Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of mixergy.com, which you know is home of the ambitious upstart. For a guy that’s never gotten into a fight, and is an adult, I really do a fist a lot, but the fist is “Give my Freedom!” Anyway, today it’s not about the fists. It’s about the story, and I’ve got a story for you of Mark Montgomery, a musician who came to Nashville with $800 in his pocket, tried to make it big as a musician, failed to make it big as a musician, and then he discovered the Internet.
That’s what led him to launch and sell a business for $25 million. That business is Echo Music, a digital marketing and distribution company, which aimed to facilitate direct communication between artists and fans. Let them communicate directly with each other. Today, he is running Flo Thinkery, a company that starts companies. I invited him here to talk about how he built Echo Music, and what he’s doing with Flo Thinkery.
And my friend, Clay Collins, is sponsoring this interview. Why Clay? Because Clay noticed that what I do is help get people who hit my site to give their email addresses so I can create a relationship with my audience. And he said, “Can you show me the page that gets the highest conversion, the one that gets the most email addresses?” And I said, “Here it is.” I said, “Can I give it to my audience?” Long story short, I gave him the ability to give it you, to give it to anyone online. If you want the page that gets the highest conversions from Mixergy, go to andrewswelcomegate.com. You should use it. It’s available for you right now. Mark, welcome.
Andrew: Are you on andrewswelcomegate.com instead of doing this interview? Have I sold you on it yet?
Mark: No. Actually, I thought I would do this interview, and then I’d go there after.
Andrew: Good move. You sold your company. Do you remember the day when you signed on the dotted line, and sold your business for $25 million?
Mark: Yeah, I remember. It was actually the night, and I think there was the Hollywood version of signing the deal, and that is the boardroom, and everybody hanging around, and it’s glamorous. We toast champagne after. That’s not really how it works. At least it didn’t work out for me. I signed my deal at 11 p.m. Pacific Time, which would have made it about one in the morning in Central. With myself, and one attorney, in a small office on Sunset Boulevard.
And my father was actually Skyped in to watch me, and his first comment was “You little son of a bitch. You beat me.” What any father would want for his unwit, which is to achieve more than he was able to achieve. Quite frankly, I was dog tired. I spent four days dealing with the last little pieces of the transaction. The sale book was that thick.
Andrew: That’s how many pages were in the document that you had to sign to sell your company? And the reason your dad was on Skype is, not that he’s a lawyer whose guiding you through the process, no, he just wanted to be there for the moment when you beat him, as a proud father.
Andrew: Well growing up, was your dad that supportive too? Was he the guy who would stand up at the plays, and say. “That is my son!” And would make you play music for his friends at dinner?
Mark: No, no. My dad was the guy who I learned my work ethic from. My dad was the guy who really worked seven days a week.
Andrew: Doing what?
Mark: He’s an entrepreneur.
Mark: At 60 plus years old, he started a new company. He sold his last one a couple years ago. So he’s sort of the entrepreneurial side of the brain, and my mom is a fine artist. So my mother’s a painter, and my father is a serial entrepreneur. So that’s sort of the weird left, right world I live in.
Andrew: You know, I kind of have that in my marriage. My wife is a hippy who wants to do good in the world. I’m the guy who wants to create more entrepreneurs, and asks them about where their money is. So when you were growing up, was it what I imagined? Is your dad teaching you about business? Is your mom teaching you about music? So when your dad taught you about business, what’s one lesson that, to this day, you remember from watching him, from listening to him?
Mark: Well one of the things I learned is, you make your own breaks. No one is going to hand you anything. So if you want something, you got to go get it yourself. I also learned from him the idea, and it really was a simple lesson I learned a long time ago. I started my first “company” when I was fifteen, which was a lawn care business. And that’s knock door to door, “Hey, can I mow your lawn?”
He wisely said to me, “You know, what you ought to do is go to a real estate company and offer to mow all the lawns of all the unoccupied houses that they have up for sale.” You can go knock on one door and get 10 accounts instead of going one-to-one. I learned that lesson early and have applied it multiple times in my career.
Andrew: For example?
Mark: In the early ’90s, after I moved here, one of the businesses I started was a company called Empire, which was a CD manufacturing brokerage. You can talk to individual bands, or you can go to recording studios who are talking to individual bands all day every day, and you can cut a deal with them. Instead of getting one account, you get 50 over an annual period.
I have applied that in that fashion. I have also applied that as it relates to advising my young start-ups. In the deals that I’m an investor in, we’re always talking about where we can go fish where we can get 10 fish in the net instead of one fish. That’s a huge piece of the puzzle.
Andrew: When you got to Nashville…I said at the top of the interview that you got to Nashville with $800 and you failed to make it as a musician. I don’t know if you noticed, but in our conversation before we started recording, I intentionally ran that past you just to see…Is he going to be so hurt that I said that about him that it’s going to spoil the conversation? But it’s not. You just made a face because, of course not, you’re not hurt by it. When I read it in the intro, you were nodding along. Did it hurt at the time to try to make it in Nashville and not have it work out? Because now you’re very happy, or sanguine, about it.
Mark: I’m still trying actually. I still write and I still play. I’m actually playing in a band that plays shows. I’m way too old to do it, but I’m still doing it because I love it. That journey never ended for me, and that just turned into, quite frankly, a really expensive hobby, but that’s okay.
Did it hurt? Sure it does. When you set out to do something and you figure out you’re not as good as you think you are, that isn’t a great lesson to learn in the sense that it is a hard thing to digest. The reality is that the market spoke, right? If I was the kind of guitar player that the market wanted, then I would be a guitar player.
Andrew: Tell me if I’m wrong about this. My sense is that in business, if you’re not doing well, you can listen. I mean we, as an audience could listen to someone like you, Mark, and have you tell us the story of how your dad suggested that you knock on one door that could get ten customers as opposed to ten doors that may or may not get you even one. We can use that to our advantage in business and do better. I can’t listen to some piece of advice like that as a musician and suddenly become one of the top mega-hit musicians, can I?
Andrew: It just doesn’t feel like anything is in our control the way it is in business. Not that business is so easy that we can push a couple of buttons and have it all work out. It feels like it’s still more in our control. What do you think?
Mark: I would say that, if I had the confidence that I have today when I arrived here, I’d probably be that guitar player.
Andrew: So confidence was the big…give me an example of how lack of confidence hurt you as a musician.
Mark: I think when you’re a big fish in a small pond you become aware, based on your surroundings, that you are that thing. Then you go to the big pond, and all of a sudden you’re swimming around and there are a bunch of big sharks around you, and they have a level of competency that is really about the market you’ve entered. You become aware pretty quickly that you have maybe bitten off more than you can chew.
The two things that would have allowed me to continue to pursue that would have been, one, runway, right? I had two months’ rent. You don’t really have the luxury, when you have two months’ rent and you move with a crazy chick, and your roommate is your drummer…there’s not a lot of time to figure that out. If you want groceries, you’re going to have to figure out something to do to get those groceries. So runway was a piece of it.
