After almost 150 episodes of the eCommerceFuel podcast, our topics have run the gamut. But one very obvious topic we’ve yet to tackle? The story behind why Andrew Youderian and frequent co-host Bill D’Alessandro got into eCommerce in the first place.
The path to success in eCommerce can be a long and bumpy one. Sadly, many people give up before they bring their visions of starting an eCommerce business to reality. Hopefully, this episode will inspire any of you with thoughts of giving up, to understand that starting an eCommerce business doesn’t happen overnight.
Andrew: Hey guys. A quick note before we get started about one of our private community members. Jason Feinberg from FCTRY is releasing a follow-up to his highly successful Bernie Sanders action figure over at TrumpVader.us. I think the domain pretty much says it all but if you enjoy creative, interesting eCommerce projects or the media spectacle about the U.S. election so far I think you’ll get a kick out of it. Again, check it out at TrumpVader.us and stay tuned for more from Jason in a future episode. Alright, onto the show!
Welcome to the eCommerceFuel podcast, the show dedicated to helping high six and seven-figure entrepreneurs build amazing online companies and incredible lives. I’m your host and fellow eCommerce entrepreneur, Andrew Youderian. Hello and welcome to the eCommerceFuel podcast. I’m your host Andrew Youderian, and a special edition of the podcast today. Normally I do this with a guest, and very frequently one of my favorites guests, Mr. Bill D’Alessandro, but normally he is across the entire country from me, not sitting right across the table from me sipping some whiskey here in Bozeman, Montana.
Bill: Yup. So I made a flight out and we are doing eCommerceFuel podcast live from Bozeman, Montana from eCommerceFuel headquarters.
Andrew: And we were both commenting just before we started how we both look like 70s-style talk-show hosts with the super cool microphones and the headphones. We do not look very cool in this.
Bill: I don’t know, we’ll leave that up to the listeners to decide. So we just took some stupid pictures, so we’ll post them in the show notes for everybody to laugh at us.
Andrew: But hey, cheers!
Bill: Cheers, man! Thanks for having me.
Andrew: Yeah, good to have you here in Bozeman, and you’re in town…we hit up Big Sky to do some skiing over the weekend.
Bill: Yeah, it was awesome! Came out for some skiing at Big Sky. I’ve not only never been to Big Sky, but never been to Montana. So this is my first time in Montana. I’d heard awesome things, so flew in on Friday and then we headed up to Big Sky to talk business, ski, it was awesome. Had a hell of a day skiing on Saturday. I hung out at the house on Sunday, talked some business, and now we’re back in Bozeman to do our podcast, and Andrew has provided me with some delicious 100 proof whiskey that I hear we have his brother to thank for.
Andrew: Yeah, thank you, Chris. This is good stuff. Man, you’re a great skier yourself, man.
Bill: Six years in Colorado helps.
Andrew: Yeah, helps a lot. So we were thinking it’d be fun in our first in-person podcast…we’ve never really talked about how we got into business. Like how did we end up here? The paths and the stories that brought us to eCommerce, to where we are today. And thought it’d be kind of fun to explore those, and want to try and be a little bit tactful and considerate of people not wanting to hear our entire life story over the course of six hours, but it’d be kind of cool to share because I don’t know if we’ve ever done it on the show.
Bill: Yeah, we’ve been talking about all kinds of specific things but we never really talked about how you can go from…I mean both of us, we worked in cubicles for the man for a long time, and here we are sitting in Montana drinking whiskey on Monday, having just come back from skiing. So both running eCommerce sites and self-employed, so I thought it would d be fun just kind of talk about how you too can get there. And a lot of times you hear people on podcasts, you think they may be not real human beings or they’re some sort of exceptional story. So may we just start by telling people how we got here.
We have a little bit similar background, actually. We both worked in finance, investment banking for a couple years after college. Did you have any idea that you would be in eCommerce when you were in college or when you were younger?
Andrew Youderian: Fashion Photographer
Andrew: No, no idea. Like when I quit the job, I thought I was going to do one of three things: I thought was either going to be a photographer, like a fashion photographer, which is just…
Bill: You’re so fashionable.
