Like The Show? Leave A Rating: https://ratethispodcast.com/successstory
About The Guest
Yosef Martin is the founder of BoxyCharm, a Miami-based online subscription beauty service launched in 2013. With his unique vision as CEO, BoxyCharm quickly became a major disruptor in the online subscription beauty box industry as the first brand to deliver full-size products to members.
Today, the company has a community of more than 4 million followers across its social media platforms, enjoys more than 10 million monthly visitors online, and is the #1 searched beauty box brand on YouTube. BoxyCharm made Inc.’s 500 as one of the fastest-growing companies in the nation in 2018, 2019, and 2020. In 2020, the company was acquired for $500 million by Beauty for All Industries (BFA), a newly formed beauty innovation platform that is home to IPSY, Madeby Collective, and more.
- 00:00 — Intro
- 02:13 — Yosef Martin’s origin story
- 06:15 — How does Yosef know he is moving in the right direction while launching a new product in the market?
- 12:22 — How did Yosef Martin get into online marketing?
- 19:02 — How to get your product to have a cult-like following?
- 33:47 — What was the biggest screw-up Yosef had?
- 47:28 — How to hire good help
- 1:00:34 — Should a CEO be a good marketer?
- 1:03:39 — Yosef Martin’s opinion on Elon Musk trying to buy Twitter
- 1:14:19 — Will Netflix recover or diversify?
- 1:18:19 — Life after selling your company for 500m
- 1:26:42 — Yosef Martin’s investment strategy
- 1:31:18 — What are the companies that Yosef Martin looks to invest in?
- 1:36:52 — What would Yosef Martin start if he started another company?
- 1:40:13 — The most essential things to teach a first-time entrepreneur
Podcast & Newsletter Sponsors
Watch on YouTube
What is the Success Story Podcast?
On this podcast, you’ll find interviews, Q&A, keynote presentations & conversations on sales, marketing, business, startups, and entrepreneurship.
The podcast is hosted by entrepreneur, business executive, author, educator & speaker, Scott D. Clary.
Scott will discuss some of the lessons he’s learned over his own career, as well as have candid interviews with execs, celebrities, notable figures, and politicians. All who have achieved success through both wins and losses, to learn more about their life, their ideas, and insights.
He sits down with leaders and mentors and unpacks their stories to help pass those lessons on to others through both experiences and tactical strategies for business professionals, entrepreneurs, and everyone in between.
Host of the Success Story Podcast: https://www.successstorypodcast.com
CEO/Founder of OnMi Patch: https://newsletter.scottdclary.com/
Write a Daily Business Newsletter to 40,000 People: https://newsletter.scottdclary.com/
Contact: Scott D. Clary MBA |416-522-5622 | email@example.com
Machine Generated Transcript
company, business, product, sell, understand, day, people, month, find, consumer, hire, create, boxy charm, big, thought, trend, subscription box, brands, marketing, eventually
Scott D Clary, Yosef Martin
The new film 13 larges is available on Prime Video, boys and their coach. I’m trapped in a flooded cave from Academy Award winning director Ron Howard. I gotta get those kids out of the crazy I said only chance. Experience the incredible true story. How sad is this? I’ve never done before. Nobody has been united the world today, so
Scott D Clary 00:22
let’s do it. 13 lines rated PG 13 may be inappropriate for children under 13. Watch now only on Prime Video. Welcome to success story, the most useful podcast in the world. I’m your host Scott D. Clary. The success story podcast is part of the blue wire podcast network, as well as the HubSpot Podcast Network. Now the HubSpot Podcast Network has other incredible podcasts like the salesmen podcast hosted by wil Baron. Now if you work in sales, or you want to learn how to sell or peek at the latest in sales news, check out the salesmen podcast where host will Baron help sales professionals learn how to find buyers and win big business in effective and ethical ways. Now, if some of these topics resonate with you, you’re going to love the salesmen podcast the psychology of the perfect cold call successful cold email trends for 2022. The four step process to influencing buying decisions, or the digital sales room the future of b2b sales. If these topics hit home, you’re gonna love the salesmen podcast listen to the salesmen podcast wherever you get your podcasts. Today, my guest is Yosef Martin. He is the founder of Boxy Charm, an online subscription beauty service that was launched in 2013. And with his unique vision as CEO, Boxy Charm quickly became a major disruptor in the online subscription Beauty Box industry as a first brand to deliver full size products to members. The company ships millions of boxes monthly, Yosef had an incredible exit selling boxy charm to his competitor Ipsy for $520 million. Boxy Charm is not the only success that Yosef has had. He’s had previous successful businesses and exits. So he’s been in multiple industries, multiple categories. So he spoke about all things entrepreneurship. So finding product market fit, how to market yourself how to make your product go viral, how to figure out supply chain logistics, all some of the horror stories that he had to deal with. And we spoke about him working with some of the largest influencers in the world who worked with the Kardashians, we spoke about why most marketers and marketing sucks and how to do better. And then we also spoke about his exit and how he sold his company for $520 million.
Yosef Martin 02:44
So, you know, one day at a time, that’s why my story is, I am an entrepreneur, and that’s my second business. The the history for me was that I started around 2004. I launched a company called merchandize liquidators merchandise with the Z, Z, it’s because I had a typo. And I noticed that later, but I’m like, fuck it, you know, let’s just go. And it was I was just trying to pay my out of state tuition studying in Florida. And anyway, I learned to search engine optimization early on. And then I learned how to run a business and it was a liquidation company was a business to business, they had to have to sell truckloads of excess inventory and customer returns from department stores. But that was a foundation for me, like an entrepreneur how to how to create something out of nothing, really, I had couple 100 bucks to start a business into it around 2012. I heard about the monthly beauty subscription box concept. And I figured there is a gap in the market. I started getting requests from subscription boxes, makeup companies that it’s not a makeup company subscription box is basically a concept where a subscriber pays $20 or $10. Depends on what you’re giving them a month, and you get five items, either sample size or full size items that sells in Sephora all does makeup, skincare products and so on. And usually, the way it goes is that the brand gift their product to the subscription box. So around 2012 We get some requests from subscription boxes for product. Imagine I’m a liquidator I sell products for pennies on the dollar, all the leftover junk from stores. So when they came over, I heard about the concept and say, Why are they buying from us? And they said, well, sometimes brands don’t give them free shit. So they come to us, and they gotta pay pennies on the dollar. So in my mind, I figured it’s not a sustainable concept to grow the business, if eventually someone is going to come and find the economics to pay the brands. So I decided to launch my own subscription. And we call it Maxi Chun. And it took off. I mean, we had a bunch of iterations to what I thought is going to work and zigzag at first a lot in the beginning, but eventually the company was grossing close to 500 million in sales or seven years in into it. And
Scott D Clary 05:01
it but you don’t just like that’s a lot of iterations to gross $500 million in sales.
Yosef Martin 05:05
consistent iterations. Because no one else has done this, like exactly to what they do. There was another company that was grossing similar numbers a little bit, first of all, much bigger than us. But they’re doing sample size. And I had to figure out the whole business. I didn’t know anything about the beauty industry, per se. But I was from Hialeah. I mean, our warehouse was in Hialeah. And we had to learn how as we go, but the constant was surprised the people with amazing products, figure out always chase the perfect product every month, and keep surprising them. And the second one is, make sure your marketing is fucking amazing. Make sure that people like your Instagram and you want to come in and because you’re selling them nothing, it’s because they like your fucking Instagram, make sure that the product is going to be so good that they’re going to go and refer you to their friends. As long as you’re profitable. Don’t worry about how profitable you are think about growing and making sure that the product is amazing the experience, because that was the cause the constant that we had, it was easier for us to grow. And the iterations were more on what is trending right now how can I get my hands on it? How can I get those big brands to want to work with me and explain to them my concept and, and so on. But eventually, once we couple years into it, you know, we became really popular, and brands understood social media. And they get requests from the social media team to big mega brands. Okay, we get beaucoup bucks each. And once you had the first one and the second one that would be reputable makeup brands. All the other ones felt like they have to do the same and they start coming falling through and, and that’s how your company keeps going. And behind all that you get great people next to you making sure that they help you sustain the growth of the business.
Scott D Clary 06:46
When you started off, you didn’t have any experience and beauty. And I want you to just comment on what a lot of people think is find a way to monetize your passion or find a way to monetize the things that you know best. And even we’re talking before, like when you work in an industry or vertical for so long. It’s really easy to start a business in that industry. Because you know, it’s so well, you came in with nothing. So when you’re launching something and you’re creating, like the category was somewhat defined, but not really new, creating a new product and a new category. How do you make How do you know that you’re moving in the right direction? Is it? Because it’s not something you’re not intrinsically motivated because of a passion for makeup and beauty? So you have to have external motivators and validators? Is the business moving in the right direction? Or you would give up for sure you give up? Because you’d be like, I don’t get this. It’s not working. And you probably have a lot of self doubt too, because like, I’m probably not getting it because I don’t know beauty and I’m missing the mark on something. You launched it. How did you how did you keep it moving?
Yosef Martin 07:40
You know, I think there is a plus and minus in both right? The fact that I didn’t understand the beauty industry, I see it more of a bigger plus, then a minus because if if I was a consumer, I would have been an Otterbox too many boxes. I mean, 2014 was the year of the boxes, and most of our competitors, at least their boxes were curated by women. And I had to be the one pushing it almost all the way to the end. Eventually I found the right people to to take over. But it was tough, the part were tough, it’s easy to understand that an outsider is going to be the trailblazer. I was the outsider. And I just did not think like the consumer that apply makeup. I thought as a person that want to understand what the consumer wants. And you find out that the consumer have different opinions and different days. And technically, when I would do it, I would just do focus groups and I would have my my team that at first we had nothing but women working for me. And just have them all asking what do you think about this? What do you think about that? Why do you think? And you’ve you’ll figure it out fairly quickly, what works, what doesn’t work. But one thing I did understand is that looking at the item right now, you understand very quickly what’s trending. Okay, so you can say, Okay, this category is trending anything, it can just say holographic highlighter in 2017. That’s the thing or 2016 That’s the thing, everybody wanted it right. Get it as soon as you can, it’s a fad, it’s gonna go away. By now don’t buy tomorrow because you’re gonna get stuck with this. So you understand the fight you’ve seen already enough. And you know what’s trending, right. But you also understand that it’s only a particular consumer that’s gonna want to use it. But what you don’t understand at first is that there’s a difference between receiving the product. And there’s a difference between viewing the product on Instagram before people receive the product. And if you’re an if you’re a person who uses that you would probably think mostly about I like it, I don’t like it. That is the end part of the of the logistic process. They received it and now they’re gonna give their opinion you need to get them excited when they see the image on social media. That part is completely different than trying it. So at first I was asking the team to try the product and tell me what they think. And the results were not always great because they would love the product but when you You put it on social media, the product was too small. And people didn’t apply perceived value when they saw something small on social media, when they received it, the comments were positive, but by then you already get crushed for selling them small items. So then you said, Okay, that’s just one example for many things like, Okay, we need to go and just have them look at the item. And so what would you think if you see this on social media, okay, now get to try it, you have to break it down into two parts. And it was all trial and error based on I mean, it was because of blood that was shed over mistakes that we made, right, we would buy an item that was very, very small, but very expensive, because there was pearls from Europe to play. And people hated that. But when they got it, they liked it, but it was too late. It gets made. So we had to learn through those, through those mistakes. And, and that was, that was the thing, if you keep chasing the perfect kind of improving and exciting the consumer with a better product, then you’re gonna win.
