Million Dollar Monday
Million Dollar Monday
Find Your Competitive Advantage with Eric Nashbar
Eric Nashbar is a serial entrepreneur who started four business ventures, grew sales to over $35 million a year, managed over 350 people, received a patent and sold those companies for over eight digits – all before the age of 40. Tune in to Million Dollar Monday to hear as Nashbar shares his story and key advice with Host Greg Muzzillo.
Chapter Summaries:
- 00:39 - Introducing Eric Nashbar
- 03:54 - Spike Nashbar
- 07:23 - Bike Nashbar
- 09:51 - Choice Uniforms
- 12:13- FaxBetter
- 15:52 - Coke Machine Strategy
- 20:15 - Key Advice
- 23:40 - Future Dreams
Key Takeaways:
- I found a need and that I was looking for a size 12 high top leather volleyball shoe. And I kept ordering it from the companies were out there and they just never had them in stock and they just, weren't doing the job. I've learned this business. I worked summers; I worked the whole time with my family business. I could do this better. So that’s kind of the inspiration for my first company.
- I became the president of Bike Nashbar, I increased the sales to 35 million and tripled the net income.
- I talk about the importance of being able to move from a critical mess to critical mass. And sometimes the critical mess that sort of happens in the beginning years. And we can vision we're entrepreneurs. We can envision, what does it look like on the other side, when we get to critical mass, but sometimes it takes either too much money, too much time, or whatever to get to the critical mass part.
- But we did find when we started really looking at our company was people just wanted a fax line. I was astonished; they just wanted a fax line, which seems so non-techy.
- it is a freemium model that I developed, which is unique to my knowledge. With normal freemium models, you give your credit card and you get 30 days. And if you don't cancel in 30 days, they start billing.
- I learned this in school somewhere that everything should approach a Coke machine analogy in your e-commerce website, the Coke machine is one click. You put your money in one click, and it either delivers the product instantly cold, exactly what you want or a little red light comes on, says, Nope, that doesn't work, click somewhere else – click once.
- I like reoccurring revenue stream businesses. In other words, you sell once and you collect almost forever. I like high margins. I like many small customers instead of a couple large ones.
- I believe that when you start a business, you should have a customer base that has some kind of sustainable competitive advantage, something that sets you apart from everybody else.
- I like to do something versus do nothing, because even if you're doing something, you're going to learn something from it.
Resource Links:
- Eric Nashbar LinkedIn
- Fax Better LinkedIn
- Personal Website
- The Florida incubator (co-founded by Eric Nashbar)
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Hello, and welcome to million dollar Monday. I'm your host, Greg. Muzzillo bringing you real successful people with real useful advice for people with big dreams. I understand big dreams. I turned an investment of$200 and a lot of great advice from some really successful people into my big dream proforma. That today is a half billion dollar company today. I am excited to introduce my first guest that I would call truly a serial entrepreneur by the age of 40. My guest today has only started the president of precedent and sold four businesses. As part of running those businesses. He's managed over 350 people through sales of over$35 million a year. Received a patent and sold those companies for over eight digits, a magnificent accomplishment for somebody to be able to do all of that before the age of 40, please join me in welcoming our serial entrepreneur guests, Eric Nash bar. Eric. Thanks for joining us. Thanks Greg. Thanks for having me appreciate it.
Speaker 2:Yeah, those are a lot of accomplishments for a young man and most people that are listening probably hope someday they could start one business by the age of 40. So congratulations Eric on all of your successes. Thank you. All right. So let's start at the beginning. Tell us a little bit about your growing up years, your family background, and some of the influence that might've led you to think you want to maybe someday own your own business and, or make a lot of
Speaker 3:Money. Yeah. You know, I, I'm a big, huge influences. I'm sure a lot of your guests have told you about is, you know, my father, he, he, he, you know, in a time when being an entrepreneur, wasn't like the thing like it is now, uh, he was running businesses and starting things. And I remember him doing like a hairpiece business, you know, and then a design business and then ultimately a bike business, which is, uh, back in 73 when she started. And, you know, my mom was there too. And she was always being supportive and helping out and doing the things with the company and around the house. And, um, you know, but I, I, uh, I worked in the business as a kid. Um, you know, I got kind of a, you know, I remember specifically when I was eight or nine, my dad's like, you got to come to work one day a week, figure out what day it is, but one day a week. So, uh, that's what I did one day a week, the next year, it was two days a week. And then three days a week until I was full-time from warehouse to the phones, to the customer service to purchasing the marketing bottom line. I just, that was my real education then going to college. I really, it was something where, um, you know, that's what I really learned. I learned not only all those different aspects of the catalog and direct marketing business, but I learned, um, you know, I learned about working work ethic and I learned about, um, you know, maybe how to start my own thing. So that's awesome. That's great. All right.
