Andrew: Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses. And I talk really fast because I grew up in New York where believe it or not, this is considered slow. Here’s the thing. I’m about to interview someone who years ago emailed me and said, “Hey, Andrew. I’m having audio problems. How do I record? And how do I make sure that the recording comes out right?” And we went back and forth a couple of times. And I didn’t know what he did with his podcast until my team sent me a note and said, “Hey, look. We’re considering having Toby on for an interview. And here’s what he’s done.” I go, “This is a really interesting approach to podcasting.” He does a podcast as a way of, and Toby correct me if I’m wrong at any point here. You do a podcast as a way of connecting with real estate agents and brokers. And the podcast is called “Super Agents Live.” Some of the people you interview end up becoming customers of your business, which is Called Real Estate Radio Experts, which helps these agents and brokers buy TV and radio ads. That’s the model essentially. Am I right?
Toby: Yeah, that’s 100 percent the model. I mean, so our podcast is just the top part of our sales funnel, right? In fact, if you look in the categories, your podcast Mixergy and mine, are many times like separated by just a few thumbnails. So yeah. So it’s a big giant sales funnel of people. Two things, right? People I interview get to know, like, and trust me. People that listened to me for years and years and years…We started back in 2013, get to know, like, and trust me. And when they want to get to the point where they want to grow their business, they’re like, “Toby’s my guy, right,” but again, you’ve had that experience where people, they listen to you. And you get on the phone with them. And you’ve gotten on the phone with me. And I’m like, “Dude, I totally know who you are, Andrew,” right? So I would give you money because I trust you. So it’s the same thing.
Andrew: Well, I’ll take your money. You know, I’m surprised that more people don’t do it the way that you do. I should introduce you as Tony Salgado. I think that when you say to someone, “I want to talk to you. Can I pick your brains for 15 minutes? Can I even introduce you to a great opportunity,” they’re very unlikely to say, “Yes,” not you. When a regular person does, but if you say to someone, “Can I interview you on my podcast,” now it’s a whole other conversation. And they’re so much more likely to say, “Yes.” Then you’ve talked to them for an hour where they basically connect with you. Especially if we do video, they feel really warm towards you. Do you do video?
Toby: No, I don’t. It’s just audio.
Andrew: What about for the conversation? Do you open up the video?
Toby: No, I never do.
Andrew: Oh, wow.
Toby: But sometimes I do. And I probably should do it.
Andrew: I think you should.
Toby: But the problem is a lot of these people like…You know what? This is a whole different thing. I don’t want to sidetrack our conversation, but, you know, some of the people that…you know, it’s radio what we do. So many times, you know, they’ll be on their cell phone driving, right, because the people that I talk with, you know, a lot of these people…well, I mean, we vet our people just like you do. So a lot of these people are making $1 million or $2 million. And, you know, my show’s an hour, just like yours. So sometimes I’ll catch them in between appointments. So, you know, I don’t want to train my audience to focus on or be ready for video and then go from video, “This is a video. This is audio.” So we just said audio.
Andrew: I get it. Okay. I think the benefit I have, it’s not for listeners. I feel for me the benefit of getting to read you when like I just saw that I was cutting you off. And I could see that it’s okay to cut you off because I could tell in your voice that it wasn’t like a big point that I was interrupting. And that little bit of insight helps tremendously. All right. Then it also makes people feel a little warmer, but frankly, you just get to talk to people for an hour. And as a result, they feel connected. I do anyway. For an hour, it makes them feel connected. I’m surprised more people don’t do this as a way of doing business development, though I have heard of some who have listened to me and then decided to take that approach. All right. I should say this interview, we find out about that. And we also want to find out, I want to find out, about how you had this thing that was like Task Rabbit, I don’t know.
Toby: Yeah. Right. Right. Hold on. So let’s get back into the history, but I just want to say 100 percent, everything you’re saying is 100 percent accurate. And then we actually launched…one of our companies that we launched from the podcast is a podcast production company because we feel the same thing, right? We’ll see agents out there or brokers or I don’t care what you do, you’re a car mechanic, you know, there’s a trout fishing guy that ranks super high in the business category in iTunes because he does this. So I think, you know, being able to connect over a mike with somebody that you would not normally be able to connect, I get people on my show. There’s no way they would…I get people on my show who at keynotes that charge $25,000 an hour. And I literally send them and cold email. And they’re like, “Yep, bring me…”
Andrew: On.
Toby: So anyhow, so yeah. We can get to my background.
Andrew: Okay. I want to find out about Task hero, which is kind of like Task Rabbit, and then this is something that you launched back in 2012, but it seems to me you’re really into this idea of letting people hire people online because back in ’99, you created something called Work Exchange, which was like Upwork before. Upwork was developed by two companies that merged. All right. I’m going to find out about all of this in your history and what you’re up to now. Thanks to two great sponsors. The first will help anyone host a podcast or a website or anything. It’s called HostGator. And the second will help you close more sales. Go check out Pipe Drive. I’m going to tell you about both of them later, but first, Toby, let’s get dollars and cents. You know that I was going to ask you how much money are you generating by helping real estate people with television and radio ads?
Toby: Look. I’m a [crosstalk 00:05:15].
Andrew: I can’t ask you that if we were just in a one-on-one conversation. It would be rude, but now I can do it.
Toby: Yeah. No. I mean, if we were at a bar and you said that, I mean, maybe I would tell you. I will tell you the top-line revenues today are…You know, we launched in 2014. You have to understand that…And, again, I’ll give you the number, but I just want to put some context around it. So the people we are targeting, the top quarter, one percent are top quarter percent of real estate agents out there. These are guys who are doing 300 deals or 100 deals. Most agents are doing 12. So in order to work with us, you have to spend at least $3,000 a month. And our top-line clients are spending $20,000 a month. So our revenues in 2016, top-line revenues, are a little bit under $5 million. We hope to get to around $8, $8.5 million in 2018.
Andrew: So wait. What was the amount for 2017?
Toby: A little bit under $5 million.
Andrew: A little under $5 million. And that includes the money that…no, it doesn’t include the money that they paid for the actual radio and television time.
Toby: No, no. Yeah, because [crosstalk 00:06:13].
Andrew: So the net of that is how much?
Toby: That’s what I won’t tell you because that’s the actual model.
Andrew: I see. Okay. Are you putting more than $1 million in your pocket a year? No.
Toby: No. No, about half that.
Andrew: Okay. All right. I’ve got a sense of it now. Let’s go back and just get a sense of where you are. You’re a person who did figure out this whole online, hire-a-person model years ago, back in ’99. Where did that idea come from?
Toby: Yeah. Here, I will tell you the story. So I’ve founded seven or eight companies. They’ve all kicked off at least $1 million in top-line. And some of them have kicked off more than $1 million in net. I’ve had two failures. The two failures that I’ve had is the same idea done 12 years apart. And it was, you know, Elance Upwork. And we launched Work Exchange at the exact same time as Elance. You know, these ideas all sort of like meld at one time. It’s just weird how that happens, but, you know, we were too early. We raised $7 million venture capital. And come ’99, right, the internet’s melting. We couldn’t raise any more. Shut it down. And even Elance shut down. You know, and they relaunched it in ’06. Here’s how that idea came about. The idea came about. We had a guy on the team that was a computer guy. And he had a giant…like this is like back when, you know, we all had…You remember this. You were in the game back then, right? We had racks of servers in the back room, right? You know, and so anyhow, and so this guy was a computer guy. And he had a giant pamphlet, like a manual, that was written in, I don’t know, German or oh no, I’m sorry. It was written in English, but he sold the system to a German company. And he had to translate the manual into German. So he went frantically searching around like, “Who can do this? Who can do this?” And he finally found some people. And then the first idea was, “Wow. We can translate all these manuals into different languages.” And it literally takes like one pitcher of beer to go, “Okay. Yeah. And we can do this. We can do graphics. We can do that, you know, all this stuff.” So we came up with the idea, “Raise money pretty easily.” And again, wrong, wrong, wrong.
Andrew: Because this was ’99. And money was very [inaudible 00:08:20].
Toby: Yeah. We launched it in ’98, like late ’97, early ’98, and closed in ’99.
Andrew: This is a weird question, but if you were running a business back then, how is your hair not gray now? How do you have such dark, rich hair?
Toby: You know what? Yeah, I’m lucky.
Andrew: That’s your hair.
Toby: That’s my hair. And it’s not colored. And I’m not really going bald yet. I have like [inaudible 00:08:38].
Andrew: No. Impressive.
Toby: Yeah, I do. I’m 47. I’m going to be 48 next month, January 11.
Andrew: Wow.
Toby: So yeah. So my beard is all gray, but yeah, I appreciate that. So yeah. We had to shut it down. And so…
Andrew: Because why? Why did you have to shut that down?
Toby: We couldn’t raise any more money. We had [inaudible 00:08:58].
Andrew: But why did you need money to run a marketplace like that?
Toby: I mean, look. Back then, you know, we had a whole bus dev team. We had three…You know, we had two Stanford MBAs. We had Harvard MBA. You know, we had a big bus dev team.
Andrew: And you couldn’t scale it back to just like a couple of people working…No.
Toby: No, no, no. Well, look. It’s a typical start-up, right? Typical start-up, when things start going bad, you know what happens? The founding team starts to get kicked out. I’ve seen it.
Andrew: So you were kicked out before the close-down.
Toby: Yeah, I was kicked out.
Andrew: God, I always think about “Founders that Work,” the book by Jessica Livingston where she talked to Ed Williams about what happened with Blogger at the worst times. And it was basically him after…like things were high. I think he raised a bunch of money. Then nothing worked out. Then it was basically him and a server. I mean, he was just like working to keep that thing going until the market turned around. And then he sold. And I wonder like why isn’t that possible? And I could see in your case it’s not possible because you were pushed out. Do you remember the day that they told you, “Hey, get out of here?”
Toby: I do.
Andrew: Tell me about it.
Toby: Well, no, you know, I’ll tell you. So it was a…And I’m the guy who did all the big deals. I did all the big portal deals. That was my baby. And I did deals with Lycos. I did deals with…ABC had a giant portal back then. And we were literally getting like 4,000 new users a day. Here’s the real problem. So the model, it was actually working. It was actually working, but the payments…PayPal didn’t exist back then. PayPal didn’t exist. So we were literally hooking up somebody like me, who needs a logo in America to some guy in Turkey and saying, “Listen. We’re going to connect you to…And hey, Mr. Guy in Turkey, can you please send us a check for 10 percent when you complete the job and get paid?” And we were getting checks.
Andrew: Oh, they had to pay you afterwards.
Toby: They had to pay us afterwards.
Andrew: You didn’t want to deal with collecting payment and then giving them…
Toby: We couldn’t. There was no payment mechanism. PayPal didn’t exist.
Andrew: But you could take credit cards from people and then ship out the checks to the people wherever they were in the world.
Toby: Yeah. Well, look, we were all about growing users. You know, look, you’re going to have put yourself back in ’97, ’98. It was all about eyeballs. The whole notion back then was, “Get as many eyeballs as you can. And if you get enough, you can monetize it.”
Andrew: I see.
Toby: We were all about that.
Andrew: All right. And so you were thinking, “Hey, you know what? Why are we going to screw around with trying to make sure that we get paid and they get paid? Let’s just say that at the end of this deal, the person who gets paid kicks back 10 percent? We know that we’re going to miss out on a lot of money from people who just don’t get around to it or actually decide that they don’t want to pay us. That’s fine. We just want to make more deals. The more deals we make the bigger we are. And then we become indispensable.” And that was the goal.
