Okay, let's get started.
Hello, my name is Chris Hong. For those of you who are in the STM Forum, I post under CMDeal.
And I'm absolutely delighted to be here today moderating this panel called
"How to grow your affiliate business to sell for 8 figures or more"
For those of you who are little slow with the math... 8 figures would be 10 million dollars or more.
Just a quick show of hands amongst people in the audience,
how many people in the audience would actually be interested in
eventually selling your business for 10 figures or...?
Okay so, quite a large crowd.
Let me ask another question,
how many of you in the audience today think you could sell your business?
Okay, a much smaller number...
So, it looks like there's a great majority of people who are interested in potentially selling their business.
Ideally for 8 figures or more but very few who believe they can do it right now
and would love some guidance around how to potentially make that happen,
and... but we're in luck. We have here 3 incredible entrepreneurs
who've each built their online advertising in the marketing business
and have sold it for 8 figures. That's to say, at least 10 million US dollars.
And it's an amazing group but what's really fascinating about this group
is that each one of this individuals have done and achieved that success in 3 completely different ways.
And we're extremely fortunate to have them with us, sharing their experiences.
So, in terms of introductions to my immediate... my immediate right, we have Dirk de Bruin.
He sold an affiliate marketing business that was based upon SEO.
And for those of you who are active in the SEO world, you may know Dirk's partner, Glen Allsopp.
He has a very famous blog called ViperChill... is somewhat of a guru in this space.
Dirk and Glen built up their SEO business from pretty much scratch.
Sold it to a South African company earlier this year for... at a lower range of 8 figures.
I'm not allowed to disclose the entire amount.
We also have, in the middle, Gerard who built and sold his company,
who focused primarily around viral content.
And for those of you who are fortunate enough to attend his speech earlier this morning,
you'll know, that he was the founder of Elite Daily,
an incredibly successful viral news publication. He sold earlier this year to
one of the most dominant media companies certainly in the UK
and increasingly in the English speaking world, DMGT for mid 8 figures,
in fact, exactly 50 million dollars cash to be exact.
And then, to the far right, we have Carlos Cashman. He built and sold his marketing company,
which was very much a pure affiliate marketing company but focused on paid traffic.
And he sold his company called CourseAdvisor to the Washington Post
for... well, over 8 figures if the rumors are correct.
So, 3 amazing entrepreneurs, 3 completely different paths to their success...
I think we're in for an incredible conversation. So, let's dive right in.
I'll start with Carlos. Carlos, conventional wisdom, at least in this industry
amongst many affiliate marketers is that you really can't sell an affiliate business.
There's no value there... there's no enterprise value. It's really dependent upon
the campaigns that you run. If the campaigns die, there's no value left whatsoever.
And I think all 3 of you are living proof that that is not the case
or it doesn't have to be the case. So, let me start by asking,
so why have you been able to sell your business for
a significant amount of money
when so many people in the affiliate marketing world believe that that can't be done?
Well, so I know Chris doesn't want me to say this but I'd agree with the conventional wisdom.
You can't sell a typical... a traditional affiliate marketing business, I don't think.
There may be certain niche buyers who would be interested but was, we all know, it's...
to sell something and particularly to sell it for a high value,
you really need to build the asset of something that's unique and sustainable.
And I think that's really the key to doing it. So, cause people are buying, you know...
usually it's not just buying, you know, revenues or if it die...
if someone's looking for something, it's gonna continue and has a certain level of stability to it.
So, the way I look at doing this is... and I don't wanna go too far ahead of us here but it's a...
I've always sort of joked about it. We call it the Michael Corleone plan.
Anybody's familiar with the Godfather here and that, you know, there were getting out of there,
getting out of the business in New York and moving to Vegas and buying casinos and going legit
like, you know, there's a great way, you know...
everybody who does affiliate business here has tapped in to a great source of cash flow and wealth,
and if you have... but it can be fairly short term thinking,
but by having a longer term vision or longer term plan you can use that to build assets
that are saleable and they give you something that is unique and sustainable.
In our case, it was technology, you know, we build unique tech
that allowed us to do something no one else could do, particularly at that time it was.
And it was... you know, technology was both broad across the...
you know, all of the marketing spectrum we used in paid search
and also very narrowly focused within an individual vertical
and both of those things can add an awful lot of value to a company, to anything.
So, you were doing essentially lead generation or affiliate marketing for higher education
but instead of just running offers, you build your own technology.
Can you talk a little bit more about that?
Yeah, I mean, you know, it was... we were lucky in some ways because of
our contacts and network, but we were... this was early on in Google paid search,
and there wasn't a lot of tech out there that manage key words.
And actually Google is only one of four search engines at the time
when we were building this, it was a split a third, and a third and a third
between Yahoo, Google and Microsoft,
and then, there was even Ask Jeeves at 10% of the market.
So, we actually had to build technology to run our own keywords
and run our own bidding on these four search engines,
and we were running 250,000 keywords auto bidding
and we were able to dial our margin to within a few percent actually.
So, if we had customers who needed more leads,
we could actually dial down our margin and up the traffic.
But if we were in a place where we were...
the customers were happy and we want to maximize our margin, we could go the other way.
But... so, we focused on building that technology. We had a group of...
I mean, we had over 19 PhDs actually working on building a lot of this
and again, it was lucky with my relationships and...
and where I gone to school where I was connected to some these folks.
But that was a broad advertising tech that we actually ended up using...
separating from the business and using to start multiple other business
that have also sold for 8 figures and 9 figures as well since then.
Within Course Advisor, we also then went and built vertically specific technology.
So, we were an education lead generation company.
There are very particular, as I'm sure a lot of you guys know,
in every vertical there is certain weird ways they work, certain things they do
and there's a lot of stuff this particular education lead gen
that we needed a pretty deep technology stack to address.
And, you know, it takes time to that. I mean... and we didn't do this right...
we weren't able to make money right away with a site we built and droop all over a weekend.
And we got that site scaling to, you know, doing half a million a month and growing from there.
And when we started the rebuild process of this vertical technology,
which was supposed to be done in a few months and of course, it took 12 months.
By the time it was over... or by the time we launch that, you know,
the other site was doing a few million a month
based on something we built on a weekend and drooped over,
then, we replaced it and had a pretty strong technology system
and what we were bought for was actually that technology in a large way.
You know, The Post had a large... has the largest education division
and, you know, they were interested in what we may able to do
and accomplish there and how it made that particular industry work really well.
So Gerard, Carlos talked about building an asset, and in his case it was technology as an asset.
It wasn't necessarily the campaigns that he was running,
or it was one of the campaigns but was supported by
this proprietary asset that he had in the technologies.
So, what was the asset that you built?
You know, for us, a lot of it was the team, you know,
and, you know, early on my career I mean, you know, it's pretty much...
a lot of times I was a solo entrepreneur, you know, with a very small team.