Scott D Clary 10:55
And elmander says something. So for the business model, when you’re shipping out these boxes, is is the is the opportunity for the consumer, because they rather is the excitement for the consumer because they see it on social and they like getting something new. And it’s like exciting, or is there actually like $1 value? So is there a margin that you’re taking advantage of when you put it in?
Yosef Martin 11:15
Let me break it down a bit more about the concept, right? And how do you get more and more than million members by the time we exit paying members, the reason you grow so much, because it’s one it’s a discovery concept. There are two types of subscriptions, physical subscriptions, one is replenishment. The other one is discovery. So replenishment is I don’t know your vitamin supplements, you need it in my company. So that’s something that you know, you’re gonna get, and you’re getting it and that’s it, you’re not gonna take a screenshot, look, I just got my razors, again, you’re not going to do it right, you have to really create awareness by yourself everytime discovery, it’s actually different, because people don’t know what to receive. And if they’re happy, they’re going to take a picture, and they’re going to go and post this and they’re going to bring awareness for you for free. That happens in my case, that was a discovery, what we did was we went on full size, and we made sure that the price ratio was about four, four and a half to five times, sometimes six times. So you pay $25, but the retail value is about $150. So now there is that procedure, there’s the price, there is the surprise element. And there is the matching with your personalization that works every time. And those are the reasons which was a couple of reasons why they get excited, it’s kind of like a surprise every month for themselves. Awesome deal that they got now two reasons for them to brag and subscribe and bring more subscribers and build your awareness. It’s kind of like the rich get richer, you have 10,000 subscribers, less pictures on Instagram, we have a million get more. And, and that was that was the reason we’re able to scale consistently. Because we focused on the fact that they needed to get excited when they open the box,
Scott D Clary 12:53
and you knew architected, you architected a little bit of that FOMO so because you found bigger products that were Instagrammable and I also love, we’re gonna talk about like your influencer marketing strategy and your growth strategy. But you architected a little bit that FOMO so that when people saw it on Instagram, then they’re like, now I want to, I want to see what’s coming and what’s new. And then you architected a little bit of virality. And I know that you were doing lives at some point, but you were like, You were hyper focused on like influencer marketing on social. Did you run a camera? If you ran paid as well? Did you run a lot?
Yosef Martin 13:24
Before we sold, we stopped, we I think we will not for the most not for a lot of most of those years. No, only at the end, when we went through a process about to sell the business, it was time to start learning how to do performance paid marketing on Facebook, we get to almost 100 million plus in sales close to 200. without really putting any money in marketing. That’s insane. I mean, we did money marketing, but influencers not paid. In the end it was working. Because again, your biggest piece of marketing is your product. And if you can create millions of views, many millions of views, through influencers and through your members, that’s all it takes. If you didn’t sell your product, it’s because your product didn’t sell itself. Then you get to work on everything else. So while we put when we put their product, so our growth was was as follows more like 20 million a year, 50 million a year. 100 million 100 plus 200 plus 400. Plus that’s how we and then that’s when we exited the company. And it was consistently growing because it was was laser focused on the fact that we want to make sure that the experience is going to be great and the product would sell itself and a side of influencer marketing that everybody knows and do what we would I would we actually were able to build was a tight community but not a community in terms of just saying, Oh, we have a community nanananana what does it really mean a community? Well, a community is a group of people with the same interest in the same space activating together Under when you take that and you said, Okay, what is my space? Where is my space, we found that there, you can have your space, say on your on your IG page or your Facebook page. But we find, we found a much better space, we found a space, that’s actually the space that they gathered together already just to talk about us that was in the Facebook groups. And they created, they created that themselves. Now, they, when I found out in 2017, that our Facebook groups, it’s just something on Facebook at the time they call it forums. It was it was nice, because I just wanted to hear the sentiment. So he joined them. And they said, look, it’s only women are allowed. And at that time, nobody knew who I was. It was private on my account. And I told them I’m the founder, box Chairman just want to hear the sentiment. They were really excited that I joined. And then they said oh listen, or the owner box jam came and they were posting this and everyone wanted to hear me. So then I said this is my super jammers. Those are the this is one of the most advocated consumers. They call each other charmers. On the forums. They said we need another moderators, we need another two charmers to be moderators coming out saying this is it, I didn’t even know that happens. This is kind of like a, a backroom door to group of passionate people. People you are most passionate people, and then I hit miss it. The community is not about the size of your community. It’s about the passion of your community. How can I amplify the passion and then I’m going to amplify their numbers. So said, Here is my space. So I said, Look, guys, you know what I’m gonna let you know before anybody else what’s gonna be next month in the box, it’s gonna be a sneak peek. We usually used to do on our platform, sneak peek on the first of the month, I’m gonna give it to two weeks before that. Everyone wants to join those groups. And I announced it on our pages on Instagram, you saw three forms turned into nearly 60 or 80 forms. And in so many other makeup forms in groups asked me to join them just to let them know what’s their problem, because there are many genres over there. And then I ended up having at the end, submitting information to about 100 forms every month, the largest box each on forum, at that time, I noticed was more than 90,000 people in one form. And my goal was to gather them all together, all those passionate add members, and make sure that they’re going to be discussing together that is their activation. That’s how you activate them together. And I would say Well, check my Instagram, I will have them all moved to my Instagram page, everything outside of the box each home page, make sure that it’s going to be kind of like the, the underground parts, not the regular channels. So they’ll fill their special coming to my Instagram page, I’ll show you something, no one’s gonna see it, it’s gonna be behind my back, that’s going to be a sneak peek to go in and check it out. Now they’re connected on Instagram. So now, those two friends that were talking on Facebook, now they get to see each other’s Instagram page. Now they’re friends because of boxer John because they chose 12 how that was creating kind of like a very tight community of people that became so close to each other over boxy jam, that was the common denominator. And there were so passionate that you get to a point that the community was so solid that when I needed to launch a new product, it was a quarterly back subscription box, I announced it twice, one time on on Boxy Charm Instagram page in one time on the forums. I told them in a month and a half, there’s going to be a new box, it’s going to be quarterly come in. The site crashed, I expected about 40,000 buyers and I thought I’m going to sell 20,000 boxes, I wanted to sell out quick, we had about 200,000 people clicking the checkout page. On the second way opening up, we told them 9am, September 1 200,000 People take my money, we added $30 million, just like that into a revenue stream in a second from two posts. Because there was an infrastructure, there was a community. Everyone spoke about that. And it was really important for me the momentum. Because we had a competitor come in at the same time with their innovation, I wanted to make sure that I’m going to take the entire conversation away from them. And I had to go and make sure that it can be on that date. So development team couldn’t really complete the site test testing to make sure so the site crashed. But it’s okay. Mission accomplished. All of them subscribed for the following for the following bucks because we didn’t have enough boxes for him. And no one heard about the company’s new innovation. We just took away the discussion in this space.
Scott D Clary 19:32
Okay, so I want to talk about the virality that you created and some of the things that also come from the virality because I think that that will help a lot of the other things you’re trying to accomplish if it’s paid or if it’s trending on Twitter or whatever it is, but you saw those groups of 90,000 people that’s You took advantage of that and that makes sense. But how looking back how would you reverse engineer somebody to try and do that and build that group purposefully? That’s what I that’s what I think the magic is. So you almost you have this like cult like for Following, but how do you get that whole like following so that I don’t, I don’t want as a company, I don’t want to be forced to create my own community. I want my product to be so cult like, and I want people to be so passionate about my product, that they create their own communities.
Yosef Martin 20:15
I think you said it’s first you start with your product. No one’s gonna get excited over. What do you see everywhere else? They have to get excited over here, then you can like it’s a recipe. It’s not one ingredient.
Scott D Clary 20:28
But it’s like you it was like you were actually selling you were selling other people’s products. Yeah, like, so it’s like it like the product was actually money to understand understanding. What was what resonate? Yeah, that was the product.
Yosef Martin 20:41
Yeah, so Exactly. I mean, I was the chief product officer until I had Christie that was working for us. And she was taking over and she was amazing. But it took me years to find that, and then I was the marketing guy behind this. So but but look, when you build a community, I guess a lot of a lot of the elements is that when you trend, right? When you try and you get to be seen everywhere, right? And how do you trend yourself using the community as as a utility,
Scott D Clary 21:06
rather than as a community, you’re talking to you exactly you’re
Yosef Martin 21:08
going. And so the way I was doing, every month, there was a spike, when people receive their boxes on the I want to say I want to say the 15th of the month, people get the box and there was a spike. And I needed to kind of like, and my problem was that if you look at the chart, it was kind of like the beginning of the month, a little spike, when I would give them a sneak peek, then it would go down after two, three days. And the discussion around bucks each round. Because we saw the sneak peek if they came to our, to our platforms, and then eventually they start receiving the box, it doesn’t add or hype spike, blah, blah, blah, blah, blah, it goes down towards the end of the month, all the way to the next month. And I needed to lift it in those two into those two steps. I needed to kind of be the market. Yeah, market maker, yeah, to be the market maker. So I said, You know what, let’s do it this way. I’m gonna go and introduce to small group of people with very loud, what’s going to be next month in a box during the dips. And I can go into just those those two times, I’ll take the two strongest items that will be next one, Max and on the first depend on the secondary data, I’m going to show that. And I’m going to do it in different ways. But my point was, I would go on the forums and and say, Is there any interest in a sneak peek? I would always use the same phrase. Is there any interest? Eventually I just said, is there an interest? And that’s it, they would already know what I mean? And all of them will said yes. And you will see hundreds of comments. Yes, of course. Why are you asking this one? And then oh, well, it’s just being funny. All these guys that just telling me so we can show it to us. And it was just really, really fun. And then I would go in and say well go tomorrow. Tomorrow at 3pm Eastern time, you’re gonna find somewhere I’m going to post something about the sneak peek. What do you have you have a couple 100,000 members at the same time searching boxy. John, what happened with 300,000 people are searching attack time don’t don’t. If you if you were to spread it across 30 days, there would be no it wouldn’t trigger the trend for it when you wouldn’t be relevant. If it is over an hour like apple. Everyone, everyone’s stressed at the same time now, you would go on Google Trends. And you would send Google Trends spike, Bob oxygen, whenever there’s a spike in the trend. Anyone that mentioned anything about boxy chum is going he’s getting tons of views. Anyone that mentioned the box, anyone that mentioned what anything. So what happened is they see that the trend when the dimension maximum done, they want to mention us more. Now, they just created more variety concept for free, you just upper funnel again, everybody here is Boxxy Boxxy, Boxxy, Boxxy, Boxxy, but you just manipulated the algorithm. You just use your community to come in at the same precise time and you do it two or three times a month. And you keep the discussion going you get you get the discussion going. And that’s all you chase the cool factor. Just in the cool factor make everybody wants to like you. Emotionally, they look at you different emotionally. I would say that also having a non faceless company does does the trick, right. But they put yourself out there. Yeah, you put yourself out there, right. But being the face for the company coming all the way from the founder makes a big deal. The fact that you don’t take things too seriously, you’re being funny and you have those consistent words that you keep all the time creates lingual around the community. Is there an interest and don’t repeatedly use the same words? It was it was engineer it’s very easy. Nothing is a rocket science. Technically, it’s just it just easy to know
Scott D Clary 24:25
what all you’re doing is you’re just paying attention. Yes. Which is like it sounds it sounds like so basic. But I mean, how many companies don’t pay attention. Like how many people don’t look at the feedback from their product and their users. And they’re just like, No, that’s what it is. I’m going to keep putting it out there. I’m going to figure out and optimize performance marketing and I’m going to find a way to like convert people that have never heard the product before and they’re not focused on people that are their biggest fans and their biggest evangelists and how do you serve them just like find new customers bring them in? is a big issue with like SAS companies to you always focus on bringing new class some reason you don’t focus on churn, you have churn, you have turn in subscription boxes as well. You don’t focus on churn, you have like a leaky, like a whatever. Like the, the the leaky. Yeah, like I’m trying to think of an analogy, someone told me really good analogy. It’s like, if you take the plug out of a bathtub and you let the water run, it’s always going to drain but try and fill but imagine like, if you like, plug that hole, and you put water and it’s gonna overflow with money and customers and all that. So you have to focus on the charity, you have to focus on the customers that have already purchased your product, as opposed to just always bringing that new and, and how did you focus on them? We just listened to the feedback from the people that have already purchased good and bad. And that’s all you That’s all you’re doing.