Toby: Exactly right. And the VCs, RVCs, right, today, everybody wants hockey sticks growth, up and to the right, but that’s about revenue. Back then, it was the same thing, up and to the right, but it was all about users.
Andrew: I’m looking at an early version of your site. I’m using the internet archive. And I can see here that it was just clean, simple. You’re not using any of the modern like landing page ideas that you have on your website.
Toby: No.
Andrew: For example, I saw for your podcast, but it wasn’t as distracting as pages used to be. I do see this whole featured partners, Lycos, Eyeone. Eyeone was a portal, like a search engine. What was the deal with them? You paid them for placement on their properties?
Toby: No, no way. No, no. I remember, yeah, we had a big meeting. So I actually dealt with the general counsel on that deal. I talked to the CEO. Those were in the days, right, when you could actually get…they were brand new. And they were giving away like…it was BACs portal. They were giving away like $1 million a day or like…I mean, maybe it was $10,000 a day to people. And they were just getting users, getting users. They didn’t have content. They didn’t have content. So I sold them this notion of, “Hey, we can help your people, you know, get work, right, for free. We’re not going to charge you guys.” And they said, “We want it. We want it.” I said, “Fine.” And I got top, above-the-fold placement for free. We didn’t pay them at all. And that is actually the partner where we were getting, you know, 3,000 a users a day from those guys.
Andrew: Okay. When did you leave the company because I’m looking at a version of the site from February 2000? And I don’t see your photo as one of the executives.
Toby: I don’t remember. All I remember is I flew out to a wedding. I was the best man. And I literally had to do my best man’s speech and get on a plane. I was going to St. Thomas. And literally, hours before I was going to do my best man’s speech, I got the call. And the guy goes, “you’re out.” And I was like, “Why?” And yeah, our other CEO like got replaced. Like the board did all kinds of crazy stuff like within a matter of weeks.
Andrew: Before the interview started, you said, “Andrew, I know we’re going to spar a little bit because that’s who you are.” And I said, “No, there’s nothing to spar. I understand the business. I’ve got nothing contention to say,” which I guess sometimes as I continue, I find stuff that I have to prod on, and maybe not contentious, but still it could seem that way. I’m looking, again, at an early history of the site from the site. And it says, in the history of the site, it says, “In July 1998, Rich Menendez and Jason Salgado built the idea of a project auction marketplace.” Are you Toby? Is Toby Jason?
Toby: No, no, no. So okay. So here’s the story. So Rich Menendez, that’s my brother, by the way, Jason Salgado. And so there was another guy that I can’t even think of his name right now, who was involved. And he was the computer guy. So Rich Menendez and Jason both, those were two of the Stanford MBAs. So when it comes out to raising money back then, that’s VC’s…today, people don’t care, but back then, they wanted a funded MBA.
Andrew: I see. And so even though you were part of the founding team, did you own as many shares as Jason?
Toby: I did.
Andrew: You did or you owned fewer?
Toby: I owned fewer.
Andrew: Okay. And so but was Rich and Jason, were they the ones who actually came up with the idea and then you came in as a founding partner?
Toby: No, no. So the computer guy that I forget…I can see his face. He used to drive a ’67 912 Porsche. So he’s the guy who had the problem. He’s the guy. And he brought it to us. And again, over a couple pitchers, we said, “Hey, this is the…you know, we [inaudible 00:15:24].”
Andrew: Jason Prado.
Toby: No.
Andrew: Okay. And so he’s the one who came up with the idea.
Toby: Yeah, he’s the one who had the problem. And all of a sudden, you know, we…the whole notion of Work Exchange stemmed out of that one problem.
Andrew: Okay. I get it. Man, it’s so disappointing that you really had this. You were a few years too early. And as a result, you had to close it down. All right. So the business closes down. Then you have a bunch of other businesses that you start, but to be honest, I don’t know as much about because it’s harder to research. They not in my space. Like I see, for example, that you ended up being an account executive at Balboa Capital for a few years.
Toby: No, no, no. That was my first job out of college.
Andrew: Oh, I see. I see. Okay. All right. Oh no, so after that, then you did BizDev for Advice America. Then you founded BNT Erosion Control. I saw a little bit about that. What was BNT Erosion Control?
Toby: So here’s the deal, right? And I think this could be, can be, and hopefully be instructive to your listeners because, so this is ’99. WorkExchange shut down. I went to Advice America, a ThinTech company. I believe they sold later, but dude, I was just done. I was just done. The internet was dying, right? Nobody believed in the internet in ’99 and 2000. And people were having a hard time getting funding. So I got engaged in Silicon Valley, moved back to San Diego because that’s where I’m from. I went to UCSD, bought a house, got married, and was looking for something to do. Now in the Valley, my resume is crazy. In the Valley, when I left WorkExchange or got kicked out of Work Exchange and looked for advice about it, I literally had like six job offers in the first three days. So I came to Saint Andrew going, “Look. Nobody’s like me. Nobody’s like. I can run whatever I want to run.” So I didn’t even look for a job. So we bought a house. And I played house for like six months. Then my money started to run out. So I was like, “I’ve got to get a job.” And right when that happened, I was like, “I’ve got to get a job.” And I started looking because I was thinking about a job, rather than founding something, 9/11 happened. 9/11 happened. And the world completely changed. So I was like, “Okay.” nobody was hiring then. And people say, “Yeah, Toby, you can come on. You can run our national sales team for $80,000.” And I’m like, “$80,000? Like I can’t do that. I’m not going to go to work for $80,000. I haven’t done that since college.” So anyhow, so, you know, through my network, I let my network know, “Hey, I’m looking for something.” And through my network, I actually knew a guy who worked for the city. And he came to me and he said, “Hey, Toby the city…” And again, this is a big housing boom was happening back in ’01 in San Diego. And he said, “Hey, man, we have all these rules on the books around clean water, but the city of San Diego has never enforced them. And we’re going to start enforcing starting in January, right?” This is September, October. Start in January. Okay? And he said, “You should look at it.” And I’m like, “Dude, come on.” I’m like, “Dude, I’m like dude, I’m from finance. I’m from high tech. I’m not going to go low tech.” And finally I said, “You know what, man? I’m going to give this two weeks.” I went into my back room. I said, “I’m going to give this two weeks.” I’m going to do some research. I went and did some research, called up companies, and I posed as a writer. I said, “Hey, this is Toby Salgado from…” And I just made it up, BNT Technologies, right? It just came out of the Valley, BNT Technologies. I want to know what is going on with your storm water. Like are you having problems? Who are you using? You know, if you had it…And there were only like two people, two companies, doing it at the time. And I said, “If there was another avenue, if there was another company, would you use them?” And everything was, “Yes, yes, yes.” And I was like, “Okay.” Literally within three days, I knew there was a business, but Andrew, I’d never seen this stuff. I’ve never put it in, right? And it was all these silt fence and [inaudible 00:18:55]. I didn’t know how to do it. So I spent $75. And I bought a book on the internet. I read it. And I said, “Okay. I know what it looks like. I think I know how to do it.” And my first call was I called a $1 billion company, Rudolph and [inaudible 00:19:06]. I called them up. And they were one of the ones that I called when I was posing as a writer. And I said, “Hey, guys. You know, I’m Toby with BNT Erosion Control. You know, I’d like to come in and talk to you guys about your storm water issues.” And they said, “Fine. No problems.” So I thought, Andrew, I was going to meet with two guys. I walk into a room. There’s 35 dudes there, 35 guys all in suits. And I’m like, “Holy crap.” And I walk up to the front of the room. I was nervous, right? And I was like, “I’m screwed.” And I walk up. And I just start talking. So I just start talking. And literally I can read the crowd. Within five minutes, I knew I knew more than they did. And that was it. And I went on for 45 minutes. I said, “That’s it, guys. I’d love to help to help you or whatever.” I’m walking out of the room. I’m opening the door. And a guy grabs my shoulder and says, “Hey, I’m doing a big project in this city. Would you like to do it?” I said, “Yeah.” So I went down there. And literally, I had a $45,000 contract signed the next day. Now this is important for your audience. The next day, I signed a $45,000 contract, of which I made $26,000 in one week when I finished it, but at the time, dude, I didn’t have a contractor’s license. I didn’t have insurance like workers comp. I didn’t have employees. I didn’t know where to buy the stuff.
Andrew: Who did the work?
Toby: I literally went down to Home Depot. We’re in San Diego. I got a bunch of laborers.
Andrew: I see. And you just told them to do…You paid them. They just went and did the work.
Toby: No, no, no, but yeah. So I found out where to buy the stuff. And I literally had to drive two hours away. I rented a U-Haul van. And we moved down. I drove two hours away to buy the stuff. And I asked the manufacturers because I bought right from the manufacturers, I said, “How do I install this?” And they said, “This is what you do.” And we did it like that. And that was it. We finished the job in a week. And I made $26,000 in profit. And I’m like, “Oh, okay. I’m done. Like write me a check.” And they’re like, “Hold on a second. You need a contractor’s license for us to pay you. Hold on. You need insurance.”
Andrew: Before they pay you. You did the work. And they’re not going to pay you until you have all this stuff.
Toby: They’re a $1 billion company, yeah.
Andrew: And so you have to go and get a contractor’s…Was getting a contractor’s license easy? Did it take a long time?
Toby: No, no, no. I just found a buddy. I said, “Hey, man.” I knew I had a [inaudible 00:21:25] friend. I said, “Hey, let them write you a check. I’ll pay you [inaudible 00:21:28].
Andrew: Got it. And this was all just you starting out from what I read in your garage. It ended up being 58 people, $4 million in revenue a year.
Toby: $4.2 million.
Andrew: Over how long?
Toby: Year two, we were number two in the market. In year three, we hit just over $4 million.
Andrew: In a year. Wow.
Toby: No, no, no.
Andrew: For the $4 million annual is what I’m wondering [inaudible 00:21:51].
Toby: No, $4 million annual.
Andrew: $4 million annual revenue. And it took you just three years to get to that level and from nothing, from not understanding anything other than whatever you read in that book. That’s some book.
Toby: We were a force. And everybody that was in that industry was like, “Who is this kid?”
Andrew: Why? What was it about you that made you so successful at that?
Toby: Because I was an outsider. I was an outsider, like all these guys had paid their dues. They were guys who like worked up the ranks.
Andrew: Yeah. So why you? I mean, I want to know why you did well. I heard it was your wife was pregnant. You had to make it at this point. You were running out of money. And that pushed you, but what was it about you that made you so much more successful than other people would have imagined?
Toby: Because I’m a sales guy. Again, all my whole career has been selling people, right?
Andrew: What’s your sales technique? What makes you such a good sales person? Give me something I can walk away from and say, “You know what? Toby just taught me something that makes me a little bit closer to his level.”
Toby: So look. There’s nothing magical about that, right? So, you know, I’m not a guy who says, “I’m going to use NPL.” I’m not a guy who’s going to use embedded commands on you. At the end of the day, it’s exactly what you did before we started recording. You said, “Hey, Toby. How can I make this a win for you?” And it’s the same kind of conversation. Hey, listen, Andrew, you are spending $1 million a month in storm water stuff. I think there’s a better way to do it. And I can tell you I just went through your Rolling Hills Estates project. And a couple things, Andrew, what I saw. And I know you’re using those other guys. They do good work, but there’s a way to be way more efficient. And I think instead of spending $1 million, I can do that same project, keep you in compliance for 25 percent less.