You know, in regards to Elite Daily, I mean, we were able to build an amazing, amazing team
that really understood our audience, really understand the content strategies
that was not just getting one viral article a month that achieved, you know...
you know, eighty million unique visitors, but
we really had... we really were able to master it, you know,
and understand and how to get, you know, multiple articles throughout that month
and what really triggered our audience to really engage and share that content.
And, you know, for us it was very much the team and our strategies,
and the outlets that we built to really get that distribution out there.
What's interesting is that you mentioned team cause I was speaking with
an affiliate earlier today about this topic of building assets
and then, building a real sustainable company
above and beyond just an affiliate campaigns that he was running.
And, you know, he was reacting saying, "Well, you know, I really
don't know, if I wanna have a team.
I'm not sure if, you know, many of the things that I'm doing, you know, if I reveal my secrets
and that person may go running off and just copying me, competing directly with me..."
and I mean, Dirk this is probably very relevant to you cause you were doing SEO.
SEO involves quite a lot of techniques that you probably don't wanna necessarily
have someone going off and competing directly against you.
So Dirk, can you talk a little bit about... and particularly in your case,
you know, you're further challenged in creating value because,
you know, you're dependent upon Google's alg-... you're dependent upon these trade secrets,
partly in terms of getting any type of valuation or assets.
So, can you talk a little about, you know... did you build a team,
how large was the team and how did you, or did you overcome this concern around
people stealing your strategies or stealing your ideas?
Yeah... so, that's always a concern in the affiliate marketing industry also with the SEO,
and I'm a big fan of like processes and creating systems.
And one thing that I can compare it to is say,
McDonalds with a... the production chain and they broke down all the
pieces of the production chain into individual components.
So, you have like one guy who is doing the buns or the burger,
one guy is doing the beef patties, one guy is... all these different guys.
But they can all be unskilled labor. They can all be minimum wage
and they can all be replaced at the same time.
So, that's what we did with our business as well. We broke down the entire production,
say the order delivery and the concept of the SEO.
We broke that down to as many individual aspects as possible where they can all be done
by virtual assistants that we could hire for 5 or 6 hundred dollars a month.
And they wouldn't know, each other's processes,
so everyone would only know one little piece of the process,
and even if those people disappeared or even if they took that data that they had,
they couldn't really do anything with it
because it was simply limited to just that part of the task.
And when we grew, we had about twelve full time assistants
and about 50 outsources that we would manage
depending on the volume of orders that we had and that we needed to work with.
Okay. So, your approach was let's keep all the secrets to our selves, or to you and Glen...
Let's just hire a bunch of people who can do one thing...
you know, hopefully they're not too smart enough to put it altogether
and make sure they don't talk to each other.
Yeah, that's exactly it.
Gerard, was that your approach?
No. No, that definitely wasn't the approach...
you know, for us it was more, you know, bringing it in-house.
You know, it started with me and, you know, two friends,
but we really had to, you know, build out that team internally and, you know,
at the point of sale, we had it close to 70, you know, internally. We did also...
Seventy employees?
Right, and we did also have an external team that we, you know, that we brought on board,
we had over 2000 contributors that we had to also teach the process
of what it took for them to be able to write and contribute the right content
and what we were looking for, what type of content, what type of topics, what type of headlines,
all of the... you know, specific keywords.
But... but, you know, it was a different model for sure.
You know, you don't find it common on that too, you know,
when we talk about building a unique asset, I mean, I would say, you know,
a process and a structure of an organization is an asset in itself also.
And I've, you know, grown companies from 0 to 300 people in two years
and a couple of hundred... I've done this a couple of times and, you know, on the 30 and 15,
I'll tell you when you start to scale any business, if you really start to get scale,
will develop a certain level of complexity
that you're gonna have to manage just on the mundane business side.
Like not even just talking about, you know, doing unique things and...
and advertising and traffic generation. Remember,
just making the business work and have... may orchestrating
those people working together gets complex the more you get.
As you add 20 people, it's... the people who are managing that and doing that
are very different from the people who work at 50 people,
you know, and know how to manage that. And as you start to grow,
you'll actually start to build competitive assets just by virtue of growing the business
and there's a lot to be said for that like even if you're not protecting a particular trick or anything,
a business of that level of complexity won't be the kind of thing
that one person can leave and just recreate overnight.
But would you recommend that for someone like Dirk?
So, he was building a business that was very much dependent on a small number of trade secrets,
dependent upon whether what Google decides to do and how it reacts,
is that really relevant for someone like Dirk?
I have an SEO business that started with 15 people and now, over a hundred, about 150.
And we went through sometime thinking about that because
there was a time, people... it's based overseas largely and a guy left and try to recreate it.
But when I start to... as I got into it, you know, I bought it
and then, combined it with some of the stuff we were doing
and bought into it with a partner, you know, once we grew to 30, 40 people,
like he was really worried about it cause he was managing the overseas team
but I was... I said, "Don't worry." They can't reproduce what we have
because it takes all these people to do it.
Like they could go and try to setup shop and try to hire the people and...
and inspire them and get them working and get the cash flow to make it all happen
because you don't make money immediately with a business like that, it takes a little while.
That's a lot to be... if someone wants try that, more power to him.
Every day we were building value. We were growing and we were doing more.
So, you know, I'd really didn't worry about it
and it hasn't been an issue for us as we've grown because
we've built ahead of steam basically. It's really hard to duplicate.
An SEO in particular, you do build assets, I mean you're building
whether to network a site or a single individual property.
You're building something that has a lot of value to it.
So, you know, on one level of your business, it's easy enough to...
for one person to leave and duplicate and steal entirely
then, you certainly aren't ready to sell the business. No one's gonna buy that, right?
I would totally agree and I would say, you know, if someone's not trying to steal your business
or recreate what you've done, you're doing something wrong.
You wanna make sure you did something even worth stealing in the first place.
In the first place... that's step one.
Let me switch gears a little bit. One of the challenges I think for
many affiliates who are trying to do what you've done,
build assets, see some sort of exit has to do with compliance.
And by compliance, I mean... and let's be honest here,
you know, some if not... certainly not all but a large number of
the big campaigns that we hear about in the affiliate world,
a lot of it is achieved because... as result of someone pushing the boundaries on compliance
in one form or another. So, that maybe legal compliance, traffic sources,
not abiding by the traffic source regulations, cloaking, offers that maybe a little bit shady,
messaging that maybe a little bit misleading, a little bit aggressive,
does the way you view compliance change if you're thinking about seeking an exit? Dirk...
Yeah, absolutely. If you're thinking about an exit then, compliance is incredibly important
because as a buyer, your intention is to generate an ROI on your investment, right?
And you don't wanna do anything that's gonna make that...
that ROI potentially risky. So, compliance, whether it be legal issues,
whether it be the fact that your traffic source could ban you
and you could stop your source of revenue or whatever it may be,
anything that can cause a risk to the buyer, that's gonna be a problem.
