How big of a business can an entrepreneur build by selling headsets?

How big of a business can an entrepreneur build by selling headsets?

Mike Faith was having trouble when the headsets he bought weren’t working very well. And after a painful experience trying to return them, he thought, “Hey, if I can’t get what I want with headsets, there’s an opportunity there.” And six weeks later, he started a business selling headsets.

Mike is the founder of Headsets.com, which sells headsets online.

Mike Faith

Mike Faith

Headsets

Mike Faith is the founder of Headsets.com, which sells headsets online.

 

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Full Interview Transcript

Andrew: Hey there freedom fighters. My name is Andrew Warner. I am the founder of Mixergy.com, home of the ambitious upstart. And frankly, this is, I think the largest collection of stories of how entrepreneurs built their online businesses. I think years from now, centuries from now when they look back and say, “How is this whole thing evolving, this internet business world?” They’re going to want to come back and check the Mixergy archives and learn. And you, my audience, are going to learn right along with us as we create this. My goal for you is to learn how others have built their businesses, use those lessons in your business, build stronger companies, leave a legacy, and hopefully when you do, you’ll come back here and tell your story. And make it part of the Mixergy legacy too. Alright, in this interview, we’re going to find out how big a business can an entrepreneur create by selling headsets. Joining us is Mike Faith. He is the founder of Headsets.com which as the name says, sells headsets online. Mike, welcome.

Mike: Hey, thanks, Andrew. I’m glad to be here and to be part of your Mixergy program today.

Andrew: Thank you. Before we started, we were talking about the company you ran just as you launched Headsets.com. It’s Time Savers. What exactly is Time Savers?

Mike: Yeah, Office Time Savers. Keep in mind this was 17 or 18 years ago. I used to tear the page out of the phone book because we had about 20 area codes around the country. And they kept changing. They kept adding another one and another one. The 4-1-5 split and the 2-1-2 split.

Andrew: This is in the UK?

Mike: No, this is here in the U.S.

Andrew: Okay.

Mike: I would tear the page out of the phone book and pin it on my wall so I would know which area code was calling when the caller ID came in. And it would go all brown.

Andrew: You know what, I do remember that. New York would suddenly go from just having 2-1-2 to having 9-1-7 and then 6-4-6. And then you have to keep track of it when a call comes in and understanding where people are coming from.

Mike: Yeah, yeah. So I had these brown pages on the wall. The paper would go brown. I thought this is bad so I’m going to print them instead and print them in color so I can easily tell the area codes. Then I thought what if I laminate them and sell them. And within four to five months, I had a business that at one point got to about two and a half million dollars a year selling laminated maps of area codes. And the funny thing was, we’d get the information from the phone companies. But even the phone companies would buy the maps from us.

Andrew: Because even they wanted it to be clear. I’m looking at the site right now. For about 25 bucks I can get a map that I can put up on my wall color coded by state.

Mike: You get a six pack for 25 bucks. It’s a bargain.

Andrew: What do you mean? Oh so I have five others to give other people at the company.

Mike: You got it.

Andrew: Got you. Wow! So that’s the business you had and then there was an issue that made you think of creating Headsets.com or an opportunity. What is the opportunity that you caught?

Mike: Yeah, I had some people on the phone and we had headsets and they didn’t work very well. And they when I tried to get support and send them back, I couldn’t get there. And based on that data point of one which is me, and that’s usually been enough in my life to make major decisions. I thought, hey if I can’t get what I want with headsets, there’s an opportunity there. So six weeks later, I started a business selling headsets.

Andrew: As I understand it, the business started with about $40,000 that you gave two of your employees who were working at Office Time Savers. And that initial funding is what launched the business.

Mike: Yeah, that’s it. Forty thousand dollars and that took us through about three years at which point, I did a very small angel round which was the other part of financing the business.

Andrew: The $40,000 was supposed to go where? What was the investment in?

Mike: I bought a few computers, enough to hire people on for the first few weeks. And that was it really. The rest of it was kind of customer funded because I cut a deal where we paid the supplier in 60. But as people bought headsets, they’d give us a credit card. So the more we sold, the better our cash flow go. I can remember I think it was about 3 months into the business and we had about a quarter of a million dollars in cash. And it was a positive cash flow business.

Andrew: And the product that you sold is a Star Key Laboratories Earphone Ear Set, right?

Mike: A little bit different from that. That might be from somewhere else.

Andrew: Okay.

Mike: Originally we worked with a Korean manufacturer.

Andrew: Okay.

Mike: And they were all corded headsets. And then over time as we got bigger, we started cutting deals with different manufacturers. And nowadays, we have our own unique product that we co-brand with Sennheiser.

Andrew: I see. I guess I’m going back to the internet archives and looking to see what was on that site. So this is 1997 and the product you created; you went to a manufacturer and you had the manufacturer create on your behalf.

Mike: Yes, did indeed.

Andrew: I see. But you didn’t have to pay for it until after you sold it. Why didn’t you just say, “Hey, you know what; let’s just pick the one that we like best and what we are going to add is some customer service to it?”