At the time, I didn’t have strong mentorship and didn’t really understand what that could mean to me. If I had known then what I know today, what I would have done was go to the best guitar player I could find and said, “Hey, man, can I hang around with you? Will you show me how this works?” I would have become respectfully persistent with cats who had what I want. Today I do that. I have a pretty substantial mentor network. And I call that the old-bull-young-bull syndrome, right? So I don’t know if you know that story.
Mark: It’s incredibly inappropriate and I’ll be happy to tell it.
Andrew: I like it. With a tee shirt like that, I think you can say whatever you want. Be open.
Andrew: Yeah, I won’t say it but people can read it right on your screen. I’m not going to say it but I don’t have a problem with it.
Mark: So the story of the young bull and the old bull is that there are two bulls and they’re standing up on a vista.
Andrew: Yeah, I see.
Mark: They’re looking down into a field of cows and the young bull pokes the old bull. He goes, “Hey, hey, let’s run down there and f**k one of those cows.” And the old bull turns to the young bull and he says, “Let’s walk down and f**k ’em all.” [laughs] So you need the passion of the young bull and the recklessness of the young bull, who doesn’t know what he doesn’t know.
And you need the wisdom of the old bull who’s already run down the hill and figured out you can’t get ’em all if you run down and that’s the blend. And a lot of people, I think, don’t recognize how powerful that is, one. Two, they don’t recognize that by asking someone to mentor them, they’re actually doing the mentor as much of a service as not more.
Andrew: Why? Why does the mentor . . . what is the mentor getting out of helping a protege?
Mark: The mentor is getting youth, they’re getting passion, they’re getting experience. Forty-year-old men don’t dream 20 year-old men’s dreams. One of our companies that we started here has a 24 year-old CEO and he knows shit that I just don’t know. Period. And I have learned a tremendous amount from having him in my orbit and I hope he’s also learned a lot. And so it really is a very give-and-take relationship. I also teach senior level classes at a university. That is probably the single most gratifying work I do, and I learn more from . . . I’ve got a so much better end of the deal there than the kids do. They have no idea.
Andrew: So because you needed to pay the rent, you only had two months’ worth of rent when you arrived, you started sweeping floors. And that was drudgery . . .
Andrew: . . . I imagine. I see the smile on your face.
Andrew: And then you saw the Internet, right? And is that when you started Chelsea Studios, roughly 1994?
Mark: Well, so Al Gore invented the Internet in 1989.
Mark: I’m being facetious. And I was . . . in high school, I was a computer hacker. So I was a . . . we hacked software games. And I’ve always been kind of a computer nerd and I was using the Web in ’91 when it was really, actually had become kind of the early version of the Web that we’re all using now. And what ended up happening is that I actually became a partner in a large recording facility and what I brought to that partnership was a book of business.
Andrew: This was when you were in school . . .
Mark: This was . . .
Andrew: . . . or arriving in Nashville?
Mark: No, this is after I got to Nashville. So after I got done sweeping floors, it took me about six months to get out of that seat, I ended up building this little CD brokerage business. And that turned into a pretty big business pretty quickly. And there was a company, Chelsea Studios, that was doing that work but they lacked external sales focus, which was what I was good at. So I basically cut a deal to bring my book of business in in exchange for owning 20 percent of the overall company.
Andrew: Gotcha. And when you say CD, the letters, compact disk . . .
Mark: Yup, that thing, that thing with . . .
Andrew: What did you do with compact disks? I want to say that just so people don’t think it’s seedy, as in dirty, as in . . .
Mark: No, no, no, no. So what we did is we managed the production process for a variety of different kinds of people and at a variety of sizes and scales. So we had clients like Best Buy and we had clients that did 1,000 CDs and put a local record out on their local market and everything in between.
Andrew: Wow. How do you start something like that?
Mark: You pay attention to the marketplace and in that case, I would say I sort of stumbled into it. The warehouse that I was sweeping was of a vinyl pressing plant and I noticed that they were selling a product they didn’t make. And I went to the boss and I said, “Hey, I think I can help you with this.” And he said, “Okay,” and we made a deal and that was a really bad deal I made, right? For me. He made a great deal for him. It was super smart on his part. And about six months into getting that going with him, I realized that he was making a shit-ton of money and I was working for peanuts.
Andrew: Wait! This is, Sound Impressions is the name of the company. They press vinyl records. You went to him and said, “You are not making your own CDs. I can make CDs for you so you can be in both vinyl records and CDs.” And I think they even did cassettes if I remember right. And so you went and made it. He sold it. Your margin was thin, his was bigger?
Mark: No, it’s actually not quite that way. So what I did is I went to him. He had already been “manufacturing” CDs. But he didn’t make them.
Mark: They were made in Canada. They were shipped into our warehouse that I swept.
Mark: And they were sold out the front door as if he made them and he sold them out the front door at a 400 percent margin. [laugh]
Andrew: Okay. [laugh]
Mark: And I was like, “Huh, that seems like a business I could do.” And so I started selling for him. And what I had done is I had created a commission structure with him that was very unfair to me because I was a moron and very fair to him.
Andrew: Oh, Okay.
Mark: And I so I figured that out and I went to him and I said, “Hey, man, this has been great but we’ve got to change the deal.” I was still riding on the city bus. And I was out selling the sales by two to one, and he’s driving a Jaguar.
Mark: And I was like, “Hey, I think I got an inequity here.” So I checked the pricing structures and I found vendors and I was like, “I can do this without him.” So went selling. . .
Andrew: So many CDs. What did you do that the Jaguar guy didn’t know?
Mark: Well, I went back to my lawn care business model.
Mark: He sold individual deals that I offered to all my buddies who I had played with in bands for years previously who had studios at that point who had gotten out of playing in vans and were servicing bands. And so those guys did anywhere between 10 and 50 projects a year. And I went to them and made a deal with them. And they sold my services for me.
Andrew: There’s the big lesson from this interview.
Andrew: Knock on doors with more people behind them.
Andrew: So you did that. The business is going well, Chelsea Music is the . . .
Mark: Well, Chelsea was basically sort of a, it was just a traditional recording studio that were trying to add services for their client.
Andrew: And you said, “One service you could add is sell these CDs.” I have the contacts that will help us get the CDs. I know how to sell them. Give me 20 percent of your business. I’ll bring this in, you’ll bring in the studios and, I mean you’ll do the studio work. Terrific! You’re in that business. How did it work out?
Mark: It worked out great! We built a basically an in-end continuum so you could walk in our front door with a song. You could walk out the back door with a distribution deal, CDs and eventually we began to build other things onto it. So we started doing websites, which is where I got into that business. I just taught myself. We start doing art direction and layout. And then we started expanding the size of the business. And then eventually what happened and this is sort of a long story.
But the short version is in 1994 it became obvious to me that the internet was going to begin to transact a lot more commerce. And this, you have to remember, in 1994 if you were really showing that you had a 56K modem, like which is less than one meg of up and down, a half a meg basically, up and down. And people were afraid to use a credit card on the Internet. I mean, I can’t even imagine how many dollars have been transacted today on the public Internet.