And that's... we also had that not with legal compliance but
when we started out our business, we literally started from nothing
and we build that up but we didn't have the proper setup in terms of company, in terms of
payment processes and things like that, and when it came to the point where we wanted to sell,
we actually had bit of issues with that,
which made it difficult to the amount of people that we could actually sell to.
Okay... Gerard?
Yeah. I mean, you know, as an entrepreneur, you know, when you're, you know,
you're a smaller team or you know, you're, you know, starting up a company, I mean...
or you're an affiliate marketer, I mean, you can... you know, it's our job to push the boundaries.
It's our job, you know, to really try to, you know...
really, you know, be creative think outside the box, you know.
Sometimes, you know, you're doing certain things for Elite Daily, you know,
a lot of people in the early on goings was like,
you know, how much are you buying traffic or using specific, you know...
you know... you know, different sites to really buy that traffic rather than us
actually knowing what we're doing and organically being able to understand
how to get certain traffic viral. And it's, you know, it's important, you know...
I mean, you know, for us when we had DMG come to acquire us,
that was a major factor. I mean it was months and months and months
of them coming in to the company, you know, completely understanding our process,
making sure the we were compliant, making sure that that traffic was 100% legit
and you know... that we were up to par again to make sure and mitigate any risk whatsoever
that, you know, if we'd burnt by interpreters or we weren't compliant,
it would risk the business failing and not fit for them. So, it's extremely important.
Carlos?
One of the most important things that you can do if you're building a business,
I think is to always look for distribution of risk.
To distribute risk in as many places as possible. So, for instance that might mean multiple traffic sources,
multiple buyers of your products, your leads whatever it is as many as you can,
and then, on top of that you always have to have a strategy for dealing with compliance, right?
And it can be an issue. These things happen.
This is... one of the first times I realize Yahoo was a crap company
was back in '06 when I got a call from their revenue depletion team.
And, you know, we were running 250,000 keywords on Yahoo,
very successfully, people obviously loved what we're doing cause we were converting,
we were able to pay for that and they said, "We don't think you should be advertising
on this hundred thousand keywords so, we're turning them off tomorrow."
and we were making a lot of money of those. We are on a very steep growth path
and we're trying show that, you know, to...
we're building the company to be able to sell at some point.
You don't wanna have a bleep like that and it was a big deal
but because we also had Google and Bing and Ask Jeeves at that time and we also had other
larger customers that we could rift, we could backfill on the other engines,
we were able to deal with that but we had to be on top of that.
We had to know what they were doing and why
because we knew Google and Bing were gonna do it soon and they did.
So, you know, you have to be on top of that. There's always gonna be this issues
but if you have a strong story, any good acquirer is gonna understand that
you know, we deal with this, right? We deal with companies that control entire markets,
like Google and Facebook. It's, you know, it's a close system.
So, there is a certain level of risk there but if you... it can actually help you
if you've had issues with compliance and things like that
and overcome them over and over and you show a certain resilience
and that you always have strategy for dealing with it
and you recognize it's just a cause of doing business.
So, by time you were able to complete the sale, you know, you
tied up a lot of these compliance loose ends,
but maybe you could confess, you know, when you were starting out,
where you always as clean or where you kind of pushing the boundaries a little bit?
Who's that for?
Anyone who wants to volunteer.
Of course you pushed the boundaries, you know, like there's a lot of company who've done this.
Again, this goes back to sort of the Michael Corleone plan of business I mean,
Zynga started off using offer power which was just become tapped away
doing an enormous amount of stuff that people would call pushing the boundaries,
you know, as far as it can go and further. And, you know, but they use that
with a long term vision to build into something different.
Tumbler started off... you know, these guys were faking tens of thousands of accounts
to make their business work initially.
Even Trip Advisor, I know, the founders of Trip Advisor
it's a great SEO story and everyone knows that today
but they started off by pushing the boundaries like crazy
in terms of even fake reviews and things like that to build it.
It became a great system. They had a long term vision which is why it's a billion dollar company today,
even more than that.
7 billion.
So, yeah. They sold it for yeah... a little bit... quite a bit less. But...
But you know, I think it's a pretty understood path and a legit path
and we did it, too. When we didn't have to do... there weren't as many boundaries in search in 2005...
2006. They were discovering the boundaries with us.
So, we did push it as much as we needed to but we didn't have to so much all the time,
although I think we could've probably done better had we done it more in some other spaces.
Yeah, I mean I said that, you know... I've been saying it since this morning.
I mean, you have to be able to push the boundaries. Elite Daily, you know, no comment.
I won't say, you know, what we, you know, in the early going but
let just say, you know, we really pushed it.
And, you know, but you have to be willing to understand your limit. You have to understand
when it's time to really shift and, you know, and be able to...
you know, adapt and you know, know your limits really at the same time.
Yeah, so, I guess with the SEO thing, SEO is totally against, you know, any form of link building.
It's totally against Google's terms of service, so
in that sense we built our entire business on something that's not really compliant.
But, you know, it's a globally accepted thing. Businesses use it, everyone uses it.
So, as long as we can manage the risk and adapt to the trends
and the Google changes, you know, with Google it's incredibly frustrating. I remember...
in the first year when we were building our business and Google change one of their algorithms,
we lost about 30% of our clients just after 1 update
because the site is tanked, not necessarily due to what we did,
but because they lost their ranking so, they couldn't continue to pay, you know, it didn't make sense.
And we thought our company was done after that. We thought, you know, what's gonna happen,
but actually it wasn't bad and it continued growing after that. We adapted to what needed to be done.
We changed our angle of how we presented our service
and after that we just continued growing. So, you just have to keep adapting
and you just have to make sure that it's of interest to the buyer.
One other area where, I think all three of you differ dramatically is
how you've decided to finance your business operations.
So, if I start with Dirk, you've bootstrapped your operations which I think is the way
most affiliates run their business. They try to generate as much revenue and cash as possible
and then, pile back whatever profits back in to the business
and reinvest without necessarily taking on external financing.
Carlos, you went the other route. You raised venture capital
where you've given up equity in your business to a third party I believe both
institutional investors as well as corporate VCs.
And Gerard you took on convertible debt. Now,
I think many people probably don't know what convertible debt is.
So, maybe I can just begin with you, what is convertible debt
and why did you decide to finance Elite Daily that way instead of
either bootstrapping or taking on a venture capital investor?
You know, actually when we started the company, we did bootstrap...
and, you know, it was a highly competitive market.
You know, people were, you know, somewhat, you know, trying to look at our traffic
and because we were so young and our trajectory of growth was just so high so quick,
we were looking for a way to really also get us a sense of notoriety and credibility
and we looked at, you know, going the venture route
as a way to get that credibility and notoriety as well as to help us...
I think it is important and if you're looking to sell, it can help position you for an acquisition.
And the convertible note for us was the most attractive...
most attractive route for us that was a bit more friendly for investors.
It's not straight equity. It's almost basically ask a loan to the company at a specific cap valuation
and at the point where you're actually going to then, raise A round, like a series A round
that will convert to equity at that point for the investors.
