← Making It with Jon Davids
Making It with Jon Davids
197 - "We Sold to Salesforce.com for $800M and Here's What I Learned" | Mike Lazerow
00:50:28
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- [00:00]
John Davids
What's up, guys? JD Here. And on today's show, I have a legend. Mike Lazzaro, serial entrepreneur and founder of Buddy Media, which he sold to Salesforce for $800 million. Mike's been at the epicenter of technology business, social media, venture capital. He was roommates with Seth Meyers years ago. He let Gary Vaynerchuk borrow his boardroom when he was starting his agency. The list goes on. And now Mike's a best selling author. He and his wife Cass just dropped the book Shoveling a Love Story. And yes, that's the title. You can grab a copy now@dropvelingshit.com or wherever you buy books. You guys are gonna love this conversation. That's coming up in just a sec. Welcome to the podcast. My name's John Davids, but you can call me J.D. i'm the CEO of Influicity. And on this show, I like to share the stories of my favorite businesses and the people behind them. And if that's your thing, hit the subscribe button, leave a review and share this episode with a friend. That's how I know to keep doing this. Get my best stuff to your inbox@johndavids.com and now let's talk to Mike Lazzaro. So, Mike, when I was doing research for this podcast, I thought I would go right into Buddy Media, which I know quite a bit about. And then I kind of realized that was your third act. You actually had two pretty successful ventures before that. So can you take me back to University Wire and tell me what that was all about?
- [01:29]
Mike Lazzaro
Yeah. So let's go way back to early Internet. I went to Northwestern University. The only reason I went to Northwestern University is it's the only school I got into. I applied to 5 and 4, said, no, thank you. Northwestern said, yes, because I'd been working on the newspaper. I was a journalism major there, and it was just a fit. And I was a journalism major at the time where the commercial Internet really started. And so it hit me really hard that this Internet thing was going to be both big and potentially disastrous for media. And I walked into my advisor's office, Mary Dudinsky. And she was, you know, she's a strong woman. First female editor in chief of a major metro daily. And I said, I have an idea for an Internet company back when there were 13 million people on the Internet. And to my surprise, she said, do it. Here's this traditional journalist who pushed me into the Internet business. And so UWire was a new service for college newspapers at the time. I was working at the Daily Northwestern. A lot of the content was kind of AP and Reuters general interest content. And I thought that we should run student content. And So I got 700 campus newspapers to contribute their content to University Wire in exchange for all the other content. And I had the licensing rights and I had a PR distribution business, a news release business in partnership with PR Newswire. Todd Grossman was one of my first partners ever. He believed in this college kid. And I was off and running and grew that at Northwestern. Merged it with a company called Student Advantage and took that public as part of the pre.com crash. Let's just say that the crash happened and I crashed with it. But that was uire.
- [03:24]
John Davids
How old were you when this started?
- [03:26]
Mike Lazzaro
So I started it when I was 19. The summer before I started it, I went back to DC, where I'm from. I was interning for Roll Call, which is the newspaper of Capitol Hill, and my aortic valve burst. And I ended up spending the summer in the hospital. Two open heart surgeries. I almost died twice that summer. I had my heart rebuilt, an artificial heart valve put in. And the only reason I say that is I went back to Northwestern. Just changed. Fearless and much more laid back. I had an appreciation for life and I just said, I'm going to make something of my. And it all started with ui er. I just dove into it.
- [04:06]
John Davids
I just had this flash in my mind of Peter Parker getting bit by the spider. This is really like your superhero moment.
- [04:12]
Mike Lazzaro
It was a really important moment because I shouldn't have lived, to be honest. I had a hole in between my two ventricles. I was in heart failure both when I was 18 months and then a toddler. Miraculously, it closed. It was a time. I'm a little older than you. Just a fact. It's not a opinion. And at the time, they didn't go into young kids with open heart surgery. So it's basically, it's either going to close and you'll live or not and you'll die. It closed that hole. When they fixed it, they noticed valve damage eight days after they fixed it. When I was 19 years old, I happened to be in the doctor's office and my valve burst. My blood pressure went from normal to zero, which means you're not getting oxygen anywhere in your body and you have three hours to live. And. And I came out of that surgery, I'm told by parents and friends, much more laid back, much more appreciative. I was kind of a stress ball beforehand and I kind of Felt that I was operating in extra innings and it was like, let's go. Like, I'm alive. What else can happen? Like, what's the worst thing that can happen? I'm still here.
- [05:22]
John Davids
This episode is brought to you by my new tool, the 1 Minute Marketing Roadmap. Available@johndavids.com roadmap. It's a fully customized report that shows you how people are finding, finding you online and where you're losing sales. We've packed 10 years of research at Influicity into a smart AI powered tool that delivers real results. I'll tell you things about your business you probably haven't thought of. Go to JohnDavids.com roadmap and get your custom report. That's JohnDavids.com roadmap Wow. It's funny, I've had conversations with uber successful entrepreneurs who have had near death experiences. Kidnapped, almost killed, all this sort of stuff. And I wonder sometimes if that just makes for an interesting narrative or if it actually was one of the big causations of the success that came after all that. And it sounds like in your case, if nothing else, it gave you, like you said, the drive to think, well, I'm already here. What's the worst that could happen? Certainly can't be worse than what's already happened to me.