But back then you couldn’t get anybody to spend money on the web and you couldn’t get any banks to actually create transactions. So we went to California to get a merchant number to allow us to transact on the internet. And on April 20th at 12:00 a.m. in 1995, we watched our first d- con platform for a single band. And I sat there for two hours and watched the orders pour in.
Andrew: Pour in. Orders were actually coming in, more than one?
Mark: Yes, pour in.
Mark: And I sat there and I went, I don’t know what the hell this is but this is what I’m going to do. And, you know, to remember that at that time there was a little application that used to be called Sound Designer that became a product called Pro Tools that began to eviscerate the studio business. So we had a million dollars’ worth of gear, 6,000 square feet of space. And today I have the same quality, in fact, better quality gear for $20,000 and I can make those same records basically we made there in my bedroom.
Mark: So over time our business became much bigger than the studio business and we eventually went to the partners in the studio and said, “Hey guys, this isn’t working for us anymore.” We’re driving all this revenue, you guys are actually a drain on the P&L. We’re not really making any money in this studio business anymore. Oh, by the way, we ain’t going to make any money going forward in the studio business. And so in 1999 myself and my co- founder of Echo packed our bag and left.
Andrew: What happened to your share of the business?
Mark: We basically . . . that was our first transaction. So what we did.
Andrew: What did you do to them?
Mark: We sold them the interests in the real estate, the equipment, and the studio business, and we took the e-com business, the branding, and marketing business and the distribution business and left.
Andrew: Got it. So no cash, just you took the part that you cared about. They took the part that they cared about, and you separated.
Mark: Yeah, that was good for all parties.
Andrew: Okay, and then how did they . . . what happened next?
Mark: So from there we started the company, Echo, and we were lucky in the sense that we had an installed customer base. So we already had clients for the work we were doing. And we went to the bank, and we borrowed $150,000 against our houses.
Andrew: A hundred and fifty thousand dollars against your houses.
Andrew: And this is with Neal Einzmann.
Andrew: Heinzmann, Neal Heinzmann and you, okay.
Mark: And we took out that loan, and the sort of mental commitment was weird. I paid that back early. We did pay that off. It took us a year to pay it off, but that gave us the working capital to expand. So we opened an office on Music Road, We hired a couple of people, and we just kept doing what we were doing.
Meanwhile, and this is probably lesson number two, I had hired a strategic planner to help us build a roadmap for what we were trying to create.
Mark: And so we were doing a planning process. I don’t do anything without a plan. Nothing. You know, ever.
Andrew: That’s so interesting because to me, when I look at you, and this is me judging you by your cover. This is just a guy who flies by the seat of his pants. He’s a musician. He must be relaxed. Look at his s**t show t- shirt. He must do what he feels like.
Andrew: And no, you just don’t wing it, you write a plan. What is your plan look like when you write a plan?
Mark: Well, I always try to start things with the end in mind. So what we were trying to do was figure out what we wanted the business to look like over a period of time. And that is about the culture. It’s about the head count. It’s about the revenue. It’s about basically saying, “I want to go over there, and how do I get over there?” And the answer is if you’re going to take a trip, generally you have a map.
Now for me the thing that probably gives you that impression that I am haphazard is I am haphazard. So I’m the kind of guy who if I’m going to go to the Grand Canyon, I may drive to Maine to get to the Grand Canyon. But I know I’m going to the Grand Canyon. I’m being a little [??].
Andrew: I see what you mean. So if I were to look at what you did, it seems like you’re not following any plan or any . . . but you do have a destination. So maybe you have more a goal than a plan for how to get there.
Mark: Yeah, I think I have a goal but I also have a general set of milestones to get there.
Mark: And the reality is that it never is what you think it’s going to be and it always changes.
Andrew: So what is your goal with Echo? When you sat down and said, “All right. We get to keep the distribution, the web, the e-commerce. My goal now is what?
Mark: Well, so let me fill in the blank before I answer the question. So during our strategic planning session I discovered a little tool called Napster. And I was like, oh s**t. We have a physical CD distribution business, and it’s generating 90% of our income. We better get a new f*****g plan right now because this is going to fundamentally transform the content business.
Andrew: Yeah, suddenly everyone was downloading MP3s as opposed to waiting for CDs to come in the mail.
Mark: Yeah, or going to a local retailer only to find out they don’t actually have the CD in stock and that’s a whole other conversation. But what we had determined . . . that moment in ’95 where I sat in that chair and watched these orders pour in and then you look at the transformation of that physical product into something that could be moved effectively without physical qualities to it, it’s like holy s**t, what this is about is connecting artists and consumers. And that’s when the vision became really clear about what we want to build.
Andrew: Why did you see it as connecting artists and consumers instead of saying, “All right, everything that we’re doing with physical discs is just going to happen with electronic [??]. And so who was it . . . I can’t think of the name, but there are a handful of other companies that did that for musicians and said, “We will help take your MP3s and sell them for you. We’ll create the store. We’ll do the credit card processing and so on. Derek Sivers famously did it with CD Baby.
Andrew: So why didn’t you go that direction instead of saying it’s about connecting artists to their fans.
Mark: Well we did, I mean in other words, part of what we did is, we sold artists’ products directly to consumers. And that was actually, that was actually the business model. But what we started to figure out is that the business was going to radically transform itself. And so the goal started out as, you know, we wanted to build a nice company, you know, blah, blah, blah. But where we ended up was, we believed that we could fundamentally change the way the business would operated. We got on this mission here of reinventing the music business. Which, quite frankly, was incredibly naive because I didn’t really understand how the business really functioned.
Andrew: What did you miss out? It seems like your logic was ahead, and you were right.
Andrew: Musicians need a connection to their fans, CD’s are going away, it’s all going digital. So what did you get wrong?
Mark: … well…still holds true… (audio skip)
Andrew: Sorry, our connection just went down for a moment. Can you repeat that please?
Mark: I said all that is true, and it isn’t wrong, it’s still fundamental today.
Mark: What I got wrong was, how the business functioned at the top, right. The business is controlled by a very small number of people who don’t want to see it change, to this day.
Andrew: To this day.
Mark: As a result of that they spend a lot of time and energy and effort attempting to stuff the horse back into the barn. And it’s a very complicated landscape that for a naive, really, guy who really, truly believed that he could fundamentally change a business that he didn’t completely understand, it seemed like a logical goal. And quite frankly it’s part of why we were successful, because we were naive enough to think we could do it.
Andrew: Naive enough to think we can go charging at all those cows.
Mark: And we did.
Andrew: [??] And you did. All right, before I ask you about the next step I want to circle back and talk about my sponsor,
Andrew: and tell people that the website, again is andrewswelcomegate.com. Mark did it make sense when I explained at the top of the interview what andrewswelcomegate.com does? I’m a little concerned that I’m not getting it right when I explain it.
Mark: No, it was not clear to me.
Andrew: It wasn’t, right.
Andrew: I need to take a breath at the top of the interview when I talk about my new sponsor. Here is the problem that we solve. How many of us have lots of hits on our websites or some hits? We’re all very proud of them, regardless of whether we have 100 or 100,000. The problem is that when someone hits your website they disappear right away and you don’t get to build a relationship with them.
