Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com. It is home of the ambitious upstart and the place where I invite proven entrepreneurs to talk about how they built their businesses.
Have you ever met one of these entrepreneurs, the kind of people who, through charisma, confidence, through hutzpah just kind of rise companies out of nowhere? I feel like the more I’ve read about today’s guest, the most he is that kind of person. He just seems to talk his way into building these incredible companies.
I invited him here to talk about how he did it. He is the founder of Alphabet City Sports Records, a record company that he founded and sold, the founder of Marquis Jet, the world’s largest prepaid private jet card company, which he sold to a Berkshire Hathaway company, NetJets. He also founded this drink right here, ZICO Coconut Water, which Coca Cola acquired. And something that’s really interesting–he hired a Navy SEAL to come and train him for a month and he wrote a book about it, which I’ve got right here, “Living with a SEAL.” I invited him to talk about all those things.
This interview is sponsored by HostGator. I’ll tell you more about why they should host your website in a moment. And it’s sponsored by Toptal. I’ll tell you more about why they should place your next developer in your office. I’ll tell you more about them soon.
Jesse: Thank you. Thank you.
Andrew: I’ve got to get you to tell the story of how you became a musician, how you got signed to Delicious Vinyl.
Andrew: Do you know what I’m talking about?
Jesse: Yes, I do. Well, first of all, I was in college. I had a big fascination with music. I really wanted to be in the music business. Like many kids at the time that were trying to break into the music business, I had a demo. I had a cassette demo, a cassette. The only way in those days to get to record executives was to send your cassette, unless you had a high-powered lawyer, which I didn’t, to music executives or A&R guys and hope that they would respond back.
So, I did. I sent out a demo tape to 100+ A&R executives. I didn’t get one response. So, I decided I kind of had to take matters into my own hands. I was in the studio where I recorded in Queens, not far from where you grew up, Andrew, in Corona. The artist that was there before me, that had probably all day until 2:00 a.m. session–I had the 2:00 a.m. until 6:00 a.m. session–left an advanced cassette.
His name was Dana Dane. He had an advanced cassette on the music board of his next album. I was a big fan, so I “borrowed” it just to listen to. I was going to return it. I went out to California that week to visit a friend and on the plane ride out I read that the owners of an independent label out west called Delicious Vinyl were big fans of Dana Dane.
When I landed, I called the label. I got the assistant of the founder on the phone and I told her that I had Dana Dane’s advanced cassette. I knew that her boss, Mike Ross, was a big fan and I wanted to drop it off. Dana wanted Mike to hear it, hoping that I could just get into the door. She put me on hold and then came back on the line, thought I was Dana, she got confused and she said, “Dana, Mike would love to meet you. Can you come in today at 2:00?”
So, I went into the office under the guise that I was this guy Dana Dane, who ultimately became a good friend of mine later in life. I sat down in this office and told them that Dana was running late and while we waited, I worked the same studio and I’d love to play my song before Dana gets here and I walked out with a record deal.
Andrew: I read this story in the book and you kind of led them to believe that you were Dana Dane, right?
Jesse: I just didn’t confirm that I wasn’t.
Andrew: Okay. What am I taking away from that? Is it just about do anything to get your foot in the door. Once you’re in there, you can always undo any damage trying to get in?
Jesse: I think there are a couple of lessons for me. I didn’t write a resume. I wanted to be in the music business. This is what I was going to do. I already had that movie in my head, I just had to fill in the script how I got there. Coming out of college, this is what I wanted to do. I’ve always been a get your foot in the door guy and figure the rest out later. That’s always been my approach.
The hard part often is getting your foot in the door. A lot of times people ask, “How did you get this store to sell this product? How did you get this?” I just tell them, “I called them. I showed up.” They can’t believe that works, “You didn’t setup at a tradeshow? You didn’t wait for people to come to your booth?” No. I went after it. So, this was no different. I was 21 years old. I had nothing to lose. I wasn’t scared of being embarrassed. The worst thing they could have said is, “Please leave.”
Andrew: How do avoid being afraid of being embarrassed? A lot of people can logically say, “What’s the worst thing that can happen, they kick you out and have a good laugh? They’re not going to arrest you for this.” Intellectually that makes sense, but when it comes time to actually picking up the phone and making a tough phone call or showing up at somebody’s office with somebody else’s tape, that’s a gut check that a lot of people can’t stand up for. What do you do to allow yourself to do it?
Jesse: Certain things I still have a lot of great fears over.
Andrew: For example?
Jesse: I just remember in college wanting to ask a girl out to go to my formal or prom or whatever it was called. I had my roommate call up and say it was me. So, certain things I’ve always been scared to do. Other things I’ve always had the vision in my head that I saw the result. So, the best gift you can give yourself is getting over the fear of embarrassment because then you’re completely free to try anything.
Jesse: I realized that early in life because there were things that I was scared to do that I regretted not going after and not trying.
Andrew: For example?
Jesse: Just silly things, like not wanting to go out for my high school basketball team. I wasn’t scared of getting cut. I was scared of making it and letting people down. I regretted it later on. I was just like I don’t want to have to sit in the audience and watch other people. I want to be the guy.
