← The Mello Millionaire with Tommy Mello
The Mello Millionaire with Tommy Mello
How 28-Year-Old Founder Matthew Iommi Made His Own Luck
00:27:47
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A lot of people get frustrated and become victims when they think to themselves, why aren't things happening and why am I not achieving what I want? And they need to understand and see where their time and their mental focus is directed towards.
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Hence quit saying you got lucky. The same people that ask you why you work so much are the same people that are going to ask you why you keep getting so lucky.
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Yeah.
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Innovative, Remarkable. Cutting edge. As a Forbes 30 under 30 entrepreneur, Matthew Iommi is the CEO and co founder of Fedi, an on demand rideshare company.
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We're doing to the charter transportation industry what Uber did to the taxi industry.
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Based in Austin, Texas, Fetty has become known as the Uber for groups. Creating smarter ways for friends, classmates and communities to get from point A to point B.
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We bring the experience of group transportation with the efficiency of rideshare.
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At only 28 years old, Matthew built Fedi with a sharp focus on serving college students to make group travel more accessible, affordable and efficient on campuses across the country.
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By grouping up groups and allowing them to ride together, we're completely removing single occupancy vehicles and attacking the problem at its source.
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Get ready. This episode will change the way you think about modern day entrepreneurship. All right guys, welcome back to the Mellow Millionaire. Today's going to be a lot of fun. We're still in Austin and we're. And I'm sitting here with the CEO and founder of Fetty, the on demand group rideshare platform that's reducing congestion while reuniting people on the move. A Texas A and M graduate with a razor sharp eye for opportunity, he organically grew Fetty from a party bus business to a thriving startup backed by Shark Tank's Mark Cuban. Matthew leads with foresight, grit and a knack for building game changing solutions. Let's just start out with what you're excited about. What got you here. Oh, by the way, there's a rainstorm if you guys are watching this video. So he's not this sweaty.
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A
I didn't just sweat or just take a shower, I promise. Yeah, number one, really excited to be here and get a chat with you, but overall just there's so much optimism going on. As you mentioned, we just raised around that was led by Mark Cuban and his kind of whole mantra is that, you know, he's a capitalist and he looks at America as the prime place to take advantage of opportunity.
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B
I listen to Mark Cuban all the time and he said, you know what, if you become a billionaire, you got lucky along the road. And I agree with that, like, there's some things that had to go right. The people that walked in, you put yourselves in the right situations. But you're right, being an American is such that alone is a massive opportunity. So tell me a little bit about the business. You know, Fetty, how you got started, what your goals are, where you see the future heading, and what gets you excited when you wake up.
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Yeah, yeah. So it started when I was a senior at Texas A and M University. Prior to starting what has become Fetty, I was always entrepreneurial, looking for different opportunities, especially with Justin Rath, who I've known since high school, who's my co founder at Fedi, but also a co founder in previous ventures that we've had. And so we had a few ventures prior that saw some traction, but never really achieved product market fit. And so along the way, we learned a lot. And so my senior year, I came across, of all things, a Facebook marketplace ad for a party bus. And I reached out to Justin, I said, look, there's this really interesting opportunity of this party bus that's being sold. It's just one party bus. It's. It's. Nothing is set up in terms of. They just have a phone that they tell their customer base, which was primarily Texas A and M students, to text. And if you want, the bus rolls up, you pay $5 per person and it'll take you to the bar, the nightlife district, the event, whatever it may be, birthday party. But what was really interesting to us is that they were able to make a few thousand each month with nothing set up. And so we were, we thought, hey, let's take everything we've learned. We know how to throw up a website, create a booking system, do some really good marketing, automate things. And, and it could just be, you know, a side business aside, you know, that we start. And so we reached out to them, we were able to set up a negotiation, and ultimately we're able to pay this thing with limited down payment just on an owner finance plan. And so we said, okay, the goal is we execute this deal. And I mean, how much was this bus? The business itself was 14,000. We didn't have 14. I mean, we were just students. We'd have 