#380 – The Entrepreneur’s Odyssey: Sell – Scale – Exit – Repeat with Colin Campbell
What happens when you pair raw entrepreneurial insights with hard-earned wisdom? You get a masterclass in navigating the business world, which is exactly what unfolded during my sit-down with Colin C. Campbell. This entrepreneurial maven, with ventures like Paw.com and Hip Optical to his name, joins us to shed light on the cyclical nature of “Start, Scale, Exit, Repeat.” The conversation takes off from ground zero—starting a business—with guidance that’s as real as it gets, sailing through the stormy seas of scaling, and anchoring safely at the docks of a strategic exit.
Ever wonder what it feels like to lose $100 million before your 30th birthday? Colin has been there, and it’s the kind of experience that can either break you or pave a runway for seven successful exits. In this episode, we expose the underbelly of entrepreneurial setbacks, turning them into stepping stones for future triumphs. Colin and I reflect on the delicate dance of scaling, sharing the secret sauce for transforming small operations into titans of industry. We also tackle the art of hiring, where the employee’s profile is the linchpin of efficiency, and dissect the challenges of raising funds, underscoring the importance of proving your business concept before reaching for investors’ pockets.
Strap in for a journey through the evolution of marketing and innovation, where differentiation is king and securing your niche can catapult your business into the stratosphere. We analyze case studies like Reebok’s 11-year hustle for U.S. distribution, Paw.com’s dive into product diversification, and Hip Optical’s fast-track manufacturing as blueprints for success. The final leg of our excursion guides you through the meticulous planning required for a lucrative exit, from compiling a list of potential acquirers to accentuating your team’s prowess over personal ego. So, gear up for an episode brimming with entrepreneurial wisdom and strategies that promise to fuel your growth and amplify your business’s potential.
In episode 380 of the AM/PM Podcast, Kevin and Colin discuss:
03:34 – Success of Book and E-Commerce Focus
08:26 – Successes and Failures in E-Commerce Lessons
10:39 – E-Commerce Crash and Bad Luck
14:56 – Helium 10’s Journey and Acquisitions
17:24 – Scaling Your Business and Delegating Responsibilities
29:54 – Scaling Business With the Right Profile
31:46 – The Scalability of Business
35:41 – Success and Challenges of Subscription-Based E-Commerce
40:38 – Using Suppliers for Financing in E-Commerce
44:20 – Reviews in Reebok’s Success
52:18 – Innovation and Marketing in Business
54:16 – Maximizing Value in Exiting and Repeating
1:01:15 – Maximizing Company Value and Planning
1:11:12 – Virtual BDSS Event Announcement and Kevin’s Words Of Wisdom
Transcript
Kevin King:
Yo, yo yo. Welcome to episode 380 of the AM/PM Podcast. This week, my guest is Colin Campbell. He’s the author of Start, Scale, Exit, Repeat, a number one bestseller when it comes to e-commerce and a whole bunch of other categories on Amazon. It’s an excellent book. Colin has a wealth of business experience from the young age. He exited Several different companies, has had his ups and downs. He knows a lot of the top entrepreneurs in the world and he interviewed them all for this book. It has their stories in it. We talk about what are some of the keys to starting a business, what are the keys to scaling, what are the things you need to think about when exiting and what do you got to do to repeat this whole process. It’s a brilliant discussion. I think you’re going to find a lot from this. I hope you enjoy it. Welcome to the AM/PM Podcast. Colin Campbell, how are you doing, man?
Colin:
Well, I’m so excited to be on with you. You are such a legend in your industry and I’m so excited to have a chance to talk with you.
Kevin King:
I don’t know. I’m just trying to take a small bit of your shadow because you’re like a D-Legend out there. I’ve heard I’ve known Norm Ferrara, a good friend of yours, known him for six years. He’s always like Kevin Kevin, you got to meet this my buddy Colin. He’s always we’re smoking cigars for three or four hours after events and he’s always talking about Colin. This Colin that I’m like who’s this Colin guy? He’s like. You got to meet him, you got to meet him. He’ll tell me a few of your little stories. And then so I saw that you were speaking back in. I guess it was in October. There’s this event happening in Orlando and you were speaking at it as an Amazon event. I wasn’t planning on going but I had another event I was speaking at and hosting and the next day in New York. So I was like you know what Orlando is, kind of sort of on the out of the way there. So I’ll stop by and I’ll meet Colin and I also wanted to meet. There’s one other guy there, John Durkitz. I wanted to meet there, so I stopped by. I had a chance to briefly talk to you. I was very impressed with you and your partner that was there. And then I, you know I picked up your book. I’m actually one of the lucky ones that actually got the book before it sold out. Norm told me just today that it’s, as of this recording, it was actually sold out the physical hardcover. Now it’s on the Kindle and you got some more on the way, so congratulations on that.
Colin:
Yeah, I mean it shocked us. This book is published by Forbes books. We did a reprint a week before we launched because they said the demand for the book was coming out very strong. So we did a reprint. Reprint which came out was coming out at the beginning of November. So there’s definitely tons of inventory now for all of your listeners. We’ve completely restocked. We’ve, by the way, in January we got into 135 airport locations. Like the demand for this book is incredible and it shocked us. We debuted number one bestseller in four categories, including starting a business, entrepreneurship, management, new release, e-commerce. We debuted number one for e-commerce, which was very cool because in the book I talk a lot about e-commerce companies, as a number of the companies that I’ve run have been e-commerce companies. We run a dog products company called pawcom in the incubator and we’ve been on the Inc 5000 list for the one of the fastest growing companies three years in a row. We run a glasses company called hip optical sort of like an edgier version of Warby Parker that we run, and we have an actual factory in Fort Lauderdale so we can produce glasses within 24 hours for anyone in the state of Florida. So it’s fascinating that we really cover a lot of e-commerce, but I will tell you a lot of the concepts and the learnings in this book can be applied to almost any industry. We just happened to do a lot of e-commerce businesses.
Kevin King:
So the name of the book for those that are listening, and we’ll talk more about this in a minute, but here it is. I’m holding up for those watching on video a start, scale, exit, repeat. And this book is thick. I mean this is not a quick five-minute read. I mean it’s detailed, it’s in depth. I have a couple of people I know I’m starting it right now but I haven’t finished it yet. But it’s a really good book and basically I mean let’s talk about actually why it’s doing so well. And a lot of that has to do with your background and your experience. I mean a lot of people don’t realize you’re kind of unassuming when you see you in person. But you’ve done some major things. I mean I remember, was it? Two Cows was one of the things that you did. I remember that was like a shareware site or something like that Back in the day. I’m an old man, old guy. I remember back in the 90s downloading stuff off of Two Cows. It was T-U-C-O-W-S. And then you’re involved in the Dot Club domain and a whole bunch of other stuff. What are some of the big things that people may recognize that you’ve had a hand in creating or just blowing up in the past?