Andrew: I have zero fashion sense. Which sounds absurd now. I thought I was going to do day trading, like options trading, which also sounds absurd. Or I thought I was going to do eCommerce. Those were my three. I actually went down after I quit my job and spent a period of time evaluating those three. Thank goodness I stuck with the eCommerce.
Bill: So how did you evaluate fashion photography? He’s like following people around downtown Bozeman!
Andrew: I was actually in Salt Lake at the time. I was really into photography and put my name out there to try to apprentice with some people, started learning about it, and to be honest, I wasn’t very good at it and my advances toward the people that really knew what they were doing weren’t well received. So it quickly fizzled out, which was good, but yeah. Just calling people and trying to work for free, mostly.
Bill: You went to Montana State University here in Bozeman, right?
Andrew: I did, yup.
Bill: What’d you major in?
Andrew: Started in Computer Science first year. My second semester sophomore year went to film, decided I wanted to be the next Steven Spielberg. That lasted for exactly one semester, and then I changed to Business Finance.
Bill: And then you decided to leave Bozeman to go to work? Or where was your job? Montana?
Andrew: Yeah, I was actually in a city about three hours from here, Great Falls, Montana. And I think it was a little bit different because you knew in college, coming out of college, what investment banking was. Coming into my senior year, I had no idea what investment banking was. And it just ended up that I ended up applying for an investment banking job and they were crazy enough to hire me. And so that’s how I got into it, but I didn’t know what it entailed apart from the fact that it was interesting and you got to work with businesses and equity raises. In retrospect, it was kind of crazy I didn’t know because it’s something that most people, I think, at least in the business world, have a sense of.
The Life of a 22 Year-Old Soon-to-Be Entrepreneur
Bill: Yeah. What was your life like? Paint us a picture of what 22-year-old Andrew Youderian was doing. Fresh out of Montana State living and working, doing investment banking, working for the man. Once you got into the job, just every man suit and tie every day kind of work?
Andrew: Oh, man, I was driving a sweet, sweet 1990 Toyota Camry. Paid $470 for it, parked it like two, three blocks away from the office so no one would see it. It was two-tone. It was sexy. It started out slowly, but gradually…yeah. I was living in a city, I didn’t know anyone. Took me like six, seven months to really meet anybody. I was really lonely those first six to nine months, really lonely. And I joke with people, you know That 70’s Show?
Andrew: Yeah, it was a place that was hard to meet young people, but a lot of work. Dated a girl that lived six, seven hours away. Got to see her probably once every six weeks. And didn’t enjoy it. Took me a while to connect with some of my coworkers, although later on they were all fantastic people. Got to know them really well and had a lot of respect for them and liked working with them.
Bill: And what kind of hours were you doing?
Andrew: Not as bad as yours. It was anywhere…early on I didn’t know anything, so they couldn’t…wasn’t that useful. But, you know, 40-50 and then maybe at the 6-month mark getting up into the 60-70, depending on what needed to be done.
Bill: Okay. So you’re cranking it out in the city all by yourself, and you decided this wasn’t for you. “I want to go do something else. I want to go be a fashion photographer.” So, you’re lying awake at night and you go, “This Excel stuff isn’t for me. I want to go follow my passion, I want to go start a blog called The Humans of Bozeman, Fashion Photography.” And you decide you want to leave. What was that thought process? How did you get up the guts to leave your job? And when you did decide you were going to leave, how did that go with your boss? Did you walk in, give him the middle finger and storm out? Or did they understand? I’m just trying to get at, for people who are maybe thinking of quitting their job and doing their own thing, how does it really go in practice?
Andrew: I don’t know what your commitment was like, but my commitment was about a two, two-and-a-half-year commitment. And I think I knew about six months in that I was pretty sure I didn’t want to do it past that commitment, and even if I did I wanted to have the option at that two and a half period to be able to walk away if I wanted to. And so I just lived as cheaply as possible, and you know the bachelor life. You can live pretty cheaply if you need to.
Bill: Yeah, it’s just you. It’s not that expensive.