14,000. And we were just betting on ourselves that we could create and grow this small amateur party bus business into something that could take care of the monthly financials to repay the owner, right? Buying the business as well as make profit, to be able to reinvest and to grow it bigger. And so we did that. We executed on that, what was one bus turned to five buses and quickly we realized that there was a real need for efficient and convenient group transportation. Prior to Fetty, there were two ways for groups to travel. The first one was to split the group up and just take multiple Ubers, Lyfts, personal vehicles, Waymos, now whatever it may be. The other option that they had was to reserve a charter vehicle days or weeks in advance, pay a three to five hour minimum for maybe a 15, 20 minute trip to where they want to go, and have no payment flexibility where, you know, you have to pay a down deposit, an arm and a leg just to be able to ride together. And so Justin and I, my co founder, we thought, well, why don't we take these high capacity vehicles and incorporate rideshare technology into them so that groups can ride together with the same affordability, convenience and accessibility as typical rideshare. And that hadn't been done before. And so we, we started developing the, the platform, the driver app, the user app, and, and the back end. And before you know it, it just really caught steam. And College Station became the go to transportation for young adults. Everything from concerts, football games, nightlife, anything like that.
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And so anything you could drink on.
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The bus, you can drink on the vehicle. Yeah, so, and then there, there's aux, everything. It's just a really good experience that we're providing to our customers and our users. And so we thought, okay, this is working great in a college town of College Station. Will this replicate to a Metro? So we launched in Austin in 2021 and really quickly it took steam again, I mean became viral. And, and one really cool thing about the business is that whenever we convert one customer, you're also converting 10, 11, 12, 13 that also experience the product because they're riding with the booker. It was a, what they call a hockey stick growth curve. We got a lot of attention. We ended up getting an investment from Y Combinator. They're the first investors in Airbnb, Doordash, Instacart, Dropbox, things of that sort. And so they took notice. They liked what we were doing. We got accepted into that, got an investment, continue to grow. At that point we were in about four markets and then Mark Cuban took notice, notice of us and, and the way he, the way we got on his radar is that his daughter was a huge fan and user of our product. So it's funny, his daughter reached out to us and she goes to Vanderbilt, but of course during the summers and whatnot, she's in Dallas and she reached out to us to say, hey, we would love this at Vanderbilt, can you come out? And I said no, we're going to do our best. We're, we're raising some capital and we'll see what we can do. Anyways, she goes to her dad, explains the product, he sees the vision, he loves it. He reaches out, ask how he can get involved. We, we raise a little bit over 7 million with him leading the round and then off to the races again. Continue growing, continue expanding. Now we're in six states, we transport over 200,000 passengers a month. And, and the goal is just continued expansion. Continue being able to provide and deliver this service to groups all across the country and hopefully the world.
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B
So how many vehicles you have out there?
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A little over 200 growing week over week.
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In tech, I know AI is getting 30 40x on ARR. What are you guys striving to get to as far as a multiple? As this continues to grow, where do you think you're going to land?
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There's a lot of movement and activity within the mobility space and just in general tech that allows us to increase the potential and the valuation for a variety of reasons. One you brought up is AI, right. Well, what's really interesting is Fedi holds treasure groves and mass amounts of data because we understand where people are going, right. Who they're traveling with and when they're moving. And so we're able to utilize that data to not only improve operational internal effectiveness efficiencies, but also in the future allow us to, to, to give suggestions and recommendations to users and to other, other partners. We do have an advertising revenue.
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How are you guys scaling the marketing? What seems to be the best roi?
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Yeah, so what's really nice about Fetty is that inherently the product, whenever it's used, it's associated with good times. Right. We, we do have a heavy demographic base of young, young millennials and Gen Z. These are people who are typically congregating in groups and going out together. And so just naturally, whenever they use our product, there's a really good associated feeling with it because they're going to a special event, they're all riding together, they're having a good time. And because of that, user generated content has skyrocketed for us.