Speaker 2:So that's a great background and there's no better trainer than your own parents because you live it and breathe it and you even eat it at dinner talking about it. So it's a great way to have learned it. So, so then, okay, so you grew up in the family business or businesses, but take me them through your college years. And some of the early careers.
Speaker 3:I, I went to Rochester against technology, computer engineering. Um, I lasted a quarter and a half there. Uh, I, uh, I, I just hated spending 12 hours a day in a computer room, you know, and I got to it, it clearly just wasn't for me. I mean, so I, I transferred into photography and I realized I hated spending 12 hours in a dark room, so that didn't work for me either. So I kinda just flounder. I, uh, I went, I was, I really basically flunked out, you know, Alrighty. Um, I went back to Youngstown state, which I'm from Youngstown, Ohio, and, uh, didn't know what I wanted to do. So I just transferred there. One thing I realized is when you transfer schools, your GPA recess to zero. So that was a really good thing, you know? Um, so, uh, I did that and then I, um, I just started like, I didn't know what to do. So I went out west and I ended up at university of California, Santa Barbara through a couple of additional transfers and really found a love of volleyball there, you know? And, uh, I, I played volleyball more than I went to school again. I mean, class was just kind of a way to fake that I was doing something real, but I was playing a lot of volleyball. And, uh, what I found from that is that I, I found a need and that I was looking for a size 12 high top leather volleyball shoe. And I kept ordering it from the companies were out there and they just never had them in stock and they just weren't doing the job. And I go, you know, I've learned this business, I've worked summers at work the whole time with my family business. I could do this better. So, and that's kind of the inspiration for my first company.
Speaker 2:And just to back up just a little bit, so our, uh, our listeners have a better, a better understanding that the business that the parents were running, what was that called and what did they do?
Speaker 3:Yeah, it was a bicycle company called bike Nash bar, bicycle parts, and accessories, and, um, shipped from the ship all over the U S and Canada. Right,
Speaker 2:Right, right, right, right. And so it's a, what saying you sort of understood that business, which you're saying is you transitioned what you learned in the bike business and bike mash bar into the new business that you started. What was that called?
Speaker 3:I started a company called spike Nashville. I love it kind of had a similar ring. So I thought I'd, you know, and to honor the family business, I thought that was kind of fun. So, um, started that right at a college in, uh, in 1990. And, uh, you know, I grew it from, um, from really nothing to about, uh, about$5 million a year. And, uh, and, uh, it was a nice company. It was, it was fun. It was, I worked hard. I remember I would get there at seven in the morning and work till seven or eight or 10 at night, you know, every day. And, um, just cause I knew what I wanted and I knew was, and I, and I tell you what, I borrowed some money from my parents. And I knew that if I didn't pay it back in my head, I was thinking, I'm going to have to pay this back, work the rest of my life to pay this back. And it was just something that was weighing on me, you know, to the point where I was, I got really down at a point where there was a point in the business where it was really tough and I was starting to lose some money and everything. And, and I'm lucky I've got to turn around. So,
Speaker 2:And did you start another business before you exited that business or did you exit that business and then start the next business?
Speaker 3:And so did that business? Um, um, there was the two companies, uh, well, I became a couple of years into running the volleyball company, spike, Mashburn. Um, I was growing it in and doing well enough with it where the family company biked national, ours said, Hey, maybe we should join some of this together. A lot of the aspects, because when I first started the volleyball company, I started a completely separate, okay. So what we did is we said, well, look, it was pretty clear that a lot of the backend stuff, a lot of the call center stuff, a lot of the fulfillment, a lot of it was similar. The only thing that was different was marketing and purchasing. Those were different. So we said, you know what? Um, let's put a lot of it together. And I said, I'll do that, but I gotta run both. And that's when I became the president, a bike Nash bar, and that was in, uh, 1992. So, um, so I took that business bike Nash bar increased the sales to 35 million. The biggest thing I did though is, uh, I tripled the net income. So we tripled the value of it. And, uh, over the nine years I was president and set it up, really the family wanted to do was to ultimately sell it. So we sold it in, uh, in 2000. So, and then right before that is when I sold the volleyball company, spike Nash. That was not so,
Speaker 2:So you actually, um, you brought the companies together for a period of time, but then you actually separated them and sold them separately,
Speaker 3:Sold them separately. Yes. The volleyball company sold in oh nine and then the bike company was, uh, afterwards in 2000.