Stockpiling Money for a New Business Venture
Andrew: Oh, yeah. It really was just trying to stockpile as much money as possible, and save as much as I could. So when I got to the end of that two and a half years, for a single guy, because I’d lived so frugally, I had a good chunk of change in the bank and it wasn’t that scary to quit. Because I wasn’t really enjoying what I was doing and I wanted to do something else, and so jump to the boss. They were really cool. They were great. I mean I went in, talked to them. They were very understanding. They gave me more time, “Hey, give it three, four months. Think about it, let’s talk about it in the future. Here’s your opportunities, what you could be doing.” But I knew I wanted to do something else.
Bill: Did you say to them, “You know, this just isn’t for me. I quit.” Were you definitive about it?
Andrew: Yeah, I think I was. I just told them, “Hey, I want to do something else at the end of this two and a half years.” And I don’t think I led with, “I want to be a fashion photographer,” but yeah, I was pretty clear that I wanted to do something else.
Bill: So you walked out the door free and clear, with nothing lined up.
Quits Job, Goes on Road Trip
Andrew: Yeah, I had no idea. I mean I quit and I went on a two-week road trip with my girlfriend, now wife, at the time, Annie, and then I went on round-the-U.S. trip for 30 days and drove down to Mexico. So I did a bunch of traveling, but yeah, landed in Salt Lake two months later and I was like, “Okay. I’ve got to figure out what to do with my life.”
Bill: And you decided that you were not a great fashion photographer, you had lost a boat load of money trading options, and you said, “These two are out. The only thing left is eCommerce or bust!”
Andrew: Yeah, pretty much.
Bill: And we were talking over the weekend and you said that now you sell CB radios, broad channel radios, and you also had sold trolling motors for a while before you sold that business. But Right Channel was your first business and still your baby, right?
Bill: But you didn’t have any particular connection. You didn’t even have a CB radio at the time, right? You just said, “I want to find a niche.” What was that process like, looking for…you knew you wanted to do eCommerce, but that’s pretty darn broad and I think there’s probably a lot of listeners that know they want to do eCommerce but they don’t have any idea what they want to do. So how did you go from that abstract to selling CB radios specifically?
Deciding to Find a Practical Online Niche
Andrew: The passion versus practicality. Do you need to be passionate about it? And at the time, my number one goal was just build a business that made money. I didn’t care what it was because I had this investment banking, this job for the last two and a half years, that was very fresh in my mind I did not want to have to go back to, and that was the motivation. So really it was sitting down, doing some basic research on eCommerce, thinking through, making a list of attributes, 10 attributes or so, brainstorming online. I just made a list of business, is there anything that you saw that was crazy? Walk into a super market and you see little kid toys. You go down the street and you see someone with a handbag. And you made this long list. And then also World Wide Brands, at the time I used that. That was a two, three-week process of just brainstorming and eliminating things based on the criteria until I came up with CB radios.
And I got done and I circled it and looked down and thought, “Really?”
Bill: “This is the thing that I’m gonna do?”
Andrew: “This is the thing?” So that was it.
The Initial Investment
Bill: And so you decide on CB radios. What was your total investment to start Right Channel?
Andrew: It was, I think, $500-$1000 to start.
Bill: Just on a Shopify design?
Andrew: Yeah, it was Zen Cart at the time, and mostly like a business license, LOC license, hosting account, domain and registration. Those were the big ones. There wasn’t a whole lot.
Bill: And did you then have to allocate additional budget for Ad Words at the beginning? Or how did you get your first sales?
Andrew: A little bit, yeah. It was all Ad Words-driven, because SEO takes a while and so in total, put $1500 in capital into the business over the course of the first 3 months. At that point, with that $1500, got it moving. I think Ad Words early on, I was running it, not making a lot on it. Maybe losing some. But most of the Ad Words I didn’t have to contribute more than that $1500 between additional profits and the organic growth and things like that.
Bill: And it was just kind of a rocket ship from there?
Andrew: Yeah, I don’t know if rocket ship is the right term.
Bill: You obviously didn’t know anything about CB radios when you started. When you called up these suppliers, did they think you were insane?
