Episode 100: A Special Q&A with Five Successful Entrepreneurs – What Would They Have Done Differently?
100 episodes! Can you believe it?
Today marks a special moment in EcomCrew history. We've hit a very important milestone and we never would have done it without YOU.
I had my struggles; I can't tell you how frustrating it is not knowing whether people truly enjoyed listening to the podcast or if they got any real value out of it or not.
But then I go to these live events and people come up to me and tell me how the podcast helped them in their businesses, and I just feel stoked. It makes me feel like what we're doing makes a difference, and pushes me, and the rest of EcomCrew, to do our best in putting out even better content for you. Your comments, feedback, questions, and support keep us going.
And to celebrate our 100th episode, we have a special treat for you. I got 5 of my favorite successful ecommerce entrepreneurs in this episode and asked them one question:
“What would you have done differently if you could talk to your younger self when you were just getting started in ecommerce?”
Their answers are a mix of rookie mistakes and lessons that took them years to learn. You can use these lessons as warnings or advice and apply them to your own business, without having to go through years of trial and error.
Below is a snippet:
From Andrew Youderian of EcommerceFuel:
“The biggest thing I would probably fundamentally change in my approach about starting an ecommerce business today versus what I've done in the past is probably take something that I thought–it didn't have to be something I was madly in love with, or my soul passion but something that [I] had some kind of interest or overlap with what I enjoy or who I was.”
From Bill D'Alessandro of Elements Brands:
“If I could go back in time, I would smack my 4 Hour Workweek self across the head and say, Don't be a wimp, hire people.”
From Greg Mercer of Jungle Scout:
“If I were to start all over again–once I figured out how to launch the successful products, and the products themselves had good unit economics–I would've looked into using other people's money to invest in my business to start to scale it up faster.”
From Scott Voelker of The Amazing Seller:
“I would focus on finding something that you know you can launch multiple products in, and then from there, taking that approach of a brand where you're able to have a face to that brand … and then start building that following, start building that email list.”
From Steve Chou of My Wife Quit Her Job:
“If there's something that you enjoy per se, that might not necessarily be the best idea for a business. Because chances are that if you have to do it for money, or you feel like it's a chore, then you're not going to enjoy it anymore.”
And of course, EcomCrew will not be the same without Dave Bryant. He has been a prolific addition to the crew and has added many extremely useful content to the site. Here's what he would have done differently:
“If I can tell myself one thing to do differently at the beginning of my ecommerce journey, it would definitely be to start with an end goal in mind and reverse engineer from there.”
Those are just a sneak peek of our incredibly loaded conversations. Go ahead and listen to the entire episode and find out why they came up with those answers.
The Amazing Seller
My Wife Quit Her Job
2018 Sellers Summit
And that concludes 100 episodes of the EcomCrew podcast! We invite you to stay with us for another hundred episodes of our ecommerce journey.
And from everyone at EcomCrew, THANK YOU.
Full Audio Transcript
Mike: This is Mike, and welcome to episode number 100 of the EcomCrew Podcast, one hundred guys. You can go to EcomCrew.com/100 to go the show notes for this episode. If you have any comments, we'd love to hear from you. Today obviously is just one of these special moments. You click over from 99 to 100, and it just feels amazing, right? It’s just one of these mental things that it's a cool milestone to hit. And I want to do something special today.
But before I get into that, I want to thank all of you out there listening. Obviously without you listening, we wouldn't have an EcomCrew Podcast. There’s has been a lot of times where I've struggled with this because it takes a lot of time to put this together, and some days you're just talking into a microphone, there is no one in the room. You see stats on a podcasting service or how many downloads you’re getting, but are people really enjoying the podcast?
There’s a lot of times I'll say, please like us or leave a comment or come over to the Facebook Live or come over to the show notes. And we don't get a whole lot of people that transition from the podcast medium over to real life where I can see it and that's really frustrating. But then I go to live events, and people come out of the woodwork, and are just like, oh man, you're Mike Jackness and we love the EcomCrew Podcast.
So it's obvious that people are enjoying it. I see a lot of comments also on the EcommerceFuel forums which is cool, and it makes me feel good. It makes me feel like what we're doing here is making a difference. And that's the whole point of this, the reason we started it. I mean it was two reasons. It was to get out of my comfort zone. I definitely I'm a believer in doing things that make you uncomfortable. And the thought of doing a podcast scared the living crap out of me just as much as speaking in front of a large audience.
And it was something that I decided I wanted to tackle for personal reasons and get better at it, and I think I've definitely achieved that. And also I'm a big believer in paying it forward. There's been a lot of people that have come up to me and said that we've made an instrumental difference in their business. They've been able to double or triple their business in some cases, or quit their job, and all these different things. And while I might not get something directly back from them, I do believe the universe pays things back in other ways.