- [06:26]
Mike Lazzaro
Yeah, I mean, it's a story that I wish I didn't have. Like I'm on Coumadin, I have like health issues, issues that I'm managing. I gotta stay healthy. I can't put pressure on my heart. Having said that, each of us have our own trauma and we take that trauma with us, positive or negative, how we react to it, to everything we do, not only in business, but in life. And that experience up to that point was the most important experience of my life. And as I looked at what it did, it got rid of a lot of the fear, uncertainty and doubt that I had. Because we end up worrying about basically the imaginary boogeyman, right? Especially as a young go getter. It's like, do I have what it takes? Imposter syndrome? How am I going to make it? How am I going to make money? My dad had gone bankrupt. So I was on a mission not to go bankrupt and to support my family or my future family. And so I think it was just, it helped shed a lot of the fear because I keep going back to just this idea which again and again in my life, which is like, what's the worst thing that's going to happen if I do this thing? Which I think needs to get done.
- [07:31]
John Davids
So you're creating University Wire. You're running it at 19 years old. It's actually crazy. So my story kind of parallels. I had a blog in university and didn't have nearly the outcome that you did, but it was my first big entrepreneurial outcome. So I know about that business. And you eventually sell it to cbs.
- [07:50]
Mike Lazzaro
We took the company public, and the whole market collapsed. So April of 2000, we went from being worth about $1.8 billion to very little. So I went. On paper, I was very rich, but in reality, I was still like, you know, I was living with, at that time, my Northwestern friends. There are four guys living in a tiny apartment with one bathroom. One of them was Seth Meyers, who, Fast forward, has his own TV show, and it's done well. He was waiting tables at the time, but we were just happy. We were just kind of like, you know, money. We never did that. You don't get into the Internet business in 1994 because of money. Right. There's like, 13 million people. There isn't a browser. Right. It's like before Mosaic, before Netscape in many ways. And so, you know, we do things that we think are right. I'm a gut person. I love data. But it's like that gut feeling has gotten me in a lot of good places. And age is just a chronological fact. I've always felt older. I feel great now. Now that I'm 51, I actually feel younger. But I've always had this kind of, like, older mentality that I want to be like. When I was in college, I wanted to be working. When I was in high school, I wanted to be in college. Now I kind of Wish I was 30 again. So I'm kind of reverting back cast as a cast. My wife and business partner and co author things. I act like I'm about 13 sometimes. But the thing about entrepreneurship is it's, as you know, it's the worst way to spend your day because it's people saying no, and, you know, the blank is hitting the fan and all this stuff that's, like, difficult. But those of us who are fortunate enough to do it, it's where we find our purpose, and there's nothing we'd rather do. So it's both awful and epic. And it's behind philanthropy. It's the world's greatest drug.
- [09:41]
John Davids
It's the worst way to spend your day, except for anything else that I could possibly be doing. It's right up there. So you have this big outcome, and so after the sale to cbs, are you financially set? I don't know if the numbers were public, but was that a good outcome for you?
- [10:00]
Mike Lazzaro
Not at all. So after all said and done, made about $2 million and paid taxes on it. When I said the stock cratered, it cratered both because of the market and the company, which was about 100 million in sales, was dependent on an AT&T calling card product just as cell phones were coming into the market. So let's just say it wasn't a very sturdy business. I learned a lot there. I've learned so much more from failure than success in many ways. But I was off and running. And while I was doing it, I went to a wedding and I met this, like, really hot woman who also was smart, named Cass Savaris, who is now my wife of 25 years. We've worked together for 30 years. And she started Golf.com soon after she moved to Chicago to live with me. So I traded Seth for Cass, and she had an unfair recruiting advantage. When UI and student advantage cratered, I accepted her offer to become a partner.
- [11:00]
John Davids
In Golf.com so you get into Golf.com and what was the company? What did it look like at that point when you joined?
- [11:09]
Mike Lazzaro
Yeah. So now fast forward to, you know, 1999. And you had Yahoo, you had Excite, you had LookSmart, you had all these, like, search engines that were light code. Yeah, it was pre Google, but it was primarily manual classifications of the websites. And there were no apps. There was no, like, side door traffic. Right. Because there was no Google. So URLs were important. And Golf.com was Fifth Avenue real estate on the Internet. And So we bought golf.com in a court auction. NBC was selling it. And what it was was just coverage of the Tour instruction, tracking your handicap unofficially, because the USGA didn't allow us to issue official USGA handicaps. And like you wire, we sold that. We sold it a year and a half after we had started to a company that was making golf clubs in Silicon Valley called Chip Shot. Chip Shot also went bankrupt, and we had to buy it back because of, you know, they just couldn't get funding post, like the dot com crash in 2000. And we had to raise money and hustle to kind of like, we just had to shovel shit to like, save our company and 30 employees. We didn't have a bank account, and we grew that on the back of Tiger Woods. We got very lucky. You had this young kid who walked into the Masters who didn't look like anyone else, who became a global icon. So think of, like, Taylor Swift today. That was, like, you say tiger, and every kid in the world from, you know, China to South America, the US Knew who you're talking about. And we basically grew that and sold it for $25 million to Time Warner, which was a media company that used to exist, which is hard to believe what's happened there.