Mike: We wanted to make some amendments to the early product. So, we custom specified with the manufacturer and we managed to convince them that we would still pay them later. Which, we have always been able to customer fund the business or have the manufacturers fund it. Having some uniqueness to the products has helped us to get just the product that we wanted; as well as a differentiation so that you’re not selling the exact same goods that someone else is selling makes a big difference in your ability to take it to market.

Andrew: I see; and as part of that reason that if someone sees something that they like on your site, or did back then, they couldn’t then Google around and say, “Where else could I get this lower?” and then you become a commodity seller.

Mike: Right. Well, this is almost pre Google. I’m trying to think when Google came about. But, your right. It gives that differentiation but of course the whole Google problem, or Google opportunity depending on how you look at it, has become much bigger nowadays.

Andrew: I see that. I mean, not just Google opportunity but Amazon opportunity. We will get into how you are working with them, considering how big they are. I’ll write that down. Where did you get those initial customers? I see people come up with great ideas, the way you did, and find the opportunity; but, it’s hard to get customers to come in the door and buy. Where did you find your first customer?

Mike: Wall Street Journal provided a lot of our original advertising opportunities. As we built our customer base; we managed to get…

Andrew: Oh, we might have just lost him for a moment. We will give it a chance to reconnect and if not; Joe will help us out. Oh there we go. Sorry, I lost you there as you were answering. What I did catch is that you were buying ads in the Wall Street Journal to get your first customers and sending them to headsets.com. What else were you doing?

Mike: We would get referral business and repeat business. This was really pre-internet. The internet was there but was never really that big at the time. It was a lot more traditional methods of advertising and early on we caught onto direct main. Direct mail became one of our mainstays.

Andrew: Oh really? Just going into offices directly via mail. I see, but the company was named headsets.com from the start?

Mike: Actually, that domain name was owned by another company. Which, perhaps, is where the star-key was if you look back to 1997. We bought the domain in 2000. I say bought, again, we did a ten year lease where we paid most of it at the back-end. We have always been able to finagle deals where we bridge our cash-flow by paying people later and getting the customer money to come in earlier which has enabled us to grow without a lot of outside cash.

Andrew: I see. How does that work? You offer the owner of headsets.com money every year until you pay off the ownership of it? And, until you do, it is considered a lease. Which, actually is good for you, because then you get to write off the cost of the domain all at once every year like that.

Mike: You have got it exactly right. Yes. That’s right, Andrew.

Andrew: I see. So, you get to spread the expense over all of those years that you are paying for it as opposed to putting the cash up front and getting the expense over the years.

Mike: Right. We weren’t in a position to put the cash down then anyway. That purchase, or the lease of the domain, as it was then was probably one of the best moves that we did. It gave us a lot of credibility with manufacturers. It put us on the map. Also, as Google begun to become a bigger force and they ranked domains, the name that your searching for, so well it became very useful to us there. So, that one paid for itself several times over and still is.

Andrew: I see. You are a real entrepreneur. Even going before both of these business that we discussed; I heard that had a candy store growing up. What kind of candy store did you have as a kid?

Mike: You have done your research. This was a long time ago, remember. Yes I used to buy candies and sell them at school. You know, I have always done entrepreneurial things. Sometimes I think it’s an addition. That’s why I do it. I can’t help it.

Andrew: Did your school shut you down when you sold candy, the way many entrepreneurs who have been interviewed here on Mixergy have said happened to them?

Mike: Yeah, I had a problem doing it at school and doing it at a local church. People were unsure if I was making too much money and whether they liked it or not. Hey, the road to being an entrepreneur is often paved with dangerous things.

Andrew: They better stop this guy who is selling candy. How dare he. Meanwhile, the school had a candy store themselves, right?

Mike: Exactly.

Andrew: I also heard that you bought bicycles and repaired them. What was that business, as again, growing up you had this business. What was it?

Mike: Yeah, I would buy bicycles and then clean them up and repair them and then sell them. So, you know, I think it was one of a bunch of things that I did and a lot of those things, they weren’t really successful, I didn’t make any real money, but I just learned. I learned about, you know, people and psychology and management and selling and all those lessons that you know, perhaps some people have very innately. And I look at people that have – Mark Zuckerberg that run businesses and they’re twenty-something and they run businesses that are billions of dollars and I was just never that smart. I’ve had to learn the hard way, but I keep doing it and doing it and doing it and picking up lessons.

Andrew: Do you remember one of the lessons that still stays with you from when you were a kid?

Mike: Yeah, gosh. You know I remember I think one of the things I learned when I sold a bike to someone and there was a problem with it later and I knew about it at the time and I think I learned almost too well. I got myself into a lot of trouble and well, I guess it wasn’t real trouble. It felt at the time. And I think I learned actually two things from that, Andrew. It’s a great question. I haven’t thought about this for years actually. You’re just saying this now. One is, honesty is good. It saves problems from later, but then I also learned enough from doing that by actually pointing problems out, you increase your chance of making the sale because you build trust and people appreciate your honesty. So not only do you save problems later, but I think you improve your conversion rate as well by just being honest.