But they... and if not, they still get a percentage back on the money that was given to you.
So, you said that raising this convertible debt note could potentially help you with an exit.
Can you talk a little bit more about how that works?
You know, for us, we were lucky enough to get a big venture firm to come in on this
convertible note Greycroft and again it... you know, it really solidi-...I think it helped solidify us
in the media world and the tech world that we were for real.
You know, a company, a venture firm of that sort when it come in...
obviously they were gonna do their due diligence as well to really justify
our team, our practice, our process, our traffic, our revenues
and, you know, it was also, you know, with their connections, it was...
we were able to talk to them and strategically talk about, you know, who we wanted to bring on board,
on our board or board of advisors to position for an acquisition.
And we were able to actually be able to use those connections to get Jon Steinberg at that time to...
that was leaving Buzzfeed to go to DMG and it worked and our plan worked.
So, in addition to just finance, they brought you credibility, recognition as well as
just a lot of strategic advice and options... Carlos?
If I could come in on that really quick, I mean it can be very important intermediary step in that
when we talk about, you know, can you sell an affiliate... traditional affiliate business or whatever,
your business may not be ready to be sold to an end company,
like let's say the Post or some public company but
investors and venture capitalist or private equity firms have a larger appetite for risk for one thing,
they'll value the cash and the cash flow in a different way.
And if you get smart investors, they help you position it for those folks later
and they'll even help you transition the business.
They'll come in and help you think about what that longer term plan is,
but they might be willing to come in at that point
when... you know, a traditional buyer wouldn't.
So, it's a... can be a very important transitory step, alright.
Now, that being said, I'm not always a fan of investors.
I mean, for sure. I mean, and they will help you, you know, build...
help you set that valuation, set that, you know, that first base line.
You know, it could work in both ways and, you know, handing it out to you
and starting and bootstrapping, and I mean, if you can do that
and you can bootstrap it and find the right buyer by doing it and...
and not have to go out seek outside funding. That's a fantastic way as well...
you know, to own a big, you know, a large or equity in your company.
Yeah, so, we just started out from nothing. We had a couple of thousand dollars
that we invested in to this idea and we started off with one client
and we never had the idea to sell initially. We just thought it was a nice thing,
to make an extra money on the side,
and eventually it just kept growing week after week, month after month
till it got to a point where it was just really big, and...
what we did mainly is just we kept reinvesting the profit.
So, that's the big thing, we didn't go out and spend it.
The initial months, we just took all the profits we had, we invested it back in
to the business to grow, to get more clients, to increase our assets,
buy more domains and things like that and that's how we ended up growing it.
So, we never... we never even thought about venture capital or raising any sort of funds.
Wonderful... I like to talk a little bit about just the daily aspect of running
a company when you're trying to seek an exit, and...
I'm reminded of a conversation that I had in London,
STM held a meet up in London in March of this year.
I remember one... speaking to one affiliate and him describing affiliate marketing as
riding the most turbulent roller coaster in the world
and he was saying that, you know, you have the most incredible highs
combined with the most agonizing lows usually on the same day.
Is that any different when you're running a business but with an exit in mind?
Though you'd still facing the exact same type of
highs and lows and the challenges and the difficulties?
For us firstly, like I said we never had an exit in mind so, we went...
we went running our business with that kind of mindset. Eventually,
it did get to a point where we started considering it,
but at the point when we started considering about selling,
I did notice to myself, I lost a lot of interest in the actual daily operations and in running the business.
So, that's something I think that's... that can really affect you if you plan for an exit
and it gets close to that point maybe you start to lose interest and it's hard to stay motivated.
Go ahead...
I mean, it could be a real brutal process for sure and it's destructing and...
you know, for us, we actually, you know, we knew that we wanted to position ourselves
to get acquired but we didn't know it was gonna happen as fast as it did...
as quickly, as it did when Jon Steinberg came on as advisor,
it was really within like 3 months that he started to show interest with DMG.
And we were actually planning on... we just started really scratching the surface with monetization.
Really started to, you know, started to boost our revenues.
We were, at that point also considering doing our series A round
to build out our valuation for the next phase and the acquisition came to us
a little bit unexpectedly but, you know, we want... we knew we had to seize that opportunity.
But it was a huge distraction not only to us as founders and management
but I mean, they came in, you know, really disrupting and pulling different employees.
They wanted to really get in within the company and it could be,
you know, it's a tough for sure process. You need to be able to make sure that,
you know, every day you're still pushing forward but at the same time,
you are, you know, making sure that the company got all t's crossed, i's dotted to make it,
you know, still very attractive for that buyer and you're on pins and needles every day,
you know, hoping that it's gonna get to...
to closure all the way to the point to where that wire goes out, you don't know.
You know, can the company... can the acquirer be, you know, somewhat trying to,
you know, it's nerve racking, looking into, diving into everything within the company.
You know, but are they truly gonna go in all the way? So, it's a tough process.
Carlos?
And to your point like any startup... I've done 8, 9 companies, I mean, in...
varying industries, from enterprise software to lead generation, whatever.
Like if you're having crazy highs and lows in the same period of a day, whatever you're doing,
that's par for the course. Don't feel like you're doing anything wrong.
It's always been the case with every business I've done.
Nothing is a smooth ride straight up. There's always some issues here and there.
So, you know, it's just I mean, it's...
that's why not everybody does this and not everyone does it successfully.
If they were that easy, everybody'd be doing it, right?
So, you know, it's a measure of your resilience, that's a measure of your strength, right?
Being able to cross those chasms and, anyone can enjoy the highs
but being able to find a way to succeed out of a lows and...
and pick yourself up and keep inspiring your team is important.
And, you know, again that you can minimize the stuff, it was back to I was saying earlier
about the whole, you know, you don't have any single point of failure if you can.
One of the things you're trying to do as the person running the business is
distribute all your risk as much as you can, across,
you know, whether it be, say sources of traffic, sources of revenue, people...
having more people to do more things. You have no single point of failure on them either.
Those are all very important and they also help you right out the low points
and, you know, your team is critically important to that I mean,
I can't tell you how many times like, you know, when you do hit one of this very low points,
where I'm feeling crushed but I can go talk to my partner... one of your, you know...
one of my head of operations or something...
Or read Ryan Holiday's book.
What?
Or read Ryan Holiday's book.
Or read Ryan's book exactly... do whatever and... or he may have and can tell me something from it.
But, you know, you conquer this stuff as a team. I mean, anything you do as a team,
I've always found is a lot easier to accomplish and you know,
that's distributing your emotional resilience as well by doing that.
So, what is the absolute lowest point that you've experienced on your company?
Carlos?
Oh boy... there's quite a few of them...
you know... I mean, I would say,
well, I've had some troubles with investors actually, that were, like...
and this goes back to what I was saying about, no I don't like...
there can be reasons to take investment. They can help
if you've got a plan for it, but my general experience has been, they suck most of the time.