For me quite frankly it's been able to meet people like the people on the podcast today. We have some pretty amazing people. First, Andrew Youderian from EcommerceFuel forums is on the podcast, Bill D’Alessandro from Elements Brands, Greg Mercer from Jungle Scout, Scott Voelker from The Amazing Seller, and Steve Chou from My Wife Quit Her Job. All these are people that I have just become really great friends with. And if it wasn't for the podcast, and it wasn't for going out and speaking at these events, I never would have met them.
So I feel like I get paid back in these ways. And these are all people that I get to learn from. These are really, really smart people. So I would encourage you to listen to this podcast. Stop kind of like all the other distractions that you're doing and really focus on this particular episode. There's a common theme in kind of in here. But also depending on what stage in your business you are, you're going to be more or less lucky.
If you're just getting started, there's a lot of things you can do right now in your business that these guys are talking about that took them or someone like myself sometimes months or in a lot of cases years to figure out. And you can listen to this stuff, and start adapting it to your business today. So the theme of this podcast, the question I'm asking everybody is “what would you do differently if you could start all over, or go back and tell your younger self a whole bunch of stuff before getting started in e-commerce?” And so again, that's the theme and that's the approach to it.
And I really enjoy this podcast mostly because I got to talk to my friends, and it makes me think of the great times we've had hanging out in person, and the things that I've learned from them. And hopefully you guys get to learn some stuff today as well. So with that, enjoy this episode and we'll see you on the other side.
Andrew Youderian of EcommerceFuel
Mike: Hey Andrew my friend. Welcome to episode 100 of the EcomCrew Podcast.
Andrew: Hey, thanks and congratulations on 100 episodes, that's awesome.
Mike: Thank you man. I wanted to do something special for this episode. It’s obviously — I don't know, it's kind just of a figment of our imagination, right? It's not really all that special. But to me it is, because we've done 100 episodes and I'm proud that we've stuck with it, I'm proud that we've grown this audience. And it's not been easy all the way along the way.
And I was like, you know what, I want to get all my friends to come on this episode just to kind of have a big powwow, and ask everyone the same question. And I think you're probably going to approach it just a little bit differently just knowing like where you're at in your e-commerce journey. But what I've been asking everybody is if you were to be able to go back and talk to your younger self back when you first got started in e-commerce and say, hey dummy, like make sure you do this one or two things differently, or do that sooner, what would that be?
And for you maybe it would be an approach of if you were to start another e-commerce business since you’ve sold your two e-commerce businesses, what would you do starting from today. So either way, whatever you think is more interesting, take it away.
Andrew: We were joking before we hopped on here that if I was going to back and tell my old self I'd say, get the heck out of e-commerce and just put everything into Apple and bitcoin, and would be the way to go.
Mike: There would be a lot of millionaires obviously if everybody was able to do that.
Andrew: I'll take the approach from today going forward, and so I see the biggest thing I would probably fundamentally change in my approach about starting an ecommerce business today versus what I’ve done in the past is probably take something that I thought — it didn’t have to be something I was madly in love with, or my soul passion, but something that had some kind of interest or overlap with what I enjoyed or who I was.
So when I started both of my other businesses, I took a very top down analytical almost mercenary style approach to just say where can I make money? Where is the market? Where can I add value? What has the most, the highest likelihood of succeeding? Where you know purely analytical approach and that worked. But I feel like where I am at life and also where the e-commerce world has come to where distribution, you can't just — distribution for distribution’s sake isn't — Amazon has solved that.
To really do well you have to create a product. Creating products is so hard; you have to build an audience. And to do that — to force yourself to do that is difficult. And I look at a lot of brands that have done that authentically where, you look at some places like BeardBrand where Eric has done a really good job of building that company largely in part because it's something that he uses, he believes and he can be a really great spokesman for it authentically.
And so I would say the biggest thing I would change or do differently would be starting a business where I had some kind of personal interest or skin in the game, because I think that would shine through. It would really help me be able to also stick with it longer. And Mike, you and I talked about this earlier is once you get to a certain — pass a certain point, and you can have a little bit of independence financially, it gets really hard to go back and do something just for the sake of just doing it to make more money, or try to build something else. And so I think having some passion level there would be really helpful and for all those reasons.
Mike: Yeah, I completely agree. I mean unfortunately for me the things that I had the most passion in; it just wasn't an e-commerce space that I can come up with. I mean I'm really into tennis, and there's not a whole lot of things that revolve around tennis. You got a tennis ball, a tennis racket, maybe some tennis shoes and a bag, and you're pretty much done. So I was like, what can I really do to innovate there.
The other thing I really love doing is scuba diving, and that's kind of an equally tough space to get into. There is more equipment there, but there's just a huge liability that comes along with maybe selling a regulator or BCD that I didn't really want to get into. So I had to kind of branch out and find some things that I wasn't necessarily personally interested in. But my interest and my passion is in building stuff from the ground up, and just really having a desire to make five star products.
I've been able to get the satisfaction of it that way. But I would love to have a tennis brand, or maybe I need to just grow a beard and throw some beard oil.