Andrew: Got it. Oh, chute. I can’t believe we went so long. I forgot my sponsor. All right. Actually, this feeds into this second sponsor. So why don’t I move him to the beginning of the ad, which is Pipedrive. Here’s my technique for selling. I am the most systemized person that you can imagine. And that allows me to close more sales, even on days when I don’t feel like it. And frankly, there was a period there where I was dating. And I stunk at dating. The same process that I bring to sales where I’m a numbers person. I know how many people I need to reach. And then form then, some of them are going to end up being potential customers. And some of them are going to end up being…And that’s what I brought to dating. I would go out six out of seven nights. I’d force myself to stay home one night because I’m an obsessive person. I know I need to stay home. And I would talk to at least five groups of people, ideally five groups of women, every night, as a way of getting to know them. No need to push. No need to like ask anyone out. If I talked to five different groups of women, one person out of those five is going to have like enough of a conversation with me that I could get her phone number. If I get enough phone numbers, some of them I could take out to parties or something without pushing. Some percentage then end up dating me. That was my whole model, this whole like funnel system one-on-one. So when it comes to sales, I do the exact same thing. I don’t need to be the best sales person out there. I do some techniques like you just talked about. I want to understand the person’s problem and then say, “Well, if I solve this problem for you, what is that worth and so on.” What I bring is a process, a process. The process is, “Here are the 10 steps that I take to taking a stranger and turning them into a customer.” Great. Well, what’s the first step? Even on days when I don’t feel like it, if I have articulated ahead of time, I know exactly what I need to do. And if I have numbers that tell me, “You said you were going to talk to 10 people a week. Did you talk to 10 people a week,” then I know whether I’m doing well or not. That’s the whole idea behind Pipedrive. It forces you from day one to systemize your sales. If you’re a chaotic person, your life is going to get changed. If you’re a systemized person, it’s like walking into church for the first time, if you were born again. Well, that’s not really the word. It’s like falling in love instantly because you’re going to see they are systems people too. And then they guide you through your own system to close more sales. Go check them out at Pipedrive. Well, you were going to say something about it before I close this all out.
Toby: No, no. Close that out. And then I have a comment on.
Andrew: Guys, go check them out, pipedrive.com/mixergy. They give you kind of the discounts and some free amount just for…screw that. If you care about that, you’re being too petty. Go sign up for something else, but if you really want to change your business, if you really want to supercharge your sales, for you, if it’s one-one, if it’s just you, or if you have a team of people, this is the best software. And I’ve been saying that before they sponsored. And I’ll say it even when they finally cancel me for talking about dating inside their ads. Go to pipedrive.com/mixergy. You will thank me for it. What were you going to say about that?
Toby: I was going to say the correlation, I think that’s great. So
Andrew: Pipedrive is a numbers…It’s a process. That’s great. You had a process when you were dating. For me, like I’m married with three kids, but when I go out, you know, like I go to conferences or whatever, I like to talk to girls. And I can do the same thing, but I can pick one girl. I can pick one girl just like I can pick one prospect. And I think that the difference…here’s what happens with guys. And I’ll apply this back to sales, right? What guys will do that go meet a girl in a bar or at a conference or whatever, and they’re idiots. What they do is they have their pitch. And their pitch is all about them. Hey, my name’s Andrew. I do this. I do that. Here’s my background. I drive a Porsche, you know. And nobody gives a care, but what I do is I go, ‘Hey, Julie. What’s your name, Julie? That’s great.” You know, and I’m genuinely interested. “What’s your background? Why are you here?” Right? And so, you know, why are you here? What are you trying to accomplish? What’s your background? You know, and like when people know that you’re interested in them, like they’re sold. And it’s the same thing. I walk into a board room. And it’s just I ask questions like, “Who are you? You know, where is your company going, right? Where has it stumbled? How can I help you get there?” And that’s so different because every other of my competitors, whether it’s what I do now with radio or anything else, people come in. They go, “Hey, I’m the best. This is what I do.” It’s all about them. Don’t make it about you. Make it about your prospect. And if you can make it about your prospect or the girl you’re trying to take out, that changes the game.
Toby: I’m with you on that.
Andrew: And I genuinely was very curious, mostly because when I was dating, before that I hadn’t talked to enough women. I hadn’t talked to enough human beings. I’d talked to business people. And that was it. And then once I started dating, I was like, “Wow. These human beings are actually pretty interesting.” I remember this one woman. She moved to LA. And she and I went out. She took me karaokeiing. And I was so awkward at karokeeing. She walked out of the room in the middle of my karaoke. I thought, “This is kind of odd.” I talked to her about it afterwards. I said, “Why did you go talk to that guy in the middle of my…I came to this karaoke for you. I didn’t want to karaoke with you. It felt a little awkward.” She said, “Well, he’s a producer.” I thought, “Oh, my God. Of course. This is LA.” And then she told me when I got really curious about it, “[Inaudible 00:28:12]. This is how poor I was. This was my life.” I had no idea people lived that way. She told me that they actually and her family used to go and poop in tires in the back yard. I had no idea people lived like that. And then I read “The Glass Castle.” Such an interesting story about a group of people who lived like that. Yeah, “The Glass Castle.” It’s going to be made into a movie. It’s that good of a story.
Toby: I’ll get it on audible today.
Andrew: Yeah, it’s so good, but it’s got nothing to do with business, just like how the other half lives. I didn’t know people in the US lived like this.
Toby: Well, I love stories. I love stories like that.
Andrew: Yeah, it’s very much like hillbilly elegy. Like we tend to think that everyone’s doing really well. And then we discover, wait. We’re not, as a society, as a country moving that far forward. And I like to see that there are these other people who have not at all like me growing up in like with my Queens background. It’s completely different. I heard about them. Anyway, back to being interested in people. Let me be more interested in this. What happened to BNT Erosion Control? What happened to that company?
Toby: Yeah. So it just shut down. So ’08 happened. And during all that time…So I started that in ’01. And all our clients were publicly-traded homebuilders. That’s all we worked with, right, so Syntax, KB, you know, all the publicly-traded guys who managed…You know, I mean, I literally at one point, you know, managed probably 200,000 acres in San Diego. Like that was all on our crew. So what you started seeing in late ’07 here in San Diego was all those guys, number one, they stopped buying land. And then they stated selling it off. Dude, it was done. It was done.
Andrew: I see. So you went from zero to 58 people, then from 58 people to four guys working in your yard, from what I’ve read.
Toby: Exactly right.
Andrew: At the height, your margins were 30 percent, your profit margins. That means that one out of…well, I guess you’re basically saying $1 million in profit a year is what you were pulling in yourself.
Toby: Yeah, I was actually paying taxes on like $986,000 after I wrote off…I still remember the numbers, but yeah. No, I mean, but and it was better before. Like when we first started, I would literally charge…not that you care, dude, but our margins went form like 75 percent down to 33 percent. And when the crash happened, there was still work out there for us to do, but the margins were then like 10 percent. And like I’m not going to do the same work that I’ve been doing for that because I can go do something else. And that’s what I did the next thing.
Andrew: Before we get to the next thing, what did you do with the…what, you made $1 million, $2 million? Did you pocket it? Did you have it in the bank account? Did you lose it? What happened to the money?
Toby: So we bought real estate. Like, you know, I have four houses. I mean, I have this house that I’m living in now. And I have three rentals. And yeah, so it was just cash.
Andrew: All in San Diego.
Toby: All in San Diego, yeah. All in San Diego.
Andrew: And you managed it yourself?
Toby: I managed two of them myself. And one of them that’s not in a great area that I just hired a property manager because I just didn’t want to…
Andrew: So that means in the other two, someone’s toilet backs up. They call you. You go find someone who’s going to fix it or I guess at this point, you probably know how to fix it yourself.
Toby: Oh, yeah, I don’t do that. I don’t do that. I let them handle whatever it is.
Andrew: I see.
Toby: And then because I trust them.
Andrew: So if the toilet backs up, you say, “Hey, look. Find the person that you like and want to work with. Give me the estimate, of course, if it’s not a crazy amount. And go and take care of it.”
Toby: Bring me the estimate. Yeah, just call somebody. Just get it fixed. And I’ll just take it off your rent. So I don’t get those calls.
Andrew: Got it. So life is good now.
Toby: Yeah, life’s been good for a long time.
Andrew: And then you moved onto this other company that I didn’t find much about, Mayfield. Real quick, what’s Mayfield because I want to get to [inaudible 00:31:41]?
Toby: No, no. Hold on. Hold on. I will tell you that. So there’s one that you’re missing. No. So the next thing we do, and this is where the cash…
Andrew: And that’s ZOF Capital.
Toby: ZOF Capital. So in ’09 what we found was, you know, banks…You know, this is banks were failing, right? Banks were failing. Banks couldn’t do anything. So they were holding onto their cash. And a lot of people were dying, right? You know, houses were getting foreclosed and all of that stuff, but there were companies who were making money. They had assets. And they had revenue. And they were in a growth phase because it just so happens, right, and money is made in recessions. More money is made in recessions than in upturns. And they couldn’t get capital, even though they needed to grow. So we saw that. And, you know, me and my partner, a guy named Tim Epler, somebody that I worked with at Advice America. And we said, “Okay. We see this problem. Let’s go find a deal.” And we found a deal. It was a great deal. They needed $10 million. I threw in $1 million. My buddy threw in $1 million. And we went out and raised the rest of it. And it was one of those deals where you couldn’t lose. We were charging six…This was hard money, Andrew. We were charging six percent a month on $10 million. We were making $600,000 a month.
Andrew: To who?
Toby: This company now failed.
Andrew: You were lending money to companies at six percent a month?
Toby: Yeah. Yes. And they were happy to take it.
Andrew: And it wasn’t too risky of a deal? Like who’s paying…basically, that’s Payday loan rates, isn’t it?
Toby: No, no, no. It’s not, but it’s hard money. It’s hard money rates, for sure. So yeah. So here’s how we protected ourselves. So number one, we wrote the contract every 30 days. So they had to pay us. We gave them money. They paid us back every 30 days. We gave them $10 million. They gave us $10,600,000. The deal is this. We looked at the revenues. We controlled their bank account. We knew what was coming in.
Andrew: Like a parcel of land, if anything went away…
Toby: That’s exactly right.
Andrew: You got to keep that.
Toby: This particular company had a piece of asset in Sacramento, California, river front. We had it appraised at $33 million. They put it up. So at this point, none of us cared. Pay us back or don’t pay us back. We’ll take the land. So we’ll do 3X, if you don’t pay us back. So it was a relatively easy raise. So we went out to friends and family, raised $8 million, and then they…It was called Nehemiah. What they did was they did down-payment assistance. So if you want an FHA loan for a house, you have to put up three percent. So what Nehemiah would do was say, “Okay. You want to buy a house? You don’t have the three percent? No problems. We’ll give you the three percent.” And then they would charge…I forget what they would charge. Like $1,500 to the seller. And the seller’s happy in this environment in ’09 to say, “Look. I’ll pay $1,500.” And they just had so much of this that Nehemiah could pay a six percent a month. And they were still up. They were making scads of money. So we did that for, I don’t know, four months or so, with Nehemiah. And it went from $10 million to $12 million. And the Congress shut them down because Congress said, “You are part of the problem that caused the whole housing market to melt down.” So, you know, we had $12 million fund. And we did bridge loans and a few other things the next 18 months. Then banks came online. That was my whole story, man. I find a niche that’s brilliant. And then there’s an outside environment that [inaudible 00:34:51].
Andrew: And you just keep moving and moving and moving and moving because…all right. So the next thing you did was you started buying houses. You flipped those houses, right, from 2009 to 2012. Am I doing right here?