So what I recommend doing is creating a page that asks your people for an email address before giving them, either access to the rest of the site or something especially special, and the way to do that is to create a squeeze page, and I have the one that works extremely well. I see that Mark’s going over the URL right now. It’s a page, that just has your logo at the top, that explains what you do, that asks for your email address and is so simple that it just works. It has an incredible conversion rate. If you want to try my squeeze page, my page that gets email addresses, you can use it on your own site by going to andrewswelcomegate.com.
You’ll get this as a template, you can remove my logo. Please do remove my logo and use your own logo. You can remove the description that says something like 1000 interviews and replace it with a sentence about what your company does. But otherwise, you keep the design, you keep the functionality, everything will just work. And it will allow you to capture your customers email addresses, which will then allow you to build a relationship with them by following up , by emailing, by staying in touch.
All that happens when you just go to andrewswelcomegate.com and get my template, and leadpages.net that service will power it all up for you and I highly recommend them. Beyond using my own personal template, they have tons of other great templates. And in fact I want to create a quick webinar and have people come in and say, “I don’t know how to create a page. I don’t want to have to worry about the design, I don’t want to even hire a freelancer to do it.”
I just went to leadpages.net and created a landing page that allowed people to sign up for my webinar earlier today and I have over 50% conversion rate on that. And it’s all because these templates are really well thought out. Alright, the first one you should start out with is mine, the one I created, that I’m going to let you use.
That’s available at, andrewswelcomegate.com, andrewswelcomegate.com. Mark what I should probably do is, I mean this is new for me and I like to experiment and learn and improve in public, but what I should probably do is, at the top of the interview write it down and then go through it. Part of my issue is, I want to keep it quick for you but I haven’t really thought it over.
Andrew: Quick for you, but I haven’t really thought how to explain what the sponsor does, and so I’m rushing through it, and I’m not being clear enough.
Mark: We call that “one sentence without a comma.”
Andrew: “One sentence without a comma” is what I need at the top of the interview for describing what the… you’re right. And that’s what I ask you to do, when I ask you what “echo” is, I say to you every single sentence…
Mark: That’s positive. That means I’ve slept since then and I’ve kind of forgotten that chapter a little bit. The painful parts of that chapter.
Andrew: The painful parts of the “echo” chapter.
Mark: Oh yeah.
Andrew: Oh, we’re going to get to the painful parts. So, we now have a new vision for the company, we have a little bit of money in the bank, what do we do next?
Mark: Well, then you just grow. Then you, you know, you basically execute. And I think that one of the things that people… I don’t want to say they underestimate it, or they don’t account for it appropriately, but the reality is that if you got a great idea, and you don’t have the ability to execute, then you’ve got a hobby.
Mark: So you should probably not continue. So what it’s all about – it’s all about driving revenue, it’s all about creating customers, it’s all about meeting your financial goals, which then allow you to meet your company goals. So as you drive additional revenue into the business, and you’ve got additional revenue in, and then the ability to take it and use it, you can then use it to build the next phase of what you’re building.
Andrew: On a more tangible level, what was the product at that point? Was it e-mail newsletters? Was it landing pages? What was it?
Mark: There was a continuum of products. So, the only thing we eliminated was the studio piece. So you would come with a final master, and we would wrap it in packaging. We would create your identity and your look and feel. We would put your physical product together. We would ship it where it needed to go. If you were quote-unquote doing a retail distribution release. If you were Best Buy and we were producing your soft crew, we’d ship that into your distribution centers. It didn’t really matter. For us, it was shipping widgets to various places.
Mark: And then on the internet side, we would build you a web site. We would build you all of the tools that would allow you to manage those consumers that were coming… e-mail lists, all that stuff. And we would handle all of you transactions online. So if you went to a web site that we were managing, that was branded the artist, whatever that artist was. Guy Clark was one of my early favorites, who if you don’t know him, you should know him. He would not be in the business of handling all of the bullshit associated with filling that order. That was my job.
And so we shipped CDs all over the world. And we shipped hundreds initially, and then thousands, and then eventually got into digital distribution. And then we started selling other products… merchandise, all the stuff that goes along with it. And fulfilling all of those orders and handling all of the customer service.
Andrew: And how did you get other customers at that point?
Mark: Well, we got it through a combination of things. One early windfall for us… Remember the dot-com boom and bust of ’99-2000?
Mark: There were a lot of companies that got bought, and then they got summarily screwed up, and they basically went out of business. And so we had several huge local competitors who literally overnight disappeared. And we were the only other game in town. So, we went at one point… one of the companies that went out of business was company called songs.com. They had 500 customers that all became mine just because of proximity.
Andrew: Because you were able to go over to them and say, “Can I service your customers?”
Mark: [??] Took over all their accounts.
Andrew: Oh wow.
Mark: You know, and that proposes a whole other set of challenges. Growing too fast can be as deadly as not growing fast enough.
Andrew: What’s the problem with growing too fast? It feels like you’ve got new customers, you know what you’re doing at this point.
Mark: Yeah, but you can’t… when you go from handling 100 accounts to 600 in a three month period? You know, great companies are always made up of great people. And if you’re staffed to handle 100 accounts, and all of a sudden you have to handle an additional 500 accounts, getting staff in and getting them trained, getting them integrated into the business, and getting your functions set correctly? It’s very difficult to do it well, even without the pressure of having to have it done in a very short period of time.
Andrew: So do you have an example of something that broke because of the speed?
Mark: Oh, shit broke all the time. I mean, we would ship the wrong stuff to the wrong place. Things that have sort of a three-fold effect. One is it damages the brand of the artist that you are representing. If you can’t get the shit right. Two is it creates more work and that stuffs got to come back and then it’s got to be refilled. And three that’s demoralizing to the operation because if you can’t get it right people start wondering if this is the place they should be.
Andrew: I’m looking at your site from roughly 2000-2001.
Mark: Oh god. Are you [??].
Andrew: No it’s actually … I’ve seen so much worse from that time, this is pretty good. Art direction, photography, replication, web design. These are some of the things you do. Catalog management, e-commerce solutions you did a lot all for musicians and then there’s this note, take a peek.
Nashville rock band the Luxury Liners are invited to the annual South by Southwest music conference and they came to us needing promotion materials for the trip. We developed an all-inclusive promo piece for the artist to use instead of the traditional folder bi-press and 8×10 inserts.
Wow. That’s where you were and I can see it right now. I can see the Luxury Liners, I see the CD that you created for them. I see the promotion material this is what you were doing, right. And then 2001 you were frustrated with the lack of tool and that took you in a different direction. What’s the tool that you were frustrated that you lacked?
Mark: Well the short version is we had, you know, we were doing business with consumers sort of end to end. But we weren’t … we didn’t really have them in a bucket where we could easily assess all the information about that consumer. And as a marketing guy that was incredible frustrating to me and we started looking around and saying, Huh there’s got to be something out in the world that does this.