And I had investors who came into a business, CourseAdvisor...
that they were horrible. They didn't get it at all.
And, you know, they've invest... our business was so growing so meteorically.
They've invested in it and seeing, you know, there's 20%, 40% a month growth whatever.
And there's... but we got to a point of seasonality in the business, it's education.
People go back to school when it's September and January generally...
in the states. So, they've invested in August.
And as soon as they invested, it flattened out and they called me to the carpet and
made us have weekly board meetings, when you wanna talk about a waste of freaking time.
Every board meeting I had to re explain what paid search was.
They could not get it through their head...
had to spend 45 minutes re explaining paid search and what we do.
I called everybody in the industry,
you know, I have a lot of contacts from conferences and things and said,
"Guys, wants going on? I think it's cyclicality."
And they all said, "Yeah, this is seasonal. September always sucks."
Board wouldn't listen. I had weekly board meetings until December
and, you know, and then, they were pushing us to bring in another executive to share my duties
and I was fine with that but it was hugely painful and a few months of like,
you know, headaches, real headaches from the stress and the tension
when there is really nothing going on in the business.
Instead of growing 40% a month, we were growing 15 and they were freaked out.
Gerard the absolute lowest point?
Wow, I mean, a lot of what Carlos is saying is just like bringing these nightmares back.
It's yeah... for sure, I mean, I'll never forget. I mean...
it's a big responsibility taking in on investment, you know.
It's a very big responsibility and, you know, dealing with investors...
is... was rough for us as well, you know, we were all, you know, pretty young as well you know
and, you know, it was tough, you know,
long board meetings, explaining, you know, our vision, you know.
We're visionaries. We wanted to test boundaries and, you know...
They, you know, the investors, in one aspect really, really helped us out
but they also, you know, also held us back a lot as well and it was tough,
like really long board meetings. I think the lowest point was
really towards the end of the year.
You know, November, December... going through this process with Daily Mail,
you know, looking to acquire us but at the same time, you know,
we were trying to grow. We were going through fund raising and it was tough, you know.
Also, you know, making sure that we were continuing to grow the business.
Facebook is getting ready to change their algorithms
and are we gonna be able to maintain the same growth and traffic
when Facebook changes those algorithms?
You know, looking to continue to raise capital so that we can continue to...
pay, you know, pay our bills, grow, pay our boys, all of that stuff.
And then, you have, you know, you know, our acquirer coming in
and randomly poaching employees asking questions,
diving into every little nook and cranny of our traffic... I mean, it was extremely stressful.
You know, I was running around meeting with all my advisors in New York City,
nonstop, getting advice, you know, to see if this was even the right time to sell
and that's a big point and part of it, you know. It's like,
is it the right time, you know? Looking... really analyzing all this different variables,
at the same time trying to continue to still grow that company.
And it was really, it was really tough. I mean, for me even...
I even had a low point after the sale of the company.
It was like this bitter sweet moment where I went into, like a depression for days.
I was like that was my baby and I didn't wanna sell, you know.
I felt like we were just scratching the surface.
But, you know, there's so many different variables. You have partners, you have co-founders,
you have team, you have the people that, you know,
were believing in you day in and day out in the office and then, you have your investors.
There's a lot of different variables so, you really have to make sure that
you can, you know, really, it tested your resilience.
You can't make emotional decisions,
you know, you have to be really, you know, really get educated and that's when it's...
you know, you have to be at your best as an entrepreneur.
Dirk, I'd like to ask you a slightly different question. It's much more practical.
So, you wanna sell your company. You have interest. How do you even begin to determine
what that's worth or what you willing to sell that for?
Okay, so, for us with pretty much any internet marketing business,
it's always possible to sell on a multiple if you have an asset.
So, in general like internet marketing businesses they get sold between 12 and 36 months
of profit that is easy to do. Obviously there's different ways to buy companies.
You can buy based on income or you can buy based on technology or potential or things like that.
But if you want a sure fire like conservative way to be able to sell your business
that is just build up an asset that generates an income that is relatively safe
and you can sell based on a multiple of that income.
So, you know, if you're doing 3, 4 million a year in profits,
you'd be able to sell that for 8 figures without too many issues if you have...
if you have an asset that goes along with that because that's a relatively risk free investment for someone.
I see, so in your case, it was fairly formulaic. You would compare it to some similar benchmarks
on a multiple of earnings. Gerard, I got to imagine, I'm no math major, but I gotta imagine that
50 million is not 12 months of profit.
I mean, they wanna really test the numbers with us right?
It was really maintaining the traffic, you know, really, you know, proving out that we...
that we had not, you know, that we were able to be consistent in the virality of our audience
and keeping them loyal to us as a brand.
Yeah... I mean, it was tougher, but I mean, you know, it also is a multiple on revenues, right?
And... you know, that was, you know, tough part for us too because you know,
as a young company, we've really felt now, that we've position
ourselves as a reputable brand, a loyal brand we've got our audience.
We really felt, you know, sh*t if we wait another year,
you know, the traffic can potentially change you know.
Algorithms can change but, you know, we really feel can revenue can double, triple and...
can we get a much higher multiple.
I mean it's, you know, so that does come into play for sure.
Carlos, do you wanna talk a little about valuation?
Look, you have to tell a story that's what it's all about
and there are people who know how to do this and are very good at it.
Generally, they're called investment bankers, I wouldn't always recommend hiring them
but there are boutique banking firms or you could find a guy who used to be at Goldman Sachs.
My current CFO was at Goldman Sachs for 7 years.
He can put together this pitch deck in his sleep.
But it's really important that you put together the story
and you know, having the right investor can also be a part of that story, right?
But, you know, everyone in here is a hustler. Everyone in here knows how to sell
and that's what you are doing is selling. I mean, some people say
companies are bought, I disagree companies are sold.
As soon as you get a little bit of interest, you can actually encourage that interest
and you build the story. And it can, you know, I mean quite often, the actual asset
can even be something of a story. You, you know, talk about your processes.
People get excited. Look, sales happen emotionally.
Whatever people wanna say, like particularly if you're talking about 8 figures, low 8 figures,
it's a lot easier to sell a company for under 50 million than it is over a hundred
depending who you're going to... in general, that's almost always true.
And people get emotionally invested. I've seen 9 figure deals done because
the CEO just fell in love with the founder or the idea of the business.
It wasn't necessarily a good move. So...
you know, you have to be able to just craft a really strong story around what you're doing.
And the better that is that helps change that multiple.
Let's say your average business and lead gen was doing... selling for 5X or 5 to 6X...
you know, earnings. He beat that, right? And that's what the bankers say...
Cause you look at similar transactions and that's what someone like a Petsky Prunier
or something can do and say, "Okay, here's all the deals that were done last year.
They're similar. They're done at an average of 6.5X earnings."
But you have the story. You grew faster, you know, our revenue, you know,
triple the first 3 years and that's for companies who only went up, you know, 100% a year.