Andrew: Not too crazy. They’d dealt with drop shippers. I think they realized I was a newbie and pretty naive and didn’t know anything, and they got sick of me asking them question after question, but they were pretty accommodating. I think a lot of people think that approaching suppliers is scary, when it’s not as scary.
Scariest Part of the Early Days
Bill: What was the scariest part for you? Did you have any failures early on? Did you ever think you weren’t going to make it?
Andrew: I think the scariest part is talking with customers on the phone when it’s the fourth customer you’ve talked to, and they ask you some question live on the spot and you have absolutely no idea how to answer it and you’ve got to dance and still sound quasi-professional but be able to get back with them with real information.
Bill: Because they’re an enthusiast, right? They know all about CB radios, and they think you’re supposed to be an enthusiast.
Andrew: You’re supposed to be the owner of this business that’s been running it for years, and you’re just some kid in a bedroom with an unmade bed and a bowl of cereal on the table, that you don’t know anything.
Bill: What was the timeline? So you started…what year was this when you quit your job?
Andrew: 2007 and then started the business in early 2008.
Finally Making an Income
Bill: So from 2008, what was sort of your timeline of rent. At what point were you making an income where you could say, “I can pay my rent! I can pay my food! I can take my girlfriend out on a date! We can go see a movie and that’s not going to make me sweat bullets!” How long did it take you from 2008?
Andrew: Yeah, I think it took, to get on a run rate of replacing my old salary, was about a year. So per month. So it took about a year and probably the business started being profitable maybe $1000 a month, $1500 a month within the first probably 6 months.
Bill: Okay. So you had to burn basically 6-12 months of living expenses, plus your start-up capital.
Andrew: Right, exactly.
Bill: And at that point you were paying…it was just you, you had no employees.
Andrew: Oh yeah, just me. Absolutely.
Bill: And then how long did it take you before you could afford to hire an employee?
Andrew: The first employee was…I think it was seven months in.
Bill: Oh wow, soon.
Andrew: No, no, no, it wasn’t quite like that. It was maybe 10 months in, almost a year.
Bill: And what was that employee doing?
Andrew: It was a virtual assistant, and they were setting up tracking numbers, very, very basic customer support, email, routing orders, things like that.
Bill: Basic stuff, clerical stuff you didn’t want.
Andrew: Exactly, and went through like four or five of them until I found someone that actually was great.
Bill: Are they still with you?
Andrew: She is.
Andrew: Yeah, which is crazy!
Bill: That’s six years on?
Bill: She’s still with you. Same VI.
Bill: That is very cool. I hope you buy her a nice Christmas present every year.
Andrew: She’s fantastic.
The “I’ve Made It” Moment
Bill: That’s very cool. So when did you feel like you had made it in eCommerce? How long did it take you, from 2008? When did you feel like, “Okay, the bottom might not drop out of this. I actually have a sustainable living in eCommerce.”
Andrew: I don’t know if I ever think the bottom’s not going to drop out of it. I tend to be worst-case scenario, and I think a lot of entrepreneurs can relate to the fact they always think their business…they’re going to come in some morning and it’s just all going to be gone. It’s kind of a fear at least I have, I’ve heard other people have. But I’d say I think in 2011, when Annie and I took some time to really step away, travel for a little bit before we had kids. I had a great team in place, who’s largely still in place today, that was able to manage things while I was on the road. That was really cool. I felt like, “Hey, maybe this is something that’s viable, that’s going to stick around for a little bit.”
Bill: So that took you three years, from 2008-2011.
Andrew: It did.
Bill: And roughly what kind of revenue were you doing in 2011?
Andrew: Oh, I think the year that we were on the road, it did right around a million.
Bill: Wow, great. So three years to a million in sales.
Andrew: Yeah, and that was with…I mean I think trolling motors contributed a little bit there, too, but yeah.
Bill: Okay. So you started your second site before that as well?
Bill’s Nearly Identical Background
Andrew: Yeah. I want to get into some of your stuff, too, Bill. You went to Wake Forest.
Bill: Went to Wake Forest.