- [13:00]
John Davids
And it was a pretty big media company.
- [13:03]
Mike Lazzaro
It was huge. And that got us to New York, and that got us into this entrepreneurial, you know, kind of petri dish where I was hanging out with people who wanted to build the next generation of apps, including social apps, which is how we got into buddy media.
- [13:20]
John Davids
So when you exited at $25 million, had you raised a bunch of venture capital for Golf.com?
- [13:27]
Mike Lazzaro
So we didn't raise venture capital because we didn't know venture capitalists. We weren't really a proven entity at this time. And a vertical content site wasn't exactly what, you know, Silicon Valley venture capitalists were looking for. You know, it was primarily a hardware business at the time. And then, you know, general Internet services hadn't gone into vertical yet. E commerce was big thing of E Toys and all those. And so we raised from. We got lucky. We met a lawyer named Bill Weaver, who happened to be on the board of Medina Country Club in Chicago, which is this legendary golf course that's hosted the U.S. open. And he took a liking to us. We didn't know him. We were introduced from a mutual friend, and he set up a lunch meeting in this ornate, epic, like, ballroom at Medina. It felt like we were in, like, the Grand Mason Society. Like, we'd never seen anything like this. We were like, this is, like, where really rich people, I guess is how they live. Is, like, where rich white people go in the Midwest where they have lunch. Yeah. And so we pitched, and that lunch raised a million dollars. Without that lunch and that break, you know, we got. We got about 100 no's. So, yeah, I was talking to an entrepreneur yesterday who's like, man, having a hard time raising money. I've done 10 meetings, and I'm like, dude, like, that's a Tuesday. Like, get to 100 and come back. Like, you're not working. Like, it's like dating. You got to meet. You got to kiss a bunch of frogs. I've heard to find your prints, you.
- [15:01]
John Davids
Got to swipe right a lot of times or swipe left, whatever it is. So. So you had that experience with Golf.com, you get out. I'm assuming you have a bit of money at this point. So Buddy Media, which was really like an epic company, it was iconic. I mean, back in the early social media days, it was buddy media. Like, that was. You sort of were the standard bearer for social media, for Facebook, for posting, for scheduling. And I heard at some point you were responsible for like 10% of all the either traffic or ad dollars on Facebook. Is that true?
- [15:34]
Mike Lazzaro
Yeah, more than that, actually, because we, you know, we had nine out of the top 10 global marketers using our software. So we had both P and G and Unilever and all their agencies. We had all the car companies and financial service companies like Amex and E Trade. And the reason is because we were really aligned with Facebook and I spent a lot of time with their team, as I still do. I'm still very good friends with a lot of those early Facebook employees. And we were the infrastructure at a time where Mark Zuckerberg wasn't really focused on making money. He was focused on growth. Chamath, who, you know, we all know all in podcasts, and he's now a kind of a celebrity type in the business influencer space, was the head of growth. And the number one, you know, area of focus was how do you grow both within the university world. And then they just launched outside of the university, Right. So you didn't need a kind of edu address. And they had advertisers who wanted to do stuff because they now had about 100 million people on the platform. And I remember talking to Mark Zuckerberg, he said, just keep doing your brand stuff, like, just keep helping us out. And so they would onboard a lot of their clients to Buddy Media software, and then that enabled the companies to spend the money with Facebook. We would optimize the ads. You could upload 100 different creatives and I'll tell you which one's working, and you could circle a bunch of, you know, zip codes.
- [17:04]
John Davids
And were you built natively into the app like you had a special relationship?
- [17:09]
Mike Lazzaro
We didn't have a special relationship. We used. We were a prefer. We were the first preferred Facebook marketing partner. They had technology partners. But when this company started in, the Idea came in 2008, Cass was having our third child, Vivi. We've had all of our children around, like, companies, which was kind of a weird thing. You'd think we'd, like, take it easy once we had a baby, but it's like, okay, we have a baby, let's go, leave orphan these kids for a while. And Mark basically challenged developers to build Applications on top of Facebook, which I knew was really important because it ushered in a whole new era of the web where instead of being a single player experience, it would be a social experience. You know, think of Zynga is where Zynga came from. Farmville. All these games where you're not playing solitaire, you're playing Words with Friends. Right. You're playing Scrabble with Friends, going in this asynchronous way, and it was just more fun. And this was a time where people loved Facebook. They hadn't ruined democracy or mental health yet. Right. We didn't know about the disastrous effects of kind of these dopamine hits on, you know, the world's youth.
- [18:23]
John Davids
It was the honeymoon phase of social.
- [18:25]
Mike Lazzaro
Yeah. And so we just, like, jumped in and you could programmatically do everything from publish content to create branded experiences to. We could do everything that Cambridge Analytica ended up doing to weaponize. Right. The data. We were just doing it for car companies, beer companies, soda companies. I'm not saying it's any better, but it's what we did.
- [18:49]
John Davids
And when you're so the. The path here, if we just kind of zoom out, you've got this university wire, AP type business. Then you've got golf.com, which was scores and more media. How did you have the insight for buddy Media? Like, did you have a moment where you're sitting in a cafe and you go, oh, I've got this idea.