Colin:
Absolutely. And let me just start by saying 30 years as a serial entrepreneur, 10 years writing and researching this book. In the last two years, a staff of six members who work with me on this book. Also, we run a club called Startup Club with almost one million members on Clubhouse. So this staff has interviewed over 200 people and we put only the top interviews into the book. All right, look my career and let me be very clear here my career has been a roller coaster. It’s been ups and downs and all of the stories this is really a collection of stories that are in the book failures and successes. We don’t just focus on the successes, Kevin, we really do go into the failures and why the failures happen. I would say almost half of the interviews we do are also talking about failures, because we can learn from those failures. I started in 1992, right out of college, working on the family farm with no money literally credit card debt, money I made from selling and flogging vegetables and I dropped out of my fourth year of college, used the money I got back from the government student loans. I know that’s probably not correct, but I hope I’m hope I’ve passed the statute of limitations on that one and I borrowed $12,800 from my mother and we opened our first company. Within that company we opened up a BBS, a bulletin board service, became the second largest in Canada. Then we opened up an ISP Internet Service Provider and that became the largest and company in Canada for providing internet services in the mid 90s and we did a. We took it public in the late 90s and then sold it. And then we also did a company called Two Cards You’re young 20s at that time. Yeah, so I would be 22, 23. Yeah, a little naive, a little bit, you know. And again, with this book we talk a lot about the successes and the failures, and a lot of my failures, I admit, come early on in my 20s. And if I had the opportunity to read this book, you know, maybe I wouldn’t have lost the kind of money I lost. And if you want, we can go into one of those stories in really in depth, because I think it’s valuable that we all learn from it.
Kevin King:
Well, don’t we say the 20s are for learning and the 30s are for earning?
Colin:
Oh, there you go. Well, yeah, yeah, oh, yeah, okay. Why don’t I just get it? I want to just tell you what happened.
Kevin King:
So yeah, let’s do it.
Colin:
We’re number one, okay, in Canada number one, fastest growing company in Canada on profit magazine that’s their version of ink magazine. They put our pictures on the front page. We were publicly traded. We decided to merge with a cable company and apply for a license from the government to get fixed internet wireless license. We won that license. We won 50% of it in our stock. Here’s a company Kevin, I am 13%, I’m 28 years old, publicly traded company and the stock shot up to over a billion dollars. Okay, now, nothing could go wrong. This is 99, 2000. The internet’s just taking off. It’s changing the world. Nothing could go wrong. Well, what happened in March of 2000? Do you remember?
Kevin King:
No, what was happened? What is?
0:09:17 –
that the dot com bust.
Kevin King:
Yeah, yeah, that’s when pets.com and all the guys that raised $80 million and did supermold ads and had like $7,000 in recurring revenue and spending millions on supermold that whole time. Yeah, I remember that. Yeah.
Colin:
Yeah, actually, and so that’s what happened to our company. We were raising $50 million that month after a judge announced the breakup of Microsoft. In March, the Nasdaq fell from 5000 to 4000. And the people that were in control of the company at the time decided to pull the offering until the market came back. Well, guess what? The Nasdaq went to 1200 and didn’t recover for 15 years. Needless to say, fast forward, a year later, the company filed for bankruptcy protection and a stock that was trading at $19 a share I ended up selling at six cents a share. Oh man, wow, that was devastating, it was embarrassing. It was horrible for me, for my investors, for my employees. It was absolutely devastating. And there are two lessons I learned from that. One liquidity, or control. See, we had merged the company, but we agreed to an 18-month lockup. We never imagined the world would fall apart. Right, okay, and that’s the second lesson. Bad things do happen, and we saw that unfortunately, occur again in 2022. E-commerce companies in 2021 were trading at values that were probably 80% more than in 2022. It literally did crash. It was a tech rec Allbirds. Let me give you one example. Allbirds did their IPO I think it was around $18 and then traded around $2 or $3. I mean, it was a complete wipeout of economic value of E-commerce companies. And ironically, we have a number of E-commerce companies in our company, including Pacom, which again was killing it. It was the pandemic Everybody’s buying dog products. We innovated a lot in Pacom and created a lot of new categories. We were just killing it and yet, for some reason, I did not get a chance to read this book, because bad things do happen. We had potential buyers.
Colin:
themselves, not as I am CEO of this E-commerce company or that E-commerce company. I want you to think of yourself as a serial entrepreneur, and entrepreneurship is a trade, a trade that you need to master. Like any other trade, you can start, scale, exit, take some money off the table and repeat and, by the way, there’s a lot of tax benefits for doing it that way as well. Let me give you an example. So I told you about that failure. Well, fast forward after losing $100 million, fast forward. Six years later, we did another IPO with another company and two or three years later, we sold the company to a Fortune 500 company for 17 times EBITDA Stocks trading at $4.55 a share. The next day it’s trading at $10.55 a share. And that was Vinda fucking Cation. We came back and it was an absolutely amazing feeling. Now let me tell you this 17 times EBITDA, our tax rate was 36% federal and 5.5% state. So we’re running about 41% corporate tax. We’re also paying a 15% dividend tax, so we’re running about 56, 57% tax. When we sold that company, we paid 15% capital gains. When you start to look at the number of years it would take to take that much money off the table to be paid out in dividends, you’re looking at probably 20 to 30 years.
Colin:
From a tax perspective, of course, talk to your accounts, talk to your lawyers, but there’s even a clause, a section 1202 in the United States, where if you hold a C corporation for up to five years, you can have the first $10 million tax free. Look, I’m telling you the system is geared towards capital gains, not income, and I know there’s a lot of aggregation going on with e-commerce companies. You saw it, kevin, and you now are seeing what happened to a lot of those aggregators. I’m not saying we’re ever going to get back to that time, but does it make sense for you to sell your e-commerce business at six, seven, eight times? I don’t know. We’ll get back to that and I know even now six to seven, eight times earnings is probably pretty lofty. So you’ve got to have something unique and different and maybe we can talk a little bit about that as to how you can increase your multiple.
Kevin King:
I know Scott Dietz is from Northbound, someone that’s in our space that one of his big sayings is 60 to 70% of the money you ever make is the day you exit, not the day you run the business. And it’s gaining that leverage of moving that money forward. Like you said, and too many people, I think, get too close to their business or they’re too like. This is growing. Why would I sell right now? You know I can double this, I can triple it, I’ll sell down the road but, like you said, you never know economically, physically, mentally, what’s going to happen in the market. And for the audience, listeners of this, you can relate this to Helium 10 software. Many coats and gear will. Well, you’ll start that in 2015. They had a background in gaming before that, so they were running like twisted humor and they were doing some mobile games and stuff and that kind of had its ups and downs. Many started selling on. Amazon started building software to manage his sales. It took off in 2019. They said, hey, you know we’re booming right now we’re just we’re going gangbusters, should we sell or we think we can double this in the next couple years? And they like we don’t know what’s going to happen. We don’t know what’s going to happen with Amazon. We don’t know what’s going to happen in the marketplace. Let’s take some money off the table. And what they did is they took I don’t know the exact figures. They negotiated to where they retained some sort of ownership. I don’t know the exact amount is a small amount and the company that bought them. It was a software aggregator called assembly that was buying up some different software companies in space. They made another sell three years later, I think in 2022. And Manny told me his second payday was bigger than his first payday. Would he have made that money if he would just kept running the company? Probably not. I think that illustrates the point that relates it to this audience is sometimes it’s time to to let the baby go and adopt a new baby and move out and move on to the next one. And that’s how you scale and that’s how you, that’s how you generate generational wealth is by by starting something, scaling it, exiting it and then repeating the process, because then the second time you know how much better it is.