Andrew: You know what, I read that in persuasion and sales books that a sales person who says, “Here are some of the problems with the product,” maybe not exactly the way I just phrased it, but who points it out, is seen as more trustworthy and in many ways he is more trustworthy. That’s one of the things you learned as a kid.

Mike: Yeah, absolutely and it’s such a, for me now, an obvious way to go. I think of things like if I can, you know in the range of our wireless headsets. You know, rather than say 400 feet, I always want to say up to 400 feet because it’s the honest thing to do. Even though we’ll give anyone their money back at any time, it’s like that’s an easy transaction and what anyone thinks if they don’t like anything about it, they get their money back.

Andrew: So you’re saying the wireless headset goes up to 400 feet even though you technically can say 400 feet. That’s what it is. You’d much rather say, look, this is where the limit is.

Mike: Yeah.

Andrew: So far, it seems like everything is a smooth ride and I know that no business can be such a smooth success story. Do you remember the first big challenge that you faced that maybe even made you say, “This is not going to work out”?

Mike: Yeah, probably lots, but I think one that maybe comes to mind is it wasn’t all plain and simple at all Andrew, you’re right. I can remember, I think we were like maybe two and half years in and we’d stop growing and therefore cash had caught up with us and we were running into a few challenges. I can remember not being able to make payroll. You’re going into the bathroom and feeling so bad I was throwing up and then coming out and having to walk around and say, “hey everyone, how’s it going? It’s great.” Because it’s partly I think being and actor and realizing you’re onstage is part of the job and some of the stress and the strains early on were pretty bad when we were going through some cash flow challenges. It only happened for maybe six months or a year in our history, but that was pretty rough. There’s nothing like not being able to pay the bills, particularly payroll.

Andrew: Why do entrepreneurs need to sometimes put up a brave confident face even in light of tough challenges that could send them into the bathroom, in your case literally puking?

Mike: Yeah. I think everyone’s making quick decisions, judgments, and assessments on people and companies and your own confidence helps people make a positive assessment and judgment. So people haven’t got enough time to gather all the data to know whether anything you say is real or not, so they make quick decisions based on how you look. I think, you know, whereas you can be honest and vulnerable sometimes with some of your close employees and close team, there still is an element of energy and confidence and comfort that you need to project even during the tough times.

Andrew: That if you don’t, then maybe they’re not feeling as confident when they’re on the phone and they get distracted when they’re talking to customers. Maybe suppliers aren’t’ as eager to work with you. Am I hitting on the right things?

Mike: Yeah, no, I think you’re right. Exactly, Andrew. Yeah.

Andrew: Can you help me understand what caused the cash crunch considering that you had a model that worked so beautifully? You got paid first and 90 days later, you paid.

Mike: Yeah, so I think as we stopped growing, that cash gap stopped growing because when your cash flow is that way around, it works when you’re growing and not so well when you’re not growing of course you pay the price then. And I think we’d run into kind of a few unprofitable things that we were doing and we just didn’t have the business quite right. I didn’t have the right controls on the business, we went through an unprofitable stage and then we stopped growing. So those coming together led to a cash crunch.

Andrew: What kind of controls?

Mike: I think just financial controls in terms of monitoring the money in and money out. I didn’t really have the reporting systems. I never really had that before and because we’d always been cash positive, it wasn’t until we’d stopped being cash positive that I realized, wow, I need to understand what’s going on here.

Andrew: What caused the loss?

Mike: For a while, we were over-marketing and our marketing wasn’t effective. I think I got a little bit lazy and maybe arrogant about how we were doing after a couple of years.

Andrew: Do you remember the kind of marketing that you did that didn’t pay off that we can learn from?

Mike: Yeah, gosh, we’re 14 years ago now. I think some of the direct mail side. Direct mail of course we needed to pay for a lot of that up front, particularly with postage and I think some of that we just hadn’t been monitoring as well as we were. We still use direct mail nowadays. I think it’s actually a terrific medium, but we’d lost track of which ones were working and which ones weren’t and which markets to send to. So I think it was just mismanagement, which was down to me.

Andrew: So, I heard that the business you started it, within three years, you got to three million dollars in sales. That brings us to roughly the year 2000. Then the business started to stagnate and you came in to fully run the company now. It wasn’t your side thing, it was your full time thing and then revenue grew. What do you do to increase revenue so quickly?

Mike: So there were a few things I did at that time. I negotiated the headsets.com domain and I did a small round of $625,000. I went and knocked some doors and raised some money and the other thing I did was our focus had been a little bit more towards price up to then. I really kind of almost overnight switched it to a very high customer service focus, where we no longer monitored how long someone was on the phone for, we just wanted what the customer thought in terms of how they rated us and really switched around every nuance in the business to be around focusing on having the customer happy at almost any expense. Those were the three things that I did over short period.

Andrew: I saw an article on Fortune Small Business from about 10 years ago where you were talking about how you were doing this and I think that there’s someone in here that was essentially betting against you and saying that’s not going to work. And obviously you’re still standing so the business has grown. That decision though to focus on customer service as opposed to price, how do you know whether it’s working out early on? It’s hard to measure it. I can see one of your early sales pages had buy two get one headset free. I know if you create a promotion like that – bam, you know your numbers right away and know whether it pays off or not. But if you say we’re going to be nicer to customers, you can’t get that data fast enough. So how do you know if you’re on the right track?

