), pretty major. He said when you have, you know, three big hits that’s the time to sell. And so I sold and woke up the next day and there was (?) doing the same thing for Universal Studios. Suddenly I was running new media, working a new area that had big company resources, big (?), big reach. I got to see what it’s like being an entrepreneur. Somebody that innovates new businesses inside. Now from the outside looking in that always looks better, easier, more fun. Oh my god, I had the resources of a giant company. But a giant company also is set up in (?), doing their thing their way and getting companies to change the course of direction is like changing a large aircraft carrier. You don’t spin on a dime.
Andrew: On a person level when you sell, after you go through all the challenges, after you suffer all the risks, when you sell what changes in you? How do you feel about yourself, how does your life change?
Jay: So for first time entrepreneurs it’s very common, especially young ones, that their company is an extension of themselves. It is their first born, their first child, and they become emotional. And I had two offers (?), had several offers to sell out earlier that would have been an (?) price and I wasn’t emotionally there yet. I believed I could take it to the next level, I could (?) on the market. And the same insight that made me think that I could be ahead of the market blinded me from seeing that once I got to where I was that the market was (?) to change and might be going (?). So the first company itself that’s always the hardest one to part with. Every one thereafter you realize, it’s a fun game. You, I (?) to come up with this new invention, you get people to follow your dream whether they’re financial people, employees or customers. You build this and when you can take the training wheels off, when you should sell. There’s very few entrepreneurs that are good operators. Learning to be a good operator, learning that discipline, that takes a lot of time and much different skill sets then being the Don Quixote that charges (?).
Andrew: Are you saying that you sold too late because you did what many entrepreneurs do which is consider the company your baby and connect yourself too much to it.
Jay: Absolutely, absolutely. I kept my first company 17 years. And when I teach entrepreneurship at USC. And what I tell them quite honestly is that 20/20 hindsight, one of the deals turned out to be worth 300 million dollars more than I ended up with, to me. That’s a lot of money. At the time I made the best decisions with the knowledge that I had, but I didn’t have the maturity. And so one of the things that you want to do is make sure that you have good advisors or formal board that can really look at things objectively from outside the four walls. And find a mentor and add years to your life and dollars to (?).
Andrew: How do you get a mentor when you’re just getting started. When you don’t have enough to offer the people who you admire, whose help you need.
Jay: You have a lot to offer. You have something new and exciting. You have validation that says. “You, sir, are an expert. I look up to you.” It’s real easy. Look at who’s speaking, who’s writing papers, who’s publishing articles. Whose out there in a field that you offer change and there’s nothing more gratifying now that I’m on the wrong side of forty than somebody coming to you and saying ‘Can you help me, oh, wise old person?’ and you go Wow, I now have the context, I now have the experience, I now have the backing relationships to raise the money. What I don’t have is the new ideas. They’re not coming from the new generation. So don’t sell yourself short. I get pitched tons of deals all the time and I’m flattered by all of them, most of them. [??] me they don’t seem to make sense but the ones that I gravitate towards I’m re-born, excited.
Andrew: One of the things that I, I’m sorry…
Jay: I said that’s what drove me to Google, was seeing a new marketplace that had at the chance to reach millions very quickly and I go wow, I didn’t [??]. I sure know how to put [??]
Andrew: One of the things that I admire about your story is that, as I read the notes that Jeremy, our producer, put together with you and as I look through the research, I just kept seeing that you’re a guy who brings impressive people to you. And we talked a little bit about that but maybe you can tell me a little bit more, like, let me see on the notes here.
You talked to Bill Gates and David Geffen about getting them to introduce you to rock stars because you had the technology but you needed the stars. Can you tell that story?
Jay: Yes. So if you would tell me as that son of a public school teacher growing up in Philadelphia that, you know, dozens of your friends would be billionaires, I’d be like what are you smoking?