Andrew: Out of the EcomCrew tennis warm-ups, [inaudible 00:08:58], I don’t know. I can see those ones can be good. I will say I think — and so it doesn't come across as two just rosy to follow your passion, I think follow your passion at all expenses is a terrible idea. You have to have overlap — and it's – you’re going to have – it’s got to be a decent market. You got to have a way you can monetize it well. You can't just solely say, oh I love chinchillas; let's go get a brand around those. But this isn’t an ideal world. If I could come across that I think that would be perfect.
Mike: You're in a better position than most, because you have interest in a lot of things. I mean you're an outdoors man, and that encompasses a lot of things. I think I’d love to get you involved in Tactical somehow, because I think that you probably know a lot more about those products than I do. And it definitely helps to have all those different interests.
Andrew: I think for your tactical side, you may need to come up here and do a little retreat in Montana in a cabin in the woods to really be able to step into that brand a little bit. I think that would be interesting.
Mike: Only if you promised that you’d thaw me.
Andrew: I could do that.
Mike: Awesome man. Well I definitely appreciate your insights and coming on episode 100. Again it's a huge milestone for us. I appreciate taking the time out your day to come do this with us.
Andrew: Yeah of course, thanks for having me on. Again congrats on 100 episodes, that's an awesome milestone.
Mike: Thanks man, I appreciate.
Bill D’Alessandro of Elements Brands
Mike: Hey Bill, welcome to episode 100 man.
Bill: Very honored to be here.
Mike: Yeah, like I said before we started recording I wanted to get all my best friends in e-commerce together. You've been instrumental in my e-commerce career, and I've always enjoyed hanging out with you. And I thought it would be fun to get you on and ask the same question I'm asking everybody else and talk about that today.
Bill: Yeah. So the question is what would I have done differently if I could talk to my younger self when I was just getting started? And one thing jumps out to me extremely clearly, which is that when I started, when I was young in entrepreneurship, I was a 4 hour workweek disciple, and I was insistent on outsourcing everything, using virtual assistants in the cloud who I never met. I wanted to run the whole business from a laptop. I really didn't want to have to see anybody face to face, or put pants on in the morning if I didn't have to.
And so I was very committed to this four hour work week lifestyle. And the single biggest thing that made my business explode was hiring people in person in an office. And I wish I'd done that earlier. I mean now I'm up to 16 employees and will be probably 20 by January, and that's all happened in the last two years. And there's something about coming to an office every day, putting on pants…
Mike: Or shorts, I see you in shorts.
Bill: Or shorts. Putting on some sort of something on your legs and coming into an office with smart people who think about your business all day, that is game changing. The thing about outsourcers is that they have other clients, which means that unless they are specifically working something on the to do list that you've given them, they're not thinking about your business. But employees are totally different, because all they think about is your business.
They come to your work from nine to five and they think about your business. And if you've done it right and built a decent culture, they think about your business like in the shower in the morning before they come in and like at night, like they have an idea and talk to their friends about your business. And they self generate to do lists which outsourcers never do. But hiring people is terrifying. So if I could go back in time, I would smack my 4 hour workweek self across the head and say, don't be a wimp, hire people.
Mike: So let's talk about that for the couple minutes we have left because I completely agree with you. I think that one of the things that people do wrong is they don't hire soon enough. But there's definitely a huge like huge lifestyle shift as soon as you hire even your first employee, because you're basically anchoring yourself down to a location versus having that location independence. So I guess what revenue level do you think you need to be at, or volume of sales before it makes sense to hire that first employee and forgo the location independence part of it?
Bill: I think it depends on what you want out of life. I mean if you're obsessed with this location independence thing, like that's fine. What I wouldn’t do is hire an employee and try to hold on a location independence thing, because your employee will be extremely unhappy and unproductive. I would suggest though that as soon as you can afford to hire someone, you do it. The thing, the lemming belief that I had was that I couldn't hire someone until I had eight hours a day of work for them to do it. What would they do? They just sit on their hands and look at me like I'm an asshole.
But even as soon as you can afford them, get them in the building, because as I said earlier they will find — if they're smart, they will fill their day, they will find ways to fill their day and make your business more awesome.
Mike: Yup, but I think that when you're looking at that eight hour stuff, you're working 16 hours a day or whatever, and you think that there's only so much you can hand off. But the reality is there's way more to be done in your business than you're even really thinking about, because you can only dream up enough stuff to make yourself so busy before you're miserable. And you end up not really thinking of all the little details that are falling through the floor or additional pieces of research or things you could be doing with someone else's time and manpower.
Bill: Yeah, it's stuff you don't even think of that they will think of. I mean my employees regularly come to me and say, what if we did this, or I thought about this. And I'm like sure, that's great, do that. Stuff that I would not have come up with, or that just would never have bubbled to the top of my list is absolutely worthwhile, but I just would have never gotten to.
Mike: I guess the only thing that I would say, because I probably would go back and tell myself the same thing that you're saying. But I would caution people to make sure that you fully understand what you're getting yourself into with the location independence thing. For me, I knew exactly what I was getting into because it was not my first business.