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Right.
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They're in the vehicles, they're tagging us, they're sharing pictures, videos, putting us on our Instagram stories, everything like that. Now what we did is we kind of took that really positive association with the brand. And, and what do they want to see? They want to see themselves they want to see what other people that the same demographic are doing. And so it's been something really exciting to see. And as part of that, in the recent round, one of our investors that came on is Barry Posnick and he's the president of MGM Television. And he really saw the vision and understanding of what we kind of frame as Fedi Media. So we kind of say there's Fetty, there's Fetty Ride, which is a rideshare app. There's Fetty Media in the future, there's Fetty AI. So it's kind of this encompassing umbrella corporation that's using everything that we've accumulated to create some really standout products. We've done large multi market national campaigns with Anheuser Busch, Boston Beer, wrapping the vans in app advertisements, in vehicle advertisements, Live Golf, we've done promotions for different things like that. Yeah, yeah, there's a lot of opportunity.
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B
Well, I want to run an idea by you that I've been working.
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Let's hear it.
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It's very rough. A lot of people have solar, A lot of them have the Tesla batteries. The biggest problem I see is these Teslas and every other vehicle the ride shares, they need to go to a station. Now if you go install the fast chargers of someone with solar, they got the extra energy in the banks. As long as you could get the fast charger. Imagine an autonomous car pulling up. I don't have it all worked out yet. But the big thing is you could get a lot like now I got to turn off, I can't run any longer because I got to make it back to the charging station. That might be hours and hours of wasted time.
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Right.
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So what if individuals are just willing to say, hey listen, come use mine. You pay a little bit of a premium, but you get more efficiency out of it.
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Coincidentally, today I had a call where I got to get some insight into the actual insurance prices for autonomous versus your typical commercial auto premium. Now, commercial auto is increasing year over year, personal auto as well. The insight that I got is the actuaries and the data are starting to catch up to what autonomous safety really is all about. And it's predicted, predicting next year they're going to be 30% cheaper now than commercial auto with a person behind. And so exactly to your point, that trend is going down significantly, which changes the landscape completely. Right. I mean if, if you're removing and decreasing the primary cost of transportation not only for businesses, but it'll be for personal. Oh yeah, as well. That's going to increase adoption a Lot quicker than if that wasn't the case.
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I mean, listen, I have a fleet of about 500 vehicles. If I go to autonomous, I mean literally that, that saves a lot because it takes the driving. Fact is I, I sent a group message out to all my guys and I was like, guys, you had four violations. You were, you sped through a steps or just didn't stop all the way.
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Like these things matter. And as you scale, especially with the numbers you're talking about for your business, just the likelihood increases. Yeah. You have to do everything in your and everything in your control to limit those claims. Because in this stage one really kind of what they call nuclear verdict or a nuclear claim can change your entire business.
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B
What's a piece of game changing advice you wish you had known in, in your early 20s?
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Piece of advice that I wish I'd known early 20s or at least before I started this. The importance of the team you're building. I think it's common for a lot of entrepreneurs and a lot of people getting into business to think because of my capabilities and my skills I'll be able to achieve the results that I want to achieve. But really quickly as you find you, you start to understand that the bandwidth you have is really not as great as you once thought. And it. And it's even more important to spend time and focus building out a great team so that you can get further. There's that, you know, if you want to go something go along, delegate to elevate. Yeah, exactly. And I think that's something that if I had learned earlier, maybe we would be in a further stage than we are now. But it's definitely something that I understand now. Investing and building a team is probably one of the most crucial aspects to growing a business that I can think of.