So first guy to work with others and got video on a computer [??] hardware stuff and in the early days when Microsoft was also a startup, I shoot an email to Bill Gates and he shoot it back and so we created this technology that we thought was really cool. And if you look at the video screen right now, imagine that the video be chopped up like a checkerboard and scrambled but all the pieces would still move at 30 frames a second.
That’d be really challenging game to put those pieces back together because as you’re moving the pieces, the images are on there interchanging. Now if you had a video with lots of edits, that’ll be even more challenging. If you had a short video with lots of edits so that you had to finish the puzzle before the video ends, you have a hit game. So it takes about two seconds again, in the 1990’s to say, “Oh, my God. What if you do this with music videos? This would be the coolest game ever on [??]”. One problem. I don’t know anybody in rock ‘n’ roll. I don’t know any bands. I don’t know music licensing. I figured out the technology.
So again, going with the idea of what’s the best [??]to get to, I asked Bill Gates if he could send an email introducing me to David Geffen, probably the most successful entrepreneur in music. So he did. To make a long story short, I gave Geffen half ownership if he would just buy me ten of the biggest bands. It took a lot of guts to sit there and say I don’t mean your bands on your label. I mean across the industry. So we ended up with 95. Aerosmith, I don’t know if I remember them all, Van Halen, Ozzy Osbourne, Peter Gabriel, Nine Inch Nails, Soundgarden, Aerosmith, etc.
So anyway, we ended up with great, great acts. We ended up with what turned out to be one of the most successful games of my entire career and one day David Geffen said, “Last night I was playing your video game with Steven and he wants to meet you.” And he goes, Steven Spielberg. I had that out of body experience as an entrepreneur trying to act like a grown up in a meeting and really being a little kid inside. I go, “Wait a second. Two billionaires that have nothing better to do than play a video game. This is cool.” So that’s how I got to meet Mr. Spielberg and had me in his office and said, “What would you like to do?” I wasn’t expecting that but a meeting. But again, that’s what people like to encourage new businesses and ideas and I was in love with one of his properties and I made a serious [??].
Andrew: Most entrepreneurs would be afraid to give up any bit of ownership. I know there were times in my life where I wanted to bring in employees and they deserved 5% and I wasn’t sure if I could do 5% properly. Does it make sense to do 4 percent? Maybe we should go to 3 percent two years from now. Here you are giving 50 percent ownership just for 10 introductions, essentially. Why do you do that?
Jay: Would you rather be the king of Lake Erie or captain of the Pacific? If you want to be the smartest guy in the room then you better get used to working the most. If you want to build a team of the best and brightest, if you don’t have cash to share in the beginning then share equity. If you’re really that good and you’re building something of value, it will more than pay for itself. Because, it is the team that makes the company valuable, not the one person.
Andrew: You said that you knew Bill Gates back from when you were growing up.
Jay: Growing up.[xx] I shipped the first CD ROMs. The one with the IBM PCs. He shipped DOS and he did OK with it. For years, we got to booth space at Microsoft’s booths at conventions and trade shows. Bill was very, very good to me. But yeah, you meet interesting people.
When we decided to try to get Internet into the nation’s schools, the president honored me with that task. I put together the best people I could. We needed a way to pay for this. So, we found this young guy. Who had just written some code to make auctions on the Internet. His name was Pierre. The software became Ubet. The same committee called Netday. There was a nice guy from Novell. Who wanted to network and find new things to do and he was very bright and very hard-working. That was Eric Schmidt. I could go on and on. The world is made up of about 6000 people and the rest are extras, is really the way I look at it. As soon as you can start being successful and creating value for others, the world will become very open.
Andrew: That is the thing, to be one of the players instead of one of the extras you have to create something valuable. I was going to say on your own. But, you are saying not even on your own. Partner up with one of the big players and create something valuable. So you can avoid being an extra in life.