Well, turns out there wasn’t. Which was the next opportunity so we started building and so that met our own need. Which at that point had grown fairly substantially. I mean, we rented – we had 600 customers on the internet and we were really beginning to see that as the future as CD sales began to plummet we knew we need to get out of that business. And so we had to figure out what is the next thing look like and this was a clear answer to that dilemma.
And as a result of that we built a tool that inevitable become the underpinnings of BACO Became [SP] which was this new business that really connected artist and consumers very directly. At our peak we managed about 20 million consumer relationships directly. About four terabytes of data flowing through our system on any 5th payday period. And a huge amount of web traffic that we were doing on behalf of these artist on a branded basis. You never really saw is, it was always for us about the artist. If you were on Kanye West’s website or if you were on Ice Cube’s website or if you were on Keith Urban’s website you were dealing with me.
Andrew: These are your clients?
Mark: Those are our clients.
Andrew: What you did was you powered their website but also their email and to just say, power their website and emails overly simplistic. You allowed if I understand you right, people to segment their mailing list to generate open rates to have profiles on users. We’re talking about all the things that today online marketers have if they have their act together you unable for musicians … did musicians even use those tools back then?
Mark: Well, the smart ones did. I mean, so part of what we did is we added a service layer to what we did. For the large enterprise clients like a Keith Urban. Where there was real scale there. There was real money there we took Keith’s business from six figures to seven figures in 10 months. We help them grow that business and we actually participated in the growth from a financial perspective.
Andrew: I see. And how much revenue were you doing at that point? Do you remember?
Mark: I mean, you mean in terms of the company overall?
Mark: We were doing somewhere I think when I …. when we sold the company we had about 9 million in revenue.
Andrew: Nine million in revenue.
Andrew: Is this around the time when you meet Rufus Lumry?
Mark: Yes, it is.
Andrew: What a great name.
Mark: Yeah, Rufus is a very interesting story. If you do a little bit of looking. It’s hard to go that far back on Google but in 1991 he was the CFO of McCaw Cellular which sold to ATT for eight billion dollars, in 1991. That’s a large transaction.
Andrew: Today we have the PayPal Mafia, back then I’m seeing an article from Forbes from 2001 there was the McCaw Mafia.
Mark: That’s it.
Andrew: And Rufus the 3rd is one of the guys. He’s the Chief Financial Officer runs and angel firm called Acorn Ventures at the time. I don’t know if you want to talk about this, but I heard you had an interesting meeting.
Mark: Oh, yeah.
Andrew: The way you met was even interesting. April Dykman here on the team told me I’ve got to ask you about that.
Andrew: I don’t know the story.
Mark: That’s probably a sub-story. The short version of that is we had a client who was using our product and our tools and our philosophy.
You know, technology’s a great thing, but people have this view that technology somehow solves problems. For me, what it allows me to do is to ask better questions. Human beings still solve the problems. Tech just gives an enablement to ask better questions and to make better decisions.
We were invited to come to his annual retreat for this company that he was financing which was a record company. He had signed a bunch of artists and they had an annual retreat.
Rufus has got a really good balance in his world of family and business. He doesn’t overemphasize one or the other.
We end up in the Washington state high desert which, believe it or not, there is a Washington state high desert, and it was sort of that cryptic drive – four hours from Seattle, and take a left at the baseball diamond on the dirt road. I drive over this hill and I look down into this valley. It’s sort of this very scrubby high desert.
There’s this gigantic house in the middle of nowhere with a pond and a freaking golf course. I’m like who the hell is this. I pull in and I get to my room and I do my thing. I go to dinner that night up at the other house which is not as big but pretty freaking big.
Andrew: But the other house, yeah.
Mark: The other house on the hill. I’m talking to the guy who’s my contact and I said when does money bags roll in with the motorcade. Who is this guy? Because I had no idea.
He said oh, well, this is Rufus’ place. I said you mean the guy over there that asked me if I needed another Coke and looks like the gardener.
Mark: He goes yeah, that’s him. I was like okay. We ended up the next day I presented and showed our technology and talked about our philosophy. We were on a nature hike that afternoon to the waterfall on his property. Yeah, I mean you can’t make this s*** up.
He pulled me aside on the trail and he said hey, you know, I have been an investor for ten years. He said I’ve never seen anything like what you’ve built and I want to help you make your dream come true.
Mark: I was like, wow, that’s a new venture pitch. Because by that time I had had a lot of venture money pitching me, because we had built something pretty spectacular and people wanted at it.
Andrew: And this was a time when everyone was throwing money around.
Mark: A lot of money got thrown around in that…
Andrew: Tail end of it.
Andrew: I guess.
Mark: The long story short is I went back to Nashville and never really thought about that again. About a month later his CFO called me and she said Rufus is confused, he made you an offer, what gives. I sort of walked her through it and I was like, you know, I just know what that is. She goes you’re going to have to trust me, that is not what this is, he really meant that. I said all right, well, as my grandpa used to say, I’ll watch his feet, not his mouth.
I called our attorney and I called our CFO and I said I want to go through this process, let’s see where it leads us. True to his word, he did exactly what he said he would do.
You know, the valuation game is really kind of where you get down to the brass tacks, so you value the company and that’s how you get to your amount of capital in and the value based on that amount of capital.
Mark: On a Sunday afternoon we had our final sort of discussion. We got our cards up, and they had their cards up, and we both drop our cards simultaneously, and we were within $100,000 of value.
Andrew: And that’s literally how you did it? You wrote down what you thought the company was worth, he did the same. Okay.
Mark: Well, we were on a conference call, but yeah.
Andrew: Oh, I see, okay.
Mark: I mean you’re negotiating.
Andrew: How much money did he put into the business?
Mark: Well, I won’t disclose the exact amount, but it was nearly seven figures in cash.
Andrew: Nearly seven, okay.
Mark: The fact that we were within $100,000 of value was unheard of. My attorney said hey, put him on hold for a minute. We put him on hold, and he turned to me and Neil, and he said you guys don’t deserve this deal, I’ve never seen anything like this.
Andrew: Where the guy just basically gives you everything you want before you’re even demanding it.
Mark: Not only that, but he didn’t want any control. He knew we knew how to operate the business, and he knew what was wrong and what we needed to fix.
Andrew: Overall, how much money did you raise for the business?
Mark: That was the one time we raised…
Andrew: That was the one time.
Andrew: At that point, how were you and your co-founder doing as friends, as partners, as people?
Mark: We were not doing well. (laughs)
Andrew: And you were still going into this negotiation with Rufus and he still felt comfortable enough even though you guys were not doing well. By not doing well, you mean what?
Mark: He didn’t know that. I mean, he knew that a little bit, but when you’re married for eight years, at some point you don’t want to be married anymore and…
Andrew: What was the friction there? Do you need to leave the room? Oh, good.
Mark: No, I’m good. The friction there was that he was the brake and I was the gas.
Mark: And we were at a point where the brake was becoming less important and I was really on a mission to change the music business and Neil just liked the idea of money.
Andrew: Having money come in as opposed to increasing equity and influence. Right.