- [19:09]
Mike Lazzaro
I knew immediately, like, literally, immediately Cass is in surgery because she had, like, C sections. But I'm sitting, waiting, and I'm on my BlackBerry reading news. I. I consume a lot of news, always have journalism major, love, you know, reading. And I just read. It was before live stream reading, I think, through Mashable. Live updates from Zuck's presentation, and he introduces the social graph, this virtual representation of real life relationships. And I, like, literally, I said, that's it. I don't know what we're doing next. I'd already left golf.com I spent a year with timing. It was the only time I had, like, a real job. And I was already like, heads up, looking for opportunities. And what happened is I then started talking to people, and the smartest people I knew also were interested. And so I'm talking about, like, Aaron Batalion, a great, you know, engineer who ended up starting Living Social, and the Groupon guys and Mark Pincus was living in New York thinking about Zynga and, you know, Seth Goldstein and all of these, like, friends who were, like, kind of Successful in their own right, not as successful as they would be. Like Mark would become a billionaire and stuff. But I just think if the smartest people in the room are focused on something, you should be focused on it, right? Like if your friends who, like you, really respect go down rabbit holes and are spending their most valuable resource, their time on something, like, just pay attention to it. And I think that's, you know, my own vision of how the web was going social, what this meant for marketers. Right. Like, imagine a world where it's not just like one way shouting on tv, but if you could get to your customers, friends, birds of a feather flock together through these, like, you know, social streams. We thought it was a new way to market. And so we didn't know what the product was. We pivoted three times. But we knew it'd be a big or we thought it'd be a big market. We didn't know how big it was. Like, if you said that I was an early investor in Facebook and let's just say I sold the stock before they were a trillion dollar company or whatever they are now. You know, we, we knew it was gonna be big. We didn't know it was gonna be like, I don't think anyone did. Like 4 billion people on one platform. It's kind of like silly when you think about it.
- [21:21]
John Davids
Early on, back in the day when there was talk about the company selling for a billion dollars, maybe It'll be worth 2 billion and somebody. It might've been. On CNBC, there was a commentator who was like, people are saying this company will be worth $8 billion. That's madness. I mean, it'll never be worth that much. And we're talking about Facebook. This is, yeah, way over a trillion dollar company today. So the Runway they had was. Was far beyond what anybody thought.
- [21:45]
Mike Lazzaro
And the numbers were different. I mean, when we, you know, we sold Buddy Media for close to a billion dollars, and that was like the largest exit in New York in 10 years. Now, like billion dollars, like a series C for some companies especially, right? So it was a time where like a billion dollars of cash from Yahoo that like Facebook was offered. It takes, it takes a badass mofo to like turn that down, right? Of course.
- [22:12]
John Davids
Yeah, yeah.
- [22:12]
Mike Lazzaro
It takes a really bad as any one of us. I mean, imagine he would have put away like 6,600 million dollars. Like he's like 13 years old, but like all great entrepreneurs, he had, he had found his purpose and his passion. And I don't know if he knew it would be this big because he. It's not a skill that even he knew, but he knew his work wasn't done right. So it's, you know, it's interesting what he did versus, you know, the Instagram guys who I think today would be worth half a trillion dollars. They decided to sell for a billion dollars.
- [22:48]
John Davids
Yeah, yeah. That, that Instagram one is interesting because. Let me pose this question to you, and I want to get back to Buddy in a second, but do you think Instagram would be worth as much today and would be as powerful as it is today had it not been acquired by Facebook?
- [23:02]
Mike Lazzaro
So I don't think it would be as powerful. Like, it's hard to say that Facebook didn't help it. However, I think it'd be bigger than Snap. I think it would be, you know, Snapchat. I think it'd be bigger, much bigger than X, formerly Twitter. And the reason is pictures are worth a thousand words. It's. There's low friction to participate. It's the best way to consume social content. Videos and pictures. And the founders were great, are great. You'll love him. I was in a hotel room about six months before he sold, talking about the Internet with him with Kevin Systrom and Gary Vaynerchuk, and at south by Southwest. And I just remember Kevin saying, this is going to be huge. I'm never selling. Right.
- [23:45]
John Davids
That's a pretty famous meeting. I've heard about that hotel room at south by Southwest.
- [23:49]
Mike Lazzaro
Yeah, we do. I mean, a lot of people went to bars and got drunk. I don't really drink. We would just go into someone's room and talk about the future, which those people ended up creating and building Uber and Instagram and major positions at Apple. You know, just because we bounced off each other.
- [24:09]
John Davids
If you're spending more than $50,000 a year on marketing, I've got something for you. It's a playbook I wrote called how to Build a Social Media Selling Machine. You can grab it now for free@johndavis.com playbook. This is the nine step formula we use for our clients at Influicity to turn their social media channels into reliable revenue engines. Grab it right now@john davids.com playbook. So going back to Buddy, you had raised, I think, $90 million in venture capital when you started that company.
- [24:42]
Mike Lazzaro
Now, when we started, we raised a million and a half at, I think, a $4 million valuation. And we didn't have a business plan. Our thesis was, Facebook's gonna be big. We want to be early. We want to figure out a business within this social ecosystem. And I was able to get first Howard Lindsen, who also funded eToro and First Money and Robinhood, and just a great early stage investor and a great guy. And then, you know, Mark Pincus, who was just starting. You know, his company was called Presidio Media, which became Zynga. And then the one that really created the momentum was I pitched to Peter Thiel, who was on the Facebook board, and he thought that our thesis of, like, how does this stuff impact advertisers and marketing? Was interesting. And he put in $400,000. And so that was our 1.5 million, which then let us hire a team, acquire two apps and developers, and then, you know, we raised six and a half million and 20 and then 50 to get us to where we got.