Jay: Yeah, two pieces of advice that took me years to learn. So, here’s freebies for the listener and hopefully this will help you grow. Number one, big companies are so busy doing what they already do, it’s virtually impossible for most of them to innovate or create new markets. That is why they pay top dollar to acquire them. They are so busy doing X. That it doesn’t further them to move into Y. The second thing is, when you deal with a big company, I used to go in and come in with a whole deck of “Why this was great for Universal Studios, why this was great for Ford, why this was great for Coke.” What I realized over time is there is no Universal Studios psyche. There is no Ford psyche. There is no Coca-Cola. There is just a human being across the table.
If you can make your pitch good for that individual. Help them achieve their goals, get their bonus, get their promotion, look good to their boss. Whatever that thing is in 99 percent of the time, and this is having done hundreds of millions of dollars worth of deals if not billions, 99 percent of the time, none of the deals I have been involved with our ever about negotiations. It’s really about what moves the needle. What changes? What would be exciting?
I pitched McDonald’s a few years ago. The time Supersize Me the movie [xx] some bad press. A giant corporation with the best marketing on the planet, genius marketing. I had a tough time. I was trying to launch a digital music store. I went to them with the following idea. Buy a Big Mac get a free track. So, with every Big Mac you get a digital song. It might have seemed like a lot of work to make it happen. But, the payoff for them was they look fresh, hip and cool. From my standpoint, I got the best marketing company in the world doing national TV commercials, signage in stores that serves 42 million people a day. For the next six weeks with the launch of my digital store for Sony, we had more traffic than we knew what to do with. Millions and millions of new customers and the cost of that was $0.00 in fact we made money.
Andrew: This was through appealing to the player. The person who you were talking to as opposed to appealing to McDonald’s as a company.
Jay: Right. So, part of the ways to get deals through, was it has to be approved not just by McDonald’s but by a different audience called the franchisee. So, the owners of the stores.
Andrew: Mm-hmm.
Jay: So, just stop and forget the promotion, forget why it’s good, forget explaining digital music and digital music players. These are people that aren’t in that audience, don’t relate to it. What would get them to say yes to this promotion compared to some other choice that may be up there? Well, was it Sony at the time? What if we give every McDonald’s owner one time to buy as much Sony products as they want from sony.com for 50% off as many big flat screen TVs as they’d like in their homes? I know whether they voted on my [??] because they liked it, why they’d not get a free [??] if they wanted the big 54 inch plasma TV?
Andrew: What a great story. All right, I’ve been bouncing around through your history. Let’s go to SocialVibe, the company you were with just before this current company which is ooVoo. You did a deal there with Farmville. Can you talk about that, the one where people just weren’t playing? You know the one I’m talking about.
Jay: So, when I got to SocialVibe, they had about 5,000 users a month, but they had a unique technology [??] watch this ad, money would be donated to your favorite charity. Noble, made a lot of sense, those 5,000 people really enjoyed it, but 5,000 people does not a business make. When you look at the 5,000 people a month, everybody doesn’t wake up each day saying, “What can I do to make the world a better place?” Wish they did, but they don’t. Everybody wakes up each day and says, “How can I make whatever I’m doing in life easy?” So, at the same time, I notice that Zynga was taking off a new game called Farmville. It was addictive, growing like crazy, and had millions and millions of players. But I also noticed that very few, single digits percentage of the players, actually ever spent money. So, they were getting tons of people to play the game, but they weren’t able to monetize it to 90% of the people. So, I went to Zynga with a proposition, said, “Forget Farmville. We have a lot of [??] games. Let me just test this idea with [??]. People that aren’t paying, what they need more currency, more virtual goods, whatever it is. They fit that role where they can’t play anymore unless they pay. Give them the following. Let them pay by paying attention. Watch this ad, get free digital goods. We tried that. Within a week, the numbers were through the roof. Within the month, we were [??] most of Zynga’s games, including Farmville. And we brought a new level of attention, because advertising up until then didn’t work for all sides of the triangle.