Kevin King:
And there’s someone in our business David cups in his wife. They started a business in 2015 with like five grand. She was stay at home mom he was still. He kept his insurance job for like a year. They built this business up. I was there with him in 2017 when they sold it for three million bucks. Then what did they do? They didn’t go to the beach and sit back and like, okay, we’ve made it. They took their knowledge, had a non compete in certain categories. They went and did it again. They sold the next one for like seven million two years a year and a half later, they did it again, so that one for 12 million, and this kept stair step in their way up, and now they they don’t have to ever work a day in their life if they don’t want to. That’s the that’s is part of the secret to this that a lot of people, I think they just don’t get it and they don’t understand, and that’s what you explain this book with, with vivid examples. Why do you think it is, though, that people don’t want to talk about their failures? Is it a pride thing? Is it a image thing? I’m, I’m, I talk. I lost a million bucks during the pandemic selling on Amazon. I talk about in a case study. I did a case study and showed exactly. Here’s what happened, but why do you think it is that people, people want to just push that stuff under the rug and only talk about their, their successes.
Colin:
I mean, come on, it’s not easy. I mean when I lost 100 million at 28 or 29. It was like, you know, I want to go home, curl up in a ball and just that’s it. I mean I really felt like that and it’s not easy, and would I talk about it back then? Probably not, you know. Now I could laugh about it because we’ve had seven big exits, more than $10 million since and I’m like, ok, what could I learn from that? What can I take from that lesson? I mean, we spent 10 years building a company and 10 weeks screwing it up on exit. My gosh, don’t make that mistake. You have to. You know, when you begin to think about the exit for your company, there’s a lot of things you should think about. And just don’t screw that up. And the book goes into detail like we walk you through all the way from start and all the the ways you can come up with an idea for your business, to taking action on those ideas, to scaling those ideas, to exiting and then repeating and and there’s. So we do it in a way that there’s a lot of stories like look, I recognize a lot of your listeners might not want to read a book. We do have audible. All right, it’s not read by me, it’s read by a professional. We do have audible. But you know the book if you, if look it’s, it’s, it’s it’s. It may be big but it’s been written for ADHD entrepreneurs, with 58 chapters, 200 callouts, dozens of illustrations and charts and graphics. We’ve tried to simplify it as simple as possible. It’s color coded for each section for start, scale, exit, repeat. So even if you get the audible, you may want the book just to refer to it. You know we talk about many, many different concepts.
Colin:
So let’s just say you’re getting to a point where you you feel like you’re, you’re in a mode where you’re just sort of going along. You know you’re doing OK, make a little bit of money, but you want to, you want to break that trajectory, you want to scale your business. Well, we talk about a lot of techniques in scaling your business. See, back in 2006, that second public company we were running before we sold it for 17 times. And back in 2006 we did flat lined with in fighting with my brother and I were both running parts of the company and I was CEO, but we’re still fighting. Staff were fighting the revenue stalls and then the board of directors started moving against me and one board member said look, you’re. You’re too young and you don’t have enough experience your way over your head, so we might have to start looking for alternatives. And even though we founded the company, my brother and I, we didn’t have majority control. So I flew to Vegas and I met a gentleman, patrick Thean, who was rhythm systems, and I asked him if he could get the board off my back. I need professional systems in place to scale the business and but, that being said, at the time I’m like I don’t really need to do all the hard work, you just need to get the board off my back. And he actually refused to work with me. He said I can’t work with you. I was like the doc. I was like the patient going to the doctor who wants to lose weight and say you know, I don’t really want to do the change my diet, I don’t really want to do the hard work, exercise, I just want the pill, that’s all I want. I don’t want to do the other stuff. And so he said I’m not going to work. I said fine, what do I need to do? And you know what we did it. It changed my life as an entrepreneur.
Colin:
See, entrepreneurs go. We’re ad hoc by nature. We go from one fire to the next fire, the next fire, the next fire. We just keep going, going, going, going. We don’t think of systems, we’re not operators. I would argue that most entrepreneurs are more artists than operators. Okay, well, we begin to bring in systems. So we brought in two days of strategic planning, 90 days of execution. We did goal setting, annual, quarterly, individual goal setting with software. We brought in profiling. We did a sales playbook. We did so many things to, to, to scale the business and it began to work. We tripled in size and that’s when we sold the company to a fortune 500 company. Look, I know you’re out there and I know a lot of. You think you know what you’re doing, you think you got it. But if you can begin to apply coaching and and goal setting and all of these systems, you can scale that company. See, the vast majority of small businesses in the United States are small businesses. They fail to scale. They fail to scale. It’s actually in the in the area of the high 90s percentage, like 96, 97% people create jobs.
Kevin King:
They don’t create businesses.
Colin:
Yeah, that’s right, they fail to scale. Yet there is a formula to scale and in this book, we go through that in detail. Now I’ve done a lot of companies and we’ve been very successful. I’ve spoken MIT to a group of entrepreneurs in 2012 and we talked about the patterns of success and that became the basis for the book that in this book there’s four sections start, scale, exit, repeat and in start, it’s all about a great story, great people, the right amount of funding and the right systems, and it completely changes for scale. And this is where a lot of entrepreneurs especially the type A entrepreneurs, who tend to be the chief sales officer as well Okay, which are about 70%. This is where they sometimes get into trouble. You got to learn to. I’ll say this, kevin the number one reason why most businesses fail to scale is because the entrepreneur is in the way. If they can learn to check their ego, can learn to work with others and learn how to hire great people, hire leaders, delegate responsibilities, not tasks, then they can scale that company. See, when you are an entrepreneur, everything comes up to you and the stress is crazy. And my wife and I we own a school. Let me give an example. She. I don’t know how many times I’ve told her delegate responsibilities, not tasks. I know she won’t listen to the show, so it’s okay, I can talk I could. I don’t think it was right. I got 16 teachers. She’s up almost every night at three o’clock in the morning. And don’t get me wrong, there are moments when I’m up at three o’clock in the morning and when the responsibilities go to you. If something’s wrong with the infrastructure or the inventory or the accounting or the legal, and it all comes to you. You’re the one worried at three o’clock in the morning.
Colin:
Yeah, but when you hire a, leader, kevin, and you say to that leader OK, now you’re responsible for all inventory management. Let’s go with that one alone. Oh my gosh, we screwed up inventory management so bad so many times until we figured out how to hire the great people. Put them in place, let them run it. Do you think I get up at three o’clock in the morning and worry about inventory management anymore at potcom? No, it’s completely delegated. So begin to. You have to begin to change your mindset to become thinking about delegating responsibilities, not tasks, and when you do that, it’s a game changer.
Kevin King:
I think a lot of what you’re doing is they. They can’t get like you said. They can’t get out of their own way and a lot of them feel that they can do it better, and that’s that’s a problem of not hiring, and that’s a problem of just assigning tasks, and I’m always either partner with the right people or hire good people and get the fuck out of their way, and I think that’s that’s difficult. What are some? How do you actually find those right people, like on this inventory example? What is what are some tactics to actually find that right person where you can actually feel like confident, to give them that trust as a non-tronur that’s been doing it or overseeing yourself? What is that magic bridge that allows you to do that or that you can take to do that?