- [25:47]
John Davids
How did the acquisition by Salesforce happen? Were you looking to exit or. That just sort of presented itself?
- [25:53]
Mike Lazzaro
Yeah. I mean, there's some acquisitions that you're selling a company, and there's others that they are buying it. And this was very much a buying it. We felt the energy because we had inbound interest and calls from not only Salesforce, but Google. Google had an offer that they put on the table. $100 million more than Salesforce, but for a bunch of different reasons. We went with Salesforce. Yahoo was at the table, and Microsoft. We had just raised 50 million. We were one of the fastest companies ever to 50 million of ARR, 55 million of ARR, which is annual recurring revenue. And we did that on the back of just this excitement around social. Not just Facebook, but then YouTube and Twitter, and. And then, yeah, I got a call from Ryan Ate, who's just one of the legendary Salesforce employees, Chief business officer for Mark headed up, you know, Salesforce Ventures. So. And I built relationship with. Over the last two years, which is what I recommend everyone, like, build relationships with your potential buyers. You just never know, right? Like, they should know who you are. And he said, listen, Mark would like to. I think his words were hang. Mark would like to hang out with you. And I was like, that's weird, because this is like my idol, right? Like this. Like any software entrepreneur who wasn't modeling their business off of Marc Benioff at the time was like, an idiot, right? And so I'm like, great. I'd love to. Like, I'd met him at events, but I'd never spend any real time. And so, yeah, I played it coy. Like, hey, I don't know when I'm gonna be out there. Next. Blah, blah, blah. Oh, I happen to be out there next week. And yeah, we met at his townhouse, and I just demoed the product and he had a vision of they already had a sales cloud and a marketing sales cloud and a service cloud. Next was marketing. He wanted to start with the new way to market social. And so we bas. It was just like, we just worked out the deal there. He's like, I could pay 800 million. Don't ask for a dollar more. I'm overpaying for your business, but I want you to be here.
- [27:55]
John Davids
This is in the first meeting.
- [27:56]
Mike Lazzaro
First meeting, yeah. He was like, Mark is. He's an incredible leader. He's decisive. He'd done his research. He also has. He's very gut driven, which is both great and also it gets us in trouble sometimes. And we were a piece of a larger puzzle. And he liked that we were in New York. He liked that I was a communicator and marketer, and he thought I was a good leader. He's like, I want you here. I want entrepreneurs leading big parts of this company now. We would have sold it anyway for this type of money, even if we didn't like the founder. But, like, you know, if you look at kind of entrepreneurs who've done really well, you know, the ones who've made a lot of money and plowed it back into making major impact, I think have done it right. So, you know, God doesn't want us to be poor. He wants us to be rich. But with money comes responsibility, and he's addicted to philanthropy, which I love.
- [28:53]
John Davids
Yeah, he's really, really unique in that way. There's one other entrepreneur I know who personally, I know sold his company to Shop to. He's at Shopify now, but he sold the Salesforce. And I think he said his first meeting was at a deli in New York City with Marc Benioff. So it's very, very sort of similar casual. Hey, let's go.
- [29:15]
Mike Lazzaro
Was that Daniel?
- [29:16]
John Davids
It was Daniel DeBeau, yeah.
- [29:18]
Mike Lazzaro
Yeah. He's a great guy.
- [29:19]
John Davids
So, you know, there's. There's a theme here.
- [29:22]
Mike Lazzaro
What's cool about all that is like, Mark and I, it's a good model for all marketers. All companies, like, get entrepreneurial, innovative energy in your company, and once they're there, treat them as entrepreneurs. And so Mark, I got to know all the other co founders who he bought because he treats us differently. Like, he doesn't treat us as just like a cog in this large machine. He treats us as like, I wouldn't say royalty, but, like, he wants our minds and our, like, innovative spirit. And so one of the cool things is all those entrepreneurs from Alex Bard to Scott Dorsey, exact target, you know, Ross from Mulesoft. You know, I just got to know just epic entrepreneurs through Salesforce.
- [30:02]
John Davids
It's interesting. You've had this really storied career where you've gone from. I mean, first of all, the people that have been involved. If I was writing your screenplay, your roommates with. Who was it? Seth Meyer and then your office mates with Gary Vaynerchuk and all these people, all these characters that have come into your life, how important do you think timing and sort of in the right time, at the right place, in the right rooms, at the right tables, how important was that to your success? Or do you think if those moments hadn't happened, you would still have found a way to be successful?