Advertising has to work with the advertiser, has to work with the consumer, and has to work with the publisher. The advertiser wants you to pay attention to the message. Why would the consumer want to pay attention to the message? Well, now, they were getting values, they were getting something. So, the average person, over, say, 500 campaigns, and this is for Kraft, and [??], and McDonald’s, and [??], and Toyota, and Ford, and Visa, and MX, all big brands, average time spent, 72 seconds engaging with the ad. More than half of the people would then put in their Facebook feed and share it. The attachment was unbelievable. Brands loved it. We had a new revenue stream for Zynga, which helped it be very successful. And it turned out that consumers loved it, because they said, “Wow. I get to pick the brand that [??]. Thank you, Ford, for doing this. Thank you, Toyota.” And so. It worked for everybody. And in the end, got up to 600,000 people a month doing it, so, very, very successful.
Andrew: So, a lot of highs and lows in business. We just talked about some of the highs. Let’s talk about one of the lows, which came soon after your first firing.
Jay: Yeah, I was not even 20 years old, and the first person that I fired was a young woman who seemed always in conflict and always, drama, and she went home that evening and [??] herself. Made a lasting impact on me. I realized no jobs [??] a person. And probably the most gracious act was about a month later. The young woman’s mother spoke to me. The whole (?) first off. But it really puts everything in perspective. We’re here for a short period of time. Let’s try to make as much difference. For those who deal with (?) and those who touch digital.
Andrew: So how does it affect your management now? What kind of manager are you? I’ve talked to a lot of entrepreneurs here and more then not they say that they’re not good managers. And here you are running either big companies or big areas within big companies like EMI and Sony. You need to be a good manager. How did you become a good manager?
Jay: I guess I always spent my teenage years paying my way through school and stuff working in food service. I had to deal with the public and deal with everybody and (?) manage. And I guess to this day I still feel more like a worker then a manager so I try to see everything from (?) point of view. Everybody doesn’t wake up every day saying how can I make this (?) into (?). Some people just wake up, how can I get through one more day? It’s really about using your senses the way God gave them to you. You’ve got two ears and one mouth, try to listen twice as much as you talk. Really stay in touch with where are people’s heads, what are they thinking? Why do they show up? Are they burning the midnight oil because somebody yelled at them to? Are they burning the midnight oil because they’re passionate? You know. How can you treat the like individuals, how can you pitch in? In the early days when we used to do crazy stuff like traditional sell animation to do (?). I’d stay up and I’d paint cells with the artists all night if they were pulling all night. So they’d say, you know you’re doing more damage than good. Just to let them know that you care.
I tell everybody that when they work for me they’ll gain ten pounds because there’s nothing else that I can do to add to the team other than to make sure to feed everyone. It’s not about being people’s friends. I had a great mentor, CEO of EMI named Barry. The greatest story that people would tell about him is when he would fire somebody they’d leave his office going, yeah Ken you’re right, now is a good time, thank you. And really when you let people go it’s really about saying, not a fit. You will be happier with your life. It’s not, ah-ha, we’re getting rid of you. So, what makes you a good manager? Be managed poorly and treat people the way you wished to be treated.
Andrew: You’re saying the way to be a good manager is to manage people poorly, is to be managed poorly so that you could appreciate what you’d want.
Jay: Absolutely. You know, the $64,000 question, which is worse. Have a dumb boss or have dumb employees?
Andrew: I could see them both being very bad. I feel like having dumb employees is worse.
Jay: Well, I’ve been in both situations. And there are challenges.
Andrew: What do you prefer?
Jay: Dumb employees you can manage and backfill around. Dumb boss, you cannot get through to them.
Andrew: I was thinking you could always leave them.
Jay: The other challenge many entrepreneurs face is they have a new idea to change an industry and they’re like, nobody gets it, everybody’s stupid, everybody’s wrong. You find yourself saying that feel like you have failed to communicate in a way that others understand. The onus is on you to communicate change. No one has to change.
Andrew: Yeah, that is a tough one to accept. That if you are looking at everyone and they’re stupid, it’s probably you.
Jay: Yeah.