Andrew: Right, and finance.
Bill: Finance. I also started as Computer Science.
Andrew: Really? Are we just duplicates?
Bill: I think we are. I think we are. You’re robot and I’m also robot, son of robot.
Andrew: Love it.
Bill: So I started Computer Science and thought I wanted to do computer science, and this was back in 2004. And this was before Facebook was really a thing, before startups had happened, and I knew I love computers. That’s all I knew. And I think I want to be majoring in Computer Science. So I walk into the career office and I said, “I think I want to major in Computer Science. If I did that, what kind of job do I have?” Which sounds ridiculous now, right? You major in Computer Science, you can get any job you want.
Bill: But in 2004, I asked, “In fairness, what would I do with a Computer Science degree?” And they said, “Oh, well most of our Computer Science graduates just go to Grad School. So I don’t really know what you would do with a Computer Science degree,” which is ridiculous. Right?
Andrew: Right, right.
Bill: And so I said, “Ooh, that sounds expensive. I don’t think I want to go to Grad School again after four years of college.” And so I changed my major to business/finance.
Andrew: And this was how long after computer science? Like had you been in it for a year?
Bill: I had been in it for about a year.
Bill: Yeah, I had taken a couple classes and I ended up with a minor in computer science just because I loved it. So I graduated in Finance, majored in Business Finance and a minor in Entrepreneurship and a minor in Computer Science.
Andrew: But you skipped a semester in film.
Bill: I did not do a semester in film, and that’s why I’m a horrible photographer to this day. That’s why I have to contract out my product photography.
A Start in Investment Banking
Andrew: Did you know what investment banking was? Were you much more tuned in than I was your sophomore and junior year? In a lot of places, this is a really competitive field, and was it something you were shooting to try and get into from the early days in school?
Bill: No, I ended up in it my accident. So I had always been a little bit of a…my website is rebelceo.com, and that’s on purpose because I had always been a little bit outside the lines. I never worked in a restaurant. I feel like it’s kind of a rite of passage that I missed. Even in lower school, I had lemonade stands and then in high school I had a business where I would fix peoples’ computers. I’d go around and this is back in the days when spyware and viruses on Windows and everything, and I would remove viruses and spyware from peoples’ computers. And I had a little business doing that, and I did that through most of college. So I always kind of had the entrepreneurial bug, and I thought that one day I would start a tech company.
But I knew at the same time I needed to make some money, I needed to have some legitimacy. It wasn’t cool to go to work and wear hoodies then. So I knew I needed to have some legitimacy, and so I was like, “Well, what is the best job you can get out of college?” And that was investment banking. And I didn’t know what the hell that was, but I learned what that was. I had a startup in college called Group Buy In. A guy named Scott Herf and I worked on it together, but we built the business up and then we had a crossroads at the end of college. Continue to work on this, see where it goes, or fold it up. And we folded up, we sold it for a little bit of money, not a lot of money, and I decided I’m just going to go into investment banking and I’ll come up for air in two years. Get a little legitimacy on my resume.
Andrew: So really, it was a way for you to keep your options open. You did investment banking because you knew it would give you credibility. After two and a half years, you could springboard into a lot of different things.
Bill: That’s exactly it. Growing up, my dad always said, “Always try to keep as many doors open as you can,” and investment banking was the thing that didn’t close any doors for me.
Bill: So that’s why I did it. I lasted much less time than you. I lasted about 18-19 months before I said, “I’ve got to either jump out the window or do something else.” So I quit.
Andrew: Before you quit, where were you working banking?
Bill: I worked in Charlotte, which is where I grew up, about an hour and a half from where I went to college, Wake Forest University.
Andrew: And did you have fake friends on TV that you relied on as well?
Bill: Actually, my fake friends were 30 Rock, were my fake friends.
Quits Job, Hangs Out with Tina Fey
Bill: So I would come home and watch 30 Rock to get myself ready for bed. So Tina Fey and Alec Baldwin were my friends. I was working 80-90 hours a week, just getting crushed and not thinking really about eCommerce at all.
Andrew: Got you. Was it something where it just wasn’t for you, or were you actively miserable in the job?