Mark: Yeah, and so that was sort of the beginning of the end of the relationship.
Andrew: How content…actually, I’m not going to ask how contentious it was. It was like a war.
Mark: No, it wasn’t a war. It was more of a skirmish.
Mark: You know, we were still highly functional and very motivated because we knew we had something really special, but I had at that point made the decision that I was going to get out somehow.
Andrew: Out of him and you keep staying in the business or the other way around?
Mark: Either one.
Andrew: Either one. You said I’ve got to get out of this marriage one way or the other.
Andrew: And then how did you get out of the marriage?
Mark: Well when we sold the business, eighteen months later, they didn’t renew him. So he effectively got out when we sold the company and quite frankly, he was the smarter of the two of us because the way that the deal ended up working out, he was paid based on the total value of the company and I had to fight for the balance of mine. So..
Andrew: Oh, they just paid him out but you got an earn out and the earn out, if the company is not run well doesn’t really amount to much.
Mark: Well let’s put it this way, since I was no longer running the company, I will agree with that, yeah. We were not run well after we were acquired. We were run well the first year when they left us the f**k alone, but once they started getting in and rooting around in the stuff we were doing, things did not…
Andrew: How did they change it? We’re talking about IAC – Interactive Corps arm for IAC marketing as you explained to me before the interview started. That’s their acquisition arm. So what did they do differently? How did they mettle?
Mark: Well, so the first thing they did was they…and this is a very long, complicated story, but what they did is they made a corporate decision so IAC had 65…or they were the parent company of 65 different internet companies. So they owned a lot of assets.
Mark: And they made a corporate decision to take those assets and put them into verticals.
Andrew: I remember the news of that, yes.
Mark: And then they spun them all out into separate tickers. So we went out with all the music assets.
Mark: Including Ticket Master, one of the most hated companies in the world.
Andrew: So you’re asking musicians to work with you and they hate Ticket Master? That was a problem.
Mark: That was part of it. They had made commitments to deliver a certain amount of client base to us. They never fulfilled those obligations. To quote one of my good friends, “You don’t belong reporting to a guy that doesn’t understand what you do.” And yet I was working for a guy that didn’t know jack shit about what we did and quite frankly that didn’t really know that much about anything?
Andrew: Who was the guy? Can you say the name?
Mark: I’d prefer not to.
Mark: I mean, he was doing the best he could with the information he had. And so we just agreed to disagree on a multitude of things and then the other thing that happened is during all of that activity, we were also…the company merged with its biggest competitor, a company called LiveNation, who also was trying to buy us.
Andrew: Before. You had several acquirers.
Mark: Yeah. We had several.
Andrew: And this was something that Rufus brought to you? The connections that Rufus brought to you helped you get all those acquirers, no?
Andrew: How did you get so many acquirers? I forget where I read that there were a handful of people.
Mark: Well what happened is after we took Rufus’ money, he said you’ve got three jobs. Job one is to build irrefutable case studies. Show them how good your technology is. Job two is grow your market share as fast as possible. You want to blow this company up. And third is spend the money I gave you, don’t save it. So the break, my old partner, would have just as soon stuck that money in a bank account and sat on it. And I was like, “We’re spending every dime,” right? Cause that was going to get us bigger.
Mark: And so what Rufus brought for us was a level of expertise about how to grow a company that we didn’t have, one. Two he brought us capital and three, he brought us his Rolodex. And basically, he said, “Look. Go do this. In 10 months you’re going to need more money and we’ll go get you more money.” And what I didn’t realize he was doing that I now know he was doing, was he was ratcheting the value up. So he figured that the capital he put in would make the company more valuable and that he trusted that I could, we could grow it quickly to get it even more valuable.
Andrew: I see.
Mark: And then when we went to raise the next chunk of money, which was in late 2006, early 2007, really, late 2006, all those boys that . . . all the bankers that do all those deals all drink within five square blocks in Madison Avenue, right, and in mid-town New York. And we went up there with a . . . we built a book and we went out and raised an additional $17 million.
Andrew: I thought so. This is before you sold.
Mark: Yeah, so what ended up happening is we raised that money, and when you raise that level of money, people start paying attention. And about a week after we got the committed dollars, the phone rang and it was the head of M & A. “Hey, we’d like to talk to you.” I was, like, “Oh, okay.” Hung up the phone, called my banker. He goes, “Oh,” he goes, “we have an auction.” He goes, “So now what you’re going to go do is you’re going to go get a bunch of other people lubricated and interested in buying this company and then we’re going to create an auction [??].”
Andrew: Ah, so once you had IAC, you were able to go to Live Nation and say, “Hey guess what IAC wants to do?” And then you were able to go . . . and that’s where you rustled up the other. Did you take the $17 million or you just had the commitment?
Andrew: No. So those people who committed never got a chance to put the money in, never got a chance to take the money out.
Mark: Correct because . . .
Andrew: That’s the part. So I thought you took $17 million . . .
Andrew: And I said, “Then $25 million sale is not that high.” Now I see. Less than a million is what you took in, 25 is what you sold for, so you did really well.
Mark: Well, we returned Rufus 11X in 18 months.
Andrew: Does he have another pond? Does it have, like, a third house on the estate because of this?
Mark: Well, I mean, he . . . Rufus has been very successful as an investor. He was . . . he owns a big stake in the company that owns the patents in OnStar. So he’s . . . and his whole investing strategy is all about the guy or the girl. He bets on people. He never . . .
Andrew: Why do you think . . . so people like Rufus are fascinating to me and they’re absolute mysteries to me because I can’t go and read his mind online. You didn’t even know who he was and you were in the same room with him, right? That’s the kind of mystery that he is. What do you think it was about you that he saw that made him say, “This is the guy who’s going to make it, who’s worth banking on?”
Mark: I think he recognized that I was unwilling to fail.
Andrew: How did he see that about you?
Mark: I don’t know. I can tell you that I can see it. I mean . . .
Andrew: You can see it. “I’m unwilling to fail.” Every part of you just communicates that because that’s what you’re about.
Mark: Well, I think it’s difficult with different people but I can tell you what it looks like and smells like and that’s all I invest in now. And part of how you learn that is by investing in people who don’t have those qualities. And you quickly, because you lose your money, you quickly figure out what that looks like.
Andrew: I see. You know what? I think it . . . yeah, it was. It was Paul Graham who essentially said the same thing. I asked him, “What happens now? What’s your challenge when you’re trying to pick companies to invest in?” He said, “Word’s gotten out that I like these, that we bank on people who will not give up and so some people have learned to fake us at the meeting.” But apparently, they got better at catching those fakes because that’s what they look for, too. So you, then, sold the company. You worked for the company. You got out of Ticketmaster, right?
Andrew: And did you get your share of the business? Did you do as well as your partner did?
Mark: No, he did better than I did.
Andrew: He did better than you did.
Mark: Yeah, and it was my idea. So there’s a stinger.