Yosef Martin 25:38
Yeah, well, when you when you make decisions. When you run a business, you have a decision to make Are you gonna spend your day you can spend your day reading core data and, and put yourself in endless meetings that you have created for yourself to follow up and reporting and ask everyone to go and think for you and create strategies for you. Or you can decide to still be the technician. In a way, you’re gonna say, Well, I’m not letting that piece go until I find someone that does it like me or better. And then I can always oversee what they’re doing. But at least I know that it’s in good hands. And this way, in a faster was one, one meeting a week for all our VPs and above. Just to follow up, we call it standard meeting, we had to talk only about what’s absolutely important, urgent, that’s it. Nothing else. Not everyone needs to hear everything about everything. So when you have enough time on your hand, you can be plugged into the consumers. Discussion, you understand what they’re thinking about your product, you can maneuver you you’re in touch with influencers, they become your friends, they’ll tell you, Hey, listen, you should go and jump on on this feature right now you’re going to blow up don’t at that time it was every new feature is gonna give you movies, okay? So guess what Boxy Charm would be the first to start using say, in IG TV at a time when you would get all the views to IG TV because it was a supply and demand issue. Right? They wanted to make sure that the adoption is going to be there. So you did and it’s all social. within you, you’re going a month and a half sooner than your competition, you get a month and a half lead time. This is by the time your competition came in, he came into a traffic gym. You already created a gap. And then after that you’re going to realize and so on are the features revealed now. So you aren’t you you’re plugged into the trend, and you have enough time in a day to look at those, those little things that can make you getting another little unfair advantage. Because you have the time to actually do it instead of burying yourself with meetings. And in many cases, that’s what people know. They just look at the business as a process, process oriented business and all they have to do is step aside and let the people work, make it smaller meetings, less meetings. I think the big mistake that people are doing is big meetings you see when you have a large meeting with 100 people but you have so many things to discuss 1415 topics to discuss. It’s it’s from, you’ll find those meetings where most people don’t even participate. And they’re from different departments. And not everyone from every department needs to hear everything about every department they need to work and they need to know only what they need to know at the time you need to know if they want to ask questions come in will will tell you but but you do not need to contribute so to so much data for them for no reason because one year out the other. It’s not going to store
Scott D Clary 28:31
or adversely if they do latch on to certain pieces of data. They’ll context it provide incorrect information or they could get stressed about things or whatever. I just want to take a second and make the sponsor of today’s episode HubSpot now pies, taking candy from babies, both things that are theoretically easy, but anyone who’s made a pie from scratch or attempted to pry a lollipop from a screaming toddler knows these things are in fact very difficult. But you know what is easy? Integrating automating and scaling your business with HubSpot. Now, the HubSpot CRM platform seamlessly transfers customer data into usable insights. Like what’s the average time it takes us to respond to a customer service request? Or how can we get better at it? The HubSpot service hub brings all your data and support channels in one place. So your team can spend less time hunting for information and more time delighting customers. Plus seamless connectivity with marketing and sales hubs means every person on your team has a crystal clear picture of your customer. Easy as HubSpot. Learn how HubSpot can make it easier for your business to firstname.lastname@example.org.
Yosef Martin 29:44
It’s like my analogy was biblical analogy. The when when when Moses came with the 10 commandments to the Hebrews, the only 10 He didn’t go with the whole Bible decks of explanations of the Bible’s because It’s useless you have a lot of people give them a little bit of information only what’s important you have smaller group of people now you can go a little bit more specific, it can retain more depends on the group. So you start, if you have a big meeting, kind of like a town hall meeting everybody’s there to three things everybody needs to hear, don’t overkill it, you can have your 10 commandments. This is your 10 commandments, don’t go and discuss everything about everyone to everyone it doesn’t it’s a waste of resources and accompanies, you can find large companies being deployed poorly, and then they’re gonna go in and, and lose for a smaller, more nimble competitor that just focus on what’s important and urgent all the time. And then the guy to get to have enough time to always be tuned to the trend.
Scott D Clary 30:45
Do you find that like, the way you lead your company, it makes a lot of sense. Do you feel like founders make a lot of profit, like you feel like founders fumble on this part a lot. And they may be trying, maybe they try and step away from the from the operations too quick. And then they hire someone and they micromanage that person.
Yosef Martin 31:01
It happens in many companies, happens in many companies where they, when they start, everything is good, because you have a small group of people, and they’re much more efficient. I think the rule and I’m stealing someone else’s words, is and I like that. And I like the analogy that they gave it, the square root of your employees will do 50% of your work. So if you have four people, at first, you’re at the optimal stage, where two people will do 50% of the work. So everyone’s efficient, everyone knows the direction everybody understand where they’re heading, and don’t motivate it. Now you have 100 people 10, people will do 50% of your work. If you have 1000, it’s 33 people will do 50%, they, the organization will be less and less efficient, right? They actually said that once you get appointed globally, right? You have the whole world, right? 7 billion people, but 50,000, people will do half of everyone else’s work where you can see the gap where you have that always those that 1.1% that are receiving everything, because there are more effective, and they’re doing everything more efficient. So when you grow your business, we’ll be becoming our own enemies. Because if you forget where you come from, and you said, Well, do I really need to step out of everything? Can a company have the founder still looking at the images we’ve covered before they go sometimes on on Instagram or look over? Is it really that bad? And I think that, that you can absolutely find a way to scale a business might look, I wasn’t a multibillion dollar business, but I was half of half a billion dollar business. And
Scott D Clary 32:29
a half a billion in revenue. Half a billion should be like the valuation at its peak would be unicorn. Well. Yeah. I mean, what I mean by most multiples, like to be honest, you would, yeah. Well,
Yosef Martin 32:40
you know what I was in an industry that you don’t have too many buyers, it was a new industry. So we sell we sold the you know, at the COVID time, but I was happy. Imagine
Scott D Clary 32:49
if you were in SAS doing 500 million good.
Yosef Martin 32:52
I forget it. I mean, look, if I was doing Spark, if I was back in the company, at that time, it was, but but I don’t want to I don’t want to talk about this. Why are you bringing it up? Thank you very much. But I would have stayed there now and then I’m done. I’m out.
Scott D Clary 33:07
You don’t want to you don’t want to be a see. Everyone I’ve spoken to who’s ever been in and around CEO of publicly traded company says you don’t want to be a CEO of a publicly traded company. Yeah. Yeah. I mean, like, there’s some like, I think there’s some, like mental health aspects that are more important than money.
Yosef Martin 33:24
If you if you have to focus about your quarterly earnings every every day, then you no longer for focus about the company the way you’re doing it in the private sector. Yeah. And that’s, that’s the biggest deal. I mean, if I had to focus on that, that would have been the depth of the business, it will just be very, very hurtful for our particular business. It’s, it’s different. But I mean, look, I think the the ride that you take is the real value. The transformation you have within yourself. No one teaches you how to build a $500 million business. You have to transform to be the best. Now you can do it. Well. Yeah, I mean, I needed I needed that evolution, to be able to go from here to here. Joe 2014 is not Joe 2020 or 2021.
Scott D Clary 34:08
You’ve probably dealt with a lot of shit every day. Yeah,
Yosef Martin 34:11
I mean every day, but at first you think every time or houses and fire and then eventually it was like I’ve seen this before?
Scott D Clary 34:18
What were your biggest fuck ups?
Yosef Martin 34:19
What was it like the worst? Well, we had quite a few. If you didn’t fuck up, you didn’t try right. It’s all about that we had. I mean, we pushed everything to the limit. You have to understand I prioritized momentum over perfection in my execution. Because look at look at today you’re going to find very creative marketers coming in with social media and they’re getting zits compared to what people have done with zero creativity in 2014. It was just a bit of momentum. So I always understood that momentum. I mean to proceed to a perfect to up to a particular level right? I don’t completely fuck Get up in the
Scott D Clary 35:01
No, no, no, but you’re not going to. I mean, like, it will be executed in a month versus if you take a six months or a year to execute something that’s that’s
Yosef Martin 35:07
exactly, exactly. So then we would write things on a piece of napkin, we would never use a PowerPoint presentation, just tell me over the phone, what do you what’s your ideas, and then we would go and execute, right? But because of that, we had a lot of, in our mind, we thought we failed. And also, when I was into the weeds of so many things, so I felt it. I mean, I had people going on social media telling me what happened, or just my box, I was really tune into admittedly, in other countries, I wasn’t pushing myself away from this. So you know, it’s kind of like, if a for if a tree falls in the forest, does it matter for them? Maybe they haven’t seen it, I would see all those trees falling in the forest. And I was concerned. So my forest eventually stayed very, very clean. Because I was like, why did that happen? Let’s understand that. Some others don’t, because they are far away from that. But I felt, I will give you one example that was stressful wasn’t really our main factor. But there was some some event that happened to us where the we had, we were trying to match a skin tone a to members. And we had the person that we hired that he was the Data Science Guy, PhD, and all that smart, he will do the cube in second, how do you call the Rubik’s Cube Rubik’s Cube in seconds? Oh, the guy’s a genius, I tell you, right. So then I tell him, look, it’s very simple. We have all the data for the members who, based on your skintone This is more important than anything else. So that when you when you use the allocation, who gets what, you know, it’s what shade you said you like on your quiz and everything. As I said, Forget all that. It’s all about the skintone. He said, Okay, ship some boxes, and when we started getting complaints, I get the light instead of the dark, I get the dark instead of delight. I get them. I go and ask him, What did he do? He said, though, yeah, well, the other considerations I had to take in account to have to change it. What do you mean, what other consideration? Well, you know, some people say they like mascara versus something else. Oh, so what did I ask you I said, before anything else, make sure you allocate the screen. Don’t forget everything else. If someone doesn’t like too much a mascara, but the skin tones there give it to them. Anyway, he actually did everything opposite. And people who were supposed to get one shade gets the other shade. So we had to stop all the shipments. Because there weren’t too many shipments that went through. But we had to stop everything. We had to reallocate the production, something that we thought will take us two days. But reality took us about two and a half, three weeks, you have to understand when you’re getting your bucks every month under 12. And suddenly, you’re not getting it until the 31st. At first, it’s all good when it’s a little bit delayed. But then it was a nightmare. People told me go back to your country. This is horrible. I mean, every we’re all stressed, right? We’re all stressed over that. Because of one error that, oh, well, I thought that the color of the lipstick is more important. It cannot be more important. We just give them for the first time skintone shade. So in that was that was early 2019. We’re actually supposed to go, we’re supposed to be sold sooner. But because of that it delayed the entire sell of the business in about a couple of months, maybe two or three months. And that affect us big because the reason I say it is the biggest event for the business. It’s because if we were to sell the company two months, we sold the business at the end of 2020. We were supposed to sell the business at the end of March 2020. Okay, you heard about the virus.