Andrew: What else do I want to talk about? Oh I said at the top of the interview that you negotiated with Steve Jobs. We talked before and you said one of the things about negotiating with Steve Jobs is that he’s used to always winning. And when you negotiate with someone who’s used to always winning what’s that like and how do you negotiate well with someone like that?
Jay: Well, Steve was a unique character and much has been written in the book that everybody reads, and much can be said. But from my standpoint he was both a genius visionary that could see far down the road and in an insane micromanager. He could keep track of a level of detail of control most people (?). So in negotiations he was very well prepared but he was willing to think not outside the box, outside just the whole playing field and finding whole different ways to get what (?) chief is in. And at the time that he was trying to set up iTunes there was great disbelief that he was sincere, because the ad campaign that was making Apple money at the time was rip, mix, burn. Basically steal music by your CD-Rom burners. And so the same person that’s spending millions doing that, to say that he’s going to go into the legitimate music business was taken with more than a grain of salt.
Andrew: And so you negotiated with him and you pushed, you eventually I think also sold the company to him. That was later on, right?
Jay: Yeah, later on, yes.
Andrew: What was the company?
Jay: It was called Digital Containers.
Andrew: And this was in 2009. How did you do on that sale since we talked about the previous sale?
Jay: All good. All good. I’ve had, I’ve taken stakes in 78 digital businesses and made money in 77.
Andrew: So how does, what’s the good part of having done this? You’ve had a lot of success, we talk so much about the challenge of succeeding here in these interviews. We talk so much about the setbacks, the pain of losing money and feeling like you’ve let people down. It’s all eventually worth it, right? Why? Do you have an example of what makes it all worth it? And something.
Jay: Oh, very simple, very clearly it’s worth it. No offense to those that believe in the afterlife but I believe you’ve got one shot on this planet. You either get to live your dream or work every day on someone else’s. And so that choice is really simple. If you have dreams, wishes and ambition there’s nothing stopping you. We have an amazing country, an amazing society, an amazing time where we’re one click away from a billion people. Get them all to send you a dollar and you’re a billionaire. I mean it’s that simple. The challenge nowadays or what I find most rewarding is the pace of innovation is happening so quickly. Business models can (?) perfect center of attention for a nanosecond. So unless you get it all right, conceptualizing, implementing it, marketing it and exiting, you can miss that whole moment and it can all be for naught. So it’s, I don’t play golf, this is my game. I enjoy this, enjoy mentoring of course, and you know, we are the backbones of the economy.
We are the jobs. Most jobs aren’t created by big business, they’re created by small business. Which is somebody willing to step forward and say, I’m not afraid to do this. Being successful is about failing often, in fact failing as often as you can. The quicker you fail (?) not to pursue that while you still have money in the bank makes sense. And most of the great businesses, Google didn’t go into business and say, hey let’s do this bid system on buying keywords. They stumbled across that once they learned that their direction wasn’t going. So learning to pivot, learning to evolve, it is the most exciting way to live a life and I’m not.
Andrew: You said failing is important. What’s your biggest most painful failure? What’s the one that makes you feel like, uh, maybe I’m just not worthy of success because I can’t believe I did that? I can’t, I’m not worthy of greatness on the level of people who I admire because, oh I can’t believe I did that thing.
Jay: Well, I’ve got a whole day for these. I guess that it just took me so long to understand how to put all the pieces together.
Andrew: What do you mean?
Jay: For me it took 20 years to be an overnight success. So many of the insights where I was ahead of the curve and I didn’t understand how to put a team together, how to put the pieces, how to get and capture a market. It is one think to invent something new, it’s another to be the one who captures that value that you created. So many innovations that are out there people said, hey wow I did that first. Great. But you didn’t figure out how to turn them into the billion dollar business. And so those are, you know, on the….
Andrew: What’s the one that you didn’t figure out how to make into the billion dollar business that someone else did?