Toby: Yeah, yeah. Yep, yep.
Andrew: Why did you stop flipping houses?
Toby: Again, the market. So I’ll tell you, but here’s the deal. So we had the money. When I started doing this, we proved the model for bridge loans. Now there was all these properties that I could buy at a discount with cash, right, coming…buy it with cash. So I took some of my own money. I took $1 million. And I said, “Look. Let me start to buy some cash. Let me prove a model that I can flip these houses so that then I can put the $12 million to work.” And I could never prove the model. And the only reason I did it for so long is because I’d buy this one and I’d buy that one. And all of a sudden I’d have like 15 houses. And it just took me that long to get rid of them, you know, in [inaudible 00:35:41], but the main reason why I stopped doing it is because what you started to see, nobody could make money anywhere in 2010, 2011. And you started to see hedge funds come in and start to buy real estate, right? You know, for every $100,000 I put on a piece of real estate, I want to make at least $30,000, right? So if I buy a $400,000 house, I’d want to make $120,000 off the thing.
Andrew: Right. And why can’t you settle for less than that?
Toby: Well, yeah. Well, we could. I could. And we ended up settling for like maybe $60,000 on a property like that, but there were still deals out there. I could buy $140,000 condo unit. And I made $60,000 on plenty of those.
Andrew: So where is the money now? Is it largely in real estate?
Toby: Largely in real estate, yeah.
Andrew: In those four houses?
Toby: No. Well, real estate and cash. So we’re hanging out waiting, you know, for [inaudible 00:36:25].
Andrew: It’s a bad economy. When you say cash, do you mean S&P 500? Do you mean something else?
Toby: No. I mean cash. I mean sitting in Chase….
Andrew: Like CDs.
Toby: No, sitting in Chase Bank making nothing.
Andrew: I see. Yeah. Who would have a problem with that? I don’t want to have more than $100,000 in one bank because I want the FDIC insurance. These guys can go out of business.
Toby: It’s $250 per…So it’s $250 per.
Andrew: Oh, is it $250 now?
Toby: Yeah, so $250 for you, $250 for your wife. So yeah, back in the day, I moved money all around, the same thing.
Andrew: God, you know what? I put it in multiple banks because I don’t want anyone, them to go under, not that…the government’s never letting any of these banks go under. We suckers can close our companies, right? VCs can kick you out. They’re going to stay around forever. I get it. Here’s why I’m asking. One of the best, no, I’m going to say the best conversations I had this whole year, it wasn’t even on mike. It was with this guy, [Inaudible 00:37:14], the guy who created Opt-In Monster. I interviewed him about that. He has a blog, a bunch of other like software that he does all around WordPress. This guy takes his money. And we just like hung out for a moment to get coffee. We ended up talking for five fricking hours at a conference. I loved every part of the way that he does business. And he’s shifted my mind completely about little things like he won’t pay for his own Netflix account. His friend has a Netflix account. And he was talking to him. And he goes, “So do you have any friends on your family?” No. Put me on, right, but this guy’s making more money than I am. And I don’t care about the details of like the pennies. I don’t watch them at all. He’s watching his pennies. I go, “What the hell’s wrong with me? Of course it gives him this better sense of money, better sense of discipline?” So I started taking that to heart. And I’m watching like yeah, on the personal level I’m watching my money where I ordinarily wouldn’t want to waste the time, but I’m finding that it is making me more disciplined. Here’s the other thing that I took away, much more important than that. He takes his money…he doesn’t buy more software. He doesn’t put it into the stock market. Oh, maybe he does, but where he really puts it is into real estate. And he’s telling me about how he owns gas stations. I go, “Gas stations? What do you mean, like you have someone pumping gas?” He goes, “No, the real estate under the gas stations because it means that you can have cars drive in and out.” I go, “You understand like maybe at one point, all these cars are going to be taken away? Gas cars are going to be replaced with electric cars or maybe we won’t even need cars anymore because it’s all going to be autonomous vehicles? You’re in the tech world. What do you think about that?” He goes, “Dude, I own the real estate. If they don’t pay me, I take back the real estate. And someone else will want to put something on there that needs cars to go in and out like maybe a McDonald’s.” I go, “All right. Maybe I should be thinking about real estate too.” And so that’s why I’m fascinated by you being in real estate, but you’re saying you only have four homes because you think the market’s too frothy. This is not the time for you to jump in.
Toby: No, no, no. Yeah, yeah. Well, and again, I mean, I was at one point I had 15, right? And I’ve had everything. I’ve had commercial property. I still have a piece of commercial property, so commercial and residential, but yeah. So I’m in San Diego. And so now we’re talking about real estate investing, but, you know, I can buy houses for $140,000 in Jacksonville. I mean, like I have so many friends. I have a friend who manages all the Fanny Mae and Freddy Mac deals that come onto the market. I can guy crazy good deals, but I don’t want a house in Jacksonville. It’s hard enough managing stuff that, you know, 15, 20 minutes away. So yeah.
Andrew: So what’s Andrew doing? You’re saying, “Andrew, just wait for the bad economy and look for things that are closer to you.”
Toby: Yeah. And I know you’re in the valley. And dude, it’s so hard to find deals in the Valley.
Andrew: It is.
Toby: So you need to be looking in the bedroom communities. So like for us, I’m in San Diego. Like a bedroom community to us is Temecula, 45 minutes away. People have no problems commuting 45 minutes, right? So I almost did a 400-lot…Oh, no, it was a 960-lot unit just outside of 45 minutes from the Valley. I can’t think of the name. That was a crazy, interesting deal because we were going to buy the lots, resell them back to builders who wanted them, but what we were going to do, and now we’re just telling stories, but I didn’t do the deal, but with developments, big, big developments, what happens with a community is you build that community, two communities, three. The guy who puts in community one puts in all the undergrounds. There’s more money spent in all the undergrounds, the sewer, the water, all the stuff that’s underground than you do necessarily in the properties. So a guy builds community one. Community two, a different builder builds it. He pays for the undergrounds. He pays the first guy for the undergrounds to access them. Community three then pays too.
Andrew: And so this guy not only gets money from his building, but also from all the underground, from the sewer that everyone else needs to pay him back.
Toby: Right. Well, because he has to pay the first guy. Now the last guy gets paid out for the undergrounds. That’s not typically…the last guy who gets paid out for the undergrounds, it’s a bond, right? That’s how metal [inaudible 00:41:05] and all…So the city files a bond. And the last guy gets paid for the underground. So it’s net/net zero, but on this particular deal, we were going to buy the lots at…we were going to break even on the lots, but there was $60 million of underground work. So we were going to buy the lots, break even, have to wait five years, and then get the underground money. Now for me, I passed on that deal. And that was with Tim, my buddy. I didn’t know. My biggest loss was a $450,000 deal I did, $450,000 of my money that went poof, gone, in like 45 days. It was a great deal.
Andrew: How?
Today: It was I invested in a company. It was a grading company who did military work. And they had $600,000 in receivables to the government. I’m like, “Okay. The government’s going to pay you. No problems.” The work is going on. And they said, “We’re running out of cash. We need to produce this. We need $450,000.” So I said, “Fine.” And I wrote them [inaudible 00:42:02]. I said, “Here’s $100,000.” I paid everybody. Like, you know, said, “Continue.” Now they’re at $100,000. I got up to $400,000. And they’re like, “We’re not done with this project yet.” And I said, “I thought you would be done.” And I brought in Tim, my buddy Tim. Tim said, “It’s a great deal.” He threw in $450,000. What we didn’t realize…and then finally we looked at the numbers. And we said, “Dude, we’re going to be in $2 million on this deal before we start to get paid back.” So we said, “We’re pulling it. We’re out. We’re done. Like just pay us for the receivables that you owe this company. And everybody goes away. And we’re going to let the company fail.” What we didn’t know and I didn’t understand Federal contracts is how Federal contracts work, if you don’t finish the project, they don’t have to pay you.
Andrew: I see. Got it.
Toby: And we had already pulled out. And so dude, my money was gone. And I actually lost some sleep over that deal.
Andrew: God, I would be pissed. I would be feeling it for years. I’d want to hurt somebody.
Toby: Oh, dude. Dude, that’s surprising coming from…
Andrew: Let me go to this second sponsor. Then I want to come back and ask you about just a little bit about Task Hero and what happened with that. That was a good idea. This was another like UpWorks style business. And then get into what happened with Super Agents Live because this is the model that’s actually working. This is the one that’s kicking off revenue. You’ve got a nice little business going on here. All right. The second sponsor’s a company called HostGator. I like that you’re into deep ideas. You keep experimenting with lots of different things. I think that’s the way when you’re in the figure-it-out mode you need to be. And if you need to be in that place where you just say, “I’m going to try this idea. I’m going to try this other one,” you need a hosting package that allows you to do that. If anyone out there is into a place where you’re feeling stuck creatively, where you’re not sure what to do next, I urge you to do this. Get a bunch of canvases that you can just paint on and experiment. And then the one that you love, the one that the world loves, that’s the one that you go for. Let me be more concrete here. What I mean is go to HostGator. Sign up for a hosting package that allows you to open multiple different domains so you can try something. Maybe you listen to this podcast the way that Toby listened to my podcast years ago. And you say, “You know what? I’m going to try a podcast for, I don’t know, real estate.” No, you’ve got the podcast for real estate. How about a podcast for anything that’s the latest technology? So they come up with crypto currency. You’re going to do the…I’m going to learn crypto currency podcast where all you do is interview people who can teach you about crypto currency. And you publish it so that the rest of the world understands about crypto currency or chat box is a new thing or virtual reality is a new thing. And you just say, “You know what? I’m going to do interviews and learn from people.” Yes?
Toby: Or AI or self-driving cars. Like there’s so much of this stuff that people don’t understand. And you don’t understand, but, right. Sorry, [inaudible 00:44:35].
Andrew: Whatever the new thing is that someone hadn’t developed the site for, make it into a podcast or a blog. You become the resource for it. And as you learn, you just publish it. One of these things becomes a thing that feels so right to you that you can’t help but continue. One of these things becomes a thing that feels so right that people can’t help but show up to your site and read your stuff and be a part of it. And then you find whatever they are looking for that isn’t solved. And that becomes your thing. Like who knows? Maybe it’s analytics for virtual reality because you see that so many of these guys that you interview or so many people you learn from say, “The one thing that sucks is no analytics.” I don’t think that’s the answer, but we’re going to find out what it is as we talk to people or maybe what it is, is that you discover that there’s a service that you could provide the way that Toby’s providing a service. Whatever it is, you only know about it by trying it. So if you’re out there and you want a package that’s going to support all these experiments, I really urge you to go check out hostgator.com/mixergy. When you go there, ignore the cheaper package. I get paid no matter what. Like if you get the cheaper package, it’s not going to change the way that I get paid, but I still urge you to go get the one that has unlimited domains. I want you to be at a place where you have so many different possibilities that you keep experimenting until you find the right one and you’re not saying, “I only paid for one. I have to stick with that. And it’s got to work. And then I’ll close that and go start another one.” Make it less special to start. Just start. All right. Go to hostgator.com/mixergy. They’re going to give you unlimited domains. That’s going to let you play and experiment and really figure out what the right approach is for your business.
Toby: And just on that, 100 percent, man. And I’m sure all your listeners are extremely sophisticated, Andrew, because you’re a very sophisticated guy, but, you know, read Eric Reese’s “Lean Start-up.” Just create a crappy site with one of your ideas. And throw it out there. See if it sticks. And if it doesn’t, move on. So I couldn’t agree more with everything you’re saying, Andrew.