Enter “The 4-Hour Workweek”
Bill: I was actively miserable. I learned a ton, and so I don’t want to bad-mouth the folks I worked with in banking because it was good for me. It was like taking my medicine. I was miserable, and I would come home and I would say I’d have to get out. And this was about the time that I came up with the idea for KP Elements. I read The Four-Hour Work Week, like many other people, and I said, “Man, I always pictured startup as being something like Facebook, something very tech-heavy. Something you had to give away for free, get millions of eyeballs, and then eventually you could sell them ads.” And that just sounded so difficult to me. And I read The Four-Hour Work Week and for me, the biggest takeaway from The Four-Hour Work Week was not all this outsourcing and VA stuff.
Big takeaway for me was you can make a business with a product that you sell to people and you make money every time, which sounds so rudimentary. But a startup, to me, meant technology then. A startup to me…I hadn’t conceptualized that you could make a thing and sell it to people and you would make money every time. So I didn’t even know what CPI was. I didn’t understand what cost ability was. I mean I did in an academic sense, but I’d never conceptualized it as a real way to start up a company.
Creating The First Product
Andrew: So KP Elements…you got the idea for KP Elements. KP Elements is a container brand, an umbrella brand, but what specifically was the idea that you…
Bill: So KP Elements was actually my first product.
Andrew: Oh, it was? Okay.
Bill: So my first product that I created from scratch, it was called KP Elements and it’s a skin cream for a condition called keratosis pilaris. So have you ever seen people with red bumps on their arms or on their thighs? It affects about 50% of adults, including me. And basically what it is is your skin creates too much keratin, keratin’s the protein…it’s the building block of skin, hair, and nails. So your skin just makes a little bit too much of it, it’s genetic, and as a result, it clogs the hair follicles on your arms and your thighs. And I’m sure people are listening right now going, “Oh my God! I have that!” 50% of adults, 80% of teens. So I was Googling around one night and I was like, “What is this? How do I get rid of it?” And I realized I had been Googling for 30 minutes and no one had tried to sell me anything. And I went, “Wow, there’s a market here.” Because this affects 50% of adults.
But at the time I didn’t know…I don’t have a background in chemistry. So I said, “I’ve got to figure out how to make a product for this.” I found a lab outside of L.A. and I said make me a cream with A, B, C, D in it. Make it white, make it not greasy, etc. So they sent me a couple versions of it. Meanwhile, I’m still working. And we turned it a couple times and finally I had a product that I was happy with. I had the label designed in India for about a hundred bucks. I had the website designed in India on eLance for about 600 bucks, and then my first shipment of KP Elements cost me about $7000 of inventory. It was about $7 a piece. So I got a thousand units. So, all in, I started the business for under 10 grand.
Andrew: Was this out of savings or did you have someone who was financing it for you?
Bill: I had just saved it up.
Bill: So this was just purely out of my savings, but $7500 bucks, while a lot of money, is not a crazy amount of money. That’s not an amount of money you need to get outside financing for. So I had the first pallet of KP Elements skin cream delivered to my apartment. I threw up a website for $600, as I said, and I started buying Google ads. I would get one sale a week, and I remember the first sale I ever got…
Andrew: Of course. Of course.
Bill Gets His First Sale
Bill: The first sale I ever got was I was driving home from my job and I was at a stoplight, and I had rigged my phone up to get an email every time I got a sale. And my phone dinged and I just asininely picked it up and my very first $35 that I ever made at a stoplight on my way home from my job. And then I had to go home, put that jar of skin cream in a box, print out a shipping label, tape it all up, and drive to the post office on my way to work the next morning.
Andrew: I love the first sale. I mean everyone always, for eternity, will remember their first sale for any new venture. Did you look at it as, “Hey, this is that problem that I have and yeah, I’ll give it a shot. Maybe I’ll make a little side money,” but not expecting it to be something that could free you from the job that you hated? Or was this like, “This is my ticket out of here.”
Bill: I thought it would be a way out. I viewed entrepreneurship as the way out. I didn’t necessarily view KP Elements as the end game and retirement plan, but I viewed this as a way to get started.