Colin:
OK. So when we’re in start, we’re going to look at partnering. All right, cash is oxygen, so we’re going to want to find people we can partner with. In fact, I have a startup that I’ve been working with and we just brought back someone who was working from one of my prior companies. He was being paid two hundred fifty thousand dollars as a CTO. He agreed to come back to work for this company and we pay him a hundred and twenty thousand and we gave him 10 percent of the company and options. Ok, I know that’s a may sound a little radical, but when you’re small, in a startup mode, we have to think a little differently In the way that we compensate, because the reality is we’re up against Fortune 5000 companies when it comes to hiring, so we got to be a little more innovative. When we begin to scale, we’re now in a position to pay a little bit more, but we still need to give options. We still need to entice them. We need to think about their needs first. We need to recognize greatness. We need to wrap our startup around them, not the way, not the reverse. I know this is counterintuitive for some of you thinking about this, but we really do. We need to understand what their goals and aspirations are. All right, and that’s just a start. Now how do we find them? One of the key things that we’ve done and we go through this in detail in the book, and I think this has made a difference in my all of my companies is that we do profiling and we use a disk profile method. I’m not certain if you’re familiar with this. I like the disk profile. So the first thing I suggest that people do I know it’s going to sound basic, but it’s to profile yourself, figure out what your strengths are. Now, once you’ve identified that, you’re going to want to identify all the positions in your company and the profile for those positions and when you begin to hire, use profiling as a method of hiring.
Colin:
We hired yesterday. At the signing I had a gentleman came in. He’s CEO of Mopro, a big website development company, and he was actually. I hired him 15 years ago and this gentleman I got all these profiles but I didn’t look at resumes, I just looked at profiles. I know it sounds crazy, but I just look at profiles and I read his profile and I’m like, ok, I have to see this person. He was going for call center manager and I saw that he had run a company a couple years ago as well and he went traveling, for he sold it, went traveling for a couple years. So I looked at his profile and I’m like, oh my gosh, this guy’s good. So I met him in the interview Instantly. We hired him as call center manager. Within six months he replaced the guy that had hired him to become chief operating officer and two years later he became the CEO, or three years later when I stepped down and then and then he left that company and then I was looking for somebody for Mopro. So I gave him a call. He’s been running Mopro for five years. He’s absolutely phenomenal. And I’m telling you this I’m not good at sales. I kind of suck at it. I hate it, I hate rejection and the reality is I find people to do that for me and that’s where the you know, some of the dominant, influential, the sort of sales oriented, social, dominant personalities get in trouble because the sales are reliant on them. They need to be out of themselves and get others to help them drive the sales as well, and now that’s just people. I mean, if you want to talk about scaling, we should talk about the number one thing that e-commerce companies can do to scale their business when it comes to their story.
Kevin King:
Before we do that, before we do that, I want to ask you one other question on this for people then we’ll go into exactly I want to get into that what is more important experience or aptitude? When you said, you don’t even really look at the resume, you just look at the reports. So a lot of people, I think, get that wrong. They look at who’s got this experience and who’s done this, this and this, rather than the aptitude.
Colin:
It’s the profile. It’s the profile. Yeah, look, I don’t care if you know. Look, I had a CFO about eight, nine years, ten years ago at doc club when we first started for the first two years he was horrible His person. He was the most social guy you could ever meet. He’d love to talk. Well, I’ll tell you one thing I hate lawyers and countants who talk too much. I don’t know what it is, because they’re just wasting my time. They’re billing me out a hundred dollars an hour, three hundred dollars an hour, whatever it is. I fired lawyers over it. I fired accountants over it. I want people who are efficient, quick, you know. So you know you got to have the right profile. It doesn’t matter the education or the qualifications or experience. You don’t have the right profile, they’re not going to be able to sell. And, by the way, a good friend of mine this is a chapter in the book he does we talk about Reinventing your company into a sales organization. If you talk to my friend, he’s made hundreds of millions of dollars. Okay, he sells distribution to a lot of e-commerce companies. He sells the UPS shipping accounts to e-commerce companies and other companies and and he sold that a comp company made a hundreds of millions, hundreds of millions of dollars. And then he’s doing it all over again With the Sun right now and the whole thing’s happening all over again. And you know what he says. It’s so simple.
Colin:
All I do is a sales playbook. I hire young people who have the right profile. I teach them the scripts Not just totally scripted, because away with the sales playbook, I teach them the stuff. I put them in the chairs, I train them for six months, I put them on the street, I sell and we scale that. So what about all the other stuff? What about? Like no, that’s all we do. You know, I met Manny Medina, who Is a billionaire. He did the data center down here in South Florida. I was doing a judging competition and we were actually judging him for for entrepreneur the year awards. Like I’m in his office, I’m looking at his planes and boats and everything he goes oh my gosh, it’s the simplest thing I ever did. He did simple health, or simply health, and he says all I did was hire people, put them in chairs and sell insurance to small businesses, and I did it over and over. I did a company, I sold it, I did it again. I sold it. I did it again. I sold it. Unbelievable. Sometimes it can be so simple.
Kevin King:
What makes something scalable? What is it? Systems, sops, is it? Certain business may be scalable, certain businesses may not be. What makes something?
Colin:
scalable, yeah, so this is why I do like e-commerce businesses. When my wife and I wanted to expand our school, we hit 110 maximum capacity. We looked at adding a floor, looked at buying the buildings around it, looked at the regulatory environments. We’re talking millions and millions of dollars to get from 110 to 111. We eventually abandoned the idea. It was just too much. We just said that’s okay, we’re not gonna do that. She enjoys the school and it’s a lifestyle business for her and she would just leave it at that, okay. What I loved about potcom is we could hit one success after another and just scale to infinity, and so sometimes the idea it starts with the idea and if you’re in pre idea mode, we talk about this in the book. We have a whole chapter on picking an idea that can scale and I actually suggest that people rate it from one to five your ideas and we give examples of types of businesses. So if you actually pick an idea that can scale, that’s obviously Positions you well to grow.
Kevin King:
If the idea is not an example. You give an example. For those listening that haven’t read the book yet, like what’s one that can scale and once one that can? I’m gonna give an example.
Colin:
Yeah, I’m gonna give an example. So I talked about the school. I gave that a rating of one very high infrastructure cost to that. I talked about e-commerce companies. I gave that a rating of three because you can actually scale Massive leader volume. You just need the distribution, you need the sales. But we have one unfortunate problem with E-commerce companies and that is inventory, and now we’re hitting very high interest rates and that’s an issue as well. What I I talked about the most scalable business concepts are digital platforms. An example of that is dot club, which is an annual revenue platform. We started dot club in 2012. We scaled it to 1 million domain names and then we sold it to go daddy registry two years ago. Unlimited inventory, 90% gross margin. Now you’re saying wall, wall. You’re so yeah yeah, yeah, okay, kevin, this was a happy. This occurred to me in 1998. Yeah, I told you I started farming. Okay, we used to be the raspberry farm of my grandmother of South Florida Sorry, southern Southern Ontario, I’m sorry Southern Ontario, and you know how hard it is to pick a flat of berries. I, I grew up every summer picking a flatter raspberry, like in the. I work for six hours, eight hours and get to two, three flats. Now I know other people can do it faster and I’d make like as a picker. You’d make like five, six, seven bucks, you know. And then you go and you sell the flats for twenty twenty five dollars To people on the on the market or whatever. You’re so friggin hard. But then in 1998 we’re selling domain names. I’m giving you Kevin Dot com or whatever it was I’m making, and they’re giving me back 70 bucks. Now when you own the registry you get all the money.