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B
OpenAI, I mean Matt is paying $100 million now. There's only probably seven people they would want to get to pay that. But a sign up bonus of 100 million because what matter is doing and OpenAI is doing, they're building something that's never been done before. Right. It's like Graham Bell when he invented the telephone. I brought that up like I could get a really good AI guy for, for half a million. But the deal is what these guys could build. You know, home service is so weird because it's a blue collar industry. But when you apply, I always say we're a technology company that does garage doors. Okay. I mean we've got these power bi dashboards and these crazy reporting and just we know things, we know if you arrived on your job on time, we know how long you spent building rapport. I've got tools that sits there with you and it's recording the conversation, saying, how many words per minute were you talking? How much did you talk during the conversation? Did you follow the script? I mean, there is going to be a clear winner. So this is like, this is everybody, these venture capitalists, they're taking a chance because they only need to get it right one out of 15 times.
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Right.
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And the payout's ridiculous. So I mean, what I would say is your ability to acquire talent that's beyond work on your superpowers and acquire the best talent fricking possible and get out of your own way. Most of the time, the founder is the bottleneck.
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And that's one of the things that in, in my kind of leadership method is, is making sure that we're acquiring and putting together a team of entrepreneurs, of go getters, of killers that don't need to be micromanaged, don't need to be babysat, that they're entrepreneurs. Right? And, and I think that's a really important aspect of, of when you're acquiring that team or putting together that team of people who aren't there just for a nine to five or just for a salary. And, and so that's something that we've done really well. And it obviously helps when you've got great traction, a great product, great market fit, great investors behind you to really sell the vision and put together that killer team.
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B
So if you had to start over, let's just say you're 17, 18 and you got $10 million, was it Bitcoin? Is it real estate? Is it investing in a business? Is it just going out there like, what are you doing with it?
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I think I'm, I'm buying a business that is experiencing, that is in a market that's experiencing rapid, not just for the financial benefits that, and rewards that could come from that, but the amount of quality content that you can learn kind of coming into a business and understanding the bottlenecks that it has and coming up with innovative ways to remove those bottlenecks and just push the acceleration even further. And I think that even goes back. It'd be essentially what I did with the party bus company, but at a larger scale, right? So that 10 million could buy a larger, more established company. Let's say in, in AI or whatever it is in real estate, I would find something there, I would purchase or invest to have a controlling stake in, in, in a smaller business and Then really kind of grow that. It's similar to what Musk did with Tesla. Right. He did a significant investment later, took it and brought it to what it is now.
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I love this game. You know, I'm learning so much and I've learned over the last five years about how money works. And you add in these factors of understanding business and marketing and sales and then you understand technology, automation, and then you start to get back and really understand like arbitrage and multiples and leverage. And you've heard this, there will be other opportunities and you're going to say, this is a goldmine, but there's only one of you. So ruthless prioritization.
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Ruthless. I agree.
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Saying no needs to become your superpower.
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I agree.
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Say no. Pick at a discipline, focus.
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Exactly. I completely agree.
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The biggest thing I see with most entrepreneurs is they dream too small. How did you get in the idea of dreaming bigger and reverse engineering that goal? To know what you need to do.
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Today, I think you bring a spot on point that you're not going to get to a destination that you want by luck or blindly and by accident, rather. Yeah, get to, oh, I just woke up and now I've achieved everything that I wanted. You have to visualize that, manifest it. Yeah, exactly. And then you go backwards and how do I get there? How do I raise the money? How do I get users? You just go backwards. So I think the biggest key is understanding that vision, visualizing it, and then learning as much as possible to understand what it'll take to get to that end point. So I think that's a big thing that a lot of people, to your point, they see the, the fancy Corvette or they see the McLaren and they're just like, okay, that's what I want.
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B
And they wake up empty, without purpose. And I think we all need purpose. And Gina Wickman wrote a book called Shine about this, where he woke up very, very wealthy, sold eos, the whole concept, world renowned, best trading you could do for management. And he just felt empty. The note to you would be, there will be a time like Mark Zuckerberg. See, Tom did it right with MySpace. He's like, this shit's going to bubble. So he sold out. Now he's a photographer all over the world, but that's his passion.