Andrew: You quit banking after 18 months. When did you start KP Elements?
Bill: About the same time. So I left banking to go to another job, and that’s what moved me out to Colorado.
Andrew: You started this the same time?
Bill: About the same time.
Andrew: About the same time, okay.
The 80-Hour Work Week
Bill: Because I was working in banking for about 80 hours a week and then I moved to this new job for a tech company out in Denver, and also a great job but they only made me work 40 or 50 hours a week. So I still had 30 hours a week of extra brain power. So my routine at the time was I would work from 8:30 to 5:30. I would go straight to the gym until about 7:00. I would come home at 7:00, I would get takeout on the way home, and then I would work from 7:00 to midnight on my business. And I did that for probably three to four months. Everybody always asks how to get started, and this is the advice I always give everybody. I made a checklist. It was an Excel file, it was really basic, and I sat down and I wrote 100 things. And I said, “If I do all 100 of these things, the business will be launched.” And then I came home and I just tried to do one thing every night.
And some nights I’d have no energy and so I did the easy thing. And some nights I was on fire and I did the hard thing. And 3 or 4 months later, if you do one thing every day, in 100 days you’ve done 100 things, and that was really how I got the business launched. And I still have that original Excel file, and I just checked little things off.
Andrew: That’s cool. So how long did it take you to get to the point where you were making, let’s say, 50K per year?
Bill Quits His Full-Time Job
Bill: We had our first sale in January 2011, and I quit my job in May of 2012. So it took me a little over a year, about 15 or 16 months. But it was slow. At that point, I think we did just under $100,000 of revenue when I quit my job, right around $100,000. And I thought, “This isn’t a ton of money, but I know the trend is going the right way and I know that even if it flattens out here, I’m not going to go hungry.” And so I quit.
Andrew: I’ve heard it from, like, the guys over at The Tropical MBA where they talked about a thousand days to a business. I’ve heard it takes three years minimum to really get a business established. I’ve seen that. Has that been your experience, too? Like really, once you hit the three-year-plus mark, that’s really when things start to come together in terms of growth, profitability, everything.
Bill: Yeah. I think three years is…I think you could do it maybe a little bit faster, two to three years, but I think there’s a whole industry, and we’ve talked about this, people kind of selling a three month dream out there on the internet. Get rich quick in three months! Sell stuff on Amazon, just slap your name on some stuff in China. And I think that might have worked 10 years ago, but I don’t think that works. And I also don’t think…any business you build in three months, you can also lose in three months. If you want to build a sustainable brand, sustainable business, I think it takes years. I think the number is years, not months.
Andrew: So it took you almost a year to get that $50,000. You have so many other things you’re doing now. You don’t just have KP, you’ve got a whole line of products.
The Snowball Effect
Bill: About seven different brands, almost a hundred different products now. I always tell people I never meant to be the personal care guy at cocktail parties. Like I don’t want to tell people…they’re like, “Oh, and what do you do?” My girlfriend looks at me and I’m like, “Oh, I make skin lotion,” she’s like, “Dude.” She’s like, “Make it sound better than that!” You know?
Andrew: Try telling people you tell CB radios.
Bill: Right. Right. You know I never thought I would be that guy, but life is weird. And it’s easier to double down in a niche you already understand than to try something new. So yeah, it snowballed. So now I’m five years in, we just had the five-year anniversary of my company…
Bill: Thanks. Yeah, in January 2016. So now we’re easily seven figures in revenue, we’re almost up to nine employees, probably by the time this airs, and as I said, about seven brands and also a hundred products.
Practicality Wins Again
Andrew: This is something. I mean the passion versus practicality, and you started…it wasn’t necessarily a passion. KP Elements was out of a need for you, which was kind of the same thing. I was very practicality…I feel like things have changed in the market. Branding is more important. I think having a brand that…to build an authentic brand, I think that passion is really crucial to do that in some ways. Historically has been that practicality’s more important than passion when building a business, but that’s flipped a little bit recently. Has that for you at all?