Kevin King:
So any, domain one time setting bucks recurring, that’s right. Exactly, that’s a big difference there too. Don’t get, just don’t try businesses that you don’t just get paid once I mean recurring revenue is is is a big key to scaling and it doesn’t have to be in the digital space.
Colin:
So for good friend of mine, joe Martin, did a company called boxy charm. Boxy charm sold for one sorry, half billion dollars, 500 million dollars three years ago. Okay, it was in the business of a Monthly box that went out to people and had beauty products in it, sort of a competitor to birch box, but they would do full products products instead of sample products, description boxes. Yes, yep, they took off. They work with an influence. I know they work with the Kardashians and it all that kind of stuff they sold for a half billion dollars. One, he got the timing right to. He had subscription, you know and, and and and. Three, he was able to scale it. So I actually think that you can take e-commerce products, or you may have an e-commerce product and if you can make a subscription out of that, it can increase the enterprise value. There’s a caveat to subscription revenue is that sometimes your cost of acquisition Doesn’t give you an immediate payback. The company I told you about that we sold to go daddy with a million domains. We lost two and a half million. In the first year, two million. The second year, a million and a half. The third year, half million. In the fourth year we broke even. The fifth year we went up to a million. Sixth year we went to two million. The seventh year we went to three million profit the third year and then we sold for an absolutely crazy multiple.
Kevin King:
But to do that you had to have funding or investors or something. And that’s a sticking point for a lot of entrepreneurs. When they’re in that start space, they don’t know how to raise the money, or they don’t have. They don’t have the money, they don’t have a rich uncle, they don’t have the credit. So how do how do these people that see these big opportunities, how can they execute if they can’t get the funding together and they may have the best idea in the world? They just don’t know how to do it. Or they don’t know where to go, or they don’t know the process. What, what’s something that people that are just crushing it but they’re just hampered by cash flow? Or, in your case, you need a five-year runway. You know Amazon had the same thing. They didn’t. What was it? 10, 15 years before they actually turned to profit? Something like that it. How do? How do you overcome that?
Colin:
Okay, so we have two separate scenarios here we’re gonna talk about. The first is you’re in start mode and again, the first section of the book is start. The third section of start is money. So we get into Multiple ways you can raise money. All right, the first thing is Generally no investors are gonna back your startup unless it’s proven All right. So it does require some time, your own personal investments.
Kevin King:
The business is proven or you’re proven sometimes, and so on ballet, they will back someone who’s proven even though the business is not proven.
Colin:
Yeah, that’s correct. It can go that way sometimes. So what you need to do really is Prove your concept, and I suggest that first-time entrepreneurs just starting out pick a certain stage gate when that’s that they’ve proven their concept. It could even be an MVP minimum biome product. It could be a product that you sell a hundred units on Kickstarter. I don’t care what it is right, but we want to be able to prove that product and then we want to start to approach investors, and we can do that through pitch competitions. We can do that by joining an incubator. You would be surprised at how many free resources there are out there for startups. We do an incubator here in South Florida at FAU it’s. I do one at FAU and I also do an FSU I’m sorry, nsu and it’s called the Allen Levan Center, and they have a free incubator, a 10 week course. We kick off the course and we do a mini business plan, a four sticky note business plan. We talk about that in the book, but they can also help you with government funding. They can introduce you to angel investors. They do a pitch competition. You can join pitch competitions and win money for your startup. And even if you lose in a pitch competition. What is it hurt? You’re getting yourself out there so early on? Money is critical. It is the oxygen in the room. So I talked about the way you can attract people by giving up equity in your idea and your vision. I will say this nothing motivates more than success. So it’s going to be important to sell a vision to attract people to your startup. That’s absolutely critical, and the my favorite chapter and one of my favorite chapters in the book is Customer funded startup. We have a company that was running out of money. It was a startup. They literally got a three-year contract, $450,000 payment up front for three years of services. You can actually do this. If you do a subscription, you can have pay the 12 months in upfront.
Colin:
Another technique is to talk to your suppliers. Like, quite frankly, the interest rates now for e-commerce companies for inventory is very high. Once you begin to establish a little bit of credibility with your supplier, go back to them and says okay, look how I’ve delivered. Okay, we have one supplier right now that’s giving us Credit for 30 days after the product arrives in the United States. We ship them from, we designed them all here and we ship them from China and they we pay them 30 days after the product has arrived. Okay, it’s huge that we’re a Q we’re at HSN last week we’re already blowing up on QVC and I was talking to the person I’m working with them saying, hey, because they want a lot of units and and bark box wants a lot, that they just keep asking for more and more Of our products for product common. We’re just we’re blowing out distribution and ten different ways for product common, which is another chapter in the book. But we’re talking about it, about HSN. They wanted product to and I’m like you know, it’s cool If we could somehow get a deal with them where they’ll give us the e-commerce Once the inventory arrives. We know how many units we’re gonna sell and we can sell 1000-2000-5000 units in a show. We’ll sell those out before we even have to pay the supplier. Wouldn’t that actually be cool? Customer-funded startup. I actually you know I’ve used some techniques, but I in this book we brought in I told you over 200 interviews of authors, experts and serial entrepreneurs. We brought in John Muller. I told you I was a big fan of the product and I was a big fan of the product. Serial entrepreneurs we brought in John Mullens, who wrote the book customer funded startup and he helped and he helped us with that chapter in the book.
Kevin King:
I’ve actually done something similar, that I had a collectibles business doing trading cards and collectibles and we got into a point when we needed money for inventory and I couldn’t negotiate with the supplier. So what did I? I had a list of at that time, maybe two or three thousand customers. I created a membership a called the gold club. It was $99 for a year and that got them a membership card, a 10% discount, and they got some other whoop-de-doo First dibs on something and that did so. Well, I got like 300 of them to pay me. You know I raised 30 grand, which at that time this is 20 something years ago was Significant and I was like this is pretty cool, how can I take these guys and raise it up on another level? So I created a platinum club. So that was a hundred ninety nine dollars a year. You had to join the gold club first and if you join the platinum club Then you got some sort of special collectible as a bonus for signing up. You know that cost me a buck or two and you got all this other stuff and we raised money that way and that’s what funded the entire thing. I got into the internet business. I had a membership website. We’re charging nineteen, ninety five a month. We had like two, three thousand people paying for that and I at one point I needed to raise some money for the physical product side of things. So I just went to those people and I said I think it was nine, nine bucks.
Kevin King:
You know, this ended up biting me in the ass a little bit down the road, but I was 99 bucks for a lifetime membership. So I knew my customer lifetime value was like four point two or something. So I knew there’s 80, 85 bucks or whatever it was at that time is what their lifetime value is. But I thought charge them 99, 95 upfront and then I was able to scale and do it that way. So you got to get creative. Is what Colin saying here, and that’s what he talks about in the book is, is you just can’t go the traditional routes and you got to be creative in your way, I think, and there’s lots of ways to do, there’s hundreds of ways to do this and those things. It’s grill and marketing. And you know, like you said earlier, the day you stop selling is the day you start dying and you’ve got to do these things right.
Colin:
Absolutely, and remember, I still want to tell you the number one thing you need to do scale and story.
Kevin King:
So I can actually I’m sorry, let’s go back to that. Yeah, you said the number one thing on scale. Let’s talk about that.