Mike: Yeah, that’s a great question, Andrew. I mean I think it takes some time to really know, but for me at the time it was in my gut and I knew that I wanted to do it and I knew it was the right thing to do. It wasn’t like I was going to dip my toe in and try, it was one of those decisions which is like this is what we’re doing and this is how we’re going to do it. You know, it took a little while. I mean it’s not like you get instant results like that, but I knew it was working. I could tell. We started to get better results on the phone and our average orders started to go up and I could just sense. I’d got back in close enough to the business where I could sense it was working.

Andrew: Let’s look at some of the specific things that you did that we could emulate and learn from. One of them had to do with Tootsie Rolls. What did you do with Tootsie Rolls that helped grow business?

Mike: So I was at a conference – this was maybe, I don’t know, seven or eight years ago – and someone said, “Oh yeah, we put Tootsie Rolls inside every package.” And I thought, Hmm. So I started putting Tootsie Rolls in every package and it’s just one of those weird, wacky things and customers call us now and they’re like, “Oh, I want more Tootsie Rolls” or “Can I just have the vanilla ones” and we put the colored ones in. So yeah, it’s been one of those small things and I think we’re the second biggest buyer of Tootsie Rolls in the world right now, so we buy huge, huge boxes of them.

Andrew: What’s the psychology behind that? A headset can cost so much more than a Tootsie Roll, which I can see at the grocery store here is like a couple of pennies per. So it’s not the financial value. Can you help me understand what a customer sees in that that makes them value you more and makes them excited?

Mike: Sure. Well, I mean, I think there’s two things and you know this is just my psychology Andrew, so I’m sure there are other thoughts on it. But one is that we’re giving them something they didn’t ask for even though it’s only a few cents. It’s like when a waiter gives you some mints when he gives you the check, there’s more chance that you’ll tip higher apparently. So I think there’s an element of that. And then the second thing is I think it gives a positive anchoring that you know, while you’re setting your headset up, if you’ve got a sweet tooth you can eat a couple of Tootsie Rolls that makes it more a positive experience.

And maybe the third thing is it kind of frames us as a little bit silly, fun, wacky, and that’s who we are so we like that framing so it plays into our brand, which means the pursuit of people who are like that will be more attracted to us which is good because that’s how we are. So I imagine there’s a good match in the customer to the prospect or matching us to the prospect kind of process going on.

Andrew: What else do you do like that?

Mike: What else do we do?

Andrew: Or customer service.

Mike: We do pick up and we, you know one of our headset advisors gets off the phone and someone mentioned their favorite team was something, they’ll sometimes say, “Hey, I want to send this customer this like a scarf of their favorite team” or “Mary had a bad day and something happened. Can I send her some flowers?” And we generally ever say yes to all those requests and we just do weird silly things which I think really customers just find nice. I accidentally mentioned something and it got picked up.

Andrew: I accidentally mentioned something on a call and the customer service would say, “You know what, let’s go do something about it.” You know the silly thing that you did that got my attention was Jason Saddler, the guy that wears people’s shirts. What did you do? His whole business is – I remember I interviewed him in the early days when he came up with this idea and he was actually generating revenue with it. I said come on here and teach us. Day one of the year, anyone who wants him to wear a t-shirt on social media, etc. pays him a buck. Day two it’s two dollars, etc. and then he did something wacky that you jumped in on. What did you do?

Mike: Yeah, he put his last name up for bid and so he said he’d change his last name from Saddler to what anyone ever paid him to do it for. So I remember I was in New York my marketing guy called my from San Francisco and said, “Look, this guy is selling his name. I want to buy it.” And I’ve learned the art of not always saying no to harshly. So I said to my marketing VP, I said, “You know, I’m not sure. Can you talk to our CFO about it thinking I know my CFO will say no.” And he said, “Mike I already spoke to him. In fact, it was his idea.” So I said all right. So I thought I had been snookered on that one. So next thing I know, we bought it overnight because it was the last night and it was $45,500 and my phone didn’t stop ringing with press wanting to ask us questions about why we did this and I think it was one of the most interesting publicity moves we had ever done. We had a lot of press on that. It was really worthwhile.

Andrew: I saw he got a lot of press on it too and he really did change his name I think. Didn’t he do a video where he went to show how he changed his name on his driver’s license, et cetera?

Mike: I don’t know about the video, but he told us lots of stories about what happened in that so it’s very interesting. “Hey, my name is Jason Headsets.com. It’s kind of weird, isn’t it?”

Andrew: You also hired an Australian voice coach. What was that about?

Mike: Yeah, so I realized that one of the perhaps important things is how we sound on the phone because that’s how we deal with people. I mean everyone can talk about headsets. It’s easy and everyone can have a large similar project, although it’s not the same as us. So I thought what’s the big thing? Well we make an emotional approach still and how we sound on the phone is important and so I looked around for someone who could teach voice lessons to our headset advisors.