Scott D Clary 38:46
So you’re about nine months late.
Yosef Martin 38:47
So what happened when we were supposed to get the final beads. After doing all the due diligence from all the buyers, it was supposed to be? March 25 2020, march 15, march 16, the whole world fell apart. So we get all those buyers,
Scott D Clary 39:02
I’ll tell the story tell the story of selling, it’s a good story.
Yosef Martin 39:06
So we were going through a process. I mean, in that particular case, if we were just few months, sooner, we would have sold that thing 2019 And all that would have been over but we ended up coming into that way. So the whole process had to be shut down because 10 days before the final bids. The world had to shut itself down and I said no it’s not fucking real. This is not happening. This is not happening. This is a Matrix movie over here I took the wrong period. But eventually we were acquired by EMC and they said now we’re gonna steal by you and we’re gonna you know the and then eventually we ended up selling for 20% more I think than the previous bidder. Because of that was coming it turned out to be for the best but imagine you do everything you can do. You try to rush it no problems but wonder one higher, one, one higher, one higher and to be honest with you, there was a discussion why should we let them go give him another chance. You know, he needs to get more explanation HR rules dadada? And I said, No, it’s unlikely that it’s a specific knowledge that none of us has. It’s data science. And if you cannot understand kind of like protocol that we give him, and he doesn’t follow that. And they said, No, he needs to need to write them up. Did you tell him this? Did you write them up like this? Did you? We have to follow all this procedures, and then eventually that will happen. So then I went through we because one hired everything that got stalled, but can complain because it turned out to be not bad at all, actually, for us, but that was everything. I mean, you know, when when I sold Boxy Charm, I knew that I needed to control the growth into 2020. Because 2019 We had, we doubled ourself in growth, but we needed to increase the profitability because it was more of an up market driven.
Scott D Clary 40:50
So So by the way, like Predictable Revenue doesn’t count for valuation in subscription boxes, like it doesn’t SAS invest.
Yosef Martin 40:57
But they have to understand it all. Also come down to how many buyers you have, and what exits you had in space. Right. When when YouTube sold for 500 million years ago, people thought Google is crazy. Imagine today, yeah. So you build it up. Were the first real exit in the subscription box. Well, the first one. If, if you look at the beauty industry, companies that were grossing, I think there’s a company that just exit for 600 million, and the gross revenue was 80 million revenue. The gross revenue, okay. Yeah. And this is this is one company, right? Imagine if coming into us, right, growing, and it’s much more predictable than other I mean, the regular SIP might, but it’s not a beauty brand. It’s really not it’s a subscription. But what subscripts on the SAS, how many bears you have one? No one ever bought it? Okay, so then that’s what you have. And that’s okay. You know, what you you’re proud of being what you did. I mean, my mom still except me in our house, and you’re fine. And, you know, no one is mocking me in the table with my family. And my cousins are still nice to me. So it’s all good. But eventually, it does get to your head. Like, it could have been a little bit I mean, but again, I can go on and on. I could have bought Bitcoin back then. And I didn’t so
Scott D Clary 42:16
no it’s it’s funny. I guess before before we chatted, I had no idea because when you think of subscription, I think subscription SAS oh my god, how would an investor not want that? How would an investor not want something investors? Were
Yosef Martin 42:27
the only one that come to us? Actually, it was it was the strategics that didn’t come to us have strategics have come to us meaning the big brands if this the four of the world and all those understood what they can do with that it’s much more than than regular size. Yeah, you have you have you have so much to do with what what we’re doing over there. But they’re going to try and build it up themselves. Well, they had already they felt a Sephora had a box and they shut it down Macy’s sandbox, they shut it down, they all failed, why? It’s not an easy business. There’s a reason why the only two big companies in that space in the beauty subscription box shows us an Ipsy the gap between epsy boxy versus everyone else was because it takes something special to understand that business, this is not a regular business, look on one on one on one aspect, your makeup brand on another one, your marketing plan for the brands. And then on the other aspect, your logistic brand, you know how hard it is to ship a million boxes composed all those boxes, when
Scott D Clary 43:24
you can never own manufacturing, you can never own manufacturing ever, it’s impossible, you don’t
Yosef Martin 43:28
do that. So you have you have to deal with all the products coming from all over the world to make no time for that particular thing because that variation has to go to that segment. So your logistic company that has to have data science behind this, you have to have technology, then you have a technology company behind this. To manage all this, as a founder you have to understand a little bit of everything. And then when you have a million plus members, the customer service team has to have different procedures than anyone else. Because if you all delay for let’s just say a week, two weeks, the amount of of input they’re gonna have you’re gonna fall apart so you have to have a by far better automation you have to connect with the member before they know that there’s gonna be a problem because if if you have 200 300 customer service representatives, that’s not enough when you have a million people not getting their bucks in time. What do you do? One time we had a hurricane. So we had a hurricane and we had to get out of town now thankfully a year before that I decided that if this is going to be we used to compose all of the below boxes in Florida we used to do it ourselves because at first we did our boxes ourselves so we’re doing the logistic don’t technology doing everything ourselves, right? Well, the hats you can just put up flyers making making it work and we did amazing, by the way, but I figured you know I can do great but if there’s a hurricane, I’m not shipping anything for a couple of days. People are gonna hate me. Let’s get out of Florida, at least the fulfillment part. So we get out of Florida and we had a hurricane. And I said thank God we got out of here. Imagine Okay, so guess why there was a blizzard in a place where the hurricane was? No hurricane Florida, but we sent it to the north east. Blizzard shut down everything for couple days again. They were trashing us. Where’s my battery? Shut it down. It was a blizzard. I mean, it can control the weather, but it’s also they’re not wrong. So then, okay, we have to go to a place that has no blizzards have no natural disasters, what are you going to do? So it’s a stressful business. And when you get executives to sit down on an office, that managing bunch of stuff, and that just one more thing, they’re gonna, they’re gonna lose. Yeah, you gotta be all in. When you do it, you have to understand how to respond to the consumer. There is no protocol for companies how to respond so many, you have to understand customer service, you get all the elements
Scott D Clary 45:46
, you had no idea that it was going to be like this going in no idea.
Yosef Martin 45:49
I had no idea what I’m getting myself into the biggest challenge is what the first biggest challenge is when you get to save 20,000 members, because you learn that at first you buy the product, you go to brands, you have it on the shelf. So you can do it for next month. But all of a sudden, when you have 1020 times where you going is that how you start, you just go into it or No, no, not stores, you go to brands, connect them explain the concept. And so you go to small brands at first, because they’re receptive to say hello to you. And the other ones worry, you get out here. But then they go and they have like 500,000 units on the shelf. But when you get to 10 20,000, you have to start asking them to produce it for you. So you have to upfront at first the money because no one gives you, they would go in and production is eight months. So now you have to build your boxes eight months in advance. That means you have to do you have to anticipate how many you’re going to need every month, which you’re never going to be right? Too many not what not enough, all that. So you build that business this way. And then you sit them this is this is hard, because eventually you run every month without having any extra money on balance sheet, but you’re making money but it’s all in products for the next few months, and you have no problems. And then some problems didn’t make a sound product didn’t make it on time because there is a strike at ALA port. So it is a lot of moving parts that you have to manage. And it’s a stressful business. And just thinking this is what business is all about.
Scott D Clary 47:12
Just think about like, think about like when my CTO has to onboard more customers and he spins up another AWS server, that’s a little less stressful
Yosef Martin 47:22
it look, I had my my wife telling me just go back to the liquidation. Why are you doing this to yourself when we had one stressful day? And I told her, you know, this is way better. Let me let me continue this one, if anything gives me more motivation. Because I told myself good, it’s a stressful business. I want to see Sephora and Macy’s coming into that space. I said that before we get in, I said if they come into that space, they’ll fail. They’ll never be able to sustain that pressure that I do. That’s how I knew it’s better for me. I knew that there’s going to be one or two winners at the at the other side.
Scott D Clary 47:57
So okay, so one thing he brought up, which I thought was interesting, is that you had a ton of ton of problems finding the right help. So you you didn’t hire people too much later that you felt like you could like not the not like the general people running the business. But like the people that could see your vision and actually execute. So you’ve mentioned the before a couple maybe miss hires. I don’t know if you want to go into though it’s up to you, but the people that that you did find how did you find the good people? And how did you? How did you stay away from people that maybe missed the mark? So?
Yosef Martin 48:29
Well, a couple things. First, I hired a lot of young people from Miami, and someone else’s words, a friend of mine that used to work with us, he said you turn them into ninjas. Now, first of all, they’re great. They’re open minded, they want to learn and they’re excited. And you can see their transformation. The thing is, they are not molded into anything already by someone else. So they sit with you and they see that
Scott D Clary 48:56
a lot like even you go into the industry. You You always you always mentioned the your advantage that you knew nothing about the industry.
Yosef Martin 49:03
You use it as an advantage. Yeah, right. You can look at this as an as a downfall. But it can also be an advantage. But in terms of hiring well eventually, we needed to hire experienced people, because there’s only eventually you have to perish with people that have done things you haven’t done. And we had some great hires that obviously overcompensate for the bad hires. I think every business comes to a point like that, that the scaling of the business where you have to tear your organization from flat into theory, then you have to put layers, there’s two components to it that everyone has to understand. One is when you tear the organization, and people are not as efficient as the work window all we do in the room. It’s because they no longer understand what we’re really doing in this business and how where we’re heading and how we’re going to get there. So I had to create the I had to create the four pillars and the goal for the business. So no matter how many teams are gonna have, everyone’s gonna understand it had to be coherent, like the 10 Come in. We had, we had our four pillars, and it was clear, precise, everyone knew how to do it. And it really carried us all the way through the exit. So that’s one thing. So they all know where they’re going to have a goal oriented business. And I can literally give a semester about that. But the second part is hiring the right people, to your point, hiring the right people, listen, you’re going to make mistakes, you’re going to hire the wrong people. The question is not just it’s important, not just how to find the right people. It’s between you and your competitors, who’s going to retain the wrong people longer.
Scott D Clary 50:35
Those are the losers. Interesting perspective,
Yosef Martin 50:38
you need to be faster in letting the wrong people go. I was yet to be. Okay. I want to say this. Okay. I was never sorry about someone to let go. The only regret I had was not letting them go soon enough. That’s the That’s my regret. If you and then some of them were catastrophic. Some of them were just okay. Some of them were, but just okay. It’s not what you’re looking for. You’re not looking for just okay. You I rather have a smaller team, with with ninjas, versus another guy that, you know, no, it needs to be for the best. If you want to be a unicorn, you want a person that’s going to fit what you’re looking for. And it’s okay. To go in and be precise what you’re looking for.
Scott D Clary 51:26
How do you find that? That’s the question. Well, you said there was one person I can’t remember her name. The woman who took over as I don’t want I don’t want one that succeeded. Yeah, the one that Christie. Yeah. So how did you find her?