So, I just started taking risks, taking risks early. It’s been very rewarding for me. I never took a business class. I had no business background. I had no prior experience in any of the businesses you mentioned at the top of the podcast. I had no background in private aviation, in beverage, in music, nothing. So, the gift was that it guaranteed that I had to do things differently to get noticed. My lack of experience guaranteed that I would do things differently.
Andrew: So, you see lack of experience as a driver for you, as the reason you’re going to make it. When you want to make a tough phone call or show up to somebody’s office with a tape and hope they’re going to listen to your tape in addition to the one they want, you’re visualizing what you want out of the situation, but you’re also visualizing how you used to screw up and you’re not going to be that person again who didn’t try even for the basketball team. Am I right?
Jesse: Yes, but I’m also just betting on me. I know that because I have no prior experience and because I haven’t really memorized a script, no one told me that this is how you pitch, this is how you do it. I know that they’re going to get an authentic version of me and I have enough confidence in me, in my idea, my product, whatever it is that I feel like if I’m just talking from the heart, it’s going to be better if it was scripted.
Andrew: I was listening to your album today. You got that record deal, which was impressive. I was listening to your album today in preparation for this interview. It sounds a lot like the music that was going on at the time. It sounds a lot like Tone Loc. It sounds like Young MC. It sounds a lot like that funny party rap music that was going on. Why didn’t you become as big as Tone Loc and Young MC?
Jesse: Well, A, they made better records than me. B, Loc had an amazing voice, amazing brand at the time. He was club MTV in the early 90s. His video was great. His music was great.
Andrew: What does it mean that he was club MTV?
Jesse: Well, he was very spring break-y, party songs. College kids resonated. It was the right song at the right time, “Wild Thing” and “Funky Cold Medina.” And then Young came out with “Bust A Move,” which took a long time to break. The record didn’t break until after being out for like six months. They really had to work it. For me, I thought, “Wow, I’m the third person on this label to come out following Young and following Loc. I’m a lock.” But it doesn’t work that way. As an artist, you put stuff out and either the public likes it or they don’t.
Andrew: There’s nobody you could make a phone call to or show up at their office and get the world to suddenly start liking your music.
Andrew: So, then you shifted and that’s when you became the guy who created the theme song for the Knicks. I grew up listening to that, “Go New York, go New York, go.” That was you, right?
Jesse: That was me.
Andrew: How do you get into that?
Jesse: Well, I realized I wanted to stay in music. Although I didn’t get picked up for my second album, which was a big disappointment, it was also an opportunity to explore other lanes. I had nothing to put on my resume other than failed rapper. I was a kiddie pool attendant for three months. I guess I could have put that on too but that probably wouldn’t have got me a job.
So, I wanted to stay in music. I’m a big sports fan and I wanted to marry the two. How could I get into sports, be in music? I came up with the idea of this Knicks song, “Go New York, go.” I played it for the brass at Madison Square Garden. They decided they would give it a shot. Unlike my album, which probably wasn’t as well received as I hoped, this song was. It became a big deal in New York.
Andrew: I remember. You made a little money on it. I think I saw on one of the other podcasts you said $400. Not that much on one album–sorry, I’m recovering from a cold–but you said, “If I can do this for the other guys, the other teams, then I might have a business.” Is that the business you ended up building?
Jesse: It is. I wasn’t in it for the money. My goal at 22 years old, when I wrote the Knicks song, was to do something I liked and just pay my rent. I just wanted to survive. I had a creative mentality. It was eat what I kill you.
Andrew: I hate to say it, I don’t know the creative mentality. I grew up in New York, like you mentioned. You were building up this business in New York. Creatives in New York were treated like garbage. Alphabet City was the place where they were because it was so cheap and you could perform for free because someone would take a busted up apartment–my sister would perform in some of these places.
It felt like a non-life where people were building empires around you. If they weren’t building empires for business, they were building empires in the music business. So, didn’t you feel at all like a loser, “What the hell am I doing living in this crappy apartment when these people are doing incredible things around me?”
Jesse: No. I have a very simple existence. I like to run. I like to eat brown rice. I like bananas. I didn’t need the empire.
Andrew: Even back then?
Jesse: Even back then. I didn’t want to wear a suit. I didn’t want to work for anybody. I wanted to make my own hours I was running. I was playing basketball. I was being a 22-year old kid doing the things that I liked and this was one of the things that I liked. I knew it was going to ultimately work out for me. In my movie, I knew that it was part of the journey.
Andrew: I’ve got to tell you, I remember once being in Greenwich Village feeling the same thing you’re talking about. I was in college feeling like I know I’m smart. I know I’m going to do big things in the world. And I saw this homeless man. I kid you not, Jesse, he was a homeless man who was saying exactly the same stuff that was in my head. He was mentally deranged, like, “I know I’m going to do something big,” all this stuff that sounds like empty boasts when someone says it out loud.
And I said, “What’s separating me from him?” It’s not the fact that I believe it in myself because this guy believes it even more than me. It’s going to have to be this hard work. It’s going to have to be me trying to figure out the path on a constant basis. It’s going to have to be me trying to figure out what’s worked and hasn’t for other people so I’m not this homeless man screaming in Greenwich Village in ten years. What was it for you beyond the fact that you just knew?
Jesse: I don’t even know so much if it was I knew. I was just content with what I had and what I was doing and I just wanted to stay in the game until something clicked or not. I wanted to stay in the game as long as I can without having to get a job. And the Knick thing happened for me early on. The Knick thing happened when I was 22.