And the guy I found that I really liked, who I think is the best in the world at this, is a voice coach in Australian called Cam Welch and we tried a few sessions and it was great and we have everyone in the company use him both in the interview process and for training after so he helps people that have got specific problems, maybe they’ve got a lisp or they speak to fast or they stutter, and we think that’s great because we’re going work on it and help them with it and they’re going to make a great headset advisor. Or people who don’t have any specific problems, but just want to learn better pacing or tone or a voice nimbleness and he works with them and teaches it and I think our headset advisors really appreciate the time and attention they get as well.

Andrew: You know, one thing I notice about you, both before and during this interview, is you acknowledge a lot of what I say. Thank you,

Andrew. Like before the interview started, I said, “How do I make this a win for you?” And you said, “Thank you, Andrew” and then you said, “How do I make it a win for you?” Where did you learn to do that? Most people are very busy during the interview, I catch you right at your office where you might be doing five other things. This is clearly something that is part of who you are, but I’m guessing you didn’t just naturally get born that way. Where did that come from?

Mike: Well gosh, thank you.

Andrew: See?

Mike: You know, I’m not sure exactly where, but one of my great mentors – I’ve had a few mentors, which I really recommend to people – and one of my great mentors taught me a wonderful phrase which I often show people. Be ruthless with your time, but gracious with people. And I think as an entrepreneur as you get busy and things get going, it’s easy to be dismissive of people and I still do, I’m merely a student on this path, but being gracious with people everywhere in your life, those that you need, those that you don’t need, those that you never see again, is a good idea. But you’ve still got to be ruthless with your time because there’s 150 things that you have to do today and you don’t have 20 minutes to be nice to every Bob, Mary, and Fred that you talk to, so I think you do have to learn to be nice to them, but do it in three seconds so you can do a lot of it. I don’t know if that makes any sense, but…

Andrew: It does make a lot of sense. So if we were going to take this and use it in our companies and – I know that I get like this. I get really frustrated because there’s so much going on and someone wants to talk to me. How do I get gracious with them in three seconds?

Mike: Smile, say thank you, pause, move on.

Andrew: Move on.

Mike: Hey, that’s just my style. Your style might be different.

Andrew: I want to learn from your style. Not necessarily emulate, but I want to learn and I think all of our styles need to develop by learning from other people. I’ve seen that that happens to you. You’ve actually heard Tom Peters on tape here and that’s what helped you decided that you were going to become excellent on customer service. So I like to see how you learn and learn from you. Here’s what else I want to understand: you started to actually label customers by type so that you understood them. According to this article that I’m reading right here, so there were 11 types including the expert, the unsure, the self-centered, etc. How does that help? Do you remember when you said this?

Mike: Very – I’m trying to think back. I’m not sure when or where, but I probably just positioned it slightly different if I may, in terms of I think understanding who customers are is important. Some customers want to call and order and don’t want to chat and just want to get it done and we should really respect and understand that need. Other customers do have a need to talk and they want to understand every detail and we should understand and respect that.

Other customers want to chat about the weather and where you’re from and where they’re from and identifying what the customer wants and delivering it to them on the point of contact, which is the phone call, is the important thing for me. So I can’t remember the article, Andrew, and I just probably have a little bit of an aversion to put them into a category and maybe I said it like that at the time, but I think what I mean there if I can just reinterpret it, is to really understand within a few seconds or minutes who you’re talking to and give them what they want and think about they’re need rather than what we can sell them.

Andrew: I see. I was imagining in my head as I read that that maybe the CRM has a slot for a person’s name, email address, etc., and then another one for their personality type and that way when the next person calls them or gets a call, they understand what this customer is like, but it’s not that methodical. It’s just an understanding of the customer.

Mike: Yeah, I think so. I think for us here, rather than the system, it’s more about having the skill set to be able to do it as much as we can help people develop that.

Andrew: All right, here’s something else from before and then we’ll continue with the story.

Mike: Sure.

Andrew: I read that you also would have a bell at the office and when a sale was big enough, the person who talked to that customer got to ring the bell and that is to motivate people to close sales when they’re talking to people, talking to customers.

Mike: Yes. We don’t pay any commissions, so to be sure, we don’t want people to be selling things that aren’t appropriate. But we do want to reward and create an environment of, yeah we want to sell things because we actually believe we’re helping people to be more productive with the headsets. So yeah, we have bells here that we ring to celebrate the success.

Andrew: I see and this is not for every little order that comes in, if someone just bought a new iPhone and got a headset for it, you’re happy but that’s not what the bell is there for. It’s for the bigger orders. How big a percentage of your overall sales come from these bulk orders as opposed to one headset at a time?

Mike: Sure, well it’s growing. So, you know, today I’ve heard the bell go off seven or eight times which is really good. So I don’t know if I’ve got a percentage for you but we’re getting more and more bigger orders that are penetrating larger companies with larger amount of headsets at the same time. I don’t know if I’ve got the stats for you there but we’re kind of moving up the pyramid in terms of company size and order size.

Mike: It seams like it. All right, so the first orders came from direct mail from the Wall Street Journal. The next batch of orders or

the next big milestone was getting the name Headsets.com which Google helped send traffic to. What happened after that? What else did you do to get customers?