Colin:
So let me take you back to 1979 and a gentleman named Joe Foster who founded Reebok. He got to $9 million in sales. He applies for three shoes. He applies for runners world for reviews. He wins three five star reviews. Okay, isn’t this interesting Reviews? How important are reviews to your listeners? Absolutely critical. So what’s old again is new again. He then, and then, by the way, he’s been in business now for 19 years with this brother, jeff. Okay, this is a chapter in the book. We interviewed him. He’s he’s a three, five star review. The next thing he does is he goes into the U? S because of the reviews, he got the attention of Paul Fireman, who decides to distribute Reebok shoes in the United States. So now he wins a distributor. By the way, it took him 11 years of rejection to get a distributor in the United States. Okay, there was no Amazon back then. All right, there was no bite on the e-commerce site or whatever yeah right, there was no Reebokcom, exactly. So he got the distribution agreements and then one of his designers says you know what this thing in LA is taking off? It’s called aerobics aerobics for women. Now, back then that nobody wanted to build anything but running shoes. It was all runners world running shoes. Reebok was in the running business. He even had a little bit of a fight with his partner about this, but they decided to to to design these aerobics shoes.
Colin:
So what Joe Foster calls this is going into the white space go where no one’s gone before. This might start to sound a little familiar, okay, and I’m going to give you a couple of examples in a minute. Well, guess what? 12 months later, somebody wears their shoes on public television. Jane Fonda wore Reebok shoes on public television and I asked Joe, joe did, did you pay Jane Fonda? And he said no, no, jane Fonda had to pay for her own shoes. Well, guess what? They went from $9 million after 19 years in four years to $900 million, eventually, being in mid-80s, the Eclipse Nike is the largest shoe company in the world. It was phenomenal to see how he did that and caught the big break. We detail it in the book, but can you replicate that? That’s the question. You know, reviews what’s old again is new again. Reviews, influencers, influencers what’s old again is new again. But what’s also, I think, what’s old again, new again is what he talks about going into the whitespace@pot.com.
Colin:
Okay, at pot.com we design multiple products. We design patents, design patents, utility patent. We do a lot of very interesting products. Every time we’ve tried to copy we get destroyed. We did, we did. You know, we have almost a million customers. So we did vitamins for dogs. You can get vitamins from other companies. We literally sold 37 memberships and I think I was one of those 37 memberships. We did CBD for dogs. That didn’t work out and we sort of killed that. And then we did shampoos for dogs, which are really nice shampoos, by the way. They are human grade shampoos. I’m making the best pitch I can for you to buy these shampoos, because we have a 100 year supply of shampoos at pot.com. All right, now let me tell you what we did. Well, we invented new categories. We trademarked those names for those products. We patented those products. We invented memory foam, pop rugs, memory foam, car seats with clasps and also waterproof blankets, and they took off. They just absolutely took off. We went into the white space. We created a moat around that white space by getting the patents and trademarks for those products as well.
Colin:
So don’t just do it. You got to protect it. You do have to take on the legal and all those you know. You have to take on the legal work. You have to do that. Again, I’m not a lawyer, so I’m going to caveat this. But if you don’t know, the products can be successful, you don’t necessarily go need to spend five, 10,000 to patent the product. You can wait till it launches and then get the patent rights in the United States. If you want global patent rights which we did for a number of our products, we would actually apply for the patents before the product even launches, and that’s necessary for Europe and some other countries as well. Again, I don’t want to get into that. The book talks about that and we interviewed lawyers for the book as well to really try to you know, try to help you figure that out. So what he did and what other companies have done with Paw.com is try to create an X factor. What do you have, Kevin, that’s unique and different, that no one else has? Okay, and if you can figure that out, then you can win in your market. What he had? He had aerobics shoes and, by the way, before I even knew Joe Foster, I bought a pair of Reebok CrossFit shoes because they specialized in the CrossFit shoes at the time. I know that some things have changed recently, but they specialized in that. So I bought those shoes because they went into the space that other companies were not playing in.
Colin:
Okay, think of Domino’s Pizza 30 minutes or free. They had to re-engineer their entire organization to be able to ship pizza fast. All right, think about national car rental. Just show up and get into a car. They had to redesign that entire process. It was not easy for either of those two companies to make those big changes, but they did that. Now national car rental leads the market. Think of Warby Parker. Right, Warby Parker is killing it. They own the glasses market online. They are killing it. And we happen to own a competitor to Warby Parker which is called Hip Optical. And now so we’re coming into this, and Hub Optical, by the way, is more edgier designs, more designed forward kind of stuff, a little bit of a younger audience than Warby Parker and whatnot. But that’s not enough to be a differentiator. That’s not an X factor. We figured out our X factor against Warby Parker because we located a factory rate in Fort Lauderdale, Florida. It cost about three to four million to build this factory and now we can manufacture glasses and lenses within 24 hours. So we have store locations. You have online. If you’re in the state of Florida, you can go to hipopticalcom order glasses and you can get them in 24 hours. It takes over a week to 10 days to get your glasses from Warby Parker. That’s an X factor. What do you have that’s unique and different that your competitors do not have? What is the bottleneck in your industry that you’re solving? If you can figure out your X factor and we’ve done that for many, many companies the dominoes will fall and you will just win the marketplace.
Colin:
And on Amazon, it’s absolutely critical because I’ll tell you this you want to be the king of the hill on Amazon. Do you remember that game, Kevin? Yeah, the king of the hill and you’re pushing the. You know you’re saying I’m the king of the hill and someone pushes you off the hill. Well, when you’re on Amazon, you got to be the king of the hill. That means more and better reviews than anyone else, having unique and different products than everyone else. If you come in and say you know, someone’s got all these reviews, I’m just going to make it cheaper, I’m telling you right now it’s a flawed strategy. It’s a failing strategy. A few people might get a little bit of short term success on that, but if you can come into Amazon with a unique and different product that you’ve patented, my gosh, you’re going to kill it.
Kevin King:
I mean, you hit on two things there Innovation and marketing are the keys to success and business and a lot of people don’t realize that. You just gave perfect examples of that. And the other thing that you just said is that and it just bugs the hell out of me is that the younger generation, they think this is something brand new. This is the new silver shiny thing of a way of marketing and like no, everything that’s new, that’s old is new again. It’s just new technology, new way of doing it. And one of the best things you can do is go back and study the people from the 50s, the 60s, the 70s. Yeah, they didn’t have the internet, but they were doing it the old-fashioned hard way and those principles of psychology, principles of business All that still matters today. And if you roll that into what you can do with the technology today, you can skyrocket. And what I think another mistake you kind of hit on to here and you’ve done this in the book is that a Illustrated this in the book is that a lot of people they they read self-help books or they read from from advisors who are or consultants in this industry and they write a book, and I think that’s the wrong way to do it. The better way is to actually study people that have done it and read their biographies or read their stories, and that’s what you’ve done in your book. It’s like, would you say there’s 50 some odd of those in there, or 200 interviews, but you said there’s like 50 something stories or whatever. Yeah, that’s where you’re gonna learn. That’s where you’re gonna learn and that’s seeing how others have done it. Not by listening to some Consultant that has an MBA from Harvard that’s never done this stuff, you know, and maybe talk to a couple people and come out with his own way.