Speaker 2:Um, I would assume you did that because you could get at the end of the day more money, breaking them apart than selling them together, which is kind of surprising because you think all the operational efficiencies would go away, but maybe did other companies buy them that brought the operational efficiency. So at the end of the day you had strategic buyers that, that didn't care about bringing along the operational efficiencies of both companies.
Speaker 3:Yeah, it was, they were, you know, more so bike Nash bar was a strategic acquisition. It was acquired by its main competitor performance bike, uh, 2000. So performance was more retail story oriented than catalog mail order and bike Nash bar was more catalog than, than retail store. So it obviously, you know, you could increase condoms of scale and all the synergies that go together with an acquisition like that.
Speaker 2:So, so eventually both of those businesses sold. And then what business did you start?
Speaker 3:I started a company called choice uniforms, which is a school uniform catalog company, um, um, really addressing the private school market for school uniforms, uh, which was pretty much before that, um, more of a, you know, you'd go to the Catholic bookstores and things like that. And they would sell uniforms once a year. And I saw that they did a poor job at it really, uh, cause they really weren't equipped for that when these big, huge winds and everything. So we did it through catalog. We did grow artery on demand. I figured all that out. Um, didn't do very well. No, that one didn't do very well. So I ended up selling that three years later, it was a strategic act. You know, I sold it to another uniform company. So I was able to get out, you know, not too much of a loss, but at a loss, but, um, you know, it just, it, it, it didn't do, didn't do great. So it was a failure. Um, but what I learned from it though, is that when you have a business and like I said, there was some luck involved in the businesses. Obviously I met a lot of hard work, but a lot of luck, you start to get this Superman mentality. I can do anything, you know, and what I realized was that was jumped into pretty quickly and really not well thought out. So that's what that's, you know, looking at that now I'm more careful about the businesses that I go into. I think the business was a good concept. It was getting to the economy of scale that I need to get to, to be able to buy those type of blank things overseas and bring them in to decrease my cost of goods significantly. I was buying them domestically and I just couldn't get it to that level where, and that was the big hurdle. I think,
Speaker 2:You know, sometimes when I talk about the performance story, I talk about the importance of being able to move from a critical mess to critical mass. And at some, sometimes, sometimes the critical mess that sorta happens in the beginning years. And we can vision we're entrepreneurs. We can envision, what does it look like on the other side, when we get to critical mass, but sometimes the, um, it either takes too much money too much time or whatever to get to the critical mass part. So bring me, bring me now to, um, the next company. And if I'm not, if I'm not missing anything, you still run that company.
Speaker 3:Yeah. Yeah, it is. Um, it started off as deposit docs, which I looked at the, this was 14 years ago. Companies were not digitizing things like, I believe that was possible and made more sense. They weren't, you know, like you go to a doctor's office and you still see rows and rows of these filing cabinets. You're like, why aren't they scanning this in and digitizing it? And I thought maybe the problem is in, in the fact that they don't know how to use a scanner correctly, the administrative people aren't using this, or they're not doing it, or they don't want to do it or whatever. Um, so what I did, as I said, the way to solve that is what I would do is give people a toll-free fax number. And what they could do is they could fax the document into basically our system, which moved it into the cloud. And 14 years ago, the cloud was a really crazy out there. That was revolutionary then. Yeah. So we did that and then they could access their documents from anywhere, you know, like you do now. Um, so I, I thought that was a really cool idea that that way, because everybody knows how to use a faculty, even administrative people when they had, if they had a problem with scanning, they just said, well, just fax it to this number. And it puts it in our cloud space, you know, we could access it anywhere. So, and we were charging like, I don't know, 15 bucks a month for this service. So, you know, people that got it, the problem was that I didn't encounter is it, it took so much time to get people to understand that this document was not lost. They would, they would fax it and then still keep it because they were afraid. They didn't know where it went, so they weren't ready to. Right, right, right. So, so the weird part. So we were working on building, you know, and, and I had a partner in that business who was a 50, 50 partner. He did kind of all the programming and everything. And I did a business and marketing and stuff. What I realized was Brisbane so much time educating people on this process. It just, there was something missing. What we did find when we started really