Jay: Oh, I did the first auction online. I didn’t see that getting as big as it did. Helped Reed Hoffman early on as an advisor on LinkedIn. There’s, I mean, there’s dozens I was involved in. And conversely had you done those you wouldn’t have explored the path and seen new and other challenges.
Andrew: You told Jeremy that one of the things that drives you is this sense that you never felt good enough. You always needed to achieve bigger.
Jay: Psychoanalysis, wasn’t hugged as a child so still looking for that.
Andrew: You know what? It’s not so much psychoanalysis. I forget the name of the book but Paul Graham recommended a book by a World War I vet, I think it was. No, World War II vet and just before they went out on to the field, they talked to other vets who told them about the highs and the lows about being scared and somehow this guy said that it made him feel much more confident about where he was going because he saw someone else made both the challenges and the successes and I’ve got to find that quote somewhere because that I feel is why we do this interviews. To hear from you that you have these feelings of not being good enough. It’s so comforting for an entrepreneur at times who feels like I’m garbage, you know? We all go through that. I want to draw on your experience and feel like ‘All right. If he’s going through that, if even Jay feels it, then it’s OK for me. And how does Jay get past it because I have to get past it too’.
Jay: The one thing that I will tell you is when I look at kids I went through college with and where we are today, the ones that didn’t give up all made it and in crazy fields. I’ll give you an example.
So I had a friend on the floor on the dorms, not centerfold material, just a regular looking gal who wanted to be an actress in Hollywood. Now there’s every good looking woman coming from around the world competing and she’s just a regular gal. Well, she decided to focus on her craft every which way she can, she hung out in the evenings with an old voice over guy who did Tony the Tiger commercials. Just anything to try to [??] and she didn’t give up and she would go to those one day [gates] where you do one line and squeaky shoe in Roger Rabbit, I mean, anything to put food on the table. And one day she went to read her part as a little girl on what’s called an inner session, the little piece between the end of the show before the commercials, like you know the commercial’s coming.
And she looked at the script and she said, “You know what? I think I can do the boy’s voice better.” And so they let her do the boy’s voice and for the past, I want to say now, 25 years now, Nancy Cartwright has been the voice of Bart Simpson. So here she was not too proud to take anything. She went out for this little one day thing on a [??] TV show, remember? It was part of a different show and it turned into a giant career success. You’ll find that with almost anybody that doesn’t give up. So the advice to the entrepreneurs is your first idea may not get you there but if you explore it hard enough you’ll stumble across an idea.
Andrew: The book by the way is “The Old Breed” by E. B. Sledge. Great book. So was it right though that that does drive you a little bit? I know what drives me. I know that walking through New York as a kid seeing all these successful people who had their names on buildings, seeing all these people who are building incredible empires before your eyes made me feel like ‘Oh, I’m not nearly as great as them. What is wrong with me?’ And I went to NYU and even though the classes weren’t very helpful, I would sit and read as many biographies, as many Wall Street Journal articles I could and get determined to undo this failure that I thought I was in comparison to all those other guys who were so successful. And I feel like that helped me. It helped me build that first company. It helped me sell the first company. It drove me. Do you have anything like that, too?
Jay: Yes. When I was in college, I was one of the editors of [??] and as part of that I got to take [??] assignments, interviewing [??] Gene Wilder, George Carlin, the list goes on and on and on. All these great icons and in each one I wanted to get them to the point of [??] kid in college, how do you get from here to where you are. I wanted to know what was that secret elevator to success, how did these people dealt with it. And in each story, in each interview, in each person, to this day [??] famous people that I dealt with, successful people, they all had some opportunity that they didn’t see coming. So they basically put themselves out there and you call it getting lucky, but if you keep on knocking on a hundred doors and one opens, is that luck? No. And they all struggled to where they made it.