Kevin King:
That’s a mistake I think a lot of people make, and so I think what you’ve done here is brilliant and I’m glad that that this book is is taking off, and I hope that you know a couple years from now, you, you, you’re in line at the grocery store and someone taps you on the shoulder, says, hey, are you calling? Yeah, I read that, I read your book, and now you know I was doing a 600,000 a year and now just sold the company for 80 million. You know that’s one of the biggest rewards you could get changing people’s lives and showing them the right way to do things. So back back, when it comes to exiting, what are a couple things around exiting that we can talk about real quick that people need to be aware of?
Colin:
You’re gonna want to position your company about two years before you go to exit. All right, the first thing to recognize is that bad things do happen and Timing is half the value. So what are the signs that we’re in a really good market? Let’s think back in 2021. Gamestop stock going out of control for absolutely nothing to do with fundamentals, maybe a sign. How about NFTs people paying a half million dollars for a cartoon ape Is that a sign, right? So we’re gonna want to look when a market’s moving along and it’s in there three, four, five, six, seven years. We’re gonna want to look for froth in the market. And I often say that when, when, when, the when the markets hot, it’s time to exit. Stage left, it’s okay to sell your company. Let other people make money from that company. Just exit stage left, okay. Early on and I mean when you start your company, set up a virtual drive, have all your documents uploaded. That’s absolutely critical, all right. Well, about a year or two before you consider selling or even sooner, begin to think of Compiling a list of potential acquires. I know at dot-club we said we wanted go daddy registry to buy our company and we Made that happen and we did not use a broker. Now, I’m not suggesting you should use a broker. I think in a lot of cases it’s a good idea to use a broker and we’ve used broker brokers for many, many companies. But we’re gonna want to put a list together of these companies and I want you to break them into three categories. I want you to break them into cashflow buyers, sort of generally private equity right. I want you to Make a list of competitors who can buy your company and I want you to make a list of strategic buyers. Now, if you don’t know of any of these companies of those lists, that’s okay. Let’s just open the spreadsheet up and let’s just start with that. Okay, I would often get on all of my companies, this cashflow buyer that call us up once a week. At least once a week. We get a call. Even now we’re still getting a lot of calls on potcom and and they tend to be.
Colin:
The problem with cashflow buyers Is you’re gonna be based on an earnings multiple and what’s worse in today’s environment is that earnings multiple they’re looking at leverage. Most I’m not saying all, but the vast majority of private equity firms like to buy companies and leverage the cashflow so they don’t have to make that full investment. They typically will do about 70% Leverage and it varies based on the market. Maybe it’s actually I’ve been hearing that there’s it’s been tougher for private equity right now. They’ve been having to leverage a little bit less. But. But if you’re going to be selling to them, if you and your interest rate is 1112 percent already, just for them to break even, you’d have to have 12% return on that, on that acquisition price. So the reality is they’re gonna be looking at about 20% on an e-commerce maybe 25% Because of the nature of e-commerce. You know the way it goes up and downs and that’s like four times earnings. So there, that’s the kind of company that I like to say.
Colin:
If you’re in trouble, you want to get rid of your company, just go do the deal. But even if you’re in that scenario, I would still encourage you to talk to your competitors because if, if you sell to your competitor, they can eliminate duplication of costs and you’ll get paid somewhere between what it costs for you to Sell the company on your own and the benefit that goes to the competitor that buys your company, they get an arbitrage. They’re not going to give you a full arbitrage, but they generally will give you a summer between 25 to 50 percent of the arbitrage. Okay, the third buyer are the strategic buyers, and these are my favorite buyers, because these buyers will take your product, your company, and they’ll leverage it with their existing customer base and Increase the earnings based on that leverage. Okay, if we were to sell pot com to Petco all of a sudden, now All the products that we developed at pot com could be sold into Petco and all of Petco products can be sold online at pot com and they could get a really nice lift.
Colin:
Now that’s strategic. Now they’re not going to give you full value for strategic. They will give you somewhere in between. In my lifetime, I sold myself off twice, once in the late 90s with a company called internet direct and the second time in 2008 with hostopia, and In both cases, my job was to buy companies. Now I’m at a fortune 500 company here in In 2008 and I bought about 10 15 companies and I’m telling you right now, the mentality that they have in these larger companies is all about how can I add bottom line to my company Instead of necessarily looking at your bottom line? If you can make the case to, to to, you know we could go on for a long time here, because we’re just touching, we’re just getting started.
Kevin King:
Yeah, I know, we’re just.
Colin:
Make that case, then then, then, then, then you can get a premium for your company. But I mean, I can keep going on and on and on, but I’ll leave one more here. We got like six or seven or eight different techniques you can use to sell your company Everything from getting an exit coach, somebody coach you through the exit process Sometimes it’s a multi-year process so to to position your company for sale, taking yourself off the salary, replacing yourself with another CEO. But I want to leave you with this last one on exit Check your ego at the door. This is a time for you to step back and promote your people. Your people are the assets. Okay, now, this might be hard for some of you to understand, but most investors, most buyers, uh, think of entrepreneurs as a little kooky. Okay, when we bought those 15 companies or so at internet direct and 15 companies at hostopia, I don’t think there was one entrepreneur that stuck with the acquisition over a year or two. I’m telling you, and it’s also not, these big corporations are not necessarily environments that entrepreneurs wanted to work at. I worked for three years for a Fortune 500 company. It was hell, it was very hard. So buyers know this. So the more your business can run and act independently without you, the higher the valuation and the easier it is for them to migrate that company into their company.
Colin:
Uh, we cover so many different techniques in this book on how you can maximize value on exit. If you are thinking about exiting, uh, that would be a section of the book I would suggest you jump to and just really get into it. But I also often will tell people well, the day you open your company, think about your exit, think about it, try it, visualize it. Get that hard drive, that virtual drive, set up, uh, and and and. Prepare your company from day one, prepare the story on exit. We next that we talk about the story, the people, the money and the systems on exit. We cover it all and, believe it or not, in each area you can maximize the value of your company by uh, by positioning the company correctly.
Kevin King:
I agree, built, built to exit from day one, and I’m actually doing that on one of my companies right now. Um, very specifically, we built it to exit. Uh, real quick. Uh, we don’t have but a few minutes here. Um, on repeat, uh, a lot of times people sell their business and we’re entrepreneurs, we have ADD, we can’t just sit around and do nothing. Uh, so what? What are a couple of things that on the repeat that you recommend people look at when they’ve exited? They’ve taken a bunch of chips off the table. Maybe they take a little break and go play a little bit, buy, buy a couple of nice things, and then then what’s the right mentality, moving forward, to do this again?