Then I knew that I at least was in the right arena. My song is on the radio, people are buying it, other teams want a theme song. All of a sudden I’m in my own lane and I’ve sort of created my own category. No one else was doing sports music. I created that category. I just wanted to stay in that lane. All of a sudden making records for radio wasn’t important. I’m going to do it for songs and teams and brands.
Andrew: What did you sell Alphabet City Sports Records for?
Jesse: Cash and stock.
Andrew: How much money did you end up with at that point?
Jesse: More than I ever thought I would ever make in my life.
Andrew: Are you not revealing it even this many years later?
Jesse: It’s public.
Andrew: I thought I saw it. You might have even written it in your book. Here, Marquee Group bought Alphabet City for $4.3 million in cash and stock back in 1998. Does that sound right?
Jesse: Well, the way the deal was structured, we had an initial buyout of $4.5 million or something of cash and stock. I don’t remember what the stock component was. Then we had earn outs. We were incentivized to stay on and if we hit certain sales figures, we would get very significant earn outs. So, we ended up making about $16 million.
Andrew: $16 million? So, you became a millionaire in your 20s, not wearing a suit, not doing it a structured way. What’s the one thing you got to buy for yourself that let you know, “I did it. It was worth the work to get here?”
Jesse: Well, Andrew, this is going to sound like a big surprise to you.
Andrew: You’re going to tell me bananas?
Jesse: I bought a bike and I bought a shit ton of bananas.
Andrew: That was it? Exercising even back then was that important to you?
Jesse: Yeah. My life hasn’t changed since I’m 18 years old, really. I did buy a lake house for $200,000. I bought a small little cabin, 1,000 square feet and that was it. Now, I’m not saying I didn’t do stupid things. I was 22 years old. I blew through that money pretty fast.
Andrew: What’s the stupidest thing you did with that money?
Jesse: Just going out… I just wasn’t smart with it. My relationship with money has always been make money, spend money, give money away, make more money, give more money away, spend more money.
Andrew: It really doesn’t matter to you? It does, but it’s not the driving force that it is for New Yorkers.
Jesse: No. Believe me, I love having money. It makes life easier. But it is not the driving force.
Andrew: How old were you when you did your first marathon?
Andrew: Was New York Marathon the first one?
Andrew: And you’ve been doing it every year since then?
Andrew: What motivated you to do your first marathon?
Jesse: I read a book called “Fit for Life.” I was living in California, read a book called “Fit for Life.” I started running 20 minutes a day, then I got up to 24, then 28, then 32. I remember that was a big moment for me, then ultimately 45 and then I broke an hour. I just kept trying to see how far I could push it. That 20-minute run ultimately morphed into a 100-mile run years later.
Andrew: That’s why you’re called the 100-Mile Man by a lot of people.
Andrew: The author of “Fit for Life,” you made him into a buddy. This is one of the things that I’m amazed by with you. You say you don’t just want to read the book. You want to do something. What did you do with the author of “Fit for Life?”
Jesse: Well, any time I meet someone or learn about someone that’s really interesting or inspiring to me or has a story that really resonates with me, I just cold call them and I try to meet him or her. This was the case with the author of this book. I read this book. It changed my life. One of the principles is to only eat fruit only until 12:00. I tried it until ten days. 27 years later, unwavering–I haven’t deviated from that path.
After following this guy’s program for so long, one day in my office I’m like, “I wonder what Harvey Diamond is doing now. He really changed my life.” So, I called him, got him on the phone and told him that his book really impacted me and changed my life. He’s in my movie. I’ve got to figure out how this plays out. We became friendly.
Andrew: And you’re still friends. You still talk. When you say “in my movie,” you mean in the movie of my life, this guy has a role.
Andrew: All right. Let me do a quick sponsorship message. The sponsorship message is for a company called HostGator. They host websites. Jesse, let me ask you this–do you think you could start a business right now with nothing but a web hosting package, nothing but a website or do you think you need more? Let’s say a website and since you’re really good at working the phones and a phone.
Andrew: What business would you start if you’re a 17-year old dropout, have nothing else going for you but you’ve got a phone and a website?
Jesse: I don’t know. I’d have to think about that a little more. I’m glad I’m not in that situation.
Andrew: What is your process for thinking of a business? This is still in your process. I’ll come back to your story in a minute. What is your process? If you were just sitting there, how would you come up with your idea?
Jesse: Usually I look at problems in my life and what would make things easier or better for me.
Andrew: I see.
Jesse: It’s always around products or something I genuinely want, use or need and how do you make it, sell it better than anyone else. Give customers a great–I’ve had a pretty good idea of understanding what customers want and being able to give it to them by looking at me as the customer.
Andrew: So, maybe that’s something we can use as a suggestion for a start. If you’re looking to start a business and you don’t have one right now, go to HostGator.com/Mixergy. They’re going to give you a 30% discount off of their hosting package, which means you’re going to get started for a few bucks a month. Just start noticing things that are problems in your life and problems that other people have and frankly just blog about them. Just force yourself every day to write out a problem you have or someone else has.
If you start being aware of problems that are around you, you’re naturally going to want to start to solve them, just like when my wife says, “Here’s the way I’m feeling.” I don’t want to understand how she’s feeling. I want to understand the problem. It’s an instinct. So, start noticing the problems that people have, start writing about them and then you’ll start to solve them and you’ll build a business. I see Jesse’s nodding, so I’m going to suggest that.