looking at our company was people just wonder fax line. I was astonished, you know, I always thought people wanted me to, or I wanted to have something that businesses that were successful were ones that were on the cutting edge of coming up with something new, in a different way of packaging. It, they just wanted a fax line, which seems so non-techie to me, you know, almost embarrassing for a while for me. So, and when we just transitioned and we changed the name of the company from deposit docs to fax better, it just took off. We were filling in me that we didn't even know existed or still to today. People I say, I run a fax company and they go, don't you just take a PDF, attach it to the email. And why would you use the fax? It still amazes me the demand for this. And there's reasons for that. But, uh, it's, you know, we get a thousand new users a week and then zero on marketing zero, Greg. I really believe this company is headed for a fall someday. So I spend zero on marketing, nothing, and it's still a thousand people sign up every week. It's it amazes me still. But Hey, it is what it is. So
Speaker 2:Is it a, uh, is, uh, uh, is there a fee for joining or how does what's the
Speaker 3:Economic model? It's a freemium model. It's a, it's a freemium model that I developed, which is unique to my knowledge where normal freemium models, you give your credit card and you get 30 days. And if you don't cancel in 30 days, they start billing. And nobody likes that because you have to remember to cancel and all that. So, so what I came up with is you, all you do is you give your email address and you hit send and that's it. And, um, I call it the Coke machine. I learned this in school somewhere that everything should approach a Coke machine analogy in your e-commerce website, the Coke machine is one click. You put your money in one click, and it's either delivers the product instantly cold, exactly what you want. Or a little red light comes on, says, Nope, that doesn't work, click somewhere else, click once. So we work on our websites to make everything Coke, machine one, click, instant delivery, and if not immediate feedback. So this is what we did with this. I said, how do I take this down from having everybody enter their credit card information, which is certainly not one click down to one click. So we have them just enter their email address and one click. Now what we do is we create what I call bookends, where they have to receive a fax every seven days, or they lose their fax number. On the other side, if they receive more than 30 pages or 50 pages now in any 30 day period, those faxes that are hidden and you have to pay me to get back. So if you're using it very sparingly, you need to receive a couple of facts is no big deal. You know, use it for free. Then you know who we are if you need to come back. But that way it's very easy for people to get the free service. Use it a little bit. You know, the cost of goods are very large in this. We can afford to do it in this freemium model, but it creates that ease of getting in the front door of the unique users that visit our site, 30% of them sign up, which is a huge number two mungus. Yeah. Right. And that's that Coke machine. And I think the, you know, that, that Coke machines put does that.
Speaker 2:It's a clever model. So what's the future. What's is the future for this in some, sometimes a good business strategy is milk the cow till it dies. Right. You know what I mean? Um, I would think that the back's business over time is, you know, diminishing, I would think, but, but maybe I I'm, I've been wrong about a lot of things that I think what's your, is your strategy is to continue to run it and grow it. It sounds like it's almost on autopilot now. Um, rather than try to seek another exit,
Speaker 3:It is on autopilot. Um, it's, um, I don't work that much at it right now because everything's kind of already set. Um, and, but I, I, uh, and it's gotten me into a point, I think of being a little lazy, cause I'm like, it's an annuity now, you know, it just works and I don't have to do much about it, which is okay. You know? Um, but I'm, I've already been moving in the direction of taking a similar that modified freemium model and moving it to, to create an app for texting. So if you wanted to get a second number for texting, you know, for a couple of reasons for dating, um, for, uh, for buying something on online on Craigslist, where you need to have a communication with somebody in texts, you need a text number just for a short period of time. Um, we can create that freemium model, cause all the other apps, there's a lot of apps out there doing that. Trust me, but they're all the same kind of model of give me your credit card upfront. If we don't, if you don't cancel in three days and charge it, you know, that kind of thing. We're, we're, we're playing with that right now. And, um, we'll have an announcement.
Speaker 2:Well, I know you're the kind of guy just based upon what you've accomplished before you were 40 that have a lot of ideas brewing in your head and, uh, uh, it'll be exciting to see what the future brings, but let's go back and look at the past again, the four businesses that you've run all of the ups, all of the downs. What advice would you get from all of those experiences? What advice would you give to aspiring entrepreneurs that are listening?