Yosef Martin 51:39
So listen, some they come to you eventually, right? At first, nobody wants to come to you, because nobody knows your company. So you have to make do with what you have. And you have to train your own people, you have to figure out things that you don’t know. Because you can find the people who know they don’t want to come to you work in a crappy place. And at first with small, nobody want to work with. You have to learn it yourself. Figure it out, then you don’t just go and expect someone to figure it out for you. If they don’t have never done this and you want it eventually was actually the best thing to happen because I had to learn so much. Eventually, I knew who’s the right person who’s not look, if I’m a mechanic, a car mechanic, and I want to hire you to my mechanic shop. I don’t know if you’re good or not, because I’m a mechanic. But if I’m not a technician, I’m not the mechanic How the hell am I gonna know? You have no idea? I have no idea. So you want to run a body shop or mechanic? Garage, you got to learn the job first, then you’re going to find better people because you’ll know who’s good and who’s not. Right. Same here. We meet my team, we had to learn everything in by the time we hired people were able to filter better than the other ones because we knew what we need. We knew who’s good and who’s not. We understood. So and it took us a while right? We needed to we needed to crack that shell herself was an easier but after you get uncomfortable, you’re fine. But again, that kept me thinking outside of the box that was created by the beauty industry. And when you bring in people in in order to be honest with you, like I tried first to bring in people from the beauty industry and I was rejected as as follow. What is your mission statement? What are you here to change in the world? Give me in seven words. Why does the world need your company? What’s your DNA? I don’t have all those questions. I just need you to help me get mega brands into my box. Can you do that? No. Before we do it, we need to go and look at the look and feel of your website. And there is no soul there is no listen, I don’t need you to be my creative director. I just need better products that’s going to sell my box. No but your website and let’s look. Let’s just not do it, then. Thank you. I know where I was. I knew exactly what’s important for my business. I can compromise on the look and feel of my website. I can compromise on the messaging for my employees and who am I because no one’s gonna care. I’m too small, I just want the right product. There was nothing else more important. And when you go to an industry that all they care about is that okay good on my competition, let them focus on what’s not important. Dig for, let them dig for for copper so I can find the gold. I just need to go I need you to give me copper. And eventually you you see the results. And eventually you find that all the time that was spent is to absolutely what’s important and urgent, nothing else. And when you do that, you learn you. You can screen those people better you understand how they think how they work and you ask them questions like I had when I was trying to hire a CMO. I had three questions because I was a marketing person. And I came from experience in that case, and I did not want a person that’s going to be just a general manager. That’s that guy. had a job somewhere as a CMO, and, and doesn’t really know the marketing, I’m a marketer that started everything from the ground up, but then scaled everything up. And I wanted to know, do you really know marketing? So I told them all, here’s, here’s how you interview a CMO you’re running a jewelry company, sir. Men and giving you $5,000 A month budget to go and promote your business. You got to be profitable, you don’t operate under that $5,000 You got to make money with this. Shoot, what do you do? Tell me after they tell you what to do with the $5,000. Okay, now your company scaled a little bit now your budget is 100? And
Scott D Clary 55:38
what’s the best answer that you’ve heard? Well,
Yosef Martin 55:40
the thing is, you got your if you are going? Well, the second one is now I’m giving you 100,000. What do you do? Now? I’m giving you a million, what do you do? Because if you if you give me the right answer for the 5000, that means you have grind in the beginning from the get go, you understand all the elements on the ground how to do it, then if you know that 100,000 That means you scaled a little bit, you might get stuck on a million that means you never really manage a large budget. And and I needed you to understand all that because at the end, we could have spent easily a million dollar or more a month. So it was it was that? No, I think the critical part where everyone felt everyone was the first one. They didn’t know what to do with 5000. You have a jewelry company? Well, I would hire an agency occupy the fuck out of my company, I do not want to hear you. I did not hire you to hire someone else. I can do it myself. Thank you very much Dory is there like I said, horrible. Horrible, then you’ll find if they knew marketing, if I go and I tell you build your own thing, do your own thing. Can you do it? Can you go in right now? Build? Here’s a website, here’s a couple of products to sell, put it on website, show me how you sell them? If you can do it, why would you think that you can go and work for my business? And no one was able to actually answer right. And I remember my partners, which they are amazing. And I think a big piece of who I am today was thanks to them. For me, Joe, you need to find a CMO and get to sell a business that has a CMO.
Scott D Clary 57:09
Before you go to the store. I need to know so the right answer the right answer. My answer to that would be like content marketing, like like, like content marketing.
Yosef Martin 57:18
I mean, I mean, my thing is organic first. But I mean, that’s my view. Because if you had your experience as a marketer for your business, you can tell me something I didn’t know about
Scott D Clary 57:28
is that I’ve always done organic social for everything to start it off on so
Yosef Martin 57:32
you you’ve done what I’ve done. Okay, you could have done something else. Yeah, that that be just fine. I’m not looking for my answer. I’m looking for urine or affiliates or fruit anything, right? You can say, well, I found that but hiring agency is not if you tell me hiring an agency or so on, if you told me I’m going to go and do paid, okay, you’re gonna do paid with the 5000 maybe, you know, paid so well. Tell me your tactics. Specifically, how are you going to do paid? Well, if you told me Well, we’re going to go and sell female jewelry. And if I’m going to go and take a bracelet, and I’m going to try to appeal to the female consumer, so I need to go. And so I said that my demographic is woman from that age to that age, I’m going to pay $4 a click. However, if I go and I basically put for general audience for whoever, I’m going to pay five cents a click, but what I’ll do is I’ll put a pink background, the algorithm automatically will associate the pink background with female and now I can hit only female consumer, but instead of fine paying $4 and ping, ah, you know what? The guy knows what he’s doing? Maybe he doesn’t know internet marketing, but maybe I can use that. Maybe Maybe he doesn’t have to work with influencers. But perhaps we can still work with that. So I needed to hear something. Let’s get creative that you’ve done this. I want to know that you actually made money, and it doesn’t have to be the way I would have made the money. So I do I do I don’t need you. I don’t need another McKinsey guy that came down not to say nothing gets McKinsey, which is just a generalist.
Scott D Clary 58:57
You need zero to one. You need people that operate from zero to one with no budget. Think about it, like bootstrapped. Yes. You have no money at all. Yeah. So anyway, there’s this cmo that you you said, your friend, your partner is needed to cmo
Yosef Martin 59:10
they told me Joel I basically said no, no, no, no, no. And they said we need a CMO we need to find any someone good and and then the thing was, and I don’t want to go too deep into it because there is more to the story. But but there were not wrong. We needed a CMO to sell to other companies because they didn’t want to say Joe is the business. You told me Joe no one’s gonna go and let you cash out on so much. The need you don’t care you have so they were absolutely right. But I told them every time they would come in with someone like fucking idiot, she’s, and I’m like that. I’m rough around the edges. Nobody has to like me all the time. But I was telling the truth. They’re not the right people in the I can find them. And they said, Are you sure that I am? 100%? Sure. Why do you think we’re making it like this? Because I’m the one doing the marketing. If they’re not as good as me or more. I don’t want them. I can keep doing it myself. My day is clear. I had all the time in the world. I was doing product and in marketing, and I had enough time, and I wasn’t sitting all day on marketing. Every time when there was a meeting I was it was a very tactical meeting. Oh, let’s let’s look at our Instagram feed. Let’s see, oh, I know why we How did we? Why do you think we got bad, bad engagement on this post and we have the team talking about this just just empowering the people and working together. That was the thing I was doing. But I would do it once a week and of time. So I said I don’t need I don’t need so much help in that regard. But ultimately, there is there is something to tell about how to hire people. But I think the 60% of that is too far the wrong people to let them go for. And I will say I was guilty of keeping some people longer. Because you know what you eventually get attached. And given that, oh, you know what, you have kids and they relocated? Let’s try more, let’s do it. It’s hard. But the better ones do better companies will be the one that just let you go sooner. If you’re not the right person for the job.
Scott D Clary 1:01:02
You think that you think the one of the one skills that a CEO a CEO should have is to be a sales or marketer first. And to understand sales and marketing? Do you think it’s one of the most useful skills a CEO can have?
Yosef Martin 1:01:16
I can tell you if it’s for everybody. But for me, it was absolutely
Scott D Clary 1:01:19
that’s one of the first things that I’m scared of, when it doesn’t matter if it’s a consumer product, or an enterprise product, the CEO can’t sell it, or can’t market it, then that’s a that’s a big red flag. Like I see. Like,
Yosef Martin 1:01:32
look at Elon Musk versus Ford. who’s the CEO for Ford again? I don’t remember exactly right. 100 year old company or so. Right? Elon Musk shows up all of a sudden, he’s how much value do you think comes from from him? Creating, putting his face out there? How much worth you imagine if Elon Musk is losing his Twitter account? What’s gonna happen to the stock?
Scott D Clary 1:01:56
It’s gonna it’s gonna crash. It’s when I
Yosef Martin 1:01:59
I mean, CEO CEO can absolutely I mean, it’s a sell job by itself, right? Yeah. People want to root for him for that. Now, obviously, he created a phenomenal product. Right? But still, he sells you sells, right? If you if he goes right now and say, Hey, we’re gonna go and put another round for Space X. If you want to be a partner, we do another round. If anybody wants, would you put your money into it? Just because it’s
Scott D Clary 1:02:20
in on a per site. That’s what Okay, so question before, I would talk about y’all in a second. Is there any do you want to go into more Boxy Charm stuff,
Yosef Martin 1:02:28
let’s get out of the box, because I’m sure that the guys already left the room and it’s only chicks we need to bring the by the guys back in Boardmaker because
Scott D Clary 1:02:36
I just want to take a second and thank the sponsor of today’s episode manscaped. Now manscaped is the leader in below the belt grooming and because you’re listening today, success story you’re gonna get 20% off plus free shipping with the code 20 success and manscaped.com but let me give you a little rundown of why manscaped is so awesome. And what you’re going to be getting so you’re getting the manscaped performance package 4.0 It has everything you need to prepare that summer body. In the package, you’re going to have the lawnmower 4.0 trimmer, the weed whacker ear and nose hair trimmer, you’re going to have the crop Reviver toner, you’re going to have the crop preserver which is under the belt deodorant, you’re going to have performance boxer briefs, and you’re going to have a travel bag to hold all of it now. There lawnmower 4.0 trimmer that is the thing they’re known for it features a cutting edge ceramic blade, this reduces grooming accidents, thanks to their advanced skin safe technology, they have a 7000 RPM motor, a new multifunction on off switch, they can engage a travel lock, they have an LED light on that you can take it anywhere because it’s all waterproof. So Beach, Lake shower, the razor goes anywhere. So if you want 20% off, that’s 20% off, plus free shipping on the performance package, you’re gonna go to manscape.com use the code 20 success, remember that is 20% off plus free shipping the performance package, all the stuff I just mentioned, go to manscaped.com and use the code 20 success. Okay, so you want to there’s two there’s two rabbit holes, we can go down. I think the Twitter one is interesting. And we can also go down YouTube two, those are two very relevant. So with Twitter any opinions on on what he’s doing with buying Twitter and trying to buy Twitter and the bid and the fact that it’s so there’s a lot now it’s just like arguments left, right and center, right? Because it’s a public traded company. People are saying Oh, like how can he have the audacity to just think you can buy it, then my argument has always been like, well, if it’s public, technically it’s always for sale. I think Jack Dorsey is the one who said that as well. Like so do you think that it’s a good thing or a bad thing that Elon is trying I
Yosef Martin 1:04:50
I’m I’m I’m a big believer in free speech. And I think Elon Musk does things not because he wants to make money up until now. I mean, he wanted to change Sting’s right at least after PayPal, at least Yeah, in after PayPal. He didn’t expect to actually make it in Tesla or SpaceX. But he thought it was important enough. And I think you’ve seen the, you’ve seen the the negative side of kind of like a control, media control. And I think he’s doing it for for that reason, I guess I guess a big example of that is to say, well, he’s he’s not taking himself too seriously when he goes to Vladimir Putin himself it if I when you leave Ukraine, and you’re just not taking himself too seriously, I
Scott D Clary 1:05:35
never take himself seriously exactly why I think people like them. Because that really is Chile’s laid back issue.