Or we have this unique tech that's gonna blow it up in another year.
You know, we've actually sold, I mean we sold our company on a much higher multiple than that,
of forward looking earnings. So, we said, well you can't look back.
We're growing so fast that 20% a month you can't look at previous earnings 12 months.
No, look forward and you get someone excited and emotionally invested in the deal
and they'll do it. And you can get, you know... that ends up being, you know, effectively
like if you say it's a... if you sold it on 10X forward looking, it ends up being like a 20X trailing...
depending on your growth rate something like that.
So, you can actually do really well doing that but
it's really about crafting that... the story that's gonna entice them emotionally.
I think I'm hiring Carlos to sell my company...
Well, I think the point that he makes is a really encouraging one
because I think everyone in this audience were here because we know how to sell something.
And whether it is selling an app, selling some sort of insurance offer or selling a company,
it is still playing on the same basic insights like human psychology, of persuasion,
of convincing individuals and so, you know, it is not just a skill sets
that I think affiliate marketers develop. It's not just applicable to
running campaigns on specific traffic sources, but it's applicable much more broadly in
various aspects of life, particularly when it comes to selling very large asset such as a company.
Gerard, you mention something which I thought was quite interesting, which was around
in fact, that you actually got depressed after you sold your company,
at least, perhaps for a short period of time but you actually went through that
and I love to just get a better understanding of just... so, you put in all this hard work,
all this grueling hours, all the pain that you put in, you know finally pays off
into what you've dreamed of which is an exit.
Now, just tell me what that feels like. On the one hand,
you know, you have given your baby away to someone else.
On the other hand, you have a lot more zeros on your bank account.
So, what do you do? Do you go out?
Are you depressed that you no longer control the company?
Do you go out and start buying yachts... yachts and sports cars?
Do you even feel more energized than before and you wanna do something next?
What just goes through your mind?
Yeah, and I'm sure no one feels bad...
you know, and I definitely wanna get the yacht sooner or later.
But I mean, you know, it's... it was like our baby, you know.
You start it, you bootstrap it, you know...
you start from your apartment, you see the growth...
You know, it's just, you know, it's just... it's tough sometimes
you know, we were talking about this Carlos earlier, you know...
sometimes you just... you're saying, "Screw this, get them out." right?
It wasn't my baby. I was ready to push that sucker out the door.
You know, and it's like... it's great to get a win under your belt.
And that's important and you know, there's a point,
you know, where we realized that... also that, you know,
Elite Daily wasn't something that I wanted to define me or our co-founders.
We wanted to be something that was bigger than anyone of us, you know.
We wanted to be in a position where it was with the right partner,
not just sell this for multiple so that Elite Daily can continue to live on,
you know, for many, many, many years to come
and continue to grow and impact more people and be a brand that will...
you know, will be something that we'll be proud of for a very long time and
elite and... you know, Daily Mail really gave us the infrastructure
to scale and that was the right deal and
you know, it was tough, you know, but until, you know, at the moment when I, you know,
look back and call home and call my... you know, kids I grow up with since kindergarten like...
sh*t it's, you know, it's not that bad, you know what I'm saying...
Carlos?
You know, this can sound silly, but there's actually quite a lot... there is discussion groups...
Go on Quora and look it up. There's book written about this.
It's a big issue in the valley dealing with...
you actually do kind of enter a bit of existential crisis when...
particularly when you're just handed a bunch of money. It's like...
It's like, look at the people who won the lotto, like almost to a person
and you look at him 5 years later and they're a mess,
half their kids are on drugs. They've lost all the money, right? whatever like...
It's just weird like if you earn it and you guys... and you put it away, that's...
you're gonna value it in a different way. But when you do sell and you suddenly get up and...
whether it was your baby or not even, you get up and you're gonna go to a meeting
and you'd think, "I don't have to go to this meeting...
My bank account's got all these zeros in it.
Screw them. I'm gonna play golf."
And you... it starts to feel you lose some sense of purpose for?
And I was, you know, like it's gonna happen and as I said, you can read about it.
There's a lot of stuff out there and...
people talk about it and it sounds kinda like a bunch of humble brag bullsh*t.
But like and to extent maybe, you know, it's a high class problem to have.
But it's something you do really need to think about
cause you can end up doing some really dumb stuff as a result of it.
But, you know, I will just say, you know, take some time.
Plan to take time. It just takes some time off.
You know, when you do that and just do whatever, have fun, think about things...
other than business because a lot of us, you're working so hard,
you're defining yourself by your business.
And when it's not there anymore, you lose some piece of that definition.
And it can actually feel really weird and you can feel a little lost for a while.
You know, if I could add to a minute...
you know, for me also it gave me... it put me to a position to be able to give back, right?
And it's like so important, you know, as an entrepreneur to
get a... be in a position where you can give back to the people that supported you your whole life.
For me, it was like being able to pay off my parent's mortgage, you know.
Take care of my sister, pay off her college, you know.
Do certain things. I started... just started my non-for-profit,
building a co-working space in Newark, which is like a really, you know,
an area, you know, with... that's an inner city, with a lot of poverty where
my family grew up and being able to now, teach entrepreneurship and
it allowed me to kinda also take a step back and look back on what was done and say,
"Hey, you know, how can I get my... how, you know, get out there now and tell my story
and be able to now, inspire and motivate other early stage entrepreneurs
and help guide them and mentor them."
And that really was what was a big passion for me. So, it gave me the ability to be able to do that.
Very powerful, and Dirk what keeps you going and I'm sure now, you can have a very comfortable life...
what keeps your motivation going?
Yeah, so, I agree a bit with Carlos, like when we sold our business,
I was happy to get rid of it cause it was, you know, it was... you know, it was a day...
You wanna kick that baby out.
Yeah, yeah... exactly but at the same time,
because we spend, you know, every day for the last more than 2 years working on this,
it just occupies your thoughts and suddenly you don't have it anymore
and then, it just feels like you're missing something, right?
So, for me what keeps me motivated is I learned a lot from this business that we built up
and I know, we made a lot of mistakes. So, I just feel I haven't...
I haven't reached anywhere near my potential yet and I wanna do it better this time around.
So, yeah...
Hell, yeah...
So, I have to ask,
what is the most extravagant purchase that you made with all those zeros.
Carlos?
Geez, where do I start?
Watches for 40 thousand dollars...
No, mine would, I mean, it was a vineyard, a house with a vineyard,
and if you've ever heard people say... they say this about a lot of industries but if you...
you wanna know how to make a small fortune?
Start with a large one and buy a vineyard.
And that's one way to keep you motivated too. You spoil your money.
But... yeah, a nice house with a vineyard. It was great. It was interesting for a while.
Gerard?
You know... I've lived an awesome life, you know,
and have done, you know, I've had like this but before Elite Daily sale,
you know, I've had the, you know, the nice cars and, you know, the penthouse in New York
and, you know, I've had fun. So...
for me, it was immediately more investing, you know... obviously in non-for-profit too.
