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098: Mike Zhang – Growing A Business To $20MM, Selling By Age 22 & Advice For Growing Your Ecommerce Business

Posted by Austin Brawner on November 5, 2015

It’s not everyday that you can get advice for growing your ecommerce business from someone who has built and sold a $20MM per year store by the age of 22.

But in this episode, that’s exactly what we get.

 

Mike Zhang is the original founder of Airsoft Megastore, an ecommerce site that was said to be generating $20MM in revenue per year at the time of it’s sale in 2012.

What started off as a small eBay project for Mike ended up turning into a full-fledged ecommerce business, one that has garnered him numerous entrepreneurial awards including Bloomberg 25 under 25 and Ernst & Young Entrepreneur of the year finalist.

He has a wealth of experience in ecommerce, and business in general, at the ripe old age of 25. In this episode he lays out some of his best advice for growing your ecommerce business to where you want it to go.

Key Takeaways from the Show

  • What it’s like to get started in ecommerce at the age of 13
  • How he grew Airsoft Megastore to $20MM
  • How to incorporate systems into your business to eliminate wasted time and take your site to the next level
  • What experiences he’s taking from Airsoft Meagastore and how he’s applying them to his new company, DripClub
  • Mike’s best advice to his 20 year old self and how you can use it when growing your ecommerce business

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Transcript

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Transmitter: Welcome to Ecommerce Influence; where the best and brightest online business minds teach you how to grow your ecommerce company from one million dollars to 10 million-plus. To learn all of the strategies from past experts, download the episodes at ecommerceinfluence.com. Chad: Austin, man, how are you doing? Austin: I’m doing well. I’m doing quite well today. I made it to – just had a big drive actually, just getting done with a big drive, and I’m happy to be done driving from LA out to Austin, with all my stuff in the back of my truck. Drove out with my mom and it was, it was a long drive man, it was 20-something hours, I think, to get from LA to Austin, so it feels good to be here. Chad: I’m sure there’s some desolate parts as well, a little bit of tumbleweed action. Austin: Yeah, West Texas, West Texas, there’s not much in West Texas. Chad: Except for the West Texas Investors Club. Austin: Exactly, the West Texas Investors Club, we went from El Paso out to Central Texas, and it’s about what you’d expect rural Texas to be like, I’ll tell you that. Chad: Yeah, I can imagine. Hey, I got a quick question for you man. Austin: Yeah. Chad: What were you doing at the age of 13? Austin: At the age of 13, just bear with us, because this will make sense in a little bit, but yes, at the age of 13 what was I doing? At 13, I was really into hanging out in the woods with my friends. I think we were like trying to save up money to buy, you know, like hatchets and stuff to chop down trees and make forts. What else am I doing? Fishing, a lot of fishing and playing airsoft. Chad: Airsoft. Austin: Airsoft; I think at the time is well, we were trying to get money for our paintball gun. I think that was what I was typically doing. When I wasn’t having fun with my friends, I was like doing yard work, started a little yard work business to make money to buy airsoft guns and paintball guns. Chad: Hey, you know what’s funny is, today’s guest was probably selling you those airsoft guns at the same age, or very close to it. So, you’re out there playing with those guns, he’s out there selling them to you, making money. Austin: I know right. Chad: Think about that. Austin: Exactly. We’re excited to have our guest on today, his name is Mike Zhang, and the reason we’re talking about what we were doing at 13 was because at 13 years old, Mike was already selling stuff on eBay and had started his first ecommerce business at the age of 13. Chad: He was importing from China at the age of 13. He was importing and selling on eBay, airsoft guns to Austin Brawner. Austin: I think Mike is now almost 25 years old and has 12 years of online ecommerce experience. Chad: Yeah. He actually built Airsoft Megastore, that’s what we’re talking about, really is Mike Zhang is the founder of Airsoft Megastore and he built that, I believe the numbers that they give are 20 million dollars in revenue by the time he sold it per year. So, think about it, he was 22 years old, built that online store to 20 million dollars in revenue, and sold it by the age of 22. That’s an incredible, incredible story. Austin: It is, and today we’re going to be talking about his experiences, what’s he’s learned in the process of growing a business, you know, from an eBay store, a small eBay store when he was quite young, to a massive, multimillion online ecommerce store, and then selling it. So, we’re going to go through the whole process, what you can learn. He’s got a lot of wisdom for somebody who’s 25 years old and has gone through a lot. Chad: Yeah, and the best part