- [30:36]
Mike Lazzaro
Oh, timing is it. It's all timing. And I now run a venture capital firm, and we've really spent a lot of time figuring out what makes companies successful, right. To deploy capital. It's nice to know, okay, we have 30 years of data, and the only thing that correlates to success is timing. If you get the timing right, in a good market, you could be the number five players, right? Like anthropic in the AI space. Like, maybe they're 3, 4, 5, depending on how you say it, but they're like the $100 billion business, right? And so it's not only timing for the business, but networking is important and treating people with respect. And, you know, I was, we were doing a bunch of events related to the book, and we're inviting all these college kids and, you know, one of them asked a question like, what's networking? And I'm, I just said simply, like, look up from your phone and talk to anyone who comes in your, like, field of vision. Like, just look up like, that's networking. And Gary Vaynerchuk showed up at the early Buddy Media office as a broke 34 year old who never had equity in his dad's business, who didn't have enough money for an office. And he said, can I use your conference room? I'm like, yeah, for the afternoon. He's no. For my, like, new company, we gave him a third. And I said, yes. Cass somehow said yes. We gave him a third of our office space, which in New York City is like, ungodly amount of money. And he is been a mentor, close friend, co investor, family member since. And, you know, I don't know how I, Seth Meyers happened to be in the dorm room next to me. And he was just another schmuck, right? Like he was waiting tables after college. It was like he got rejected from Second City. It's like he. People are who they are. But if you build relationships over a long period of time, regardless of who people are, you will, I think, have a very meaningful life and have a step up. Because those are the people who knew you before you were, anyone who you've helped, who will go to bat for you.
- [32:48]
John Davids
Did you see anything, I'm curious in the case of Gary Vaynerchuk? Cause we all, he's very visible to all of us. Did you see anything unique in him, if you're being honest? Or was he really just like, oh.
- [32:59]
Mike Lazzaro
He was so unique. I remember saying to Cass, like, you gotta meet this guy. Like, this guy is the best. Like, he's personable, he cares. He did his research on us. His ask was not only could I use your conference room, but something I haven't really talked about often was it was also a business decision. Like, he came to us because we were like this early leader in software for social. He was doing services. So like providing what he did with wine library TV to grow his dad's, you know, wine business he was going to do for companies. And so he basically saw us as partners in locking down business. If I could just like draft off of Laz, I'll be able to get customers, right? Because someone's got to do the work. And we ended up, I remember the first meeting, we went into the NHL together and let's just say when you're with Gary in a meeting, you don't say a lot like, Gary just like takes over and does his thing. And I remember that first meeting, I'm like, this guy, like, I love this guy. Like, because it's not like, you know, there's sales and there's sales where you don't know you're being sold, right? And he gives so much, and he gives so much knowledge and, you know, it's give, give, give, give, give that. He's unlike anyone who I'd come across, which is, you know, I wouldn't have given like the. We wouldn't have said yes to like just anyone. Like, it's such a big ask, like such a crazy ask. Who does that? Let me have a 30 year office from. I'm like, for free? Yeah. What?
- [34:26]
John Davids
And it worked. He must be a great salesman in that case too. So you have this big exit and after your third. What were you feeling like, so describe your life at that point. You've got three kids, you now have three exits. You have serious money at this point because you've just had this enormous exit. What did you think you would do next?
- [34:46]
Mike Lazzaro
So, yeah, we write about this in the book. We should have been at the top of our game and thrilled and just ecstatic about, like, all this money, which is not. I mean, when I made a million bucks, the first million, I was like, I'm done. This is the most I've ever thought I'd make. Right. Then you make five and you make 100, and you're like, oh, my God. I was 40 pounds overweight. I was traveling the world because we now had hundreds of employees, offices in Singapore, London, you know, everywhere, because social is everywhere. Cass and I were not very connected, which we're at our worst when we're not connected, both business and personally. Right. And we were just worn out. And I think a lot of entrepreneurs, like, the day we sold, I still assumed we'd go out of business. Like, it's just the way I think, like, we were barely profitable. But, you know, very fine line between, like, we're a great business and we're out of business in my mind at the time. And so, you know, I remember going back from announcing the deal to our company. We're in a car, I think Uber. Yeah, Uber at the time. And it was just like, okay, who's taking the kids to the doctors tomorrow? We got to get the camp appointments and the. All this. And it was just, we're just tired. Having said that, it was awesome. Like, we wouldn't trade it. So it's kind of like the whole idea behind shoveling shit, a love story is, you know, the idea that, yeah, you're working hard, it's not guaranteed, but there's like virtue and hard work. And we had found our purpose as builders. Maybe not like, yeah, we've talked about this a lot. Like, we Never ran a 500 person run a 500 person company. So we were trying to replace ourselves when we sold. Maybe a little over our head in terms of running. I wasn't a great leader, but then that. I think the best thing that happened there is money doesn't do a lot other than health. Lets you buy back your time and lets you be free to do what you want, which was the biggest gift. Like getting my health back and just being able to, like, do what I want and be proactive. It's just a lot less stressful than when we first started out. Where it's like, this doesn't work. I'm going to. I guess I'll try to be a reporter, right? I was so scared. Like I wasn't in. Like the money didn't motivate me. The fear of failure motivated me.
- [37:05]
John Davids
That's interesting. And I was going to. I was going to ask about motivation because I'm still in my mind, I'm still thinking about how you. You almost didn't make it when you were just a little kid. When you have that first exit and second exit and then third exit. Do you feel like. I've heard this expression, you can hit rock bottom, but you can also hit cliff top, where it seems like it doesn't even matter if you have more success because you're almost numb to it. Did you ever have that feeling of, I'm not even sure I could ever top this. And you're only at the time in.