Andrew: Yeah. I think we worked with manufacturers a lot to convince them about the value to them of the marketing we were doing. And we started to get manufactures to contribute towards our marketing. So that helped a lot. And then a few years ago we worked with Sennheiser to set up some products that we co-branded with them. And we specified some of the products and changes to it so they could be just how we wanted and then took them to market. And Sennheiser got a great name in the audio industry but we’re really just trying to crack into the headset industry. So that was a good opportunity for us to work with them and give them a better image and brand presence and sales footprint in the US and Canadian markets.

Mike: And they still send from what I can see, they send the orders to your site where you process them for them.

Andrew: Yeah.

Mike: Not all but, as far as I can see, not all but a lot of them.

Andrew: You’re right, yes. You’re very good at your research. I’m impressed.

Mike: Thank you. I try. It’s very hard from the outside to get as much info as I need in order to be intelligent through this interview. So I do as much research as possible. Another thing we talked about earlier was Amazon. I see you get orders from Amazon too.

Andrew: Yes, by the way, I love Amazon as a stockholder. I made a lot on that. I’m very pleased.

Mike: Congratulations.

Andrew: I think to compete is challenging for many businesses nowadays because Amazon will ruthlessly go for the lowest price and of course they have a terrific value set up. Not in terms of talking to customers that don’t do well but in terms of delivery in stock and delivery for a very low or a free price. They’ve really got that nailed. So I think that makes it a lot harder to compete if you’ve got the same products that other people are selling nowadays. But our products are unique. We actually sell on Amazon. We think there’s a value there. And some people want to buy our products, but they want to buy them from Amazon because they get their prime and next day free delivery.

Mike: Yeah, you get prime, fresh even for your headset. So in other words, if tomorrow morning before 7:00 a.m., I wanted to have one of your headsets here, now that I see it, I could have it by 7:00 a.m.

Andrew: Go ahead and click the button. Get one.

Mike: Let’s get one. The rhapsody convertible headset system I could get by tomorrow morning.

Andrew: Yeah. Okay, I think that would be a smart move Andrew.

Mike: I’m scrolling all over their website. So that’s the thing. You establish a store on their site. Do you know at that level how that works?

Is it just that you list your stuff there?

Andrew: Yeah, we list our stuff on Amazon. It’s pretty straightforward for anyone to do. And Amazon will take a percentage. And then they’ll ship the goods out and ship them to the customers. Yeah, there’s some benefits. There’s some things you lose. You don’t get the customer details as your customer in your database. For some people it’s good. For some people it’s not. I think it’s going to vary by person. But they certainly have a wide reach.

Mike: And from what I can see, you also buy ads on there that send traffic to your site.

Andrew: Yes.

Mike: How involved are you in that? I sometimes wonder should I get in the weeds with the guests where we talk specifically about one ad buy on one website? Are you that involved with it that you would know where the ads are going?

Andrew: I’m not. But one of the things I’m close to is the marketing {generally So I’ll spend probably an hour and a half in the marketing function every week going over stats with the team and looking at what’s working and what’s not and asking awkward questions. And I really enjoy that because that’s kind of in my blood. And there’s part of me that’s still the chief marketer. And I’m always coming up with ideas and thoughts and challenges.

Mike: What is an idea that you had that worked?

Andrew: I’ve just come up with a new ad idea. I copied it off of another ad. I was surfing and I saw an ad and I thought that’s what we want. So I just copied it, sent it into marketing and said, “Put headset in and change the words.” And I do that. And sometimes they’ll do it and sometimes they come back and they say, “No way.” So that’s just gone up so we’re just testing that at the moment. So I’ll often do that. I’ll just see an idea and I’ll be like, “Hey, let’s translate this.” I’m a big believer in borrowing other people’s ideas.

Andrew: And I see you guys buy ads through Google’s network and also through Criteo, which I’ve never heard of before even though it’s a publicly traded company.

Mike: Yeah, I heard we tested with Criteo. It was while we were still using it. That must mean it’s good, I imagine.

Andrew: Okay. My data on that could be a little behind the times. All I can do is see from the outside what happens. You guys might have changed it since then, but you do do a bunch of ad buys. You do still from what I can see benefit from good search engine optimization. A lot of this you’ve mentioned some people on the team and I don’t want to overlook them. You’re big on delegation. You actually told our pre-interviewer that one of the books you’d recommend to other entrepreneurs is The One Minute Manager because of delegation. What can we learn from The One Minute Manager from Ken Blanchard about delegation?

Mike: Yeah, sure. So don’t forget Spencer Johnson, the co-author on that one. So he’s actually a customer of ours and has got one of our headsets. So what can we learn from that? Here’s what I’ve taken from it and I really recommend anyone read it. I mean, it’s a nine-dollar book I think. It’s a half hour read. I think a few things I’ve learned – one is to be really clear in your communication about what you want. Often as entrepreneurs, I don’t always know if we’re the clearest communicators in terms of delegation, so to get really clear about what you want and then to give feedback you know, in terms of not just great job, but this is a great job and specifically I liked this, this, and this.