is, is, of course, he always gives the, he gives the what would I have done at the age of 20, now that I’m 25 looking back. So that hindsight is 20/20, that little piece of information I think is probably one of the most valuable of the entire episode, so make sure you listen all the way through. Before we move on though, I just want to remind you that we’ve put together a library of free, ecommerce training. It includes videos, master classes, and now eight guides including ‘How to generate 80k per month in 9 months with YouTube influencer marketing’, ‘4 steps to hiring A-players on Elance’, and ‘Selling your business for max value’. You can get access in one easy way and that’s by heading over to ecommerceinfluence.com/insider, when you get that free membership, you have access to everything we just mentioned plus much more. So, head over to ecommerceinfluence.com/insider to get access. And we’re going to dive in now, but a quick background on Mike. Mike Zhang co-founded and grew Airsoft Megastore into one of the largest peer play ecommerce retailers of airsoft and tactical shooting sports products in the United States, overseeing product development, technology, operations, and corporate strategy. He successfully executed the sale of the company to a strategic acquire in 2012. When he sold that company to another entrepreneur, it was generating more than 20 million dollars in annual revenue. He has been recognized for numerous awards including 2011 Impact 100 honoree, 2011 entrepreneur, Ernst and Young entrepreneur of the year finalist, 2011 Bloomberg Business Week top 25 under 25, and 2012 Impact 100 honoree. That’s quite a list there. These days Mike is busy running his newest ecommerce site Drip Club as well as a software platform called RetailOps which Huckberry is currently using, plus among, amongst other ecommerce stores. So, we’re pumped to welcome Mike to the show to give us all his wisdom in the ecommerce world. Mike: Hey guys, happy to be here. Chad: Awesome man. Well I know Austin’s excited because airsoft used to be his thing in high school and — Austin: It was. Chad: – talking a little bit about your ecommerce business amongst other things is pretty exciting to both of us, but I think Austin’s really thinking about those airsoft guns and bringing them back a little bit. Austin: It was a big chunk of my life when I was, I think in, I don’t know, freshman or sophomore year. We bought all these airsoft guns and, and maybe from you, I don’t know. It’s funny, thinking back, we might have actually bought some airsoft guns from you, Mike. Chad: Awesome, everything comes full circle, full circle. Austin: Exactly. Chad: So, anyway, Mike you started Airsoft Megastore back in 2004, which really like in internet years, that’s like the dinosaur age, so what compelled you to go ecommerce route at such an early age, such an early time and at such a young age? Mike: Sure, yeah. I mean, you know what, I started, I had been buying and selling just random products, I guess on eBay, it was kind of a way for me to, you know, after school make some extra money, and I also kind of wanted to help my parents out. You know, they’re first generation immigrants here to the United States, and so from an early, I guess age, I saw my dad was also an entrepreneur, he was in the import and export business, and you know, saw the value of hard work and you know, connected that to kind of the internet and eBay which was booming at the time and stumbled upon airsoft guns, you know, growing up and just it evolved I guess into a real business from there. Chad: Awesome. Well, how was, we’ll obviously get into a little more nitty-gritty, but just quickly here, how has ecommerce changed since you started Airsoft Megastore? Mike: Yeah, so, I mean there’s so many, so many different ways that I think ecommerce has changed. Some probably more significant trends or themes I guess, I think would be the speed at which ecommerce companies can grow nowadays and sort of evolve and really have to adapt, you know, and that’s, you know, across all different functions or disciplines of, I guess any ecommerce company, whether it’s the marketing, whether it’s the demand generation, whether it’s ops and fulfillment, I think that’s been a huge – a lot of, in a lot of ways, I think, there had been lower barriers to entry, you know, back in 2004 there weren’t so many great, you know, as an example hosted shopping cart, ecommerce shopping cart solutions. So, if you wanted to kind of build a website that had really great functionality, you’d have to, you know, do hosting yourself and you’d have to kind of install software in some cases. So, I think the barriers have really been lowered, but that’s also allowed a ton of very smart, you know, entrants to sort of enter the market as well. And so, that’s probably one of the biggest themes that I’ve seen. I’ve also seen I think, as they really, they get a product ecommerce businesses, where you know, you’re either importing product from oversees or sourcing them domestically, I think just the number of competitors have made it really, really difficult in some cases to really compete and stand out amongst all the noise. Austin: I was, I was reading a little bit about your background and how you got started going around 12, 13 years old when you were selling stuff on eBay. How did you, can you tell us a little bit about how you picked the airsoft gun as kind of the product that you were going to maybe make a little bit of a larger business? How that process, what that looked like, and how old you were when you got started doing that. Mike: Sure. I was, I was 14 and so I was, my family, I have a lot of family back in China, around the Shanghai area. So, I went back, you know, for the summer before I went to high school actually, and I visit the family, stayed there for like a month and airsoft guns in China at the time were really, really inexpensive and cheap, so you know, being a little boy in eighth grade, you know, it was kind of like a little bit of paradise to go back and spend 5 bucks or 10 bucks and get this sweet, you know, airsoft gun that you can kind of, you know, shoot at cans or whatever in the backyard. And of course, you know, when I came back to the States after my trip, you know, you couldn’t really take airsoft guns on the airplane, you know back, because they, you know, they looked somewhat realistic even with an orange tip at the end of the barrel. And so when I got back to LA, I started looking online, you know, and went into like I think it was like a big five sporting goods at the time to kind of look for some of the guns that I had bought back in China, and I just realized that, you know, the retail – there’s a huge price gap where literally some of the stuff that I had bought back in China at retail was you know 6, 7, 8 dollars U.S., and you know, back in the States, they were selling for 50, 60, 70 dollars in some cases and you know, if you could even find them at all. So, that’s, you know, that’s kind of one of the big light bulb I guess moments. I’d already been selling products on eBay for a couple of years, and I realized whoa, you know, we can, we can try and really make a go of turning this into a real business because there is a lot of demand on eBay at the time and not a lot of supply. Chad: So, eBay is technically where you started all of this, and then how did you progress to that next level? Like what was your decision, what was your decision-making process to say okay, this is working on eBay, what’s next? Mike: So, when I started, we started eBay and you know, very quickly there are a lot of transactions and sales, we were capturing a ton of demand, and that was in 2004. A couple of years in, eBay started really to reign in a quality standard because they had kind of had a dilemma of, you know, they wanted to be competitive in the marketplace space with Amazon, and they identified Amazon, you know, as having much higher quality of service amongst their seller base. And so, at the time, eBay sellers, a lot of them were up and arms about, you know, seemingly impossible standards for sellers, at the time on the marketplace. And so, we were obviously affected as well because what eBay was doing was, it would kind of, you know, just selectively choose to kind of promote and demote, using an algorithm, certain seller listings. It was a very, very real kind of wake-up call moment where we said you know if we really want to grow this into a real business and make it sustainable, we have to own the customer relationship and we have to really own the customer communication channel. It couldn’t just be us sort of in a sea of other eBay sellers or we’re just selling widgets on eBay, and that was when the idea for airsoftmegastore.com as a website, as standalone, you know, B2C, direct to consumer ecommerce website was born. In the early days when we first launched the website, we took all of our eBay orders and we were also still on Amazon at the time, we took all of those orders and we placed, you know I think 3×5 postcards in there, that said ‘Hey, you know, thanks for your purchase, here’s a 10% off coupon to go buy, you know, make your next purchase on our website’, which was airsoftmegastore.com. So, that’s kind of when the transition happened. Chad: Awesome. It’s funny because there’s a lot of, there’s a lot of people out there right now selling on Amazon. I’m not sure if you know about this, this recent influx of people going and private labelling products and selling on Amazon. And the thing that, I think the thing that’s important to hear here is that, or listen to here is that you took a platform that was enabling you to sell, and you made sure you push them to your own website so that you could own that entire process, and with people who are currently selling on Amazon who might not recognize the importance of this, like what is your advice to them who are, to people who are just strictly trying to sell and make, you know, make a brand on Amazon or just on eBay? Mike: Yeah, sure. I mean I think that kind of speaks to the earlier question of the dynamics, the marketplace has really drastically changed in the last, you know, even few years, but definitely certainly since 2004. I think there’re a lot of businesses out there that are doing, you know, are probably thinking about doing what we did with