Colin:
All right. So one of the concepts I have in the book it’s called laddering up your wealth. Right, we talked about the benefits of selling earlier, the tax benefits. Uh, the idea is to start, scale, exit, take some money off the table. Repeat Instead of delegating responsibilities, not tasks, why not consider delegating companies? Okay, this might be a little more radical. Why don’t we take the people who are successful and help? Are the leaders that we used in scale that help us build the companies and partner with our ex employees, uh, especially if they’ve if they’ve worked, if they’re working, for the company is sold, I don’t recommend hiring anyone because I don’t think that’s ethically correct, but if they’ve already moved on to another company, it’s fair game. We’re going to want to track our A players. I do that through LinkedIn all the time. I told you at the beginning, we hired someone uh who would work for me 20 years ago and we hired him a year ago and we gave him 10% of the company and he’s working for a lot less uh salary than he what he was getting paid for. Another thing I talk about is dress for success. This is something a lot of your listeners might not have thought of, but you are a brand, and I don’t mean literally dress for success, cause, if you know me, I’m always wearing the same shirt every day the polo black. You know jeans. Whatever, I’m talking about online. I’m talking about your LinkedIn. I’m talking about the front page of Google. You know, when I first set out on this project with Forbes, they asked me to change my name. My name is Colin Campbell. There are there’s a hockey player that’s calling Campbell. There’s doctors, famous doctors. There’s Lady Collin Campbell. There’s so many Colin Campbell’s out there, uh, that they said change your name. You want to be on the front page of Google for your e-commerce products, but you also want to be on the front page of Google for your brand, your name.
Colin:
The next thing, which it’s very hard to do I know it’s very hard, but if you can get a Wikipedia page about you, there’s high notability requirements. I was fortunate that someone did that for me five, six, seven years ago when we were doing that club, and you know we’re getting enough notability. Um, that can be a breakthrough as well, because we want to really set ourselves up to use OPM when we do the next play, and I’m not suggesting to use OPM when we test our products. Let’s get that company up. I invest 100% into the startup. You know, whatever it costs to get the start up to a point in time where we’ve proven the concept, then I bring in the mom test If I can. If I think this company’s safe enough for my mom to invest in it, to scale, then I’ll let others invest in it. And in giving an example of that, we raised a $7 million of the $12 million to launch dot club and my mom was one of those investors, by the way, we had to raise $7 million in 30 days. I did it with my LinkedIn contacts and, talking about dressing for success, we did a private uh place for the first time in a while Uh placement memorandum. We filed a Reg D with the, with the, with the government. We did all the the funding correctly and if this is a little bit confusing, don’t worry, it’s all in the book too. It’s all laid out very clearly. But when people received that documents and they saw that we were raising money and, by the way, no revenue in the company at all, none we I sent it to 36 contacts. We closed, 27 of them on LinkedIn, and a lot of that has to do with reputation.
Colin:
I talk a lot about reputation in the book and if you but if you dress for success, you have the right documents, you have the right signage, uh, for your, for your project. People look at you and LinkedIn. They see your Wikipedia. They type in your name and you come up on Google on the first page. That’s why my name is Colin C Campbell. It’s not Colin Campbell. Now you type in Colin C Campbell one, two, three, I’m on the front page. So there’s just a few techniques I talk about and repeat today I have over 10 companies I’m a principal shareholder of, I’m invested in 20 companies, I’m involved in 20 companies, uh, and maybe it’s a little too much, and I talk about that too in the book. You know the, the, the, uh, that entrepreneurship is a drug. Sometimes we go far serial entrepreneurs and I think some of you can relate to me when I’m, when I talk about entrepreneurship being a drug and you do get a fix out of it. I can do a blackjack player like myself who gets a fix out of playing you know, blackjack at the casino, uh, so you do have to, you do have to find ways to temper that, but for the most part, you can begin to use other people’s money, you can scale companies, but the key, the key and repeat is you need to have really good people. You need to have really good stories. You need to have really good systems. By the way, you apply the systems to every company.
Colin:
Every company we have does two day strategic planning, goal setting, uh. Daily sales huddles. We do it across the board. We expand distribution, we do profiling. We do all of it. Uh. So you have great people, great systems. You know you have the money other people’s money to grow these and you scale them quickly now because you and you want to scale based on after it’s been proven. It’s simply like throwing fuel on a fire, so it’s just put, put fuel on it. It explodes. That’s what investors really want and you have to have a great story for every one of them. You get those four components right on repeat, you can do it Over and over again, like we have, and we continue to expand and grow. Awesome stuff, colin, uh.
Kevin King:
So if you want to get the book. This is the book of those of you watching uh on YouTube. Here, start, scale, exit, repeat. You can get it on Amazon, Barnes and, Noe, I’m sure, maybe your local bookstore. Next time you’re flying, check out the local airport, uh, they may have it. Uh, sitting there, right there uh for you. If people want to reach out and learn more, how, how could they follow you? Is it on LinkedIn or is it? Uh, how would they? They can do it on YouTube, Uh, how would they? They get in touch or follow you if they wanted to know more of what you’re up to? Colin?
Colin:
You can reach me on LinkedIn, colin C Campbell. Of course I’m happy to uh connect with you. Also, I do a live show on clubhouse every Friday at two o’clock Eastern and uh, LinkedIn audio at three o’clock Eastern. I do the LinkedIn audio. We’re doing an open mic, so if you’re reading the book and you’re stuck on something, you have a question, you can come on stage. Or maybe you’re an expert at starting, scaling, exiting, repeating and you come to the show and share with us these live shows, share with others your experiences, uh, but the way to really connect in my ecosystem is to go to www.startup.club and sign up to our mailing list. We have great speakers. We’d love to have you on, Kevin and, by the way, we got a partner up on start, scale, exit, repeat for Amazon e-commerce stores. That would be a great button.
Kevin King:
I think we have a few things to talk about here Right now. I want to say thanks, colin, for spending the time. You’re a busy guy. Um, I really appreciate you coming on and sharing. Uh, I think this has been very helpful to a lot of people. Make sure you go out and get start scale, exit, repeat. I bought it, I endorse it. Uh it. You’ve probably seen it. If you’re reading my newsletter, you’ve seen me plug it in the newsletter. Uh, go back and listen to this podcast a second time because uh Colin was dropping a lot of nugget bombs there. So make sure you do that, uh and uh Colin look forward to seeing you again soon. Appreciate it, man.
Colin:
Absolutely.
Kevin King:
I’d love to come back on Great stuff with Colin and this discussion. You know, one of the ways you can level up is to surround yourself with people that are a step or two ahead of you. Colin is a few steps ahead of me. Even though he’s a little bit younger than I am. He’s a few steps ahead of me in business. We both got a lot of experience and a lot of things that we share in comments, so it’s always great to speak with someone that’s been there, done that and understands it all. If you haven’t gotten a copy of his book, make sure you get that. Start scale, exit, repeat. You can grab it on Amazon or wherever you like to buy your books or get the audio. Audible or audio version of it is also great. Like you said, it’s read by the guy that does all the Budweiser commercials. Colin is a amazing entrepreneur, really smart guy, very well connected and someone you should definitely follow on LinkedIn or Clubhouse if you’re using the Clubhouse app and join in for one of those talks, like he does on Fridays. Great stuff. We’ll be back again next week with another excellent guest. I hope you enjoyed this and are having a great start to the new year. Don’t forget to sign up for my newsletter, billiondollarsellers.com. And also, don’t forget, the virtual event is coming up. The virtual BDSS event is coming up February 21st and 22nd. You can do it from anywhere in the world. Go to billiondollarsellersummit.com to get more information on that. It’s an incredible lineup of speakers. You don’t want to miss this event. And before I leave you today, I’ve got some words of wisdom for you. You know, if you get caught in a storm, the way you survive is make sure you’re holding tennis balls and not eggs. You get caught in the middle of a storm, make sure you’re holding tennis balls and not eggs. Think about that for a second, how that applies to your business. And while you’re doing that, have a great week and we’ll see you again next Thursday.
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