Yosef Martin 1:05:40
I think I think the biggest thing is when we look at, I’m not gonna go all take away but look at Netflix right now Netflix crashed, I think anyone that doesn’t know. So Netflix crashed three months ago, after the quarterly earning that they did good, actually, they, they lost because of one thing that their CFO said that we don’t know why we didn’t grow as fast as we can, that basically crushed the whole market, but I
Scott D Clary 1:06:01
thought they were down to under 1000 subscribers now, oh, you’re talking No, three
Yosef Martin 1:06:06
months ago, they just didn’t increase as much as they said they’re gonna increase, then their projection was to increase this time. 2.5 million. And now they actually went down 200,000, which is not allowed. But the biggest part was, they hit the ceiling. They hit the ceiling for member base. And when you invest in a company that at that time, the least
Scott D Clary 1:06:28
you think they hit the ceiling. I don’t think that’s why they were down.
Yosef Martin 1:06:31
Well, I mean, listen to hit the ceiling for them. To say that the space is three times bigger is foolish, it’s not true. The space is not three times. That’s it. Now 150 or so million members are that are paying for the streaming service. They have stiff competition coming from really strong competitors, you have Apple doing in streaming service. They have Hulu, Hulu, they have Amazon, they have Disney Amazon, right. And what happened is that at that time, there was no one else and they did a fantastic job. I think they changed TV as we see it today, right? They created their own TV shows exclusively to create stickiness for the platform. But now everyone else is doing that. And I don’t think it’s about the price that they’re increasing the people complain, I think the biggest mistake that they did was eventually will come the time that you’re going to stop growing in member base. And when that time comes, people are no longer going to look at your P E. Price for earnings. As as a fast growing company anymore. Now it’s going to have to drop to about one in 1012 P the P E ratio is you believe,
Scott D Clary 1:07:33
do you believe that the average person that’s investing in Netflix understands the TAM of streaming? Because I don’t think they I
Yosef Martin 1:07:38
believe that? That there’s a big percentage, because look at the fact that you have and we don’t know what is the percentage of institutional money going behind this? And they You bet they know it. They know. Yeah, for sure. And then you still have at least 50% of the other people I don’t know, a percentage of all the other ones that understand that. But then look, there is the herd the herd mentality, they all come they will come back. But the thing is, if you understand doing, doing a simple math, okay, they are no longer growing. Why is the PE so high? Why can I just put it on a more stable company that doesn’t go anywhere more like a PNG there’s there the slow growth like anybody else, like PNG, like j&j? Like, like closer to blue chip? Exactly. They go out. And that’s it, like you moved from that category. Now, where he’s going to be the P E ratio, it’s based on the market goes up and down right now. But because that happened to create a lot of panic, and there is that momentum with that overcorrection. The thing is looking at all this, and I think this is where the discussion is lacking right now on social media. What is the mistake that Netflix have made? And I can tell you in my mind, it comes from the CEO, where the CEO should have anticipate that and he needed to go and diversify to another Tam. total addressable market, that easier for him to get into. Because right now, all the make all the revenue is just from streaming. And you look at Amazon, when you look at when you look at Disney, when you look at all the minus Hulu, I think all of them are making multiple revenues from different streaming from different services. This is just one more time for them. And he did they needed to go into the same music. Streaming was the first one they should have gone into five bucks a month extra get music as well. How are you going to say no to that? Build up the algorithm so I can hear it better than my music and Spotify, like a piece of that market. Now it does. It’s going to create more stickiness. And it’s not defined only by the TAM for streaming service only. There is another market for you that you can grow. Second one and I think that is the biggest opportunity that they have missed and that’s lack of creativity. Compete with YouTube. Why YouTube? Very easy. Imagine if they go on to create their own social media platform YouTube style where you can go and start reviewing. There you go. You put your own reviews on movies and get Start when you go on Netflix, just next to the trailer, I can start seeing the top reviews by people. Imagine everyone is going to jump into that. I don’t want to break it all down, but it is easier for them easier for them than anybody else. It could have done this early enough. build their own celebrities, just like Tic Tac build. Amelia and all that Amazon’s
Scott D Clary 1:10:23
doing. Amazon has influencers now to
Yosef Martin 1:10:26
bam, I had no idea about that. This is what I should have done. They do
Scott D Clary 1:10:30
like they Amazon? I don’t know they’re doing it for the movies? No, it’s our first streaming. So live streaming shopping. So now they have Amazon’s
Yosef Martin 1:10:39
streaming shopping because they’re going after what Facebook is doing? Yeah, I think they should have done this for videos where you can create your own videos about anything, but it can start as reviewing videos, you can go and cut and paste do your own trailers, you can do your own, whatever it is, for them to do, it would have been easy, and people would want to do it. And then eventually, I mean, how do you drive people into it fairly easy. If you’re one of the top ones, you’re gonna go to the premiere next time you can be invited you can meet, so everyone’s gonna want to do it. They could have had, so they can enter the social media market, it gives you power, it gives you a lot more influence. And more revenue. Now you’re not long, you don’t die, this is your safety net, when you hit you, by the time you can reach your peak, you already have other revenue streams that are coming in building himself up. And that is, again an infrastructure for something else in the future. And that is the mistake they made they were more than $200 billion market cap, they crushed it and they had the cash they had opportunity and you need to do it when you don’t need to do it.
Scott D Clary 1:11:36
That’s that’s the that’s the golden piece of advice, you have to do it before you need to do it. You know, there’s other things they could have done to you didn’t even touch on the thing that they’re actually trying to do. So they’re going to introduce they’re thinking about producing add tears. So let’s see,
Yosef Martin 1:11:49
this is doing the same thing, right? This is for me, this is kind of like you haven’t stepped out of your own path. They’re still
Scott D Clary 1:11:55
they’re still stuck. So same time, more revenue than a different different, I
Yosef Martin 1:12:00
don’t even know if it’s gonna create more revenue, they just wanted to go in and go back for the churn. They look, if you’re in your own time, eventually you’re going to start eating, eating from your own pan, and it’s going to just get harder, you’re going to rethink everything you’re doing and everything else you needed to get out.
Scott D Clary 1:12:15
You could also do what about you? What about the thing that like prime does, Hulu does where you can rent like, like first releases, you can pay for them ahead of everyone else, you can also do that? Absolutely. That’s a slightly different term.
Yosef Martin 1:12:28
It sounds it’s definitely a different time that they should have done. But But overall, it’s the same time in that industry, but modification but all of all over what I’m what I’m trying to say is that while you’re losing your creativity, and it seems like that’s one of the things they’ve lost when you go and you said well, I’m going to make sure I’m going to find if you’re using your password. And then you know I spend a little bit less, but I’m going to show you commercial, I think that’s when you can see a finance driven mentality and not creative driven mentality. running the business. It’s more of a financier banker running this business instead of instead of a product person that want to create excitement, every
Scott D Clary 1:13:04
firm believer that finance people should never run businesses, every business that I’ve ever seen a finance person run and not a salesperson, a marketer or a product or a creative person, I always find that they screw the business up.
Yosef Martin 1:13:17
Well, I I don’t disagree. But what I will say is, look Jeff Bezos came from from finance world. And the thing is, he was able to step out of that mindset and he was able to be the financier when he needed to but he understood perhaps that this is not what it’s all about is not Finance Finance, you can find this is this is commodity you can find financiers everywhere, find great better than anybody, but you just need to be that person to find opportunity. And he was not a financier when he was doing this it was really looking at the experience for the members it was all about the consumer let’s go and ship it faster it was it was nothing like a financial so some people can get the finance experience or they can get access to opportunities through the finance position that they sit in it was in
Scott D Clary 1:14:04
I know a lot of people that have been put into CEO roles because they’d been in like, they’re like accountants at one point and they moved their way up and then but they’re usually
Yosef Martin 1:14:11
horrible. He’s a unicorn. Yeah, you mostly mostly when I see PE people coming in they their job is to be operation they want to run a business and you know, it’s okay in some cases but but it’s like they go many many of them go back to the comfort zone which is let me let me look at the core data. Let me go and cut the meat and in fire people they’re just not looking at everything the right way from the fat during the fight. Yeah. So that’s good. It’s interesting. Your English
Scott D Clary 1:14:43
cut the meat that’s new No, okay. So what do you think? Do you think Neff was gonna recover? Do you think we’re gonna diversify? And I also you know what the funny about the TAM. on Netflix you saw CNN plus with Oh yeah, so it was like 300 million that they invested or something like that. And that 10,000 subscribers. Oh my God, that’s a ceiling.
Yosef Martin 1:15:06
Right? Yeah, it’s definitely a tough competition to go into at first. Amazon didn’t do it all great. In the beginning of the series that they came up with a movie, they came up with a boring movie. Now I love the Lord of the Rings coming out everything you have everything people for, at first being Netflix was a big deal. Now, Netflix is not the only player in town. And now people can have options. So they open it up for competition. Listen, I think that Netflix has the opportunity to go and do it. But I think it’s a bit late for them to go and manage, manage everything else, right. They did declare what they’re going to do in coming into earning after earning after earning, they can get beat. I can see them dying. They’re still big last time I checked out $97 billion market cap. But I think it’s going to affect a lot of the quality of the movies, the the mistakes they made. And I think people give it to more dramatize it more than what it is I think they went political. And they went extreme left in the US
Scott D Clary 1:16:07
was actually tweeting about this. Musk Elon Musk was tweeting about it. So right before the shares right before the earnings report, and the shares dropped like 30 points. He actually tweeted, like Netflix screwed themselves by going to woke. And it was like the it was like 24 hours before?
Yosef Martin 1:16:21
Yeah, I mean, like I don’t get it why why would a public company in which I, any one of us can buy shares in both sides of the spectrum, go, go go pull politic any side, because you have an obligation for your shareholders, to make sure that you’re not going to create any reasons for people to dislike you being disliked by a group of people. It’s just not a favorable position. Now I get it if you have a plan B and is like, you know what? I’m going to grow the business, I’m going to go to a very dedicated consumer and this is going to be my strategy. But when you’re already there in the middle of things, and you have such a big company and you’re
Scott D Clary 1:16:59
agnostic, nobody, nobody looks at Netflix as a political company.
Yosef Martin 1:17:03
Now they do. Now they do they do and, and people are not. Now I don’t think though that that was really what what hurts them. Because I don’t think people say you know what, screw them. Let me cancel. Now they still wanted to see the shows, they still wanted to see all that. And I think they have a long way to go. I think they can still recover. Look. There’s the day two companies which I believe there during day to company, it’s a slow sinking ship.
Scott D Clary 1:17:28
What do you mean, what is that you don’t even know that term?