airsoft, and you know, I think, I wish there was a more defined answer; we said, you know, absolutely, you know, go start your own ecommerce website because you obviously can own the customer relationship, you can better build a brand. And I think for some businesses that might make a whole lot of sense, but for other businesses, you now, and I’m not a very, very well versed in kind of Amazon businesses or you know, kind of a lot of the FBA sellers I guess that are out there, so I can offer a, probably only a limited perspective there, but from what I understand the fulfillment costs and the, you know, just operational overhead that Amazon charges, you know, relative to kind of what you might need to invest in your own ecommerce website, your own kind of fulfillment, that sort of thing. You know, it might make sense for some but not always makes sense for others. So, I think it’s a function of, you know, what kind of business are you trying to build? Are you, are you happy kind of selling a commodity product and doing a ton of volume? Or you do you really want to have it evolve to kind of, you know, own the kind of customer brand experience, in which case, you know, the branded site might make a lot more, a lot more sense. Austin: Sure, I’d love to hear, you know, you’ve moved in and are working on, you know, one of your main projects is the Drip Club. I’d love to hear kind of how you approached Drip Club and growing Drip Club from your experience with Airsoft Megastore, and can you maybe, for our listeners, describe what you’re doing with Drip Club and why you went the route you were going to Drip Club? Mike: Sure, yeah, it’s a funny story. I mean I think with Drip Club, the opportunity sort of fell on my lap one day. I had a couple of really close friends who started the company and you know, we just sort of decided that hey, the next thing that we’re all going to build, we’re all going to build together. So, it was very serendipitous I guess, you can say, how I got involved, and yeah, there’re a lot of lessons that I think that you know carried over from airsoft. You know, ecommerce obviously, the landscape of ecommerce has changed so drastically so there’s a lot of, you know, technology investment that we’re making, you know, custom sort of developed functionalities, that I think can really set us apart from the competition. You know, when Drip Club started, we were a, you know, kind of like a birch box for liquids that go inside the refillable electronic cigarettes, and so you know that sort of evolved to a point where, you know, we’re looking at a lot of data that we have in terms of taking the data, putting it through an algorithm and trying to figure out, you know, what customizations customers really want to be satisfied and continue to kind of keep their subscriptions with us. So, and that’s all technology-driven. I think if you try to do that, you know, 10 years ago, it would’ve been extremely cost prohibitive and I don’t even know if the technology would’ve existed to sort of accomplish that. But now you know, there’s so many different avenues in which you can build technologies, and contractors and you know talking to data scientists, sort of contractual basis that I think has really allowed us to grow the business. But I think a lot of the cornerstones of ecommerce still, you know, stand true, the merchandising, the marketing, SEO and display ads and stuff like that, that’s all, you know, those are all kind of core parts of what we do. Austin: And so, can you maybe elaborate on some of the customizations, that’s really interesting about what you guys are doing. So, if you could maybe go and, you talked about how it’s a birch, was somewhat of a birch box for liquids that go into electronic cigarettes, how has it evolved and what are you looking at it right now, and what are some of the customizations that you’re excited about doing on, on the Drip Club website? Mike: Yeah. You know there are a ton of things that we didn’t have in terms of technology when we started even a year and a half, two years ago. So, you know, it’s very similar with birch box because you know flavor preference for folks that are using e-cigarettes, I probably – it’s probably a terrible analogy, but you know, cosmetics and even you know food and they’re all very similar in that there’s a lot of products out there that are very polarizing, you know, some people love it or hate it, sort of like you got to figure out the big challenge of, you know, if we’re really going to grow in scale our subscriber base, you know, grow in scale, the people that buy products from us on a regular basis, you know, how do you cater that experience not only from a site shopping experience, but really starting with the products that, you know – you’re basically putting in front of them products perhaps they didn’t even know they wanted, and then you know, building up good will so that they try the products, they go ‘Oh wow, you know, I’ve made a discovery through the Drip Club for my new favorite flavor’ and so we put a lot of thought into kind of how do we do that at scale and so one of the specific examples I guess is when we started the company, it was