Andrew: Yeah. And it’s so much easier to start right now.
Toby: And it’s cheap. What does HostGator cost a month? $10?
Andrew: You know what? It’s like $4.98 a month, but I see an asterisk. Let me follow the asterisk. I don’t know where the asterisk goes. Oh, prices reflect discount on first term. Okay. To get that, let me see. I hit the asterisk. So it’s not if you buy it on a monthly basis. I think you have to commit to a few months to get that lower price, but frankly, whatever it is, they’re known as the low-cost leader. So if you want a cheap hosting package that just works and lets you focus on other things, go to hostgator.com/mixergy. And check out that bottom of the page where they offer $100 AdWords offer, $50 search credit from Bing/Yahoo to help you promote your business right, right from the beginning. All right, hostgator.com/mixergy. All right. Task Hero was your second bite at the same thing. You said, “Look. We still need to create this marketplace for work.” You had decided that you were going to focus on veterans. Why veterans?
Toby: Right. So I’m in San Diego. So it’s 2011, right? So I believed in the idea. At this point in 2011, Elance is kicking off, right? And I’m like, “We were there. We were there at the same time they were. And look how they’re doing it.” They relaunched in ’06. So, you know, I heard about Task Rabbit and what Task Rabbit was doing. And it’s a little bit different than Elance, right? It’s not virtual. It’s real people doing something at your house or for you. Now the deal is we’re in San Diego. We’re the most military city probably like other than, I don’t know, Arlington, Virginia. I don’t know, but we have four bases here, right? We have Marines, Army, Navy. We have everybody. And in this community, there’s a lot of sentiment for people who serve. So we launched Task Hero. You know, let your hero, you know, go out and do it, first responders and all that, whatever. So that’s how we launched. We launched the thing, Task Hero, veterans only before we launched…Like I’m a big believer in prior to spending time, prior to spending money, like come up with your idea. And go sell it just like I did with BNT. Go sell it. Just like we did with COF Capital, we had the idea, but before we put any money in the bank or even told, you know, our friends and family about it, we went and found a deal. We have a deal. It’s all locked up. And now [inaudible 00:48:43] put money. So Task Hero did the same thing. I went to all the bases. And I said, “Hey, man. I know all of your folks. They don’t make a lot of money. Here’s what we’re doing with Task Hero. You know, they have skills. They can make an extra $50.” Some mom, you know, working mom just went out and bought a big giant [inaudible 00:48:58] and doesn’t know how to install it. She bought a bed or…
Andrew: Right. I’ve seen one of the tasks is one that I’m actually going to hire for this weekend. Clean out my desk. I do that from time to time. I really pay someone to come to my house, clean out my closet. And clean out my desk is going to be one of the next things that I’m going to do here at the office. I do that from time to time. Yes. And so I see that. That’s the kind of thing that was listed on the site. It makes sense.
Toby: Right or, you know, there’s a ton of stuff. Clean out your rain gutters, right? You know, Task Rabbit started with,” “I need somebody to go get dog food for me.” So anyhow, so I knew…And I built it. I built this. Again, I knew how to build a marketplace. I knew everything about marketplaces because I did it before. I knew that you had to build it on a one-off basis. Now here’s why I built it, Andrew.
Andrew: What do you mean by a one-off basis?
Toby: You can launch Elance and turn on live in the nation, in the world, and start to build the supply and demand, both sides. You cannot do that with a physical, the way the Task…That’s why the Task Rabbit is fundamentally in San Francisco. They have Los Angeles. And they have other markets, but you have to go market by market. So I knew they were going to have to build this physical thing market by market. Now I figured they had San Francisco. They had launched in LA. We knew how many users a day they were through their software and that. Great. We could get in the back end of it. We knew how many users were signing up. We knew how many tasks they were doing. So the next step was going to be to move to San Diego. Now I built it. So I was like, “Okay. Let’s build this thing. Let’s kick it off. Eighteen months, we can own this market. And Task Rabbit’s going to have to buy us, right?” That was the notion. And that’s not the reason really to build a company. So we built it. We built the software. We launched it. And the idea was start with veterans. And then move to people like firemen and teachers. And then basically, then open it up to everybody like Task Rabbit, but find the sentiment in the marketplace. Veterans, [inaudible 00:50:50]. We went to all the bases. The bases loved it. Everybody loved it. We said, “We love it. Our people could use an extra $50. We love it. We love it. We love it.” So we built it. So we figured we had one side of the marketplace, the supply side.
Andrew: Covered.
Toby: Covered. We launched it. We went back to them. We didn’t ask them no one question. We said, “Okay. It’s launched.” I said, “Can we have all the people that are coming into your job? And like give us to them or, you know, give them to us, whatever?” And they’re like, “Oh, no. Sorry. We can’t promote you because if we promoted you…” I’m like, “What?” I was like, “I didn’t think to ask that.” They were ecstatic over it, but then they said, “We can’t promote you because if we promote you, we have to promote everybody else.” Like how am I going to know to ask that question? I didn’t know. So I said, “What do you think of this idea we’re going to launch this?” So anyhow, so it turned like, “Okay. Now we have to start really building a marketplace.” And so we started. We found the most important or biggest thing that Task Rabbit would do was Ikea. So we started canvassing the Ikea parking lots. And it was growing. It was working, but, you know, for this to be self-sustaining, you know, I knew early on, it was like, “I have to at least net $100,000 for this to be even worth me spending any time with at all. So we gave it eighteen months. And it was growing, but not growing as fast as I wanted it to. And by the way, the average spend, that would have been 40 tasks per day. And 40 tasks in a two million person, you know, like a 3.5 million person market in San Diego, that shouldn’t be unreasonable. And I wasn’t getting there. And I was bored with it. Again, I didn’t have any passion for it. I built it for all the wrong reasons. So I just said, “Dude, let me move on.” And what people don’t know, and hopefully, we can get to what I’m doing right now, but I think everybody needs to…Yeah. So I launched a podcast, but what I want everybody to know is dude, I was listening to you. I was listening to Jason Calacanis, right? I was listening to Mark Schuster. I was listening to…you know, when I was in the technology piece. And you were instructed to me. Jason was. [Inaudible 00:52:44] talks about different things, at least back then. And you did this episode in 2011. And I literally remember where I was and what I was doing. Like it hit me like a lightning bolt, Andrew. I am not messing around with you. I have an acre and a half. And I was in the front part of my…it was in the afternoon. I was in the front part of my property. And I was raking up leaves. And I’m listening to you. And here’s what you said. And you said, “If I did a podcast, I would do two things differently. One, I would have monetized earlier.” And I was like, “Oh, that’s pretty interesting.” “I would have monetized earlier.” And then you said, “If I had to do it over again, I would pick an industry.” And you said something like HR. “And I would do that. And then I would take that content and then sell it to companies who had problems with HR.” And I was like, “Brilliant. Brilliant.” I said, “I’m doing that.” So it literally took me two weeks or a week. And I said, “Okay” Everybody was interviewing entrepreneurs, right, at this time back in 2011.
Andrew: Yeah. They still are.
Toby: I said, “Let me do what Andrew just suggested that he would do because he’s a smart guy.” And I said, “Okay. What’s the biggest industry I can find that needs the most help?” And so HR, no, like that’s not interesting, right? And I was like, “Real estate. There’s a billion real estate agents out there. And this industry, like people don’t know how to do it. And so I said, “That’s it.” So we built the site and launched it. And literally, again, before I spent any money, any time, on it, I went to a Zillow little conference. And Spencer Raskoff, like the founder, he literally was in the room. Like that’s how early this was. He was in the room. And I walked in the room. And I pitched all the…there were a bunch of girls, ladies, there. And I said, “Hey, like do you listen to podcasts?” Most of them were like, “I don’t know what a podcast is.” And I explained it to them. And I said, “If I did this, would you listen to it?” And it was weird. I didn’t know anybody in the industry. And they said, “Well, if you have Mike Ferry.” Like four people said, “If you have this guy, Mike Ferry.” So I was like, “Okay.” So I literally left, went back to my office. And as a founder, right, if you were a founder of any business, calculator.com, most likely the founder is going to be toby@calculator.com. So I found his business. And it was mike@mikeferry.com. So, again, I just discovered his email, sent him a message, “Hey, man. I’m doing this podcast. Would you like to be featured as a guest?” And this guy’s a big dude. This guy’s a big, big dude.
Andrew: I’m looking at this website. I had never heard of him before, but I can see, yeah.
Toby: Oh, no. He’s like the Tony Robbins of real estate. He throws on live events. He’ll have 2,000 people there. Like and he does it all the time. That’s all he does. So I sent him a cold email. I don’t know who this dude is. Twenty minutes later, I got an email back. And, you know, he was like, “Blah, blah, blah, blah.” And I was like, “That’s it.” And there was another name. So I proved the concept with a couple emails. And then I spent money. And then I spent time. So here we are today. So, you know, we’re the number one podcast for real estate agents. And by the way, this is not really about selling. This is about improving your mindset. This is about strategy.
Andrew: You teach them how to sell.
Toby: No, no. So I talk with people who are doing tons and tons of…
Andrew: Right, the top real estate people, yeah. When I said, “That’s the way I would have done it,” that’s exactly it. Find something other than start-ups because everyone started…once I started doing podcasts for start-ups, suddenly everyone was doing interviews with start-ups. To find someone in real estate makes a lot of sense. What about the revenue part? How did you figure out that part?
Toby: So the revenue part was, you know, we wanted to…You know John Dumas, right? He’s a buddy of ours, right? And he was in San Diego at the time.
Andrew: I know him, yes.
Toby: You know, so he was driving a ton of traffic. And he was monetizing through ads, just like you are. We chose not to do that route. We do take sponsorships every now and again, but we don’t want to dilute our content. We found thematically what the top people were doing differently than the bottom 20 percent, right? What are the top 10 percent doing differently than the bottom 20 percent? And basically, one of the things was, is, if you’re doing 300 deals or more, you are on radio and television. The people who were doing 50 deals are not on radio and television.
Andrew: How long did it take you to know that that’s what they were doing?
Toby: Probably four…
Andrew: Sorry. How long?
Toby: Four months.
Andrew: Four months. And part of it was…so you went into it for four months not knowing where the revenue was, but thinking, “I’m going to find it.”
Toby: No, no. I knew I was going to follow your model and John’s model. So I was just all about getting more downloads, more downloads, more downloads.
Andrew: So you could go and sell ads, right?
Toby: Yes.
Andrew: And by the way, for me and John, I feel like that selling your own stuff is much more valuable than selling ads.
Toby: One hundred percent.
Andrew: Which is the way that you ended up too.
Toby: Yeah, one hundred percent.
Andrew: Were you chewing gum this whole time? I just saw you take something out of your mouth.
Toby: Yeah. Some Nicorette, man.
Andrew: Nicorette. Ah, that explains it because this was like the second piece of Nicorette. How long have you gone without smoking?
Toby: There’s the third piece.
Andrew: Oh, and now you put the third one in. I can’t believe I can’t hear it on mike.
Toby: Yeah. No. Anyhow…
Andrew: How long has it been without smoking? Come on. I’m asking you a personal question.
Toby: I didn’t smoke. I chewed for 18 years. I chewed.
Andrew: Eighteen years. And you’re still on Nicorette gum.
Toby: Yeah. I’ve been chewing Nicorette for like the last 10.
Andrew: So now you’re addicted to Nicorette or is it more than usual because you’ve having this conversation with me?
Toby: Yeah, I just want to stay fresh. I want to stay fresh. So yeah, it’s more than usual just because like you get me excited, Andrew.