Go check out HostGator.com/Mixergy. Even if you have a hosting company right now, you should switch to them. They’re better than your hosting company. They have better support. I know that.
Okay. Shortness of breath here.
Jesse: That’s okay.
Andrew: Let’s go on to the next part of your life. Actually, there’s this one story that stood out about the way that you do business that we’ve got to get back to–the Grant Hill Foot Locker story. Do you know the one I’m talking about?
Jesse: Of course.
Andrew: You were doing some work for Foot Locker…
Andrew: What happened with Grant Hill?
Jesse: I was doing a campaign for Foot Locker. I promised the CEO that Grant Hill would be part of this campaign. We had to interview celebrities and athletes and weave them into a radio campaign. He really wanted–this is the early 90s–Grant Hill. I told him, “No problem. I’ll get you Grant Hill.” I didn’t know Grant Hill, but I wanted the Foot Locker account.
We kind of got the account based on getting Grant and others. Grant came into New York, did an in store appearance at Foot Locker. It was the night before the New York Marathon. I blew it off. I didn’t interview him. It was terrible weather. I got a call from the CEO of Foot Locker the next day or on Monday. He chewed me out and said, “I can’t believe you didn’t get Grant Hill,” and went crazy on me. I said, “I’m getting Grant tonight in Atlanta.” He was playing for, I guess, Orlando. They were playing the Hawks. I said, “I’m on my way to Orlando to get him tonight.”
So, I put myself on the line and then I had to go figure out how I was going to get Grant Hill to say that he shops at Foot Locker and record him and have it on the radio in basically 24 hours. So, I did. I got on the plane. I walked into the arena at Phillips Arena with the band that was going to be playing the National Anthem fake carrying a tuba. Then I waited pretty much eight hours for the Orlando Magic to come into the arena for shoot around.
In those days, there were payphones on the wall. So, I pretended I was on an important payphone call. And then when Grant Hill walked by, I put the phone down and I said, “Hey, Great,” I motioned him down to put his ear down to me so he can hear me. I whispered and basically said, “I’m going to lose my job and my livelihood. I made a mistake. I was supposed to get you to say something for Foot Locker.”
He didn’t know what the hell I was talking about, but he looked in my eyes to see that I flew down here on my own nickel and I was in jeopardy of losing my job and he said he would do it. He took me into the bathroom and we recorded it into the bathroom because it was less noisy than the locker room. And I got it done.
Andrew: Did you need to pay him or get any kind of signed permission or anything? That doesn’t bother you?
Jesse: It would bother me now. It would bother me today. At 22 with the CEO of Foot Locker yelling at me like I’ve never been yelled at, it did not bother me.
Andrew: I feel like that’s such a gutsy move. This is one of the things I admire about you. You said in this story as you told it right now, you said, “He saw the fear in my eyes and that I paid and so he went into the bathroom and recorded it with me.” In the book you talk about a little bit of back and forth. The guy initially is going, “What the hell are you doing here? You want me to record what?”
And he’s saying, “How about if you come back later?” which actually makes intellectual sense. You say, “All right. The guy is about ready to get playing here. That’s what he’s here to do. I don’t want to mess with his rhythm. I’ll come after the game.” Most people would do that and at that point, you lose it. That’s’ the gutsy part that I’m in such admiration of.
Jesse: Every time you say, “Let’s go back,” or, “Let’s do this later, it never happens.” So, you’ve got to do it right now, no matter what. Chain yourself to the chair until you get the order.
Jesse: As I look back on that thing, I must have been wearing the right clothes, said the right thing. Everything had to click for me to not get a no. Part of it is just reading people and just reading his whole vibe and his energy and then trying to match my style to that.
That was no different than when I met Mike Ross at Delicious Vinyl. I very quickly was able to figure out what he was all about, took quick inventory around his office, saw the plaque that said he was into basketball. We were able to connect on a personal level. Literally in a very quick amount of time, even Grant became friends, not friends friends, but there was a mutual–maybe it was 90% me, 10% him. But there was a connection that he trusted me to give me that interview.
Andrew: I know what you mean about the vibe. I notice that about myself as an interviewer. I change based on whoever I’m interviewing. There are some people who are really deep, thoughtful, quiet. They need a few minutes before they can put a sentence together. I spent a little more time on each question. I give them more space.
And then there are other people–I’m a lot more hype right now because we’re trying to get so much done in such a short period of time because we started a bit late. I change. I think for an interviewer it draws more out of the guest, but also I wonder if my audience gets a sense of who I am because I keep adjusting with the wave of my interviewees.
All right. Marquis Jets–there are so many other companies I’ve got to talk to you about. Let’s move fast to Marquis Jets. In the 1990s, you were on a plane with your friend Kenny. It was a private plane. There was something about that experience that changes your life. What was it about it that made you say, “This is the business I’ve got to get into?”
Jesse: Just the convenience. I’ve never been on a private jet before. We were guests. I walked onto the plane. I was just and as was my partner Kenny like, “How do we do this more often? This is unbelievable.” The convenience, the simplicity, the luxury, the ease…
When we got off we’re like, “How can we do this more often?” We started to research how do you move around in a private jet. The only way to do it was to buy your own plane, which was way out of the question. We couldn’t afford that. Buy a fraction of a plane which is also tremendously expensive and required a long commitment.