So, you know, I just invested in a new residential, 64-story
building on Lexington and 50th in New York City.
I'm an active angel investor. So,
heavily, heavily investing into different entrepreneurs and different startups,
you know, and just putting my money to work, you know. Like I relayed to you in saying that, you know,
it's not the time to be extravagant. It's the time to
take it, learn from our lessons and know, that,
you know, we can continue to push forward and you know, still...
Now, you're making me look bad man...
Sorry...
Dirk?
I did that stuff too.
Yeah, sure you did.
It's one of the other answer. You wanna know what the fun stuff was.
<i>[simultaneously speaking]</i>
Yeah... So, I haven't really made any, like material purchases. I like to travel.
I don't really like to own stuff cause it's just maintenance and difficult, you know.
So, I don't even own a car. I don't own a house or anything. I just like to travel.
I like to go where I want when I want and, yeah... I spend my money on that.
Wonderful, so, let's suppose that you're starting all over again.
Not much money. Not too many connections or even that much experience.
So, what would be your game plan if you wanna grow another
8-figure plus business related to marketing, affiliate marketing, internet marketing and the like?
I would say, you know, one good way to do it... I mean, like everybody here is hustling
and kinda figuring out already. So, that's great but if you don't really know, where to start with it,
you know, go get a job at a company that does this.
And there is a company in New York, I don't know if you knew it, Venture Direct.
For a while, years ago, they'd... was a training ground
for the people doing affiliate marketing basically
and they were probably a hundred some people, sold... it made them some money but
they probably started 25 companies out of that company
and all doing the same kind of thing. Everyone in there learned
how to do it, what to do and then, went off and had contacts, had a network,
you know, and knew people in the industry, knew the right places to go after
and that's a great way to do it and there's nothing wrong with saying,
"Look... I'm gonna..." it's like, you know, going to school except a better learning.
You say, "I wanna spend 2 years at this company that does a really good job at this stuff
and I'm gonna learn what to do."
You know, I mean, we bootstrapped... I mean, I would take the same road, you know.
For me again, it's about team, you know... I would get... go... you know, be able to find the right team
that can align this at my values, the same goals, same passion,
you know, and just, you know, roll up my sleeves and go for it.
No matter what, no matter what your business is, you're gonna hit... you're gonna...
it's about solving problems. You're gonna have those challenges. You're gonna...
you got to learn how to just keep pushing forward.
You know, just get out there and continue the network
and build out that network. I mean, that's why we're all here.
Dirk?
So, I'd say if I have to start over again, which I'm kinda doing now since we sold the business
is I'd focus on recurring... recurring income based businesses.
So, that can be either software as a service or whether it's a,
you know, any kind of service that you provide where you have recurring income. So...
with the affiliate marketing industry, it's mainly based around one time sales.
But if you... even if you're making good income, you have to keep making the same amount of sales
every single month just to maintain your income
whereas if you're focusing on recurring income, if you keep putting in that effort,
you're gonna grow month after month after month.
And things like software, like apps, they have... they have relatively low cost to be able to design them.
Specially if you know how to code yourself and you know how to launch them yourself.
You can do that for under 10K. If you outsource it 30, 40, 50K,
you can get yourself something good that can generate 7 figures and more.
Great... Let me ask you about personal branding, and the reason I ask this is
increasingly we're seeing large number of affiliates trying to develop their own personal brand.
Having blogs, doing a lot of outreach on social media, are really building up themselves
as an individual above and beyond just the campaigns that they're running.
And this is also an area where all 3 of you have taken very different approaches.
So, if we take the case of Dirk,
you're very difficult to find online.
We have to go very, very, very deeply into some SEO's specialized websites.
I think Carlos you're on some of the standard social media, but you don't have your own website.
You know, you don't... I don't think you do too much social media posting.
Gerard, you're off the charts. So, I don't know, if on...
on the back of his great presentation this morning, you've actually had a chance to
look for Gerard on social media or on websites.
Gerard, you have your own websites. You have an incredible social presence.
Instagram account filled with beautifully shot photos of Ferraris, yachts, tigers, exotic travel.
You've branded your name. You've had a custom logo for your initials,
a trademark and description of yourself...
talk to us about personal branding and is that... do you see that as net positive
when you're trying to build new companies and eventually exit them?
Do you see them as a potential hindrance and why have you taken that approach
where... and Carlos and Dirk, why have you taken a complete different approach?
You know, for me I just saw a gap were when we exited,
I looked at the thought leadership landscape really. For me that was like the first thing and
there is some just... and you know, amazing thought leaders out there but I...
I did see that there was, you know, a little bit of a gap for millennial thought leaders.
And obviously, building Elite Daily, I... you know, I looked at my story
and I wanted to be able to get out there, tell my story and...
you know, I think social media has given us the ability to just
really build up a huge, you know, a huge audience, a huge following.
It's a great way to test... test things out, you know...
you know, test out what people think. Immediately get a quick focused group...
I've been able to use it for, you know... to get a lot of different opinions.
And, you know, I also think it also build some brand equity.
You know, for me getting ready to, you know... as an investor,
you know, it brings some, you know, bring some cloud and helping
you know, the companies that I advise, that I get involved in.
And, you know... you know, it's interesting cause, you know, one of my mentors always told me,
he's never an expert of any one thing. He's an expert of experts and I've... you know,
I've always try to take that approach. But now, you know, I do want to, you know
build up that, build up my personal brand.
And it seems that that can be very powerful so,
Carlos, Dirk... why have you not done this?
You know, I think it's... I'm old.
I'd say, 2 things I am old and I got a family now.
I did this with one of my first company I started in New York.
We, you know, we raised 75 million dollars. Took it public, you know, and that kind of stuff.
And I was out in front of that doing the press, doing the conferences, speaking and I was a lot younger.
And I was a lot more interested in doing it at that time.
But I, you know, I also saw that... for a company in particular that doesn't do a whole hell of a lot,
like delivering on doing something great matters a lot more.
So, as I've gotten older and done more things,
it's more important to me to deliver great product behind the scenes but
even more than that, like now I've got a company with, you know, Fortune 500 clients and...
and, you know, growing really well with a lot of, you know, and
the clients have got or run the spectrum of opinions and ideas,
I actually would think it's a little dangerous for me to be out there
cause I might say something. I'd be very likely to...
that, you know, someone might disagree with
and I don't wanna lose a client because they said, "That guy is a jack ass." something like that.
So, like I actually prefer to be behind the scenes and build up other people on the company for it,
you know, and to be leaders in the space. But it's important. A business needs to be seen
as forward thinking and as a leader and... but that can be other people in your business.
It can, you know, bring benefit to the whole business and you can do it carefully
but that's the reason I prefer to sort of sit behind now.
Dirk?