Yosef Martin 1:17:30
It’s not me again, it’s Bezos, he was explaining that one. And they do. They want it your first day in a company, if you everyday wake up, like it’s the first day that you launch a company. Those are the companies that thrives. The company, the day to mentality is the company that the hydro heydays, now during the second day, and the excitement is not there, it’s a slow, it’s kind of like a company that that doesn’t observe that that don’t want to go and accept the trend, they swim against the trend, because the trend has changed since what what back then used to work now you’re finding they’re swimming against the current, basically, instead of swimming with the current observing the accepting the change, and, and so on. So those are the but it can be a slow, slow death, it can be over years, you can see companies that takes them years, and I’m not telling you, they can’t get out of it. But they need either a mind shift that the general is going to have. And usually it’s under General and tapping in it’ll be the whole sea level underneath him because you hire like minded people that pretty much have that idea is sometimes you have to have routine change, to make make an impact in business in the right way. And then it goes through some tough times sometimes because the first change, you know, you’re not gonna see the results right away. But it’s kind of like a necessary evil, we’re antibiotic you’re gonna feel weak a little bit, but eventually it’s going to kill the disease.
Scott D Clary 1:18:50
What are you so I’m just it’s interesting, because now like, I know, you’re hyper focused on like, your hyper focus on investing, and you’re looking at different companies. And I’m actually curious as to what you think about different different companies that you’re interested in, in different trends, like just outside of YouTube, but just to like to bring it back like, you’re like recently fresh off the exit of your company to what is it like when you’ve worked so hard towards something, and then you sell it? And now you have cash in the bank? And like, explain what your day to day is like and what it feels like to decompress after that.
Yosef Martin 1:19:26
So, you know, the day when the wire came in, the disappointment is that you don’t feel anything you expect because you premed it, kind of like sit in your head and all that and you work through the due diligence part is like six to eight months and you’re very happy or very excited and all that you keep it secret. It’s only a small circle of people that knows about it and sitting down well excited. It’s my partner’s myself just talking about that. Then that my mom didn’t even know about that really scores now, even when we exit I never really told her anything. So come the day and get the cash. And I remember my banker said, Okay, we I sit in the account. I’m like, I don’t see it. I’m refreshing. refresh again. Nope. Let me log out. Let me log in. Yeah. Oh, there’s like, Oh, it’s here. And they said, Okay, wow. And rock. Yeah, it’s yours. Like, what do you feel now? What would you don’t I don’t know nothing. Maybe it’s because I already premeditated this too many times in my head. And, but I will say that comes a time, I think it took me about a year until actually process that. It took me a minute to process that and you start processing that worm, that first you get some concern, when you get the cash, it gives you a little anxiety, because you’re not used to hold something like this. And then then goes away. And then eventually comes the point where you, you start thinking, Okay, I want to make sure that I’m going to be doing right, the right moves. But you really don’t have to wake up and manage so many people. You don’t have to stress. It’s a different level. And I didn’t have this for 18 years, I had the first company into the second company, we No stop 18 years, just building something out of nothing. And suddenly an art it’s, it’s fine, you can just sit down and you really don’t have to worry about that every day. And I remember that one day, I sat down and I felt like whites hitting me can just sit down and joy. And I didn’t enjoy vacations for 18 years I couldn’t enjoy. I was able to go to McDonald’s. I was there for eight days. And I was free. I felt free for the first time because when you run a company, I was not the guy that could detached. I was 100% in I was forced, my wife was like, Hey, listen, we gotta go. And every time I would go with her anywhere, I felt like I’m suffering. Because my mind was in there. And I had to be on the phone the whole time. And you just cannot mentally disconnect. And it’s going on for 18 years. I don’t know if there is a total for that. But for the first time, I don’t
Scott D Clary 1:21:55
know probably is there probably is a toll on him. Like, I’m sure like if you didn’t do that for 18 years, like you’d be, I don’t know, maybe a few less right here, as I’m sure it does stuff in your body to like your heart like you’re like I’m sure there’s like,
Yosef Martin 1:22:07
I’m 72 years old right now. And you can see how age Nam skin. So I had I had that moment when I told myself I really am free now. And it took me more than a year to process that at least for me it was like that. But you know, going I remember driving Mykonos and just not worried about anything needing to check my phone all the time, I can just drive and there is no Armageddon situation that can happen in the business any given times. It’s just, it was it was amazing to go and fill that but I needed a moment I needed more. And I still I’m not gonna lie to you. I am still not 100% there. I don’t know how to really take a break. I don’t know how to do it yet. I feel like I need to do something that adrenaline is is very addicting. I need that adrenaline and look, my friends have been going to so many vacations all these times. I can’t. I can’t I want to do other stuff. I want to figure out some things. Let’s go and check this manufacturer. Let’s go and look at the data. My mind keeps running and I go to sleep at night I keep thinking about and I don’t know how to shut it off yet. But that one week that gave me that moment where I didn’t have to think about it. I’m just thinking about how we’re gonna go for the afternoon. Let’s jump into the pool. And it was son it was beautiful weather. It was great. I didn’t have that for 18 years. And I enjoyed this. Unlike all the other times where I hated that. And I was just looking at trying to come up with excuses to go back and kill the vacation. I was horrible. I was horrible. I couldn’t I mean to someone else that didn’t have to experience baptism. But while I was in boxing champion was the biggest vacation. I can look at this as I was I was on a vacation for 18 years. Instead of once a while I enjoyed every minute. I had a purpose a wake up, I before I went to sleep out I couldn’t I couldn’t wait for the morning to wake up for 18 years. I remember that one of our employees our name is Zara and she was very observant to she worked she was employee number seven for Boxy Charm all the way to the end. And she told me one day Mondays you need to see Joe Joe is something else Mondays he comes so excited okay guys standing on. You don’t think about this until someone else is more worried. And they tell you that and I started thinking about this like Monday could just couldn’t wait to be that would be the earliest orders was exciting. So yeah, it’s a process. It’s a mental process. You programmed in a certain way after
Scott D Clary 1:24:31
it is you feel like your life actually materially changes after?
Yosef Martin 1:24:35
No I don’t I don’t think so. I mean, no, look. So I separated my wife and I are still best friends but the thing is, so I bought a place in that perhaps couldn’t afford before. But that’s it like I don’t really care for cars. I don’t care for shoes, sunglasses, watches. I don’t. I don’t like boats. I like my feet in the ground. I do care for experiences. So I like going to puppy steak. I like going to Komodo I have I have friends that people like us sitting down talking I like to be intrigued intellectually and for that you don’t need money for that you really don’t need money you need you need to just have the friends around you need to be in the right place and I’m think I think I’m very fortunate to be in Florida it’s it’s the right place to be and you don’t really have to make anything difficult go right here to endless beautiful places to go out and bars and, and seek smart sources. Quality of life is through the roof through the roof and we went through a renaissance people like you coming down to Florida, you guys have transformed Florida prior to you guys coming down here. When I say you guys I’m talking COVID COVID refugees that came down to our, to Florida, so many friends that came down here. Before that many, many times I had to travel somewhere to find the right intellect to talk to them. I had my city or my previous city was actually an old time friends used to used to have a dating company before in the past, and he was living in Toronto, and every time he would come down here, we would always talk about SEO. And we would go and look let’s go to South Beach. I said okay, we would sit down in his room and we started talking to chatting every time about SEO and we would find ourselves not wanting to go to the club because I don’t need that noise. I need to hear you what you say. bouncing ideas. I didn’t have any of this in Florida. Now through clubhouse I was really into clubhouse during the COVID time. So many of my friends on clubhouse that I made decided they’re moving to Florida, and so many other people, their friends. And now you have a network of beautifully smart people coming down here. You’re not gonna get bored. Yeah, and yeah, so this is this is basically my my time. I’m a simple guy. But but that’s that’s the thing. I this is my best leisure time.
Scott D Clary 1:26:41
What’s the Okay, so what’s your what’s your passion now? Because I do know because I see you on I see you on Instagram, the story of of you going on, like live and like talking about like different stocks and like getting in and out of the market? And like everybody who follows you doesn’t care about that?
Yosef Martin 1:26:56
Yeah, most of my jomres were most of the followers are Chalmers or Chalmers growing genres. And, yeah, you’re not telling me what’s next month in a box? Why is he talking about money now you
Scott D Clary 1:27:05
can do whatever you want. I tell you, I’m telling you to do your own thing to build your own thing. We’re going to probably do a podcast, I don’t know. But you can now do like what your passions are. And you can you can sort of, so you talk a lot about like stocks and like so what what businesses interests you what what’s exciting for you that you focus on.
Yosef Martin 1:27:24
So you know, I gotta say this okay, I want to call myself a newbie until I die on this one because I’m literally die. Yeah, because I’m 40 some years old getting into the stock market. But, but the idea is that it’s funny, I could have put all the money in the stock market, like I did at the time, and then I pulled out and I start coming back in or I could have had the money going into a real estate investment trust and made a lot more money because anything that I did put over there was giving me already more than 50% 50% more than 50%
Scott D Clary 1:28:00
in a real estate trust. Yes. We have to talk after
Yosef Martin 1:28:03
- Yeah, yeah, and it’s just time I should have put my man I mean, how would I have known right? I mean, not even blaming myself for not buying cheap Oh no, or buying a Bitcoin or something like that early enough.
Scott D Clary 1:28:15
Trust I don’t ever like I look at real estate there’s obviously a huge investment opportunity but I don’t look at trust is the ability in real estate if you don’t
Yosef Martin 1:28:22
want to manage a headache if you don’t want the headache and you get a little bit less and you basically put the money out the reason I like to use the current real estate investment trusts the new ones that are coming out is the the previous ones were okay we’re gonna buy multiple buildings, whatever it is, here’s the money you put it in and then every Grant Cardone does. Yes, I don’t I’m not specialized in Grant Cardone stressed I’m going to bigger one more like a black Blackstone or a there’s not a one name is Harry’s or something. The reason I went over there, it’s because it’s a liquid trust, meaning you can pull your money after I think you have a year like up and then you can pull it every month when you want to because there is a pool of cash ready for anyone that wants to pull out and there’s always buyers and sellers coming in. And the idea is that it’s all it’s pretty much as liquid as putting the money in the bank, almost. But the returns actually put it more like a monthly CD, right? That you get nothing for it. Well, now you get a little bit more because of interest rate up. But
Scott D Clary 1:29:25
if I didn’t want to take it out, could you not just loan against that trust?
Yosef Martin 1:29:28
Perhaps you can. But But, but I mean, right now, I mean, you I think you can actually you’re getting 50%. But if you if you’re looking at previous rates, maybe it’s better, right? Because look, think about it. What do you do with the trust? What am I getting a trust, you have two components for the trust. One is the stock that sits in the trust, and then you have the dividend. So those particular interest to think every month. They distribute dividend from the rent. And so let’s just say that’s going to give you about 4% a year, right? Something like that. So Sometimes three point something, sometimes four point something depends sometimes use that cash to buy more or something more properties or something like that. And then you have depreciation. So the money that you get every month is not going to get you rich. But at least if you put $1 into it, you get, say four cents back every year. And you can live off of that, or you can use it for regular expenses, but it’s completely deductible because it’s real estate. The other part is actually, you’re going to expose yourself to capital gain if you sell out, but it’s there, just like you sell any other building. It’s there at least. So it’s comfortable with just a phone call, and you get your money in. And that’s it. And you’re letting you know, you can take it out. And you can do it also on many other options. Now the risk is obviously that the market can turn. But I mean, do you want to tell me that it’s it’s as risky or more risky than the stock market? Now there’s that. So it’s a safe investment. And I mean, I’ll be happy with 12% a year I think this year was a crazy year for real estate. That’s why it went up so much. Yeah, but even if you give me 12% serious, it’s not bad. What the hell 12% Without doing nothing,
Scott D Clary 1:31:07
you know what you get yet. So that’s the thing is that you’re not doing anything for that 12%. Because if you do go into real estate, and you you sell a building, if you don’t have to pay capital gains on that, if you reinvest it in more real estate,
Yosef Martin 1:31:21
of course. So of course, but but the thing is, do you mean I’m not saying I’m not getting into real estate as well, this is you put some into everything right.