Andrew: How expensive was it at the time?
Andrew: Millions of dollars to be a NetJets owner?
Jesse: Millions and you had to commit to five years. And we had three or four flights we wanted to take, not five years’ worth of a trips. And we didn’t know what the next couple of years would look like financially. We just wanted to go with our friends to play golf kind of thing.
So, we came up with this idea of a 25-hour prepaid flight card where you would have all of the benefits of owning your own plane but none of the responsibilities, none of the headaches. We just knew it was a great idea. The problem was we had no airplanes. So, we ended up partnering with NetJets that had 500-600 airplanes at the time and selling this 25-hour flight card called Marquis Jet through NetJets.
Andrew: The way that you got that was you found our who was running NetJets–I’m looking for the story here in the book, but I’ll just do it from memory–you found out who owns it and you actually had done a favor at some point in the past. His daughter wanted to meet I think it was Christina Aguilera, right?
Andrew: So, how do you get his daughter to meet Christina Aguilera?
Jesse: Well, from my days in the music business, I knew Aguilera’s manager. I got a call from a friend that said a fellow named Jim Jacobs, I didn’t know what he did at the time. It turns out he was the president of NetJets. He was throwing a sweet 16 for his daughter. She wanted to get tickets to Aguilera. He knew that I had a relationship. So, I called the manager and got the tickets, but also got some wild experiential stuff to go along with it.
The next day he called me and he’s like, “I don’t know who you are or what you do, but if you ever need a return favor, let me know.” About a year later when we came up with the idea, I called him up and said, Jim, I need the return favor, just a meeting to pitch an idea.” When we first pitched the idea for Marquis Jet we got thrown out of the office because the CEO and the founder, Rich Santulli said he was never going to give his whole fleet of airplanes to two 29-year old kids to do this cockamamie idea.
But we were able to setup a follow up meeting and we brought in our own focus group. One by one, athletes, entertainers, business executives would stand up and tell Santulli and Jacobs why they would by a 25-hour flight card but hey would never buy a timeshare with NetJets. They said, “You know what? If you guys put your own money up and you want to take a shot at it, let’s see what happens.” A year later, I think we had more customers than they did.
Andrew: And they committed to buying. Who were some of the people on there? Who were some of the famous athletes or musicians?
Jesse: Without naming names, I would say we had at least half the all-stars every year in the NBA and probably the majority of the baseball all-stars and a lot of Oscar winners. We were flying everybody. We flew 4,000 of the who’s who of pop culture.
Andrew: I read an old New York Times article about how you heard that Ben Affleck and Matt Damon were going to be on one of your planes as guests of somebody else. Do you remember this story?
Jesse: Of course.
Andrew: You do? What do you do when you hear they’re going to be guests of one of your customers?
Jesse: Well, what happened was we were just starting Marquis Jet and I was trying to build out the entertainment vertical. Every day I would get an email of who was flying that day and who was on their planes. Matt and Ben were guests of one of our owners. They were flying from LA to Sundance Film Festival in Utah. I was in New York. I’m like, “I need Matt Damon and Ben Affleck in our program.” I told the cab driver as he was taking me to work. I said, “Take me to LaGuardia.”
At the time, it was the middle of winter, but I went to work in shorts almost every day. I’m in shorts or kind of like a ski jacket or vest. I have nothing with me. I went to the airport, bought a one-way ticket to LA, got there about 40 minutes before they were supposed to take off. I met him at the plane.
I introduced myself and I told him that I happened to be going to Sundance as well and asked if I could jump in the jump seat and we’ll be on our way and I’d return the favor or something and they said okay. Once the plane got up in the air, I went in the back and started talking to the guys and connected with them and ended up signing them up to the program and building a relationship.
Andrew: And stayed friends with them.
Jesse: I did.
Andrew: What do you do to stay friends with people?
Jesse: I don’t try. If there’s a connection, just stay in touch. I’ve been good at that. That’s been a big part of my business success, I don’t know, that’s a bad word, but career has been staying in touch with people, building relationships because for guys in my 20s that I was friendly with are now in their 40s, 50s and are in positions of decision making power and influence.
Andrew: So, how do you stay in touch with them without being like a pen pal? You seem to me like someone who has a process, Jesse, do you?
Jesse: No. I do kind of march to my own drum and I’ve always been kind of doing it my own way, a little bit non-traditionally. I think people gravitate towards that kind of stuff. It’s unusual. It stands out. I remember when I was younger going on business trips, I wouldn’t pack. I’d just bring my laundry bag and do all my laundry when I got there because I didn’t want to take the time to figure out what I had to wear or whatever. That’s a little bit odd. People want to talk about it. So, I’ve been able to stand out a little bit.
Andrew: What about afterwards? There are some guests who I do connected with who say, “Andrew, I’d love to see you at some point. I invite them, “Come to San Francisco.” We never get to see each other because by the time they come to San Francisco, we’ve lost touch already. If I were to email them every month, it would be a little too much, too much of me to think of what to email them, too much for them to get an email from their new best pal, Andrew. I couldn’t do this with lot of people. Do you have a process that would help me?
Jesse: I wouldn’t suggest emailing and inviting them over and doing kind of what everybody else has been doing. That usually gets deleted or…
Andrew: I get that.