Bill: I don’t necessarily think that passion is critical. In fact, I think some of the worst business advice people ever get is to follow your passion.
Bill: But I think passion helps. It’s just easier if you’re passionate, but it doesn’t mean that you can’t do it practically. You could wait your whole life for something you’re passionate about and never find a business idea that you’re passionate about. So I hate it…if you wait for all the lights to all be green at the same time, you’ll never go. So I think it’s bad advice to tell people to wait for their passion, but I think if you can find something you’re passionate about, it’s easier. It’s more enjoyable on a day-to-day basis. For example, one of my brands, Ski Balm, is a wind burn protection sunscreen for skiing. I love ski. I love snow sports. That is one of the most fun brands for me to work on because I empathize with it. Organic shampoo I empathize with less, so I tend to find myself spending more time on Ski Balm.
Andrew: Well, we were up at Big Sky and you were like, “Hey, I’ve got two stores up here that sell this stuff!”
Andrew: Did you ever swing in there?
Bill: I just swung by, yeah. The owners weren’t there.
Andrew: Oh, okay.
Bill: It’s so cool. I mean to walk in and see your product on the shelf is really cool.
Andrew: Yeah, I can imagine. So where do you go from here? I mean you’ve been at it five years. You’ve bought and built a great collection of different products and brands. You’ve got a team. Where do you want to be in 5, 10 years?
Entrepreneurs for Life
Bill: Yeah, we’re thinking about that right now. My 2016 goal is we’re thinking about perhaps raising a little bit of money, going a lot bigger. Trying to do a lot more acquisitions and build a huge portfolio. Not at liberty to speak extremely specifically about that right now, but there are probably some big things coming as far as scale. I’m trying to take what I’ve done on a smallish scale and 100x it and go from there. But I think I’ll be doing eCommerce for a long time, and even if I weren’t, we were talking this weekend about, “If you lost everything tomorrow, would you do anything different?” And I don’t think I would. I think I would just go right back into trying to start another business. I would just start over again, try to make that first 50 grand and just try to pay your expenses.
Andrew: Do you think you’ll be in entrepreneurship your whole life?
Bill: I do, yeah. I don’t play well with others.
Andrew: Though it’s cool hearing your story and diving into this, I’ve gotta say cheers to many more years of entrepreneurship and excited to see what comes for you, man.
Bill: Yup! Cheers, buddy!
Andrew: Cheers. Thanks for listening, guys. Appreciate you indulging us in just talking about the backstory, what’s going on, and next time we’ll have to come back with maybe something a little more on the actual side. But it’s fun to hear the story because I didn’t know a lot of that.
Bill: Well, next time we’ll be live in North Carolina. I’ve gotta have you over at the East Coast.
Andrew: Oh, that’s right! Every year you get some guys together on the beach. Wasn’t able to make it last year.
Bill: Yup. Private mastermind we do every summer and I’ve been trying to get Andrew to come, and he’s got a family and wife, which I understand. But I got on the schedule way early this year! So we’re going to have him in South Carolina this summer. So we’ll do another episode of ECF live over West Key.
Andrew: Sounds wonderful. Bill, what do you say we hop on down to Main Street on Bozeman, go grab some dinner?
Bill: Yup. Will you take my picture, fashion photographer?
Andrew: I don’t know, what are you going to wear?
Bill: I don’t know. Blue jeans.
Andrew: All right, and that’s where we’re going to end it. Thanks so much for listening. We’ll talk to you next time.
Andrew: Want to connect with and learn from other proven eCommerce entrepreneurs? Join us in the eCommerceFuel private community. It’s our tight-knit vetted group for store owners with at least a quarter million dollars in annual sales. You can learn more and apply for membership at ecommercefuel.com. Thanks so much to our podcast producer Laura Serino for all of her hard work in making this show possible, and to you for tuning in. Thank you for listening. That’ll do it for this week, but looking forward to seeing you again next Friday.
What Was Mentioned
- Connect with Bill: Rebel CEO | KP Elements | Ski Balm
- Big Sky Resort
- Tropical MBA
- The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich by Timothy Ferriss
Photo: Flickr/Katy Warner