Andrew: And you owned equal shares of the business. He just happened to . . . no, you didn’t. Mark: We did. We owned . . . we were 50/50 partners and obviously, we were deluded equally along that continuum. But when we were purchased, he took the option to leave in totality. And so he got paid as if . . . he got bought . . . we . . . he got bought on both sides of the deal. I took the . . . I bet on the come and I bet wrong.
Andrew: I see. And when you do less, is it . . . did I have it right? I feel like I didn’t, where I said earlier you had an earnout and because the company wasn’t run your way and you had no control, your earnout was less.
Mark: Well, no, it’s more complicated than that.
Andrew: Yeah, help me understand it.
Mark: That’s how it, that’s how it should’ve worked. In my case, I had an earnout and I had a deal and when we basically jointly agreed I would leave, they said, “Hey, this has been fun and we know we have a contract with you, but we’re not fucking paying you. Come and get it.”
Andrew: Ooh, I see.
Mark: Yeah, so I had to go to war with a company with $34 million in annual legal budget cause they got sued a lot, and it was me against them. And 14 months after I exited, they had to pay me the balance of what they owed me.
Andrew: You won.
Mark: I won.
Mark: I don’t ever give up.
Mark: And I was right. The day that I got my first inquiry from an M & A perspective, I had my head of IT set up a phantom email account so every email that came into my corporate email box also went to a Gmail account.
Andrew: Ah, so when they shut you off, you still had all the records.
Mark: I had every . . . I had all of the proof I needed.
Andrew: And the proof was them saying, “This is what you’re owed.”
Mark: No, the proof was me showing, basically, walking people through a 300 page binder of every smoking gun email, all the commitments they made vs. what they actually delivered, everything from that to me showing them smoking gun emails where they were trying to jam $700,000 worth of new costs down on my company to reduce the value of it. Andrew: And so the reason you ended up with less than your partner is because of the legal expenses or something else in addition?
Mark: Because inevitably I had to settle for less than a dollar-on-a-dollar value.
Andrew: Oh, okay.
Mark: So I didn’t get everything that I felt I was owed. In fact, I got less. That said, less was still pretty damn good.
Andrew: Yeah, I see. You’re not shy about . . . or maybe, I don’t know. Did national business journals get this out of you, that you became a millionaire by the time you were 40? I guess that’s a big secret. That’s not highly specific.
Mark: You can do the math. It’s not a secret. So yeah, I did well.
Andrew: You did really well and then you’re a guy I wouldn’t have guessed who has a lot of ideas because you seem so focused. And so that’s why you ended up creating Flo Thinkery. I read somewhere that you just had all these different ideas that you wanted to pursue and Flo Thinkery is your place to not just pursue them but to help others pursue their vision, too.
Mark: Well, yeah, I mean, it’s funny. Now that you’ve read the book, you read the book by its cover and you figured I’d be an unfocused, flaky musician. Now you’ve changed your mind and I’m focused. I’m teasing you.
Andrew: What I mean by unfocused is I feel like you do one thing because you didn’t, as far as I could tell from my research, you weren’t running Echo Music and at the same time creating a sneaker brand and at the same time getting to the portal space and then saying, “What if there was a 57 baud modem and I could beat the 56 baud modem guys?” No, you were on this one thing, like a missile, back when people didn’t believe in it, back when there was no reason.
You weren’t getting press as far as I could tell back in the day. I mean, people were talking about Infoseek. They were talking about other companies that went away. I don’t see nearly as much coverage of you if I do a Google search that limits the search to back in the early 2000s. Anyway, so where does Flo Thinkery come from? Where does that idea come from?
Mark: Well, so after I finally untangled myself from that previous mess, I went to work for a venture firm. And I did it [??] . . .
Andrew: As an entrepreneur in residence.
Mark: Yeah, I did that very intentionally because I wanted to understand how they thought.
Mark: Because for the most part, I was not really venture-backed. We were angel-backed.
Mark: And when you sell your company and you become a “hit songwriter” in entrepreneurship, every Tom, Dick and Harry wants you to . . . wants to write you a check and back you for your next deal. And one of the things that I determined in the time off I had is just that I didn’t want to do one thing ever again. I’d already . . . I’d built a company and exited it and it was great.
And in the big scheme of things, I’m a pipsqueak compared to some of the deals that have even happened in my own market. National has had . . . well, now that we’ve had this recent acquisition, well over a billion dollars’ worth of exits and technology in the last five years. So $25 million ain’t that much money comparatively. But what I had kind of come to is I didn’t want to do one thing ever again, and part of what I wanted to figure out is how the other side of that business, how the other side of the business works. So I went to work with a firm and, you know, effective what I learned is, is that all this time I had believed that the money had the upper hand.
When I spent a year inside the money, I figured out that I had the upper hand and that the things that really matter to an entrepreneur were not the money. The money’s the easy part, right. If you’ve got a great idea and you build a great team and you’re the kind of entrepreneur that can get the job done, you have the upper hand.
The money is the lowest common denominator piece of the equation. And so what I wanted to do was, I wanted to spend my time working on a variety of projects that I maintained a level of interest in that I thought or feel is, you know, worth what my time and energy and intellect is worth. And we started a company that basically in the image of starting other companies. And so, you know, that became my answer to the venture business. And that’s kind of where we are now.
Andrew: It evolved into that?
Andrew: I see multiple different descriptions in my research. You know, we like to have as you said, “One sentence no comma description of each company.”
Andrew: I see multiple descriptions. One of them is where is it a think tank, right? So how did you go from think tank to investment firm to company that starts company?
Mark: Well, so we are still a think tank. And we are still an investment company.
Andrew: What does it mean to be a think tank? I tend to think of think tanks of something that happens in politics where people are paid to come up with solutions that make sense for the right or the left.
Mark: Yeah, I think of a think tank as a company that’s got a bunch of really smart people that solve problems, period.
Andrew: I See.
Mark: Our early monocle was let’s do smart shit with cool people or cool shit with smart people. And that was really it. That was the foundation for the business. And so the first year was really about telling nobody anything about what we were doing which just made them all that more frustrated with me, which I loved and because I could get away with it, I wanted to get away with. And so we didn’t tell anybody what we did, who we did it for, how we did it or what it costs. And yet, we did a million dollars’ worth of it our first year, right. And we did it for Google and we did it for Health Care IT companies.
Andrew: Because you’re a consultant at that point helping those companies out?
Andrew: Right. So before you launch companies you were a consultant. Here’s what I have, helped bring Google creators and Google for entrepreneur events to Nashville.
Andrew: Where else do I have? What are some of the other projects you did when you were going? Oh, here, consulted for companies like Nissan and Under Armor, helped Kenny Chesney start Blue Chair Ray Rum, that’s a rum?
Mark: Blue Chair Bay Rum.
Andrew: You’re right. I should at least learn how to read what’s in my notes. So it was consulting revenue that brought in a million dollars first year?
Mark: Yep, we’re very expensive. [laugh]
Andrew: That’s phenomenal and all that with, like Bozo the clown was one of the employees?
Mark: Yeah, which was also very intentional?
Andrew: What is the intention of having Bozo the clown on your team page?