And I made a conscious effort to say, okay, I'm at a point in this business where I need to kind of give up the location independence part. I'm going to grow an eight figure company, and that starts right now. I need to not only give up location independence; I have to be in the office to support these people. I have to be there an equal number of hours as them whether I like it or not, because employees don't quite understand that you work at night, or you work on the weekends and all these other things. They want to see you there just to feel good about that. And it's something that you have to commit to.
It's a long term commitment, and it's something that I’m completely fine with at this point in my life. I've already done the location independence part, and I knew what I was getting myself into for the next five to ten years as we're doing this, and I'm fine with it. But you've got to definitely understand that.
Bill: I totally agree. People think they can have their cake and eat it too to hire an employee and then just never be there. It will not work. You're totally right. When you hire this person, you commit to them to make their experience a good one. And if you do that, they will make you a lot of money. But I think it's important though not to position it as you have to give up The 4 Hour Work Week lifestyle.
I mean yes you have to not do that anymore. But I think to position it like a sacrifice is kind of wrong, because there are very many emotional dividends that come with you going into an office and working with smart people every day and building a real company. That's kind of what I was saying earlier, I was so seduced by this location independent, 4 hour work week, digital nomad type thing as the ultimate manifestation of entrepreneurship.
And I now firmly believe that it is not the end all be all, and that there is much joy and fulfillment to be had by coming into the office and working hard with other smart people. It's a choice, it's simple, you choose one of two paths, and there are tradeoffs to both.
Mike: Yeah. I definitely agree, I definitely enjoy my team, I enjoy being here. I wish I could flip back and forth between here and the Philippines and spend an equal amount of time with both of them, because I love both teams. But definitely agree with you. So man I definitely appreciate you coming on episode 100, I think this was great insight, and I'll see you at ECF Live in January.
Bill: Yeah, I'm looking forward to it man and maybe you could get me on in the second hundred.
Mike: Nice, exactly. Well I've been trying to but you're busy man.
Bill: I know, I know, yes so I’ll talk to you soon buddy, thanks very much.
Mike: I appreciate it.
Greg Mercer of Jungle Scout
Mike: Hey Greg, welcome to episode 100 of the EcomCrew Podcast my friend.
Greg: Mike, stoked to be here.
Mike: Thank you so much for doing it. I've been asking everyone the same question. So I'm definitely curious to see where you're going to come out on this because obviously you have an e-commerce business and a software business and the software has helped like dictate your e-commerce business, and you probably have learned a ton through all that data. But if you were able to start all over again, and you were only doing e-commerce, what would you do differently, like what would you do sooner or not at all, or what realization would you might have had much quicker than you had taken a longer road?
Greg: If I were to start all over again — once I figured out how to launch the successful products, and the products themselves had good unit economics, I would’ve looked into using other people’s money to invest in my business to start to scale it up faster. I think I used to let's say like my more immature entrepreneurial mindset, I was kind of like against that, or it seemed like taking out lines of credit or anything else has come like this bad thing. Whereas I feel like now more like a mature entrepreneurial mindset is like once you figure out a business strategy that works and all it takes is more cash in order to grow a lot faster, now I’m a big fan of doing that, and that's what I would have done.
Mike: Interesting and that's really great advice. I actually was the same mindset as you. I'm probably a graduate of the 101 course and headed for the 201 course. But Bill D’alessandro actually sat me down one day. He is like dude, like smacking me; he is like you got to be able to take a line of credit for an inventory based business. Every major corporation does it, this is a tool you just like you absolutely have to do.
And as credit averse as I am, it made a lot of sense. As long as you're not using it to pay for employee salaries or things that aren't assets, it's definitely the right way to go. And I think you're even suggesting taking it a level further by even getting outside equity and stuff like that maybe?
Greg: Yeah I think if that's what it's going to take to kind of like get it to the next level, especially when you're importing from China, you know some of these — the timeframes for like how long your cash is tied up is just really long. So really slows down I think a lot of people's growth for their businesses. So yeah, I would be definitely open to a line of credit, and then I would also be willing to take on other private equity or raise other type of money as well.
Mike: If you were considering private equity, I mean obviously you want to have enough skin in the game to make it worth your while, but you've got like give up enough of the business to make it interesting for private equity. I mean what percentage is there, or have you looked at or thought about for doing these types of things?
Greg: I would probably still try to hold on to a majority stake. And even like the smaller private equity funds, most of these guys are going to be very interested in businesses that are doing at least probably a few million dollars a year kind of like in revenue, right? So yeah, this is going to vary from person to person. But if that's what is going to take to grow my business a lot faster, I knew I had like the processes in place to grow, and the only thing holding me back was money.
And I'm thinking even if I sell 30, 40, 45% of my company with this other capital I’ll be thinking about all those like with this other capital five years down the road, am I going to be three or four or 5X as big? Because if so even if you only own half the company, that’s still a much bigger chunk. And a lot of the investors can bring other kinds of expertise and advice to the table as well, which can be beneficial especially when you're making some of the more tough strategic decisions.
