Transcript
A (0:01)
My goal is so for this year, I call it the blossoming where all these companies begin to take take shape and become self sustaining. Once I feel like all those are self sustaining now, the bigger you want to go, the deeper your foundation has to be. No one cares about the words you say. They care about who said it.
B (0:24)
All right, guys. George stuff I tried.
A (0:27)
What is that, a Bulgarian?
B (0:29)
Bulgarian. Wow. Where your family's from?
A (0:31)
Yeah.
B (0:32)
Nice. Thanks for coming on though. We've known each other for man, what, seven, eight years?
A (0:36)
Seven, eight years. I think it was 2018.
B (0:38)
Yeah. You were doing E commerce back then. E charging cases.
A (0:41)
Yeah, mainly people know me from E Commerce so I started in 2013, was the first time I had a Shopify store and I've done over $15 million in e commerce sales and, and then in 2020 I decided to branch away from E Commerce and dip my hand in software. So I started a venture backed software company called Blue Receipt which was SMS marketing for Shopify brands. That was the first time I raised capital. So we raised $1.5 million of venture backed capital. But then what I realized was that was a completely different game than a cash flow based approach. You see an E Commerce, what you want to do, especially if you're drop shipping, you want to make your money tomorrow. Whereas in the software game there's these things called payback periods. So imagine a lot of these companies, they'll pay back the money they spent to acquire a customer 15 to 28 months ahead of time. And so you need a lot of that capital to burn to be able to sustain that long term, you know, value of that software product. So what happened was we raised this money. When you raise money you become almost a glorified employee because now you're not paying yourself out, you're paying yourself out a salary like a W2 employee. And now you're relegated to this opportunity that you're kind of stuck in. And what happened was a lot of my competitors, especially in 2020, 2021, raised so much capital. Attentive Mobile, one of the biggest competitors, raised $1 billion in essentially a coffin. They started giving away $500 gift cards to Amazon just to book a demo call with them, giving break even pricing because they had all this money they needed to spend. Klaviyo raised 400 million, PostGrip raised 250 million, Emotive raised 50. You had a lot of these other ones raised 10, 15 and then some auxiliary competitors, Active Campaign raised 250. And what I realized was now I'm in A bad position. You know, I'm in a rock and a hard place where I can't just say, you know what, I don't want to do this business anymore because remember, I have obligations, I have employees, I've raised this capital, I can't just walk away. But at the same time I can't just do other businesses to make an additional income like you know, other ventures because I feel like I'm committed, I want to be all in on something. And so then in 2022 I was like, you know what, I gotta sell this company. Because it didn't seem like when you go in a venture back approach, you want to go into a venture back approach for two reasons. One is you're looking for 100x outcome or two, you're looking to validate an unknown opportunity and there's a lot of capital intensive things that need to happen before validating that aspect. If that's not going to be the case, there's no need for you to raise venture back capital. And so for the vast majority of people that I recommend today, for any young person, there's only a couple things you got to do. I would focus on drop shipping number one, because you're making cash the next day, info products, building out your social presence and producing things that have massive gross margin, I'm talking 90% margin or more with almost no upfront capital. That's the number one thing you need to do. And, and then you're going to be taking that distribution and transitioning it into other aspects. Maybe it's branded E commerce, maybe it's software products, maybe it's something else. But everyone that I'm seeing talented today, they're not taking on, you know, these more standard approaches of business back in the day. Everything nowadays because distribution's so cheap, if you're good with organic, you want to be focusing on things, you're making money the same day with huge margin and, and you're not taking on crazy upfront capital risk. There's no, there's no need at all, right?