literally, you know, my started out of, my partner’s home, his garage you can say, and they were the guys that were curating, you know, every single subscriber’s box. So, as you can imagine, you know, manual curations up until a certain point are kind of fun, and you know, maybe after you do a couple hundred of them and you have to do them every single month that it doesn’t turn out to be so fun. Austin: Yeah. Mike: There’s so many variants, right, so we built a lot of, you know, standardization and technology to kind of make that a little bit easier on our operational team. Austin: I’m interested what you mentioned about how, you know, it’s like food and like cosmetics, how people have, you know, it’s very polarizing, people have their personal, whether they like, flavor profiles that they like, and when you look at it from the perspective of selling something online, obviously lots of people sell food, that sort of thing, food and cosmetics online, how do you guys approach the, I guess, the problem or the desire for somebody to like kind of try something before they buy it from your, from your website? Mike: Sure, yeah, I think a lot of it for us comes down to just pricing. So, we’ve been really fortunate to kind of work with a lot of bender partners that realize that hey, you know, we have a great product, but if people, if we’re going to get regular customers for this, we need to really get this out there and have people sample this product to kind of make their own educated decisions. So, I think a lot of it we tackle pricing, we try to, you know, we’re really trying to reduce the cost of effectively discovering the products, and so in a perfect world, that’s kind of win-win for all the parties involved, for us gaining a dealer or a customer base rather that can purchase products from us because they trust us, for the customers they think it’s a great experience because they’re discovering products at a discounted rate, and then for the brands or manufacturers I guess themselves, they’re getting their products out into the market without having to sort of do like shout-from-the-rooftop marketing. And so that’s kind of how we’ve approached it. I think, it’s interesting because if you look at, you know, a standard kind of transactional ecommerce retailer, there’re a ton of tools out there that again 10 years ago didn’t exist or cost prohibitive, but now you can do a ton of dynamic testing, you know, starting with basic Google webmaster tools, like AB testing and kind of moving from there into kind of some of the more nuanced and specialized platforms, you know, one that we’ve been looking at very close is one called Optimizely, and you know, so you can do a lot of dynamic like content testing, because half the battle is sort of messaging your offer the right way, and so to that end I think there are a lot of ecommerce retailers that probably have a ton of, a lot more you know runway for them to sell more, increase their conversion rates, and increase their average values, if they just kind of could listen through real-time feedback to what their customers actually want. Chad: Makes sense. You know I do want to step back on one question here, you talked about this curation process and standardizing that process, right? And selling a business that’s doing about 20 million dollars in revenue in airsoft requires some serious standardization so that things run efficiently and now you’re obviously doing that with Drip Club. What kind of advice do you have about building systems to the people listening? We talk about it so much, but for somebody who’s basically sold a business at 20 million and now starting his next one, like what can you say about building systems to the people listening and how important that is, you know, for their business? And how about, I mean how they might go about building theirs as well? Mike: Sure, yeah, I mean I think it really starts with recognizing, you know, to your point, the importance of having systems in place. There’s a, you know, there’s a great quote from a, there’s a book called The E-Myth by Michael Gerber, and that was a very formative kind of book for me to read and there’s a line in there where he says, you know, “Don’t work in your business, work on your business.” And so that I think has a lot to do with building systems, and also placing into those systems really high-quality people to kind of keep them running. What we did, a lot of times I think in a growing business like in airsoft for example, the systems and the processes, like we had an entire binder filled like the SOPs or you know Standard Operating Procedures that sort of ran the gamut of sort of if this happens, you know, what do you do. If a customer emails in with this kind of question, what’s the kind of go-to response, and so those are all a function I think of when you’re growing and there’s obviously a lot more transactional volume, there are a lot more things that could, you know, potentially go wrong and you have to kind of diagnose and troubleshoot. So, you know the entrepreneur is usually one or, one guy or if you've got a partner or two, you’re only a few people, so you’ve got to really lend I guess your