I was born and raised in Redlands, California. I grew up in an upper middle class home with a father who was a dentist and a mother who was a nurse practitioner. We were really always middle class until my father became a dentist at the age of 41. I think it was maybe three or four years later when they began to do better financially. I was an average student who played tennis, skateboarded, snowboarded, and had a natural knack for programming and using computers. I truly believe that entrepreneurship has to do with a genetic coding within you. I think that you either have it or you don’t, it cannot be taught! For the group of us that do have it, we also have a curse that cannot be cured or remedied which often has an early onset in life.
Early memories of organizing neighborhood children to perform ridiculous circus acts for neighbors on rollerblades and unicycles come to mind at the age of six. After convincing other children it was fun I was off to sell tickets door to door throughout the neighborhood to my spectacular show for the price of 1 penny a ticket. The dollar value at this point was not really a relevant point, however, looking back I learned from an early age how to leverage relationships and utilize other people’s talent to make myself money. This skill is something that I still utilize today and was reinforced by a very sharp man I know who said “Pay attention… there are only two things in this life that will truly make you money; money and other people”.
All of these things came to a screeching halt when my ISP (I registered my parents’ house as a business and forced them to run high speed broadband to the house while everyone else had dial up) decided that it was against their current terms of service to run a hosted internet service business directly from my house. This was at a time where bandwidth was limited and my upstream traffic was far beyond the capacity of a consumer. The ISP no longer supported my initiatives and I was forced to close down my servers.
Over the course of the next few years from age 16 through 19 my life was uneventful. I was in community college with no direction in life. I had started several new companies which all failed.These companies ranged from auto detailing companies, to ecommerce drop ship sites to real estate ventures. The issue with all these companies was I did not have the experience nor did I apply the proper time commitment to make them successful. At this time in my life I am confident I could make any of those companies work had I tried them again; as a matter of fact I still have a ecommerce presence that does fairly well. At age 19, I got interested in trading stocks. I started trading for income at that time and did so for about a year. The big problem with day trading was I fell into the common saying statistic: “99% of day traders lose 99% of their money 99% of the time”. Once again I was back to square one.
Protecht, this was a contract manufacturing firm that I started specifically to build a protective sleeve product for remote controllers by Sonos. The reason this failed is in my early career, is because I didn’t realize how crucial it was to have diversified revenue verticals and focused on one product with zero regard to the fact that the remotes would soon be replaced by smart phones. Twice during the time we actively ran this company we were asked by two national big box retailers to contract manufactur some select products for them and we declined to take the business due to the complexity of the deals. Had we taken those deals I do think this company would have actually turned a profit (at least for a year or two) The website is still up and can be seen at ptecht.com.
Sometimes in business we find little opportunistic pockets to make a large amount of profit in a short amount of time. Within my group of business associates we have nicknamed this a “well” opportunity. This term was derived by the saying: “the well runs dry”. Any opportunist knows that the well always runs dry but when the well is full, DRINK!
Based on some relationships my business partner and I had we were offered a job at a major healthcare organization doing the removal of unpermitted storage tanks directly beneath a hospital. We explored the opportunity and found the same problem with a few different organizations including other hospitals and hotels. So we created a company specifically to bid on these jobs, licensed it, insured it, won the bids then sold the company to a competitor who was really more capable of completing the actual work. Not including the time we spent licensing and insuring the company, we were in and out in 4 weeks. It was a great feeling.
I had to be doing something while I was building Waste Stream Solutions. However, this job with Target was not really about the money as much as it was about the experience and management training. If there is one thing I took away from there it was how to manage people and employees.
There was a time where my direct team was 300 people under me and learning how to deal with 300 people and lead 300 people who are all older than you (some by 30 years) is a very difficult task to do. Additionally, at this point in my life it was a great humbling experience. Experiencing corporate America, having a boss, learning corporate management skills as well as knowing that if I was in a Target store and walked by a customer I would still have on red and khaki and still ask customers if there was anything I could do to help them. This culture has stuck with me and still exists within my companies today. If anyone is tired of their job at target in management and I have an open position at one of my companies I would hire them over the MBA from Harvard. That’s how much I like their management training.
I used all the capital I had to start Waste Stream Solutions, which took years to get going but I ended up back at square one financially. I had to sell all my cars, lost my house to a short sale, and moved in with my fiancé’s mom for a period of time. But just like all things, if you work hard at something and see the vision you can achieve whatever you put your mind to. When it came to the decision to stop paying my house payment it was because I could either pay my mortgage or the lease payment on my office space. At the end of the day your house is not going to make you money (at least not in the short term when it is 50% upside down). So I focused on the business.
Although deal details are ones I will not disclose it is public information that Waste Stream Solutions was acquired by Stericycle in 2nd quarter of 2013. The feeling of success was great as it was the largest sale I had done to date, however, it was quickly diminished when one day you are on vacation laying on the beach drinking a beer and think “Holy Shit! I have greatly reduced my cash flow.” Cash flow is one of the most important things you can possibly have. It gives you security, marketability to banks, and potentials to do your own acquisitions. Other businesses I still currently have a stake in include a network of ecommerce websites which still provided some cash flow but nothing like I was used to.
At the end of the day I am happy with the decision to sell the company and would do it again in a heartbeat. You never know what the economic situation of any industry will be in the next few years and sometimes you need to make decisions to take your money and run. Even a squirrel knows to gather nuts BEFORE winter!