Andrew: Or anxious.
Toby: No, no. It’s not anxious at all. So here, I will tell you, here’s the thing. So it took us about four months, which that’s about maybe 60 interviews. I got 30 in the can before we released, right? So it’s 60 hours of talking to these people. And then I realized thematically, that’s what’s different. Three hundred deals, 500 deals, versus 100 deals. It’s radio. Now here’s the thing. When I had that $12 million fund, at the time, just like my storm water, just like BNT, BNT when I launched, two main players. There’s really, there was in 2014, one major player putting all these agents on the radio, one company focused specifically on real estate agents. Now here’s the funny thing, Andrew. I know the dude. I knew the dude from years ago. And in ’09, he knew that I had the $12 million fund. His business, just like everybody else’s business, was going downhill. And he came to me and said, “Hey, do you want to buy my company?” And I said, “Not really, dude. I’m making $100,000 a month. And I’m not doing anything. Like I’m racing my Porsche every weekend. Yeah, I’m not interested, but I’ll take a look.” So he brings a big box over. I looked at everything. And I had the box.
Andrew: And so you still have it.
Toby: I had it. I still have it, yes.
Andrew: You still have it. So you understood how his business worked. It wasn’t relevant. You weren’t competitive. You weren’t in the space, but the knowledge was in your head.
Toby: Yes. Yes, and sitting in the box.
Andrew: So once you got into this space, you said, “Hey, you know what? That thing that’s in my head is now applicable. What if I do that too,” but go ahead.
Toby: No, no. There’s no buts. It was I always was like, “If I need something to do, he’s got one player. He’s got no magic.” I had his copy. I had his client list. I had his contracts. I had everything, not that I used it. I didn’t use it as an unfair advantage of him at all, ever.
Andrew: [Inaudible 00:41:05] what happened is business.
Toby: No, he’s still in business. He’s doing better than ever.
Andrew: Okay. So he’s still a competitor. So then you said, “I’m going to do the same thing.” The problem with him from what I understand from your conversation with our producer was he only worked with on person exclusively in a zip code. There were so many people who would want to work with him, but they couldn’t. And this was an opportunity for you.
Toby: Exactly right. So what he would do, how he got his clients? Two things. One, he said, “Sean Hannity, I’ll get you a national endorser, Sean Hannity, Glenn Beck. “Barbara Corcoran is somebody he can get. “I’ll get you a national endorsement, number one. Number two, if you sign up with me in Chicago, Denver, you name the market, San Francisco, San Diego, you have complete exclusivity in that I will never put someone else in that market.” And this guy’s been doing it for 10 years, right, being 12 years. So there’s all this pent-up demand. There’s all these agents out there that are like…now, hopefully, none of your crew is going to listen to this and go, “Yeah, I’m going to do radio.” By the way, if you’re going to try to compete against me, forget it. It’s like you have to know how to do this. And I’ll tell you how I learned how to do it in a second. So basically, there was all this pent-up demand throughout the nation. And people were like…His name’s Matt. I won’t say his last name. “I called Matt. And I can’t get signed up with him.” So I knew all these people who wanted to get on radio, but couldn’t. And, again, this was not a media you can buy. So billions should not try to build this media. So I was like, “There’s pent-up demand. There’s one major player. I have now, you know, 100,000 people listening to me.” This was back in 2014. “I have 100,000 people listening to me every month. I’m going to launch this business.” So we launched it. And boom, boom, boom, boom, boom. Now how did I learn it? Here’s the deal. Again, again, I knew Matt. And I know all of this team. And when I say I know his team, like people on his team then and now, like they’ve been to my house swimming. Their kids know my kids. So Matt had a very good mutual friend named Rob. Again, I won’t say a last name, who was his GM. Rob ran everything. At the time, Rob and Matt were butting heads. So what do I do? I hired his GM. And I said, “Rob, let’s dig into exactly what he’s doing, what he’s doing well, and what we can do better.” And literally, it took us like two months. We had a similar, but new model. We launched it. And now we’re putting people on the radio.
Andrew: Even the name is the same as his. They’re similar.
Toby: Very similar.
Andrew: Yeah. I’m looking at his site right now. I see. You know what, frankly? Because it matters so much, you don’t have to reveal the name. I’m not going to say it. And I don’t think it adds much to the story, but I get a sense of what you’re doing and how you understood the market. Why are you telling me, by the way, that you had Matt’s information and so on? You could have hidden that from us. I don’t know that I would have found that in preparation for this interview.
Toby: No, you would have never found it. You would have never found it.
Andrew: Yeah. So why are you so open about it?
Toby: Well, here’s why I’m open about it. It’s because every single thing…and this important. BNT, I mean, millions of dollars to my personal net worth, that wasn’t my idea. Okay. Go back to Work Exchange. Work Exchange, it could have worked. It wasn’t my idea. It came from my network. BNT wasn’t my idea. It was a friend said, “Hey, this is happening.” COF really wasn’t my idea. That was Tim’s idea. Tim’s a financial guy. He just brought me on. And this wasn’t necessarily my idea, right? I think people sit in their bedroom going, “What’s the new thing? What’s my idea? What’s my idea? What’s my idea?” And they bang their head against the wall, but you know what? Ideas are out there. They’re out there. You just have to leverage…you know, here’s a line I’m sure you’ve heard a billion times, but your net worth is your network. So build your network up. And go out and be genuinely…Like we said earlier, be genuinely curious about the people you know. And let them know what you want to do. Hey, I want to found something, but I don’t have any good ideas. There are ideas out there in your network. So the reason why I’m telling you that is because number one, inside information. And at every single thing I’ve done, I’ve had some sort of insider information that’s out there, and this is not illegal, that I could capitalize on.
Andrew: Yeah. You know what? My favorite professor in school, Craig Boyce, he used to say, “What insider information do you have?” He says, “You’ve been trained in all these other finance classes to avoid inside information. I’m going to tell you if you don’t have some kind of inside information, unfair advantage, I don’t think that you’re going to make it. And I don’t want you to come to me with those ideas.” Okay.
Toby: Yeah. Yeah. Hold on. Wait. Wait. Wait. Let me just add one thing to that because it’s important. And that’s why real estate’s so good is because like Martha Stewart went to jail for insider information. Every single whatever, you should not have financial information. Real estate is the only industry where it’s legal to have inside information.
Andrew: I would say even in an online space, there’s a reason why Neil Patella and Heaton Shaw are so good at founding tech companies and advising tech companies. They’ve been in the analytics world for so long, right? If you own Kitz Metrics, you get to see other people’s analytics. If you own, what’s it called, Quick Sprout, and now they’re asking for people’s Google analytics in order to access their site, they get to understand how these markets work. And then, of course, they have all these clients who then give them Google analytics so that they can help their clients out. That gives them deep insight too. And that’s inside information that’s totally legal.
Toby: Completely legal. And you know what? So Bitcoin today is now trading options on the CBOE. You know, Cuban came out just recently, months ago. He was not bullish on Bitcoin. And then he became bullish all of a sudden and bought a bunch of Bitcoin. I mean, the guy named Mark? Do you think he had some inkling that, you know, the CBO is going to start trading options?
Andrew: I see.
Toby: Probably, but so yeah.
Andrew: You know what? Speaking of him, he’s a Shark along with Barbara Corcoran, which reminds me of the earlier saying that this other guy had access to Barbara Corcoran for an endorsement. How does that whole thing work where a local real estate person gets endorsed by Barbara Corcoran? And Barbara Corcoran gets paid for that?
Toby: So yeah. Right. Right. Right. So how this world works is so, you know, I can go out and hire Sean Hannity, right? He’s just a talent. He’s just a piece of talent on air. So everybody has a different talent rate. Barbara is a little bit different. I’ll tell you how that happened for him, but yeah. So these guys are…I can hire anybody. I can hire Rush, if I want to pay $1 million, right? So everybody’s just got a different rate. You know, if you were on, I don’t know what big station out there is in San Francisco, but, you know, if you were on some station and you’re a talent, I would say, I would come to you and say, “Hey, Andrew, I want you to read, you know, five ads a week, live ads. I’ll pay you $2,000 a month.”
Andrew: Okay. So it’s just that they’re doing the live read that…so Sean Hannity has a radio show. So any one of your clients or his clients who wants to get Sean Hannity, they have to pay for national exposure from Sean Hannity?
Toby: No.
Andrew: Or he does local too?
Toby: No, no. you just run them local. And so he’s a national syndicated talent, but we buy them on WZBN. And we just run that on WZBN.
Andrew: And he will record the ad just for local stations.
Toby: Yes.
Andrew: He will?
Toby: Yep. Yeah.
Andrew: Oh, I see. So you go to Sean Hannity. You say, “Sean, I need you to record ads for this client.” He records it, even if it’s going to run in a local market for a short period or for a short period of time.
Toby: Yeah. Right. Yeah. And we sign annuals. So somebody like Sean, we’ll pay him to run a pre-recorded ad because he can’t do, you know, one in Atlanta, one in…but the key is…now this is part of the trick in radio. Yeah, I’ll give you…in radio, right, and this is the magic. In radio, commercials are called units. Now you don’t want to be unit number six or unit number four in a six-unit break. The reason why we hire a local or a national endorser is because we get, it’s called first stop. We want to go from content, Sean talking about, “Hey, you know, Trump is a real estate guy. Speaking of real estate, do you need to sell your house? You need to call my friend, Andrew. Do you know why? Andrew, blah, blah, blah.” So if it’s done right, first stop matters because we want it to seem like part of the content, part of the niche.
Andrew: I always thought that that was national only.
Toby: No.
Andrew: That if they did it, it went everywhere. No. So you’re saying they do it. They record it. And then it sticks with the local market. They just run it in the local market.
Toby: Yes.
Andrew: And so you get to do that. And the reason you know all this is because you hired the general manager of the guy who was in this space for so long.
Toby: Yeah. Yeah.
Andrew: Got it. And that guy, by the way, was in…
Toby: Well, even something like first stop, yeah.
Andrew: I’m sorry.
Toby: Yeah, even knowing like the notion of first stop and [inaudible 01:08:04].
Andrew: Comes from this relationship. And the reason you knew that you could afford to hire him was you sat down, you told our producer. And you said, “Here’s how many sales I need to make to real estate people to bring back $1 million in revenue. If I bring $1 million in revenue, then I could afford to pay this guy a salary. And it’s worth my while. I don’t care about small money.” That’s the way you sat down and thought about it.
Toby: Yep. Yep.
Andrew: And so what was the number of clients, 210?
Toby: One hundred and forty.
Andrew: A hundred and forty. If you 140 clients to buy ads on an annual basis, then you make $1 million and net $1 million a year.
Toby: I net $1 million, yep, at the average spend, which is $5,000, but as we get into bigger markets…so we have people in Dallas spending $20,000, right? So that skews the numbers, obviously, right? We have people in Detroit or when I say people, person…if you’re spending $12,000, right, we’ve got Denver…
Andrew: If you can just get one person per market, you’re not going to represent multiple people.
Toby: Well, we will. We will. I will, but I will never put another person. Chicago’s 9.5 million people, right? I can put somebody on WBBM and put somebody on KJAX, right? Like no problem. It’s a different format, a different station.
Andrew: And some of the people who you interview end up being your clients too?
Toby: Yeah. Yeah.
Andrew: Because how do you make the transition from, “Hey, the interview is done.” “Thank you too. You know, you should consider buying ads for us.”
Toby: No, they know.
Andrew: They know.