Mike: Got you. So let's just take, I guess we have like one more minute left here, so I’m just kind of curious how that structure works. If let's say you’re a five million dollar company, or let's use ten million dollars, it's an easy rounder number. You're doing ten million dollars in sales, let's say you're cranking out 15% in margins, you're making 1.5 million dollars a year in net profit. If you were to sell 40% of the business, how much cash would you expect to get into the business into your pocket, and then what would you do with that money?
Greg: Yeah so in that case they probably value the company; let's just say six million dollars or so. So if we were to do 25% equity, probably like a million and a half bucks out of that, you’d have to work with the private equity groups because they're not going to want you to just put all that into your pocket. But if you could put like a half million bucks in your pocket to kind of give you a little cushion in the future to make sure your [inaudible 00:21:40] may do stuff, and then also have a million dollars of extra capital in your business to be spending. I think it would help a lot of businesses grow a lot quicker, and it's a route that I think a lot of people don't really think of outside of kind of the tech space.
Mike: Yeah, I think it's really great advice man. I think that the reason I was asking those questions, I think it appeals to a wide variety of people listening to this. If you’re just getting started, I think that the point here is that when the first Amazon loan offer comes, take it and then use that to expand your business. We certainly have, and we've also been working with banks now to get lines of credit at cheaper rates.
Take that, and then obviously if you are in a position where you're large enough that it's interesting to a private equity firm, do that too because this is a cash intense business and you can grow at a much quicker rate, quicker than organically. Organically you're going to be at maybe 1.5, maybe 2X. You can you can get two organically depending on your margins, but you could be growing at three to five to 10X if you have outside money. So I think it's awesome advice, and again Greg, man I really appreciate you coming and doing episode 100 with me, and hopefully I'll see you again at a future conference or whenever you're in town.
Greg: Thanks a lot for having me on Mike.
Mike: Come on, take it easy.
Scott Voelker of The Amazing Seller
Mike: Scott, welcome to episode 100 my friend.
Scott: Oh thanks for having me Mike.
Mike: No worries man, I appreciate it. I was sitting back, what to do for episode 100. I'm like I want to get my favorite people in e-commerce, my friends in e-commerce to come on here and ask one question. And that is, if you were to go back and be able to tell yourself in a letter or have a minute to talk to yourself back when you got started in e-commerce, what would you do differently, because I think that all of us entrepreneurs think that way. So like we would go back and do something differently, and a lot of our audiences, both your audience and my audience are just kind of getting started. So what would you do, what would you tell younger Scott to do differently?
Scott: I think I would tell him to number one, instead of just slapping stuff at the wall and seeing what sticks in any brand or any market, I would focus on finding something that you know that you can launch multiple products in, and then from there taking that approach of a brand where you're able to have a face to that brand, whether it's yourself or someone else, and then start building that following or start building that e-mail list, and kind of doing all the things that I'm doing now.
But in the beginning you're just kind of testing, you're kind of like thinking to yourself; can this really work for me? And that's kind of what we all do. But I think I knew in my heart that it would work, it was just a matter of proving it to myself in this before I started spending the time in doing it. But once I validated it, then it was like I know that's the way that you're supposed to build businesses in a brand and it's more long term.
So I think I would have told myself, listen, you know this already, you've been in business in other things, even brick and mortar and stuff. You know that a brand will outperform just throwing up a product and seeing if it'll sell. So that's what I would have told myself.
Mike: Yeah, I think that's really good advice. I mean I eventually figured out all those same things where we you and I have talked about that quite a bit. And I think that the human nature thing where we all go flawed is you're looking for originally, or when you first get started in this like the path to least resistance, and not finding it necessary to do the extra hard work. The stuff that you are talking about is a lot more work.
I mean building a brand is not easy; building these on a list is not as easy as just throwing a product up on Amazon, but the end result is like it works so much better. Like you eventually hit an acceleration curve where it's working so much better that the sooner you get started with it, the better off you're going to be is what it really comes down to.
Scott: Yeah and I think also I look at the bigger picture now too that you know yes we are using Amazon as our launch platform, at least I am personally just to kind of test and validate before we do go all in. But with that being said, I also know that by building these other assets like the email list, the social media following, that type of stuff that will also be worth more to a buyer if I ever decide to exit.
Mike: Yeah no doubt. I think twice as much or maybe even three times as much.
Scott: Yeah, I agree hundred percent. So Mike, to answer your question and I know we don't a lot of time because we're doing this quick, but that's what I would tell myself, like you know that it works, so just go there and do the right things upfront as far as like figure out the market that will be purchasing multiple products. And then figure out who that face is going to be or who the brand, the presence is going to be, and then just start from there and just keep going forward.
Mike: Yeah, I think that's awesome advice. So we do have like one more minute. So I want to ask one more question.
Scott: Cool, sure.