Jesse: In today’s world, everybody–first of all, there was no email or internet when I was doing it. In the early 90s, I wasn’t emailing. Nobody was as accessible. So, you would meet people and build relationships face to face at events, at parties, at celebrations, at weddings. That’s a lot different. When you’re talking to someone and you create a memory, a laugh, whatever. It’s a lot different than, “Hey, man, you want to get some lunch or something when I’m in San Francisco.”
A lot of my relationships were cultivated face to face and through experiential stuff. A lot of mine have been through running. Running a marathon with someone, you’re training with someone or whatever or events. But I don’t have a process.
Andrew: Okay. Let me do a sponsorship message and then we’re going to come back and talk about what happened to Marquis Jets.
Andrew: But first, Toptal is the company to go to when you’re looking for a developer. They have a network of these phenomenal developers. By the way, what makes them phenomenal? I can tell you that they’re being tested. I can tell you that they make sure it’s the right person. I can tell you all that.
But here’s what makes a really good developer. See how Jesse comes up with these problems and he finds solutions for them? Like, “How do I get Grant Hill to record something for Foot Locker? How do I get my foot in the door with the people who are going to give me the jets to start Marquis Jet? How do I get all that?” Entrepreneurs see these problems and find solutions on the spot. You can’t tell them how to solve it. There’s no book that’s going to solve it for them.
Same thing with really good developers. They come across problems and you as the entrepreneur, you as the business owner can’t tell them how to solve it. You have to hire the right people who are so clever that they’re going to eat those problems for breakfast, that that’s what fires them up. That’s the kind of thing that’s going to make them want to write great code.
So, when I say you’re going to get good developers or great developers that they’re different from all those freelancing websites you see, this is what I mean–cleverness, the ability to think for themselves, solve problems in a way you never could direct them to do for you.
When you want that kind of developer, you can do a couple of things. You can start asking friends. You can hire a headhunter. You can try to poach from your competitors. You can do all those things and they all work for people. But there’s a new system that works really well without all the headaches of all those other processes.
It’s called Toptal. Just go to Toptal.com/Mixergy. They’ll get on the phone with you. They’ll hear what you’re trying to work on and they’ll tell you if they’ve got someone for you. If they do and you like them, you can get started often within a couple of days. If you want my intro to my person over at Toptal, just email me, Andrew@Mixergy.com. I’m happy to make an introduction. But you can just go to directly to their website, Toptal.com/Mixergy.
Jesse, why did you decide to sell the business then?
Jesse: Why did I decide to sell it?
Andrew: Yeah. It was doing well. You got a lot of customers.
Jesse: Yeah. I think for me partially just because I like new challenges and I wanted to go to the next chapter of my life, I’m highly ADD. So, I love the honeymoon period, but I don’t love the actual operating. Most of the businesses that I’ve been in after a couple of years, I have a new idea or want to try something new. Then second of all, I had partners, so the decision wasn’t solely mind. We all had to do what was best for everybody. Right time, right situation, right partners. So, it was an easy decision.
Andrew: What part of the business did you own? What share, I mean?
Jesse: In what?
Jesse: A large share.
Andrew: More than 50%?
Andrew: Okay. By the way, I’ve been sick as you can hear my voice. I was in bed watching just about every episode of “Entourage.” I saw Marquis Jet in “Entourage” featured a lot. Was that something you did?
Jesse: Well, in that particular case, we had a relationship with the director. We were on for a while. My partner went to college or high school with Doug Ellin, who did the show. So, we had a lot of exposure, free exposure out of friendship.
Andrew: I think Mark Wahlberg even wore one of your logos on a baseball cap.
Andrew: It’s just you guys had a friendship asking for it?
Jesse: Yeah. And we provided some airplanes for some of the shoots. So, there was some barter stuff going on.
Andrew: What did you sell the business for?
Jesse: That’s private.
Andrew: I couldn’t come up with anything for that. Did you raise money for it?
Jesse: We raised a little bit of money, not a lot. I think we raised–we put in a total of $1 million and we raised $4 million on top of it. That is a lot of money but not for a company that did billions of dollars.
Andrew: I see software companies that have nothing raise a lot more than that. Can you say what your revenues were before you sold?
Jesse: Yeah. I think we did $5 billion in cumulative sales from start to finish.
Andrew: Net margins are tiny in that business, aren’t they?
Jesse: If you’re doing $5 billion, it doesn’t really matter.
Andrew: Are we talking about like 10% margins or 1%? What’s the ballpark?
Jesse: We reinvested a lot of money in the business to build the brand. We scaled it by bringing in a lot of great salesmen and a great team, a super talented marketing team. So, every year was kind of different. But we had some great years.
Andrew: Okay. Did you have any bad years there?
Andrew: It just took off.
Jesse: We had some challenging years in the sense that there was a pilot strike one year, stuff that was out of our control, weather was always out of our control. Planes are a very difficult business. They have mechanical regulations and challenges, maintenance requirements, pilots.
Andrew: Can you tell me about one especially difficult moment. I don’t want to give the audience or frankly even myself the impression that life was really easy for you there, that you just came up with the idea and because you’re someone who has the guts to get on a plane with celebrities, you’re able to sell them. There must have been a difficult period that would have broken lesser man. Do you remember one of those?