Toby: And so if they’re on radio, they’re with my competitor. And every single person of my competitor, they know who I am and what I’m doing because, Andrew, prior to me going out and saying, “We’re going to hang our shield for radio,” again, remember, I told you I had his client list. So I went and brought all those people on.
Andrew: As a guest.
Toby: And said, “Hey, what do you do? You do radio. I see. How much do you spend on radio?” Sometimes I’d get an answer. Sometimes I wouldn’t, right? So I’m getting market data prior to saying like, “Hey, I’m hanging out my shield.” So how much is radio…in terms of your listings, what percentage is that, right? So I’m getting all this market data from…they knew exactly who I was.
Andrew: Within the interview. They knew what you did. And in the interview, they’re answering questions. And then do they…
Toby: No, they knew that I had a podcast when I was asking them. And then, right, six months later, we roll out and go, “Yeah. We’re real estate experts.” And then everybody was like, “Oh, crap. I just told that guy everything.” And some people were mad. And some people were like, “Yeah. No worries.”
Andrew: But today, when you do it, how do you make the transition? Let’s say you have a next guest. He’s already buying ads.
Toby: They know.
Andrew: How do you make the transition from saying, “Thanks for the interview,” to, “Give me business.”
Toby: Dude, I don’t. Honestly, if they don’t know, and normally it will come up in the interview when we talk about marketing, they will tell me. Like they’ll say, “Hey, yeah, I know you do radio,” or not. If it doesn’t come up, I’ll say, “Hey, man. Do you know the other stuff that we do, right?” I just go, “Hey, do you know the other stuff that we do,” you know?
Andrew: But you’re not pitching. You’re just letting them know what you do. And if they want to do business with you, they follow up and ask questions.
Toby: Yeah. Yep.
Andrew: What about recurring revenue? One of the things that interested me in looking at the prep that my team did was you told our producer that once you make a sale, there’s ongoing revenue that comes from it. I guess that’s because once you make it, you guys keep placing ads month after month.
Toby: Yeah. So when you sign up with us, so when we get a talent for you, you have to commit to at least 13 weeks. So every new client we get, Andrew, you know, we were talking about real estate and passive income. Here’s how it works. Now again, like now we’re getting into some of this stuff, but so here’s what happens. We charge our client a small fee to work with us, to write copy and to manage their stuff on an ongoing basis. Well, they pay us a fee for us to put them on radio. Then they pay us another fee on a monthly basis, but really how we make our money is the radio station gives us 15 percent of their [inaudible 01:11:39]. So if you spend $10,000, the station pays us $1,500 a month. So in a lot of ways, every new client I get is like buying another piece of property because I have clients that I have not talked to in eight months. It just works. We pull money out of the account. The ads are running.
Andrew: And the revenue keeps coming in.
Toby: And the revenue keeps coming in.
Andrew: What about the idea that radio is losing out to podcasting? In your own bio, you said you recognize that there’s a shift in the way that people are consuming radio-type content.
Toby: Yeah. Right. And we’re slowly getting to digital, but it comes down to your demographic, right? So at the end of the day, right, am I going to convince a 35-year-old…You know, and there’s plenty of 35-year-old millennials that are listening to Rush, right? And we love conservative news talk, right? So there’s plenty of people who are driving around from point to point who are not listening to me, who are not listening to you, and they’re listening to Rush and listening to Glenn Beck because they want to hear what’s going on. They want it to stay current.
Andrew: Yeah, I’m surprised that those people exist, that they don’t just listen via podcast or something, but I get it.
Toby: Yeah, but hold on. Like I will not put anybody on radio in your market. I’ve had people that say, “Hey, I’m in Danville. You know, I’m in San Francisco.” And I’m like, “Dude, I will not put you on radio,” because the demographics for your market are way, way different than Omaha, Nebraska, okay? Like San Francisco, Washington DC, you know, are way different than the rest of the world. You have to understand that.
Andrew: I get it.
Toby: And hold on. There’s a little bit to the last point real quick on that. The deal is this, man. The real people that we want, right, are 45 to 62. Those people, they’re native. They consumer content they way they have always. Dude, you can go here in San Diego, much less Omaha or Farmington, New Mexico. And, you know, dude, they’re still at the diner reading a newspaper. Don’t get it wrong.
Andrew: I can’t believe that.
Toby: Yeah, I know you can’t. Well, because that’s where, you know…
Andrew: But you’re right. Maybe it’s because of the cities that I’ve lived in, New York, DC, LA, here. I’m looking at builtwith.com. I love that resource for checking out what people…You’re not as much into like the digital part of like a business as I am. I’m so fascinated by…I do View Source on people site so much that I have a plug-in for my phone. So if I’m looking on Safari on my phone, I can do resource. That’s how much I…one of the things that I see is use listless products, which is listless member, like we do, to turn your site into a membership site. You told our producer that you guys charge $99 a month for a School of Profits. That’s what you do. You just have this Wish List member plug-in to turn your site into a membership thing. What’s part of School of Profits? Tell me about that part of your business.
Toby: Yeah, I didn’t tell you that. So yes and no.
Andrew: No?
Toby: Hold on. Hold on. There is School of Profits. I’ll tell you what that is, but Wish list, so back in the day, guys like Dumas, right, Dumas and the guys that…look, you and I know a lot of the same people. What they were doing, they were basically charging people $267 a quarter or sometimes more a month to just join a private Facebook group. So we put Wish list in there because we were going to do the same thing. You know, we always knew also…You know, iTunes will have…We wanted to produce premium content and charge people for that. We installed Wish list years and years ago. We’ve never used it. We will start to because some of our older episodes, we’re going to start to archive. And so I think we’re going to charge like $.99 to access those, but we put Wish list…
Andrew: That’s a bad model, $.99 to access individuals does not work.
Toby: It doesn’t?
Andrew: No because if someone’s going to whip out a credit card, $.99, first of all, the difficulty of getting someone to say yes is really high. And if, at the end of that, all you get is $.99, that doesn’t pay for all the trouble.
Toby: Is it trouble? I don’t know. Again, we’ve never used it. I don’t know. We don’t use it. We intended on it. Look. Here’s what School of Profits says. Here’s the deal. And it’s a scam in this industry. People need help. People need help. And everybody who does 400 deals, they want to be a coach. Hey, Andrew, you’re selling real estate. I do 500 deals. I’m now a coach. I’ll help you build your business. And Mike Ferry and everybody, it’s $1,000 a month. And you have to sign a 12-month contract. I think that’s a scam because you know what? At the end of the day, the coaching is not telling people what to do or how to do it. There is like a, “What do you want to do, Andrew? How many calls do you want to make? All right. We’ll talk next week. Hey, Andrew, you said you were going to make 100 calls a day. You only did 50. What’s up?”
Andrew: It all comes down to that. How many calls are you doing? Yeah. I see. It’s $900 is what he charges for this, 90 days with Mike.
Toby: Yeah. Well, okay, he used to charge $1,000.
Andrew: No, you know what? Actually, maybe this is a different thing. This is free coaching and evaluation call. Okay. I see he has a lot of packages. I’m not going to be able to open all of them.
Toby: Yeah, that’s a lot of packages. So we launched School of Profit. It’s $99 a month. This is all like trip wire stuff, right? I just want to get you closer to me in my orbit. For $99 a month, I do an hour call once a week. So we have, you know, 40 people on the call. And, you know, we’ll go through. We’ll, you know, say, “Hey, Andrew, you know, this week what are you struggling with because chances are, if you’re struggling with something…If Andrew’s struggling with something, Julie and Jimmy are struggling with the same thing.”
Andrew: A big mastermind. And that’s what you’re going to be doing.
Toby: Yeah, it’s a big mastermind. Exactly.
Andrew: But you’re not doing it yet.
Toby: I am doing it. Yeah, I’ve been doing it for a while. It’s schoolofprofits.com.
Andrew: Oh, okay, because when I go to superagentslive.com, that’s your site, right?
Toby: Yep. Yep.
Andrew: And I go to members area, I am taken to a wish list member thing, but you just don’t do much with that.
Toby: Yeah. Just go to schoolofprofit.com or School of Profits. And I think there is a products page or tab on Super Agents that I don’t even know if it’s on there.
Andrew: Yeah, you might want to get rid of that. I see, $99 a month, yearly $1,000. Well, what kind of revenue are you pulling in from this?
Toby: Well, so we have about 40 people that pay us every month. And, you know, just like anything else…
Andrew: So it’s a start.
Toby: It’s a start, yeah. And it’s fine, but, you know, the deal is, you know, there’s 40 people that pay us. I don’t even know who pays us anymore, but, you know, only 30 percent of the people actually show up. Other than that, we just charge them with their PayPal. And, you know, that’s on them, right? I mean, I send out an email, you know, every week and go, “Hey, dude. It’s happening at 10:00 a.m. Sign up,” or, you know, “Here’s the link. Jump on.”
Andrew: All right. There’s so much that we talked about. And there’s still so much that I would want to talk to you about. I’m going to use this as notes for like what I didn’t get to in my notes. I’m going to use notes for another interview. And I’d love to have you back on at some point in the future.
Toby: That’s great, man. I’d love to. You’re a fun guy to talk with. I’ll tell you this, man. I know you do every Wednesday…I think it’s Wednesday you have like Whiskey Night or something. Do you still do that?
Andrew: Wednesdays? I don’t do it now. I don’t have time to even drink whiskey, but I’d love to. Why?
Toby: Dude, seriously, it’s cheap. I literally many times have said, “Dude, I’m literally going to buy an airplane ticket just to fly down there, get an Uber, and go [inaudible 01:18:38].”
Andrew: I’ll tell you. When I did it, it was totally worth flying in for it. The conversations that we had over Scotch were like this that we did, but imagine even more personal, more specific. And I just keep the conversation moving, but I can’t do it all. I’ve got to pause.
Toby: Yeah, I should have flown in.
Andrew: I’ll tell you this. I will be in San Diego. I’m going to be at Social Media Examiner. They invited me to come in to speak at their conference. I’m going to talk about chat bots. I am going to do some kind of Scotch night. Tomorrow or Wednesday I’ve got a call with my team. I can’t set it up myself. I want them to set it up where we’re just going to do Scotch. And this will be in San Diego. I’d love for you to come by.
Toby: Yeah, that would be great. I was thinking like crashing there because Jamie Masters invited me. You know Jamie.
Andrew: Yes. Yeah, she’s going to be at the conference too.
Toby: Yeah. Yeah, all of those guys.
Andrew: I’d love my team to say, “Look. Andrew wants to run. And Andrew wants to talk to people. Just schedule that, that whole week.” And I’ll go to sessions, but I don’t really need to be at sessions.
Toby: Dude, I never go to sessions.
Andrew: I want to run in San Diego. I want to talk to people. I should do dinners with other speakers, Scotch night with people who I care about, and one big thing for everybody. All right. I totally forget what my last question was going to be.
Toby: I recently quit drinking 30 days ago, man. I’ll tell you why when you have the Scotch.
Andrew: You’ll tell me why what?
Toby: I quit drinking 30 days ago.
Andrew: All right. Now you’ve got to tell me why? Why did you quit drinking?
Toby: No, no dude. It’s a long story. I’ll tell you.
Andrew: Go ahead.
