I’m thrilled to bring you an interview with well-known entrepreneur Gary Vaynerchuk. Gary transformed his family’s New Jersey liquor store into wine powerhouse Wine Library, largely by embracing eCommerce in the late 90s long before others realized its potential.
He’s probably the world’s most vocal advocate for utilizing social media which is the topic of The Thank You Economy, his book that reached #2 on the New York Times Best Sellers list. For more on Gary, you can check out this keynote he gave for an Inc 500 seminar in 2011.
In this interview, Gary shares his thoughts on:
- His #1 piece of advice for aspiring eCommerce entrepreneurs
- If you should pick a niche you’re not passionate about
- The impact Amazon will have on smaller stores in the future
- The two big mistakes he made building his eCommerce business
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Andrew: Gary, I love that you were one of the original eCommerce pioneers, building the Wine Library store during a period when Netscape was the de facto browser and people were absolutely terrified of shopping online. Given your experience from the beginning, what’s the #1 piece of advice you have for aspiring entrepreneurs who want to launch their own eCommerce venture today?
Gary: I think they need to take the same energy into their eCommerce venture that I did into mine which was people are going to buy this way in [upcoming] years – and that was kind of my thought. So I made the investment 36 months out and not based on what was going on at that moment. And it was really tough to feel that way back then because a lot of people told me they’d never buy something online. People were petrified of putting their credit card numbers into a computer.
I would tell aspiring eCommerce entrepreneurs to think the same way which is this: a site came along not too long ago called Woot.com and it changed the way retail was done. All the flash sales and the daily deal sites came from that energy, right? And so I would say one thing I’m thinking a lot about right now is mobile. Who can win [create] the most native, most natural, easiest way to buy something on a mobile device? I think that person has a huge opportunity.
That’s the way I believe people are going to be shopping in three years but someone else might be reading this thinking “Hey wait a minute, what about Google glasses? If I can figure out a way that if someone is looking at a shirt [through the glasses] they just press a button on their glasses to buy it…” — and they’re probably right. Don’t take my word. Take your intuition, your research, your ability, your gut feel, your thoughts and apply that to where the market is in 36 months. I think that way too many people are playing in the reality of what it is right now vs. three years from now and I really believe that’s the way to play – three years out.
Andrew: So if you do look down the road three, four, five years down the road and anticipate the new “normal” – the new things stores are going to have to be doing to compete effectively, do you think mobile is at the top of that list?
Andrew: I talk to lots of people who start online stores around their passion but often end up failing because their value proposition is too weak or the market demand isn’t there. My philosophy is to go after an in-demand niche where you can add value that will give you the best chance of success – maybe not even one you’re interested in at the time. Then as you experience success you can’t help but become passionate about your business and your products and…..
Gary: I think that’s the statement of an entrepreneur’s entrepreneur.
Andrew: What do you mean by that?
Gary: I think the way that you just articulated it is the same way that I could conceivable articulate it, but I believe a lot of people aren’t in love with “selling” the way you just described it.
Andrew: So you think it’s a process that actually can work, or….
Gary: No, no I don’t. I think everyone is an individual and if you’re an entrepreneur and you sold lemonade, and sold rocks, and sold blow pops in school you’re going to be able do that, right? Because guys and gals like us – that’s us. I mean, I fell in love naturally with wine – there was nothing better a sixteen year old could fall in love with, right? So I agree with you but there are also a lot of people who don’t roll that way. My Mom can’t roll that way. And so I would tell you that it’s very dangerous to give a one-size-fits all advice – so yes but also no.
What really happens is that I don’t think people realize that being an entrepreneur or a business owner is a skill or a talent, much like being a professional golfer or a painter. There’s a funny belief that anybody can do it and I just don’t believe that. I think anybody can have some form of success, but sustainable “this-is-what-I-do-for-my-living” success? No. The only way that I think that that could conceivably happen to people who don’t have that talent is if they love the thing so much that they literally love it to success.
Andrew: So how can someone who’s thinking about starting an online store, how do they know what gut questions they need to really ask themselves and be honest with themselves to determine if it’s actually something they can pull of – or if they’re just going to waste a lot of time and they’re better off suited to a traditional 9-to-5 job?
Gary: Let’s get real practical. If they’re reading this right now and they have that feeling, they should just do it. Because they’re going to be 70 and regretting that they never just did it. I’d rather that they spend $20,000 to $50,000 and be happy when they are 80 years old than not. Again, I’m letting you know I’m answering this question in a format where the person reading this that has that feeling needs to go and do it. Does that makes sense?
Andrew: Amazon is something I’d love to hear your opinion on. They intimidate a ton of eCommerce merchants, especially the smaller guys without the scale and the pricing power and shipping options. And so looking forward three to five years, how do you think their role will play out in the eCommerce ecosystem? Do you see them being successful in overtaking most smaller, niche merchants or do you think their huge size and obsession with growth will ultimately end up hurting them?
Gary: No, I think they’re going to win and I think they’re going to eat up a lot of the small stuff. But they’re going to eat it up as being the platform meaning a lot of small guys are going to thrive selling through Amazon as a platform more so than Amazon [itself] will sell everything on the planet. Amazon is also very vulnerable to small guys. The people that should be scared of Amazon are the medium and big guys, not small guys. Small guys can scale effort where Amazon can’t. You can win on customer service, and really trying, and really caring, and all the things that Amazon will never be able to do like calling every single one of your customers that bought something, hand-written notes, just the humanization – that’s where small business can win and that’s where you need to play. You need to David and Goliath them – you need to win with little rocks.