Jesse: Well, it was easy for us because we loved it and we were all friends. I started it with a good friend. I brought in good friends. We built a great team. So, it was fun, even the challenging stuff was fun. It’s all what you put in your mind. It’s only as challenging or as difficult as you make it to be. I’m not saying everything is rosy. There were periods where the pilots went on strike. There were people that were, at times, one specific day got stuck over the holiday time waiting for their plane, but you pick up the phone and you deal with it.
Andrew: What do you do in that situation when someone just stuck?
Jesse: You explain it. You apologize. You make up to it. You be honest. You address it head one. You don’t run from it. Those are hard conversations to have when you’re paying $15,000 an hour for an airplane and you’re flying home from Aspen and you show up with your four-month old, two-year old and four-year old kid. You want to get home and there’s no airplane and now it starts snowing. That’s not a fun conversation.
Andrew: That’s a tough flight even when everything works out well, but when it doesn’t… The idea for coconut water came from an observation that you made that there was something here. What did you notice?
Jesse: I’m a runner. I ran 100 miles nonstop. I did a lot of research on hydration and nutrition, like what do you drink if you’re going to run 100 miles. What do you eat? How often? How many calories do you have to take in? I discovered coconut water during my training and it became my go-to drink, loaded in electrolytes, etc.
I used it during the race. It felt great. It felt like that was kind of a fountain of youth and realized that if I felt this good after running 100 miles, I didn’t feel that good. But if I completed the race and I didn’t cramp and I have been using this product, I bet other athletes would want to use it to if they really knew the benefits and tried it versus a sports drink and a manufactured sports drink. So, that was kind of the light bulb in my head to get involved.
Andrew: Why didn’t you just go at it alone? Why didn’t you say, “I see how this works. I’ll go and find someone who can make coconut water for me and I’ll start my own company.” Why did you partner up with someone?
Jesse: Well, I thought about it. I looked into it for a year. I went to Jamaica. I went to Brazil. I looked at importing coconuts. The learning curve was a little too much for me as it related to the speed that other coconut water products were being brought to the market. So, I felt like by the time if I went at it myself, staffed up, raised money, did all the things I would have to do, the train would have left the station. I wanted to be kind of first to market and not playing catch up.
So, is decided to partner with ZICO, a guy named Mark Rampolla, great guy, because they were still in the top of the first inning, so I could still kind of put on my entrepreneurial hat, but at the same time help them get to third base faster.
Andrew: What did you do for them that they didn’t do before?
Jesse: Well, we brought in a lot of celebrity endorsers that were also investors. So, in the old days, companies would pay athletes or whoever for endorsement deals. In this particular model, we flipped it upside down and they actually invested in the company. So, they had not an obligation but they were certainly incentivized to help promote the brand. They had more reward than getting paid $100,000 or whatever to be on a billboard or whatever it was.
I did a bunch of deals like that and a lot of the sizzle grassroots marketing and ideas. It was easy because we had such a great CEO in Mark Rampolla. This guy was and is and a rock star. So, all I had to do was blow a little pixie dust on it.
Andrew: You said street something? What’s an example of a promotion you did to help it take off beyond introducing celebrities?
Jesse: Well, the biggest thing was just getting influencers to buy it, drink it, share it. I did a big mailing campaign. I did a big campaign in offices to get the right people to visibly consume the product.
Andrew: How do you do that? What does it mean to have somebody in an office visibly drink he product?
Jesse: I would go into offices and whenever someone would open up the refrigerator, which people do all the time in the office, I wanted to make sure people saw ZICO. I would seed the product with influencers, athletes and entertainers, etc. and encourage them to chat it up, drink it in public, walk around with it, snap a couple of pictures, put them in the magazines and just build the legitimacy, the authenticity but the credibility of the brand.
Andrew: I see. And you partnered up with Coca Cola in a deal that would, if I understand it right, they distributed ZICO for you? What was the deal?
Jesse: The deal was they bought a certain percentage at the same time that I want a certain percentage. Then they have the right to buy out all the shareholders as we hit certain benchmarks in sales. They bought 100% of the company three years later.
Andrew: Okay. And some time after that, you hooked up with this Navy SEAL that you wrote this book about. He doesn’t even let you use his name in the book. He’s kind of a mystery man who you met on this insane race. What was the race where you met him?
Jesse: I met him at a 24-hour race in San Diego that I was doing as part of a six-person relay team. So, as friends we would rotate running a mile each. Whatever team had the most miles in 24 hours was a winner. The guy sitting next to be at the start didn’t have a team. He was doing the entire thing himself, alone. The race was self-supported, which means you had to bring your own supplies.
Most of the teams had a tremendous amount of food and powder and Vaseline and medical supplies. This guy had literally three items. He had a fold-up chair that he sat on, a bag of water and a box of crackers. That’s it. I was so like, “Who is this guy?” He was a heavy-set guy. He was about 280 pounds. At mile 70 he had broken all the small bones in both his feel because he weighed so much, literally crushed his bones. I watched him get out of his fold-up chair after taking a short rest, basically tape himself up or whatever he did and finish this race.
I was so inspired by his drive that I Googled him and learned he was a Navy SEAL with a crazy backstory. I decided in the spirit of what I like to do, I cold called him and few out the next day to meet him. In sitting with him, I realized that my life would be a lot better if whatever got him out of the chair to finish the race rubbed off on me. I asked him to come live with me for a month. Three days later he was at my breakfast table.