- [37:34]
Mike Lazzaro
Your 40s, right after. So after we sold, Mark wanted us to be there. And we're having trouble with the kids. Like we needed to get. One of us needed to get back. One of them was goofing off at school, who had never goofed off. The other was having like some, you know, health problems and mental health problems. And so Cass went back. Mark had forced us to re vest our stock to keep us for three years. Now one of Mark's biggest. One of the biggest lessons I got from Mark is just do the right thing. So we thought we'd forfeit a big part of the deal. I told him that one of us has to go back. And it probably makes sense for Cass because she's the operator. And he said, great. Like, she can keep her stock. I get it. Family first. And it was one of many times that Mark did the right thing. We had a stalker once. He paid for 24. 7 security. Like, he never looks at agreements. It's like, what is. And whenever I approach him with a question, he's like, do the right thing. What is the right thing? And do that. Whatever the agreements say. And I worked at Salesforce for four years and burned out. That's where I burned out. Because the company went from 2 billion of sales to 10,5000 employees to 20,000 employees. I was traveling every week. I get calls like, hey, Unilever is not happy. Go to London. I'm like, I'm not that much closer being in New York. Like, you go to London. Like, I should. Like, I'm. I got a whole. So it's. I went to Mark and I said, listen, I've been here for four years. I'm 40 pounds overweight. My cardiologist says I'm going to die because I'm putting this strain on my body. I just have to, like, I'm not going anywhere. I just need to take a break. And I was a little lost. I was cast. Got me a painting studio. Like, I love painting. That's a hobby. I'm awful at it, but I like it. And I took a few years to just figure out, like, what I wanted to do. And it wasn't until, you know, we really focused on, like, let's scale the investing side that we really jumped in full speed ahead.
- [39:32]
John Davids
Had you already been doing angel investing over the number of years?
- [39:37]
Mike Lazzaro
Yes. So at that time, we probably had done 50 deals, and the first few were pretty. Were like, we just got lucky. Like, we happened to be in the Facebook ecosystem. So we rode that from, like, early to post IPO and then sold, you know, that stock and, you know, did well with Tumblr. And, you know, we just had a bunch of big wins, which then let us parlay it into a professional investment firm. It was a very different time. We're actually, you know, thinking long and hard about the venture business, which we think is broken in many ways now, but we're just too tired to start another company. Starting companies, we just, you know, we've done it eight times, and it's just. It's hard. And there's no way to half asset when you're in. You're in. Like, there's no, like, oh, we'll do it, but we'll hire a CEO. Like, no, like, you either do it or you don't. And we've had. I've had a huge failure with one company I launched without Cass, which once again learned more doing that post the deal. I think what happens when people make money, they assume that they're. And this happened to me, they assume that they're, like, really smart and they know more than what they know, and their ego starts to take over. And so I made some bad decisions around businesses that I just assumed I'd be able to figure it out. But now we're kind of more grounded and, you know, the next 50 years, we hope, you know, we're optimizing much more for impact than cash, but we're capitalists, so we like making money. So let's go.
- [41:06]
John Davids
So what is. What does the setup look like now? Are you taking two, three meetings a day? Are you doing the VC thing?
- [41:13]
Mike Lazzaro
Yes. So we have a venture capital firm which is $400 million assets under management called Velvet C Ventures. We are not raising a new fund there for a bunch of different reasons. We think that the best companies won't need a lot of money. It's. We're in a renaissance of entrepreneurship. It's never been, like, easier to start stuff and to get product market fit. We're marketers, and we think that all the development tools shift the power from engineers to, like, business people. And we've just reiterated that with, like, how we've done the book. We, you know, the book that came out a week ago, we treated like a company. And so we had our own, like, document of. Here's our vision. We want to be a bestseller. And not just to get on the list, but, like, why write a book if no one reads it, right? Like, what's the purpose?
- [42:02]
John Davids
What is. And I wrote a book also, so I have my own answer to this. But what is the purpose of writing a book in 2025 versus putting out a bunch of tweets or a Facebook post or putting it in a blog?
- [42:15]
Mike Lazzaro
So Cas had a bucket list item, which was write a book. I was very against it being the journalism major. Let's write a book means Mike, go write a book. In my mind, little did I know, she had kept lists of. We had about 150 cheat codes that everything from put the cult in your culture, don't shine the turd. You know, how she moneyballs people. And so she actually did a lot of the thinking, like, the structuring of it, and I did a lot of the writing. She got better at editing. She wasn't. You know, we do very different things. Like, she's an operator on more of the sales side. Writing a book together. You're all in it together. And so let's just say there was some marital stress that came out of the process. I'd write a chapter, she'd be like, I don't like it. That was her editing. Okay, like, what don't you like? It's just not doing it for me. Okay? Like, I'm not just rewriting it to then get feedback. And so it was like a bunch of tough conversations where I lost my, like, patience. I was like, fucking this lady, right? But we then got in flow and we got it done. And then we realized that, oh, there's no one who sells books. You have to market it yourself. So that's like our third job, which has been great because we've done primarily, like, speaking gigs. Like, we'll just show up, ask us to Speak and we'll show up and like, just share, like, topics. And that's driven a lot of sales we've done, you know, not too many, but I see some of these authors go on like a hundred podcasts, but we've done like a few that we respect and love. And then we've made some very uncomfortable personal asks, like, hey, I'll speak at your LP meeting, venture firm, or like a founder portfolio meeting. But I need you to buy 20 books or 50 books.