Andrew: In terms of Wine Library and the things you’ve done, are those the strategies you are taking there – obviously you’re a niche wine reseller….
Gary: Yeah, absolutely. And I think we’re bigger so we’re even more vulnerable. I would say that if we were smaller and only selling Pinot Grigio, we’d be fine. Does that make sense? But because we’re more broad and a leader we’re definitely going to feel the heat but if we continue to do things we’re doing like calling everybody who places an order for the first time and really giving personal recommendations…. I mean, the only way we win is by out-humanizing and out-friending them.
Andrew: So don’t try to compete on Amazon’s own level of efficiency and price. Really, the only way you’re going to win in the long run is…..
Gary: It’s like sports, right? Like boxing or football. You can’t let them play their game, right? You hear that all the time.
Andrew: For an ambitious 18-year old with $50,000 in the bank and he’s interested in owning his own business someday – I know you went to college – but in today’s with all the educational issues and student debt issues….
Gary: By the way, I would have never gone to college if I could have convinced by parents otherwise. I thought it was a four year waste and I would have been four years further along. I feel like I’m 37 right now and I feel like I’d be at the same place at 33 [if I hadn't had gone to college]. I really do.
Andrew: So I guess I don’t need to finish asking my question! So you would advise someone to forget college, take that money and start you’re own thing.
Gary: There’s one thing I would say about college. It creates a lot of opportunity for social growth so if you’re going to do that [skip college] figure out a way to subsidize the social growth that at that age really brings a lot of value.
Andrew: When you say social growth, do you mean actual interacting with friends and peers or do you mean professional networking?
Gary: Yeah, I mean leaving your parents house for the first time, I mean friends, I mean you’re going to miss going to parties and hooking up with guys and girls and drinking beer and all those life events so that’s going to make you act out at 25, 30, 35 and that will have an impact on your life. So we’re looking at it from one equation. Do I think that financially and business wise you’ll be more successful? I do. But that’s not just what life’s all about. And so you’ve got to think about how to subsidize some of those social things. And so maybe you go to Spring Break with a couple of buddies each year – be smart about how you do that.
Andrew: Tying in a little bit to the personal side, everyone knows that someday you’re going to be the owner of the New York Jets. Everyone knows that you’re a huge advocate of social media. And everyone knows that you’re always in this just unbelievably fantastic mood – nobody’s quite sure how – but these are all parts of your persona. But what’s one thing that doesn’t get talked about a lot that you love to do or that you’re passionate about that people don’t know about?
Gary: That’s a great question for this series. You know it’s funny, I’m a fairly outrageously open book, ya know? I would say…. You know what? I’ll give you a good one. I’m in love with documentaries. I love documentary movies. If I don’t want to be working – or if we’re going out and Lizzie is taking two hours to get ready – if I can sneak in a documentary. I love the 30 for 30 Series that ESPN is doing. Or serious topics – I’ll go to on-demand TV documentaries and that’s the way I enjoy to consume content. And so, that’s something I don’t think I’ve said much ever – trying to give you a little nugget for this interview. I’d say I’m a big documentary buff.
Andrew: Can your wife stay awake through the documentaries? Mine can’t, she usually totally passes out.
Gary: She’s pretty good – Lizzie can get into it. I love storytelling and I think that documentaries are so raw and real. The Bo Jackson 30 for 30 ESPN documentary was just riveting stuff for me.
Andrew: That’s great…. Gary I know we’re getting close to how much time we have allotted for this interview so I want to end with one last question. When you were building up Wine Library what are a few of the big mistakes that you made over the course of taking that wine business from a bricks-and-mortar store into a full-scale eCommerce business that looking back you’d do differently – and also that you could warn entrepreneurs against making those same mistakes?
Gary: If you’re successful and you have some early success like I did – even though I’ve always been very confident in myself I don’t think that I went all-in in two separate times. One was SEM (search engine marketing) – when Google AdWords came out – it was really working for me but I should have gone way more all in and I let the market catch up. I had three or four years where I could have been the SEM (ie PPC) leader and it was inexpensive and I just didn’t do the right thing there. The big data stuff, I didn’t win on that.
And then the other mistake I think I really made was even though I knew YouTube was going to be much bigger than Viddler, I made WineLibrary TV live on Viddler because I just liked the founders and in hindsight not betting on YouTube and not amassing all those views and building up channels has been a mistake. I knew it at the time and I let my emotion for loving human beings trump what my business savvy was telling me and I don’t know if I necessarily view that as a mistake, but at some level I do.
Andrew: So breaking those down, they’d could be summarized as find what’s working and go all-in to take full advantage of it and don’t let personal relationships trump your business judgement.
Gary: And listen, that’s only putting my business hat on. I’m glad I supported those good human beings at Viddler but it definitely cost me. No doubt.
Andrew: Gary, again, thank you so much – this interview has been everything I’d hoped it be and more! It’s been a pleasure chatting with you.
Gary: Wish you well! Goodbye.