Mike: Because I think what ends up happening is that people they hear this, and they're like; man I'm foolish that I hadn’t figured out this out sooner. I mean I'm going to say that for me, it took me almost two or three years to kind of have the aha moment and start doing all the stuff that you started mentioning. I'm curious for you, how long were you through this journey before you kind of had that wake-up call and started doing this new model?
Scott: Well I think after I knew that I was relying way too much on just Amazon, because when I threw up my first couple of products, I didn't really have like that brand in mind, or that I guess that bigger focus in mind. And once that happened, I'm like, wait a minute here, should I switch gears because I know that I could build a brand somewhere else as long as I find a market that will allow me to do that.
So I think it came down to the point where I felt as though that wasn't the direction that I wanted to go in the future. And I mean I know a lot of people say too, you want to be kind of passionate about what you do. I'm not one hundred percent on board with that, but you do want to feel excited about what you're doing. And excited could just mean that you're excited about the opportunity and all of the pieces that you can put in place to make this thing grow.
So for me I think the aha for me was like, okay, hold on a minute, do I want to stop this thing and start over in a sense, or do I want to just kind of want to keep building on this thing that I kind of threw together? And for me it's kind of like let's start over, let's start a new brand, and let's kind of play in that sandbox.
Mike: And how far — what was that like a year or two, three years ago?
Scott: I would say a year.
Mike: A year, okay.
Scott: Yeah, I would say it's a year into it, and then I started to make that, and I had dabbled a little bit in even doing what we call the open brand where you kind of throw a bunch of products out there and see which ones are or what market is actually I guess more of a raving buyer, you know what I mean? So for us we're kind of doing that as well, and then we're playing there. And then from there what you can do is that — and that's what we've also done is that we can start focusing on that market.
So that's just a couple of different ways that you can do it, but for me, yeah I think about a year in I said, wait a minute here, I think I should probably rethink this. And you know the story, but it's kind of like I didn't plan it necessarily how things happened. I don't think any of us do, I think but as you get that momentum, as you get started, then you have those opportunities start to come out, because you're actually doing something.
Mike: Yeah, that's awesome advice. So just to reiterate, I mean first of all Scott was smarter. I mean he figured after a year. It took me two to three years. But the point is, stop what you're doing, re-evaluate and think about building a brand, getting a brand that can do multiple products under that one brand, building email lists and building assets off of Amazon that you control, that you can use then to launch new products and more stuff. And have an asset that's going to make your business ultimately worth more.
So Scott man, I can't than you enough for coming on. Thank you for doing episode 100. We'll have to do another full length one. I know you've already done the podcast with us, but we'll get you back on for another full length one in the next hundred episodes, and thanks again man.
Scott: Alright Mike, thank you and I always look forward to watching your progress too brother.
Mike: Thanks man, we'll see you soon.
Steve Chou of My Wife Quit Her Job
Mike: Hey Steve, welcome to episode number 100 of the EcomCrew podcast my friend.
Steve: Congrats on episode 100, it is certainly a great milestone.
Mike: Yup, it's crazy to look back and realize we've been at this for two years. And you know the episode 100 obviously has a lot of significance, and I was thinking about what should we do for this episode? And I was like you know what, like I've made a lot of friends in this industry over the last two years because of the podcast and other things, and I want to get my friends to come on.
So I appreciate you coming to do this. We obviously get to hang out as much as we can, but not often enough. So it's fun to have you on here, and I think you obviously have done well over 100 podcasts. You have a lot of insight in e-commerce. So I think it'll be good to have you today.
Steve: Cool man thanks for having me, and it was great hanging out in China. Of all places it actually made the trip much more pleasant for me.
Mike: Yeah, actually and if you go back and listen to my last episode — when this comes out, it won’t be the last episode. But I did a China trip report and I was talking about that dinner. I won't give it away because that's kind of funny, but just listen to the last like two minutes of the episode, it's actually pretty funny.
Steve: Okay, will do.
Mike: Cool, so I have been asking the same question to everybody, a basic question, which is all of us now have kind of been in business for two, three, four, five years, six years, seven years, whatever it might be doing e-commerce and anything in business. As you kind of go down the road you realize, I should have done this sooner. I wish I can go back and tell myself, like if I could go back and do it all over again, to focus on this one or two things much, much sooner, or don't do these one or two things because it was a bad idea. So I’m curious like what would those things be for you?
Steve: Yeah, I'm going to try to pick some things that maybe some of your other guests haven't talked about yet. One in particular that just kind of applies to our business really is we sell personalized items in our store, and that actually was my wife's hobby before we started business. And she used to really enjoy doing embroidery; she embroidered stuff around the house.
And then one day I came home and I said, hey, why don't we charge people for your embroidered stuff for them? We are going to have a huge up charge; it will be a great value add. And so we added that to our business, and that basically just ruined her entire hobby.
Steve: She never wanted to do it again.
Mike: Yeah that's interesting. So never like think of it in the same way anymore, like it's no longer a hobby obviously at that point.