- [44:03]
John Davids
That's what you got to do, though. And I mean to anybody out there, because writing a book is like a startup. It happens in a much shorter window. But the reality is you've got to be comfortable doing a lot of uncomfortable asks.
- [44:15]
Mike Lazzaro
It was peak uncomfortable. We had not asked. Our last 10 years has been helping others, like 100 portfolio companies, friends launching businesses. Like, how can we help? How can we help? How can we help? Right? Like with just with Gary, we helped. We funded Empathy Wines with him. We have a pickleball team with him. Like, if Gary asked for something, I say yes. Cause he's a winner, right? Winners win. This was like, I need you to do this. Which was both uncomfortable. But what we realized is that it feels really good to help people. And we know that feeling. Like, if any of our friends write a book, we buy a hundred copies and we send it to the hundred people in our network that we think can benefit from it. And it feels so good. Like, I get. We get. We just did it for Matt Britton's book Generation AI, and we sent it to people who should know AI stuff. They send us messages. We ask them to write a review for Matt, send it to Matt, and it's like, I love supporting people like that. And a lot. Some of the asks were disappointing. Like, people are just like, I don't buy books, whatever. But others really went overboard, including Gary, including Scott Galloway, who we've known forever. Mel Robbins, who we don't know well, but she's gotten really big and is on the back cover. Like, she promoted a book called Shoveling Shit, which is not really her brand. Right.
- [45:45]
John Davids
It's a little off brand for her. Quick break so I can tell you about Influicity. That's the little marketing agency I started in my apartment about 10 years ago. Well, fast forward, it is not so little anymore. Influicity works with some of the biggest brands in the world, building customer communities that drive revenue. We do this through influencers, podcasts, paid media, social media, content, AI and so much more. You can learn more@influicity.com and hey, while you're there, check out our case studies. We have a lot of them. That's influicity.com so let me ask you this because I want to sort of end off here on a question about the future from someone who has been so heavily involved in the last 20, 30 years and so successful in it. We're at this major inflection point, as you alluded to, which is you've got AI, which is changing everything. You've got all these tools where someone with zero experience can code an entire website in 15 seconds. What do you see both as an investor and an entrepreneur? What do you see for the startup landscape where you can basically build a million dollar company out of your basement by yourself with no funding? And what does that mean for what the next generation of builders will look like?
- [47:04]
Mike Lazzaro
Yes, so what I'm most excited. There are very few AI startups and a few of those will be venture backed, but very few. So vertical AI applications. So AI applications that do one, two or three things, there will only be a few winners that are venture scaled, but there can be a lot of cash flow businesses. So businesses that just have customers and they provide value to customers. So knowing that there's starting AI companies and I'd encourage everyone to look at like, what's a problem that you're having that you could solve and maybe offer to others. The biggest use of AI is what I'm calling like augmented intelligence, which is we're moving from like a focus on the AI tool itself to how is it fully deployed across workflows. And a big part of what we're doing with our private equity business is buying cash flow businesses and making them more productive. And every business. This book was not written for tech startups. We have it easy. Like venture capital, there's a safety net we can go and get other jobs. This was written for the pizzeria, right? The pizzeria owner, the headhunter, the real estate broker. Real entrepreneurs that don't have the safety net. And we own a health, we own an executive search firm primarily in the healthcare staffing space. And we're now using the technology to, you know, as matching tools. So we have a big database, 50,000 people. Which of those people best match these job descriptions? Our recruiters can now do three times as much work because they're not spending their time doing the manual research. Right. And so the future is productivity gains drive value. Whether it's in the public companies or a smaller business that you want to sell at some point. And so everything you're doing. Look, ask a question. Can this be automated? Can I get rid of busy work? And if you do that and you could find 5 percentage points in margin, that's real money. If you sell a business for eight times earnings and you could find $1 million of earnings, you've just put another 8 million bucks in your pocket, Right?
- [49:21]
John Davids
Yeah.
- [49:21]
Mike Lazzaro
And so that's. It's not like you do not need to be a Silicon Valley tech startup founder to transform your life and business with. Just think of them as productivity tools. They're very simple productivity tools.
- [49:37]
John Davids
Mike, I feel like we could do another two hours. I certainly could because I've got so many more questions. But I really appreciate this. Your congratulations on the book and the early success. I know a lot of people are going to read it. I'm going to go out and buy 100 copies myself. So I really appreciate you joining.
- [49:53]
Mike Lazzaro
I appreciate the support and keep doing what you're doing. I mean, you're, you know, listen, you're exposing people to ideas that otherwise they wouldn't get. And so we don't have a podcast. We know how difficult it is, and what you're doing is God's work. So keep. Keep it up.
- [50:09]
John Davids
I appreciate that, sir. Thanks so much.
- [50:11]
Mike Lazzaro
Thank you.
- [50:12]
John Davids
Thanks for listening. If you enjoyed this episode, make sure to leave a rating or review wherever you listen to podcasts, Apple or Spotify. Let's add other folks know that you love the show and it lets us know that we're doing something right.