Mark: Well, it’s all about culture, right. We tried to take ourselves too seriously. This is supposed to be fun. And so, you know, for me it’s about being mildly irreverent and, you know, the thing is that you can get away with that if you can backup what you do. And I feel very confident about what we do. And I know how good we are at it. And we’re just getting better.
And I think that’s the goal for anybody in their life. I will be learning the day I die. And so for me it’s about constantly challenging my intellect, constantly challenging myself with the people around me. So the way in my opinion that you’re truly going to be successful is by being the dumbest guy in the room. And if you can keep putting yourself in situations where you are the dumbest guy in the room and you’re reasonably adapt at that, you’re going get into smarter rooms all the time.
Andrew: How does the dumbest guy in the room get into smarter rooms? I mean, I just mispronounced the name of a bottle of rum as it was in front of me. I don’t think I’m getting into a room with that?
Mark: No, you’re fine. I mean I think, you know, it’s a live broadcast. No pressure, right or it’s a recorded live broadcast?
Andrew: Right. It is, but I don’t do any editing, so you’re right.
Andrew: So you’re right. I read this stuff quickly as we talk. And I can see where this screw up would come from. I’m not apologizing for that. I know how that happens but, you know, it’s a more serious note, how do you get to be… What does that mean when you say I ask so many questions that I don’t come across the smartest guy and that’s how I get the business?
Mark: Well, that’s not what I said. What I said is by being the dumbest guy in the room, by finding people who are smarter than me and understanding what my role is in all that, that’s how you become successful.
Andrew: I see.
Mark: And if you’re in a room with people who are smarter than you and you are reasonably intelligent, you will benefit from that aptitude and experience and become smarter.
Andrew: I see.
Mark: Then, you’ve got to go find a room to be smarter in. That, for me, is the goal. I’ll liken it to songwriting. There’s a big difference between writing with somebody who’s as good as you are and writing with a guy who’s written five number one hits in the last 12 months.
That’s a different kind of writing than you and I writing a song together. The chances of you learning from me are pretty good, and the chances of me learning from you are pretty good. If I’m writing with a guy who’s written amazing, amazing songs, I will learn something and I will become better as a result of being around somebody better than me.
Andrew: I’m on a website called madeinnetwork.com. That’s you guys.
Mark: Yeah. That’s us.
Andrew: When you create some… This is a YouTube network, right?
Andrew: A network that publishes…
Mark: It’s a generation two multi-channel network.
Andrew: When you create something like this, is it that the entrepreneur comes to you with the idea, or that you just find the entrepreneur and give them the idea and watch them run with it?
Mark: In that case the original inspiration for that was ours, and when we found Kevin Grosch – who runs the company, who’s a 24 year old kid that we just wrote a huge check to – he made the idea five times better than it would’ve been with us. Even though he’s 24 and he lacks certain skills, he has many other skills that we lack. He took the idea and made it better, which is how he ended up owning over half of the company.
Andrew: I see. Even though it was your idea, you’re the ones putting in the money, he ends up owning more than half the company because you want a guy with your never-say-die attitude who knows more than you know about this and can run it.
Andrew: There’s not much else that I can say about Flo Thinkery because a lot of it is still ongoing, right?
Mark: Oh yeah.
Andrew: You have something called Mothership, a consumer data repository, that’s still in stealth mode, right?
Andrew: You probably have a couple of other projects. Is there anything else that you can talk about there?
Mark: I can’t really talk about much else right now, but I can tell you that, for example, the consumer products business we’re in with Kenny, Blue Chair Bay Rum, is now the fastest growing new company spirits launch in the history of liquor. We’re going to do more of that. We’re going to do more consumer products.
Andrew: Do you own any part of that?
Andrew: You do. I see. You’re not just a consultant. You own. Does he pay also, the consultant fee?
Mark: I don’t do anything I don’t have ownership in any more.
Andrew: That’s it. Also consulting fee and ownership?
Andrew: Look at that.
Andrew: What is the deal… Let me end by asking. Actually… What? You blow my mind at every turn here. What is the deal with the tee shirt? You didn’t just go and pick it out in the store.
Mark: Actually, my wife bought it for me.
Andrew: Why? Is there a significance to it?
Mark: No. I guess I’d say it this way. I use certain tools to help eliminate jerkoffs early.
Andrew: For example?
Mark: If you don’t like the way I dress, or the way I talk, or the way I look, and you’re not judging me based on my aptitude, skills, knowledge, brain, I don’t want to do business with you.
Andrew: I see, and if someone sees you in that tee shirt and says this is not a guy that I feel comfortable being around, that’s a good way for you to get rid of them.
Mark: Yeah. If you’re easily offended you’re not going to last long around me.
Andrew: I was looking to see how we even found this. How did we even find you? I don’t know you. I don’t think we have any mutual friends. It’s James Ashenhurst who introduced us.
Mark: And I don’t even know who that is.
Andrew: A guy in the Mixergy audience who said you’ve got to go and meet this person. Forget about his tee shirt. You should interview him. I’m kidding about the tee shirt part.
Mark: That’s funny.
Andrew: But I’m really grateful to him for making the introduction.
The thing that I wanted to recommend to anyone who wants follow up on this, we were talking earlier in the interview with Mark about how the money is the part that’s a commodity. You as an entrepreneur are the big asset that the commodity needs to fight to do work with. I did this killer interview with a man named Oren Klaff. Type this into your search bar if you’re on Mixergy, or if you’re not write it in your phone and go look for it. Klaff, K-L-A-F-F.
He talks about the way that he sees raising money, how he talks to investors, how he prizes himself as a way of turning the tables on them. Even if you’re never raising money, even if you just want to show up to a meeting with strategies that will help you get the upper hand, that’s the guy you need to learn from. It’s kind of like… You know what he said, Mark? You know the book ‘The Game’ right?
Mark: Oh yeah.
Andrew: Right? These guys go out and they want to pick up women and they become pick up artists. It’s like that for business, all those kinds of strategies used for business. He put them in his book ‘Pitch Anything’ which I recommend anyone out there get. Or, even better, maybe just as good, get the interview with me where we talk through the process. Frankly, maybe the book is better. I don’t know. Oren Klaff is the guy you guys should listen to as a follow up.
And, if they want to follow up with you and go to Flo Thinkery the URL is findyourflo.com, findyourflo.com. If you’re in Nashville, is there a way for them to connect with you in person?
Mark: I make it hard to get at me. That’s the first test. They’ve got to find a digital hole and jump in it. Twitter #hellomarko. Find me on Facebook. Find me on LinkedIn. Then, figure out if you can get through the gate.
Andrew: My audience can figure out how to get through. I have to just keep reminding them. When you know how to get through, don’t start off with asking, don’t start off with saying hey I’ve got a great idea. Start off by saying hey, I saw the interview, thank you.
Andrew: Hey, thank you. I’m going to say it right now, Mark, thanks so much for doing this interview.
Mark: Thank you.
Andrew: You bet.
Mark: I appreciate it very much.
Andrew: Me, too.
Mark: I’ll look forward to seeing it online.
Andrew: I am, too. Thank you all for being a part of it. Bye guys.