So people know how they can readjust and give you more of what you want because most people want to give you what you want. And then not be afraid of the reprimand. That hey, this isn’t good. This is how it makes me feel. I don’t want any more of this and to make a good job of that. Instead of kind of being annoyed and passive-aggressive and I think we’ve all got a lot to learn and me still, I’m still a student, in how we manage people and make it work for them and make it work for us.

Andrew: Do you have an example of a time when you had to delegate and learn very clear? I want to get a sense of how we could, as entrepreneurs, sometimes be foggy in our explanation.

Mike: Yeah. Gosh, I’m not sure if I can think of a specific example, Andrew, but I know that often, you know, we can say, “Oh, get this done. Do it quickly.” Or “Hey, I really need this.” Well what does that mean to some one? You know, instead saying, “Hey, I’d like this back by 2:30 and this is what success looks like.” So for me, painting that picture of success so people know what’s expected of them rather than a vague kind of urgent request which they don’t really know how to fulfill or what the urgency really means to you. I think those are the things most of us can get better at.

Andrew: I see it. This is what success looks like is a good takeaway because I think, I know for myself, I internalize a lot of what I heard recently about virtual assistants and outsourcing. In those worlds, you want to be super specific, not just about the outcome but more about the process. Do this step, then that step. But now that I’ve hired someone here at Mixergy and I’m working with people more beyond the virtual assistant level, I need to not tell them specifically what to do but now, as you’re saying, give them a vision of what success is and allow them to build the path.

Mike: Yeah, yeah. Definitely. Can I mention about personal assistants? I’ve got a little interesting one on that if I may.

Andrew: I’d love that.

Mike: So I used to drive some way to work and I though, gosh, that’s wasted time so I need to get someone to drive me. So I had someone who worked for me and lived nearby start driving me. Then I realized that wasn’t as effective as it would be if I drove because I would be able to drive at the same speed as them, but they can type about twice as quick as I can. So for some time now, I always drive myself, but I have someone with me and I always have some one type for me, even in the office because someone who can type at 80 words a minute is going to be far more effective than me and my typing speed was what was holding me back getting through the slew of email and you know, keyboard stuff that we have to do as entrepreneurs and CEOs nowadays.

Andrew: So going into work, there’s someone sitting next to you. You say, “Read what’s the email that’s coming up next.” They read it to you, you tell them what your response is and you type it out.

Mike: Retype much quicker. And of course, after a while, they get good. They know which ones to delete, which ones to just put in the calendar without telling me. It takes a while to get that real nuance of the rapport that works but once you do, it’s incredibly, incredibly a successful. A lot of the time they will respond to emails for me because they know what I’m going to say. They are good enough that they can do it for me.

Andrew: Sounds like a good way to stay accountable. If you have someone there responding to your email with you, you can’t get distracted and check out another website.

Mike: Right. There you go.

Andrew: You seem like you’re really good at these time saving techniques. Do you have a couple of others that you would share with us?

Mike: Apart from always us a headset and walk around the office with it, that would be self-serving so I won’t give you that one. I think email is the big time suck for a lot of people nowadays. Using P.A. for your email I think is great. Meetings, I am very big on 1:00 o’clock meetings, starts at 1 o’clock. People know that at five past one there are out and they don’t do it a second time. Not to be mean or harsh but there just isn’t time for everyone to hang around and wait. It’s just part of the company culture that we’ve set up here. Then of course generally be gracious with people but ruthless at the time. Using the two in tandem together is what enables us to get a lot done.

Andrew: Was there a point where you reached outside of headsets with Headsets.com and diversified a little too much?

Mike: Yeah, from time to time I tried to expand the product line or tried to get involved with other businesses. I think every time I’ve done it I’ve got the lesson pretty quickly that focus is better. I am a big believer in focus and narrow the focus, go deeper, narrow go deeper, is generally a better strategy than going wider.

Andrew: When you went wider what’s the widest you went and then got pushed right back into your approach?

Mike: We tried airplane headsets and headphones and all sorts of things. It’s never been as effective for us as when we just focus the time on headsets.

Andrew: Wow, I would have thought that would make sense because it’s so similar. It’s not like you suddenly were saying lets sell speaker systems for people’s homes. It’s still over the ear headsets. Then when you say go narrower, how are you going narrower and narrower today?

Mike: we started a reduction of our product line. We started to focus only on the office market. We will probably drop Bluetooth headsets pretty soon we think. It’s a consumer market, different customers. Lower order value. Less value add that we’ve got. The quality on a Bluetooth headset isn’t as high as on an office headset which is more technology and Bluetooth is still a little bit flaky sometimes. I think we might be cutting out Bluetooth headsets soon.

Andrew: I see and that a way of going further to your business audience. What’s the damage to the business audience if you also have Bluetooth. It seems like if you focus on your business audience, but you still have these Bluetooth headsets on the side that you won’t take anything away from them.

Mike: My belief, Andrew, is that maybe it doesn’t take away from the customer but it takes away from your own focus and what you can do. Because you are thinking of that as well. The more you can narrow your focus the more you can become an expert on it as well. Also, from a customer’s perspective, the more you occupy a narrower position in their mind, the more you can firmly occupy that position. For those people that you really want as your customers. I think there’s a double benefit.