Steve: Yeah, so what I was going to say is if there’s something that you enjoy per se, that might not necessarily be the best idea for a business. Because chances are that if you have to do it for money, or you feel like it’s a chore, then you’re not going to enjoy it anymore.
Mike: Interesting, but just one quick thing there, because you mentioned personalized items. That's actually one of the things ironically that I personally think is kind of the future of us like Mom and Pop e-commerce store owners. I mean having something that's really defensible that Amazon isn't going to do and get in the game of, like they're never going to embroider a handkerchief, right? So I mean I think that in a roundabout way it worked out well for you because now you have something that is defensible, and you can get higher margins on, and Amazon isn’t going to come eat your lunch.
Steve: Yeah I never want to say never, because there are companies out there that kind of specialize in these sorts of things and who knows; maybe Amazon will acquire one of them.
Mike: True, yeah.
Steve: But for now it's a decent spot, yeah for sure.
Mike: Cool. All right so that's one thing, what about — and we only have five minutes, let's hit one more.
Steve: Yeah, let's hit the importance of actually going out and visiting the vendors. When we first got started like ten years ago, we just kind of ordered stuff blindly. And oftentimes we’d get really good samples and then the rest of that order would be kind of crappy. And what was funny about that was once we actually flew to China, had lunch with our vendors, got to know them a little better, miraculously the prices got cheaper and the quality got a lot better too.
Mike: Yeah, I mean this is something that lucky for me because this is not my first business. I learned this probably about ten or 15 years ago, just in any business relationships are so important especially when you're in a business like this with inventory. So within the first year I was doing this. We were going out to Asia and having lunch or dinner with these factories, seeing the environment that they're in, and also like for me like I don't want to make money on the backs of a sweatshop.
So we've actually switched some factories now that we've seen them because I just don't like the environment that those employees are in. I can't stop them from working that way or having their people work in that environment, but I can sure as heck move to a factory that puts people in a much better environment.
Steve: Yeah absolutely, and it's actually — we just got back from China, right? It's actually pretty — it hurts me now. Like it takes me a long time to get past the jetlag, so it's definitely a trek, but it's well worth it especially in the beginning.
Mike: So cool, so I guess the two things here or takeaways which I think are awesome, be careful if you're going to be bringing a hobby into this, which is good in some ways because you're bringing your personal passion into it which is good. But very quickly your hobby is probably going to get destroyed and not be a hobby anymore, and be this thing that becomes a stress point in your life rather than a hobby. And then the other would be value relationships and get out and visit those manufacturers and factories much sooner.
Mike: Awesome man. Again, thank you so much for coming on episode 100 of the podcast. Hopefully between this episode and the 200th episode we’ll get you back on the show again.
Steve: Awesome man, I’m happy to be part of your hundredth episode, really appreciate it.
Mike: Thanks so much, take it easy man.
And that's a wrap. I want to thank Andrew, Bill, Greg, Scott, and Steve again for coming on the show. It's just so awesome hitting this 100th episodes. It's meant a lot for me for them to come on, take time out of their day. So I want to thank you guys again. One other thing I want to talk about real quick is the EcomCrew podcast hasn’t been the same since Dave Bryant has joined the show. Obviously Grant is still a great friend of mine.
If he asked me for anything and need me up in Seattle, I'd be up there in a moment's notice to help him with anything. He's just one of my best friends in life. He's just a great guy. But David for the podcast has just been a great fit. He is more in tune with e-commerce; he's doing that day in, and day out just in the trenches, and has a different perspective. And of course the best thing is that we are kind of like Batman and Robin in the fact that I don't particularly like writing, and he is a prolific writer.
And I enjoy doing the podcast these days, and he doesn't enjoy doing that. So we're a perfect team from that perspective. If you guys haven't had a chance to check out Dave's articles on the blog, they are awesome. Dave is putting out some really high quality content stuff that I just wouldn't be able to do in my wildest dreams. He just does a great job with it, and he's doing it week in and week out.
So with that, I asked Dave to come on the podcast today — now listen he's living in China so we couldn't do the interview style that we normally would do because the call quality just isn't good enough, but he was nice enough to put together a five minute blurb real quick on what he would do differently. So we're going to end the show with that today. And with that, enjoy Dave's talk real quick on what he would do differently.
Dave: So if I could tell myself one thing to do differently at the beginning of my e-commerce journey it would definitely be to start with the end goal in mind and then reverse engineer from there. So what I always do is to create a one year goal and a five year goal. And normally I do this actually right at the end of the year right around now in November or December, kind of set my goals for the next year and then five years out.
And what this allows me to do is really kind of makes smart macro and micro decisions. I know a lot of people hate making these types of goals because they feel like they have incomplete information, and that any goal they make is a simply an estimate, and how can they have any idea where they're going to be in one year from now, let alone five years from now. Well, my experience ambiguous goals really lead to ambiguous outcomes, and goal setting is — it seems to be a strategy that most high performers really utilize in their daily lives.