Toby: I told everybody on the podcast. I kept it secret for 10 years. So here, I’ll tell you really quickly. Dude, I got into a bad car crash 11 years ago, 11 years ago, like a really bad car crash. This is 2006. I went to the ER, right, casted up, whatever. They said, “Okay. You’re fine. Here’s some pills.” And if you might hear, my dog whining in the background. “So here’s some pills. Go to your doctor.” I went to my doctor. He said, “That’s great.” They fixed you up. Here’s some more pills.” And my doctor fed my hydrocodone, 10 325s, for a decade. I was eating pills for a decade. And dude, I didn’t feel it. I mean, I did all the stuff that we talked about on, you know, four pills, six pills a day. And I only felt it when I didn’t take it. And last December, last December, I said, “I’m done.” Jeff Sessions came in and said, “Hey, we’re going to solve this opioid crisis.” And I’m like, “Dude, I’m not getting cut off. I’m going to cut myself off.” So December, I said, “I’m done. I’m out.” And it took me from December to February…February 14 I took my last half a tab. And I’m like, “I’m done. I kicked this thing. I did it on my own.” Great. The problem is like my body still craved something. And I started drinking vodka. I started drinking too much. And I had a stomach ache this whole summer. Finally, my wife said, “Let’s go to the ER. Let’s go to the ER.” Finally, one morning, I literally had tree guys here trimming my palm trees. And I’m resurfacing my pool like on a Monday. So I have like 15 dudes in my front yard working. I’m in the shower. I’m like, “Honey, I’m this close to going to the ER.” She said, “Let’s go.” I go to the ER. They put me through CAT scan and everything. And I thought I had cancer, Andrew. I thought I had cancer. No cancer. And they said, “You have a mild case of pancreatitis, which came from drinking too much.” And they said, “You’ve got to quit.”
Andrew: So just a year of drinking got you pancreatitis?
Toby: Nine months of heavy drinking, yeah.
Andrew: Wow. That must have been heavy. What’s like the drunkest thing that you did in those nine months?
Toby: Dude, I never got drunk, man.
Andrew: You didn’t even get drunk.
Toby: No. Here’s what it was. And here’s how it happened. Like when I was getting of the hydrocodone, I had tons of energy. I mean, like I remodeled my office. You should see what I did around the house, like new carpet here, like new paint here. It was like new baseboards. Like I was going crazy, almost like I was on speed, but I was just like…my body was like getting back to normal. And one of the things I did was I was like, “Hey, everybody. Every Saturday,” I said, “Let’s pick the 10 best places to eat breakfast in San Diego. Let’s eat at them all.” So we started going to breakfast every Saturday. And one day, I met this, at Breakfast Republic, a great place in whatever, Liberty Station. And the guy next to me has a Bloody Mary. And I’m like, “I’ll have one of those.” And I had one. I’m like, “Oh, my stomach doesn’t hurt anymore.” And so then I started going out to breakfast and like a Bloody Mary. I’m like, “My stomach doesn’t hurt anymore,” because my stomach was killing me, right?
Andrew: So you were just drinking that much. Still, it seems suspicious for nine months. You’d have to drink a whole lot for that kind of pain.
Toby: A bottle a day.
Andrew: A bottle a day?
Toby: Yeah.
Andrew: And you were functioning doing your interviews, the whole thing?
Toby: Dude, totally, but it was a swig at a time. Like my body would wake up at 12:30 a.m. I’d go downstairs and have a swig, right? At 3:00 a.m., my body would wake up again. Go have a swig. At 6:00 a.m., have a swig. So it was just every hour and a half, like I would have not even a shot, dude, just a swig. And then I would quit like at [inaudible 01:23:19].
Andrew: You know what? I just listened to an interview with Alice Cooper. I’ve been fascinated with him ever since I heard about his manager, Shep Gordan, who I interviewed, a fan-fricking-tastic story. And he said that he was never drunk, even though he was an alcoholic, because he always had the golden buzz. He would just drink a little bit a day a little bit at a time, just get that buzz, and never got drunk, which is shocking to drink that much and never get drunk, but I get it, if you’re just doing a little bit at a time like you did. I’ll tell you this. Now that you’re not drinking, it’s totally fine to come to Scotch night not drinking. People do that all the time. Here’s the thing. I think that you and everyone else who’s listening to me who doesn’t drink should an easy answer to why I don’t drink because you’re going to get asked that forever. You can either be resentful of it, not that you are, but Ryan Holiday did this whole post about how he’s tired of answering the question. You could be tired of it. You’re still going to have to answer it, or you could say, “This is an opportunity for me to make a statement about who I am and how I live my life.” And to say something like, “I feel a lot healthier now that I don’t drink. And here’s how much I get to do,” that sends people a message. They just look for some reason. And this is a great opportunity for you to tell them who you are.
Toby: Dude, I’ll tell you the line because I’ve sensed it.
Andrew: Yeah. What is it?
Toby: It’s I can see the ball quicker. I can see the ball faster. It’s like being up to bat and like somebody pitching. Like, you know, you don’t see the ball until…dude, I can see the ball coming a little bit faster.
Andrew: Yeah, the truth about who you are that is expressed in why you stopped drinking. And then you could always go deeper with some people or leave it there for others. All right. I’m fascinated by you. I’m going to put it out there that I’m now also fascinated by real estate. I don’t exactly know where this fascination’s going to go. And I’ve always hated real estate, but [inaudible 01:24:52], man. That guy’s amazing. He opened my eyes to this idea of rea estate. And he’s right. I should be investing my money better. [Inaudible 01:24:57] of my business.
Toby: You 100 percent should, dude. You can have this income. It’s easy. And you know what? You make your money when you find the deal. And look, I know we’ve got to quit. I know we’ve got to quit. Dude, can I tell you a story in four minutes?
Andrew: Yeah, go for it? Four minutes? Go ahead, yes.
Toby: Four minutes. It may not take me that long.
Andrew: No, we’re going over anyway. We might as well.
Toby: I have a piece of commercial property right now. Here’s the deal. So it’s a little house on a big lot. You can see it from the freeway. My buddy bought it. My buddy bought it back in, I don’t know, ’07, ’06, ’05, whatever. He paid $360,000. It’s a 600 square-foot house, okay, with a detached garage. He paid $368,000 for it. It was fixer. He put another $70,000 into it. [Inaudible 01:25:35] had it. Lost it. Now it just so happened…again, this ties into also insider information here. He was going to lose it. So he said, “I’m going to short sale it. Instead of being foreclosed, I’m going to short sale it.” Now his mom just so happened to be a real estate agent. She convinced the bank to let her list the property. Now I told her, I said, “Hey, I want the property. I want the property because I can do anything with it.” It was, again, commercially zoned. And I said, “You’re going to list it. You give me a good deal on it. And I’ll give you $20,000. Like, you know, I’ll kick you back some.” And she said, “Okay,” but she didn’t really say, “Okay,” right? She didn’t know how…and again, I’ve known her, but she didn’t want to cut that deal. So whatever. She said, “Okay.” So, again, my buddy paid $368,000. Put $70,000 into it. And I said, “Give me a number.” She said, “Let’s make an offer for $85,000. $85,000 cash.” I said, “The bank will look at that?” She said, “Trust me.” I said, “Okay.” So we wrote up an offer. And she’s in LA, by the way. That’s important for this. So we wrote up an all-cash offer for $85,000, closing today. No inspections. No nothing. We’ll take it as-is. She put it on the MLS because the banks want to see that it’s on the MLS. She put it on the MLS in Los Angeles. This property’s in San Diego with no picture and pending. Now the bank sat there for six months with my all-cash offer. Take it as is for six months. And they’re like, “Well, nobody wants this piece of crap.” The bank never even looked at it. They didn’t even know what it was. Six months later, they came back and said, “We’ll take your all-cash offer.” So I got this house for $85,000. I could sell it right now. It’s not the money, but, you know, it’s worth $450,000 now, right? So dude, so yeah, real estate is great to make cash with, but you have to be on the inside. You have to find the deals, that insider information, and be ready.
Andrew: Yeah. All right. This is maybe something we’re going to talk about in person when I come to San Diego. I want to know how to get that. You’re right because that’s the other thing that [inaudible 01:27:27] told me. He goes, “Like I just loves deals.” And he loves deals. He’s as proud of getting that Netflix for free as I am of like the best deal of my life. All right. Thank you so much for being on here. If people want to follow up with you, what’s a good website for them to go to? Of all the sites, which one?
Toby: Yeah. Just go to superagentslive.com. Just send me an email. I try to respond. I mean, I get a lot of emails like Andrew, but I try to respond at least, you know, a one-liner.
Andrew: Superagentslive.com. And they could probably get your email address from that. Here’s the one weird thing about Super Agents Live. The copyright is still from 2013. It’s a WordPress site.
Toby: Yeah. I need to update it, man.
Andrew: Otherwise, it works really well.
Toby: Yeah. Yep. And some of the spacing, like I put that together like really quickly. And yeah, I should update it, but, you know, I mean, again, we have listeners that…dude, I get like 100 opt-ins every day.
Andrew: A hundred opt-ins a day just because you’ve got that welcome mat.
Toby: Yeah because I gate it. And most of the people who go there are not sophisticated enough to…I mean, you can cancel it out. There’s a big X up there.
Andrew: You can hit X, but if you keep refreshing, it still happens. It keeps coming in. What software do you use for that?
Toby: My developers built it.
Andrew: you don’t even know. It’s basically the [inaudible 01:28:35] that we’re talking about is you ask for an email address the first time you go to Super Agents Live. All right. Super Agents Live. And I’m going to thank…you know what? I’ve got to thank one other person. You’re going to want this tool I think after I tell you. Once you get past like 400, 500 interviews, it gets really hard for people to find the interviews. We tried all these different search tools, including Google Search. None of them fricking worked. It drove everyone crazy. Then we signed up for Swiftype. I don’t know if it was…yeah, it was before I interviewed the founder. Swiftype changed everything. It makes it easy for me to get rid of pages that I don’t want people to search for. It makes it easy for me to like know what people are searching for, bubble up the best pages. It’s so good. It integrates with your site. I signed up for them. We’ve been using them for a long time. We’ve wrote custom code for them and contributed back to the community. I don’t know exactly where we contributed it. It’s really good. Anyway, the founder’s been really good to me. And I want to thank him. It’s a website that’s like…I don’t know where they got their fricking name. I hate their name. It’s Swiftype. What does that mean, Switftype?
Toby: Wait a second. Wait a second. So I literally went on your site prior to this interview. You asked me the day before because I knew because, again, look, I thought you were going to be like way more…
Andrew: More confrontational, yes.
Toby: Yeah. I thought you were going to be like, “Example. Example.” And I’m like, “Okay. I’ve got to prepare for Andrew, right?” So I went and I actually did search. And I searched something. And you have this tool. And I’m not sure if this is what you’re talking about, but literally like I saw all these categories like e-commerce and all these categories.
Andrew: That’s Swiftype.
Toby: So I was like, “That was brilliant.” Dude, I want that because my audience has been saying because they want certain things, right? There’s certain things in real estate, farming Legion, you know, team building. So I want that.
Andrew: Yeah. We added some custom stuff to it, but that’s Switftype. And the search is Swiftype. Here’s the weird thing. They sold their company I guess to…it’s now saying…I’m talking to you. So I wanted to look at it a little bit more. It’s now an elastic company. I guess he sold the business. Anyway, I just want to thank him. The founder’s been really good to me. And the software’s damn good. So it’s switftype.com, for anyone who wants to search. Check on my site. And you’ll see the search. And you’ll get a sense of how it works. All right. I also want to thank my two sponsors. The first is a company that will host your website, right? It is called HostGator, hostgator.com/mixergy. And the second is a tool I use to close more sales. It’s called Pipe Drive. Go to pipedrive.com/mixergy. And I’m grateful to all them. Thank you.
Toby: All right. Thanks, Andrew. See you. Bye.
Andrew: Bye.