Andrew: That happened three days after you asked?
Jesse: Pretty fast.
Andrew: What did you want from him for 30 days that he was going to be with you?
Jesse: Well, A, I wanted to get in great shape, which was a given. But I really wanted to know what makes a guy like this ticket. How does he stay so motivated all the time? That’s what I was searching for.
Andrew: Here’s one thing that I got from the way that he stays motivated. He kept saying things like after a tough workout, “I want to sit here and enjoy the pain. I earned it.” He has a different way of looking at pain than we do. For us, it’s almost punishment for having pushed ourselves too far. For him, it’s a reward for pushing himself right. What else did you get about what makes him tick? Does that seem right to you, what I just said?
Jesse: Yeah. That was his way of reminding himself that he put a lot of work in and he earned it. So, he would sit and enjoy the pain. He gravitated towards that. I think for him the harder the degree of difficulty, the more he enjoyed it. For me, having lived with him, the harder the degree of difficulty, the more alive I felt. There is a lesson there. He was super motivated and always trying to figure out what his real imitations are and pushing it to see what he’s really made of.
Andrew: One of the places where he pushed you to a place that felt too far for me–and I think we should end it in a moment–it’s this place Windsor Hill, you guys go for a five-mile run and then you end up seeing what seems like a frozen lake and he tells you jump in it.
Andrew: And you do it.
Jesse: When he decided to live with me, the one rule was I had to do everything he said and nothing was off limits. By the way, I was at a great spot in my life when he was living with me with my wife and I and our son at the time. But I was in a routine. I couldn’t get out of my routine. Like so many of us, routines are great but they can also lead to a rut. For me, the complacency led to a rut.
So, I wanted to get in great shape. I wanted to know what makes a guy like this tick. I also wanted to blow up my routine so I could look at things differently. So, I kind of instructed him to get me out of my comfort zone. So, jumping in the lake was part of that. Part of that was to just kind of chip away at my mental toughness. My mental toughness shield and help me break through and approach things with a little bit more grit.
Andrew: I saw that you did it, right? He told you go in there, you did it. You come out within seconds of getting frostbite. You go back, I think you nearly pass out at some point because of this. How did you become a better person for having done that?
Jesse: Well, again, I felt very alive. I felt like I accomplished something by doing this thing I didn’t want to do. There’s all kinds of research that says that grit is a great indicator of future success. That’s what he was doing. He was giving me a little bit more grit in my world when I needed it. It wasn’t like all of a sudden I jumped in a frozen lake and I’m going to walk an old lady across the street when I might not have done that the day before. It was more like I can do things that stink, the make me uncomfortable and that’s going to make me a little bit better, see what I’m made of.
Andrew: You end the book saying, “I absorbed some of the just get it done and there is no excuse attitude. I’m grateful for that. My perspective on time changed too. I got so much more done when SEAL was here. I was much more efficient. Now if I have to drive a few hours in a car to get somewhere, I do not get frustrated. Rather, I think about how lucky I am to be sitting in a warm and comfortable environment, which is so much better than being in a lake.”
Andrew: Let me ask you this to close it out. Why write a book about this instead of this business career of yours? Obviously the stories about your business, about these companies you’ve built are sprinkled through his book about your experience with a Navy SEAL. Why not write a book about business? Why write a book about this instead?
Jesse: I think everything, business, personal, any kind of growth or success ultimately is centered around mental toughness, not motivation and I felt like this was a little bit of a blueprint or a little bit of a look into probably the most mentally tough guy on the planet. This is the guy who set the Guinness Book of World Records for the most pullups. He did 4,030 in 17 hours. He lost 100 pounds in 59 days before he reported to Buds Navy SEAL Training Camp.
He has all kinds of world records as an endurance athlete. He’s consistently disciplined, which is so hard. So, I felt like this started out as a blog and I was sharing my training with my friends. I sent it to 30 friends. But the fascination was on the psychological side. That’s why I wanted to write a book to kind of illustrate that element of it.
Andrew: I enjoyed reading it specifically because it wasn’t a business book. I wanted to get away from everything work related to just take some time to relax. This was a good book to kind of relax my mind, but at the same time, push myself to do more pushups, to run a little bit harder, to be not such a freaking wuss about things I didn’t realize I was being a wuss about. If you could have your balls bleed, which happened at one point here, I was in pain just reading about it, there’s always room to push yourself further.
It was a really fun read and I’m glad you sent it over with your autograph here right at the start. Anyone else who wants to read it, I highly recommend it. I enjoyed it. It’s called “Living with a SEAL.” There’s the book. There are so many other stories we didn’t get into in here.
Jesse, thanks for doing this interview with me.
Jesse: Andrew, man, I appreciate it. From Queens to San Francisco, you’ve had quite a journey.
Andrew: Right on, man. Fist bump. Cool. Thank you everyone for being a part of Mixergy. Remember the two sponsors are the company that’s going to help host your website. It’s called HostGator. The company that’s going to hire your next developer, it’s called Toptal. Of course, if you haven’t yet subscribed to the podcast in iTunes, you’ll love it, we’ll get you every single one directly delivered to whatever device you love.
Thank you, Jesse. Thank you all for being a part of Mixergy. Bye, everyone.