If you look at anybody from Steve Jobs to Bill Clinton to Barack Obama, they all were prolific goal setters. So like I mentioned, I create a one year go and a five year goal. My one year goal normally I just simply pick a revenue number that I want to do in the next year. And if you're following the blog, you know that I have a goal of doing a million dollars a year in revenue, recreating a brand basically from zero dollars.
And so with that goal in mind, I can really kind of backtrack and figure out what do I need to do to get to a million dollars a year in revenue. And with that yearly goal, I break it in to a monthly segment. I do the math and I figure out, okay, a million dollars a year is $80,000 a month, what do I need to do to sell $80,000 a month? And I know in the niche that I'm in, I’m probably not going to sell $80,000 of any one product.
And so I ask myself, what's a reasonable amount of revenue per product that I expect to sell per month. And I think that number is around $2,000 per product. And that's probably on the low end, but I would rather be on the low end and underestimate and then subsequently over achieve, than overestimate how much I can sell per month and subsequently underachieve. So I simply do the math, okay, $2,000 per product divided by $80,000 a month. That basically means I need 40 products per year to be selling.
And with that goal in mind, it really allows me to pace my work ethics. So I'm going to a trade show or to searching around on Alibaba, I know, okay, I need 40 products. I need to do about five products a month in terms of sourcing. So every month I can kind of look at my progress and say, okay, have I worked on developing five products this month? If I have, great, I can probably take it easy a little bit. If I haven't, then I probably need to put a few hours in on the weekend or really get cracking on just committing to quicker product development.
So having that angle in mind really allows me to figure out where I need to be and what I need to be doing to get to that end point. And along with my one year goal, I always have a five year goal as well. And actually this five year goal often what I'll do is, I'll write it down on a piece of paper, and I'll paste it on the wall. So I’ll put it in my bathroom door or I’ll put it on my bedroom wall, or something like that where it's always visible to me.
And with this five year goal, I always just imagine where I want to be with the company in five years. And the big question that I need to always ask myself is, do I actually plan to be holding on to this company indefinitely, or do I want to sell the company either by five years or earlier than that? And that big level question right there allows me to make a couple really macro level decisions. So if I'm thinking about getting into a lease, a five year lease on a warehouse or an office, and I know that I want to sell the company in three years, well, that doesn't make sense.
So that really allows me to prevent myself from spending a lot of mental capital trying to think about a decision like that, whether I want to be committing to a long term lease. The other thing I do like the same thing with my one year goal is I have a kind of revenue target for what I want to be at within five years. So for example, this new company I'm starting, if I had a ten million dollar goal, that would be quite a bit different than whether I had a two million dollar goal. If I had a ten million dollar goal, again I need to figure out what do I need to do to be getting to that ten million dollars? It really helps me make a lot of those macro level decisions.
Ten million dollars I can't do with one person and let alone two or three. I'm going to need to have a whole staff there. I know the hiring is going to be a big focus of mine in the next five years, and I’ll always have that in the front and center of my mind. So the great candidate comes along that I think would be great for my company, I will try to basically snap them up, and convince somebody to come to my company.
And the same thing if I had a smaller revenue goal of say two or three million dollars in five years. With that revenue goal, I know that I can achieve it probably with two or three people, and therefore my impetus to try and hire and recruit people isn't quite as high as it would be if I had a more ambitious revenue goal of say ten million dollars. So that’s what I would do differently if I was starting all over in the beginning, and hopefully you guys found that helpful.
Mike: Alrighty, thank you Dave for recording that segment. I think that he had some really awesome actionable advice there. I love the approach that he takes to business. We talk about this stuff all the time. He definitely takes a different angle than I do, and it's definitely helped me shape my business.
I also want to thank again Andrew, Bill, Greg, Scott, and Steve for coming on the show today. And thank all of you out there in the audience just one more time for supporting the EcomCrew Podcast. If you do get a chance to go to iTunes and write a review, it does mean a lot to us, or go to EcomCrew.com/100 to the show notes and just leave a comment. Let us know you're listening. Make it so we want to do another 100 episodes, and that's the goal is to now strive for number 200.
We have upped the podcast now to twice per week. So over the next year, hopefully we’ll get close to episode number 200. We have Mondays and Thursdays now. We're going to be doing a mix of interviews and some business updates kind of like we have in the past, and hopefully do some new formatting and other things to kind of continue to improve the podcast.
I’ll also be speaking at lots of events over the next year, working on that aspect of my speaking career as well. The next ones that are coming up are EcommerceFuel in January 11th through 13th, and then also Sellers Summit, Steve's conference in Fort Lauderdale. I believe that's in May. That still has tickets available. If you haven't signed up for that yet, and you want to come meet me in person, or talk to all the other guys who were on the podcast, almost all of them, go to Sellers Summit. I definitely encourage you to do that, it's an amazing conference, definitely well worth the price of admission.
So again thanks everybody for getting us through 100 episodes of the EcomCrew podcast, and we’ll be back with the next episode, episode number 101 coming up. It sounds so cool to have triple digit numbers. And until then guys, happy selling and we'll talk to you soon.