MedTrainer is my latest venture. MedTrainer is a cloud based learning management system for healthcare. This company is new and is in beta and our hard launch date is July 1st 2014. I have been working on this project for the past 2 years even prior to the sale of Waste Stream Solutions. I am very excited about it and think it has the potential to be a 9 figure sale someday or possibly even take to an IPO.
The best thing I learned from Target was how to manage and work WITH people. Your employees need to respect you and they need to also understand that if they don’t do their job they will be let go. Show people you can do their job, show them you’re not afraid to do their job and they will respect you more. I remember when I would attempt to earn the respect of a team at a Target store it was very important to jump in and show them you’re not afraid to work. I would unload trucks, stock shelves, do cashier duty, and wear red and khaki. I am not too good to help you find what you’re looking for and I am not too good to stock the freezer isle (if anyone reading this works at Target they will get that joke).
Due to the nature of what I do for a living I look for the following:
1. The product or service is currently being offered and is successful. Without competition it is a gloomy road that usually ends poorly. Just because someone else is doing it doesn’t mean you can’t do it different, better or both.
2. I plan an exit. All companies I look to build, I also look to sell. The company MUST have an acquisition potential. I am not looking to build and keep anything, just looking for large exits.
3. The multiplier for acquisition must be proven to be large. I will let the manufacturing industry keep their 2.5 X EBITA. I want 10 X Revenue!!
4. I want MONEY, not employees. Just because you have 200 employees doesn’t mean anything to me. That’s 200 mouths to feed. If I can make the same or more with less people that’s what I want so I look towards companies that can be heavily outsourced.
5. Finally, I don’t do companies that will require so much time at the office that it hurts my home life or eliminates me from traveling. Having a sound mind and good home life can make you RICH and not in a bullshit metaphorical sort of way. If you have problems at home it will affect your performance. All that “I’ll sleep when I die” and “I go to bed later than you and wake up earlier than you because I work so much” is for people who get paid overtime and need extra hours.
When you feel like you made a bad decision trust your gut you probably did. Cut losses early and double down. Similar to chasing your bet in roulette, I try to double my investment on the next project to double speed / results. I start with 3-4 companies and drill it down to 1 over the course of 6 months. Don’t get emotionally committed to anything. Sometimes a loser is a loser and you need to let it go. If you take on partners or are on the funding side of a business make sure you have control and final veto rights because you may need to tell your partner his idea is not Facebook and never will be in order to protect your investment. Additionally, if revenues are not meeting your expectation, change your model. If the change doesn’t work, close the doors. Don’t put too much good money after bad.
In my business everything is about SPEED. We have to figure out the fastest way to grow to the revenue because we need to sell. In order to scale, make sure that you are reinvesting into your company. Marketing drives growth. Make sure you don’t skimp on the marketing efforts and dollars. Make outside marketing companies WORK for their money so they only get paid off results not off of promises. As you scale, everything is negotiable so never pay list price for anything. There is always something out there that is similar and cheaper with hungrier owners who WANT your business. Don’t set your company operations up like IBM when you’re NOT FUCKING IBM. You scale when you have money and put in money only when you prove your model.
For example, if you put $10,000 a month into magazine ads and $10,000 into email campaigns and your return is better in magazine ads, pull money from email budget and put into magazine ads. Go with what works not what the world tells you is going to work. People tend to think “Oh I have to have everything on social media and do SEO and drive traffic to my website.” This is true but not for everything.
For instance, you are not likely to get a major hospital system as a client that found you on Twitter. It sounds good in theory but is very difficult to make happen. Little blue tweeting birds and apps ending with “gram” do not and cannot replace meeting a decision maker and shaking his hand. Scale in the correct area and you will drive revenue. Putting money into items that are ‘supposed’ to be good might destroy your company and your bank account.
Throughout all of this time I had major ups and major down. People like to see flash and hear success stories but it is not as easy people think. Along the way I had enough success to maintain a good lifestyle the majority of the time. I have owned watches worth more than some people’s cars and cars worth more than some people’s houses. For many people, it is hard to have exposure to that lifestyle and lose it then rebound back. I think many people have struggles during their business that their outside appearance does not reveal.
More immediately success has allowed for me to provide things that make me feel good and create a layer of safety for my family. For example it is nice to know if you are car shopping for a safe car it doesn’t matter if the car is expensive because you can afford it. It sounds bad to say but if my family is going to get into a car accident I want them in a Range Rover, not a Toyota RAV-4 and success has allowed me to do that. I do know many people shake their heads at that statement but I find it very true, don’t you want the best for your family? Don’t you want to feel good about the fact they are safe? I think we all do…
At the end of the day, just because you end up on the bottom does not mean you need to stay there. Most wealthy people I know have been on both sides of the fence. Put on a suit, feel good about who you are, get into the gym, motivate yourself, start over and get back to the top.
I think it is very common and natural that most men develop a love for cars at a young age. Who didn’t want a Lamborghini as a kid? My first Lamborghini was a 2004 Gallardo that I bought for $75k with 30k miles on it. I loved that car and it really meant a lot to me because it was like crossing a goal off my list (even though it was used and old; I still loved it). I have since had quite a few Lamborghini’s and currently I have a Lamborghini Gallardo, a Bentley Continental GT, a Maserati Quatroporte, a Ducati 848, A Range Rover and have a Lamborghini Huracan and New Range Rover arriving before end of the year that are on order.