Andrew: I see so now when a business person looks at your website they know this is not for their kids, it’s not for someone just walking down the street and wants a headset to listen to music with in between calls. It’s for them and you will understand them.

Mike: You’ve got it exactly.

Andrew: All right, why don’t we close this off with, oh I know what else, before we get to the close it off. Split tests, I see that you guys use 99test. You told April in the pre-interview that you are big on running split tests. Talk to me about his testing environment that you’ve created.

Andrew: Coming from direct mail where we were always doing tests. I think we were problem on the web doing tests. We created our own split test and have been doing tests for over a decade now. We’ve always got several tests running. If you go to our home page, you’ll get one of three home pages currently. You may not be able to spot the difference from the different home pages, but there is differences. So we are always learning what works. Right from the home page, through to sites in the middle and our check out page. We’ve got different language running on the checkout page right now where we are testing Name versus “please give us your name”. Or what’s your name buddy? We have different versions of how to ask the question that we are testing right now to see which will give us the best response.

Andrew: 99tests seems like it is crowd testing. Where they put people in front of a computer, load up your site and say what do you think of this site. Do you know that you guys are on there too?

Mike: I didn’t.

Andrew: I don’t know much 99test.com but seems like and interesting way of getting feedback on how your site is working.

Mike: I am going to go and take a look later to see what we are doing there.

Andrew: It’s got to be someone on the team who said, her lets impress the boss here and get him some data from real users. Alright, I will do a quick plug here for Mixergy then I want to come back and ask about the final question. Which is important. the plug guys is, if you are enjoying this and want more. More interviews, we have over a thousand for you. Or more in depth conversations about specific aspects of what we talked about today. How do you testing? How do you get customers, et cetera. If you want all that join Mixergypremium.com. When you do you will get access to the whole vault of old interviews, courses and so much more available to you at Mixergypremium.com. I guarantee you’ll love it.

Final questions is this. You clearly are a lifelong learner. We talked about one of the book you recommend which is “The One Minute Manager”. I’ve got three others. I will just quickly list them and if you could just tell me why you recommend those books we’ll get a sense of why we should or not. “Twenty Two Immutable Laws if Power”. What do you like about that book?

Mike: Is it Twenty Two Immutable laws of Marketing?

Andrew: Yes, I was thinking of Robert Greenes book and this book at the same time.

Mike: I’ve read the Robert Greene book and it is very good too.

Andrew: I thought that was a little out of character for you all of a sudden. Ok yes.

Mike: The “Twenty Two Immutable Laws of Marketing” is by Al Ries and Jack Trout. It’s really one of the books that was the staple of where we formed our company and how to market. They talk a lot about focus, narrow the focus. I think it’s where I got a lot of that concept from. We focus very narrowly and go deep and own the market position. So terrific book. I think everyone in business should read it.

Andrew: Here is one I haven’t heard of before this interview. “The Five Dysfunctions of a Team”.

Mike: Another one which had a huge influence on our company. It’s written by Pat Lencioni. It talks about the C.E.O. should be vulnerable to the management team and the management team should be very honest with each other. There is no room for politics at the executive level of your company. If you get it right there, you can get it right throughout the rest of the company. Again, terrific read.

Andrew: Finally, “Think and Grow Rich” by Napoleon Hill. Why that one?

Mike: Everyone has got to read that. I think it was written in 1920 or somewhere around there.

Andrew: Somewhere around the depression.

Man 2: Yeah, it’s the story partly about how Andrew Carnegie made his billions. Just a terrific book on getting your mind set right. For most of us our real opportunity is our mind. Whether we have negative thinking or positive thinking and how we can control that ourselves. Gosh, these are just wonderful books. I would send them to people free just because I think it’s important that people read them. These are real works of art. Everyone in business, just in life generally, particularly the “Think and Grow Rich” everyone should read.

Andrew: That’s the book that inspired Mixergy. I love that book. Great recommendations all. Mike Faith of Headsets.com. Thank you so much for doing this interview. Everyone out there if you got anything of value from his interview and you have a way of connecting with Mike. Maybe it’s a conference. Maybe you see him down the street with a personal assistant taking notes as he goes through, don’t waste his time. Do what I am about to do which is show appreciation. Mike, thank you so much for doing this interview with us.

Mike: Andrew, thank you. I really appreciate it. Thanks for your time.

Andrew. You bet. Thank you all for being a part of it. Bye guys.


  • andrewjmead

    Mike, this was one of my favorite interviews. I love your emphasis on people first (employees and customers), and the amount of time/money you put into making your staff better at their jobs.

    A lot of people seem to forget that all problems are people problems. Thanks for the reminder and the tips :)

  • I loved the discussion on sales where Mike talked about selling a bicycle without fully disclosing some sort of defect. I used to struggle with this myself, but more on the side of over disclosure and how pointing out every fault can turn away prospects. I would love to hear Mike’s (or another’s) thoughts on how to provide enough disclosure to build trust without over disclosing to the point of scaring off the prospect. What a great topic that I never hear discussed.

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