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Well, with Mark too.
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Mark, Mark said, I'm going to keep rolling. He took on some investors, but he still got purpose. So just remember, a guy like you, you could go rebuild and do this stuff, but man your team or your camaraderie. So if you Ever get a chance to say, listen, I just. I want to be involved. I don't care if I'm the janitor. I just want to show up and have purpose.
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No, I agree completely. And. And it's something that a lot of people don't. There was this man. I wish I remember which entrepreneur it was, but he sold his company for. For. I want to say he was either hundreds of millions or even a billion plus. Granted, that's not what he kept, but that's what he sold it for. And he. And he decided to start another company. And somebody came to him and said, you know, you're crazy. Why are you doing this again? You've got all the money. Why would you put yourself through this again? And he said, look, I'll tell you why. Once I sold the company and I had all this money, my life became really boring because I was done being in these circles where people were wanting to discuss, collaborate, build, come to me. And now you're on this island with a lot of money, looking for purpose, looking. Well, maybe the bigger house will. Will do it for me. You know, you're spot on in. In terms of. You always have to have a mission. And. And we've got. One of our advisors is Joseph Kopser. He was in the army. Another of our investors was in the Air Force. And when I talked to them, and they're both entrepreneurs now, and when I talk to them, they. They tell me, look, when I left military service, the closest thing I could find to that mission, focus, that team, focus, even some of the adrenaline, was creating a business.
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Well, I'll tell you this, not a lot of people can't stomach it. I'm willing to bet the farm on myself every day. We're willing to change. We're willing to. We're not too dumb to just say if we're headed off course, which you will be at times to get back in and try something new.
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Well, the business needs to change, but also you need to continue.
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You need to grow.
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Exactly.
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The law of the lid says you and your team is as fast the company is going to grow, that when that lid grows, the company begins to grow.
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Yeah.
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And the lid expands.
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Yeah.
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And this, you know, it just goes. You're dead on. And the fact that you're 28. I mean, look, when I was 28, I was working my ass off. I was still running calls, and I didn't know how to work on the business. That old cliche.
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What do you think changed?
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Well, first and foremost, I got on the right Software. And all of a sudden I was with these people in H Vac that all had private planes and I got introduced to the right circle.
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Okay.
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Also what I realized is these guys are devouring books.
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The more you invest in yourself, you focus, you grow, the more frequent. You got lucky.
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B
Well, yeah, there's a lot of opportunities. But I'll tell you this, I learned how to say no too, to some of them. Because one of these, and one of the things I'll tell you that I've been studying a lot is be careful who you take investments from. And if you're not performing at the level that we all committed to, we've got a prenup here.
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Yeah.
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But this is going to dissolve your ownership and here's how it's going to work. This is the exit agreement.
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The reason I ask is because he's exactly like that.
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B
Tell me a little bit about them. Tell me a little bit about some of the investors.
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Yeah, so. So Mark Cuban is our largest investor, aside from Justin and I, the co founders. And exactly to your point. Very Hands off. Very. He trusts that, you know, we're able to man the ship and that's the reason why he invested. He's not looking to start running new businesses. With that being said, whenever you need something, his work ethic is phenomenal in the sense that you could send him an email and, and, and whether it's at night, whether it's on a, on a weekend, I don't know what his setup is. I don't know if he's in the office or it's just his phone or whatever it is, but he's always there, which we really value. And then we have Y Combinator, who I mentioned. They're just a great overall team and they've been really influential in connecting us to, to other resources. And what's really cool about Y Combinator is they've got a huge portfolio of successful, especially software companies. So there's always somebody to reach out to through your advisor, through your, your, your, you know, your actual. Whether it's a board advisor or board member to connect. And so they've been really influential. I mentioned, you know, one of our larger investors as well, his name, Scott McFarland, he served in the Air Force. He's been just a great supporter of the, of the company as well. And I would say a lot of these investors that we bring on. One of the key components is trust. Oh, yeah.