Yeah, I agree with Carlos. I'm the same. I don't necessarily want to be associated
or be the face of my company. I want my company to work
and the clients like the company for the services that they provide and the value that they provide
and not necessarily because I'm the face. And...
also another thing like when you wanna sell something and you are the brand.
How does the company continue if you're not the face of the company anymore?
So, that's my reason why I don't really prefer to.
We'll, we're running very close on time, I think I'll finish with 2 final questions.
The last question will just be for you to give any word of advice or
maybe the most important advice that you've gone.
But before that I like to ask a question about education.
And one thing that I've always found incredible about affiliate marketing
is that it's an industry open to people of all backgrounds.
It can be a successful affiliate that used to be a construction worker
or successful affiliates that have PhD's in biochemistry.
And I think that's just great that there's... not just because, maybe you didn't pursue formal education
or went down a particular career path, that doesn't mean that affiliate marketing
is not available for you. Now, all 3 of you have taken very different approaches to
higher education. So, Dirk didn't go to university.
Gerard I think you went to university for 1 month and dropped out?
And Carlos you went to arguably one of the best universities, MIT, on a full scholarship.
So, very different backgrounds... can you just talk to me about
whether you think or maybe whether you think that the educational decision that you've made
was the right one, and whether you actually believe that higher education is even necessary in order to
become successful in this types of entrepreneur activities?
Dirk?
Yeah so, I came from a background were my father and my grandfather,
they were all entrepreneurs. They never went to university.
So, I guess I was just kind of conditioned with the same thing.
If you work hard and you dedicate yourself and you build your own business,
you can make money. You don't necessarily need to go to university.
And I'm happy with the decision. I think anyone can build a successful business
and I think you actually learn more from building up your own business and failing at it
than going to university and learning the theory behind how to build a business.
Gerard?
So, you know, I completely agree. I think, you know, especially when like building a business,
I mean, you can't learn that in books. I mean, you have to learn from getting out there and trying and...
you know, making those mistakes and learn from failure and I've failed
early on in my career and had to fight through adversity, learn from that and continue.
And I looked at college as like a big business, you know, I'm pro education but,
you know, I feel, you know, we're on an era where you can go out.
You can self-educate yourself. You can learn how to build a business without...
without going to school. I'm a testament to that so as Dirk so.
Carlos...
So, a lot of people... a lot of my friends call me hypocrite here but...
...it's funny, when we first met I started going off of one of my standard rants,
getting my soap box, talking about what bullsh*t 4-year college is.
It's a complete waste of time I think and I've never met anybody
in 25 years of business who actually needed their 4-year degree.
I was even saying this to a doctor the other night saying,
"Well, you probably needed some more years in your med school."
And he turned to me and said, "No, no, not really.
It was all wasted. I could have done med school in a year maybe
and then, some on the job training."
So, you know, and it was funny. I was saying this to Gerard and he tells me
he made a documentary called The College Conspiracy and I say, "Aw, geez... I gotta go see this."
And there is no way anyone can tell you it's necessary.
By any means, it is not. Now, at the same time, I'd be lying to say it hasn't helped me.
It's... I built a great network at college and it's opened tons of doors for me
and people formed an opinion about me before they meet me because
they hear of my background or where I went to school.
That's dumb but that's how our society works.
But, you know, my network I'd built since college when you look at what I've done in business,
way more effective. Like I have powerful friends from college and I've done some things with them
but I've done a lot more with the people I've met in the business world,
and I've learned a million times more by starting companies and failing and
getting things wrong, getting some things right and getting out there and doing it. So,
by no means is it necessary if you're gonna do it,
you know, it's worth it to go to a place that has serious brand name,
MIT or Harvard or something or... and there are many other great schools
that are gonna help you with that networking or opening doors later but it's not necessary.
Wonderful, well this has been fantastic. I think it's really...
I've learned tremendously from, just this conversation
and I believe many of the audiences have at least taken away a number of profound insights around
how to at least start take in the first step if you are interested
in taking your skills, assets and relationships and turning it to something much, much bigger,
both from a personal but also from a wealth creation perspective.
We're just running out of time so, I would love if each one of you could just close with
just one most important piece of advice that either you think this audience could benefit from
or one most important advice that you received yourself
that has helped you in your career... Dirk?
Yeah, so, I'd definitely say focus on building an asset,
think longer term and think bigger, you know.
It's not just about the next 6 months or the next year or even the next 5 years, like
where do you wanna end up?
It's nice to be making good money now, but what if that stops?
So, think bigger and try and focus on building an asset that you can eventually sell.
Gerard.
Yeah, I would say... to, you know, continue to just build your network.
You know, if you're the smartest person in the room, you're in the wrong room.
Continue to really put yourself in, you know, tough, tough situations.
You know, and continue to just build out that network of people that you can really learn from.
That's really helped me along the way.
Carlos, bring some...
Everybody in here is good at spreadsheets. You gotta be able to do equations to do what we do.
I would say there's a really important equation that everyone should think about
and I'll contradict this a little bit at the end but if I gave you 10 million dollars tonight,
what do you gonna do with it to earn?
Could you guarantee that you would earn 500 thousand dollars
in the next year and every year after that of that 10 million investing it?
There's no way... there's no way you can guarantee a 5% after tax return.
There's a very good chance you put it in stock, you'll lose if the market goes up and down.
So, if you got a business that producing 500 thousand a year for you,
750, you've got the equivalent of 10 million to 15 million in the bank untouched.
There's an enormous amount of value to that.
And you'll learn when you sell something and you make
maybe single digit millions or something. It's great for a little while.
But it doesn't... it's not necessarily gonna last.
And, you know, it depends where you live, what you're doing, whatever.
But get married, have some kids, you'll see...
In Bangkok, it will last.
Yeah, in Bangkok, it will last.
But, you know, that's something really important to think about, like
I've... I thought a lot about this more that owning the means...
real wealth is owning the means of production
and, you know, doing your business is the means of production.
So, that's something really important to think about before you do this.
Now, there is a level of which or a number of which everybody's got which...
you can have... which you can do a lot more, you can go start another business whatever...
that it's worth selling it for and, you know, I would just say on that front,
it's a little bit contradicting that but sell early, sell often.
I think it was Bernard Baruch who said,
someone ask him, "How do you get so wealthy?" and he said, "I sold to soon."
And, you know, if you got the chance, if the opportunity presents itself and you haven't done it,
you never know the vigors of business, you know,
business can change. Google algorithms change. Facebook comes on the scene.
It disappears. Pinterest is there. Stuff changes all the time and if it gets to the point,
you happen to be at one of those crest, where you could get money for your business,
take it. Certainly, for the first one. Get that under your belt.
You've done it and it put you in a different place to go do it again.
Well, this has been great. I think all of us would agree that there's been
enormous amount of knowledge bombs dropped in this past hour.
I'd like to thank all 3 of the panelist...
Dirk, Gerard, and Carlos for sharing all of their experiences,
insights, experience and war stories...
If you can join me in giving them a round of applause.
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