Speaker 3:Yeah, I'm um, it's a great question. Right? I, I, uh, you know, we mentioned the, the failure in choice uniforms, but really I've had tons and tons of failures in there. The thing is, is that, you know, I come up with ideas and everybody has ideas for businesses. And then always the question is, oh, you've got to do it. You've got to do it. No, you know, the, the, what I did is determining what ideas you do and what ideas you don't do. And what I did is I came up with filters that I use, and I encourage any of your, you know, the Watchers out there. Just do the same thing as the come up with the filters that make sense for you. For me. I mean, I have a list. I believe that when you start a business, you should have a customer base that it has a, has some kind of sustainable competitive advantage, something that sets you apart from everybody else. That's number one, number two, I like reoccurring revenue stream businesses. In other words, you sell once and you collect almost forever. You know, I like, um, I like high margins. Um, I like many small customers or many small customers instead of a couple large ones, because what I kind of break that down to when you have a job, you have one customer, your boss, you know, so if you want to get away from that, why would you start a business with three customers? You know, because you have three bosses, that is what it comes down to. So I like hundreds of millions of customers, where if somebody says you got to do it different, I'll go, well, I don't really need you. You know,
Speaker 2:I'll just move on. I like that. I like that viewpoint. Um,
Speaker 3:And um, I like to go after areas that are very strong, uh, very, um, growing quickly and very profitable. Actually, what I'd like to do is I like every year when the Inc 500 comes out or in 5,000, I love looking at that list. It gives me ideas on underserved markets, the way I look at it. I mean, you know, because they're like, if people are growing businesses either have some very sustainable advantage or they've hit on a market niche that nobody's addressing. So maybe that's an area, you know? And, um, lastly for me is like, you know, I like to do something versus do nothing, because even if you're doing something, you're going to learn something from it, like the choice uniforms example and right,
Speaker 2:Right. Even what to look for, like, what are some of the certain things that, that I love the word filter, because sometimes something might get through one level of filter, but then you get to the margins or whatever the next filter is, and it doesn't make it. So you move on to the next one. I, I really like that. All right, Eric, most of the people I've interviewed, uh, for million dollar, Monday are much older than you. And, uh, uh, and there, sometimes when I ask them this question, their dreams are more about, you know, the, after they sell their one business or whatever, you know, giving back or whatever. And, and yet you're still a young guy in your young fifties. So you got lots of runway left, lots of life left, uh, God willing. And, and, uh, I know you're healthy and take care of your good, good care of yourself. What dreams do you have for the rest of the long life that you have ahead of you, Eric?
Speaker 3:Um, well, uh, uh, you'll enjoy it. I play a lot of actually, uh, so I'm actually going to play tonight with a friend, but, uh, um, but for me more so I've found I really enjoy, um, coaching or mentoring entrepreneurs as they come up. Um, I started a group, co-founded a group with a friend of mine, um, who we call it the incubator or floor where we look for small companies, not necessarily ones that we want to invest in. I mean, there's obviously investments to make money on, you know, and help and kind of lend our support and help in that way. But also from the other side, kind of a philanthropic way, maybe somebody needs a helping hand. It's not necessarily a moneymaker, but it's something nice that we can do to help somebody out. So we look for companies like that. So it's kind of a pseudo philanthropic kind of a hybrid there, but, um, and also I've, I've, I've with that, you know, with coaching and mentoring, you know, there's also the avenue of, um, like I mentioned, there are some venture capital investments and I made a couple of those. Um, there's a salon in Fort Lauderdale that has a really unique, uh, membership model, uh, for blow-dry bars, which you and I would not know what this is, but women get this done. I'm sure Vierra knows what this is. So, um, and, uh, another one, my Porter, which is a, um, it's a self storage, but again, something different where they pick up and deliver your stuff for you. So a couple little fun things that keeps me interested, but that don't have to be day to day on those, you know, which is nice. Um, but, and again, like I said, the texting company and always thinking of new things and running it through the filters and, you know, yeah. Well, I have no doubt Eric, that
Speaker 1:As you continue your pursuit, just what a clever idea to be looking at Inc 5,000 for inspiration and ideas by itself. But knowing what you've accomplished before the age of four and knowing everything that you learned, all the wisdom that you have no doubt that you have many brilliant decades of success ahead. And I look forward to catching up with you somewhere down the road and reconnecting and do this again, Eric, thank you so much for your time.