tribal knowledge to make it a lot more accessible as you hire people and grow your business. And so, it’s not, you know it’s not rocket science, but at the same time, you know, sometimes it’s not intuitive when you’re stuck in your business, kind of running the day to day and you feel like you’re kind of buried in, you know, customer service emails or you know having to reorder products from vendors and you know at the end of the day, you just kind of tired and you want to go home, you don’t want to, you know, spend your night writing Standard Operating Procedure binder about, you know, what to do with customers, you just do it, you know, you’re just frustrated. So, I think what was really helpful for me was recognizing that look, if I walk away from the business and take three days, it’s not going to be the end of the world as much as you think and are afraid that’s going to be the case. The worst thing that could happen is you, if you’re really plugged into the business, maybe your sales take a dip, maybe your customer service ratings take a dip, but you know, you got to have faith that you can bring those back up and really step out of the business to kind of create the processes that you then want to bring back into the business. I think one thing I sort of learned the hard way and still kind of learning as I go is ultimately you can have the best, you know, processes in the world that are written for you by world-class, you know, experts, but if you don’t have the right people in the business to really enforce those processes, and sometimes even break those processes, you know, in the pursuit of like customer satisfaction or going above and beyond, then it’s all good on paper, but it doesn’t really work out in real life. So, that’s one thing that I think I guess is the nuance in all of this is that you can write the best processes and you should, but at the same time it is very, very important to kind of focus on if you’re growing a business that requires processes and some automation. It obviously means you’re probably doing very well and you know all of these kinds of process things are good problems to have, but you do need to also be mindful of the quality that people you’re bringing into, to enforce and sort of adhere to your processes. That was one lesson that I learned I think along the way, because I wrote a ton of processes, ton of SOPs, and with poor kind of employees and perhaps employees that were not trained enough on those processes, they didn’t really make a huge dent on, you know, improving the operations of our business. Austin: You mentioned something Mike that I thought was really interesting. You mentioned that as you grow, you need to lend your tribal knowledge to others. For the listeners, can you expand a little bit on that and what you mean by lending your tribal knowledge to others? Mike: Yeah, yeah. I’m going to try to articulate it as best as I can. I think, you know, in the shoes of the entrepreneur, one of the biggest frustrations probably, especially for, you know, entrepreneurs, or small business owners that have maybe just a couple of employees, right, you’re not a big business but you’re definitely you know making money and you’re not working for anybody so that’s kind of cool but also frustrating and incredibly stressful at times, because I’ve definitely been there and I think it’s a very, a formative part of, you know, the entrepreneurial journey. I think in that process and in that mind set, you know the best way I can really describe the whole bit about tribal knowledge is you know, there are probably days when you walk into the office and you’ve got an employee and you know they did something wrong and you’re just like, ‘Man, if only they saw what I saw, if only they made you know decisions the way that I make decisions.’ And so, not to say that the owner or you know the entrepreneur is always right, but you know there are probably objective, you know black and white times where it’s like it’s pretty clear that hey, you know, something should be done in a way that to the entrepreneur is common sense, but to the employee is kind of like whoa, you know this is, I didn’t know that was required of me. So, I think that kind of, those types of moments of frustration are what drive the need for you as an entrepreneur if you’re effective, to write down a repeatable process that sort of captures, ‘Hey, in these very specific situations, here’s how we should be responding to those situations.’ I think you know there’s obviously a ton of examples I can give, whether it’s customer service or you know fulfillment or you know reordering products because those are all kind of key elements to making an ecommerce company go in terms of sustaining sales, growing sales, you know, keeping your customers happy, that sort of thing. Chad: You know I got a question for you, we, we try to hammer these points home quite a bit in the podcast, so it’s really great to hear somebody of your level or at least the ecommerce level that you have been at, talk about this and really support some of the stuff we’ve been talking about for so long. And I’m sure a lot of it actually played into the sale of your business meaning you know when someone came to purchase Airsoft Megastore, you know, this is a big part of it, the operations, the systems, all that good stuff. So, on the sales side of the business, what did you learn about selling an ecommerce business, especially at that size? And like what kind of advice do you have for those who are thinking about selling or even on the flipside buying an ecommerce business? Mike: Sure, I think a few key things, and I’d probably separate them into different buckets, one is you know it’s really great to hear you guys are hammering home the points on, you know, operations and the processes because that’s a huge part of like any buyer’s consideration is, you know when I buy thing, is it going to run itself and I can you know add value and enhance the business or is it going to fall apart because all of a sudden, you know, certainly you know key stakeholders are no longer there, that sort of thing. So, I think the process is important. One thing also probably, you know, to kind of keep in mind and actively work on is if you look at what, you know, a lot the buyers, at least certainly was the case for airsoft, what they look for, pretty standard things, you know, audited financial statements, which basically speak to kind of the discipline and you know the tightness, the overall tightness with which you run your organization, your operations, and that flowing through to your financials. So, that was, that was kind of a big lesson I guess or eye-opening experience for me was you know it’s one thing to kind of have a bookkeeper and have you know relatively clean books, and it’s quite another thing to, you know, have audited financial statements that are kind of prepared pursuant to GAAP, you know, Generally Accepted Accounting Principles, right, so that was a very, very eye-opening experience for me. And then I think also probably taking a look objectively, and going back to the idea of kind of taking yourself out of the business, you know, for a few days or a few weeks even to kind of really objectively look at, you know, why is it, what’s my motivation for selling? Am I just completely done? Am I, you know, do I, have I reached my sort of limit in terms of adding value and it’s time to bring in a more professional, perhaps more well-capitalized business partner to help me, you know, take this thing to the next level which is certainly a common trend I think amongst entrepreneurs selling their businesses, not only you know just in ecommerce, and that sort of thing. So, I think the ‘why’ behind why you’re selling your business is really, really important, and so far as it kind of drives what you’re willing to do in order to actually go through the very, you know, tedious process of selling the business. I think if you don’t have that kind of element down in a very objective way, you might be walking into something that you’ll regret later on, because you know, at the end of the day, it’s frustrating and it’s very, you know, there’s a ton of pressure that I can probably say entrepreneurs feel, it’s like a rollercoaster of emotions, right? Running your business and putting out fires, that sort of thing, but at the same time the reason why we’re probably all, you know, still entrepreneurs is that it’s exciting, it’s dynamic and you kind of get to be your own boss. There’s some truth to kind of the positive effects of that. So, I think you know if you kind of look at it with impartiality and you step away from the business state, you know what I’m going to miss that, I’m going to miss being in charge, I’m going to miss calling all the shots, you know, then I think there’s a very real kind of business decision you have to make in terms of, hey, you know, is it possible for me to build another business after this, I mean because I think based on you know stage of life and kind of what you want to do in life, you want to kind of cash out and kind of travel the world for the rest of your life, you know. All of those elements as trivial and as sort of aspirational as they might sound, they’re very real considerations that I think people probably don’t think about because they’re just so stuck in the heat of the moment saying ‘Man, it’s just so frustrating, I just want to, I just want to have a life, I just want to you know, not have to worry about all of this pressure that inevitably comes with, with the job of running and growing a real business.’ Those are the things that I think in retrospect – Austin: Sure. Mike: –would be important to me now. Austin: And how old were you Mike when you sold your business? Mike: I was, let’s see, I was 22. So, I was young. Austin: So, 22 year old and right now, you’re 25 or? Mike: I’m 25, yeah. Austin: Okay, so 25 all right, so just, I know we’re heading towards the end here, I want to wrap up, I want to ask you this because I’m really interested. At 25 now, what do you look back and see 20-year-old Mike, what advice would you give 20-year-old Mike in, from the vantage point of five years later and after going through a sale and starting another business? What would you sum down and tell 20-year-old Mike as advice? Mike: Sure. I think, you know with the benefit obviously of hindsight always being 20/20 – Austin: Sure. Mike: – I think, you know, investing in people is a huge thing that, that I think I would probably hammer home the most. I think you know when you’re a first-time entrepreneur, every accomplishment, every achievement that you have is, you know, a big win right at the time and something worthy of celebrating, so I think you try to sort of encapsulate that and have that show whether it’s in, you know, profits or whether it’s in sort of the growth of the company, you have it, you know, you channel it in those ways. But I think there’s a huge benefit to kind of sharing that, sharing those wins, you know, amongst your entire organization. I think that’s probably something that I, you know, try to do a lot more now is finding great people and then aligning their interests because at the end of the day, you’re not going to build an enduring business that is going to be, you know, impactful and long standing and sustainable if you don’t have people that are kind of right there, like shouldering a lot of the pressure with you. So, I think a lot of first time, like or even very established entrepreneurs really focus on eeking out a ton of profit and, you know if you guys talk to Sean on the last episode of the podcast, he’s probably, I think his company is like a certified B-corp, so they’re got, you know that even to a further degree builds right into the business model, so that’s one big thing. And then, I think the other thing is probably just realizing that the whole process should be enjoyed. You know my mom always tells me this because when I’m when the most stressed, she’s like, she’s the therapist that has to kind of hear it, and get like just roll her eyes and go, okay, you know, that’s nice, but you’ll live to fight another day, and I think she always says you know, sometimes you got to stop and smell the roses. I think that is probably a piece of wisdom that I don’t give her enough credit for, but yeah, I think you have to really just enjoy the process and recognize that it’s always a marathon and not a sprint, and if you get burnt out, you know, it’s not good long-term for your health and so, that’s one other thing that I think I’ve been a lot more mindful of, you know, and kind of what I do now. Chad: Good stuff. So, we definitely need to wrap it up here, but I do have one question for you before we do the wrap up part, but you have another business, software, a software company, I think it’s called RetailOps, can you take like 15-30 seconds and explain a little bit about what that is and who fits that, fits that platform, because I believe Huckberry’s on it, correct? Mike: Yeah, yeah, they’re on it. I think it’s basically, RetailOps you know, started as an ERP for ecommerce retailers and sort of has really evolved. You know I got involved with the company when I saw the, you know, MVP like beta version of the product, and it was being developed for a fairly sizable, you know, kind of first client retailer that is you know, doing close to a 100 million in revenue, and you know, it really just addresses the issue of the operations of an ecommerce business. They’re a ton of ERPs out there that sort of address one silo of you know warehouse management or order management that sort of thing and doesn’t really take you through the flow from the time a PO is created and cut to the time you receive it in your warehouse, the time you, you know, merchandising products and pushing to like all of your sales channels you might have, you know, marketplaces, you know, multiple websites. And so, you know, it was really born out of frustration that that didn’t exist for ecommerce retailers. And yeah, it’s, I mean it’s great software, we run it here at Drip Club and it’s a great software for I would say ecommerce companies that are doing anywhere north of 5 million to kind of 250 million in revenue where you start to get bogged down by a lot of operational processes that need to be solved with software. Chad: Awesome. Cool, well the last question of the day then is where can our listeners connect with you? Mike: Yeah, absolutely. I think the easiest way to connect with me is on LinkedIn. Chad: Perfect. Mike: Yup, any sort of questions and you know ecommerce-related, I’m always more than happy to engage in conversations. Chad: Awesome, Mike. Well it’s been a pleasure to have you on the show. I think one of the most interesting episodes we’ve done in the sense that doing over 20 million in revenue, and then you sold it and you’ve moved on to a few other things. It’s pretty exciting to have somebody of your caliber on the show and talk about your experiences so that people who are not there yet can get an idea on what’s it’s like in the process that you went through, so we appreciate that. Mike: Yeah, absolutely. Thanks guys for having me on, it was a blast. Really appreciate it. Transmitter: Thanks for listening; to get even more actionable insights from the most influential experts and the most successful CEOs in ecommerce, to help you grow your business from one million dollars to 10 million plus, visit ecommerceinfluence.com.
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