Scott D Clary 1:31:31
So what’s your what’s your what’s your mix? Like? What’s your portfolio mix?
Yosef Martin 1:31:34
I don’t want to break it down too much. I mean, I’ve a little bit in private companies and I have in
Scott D Clary 1:31:38
private companies. We don’t need percentage to private companies real estate. Yeah. Traditional stocks. You do crypto a little bit. Yeah. A little bit. Okay. Not like a significant amount, though. Okay, what are the companies that you that you actually look
Yosef Martin 1:31:51
at? I mentioned one called Z, Z, im The reason I am gonna bring it up. And I’m not telling you buy anything with that. We’re just something for you to look at. The P E ratio is below 2%. Below two to two. So it’s, it’s rare. So when I started this, that doesn’t make sense. And then they distribute crazy dividends. Now it’s all about the stock price. It’s actually really down right now. I’m negative on my stock. But I actually got this long, longer term for the next two years. Because it’s it’s a cargo ship companies. It’s in Israel. It’s been there, since I remember it way before it was born. Not going anywhere. They’re just new in the stock market and supply chain right now. I mean, they’re the ones making all the money the ships, right. And you can really build ships that quickly to offset that. How many years it takes to build a boat enough for a tango? Yeah, you get two good years, right. And I’m buying it. It’s a small company, it’s only $8 billion market cap. And I think right now the lowest in the last six months. But the point for me was they’re distributing high dividend crazy, crazy high. So we put $1 you get every year, I think 15 $16 Back in data recorder, but then I think next significant, very, yeah, it’s very high. So I was
Scott D Clary 1:33:14
like, like, you’re, you’re a business leader, like you’ve you built businesses. So do you go and you look at the strategy,
Yosef Martin 1:33:21
and they actually distributed. They have distributed more dividend. I think March they gave $17 for each one that holds a share. And that’s a quarter that
Scott D Clary 1:33:31
was the propping up their stock price. So the way they’re propping up the stock price by
Yosef Martin 1:33:36
a stock price blocked right after that. Because people, people who sold the stock right before are still eligible for the dividend. So they said okay, I’m gonna sell the stock because it’s high, I’m gonna get out and the stock dropped, it was 85 and now it’s 55 or something like that. And I got it a little bit higher than what it is now. But the point for me is it’s a it’s a dividend play. For the next 24 months, I don’t care about the movements in the last 3040 days. I care more about the next two years I know that supply chain is not going to be resolved in the next two years especially now China like down the people against it says it’s not a bad thing. Look, being into that space where we had to pay $4,000 to ship a container from China to California, four grand now it’s 16 grand or so. That right? So they’re turning it’s a casino they’re making money like casino so that’s why I believed it would be a smart move to put it out there and then have to worry about the fluctuation like I said it’s a small company Yeah. So expect that to be much more volatile. But ultimately they’re too profitable not to put something some money
Scott D Clary 1:34:45
I’ve always thought that like when I like I like go on forums and stuff like that and like like I look at look at the people that are like you know, that make like millions of dollars in investment and I’m just like a minor investor like like insignificant but I always look at like opportunities that are outside like North America. So I also think that’s really interesting that you wanted to Israel like I’ve looked into Asia companies like AIPAC companies as
Yosef Martin 1:35:06
well. It’s actually in America because it’s traded over here. I was not even on a foreign stock exchange, no, me to NASDAQ, NASDAQ or some I don’t know, I don’t know, mulberry to to, you know, talking about Latin America though. The question when people ask me about launching a business over here and you ask yourself, what do you do in America, everything is saturated everything you want to do any consumer good product, probably the rock already launched a company for that. Or Logan Paul and you have to compete with giants, right? Everything is tougher. What do you do? And I get out of that fun. Get out of America do the same thing. But do it in Colombia, do it in Mexico during China. Do it elsewhere where you don’t have those monsters to compete with?
Scott D Clary 1:35:51
There’s there’s a family. Have you ever heard of this family that they took Pinterest and they launched it in Germany? Three brother?
Yosef Martin 1:35:57
Oh, yes. Yes. Yes. Interest you’re talking about?
Scott D Clary 1:36:00
I’m going to find their name.
Yosef Martin 1:36:01
Are you talking about rocket? Rocket? The one that launched Glossybox. I’m going to I can’t remember two brothers. They also sold something similar to not Pinterest you talking about? The two brothers? Two brothers think it’s two brothers that
Scott D Clary 1:36:19
now that I thought it was three the SAM were brothers. Yeah, German brothers all over mark and Alexander
Yosef Martin 1:36:25
did the lamps Glossybox. I’m looking at what
Scott D Clary 1:36:27
they launched. What did they launch they the brothers are facing disapproval. People were not happy with them. They launched clones in Guangzhou, Germany, China, Russia, Brazil. But I don’t know what they launched clones that maybe it was Glossybox the ideological
Yosef Martin 1:36:48
ones because they saw Birchbox. And they said, Well, it’s the same glassy box. And they went to like 20 different countries.
Scott D Clary 1:36:55
And they’re billionaires now. Yeah, yeah. Yeah.
Yosef Martin 1:36:57
So you do it outside, you do something you see the proof of concept in America and you modify it to the local markets outside of the US.
Scott D Clary 1:37:03
That’s a smart, it’s a smart business play, too.
Yosef Martin 1:37:06
It’s very simple. It just, again, we’re in a box, right? When the United States bucks, get the hell out of your box. It’s competitive over here, check. So if you have multiple lanes, you can drive on the 95. Yeah, there’s one that’s all jammed and the other ones are free. Just get on the freeway? What
Scott D Clary 1:37:22
do you what would you start? What would you start if you’re gonna start another company? And I asked that knowing full well that at some point in your life, you’re gonna do something else?
Yosef Martin 1:37:29
Yeah. So I mean, Ben for few years to touch anything building or care to go into the beauty I need, I need to modify myself, I can tell you specifically what I’m gonna get into. But ultimately, the the category that I want to go into, I would like to see a product in which I can go in and make a change, meaning the modification for the current product, and make sure that the product is going to be a little bit better, perhaps can be a service, it’s not, it’s going to be better enough to go and get people excited and talk about that.
Scott D Clary 1:38:03
Do you like blue ocean? Which one blue ocean like category creation? Like?
Yosef Martin 1:38:07
Yeah, well, obviously, that was my analogy with weed lanes, right? Yeah, jammed in? Absolutely. I think if you can get that look, you can warm up your brand outside of the US and then bring it over. Right? You can come in when you already have the company outside. It’s funny when you see companies launching in us then going international they struggle companies that go international coming to the US they don’t have to always struggle to actually do well. Because the just something that I keep seeing again and again and again. If I had to crack the code, and I had to pick a country I would go to China right away huge market and they are as advanced when it comes down to social media and shipments infrastructure delivery. Very very easy to control that Latin America a bit challenging in certain countries. Some are easier than other but I mean if you go to Mexico Mexico has some issue in terms of adoption to pay online. You go to Brazil hard cash can get the money out you can get products that wasn’t produced over there. The I said the labor laws of the day are horrible, it’s worse than then in France, you hire someone you can never fire them it’s it’s very hard so you don’t get that in Asia. You go to one country you go to say the Philippines Boom 100 million people no problem everyone uses the internet because brick and mortar is in scarce over there. So I saw it on I mean, people used to get back some of it or somehow these to ship it from from the US all the way to the Philippines because they couldn’t really get makeup unless it’s online. And that’s 100 million people. And most people don’t even go there because the 770 100 Islands over there and go figure what to do, which is how All right. So have the infrastructure in Malaysia. 100 million here 100 million. Let’s go. And now for me to understand how, okay, Tagalog, I’ll take some courses. I’ll speak to Gallo tomorrow if I have to. And then let me go in and adapt to that consumer, see how they think it’s enough people to go and pay attention to sound a small market. And it’s open, you can do it, everyone. So look at the right markets and then go from there. That’s it’s not it’s not, it’s not that hard. selling online is really not that hard. You can go in through Singapore start dispatching products to Thailand, to the Philippines to multiple countries through a warehouse hub over there.
Scott D Clary 1:40:44
I mean, the only thing that that I think like stops entrepreneurs is that the whole, like, all of that sounds great. But when you’re starting something for the first time, it’s like the thought of even doing it successfully in the US for an American.
Yosef Martin 1:40:58
So that’s when you’re doing for if you do something first time, do a $5 million business or is that I mean, if you would billion dollar business, you want to have different advantages. When you come in, you want to don’t don’t. So depends on what stage you are, right? If you
Scott D Clary 1:41:14
what I wanted to do, is I want to I want to, we’ll do other shows at about I want to like finish this one off, because we’re hitting almost late, we’re gonna hit the two hour mark soon. So what I want to do is I want to, like just draw some insight out of you, for entrepreneurs, like starting off like early stage entrepreneurs, and like teachable moments. And we’ve gone through a lot, but I want like, summarize and like and like end the show with that. Because I think that will be very useful, too. So a lot of the people candidly, a lot of people listen to the show or not at the level that you’re at. So a lot of people that are not trying to figure out how to build a billion dollar business trying to figure out how to build a five or $10 million business, that’s really the goal. I don’t think they want to just build themselves a job and make a million dollars a year, they want to build something that you know, 10 million good, yeah. gratulations. So if you were if you’re mentoring a first time entrepreneur, what would be the things that you want to you want to drill into their head, the most important things?
Yosef Martin 1:42:08
Oh, man, it’s kind of hard to see there’s got a
Scott D Clary 1:42:11
billion different potential opportunities, but somebody comes to you.
Yosef Martin 1:42:14
I mean, I like to talk about marketing. First. They it’s very hard to find good marketers to work for you near impossible, because the good ones don’t work for you. So you have to be the marketer. You have to learn marketing, because good online marketing is like back in the day, location, location, location. If if I go and I get the right location to open a store, doesn’t really matter if it’s clothing store, if it’s I know selling bananas, I’m in the right location, I’m going to, I’ll be okay. So learn how to market yourself, then from there for that make it make it easier to go and start with that because that’s a skill set. I can go and tell you that anyone can make the right decisions when the right leaders of the organizations that the the whole mindset of how to make the right decisions, it’s probably hard to teach how to teach. It may it comes down to the way you’re wired. But assuming you have that in you, if you also get the skill set of marketing. Now you’re you have an advantage and I think it’s also going to give you a lot more motivation to start a business. A lot more motivation because knowing how he here is I’m giving you a store over here in a busiest street. Go figure out what to sell over there. It’s going to work you have a busy street, same thing, learn how to blow yourself up you just need the traffic the traffic you can zigzag after what product change the product, figure out what the product is. So that would be also a motivation level for the for the member that’s that was something that helped me so I figure if you understand the marketing, you already have a big piece of that.