You just never see the struggle. In the years I ran EMI and Universal [??] and we marketed, you know, great musicians and rock stars, you look at them as alone on the stage [??]. You don’t see the stylist and the PR people work for the marketing teams and the whole machine that it takes to make an overnight success, so it’s really about believing in yourself and your ideas, knowing that it’s going to take work and I still look at what others have achieved, both in good deeds and in business, it’s a balance. One interesting thing that I would also pass out, in the beginning of your businesses, you have lots of time and not a lot of money. One of the things that I always did and tried to motivate the team together is every year we would sit down and pick a (?), pick something we could use our skill set to make the world a little bit better and when I look at people now, 10, 20, (?) 30 years of doing this, it’s those things that we remember, making handicapped software for computers so kids could learn to communicate with them, grading (?), producing tsunami (?), it’s these things that put us all together, say we can use our talents to do good and do well. So, you know, find that balance.
Andrew: All right. You know what? I’d love to do that. I feel like we need to do that here at Mixergy and I’m not exactly sure how, but I want to do that and the reason I’m not sure how is because so, the whole team is dispersed throughout the world and I feel like it’s so much easier to do that good thing apart from work when you’re all together.
Jay: Maybe, that’s the advantage. Maybe, there’s good that you can do throughout the whole world.
Andrew: Yeah, maybe there is an advantage in that someone else who has a whole team within their office is going to say, “I wish I had a situation like Andrew where it’s all diverse”.
Jay: It’s lighting 1,000 candles in different places.
Andrew: I want to do that, I want to find, now especially that I have some breathing room here where we’re not constantly worried about “How do we get the next guest?”, “How do we get the thing up?”, “How do we have this?”, you know, I feel like all, this system here works. It’s like a machine here at Mixergy so there’s room to think about how do we do some good and some more good in the world. All right. Finally, we’re on ooVoo.
Jay: OoVoo (?) talk to all 12 of your people in high def video at the same time. How’s that for a plus?
Andrew: See that’s what I was going to ask you about, what’s your plan for ooVoo, and by the way, one of the mentions why you’d mentioned ooVoo for that is because we could do a 12-way conversation for free. We don’t have to, unlike other services, pay for it. We don’t have to, unlike other services, do text only or voice only. We could all be online at the same time. It’s a great program. What’s your vision for spreading it and for growing it?
Jay: So, we’re now at 55,000,000 users and growing, a million users every (?) and my vision is when you think of Facebook and social media today, Facebook is the greatest way of staying in touch with friends (?). OoVoo lets you do those things. So pretend I’m sitting having lunch in Hollywood with a friend and there in the next booth, “Oh my God, it’s Lady Gaga”. The biggest Lady Gaga fan. Instead of taking a picture with your phone, you can now call all your friends, get them all on, the can egg you on, you go over, videotape you and Lady Gaga, she gives you a peck on the cheek, everybody now puts it up on their Facebook, and we did this at Rock the Bells this past weekend.
So, my vision for it is ooVoo is the marriage between communication and social media. So now all those moments that make life special, all of those (?) that happen, you can now share it with those people that are most important to you no matter where they are on the planet, whether they’re on a Mac or a PC on an iOS or an Android or a tablet or even within Facebook.
So now the world gets smaller. Now you can actually be social on social media, you know? We’re 20,000 years of evolution. We read facial expressions. We want to talk face to face. We want to share. It’s one thing to have a one-on-one call where grandpa gets to see his baby become a grandpa for the first time. It’s another thing to have a whole family witness dad realize it. So that’s (?) and what we’re doing is working with the biggest brands and biggest places in entertainment so that more people will discover ooVoo and start using it.
Andrew: I see. OK. So that’s the thing. To get the word out about, the software already does everything that you mentioned up until now. Your vision is to get the word out by working with brands and celebrities.
Jay: Oh, we have improvements and other things we’re adding to the service but those come later (?).
Andrew: Alright. Well, I’m looking forward to seeing it. We are on ooVoo, O-O-V-O-O.com is where you get the software if you guys want to try it for yourselves. Thank you so much for doing this interview Jay.
Jay: My pleasure.
Andrew: All right, and thank you all for being part of it. Bye.