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B
It's where everything's built. You know, speed of trust. It's a great book, is it, yeah.
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A
I think, you know, if you have trust with your shareholders, they, they're not going to be like, hey, we need to come into the office. We need to, you know, make sure everything's being run. We, we need these reports today. It's more so that trust is there. One thing too, you touched on it is that trust is also built when you come to them with the hard questions, with the things that aren't working in the business. If you just go to them and say, hey, everything's good, we reach records number. You know, they have a BS meter and they know that they've done this before. Not everything is always good. And so when I come to them and I say, hey, we're having trouble in this market or we need help reconfiguring our insurance policies or anything like that, that allows them and to your point, exploit them and give them the opportunity to really provide meaningful advice and resources.
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B
Rapid fire for question we'll close out who's a better customer, College kids or corporations?
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I like college kids because you're less dependent on one certain contract to keep your business afloat.
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B
What's your company's best idea that came from just talking to a customer?
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A
Probably the best, the best idea was our payment processing feature we utilize. We're one of the only rideshare companies that utilize a QR check in system. So whenever the vehicle comes, each person will scan a QR code on the Fedi app that allows them to pay solely for their fare rather for the whole group. What that allows us to do is increase the accessibility of the service so that if you're riding with a group, you don't have to pay up front. Granted, I know you can afford it, but you don't have to pay upfront 100, $150. Rather you can just pay your $5, $6 to get on and everyone else can pay for themselves. That, that opened a lot of success for us.
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B
Any books that were game changers for you in your life? I'm sure there's a lot. But what's one major book?
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A
I probably say the Hard Thing about Hard Things. I really hope I didn't botch that title, but I'm pretty sure that's what it is. Ben Horowitz wrote that and it's, it follows his journey, especially early on when he was starting companies alongside Mark Andreessen and kind of the, the tribulations that he experienced. Another one is the Snowball Effect and that's the biography on Warren Buffett. That's a great One, to understand just the overall macroeconomic game of. Of, you know, fundamental investing. And I don't say investing in the sense of. Of, you know, just putting your money into the stock market, which I think is a great thing to do, but also just understanding what makes a company valuable and what makes it fundamentally valuable. Right. Not just something that has a lot of hype and that just a lot of money is flowing into, but something that can last four generations.
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B
So talked about a lot of things here. I'm going to allow you to give us one final thought with the audience to close us out.
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A
I would say that a lot of people spend their time wanting things in life. And I think it's very crucial to understand and self reflect that. It's great to want things in life and it's important, but what's even more important is acting on it and doing those things that will produce what you want. I think a lot of people get frustrated and become victims when they think to themselves, why aren't things happening and why am I not achieving what I want? And they need to understand and take a look back and see where their time and their mental focus is directed towards.
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B
And quit saying you got lucky. Yeah. The. The same people that ask you why you work so much are the same people that are going to ask you why you keep getting so lucky.
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A
Yeah.
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B
Matthew, I appreciate you very much. This is a pleasure. Thank you. All right, guys, thanks so much for listening to this episode. Like always, we're going to close it out with the Tommy Truth, which is a little slice of wisdom from me to you that can help guide you in whatever you're striving towards right now. So a lot of people come up to me when they're early on a business and they say, how do I get access to cash flow? And it's very difficult. Number one, when you start a business, I very rarely would suggest you start a business and quit your day job. I would have a plan going into there where you've got a second income coming in or maybe your significant other does. Number two, make sure I've got great credit. Those access to credit cards, I don't recommend you use them all the time, but it's great to have there that if you borrow a dollar, you can put $2 into the business. The main goal should be not have access to a lot of money because when you do, you make much bigger mistakes. When you get access to the money, you'll know all the mistakes you made early on and you'll be better for it. And that's it, guys. We'll talk to you next week.