Terry Williamson's Proximity to Power EXPOSED

Summary

In this conversation, Jon Stoddard shares his entrepreneurial journey, discussing the challenges and rewards of building and selling businesses. He reflects on the importance of identity in entrepreneurship, especially after retirement, and emphasizes the need for passion and purpose in business. Stoddard also explores the concept of strategic consolidation in business, particularly in the context of Amazon FBA, and how aligning business goals with personal values can lead to fulfillment. In this conversation, Jon Stoddard discusses various strategies for succeeding in the Amazon marketplace, particularly focusing on the importance of geographic market strategies, the nuances of business acquisitions, and the significance of community building and influencer partnerships. He emphasizes the need for specialization in product offerings, particularly in the dog product niche, and shares insights on exit strategies and funding approaches for business growth. The discussion highlights the shift from traditional paid advertising to building a loyal customer base through community engagement and storytelling.

Takeaways

Bigger companies can lead to less operational involvement.
Retirement can lead to an identity crisis for entrepreneurs.
Setting clear financial goals can drive business success.
Fulfillment in business comes from passion, not just profit.
Building a brand with a charitable component can enhance its value.
Networking and being in the right place can create business opportunities.
Finding your zone of genius is crucial for business satisfaction.
Consolidation strategies should focus on brand coherence.
Authenticity in charitable efforts resonates with consumers.
Strategic acquisitions can create a more valuable business model. Understanding geographic market strategies is crucial for product success.
Amazon ranking is influenced by local buying habits.
Specialization in a niche can provide a competitive advantage.
Building a community is essential for driving traffic and sales.
Influencer partnerships can enhance brand storytelling and reach.
Exit strategies should align with long-term business goals.
Relationships are key in the acquisition process.
Creative financing solutions can facilitate business growth.
Community engagement is vital for sustainable success.
The best way to transfer wealth is through an ESOP.

Watch the Interview Here: 

Transcript:

Jon Stoddard (00:00.46)
love the fact that you're doing podcasts with just epically guys. I've done a couple outside the LinkedIn. It's interesting. knew a guy, by the way, I started recording just fine. absolutely. A guy I've known for almost 20 years. used to do it as own companies now doing cannabis with his son and yeah.

You know, he's, went up to the gyrations. He started up buying companies, went public and a lot of capital, a lot of interest and using that, stock as currency and bought a lot of companies. And then boom, it went back down that. he had to re contract and sell some stuff off and it didn't integrate a lot of stuff. Didn't integrate to his business as he, as he opened it. Now he's doing it. It just seems like he's doing a lot of it by himself and it's a lot harder.

Well, it is a lot harder, but I mean, you do get to pick your own flavor. And I had kind of a, not kind of a similar experience, you know, founded a company, grew it national company, sold it to a private equity firm, and then sat on a board for 10 years with a couple of billionaires and watched how they just built this kind of Bohemoth thing. And I was like, I thought that would be fun.

I thought it would be fun going to board meetings and listening to the list of acquisitions. And, but actually after a while, it wasn't, it was, it became more of a, less of an operational thing and more of just kind of moving business chips around. So, so I did that for a while. and then I like the story you just said, I'm like, I really liked the operations. I really like.

the beginning part of the business. And I'll tell you about what I'm up to now. Yeah, yeah. Yeah, the assembly piece. And then when it gets really big and bureaucratic, then it's just board meetings all the time. I kind of lose interest. So I totally get what your friend said, bigger is not better.

Jon Stoddard (02:15.682)
more money, more people at the table. Yeah. Well, I got a question for you about that. Now you sit on this board, whether it's a phone call or you go to face to face. mean, did you just listen most of the time or did they say, Hey, it really, it it really was that it's a, it's a company called KPA. The site's KPA online for anybody who wants to go take a look at it. And it was compliance consulting in the automotive industry, which is like, well, how, how fun can that be? Well, not fun, but very lucrative.

because this was the 90s when really the environment became very popular to talk about and saving the environment. And there were all these safety regulations that came out. So my company just exploded. We went from California only to national. And it was like super kind of cool, just growing and picking up thousands of clients and putting offices in everywhere. But like I was involved with all of that.

And then I sold the thing in 2004, just to date myself a little bit, but because I'd done so well, still got to keep a lot of the stock. So I ended up the third largest shareholder when I thought it was selling and leaving. The two guys that came in, it was just a different way of doing business where like, I would like get an endorsement in a new state, put an office in, hire staff, bring in marketing.

Scalda, HQ, they would just come in and go, we should be more in software. Let's get an HR software company. And I was like, huh? How does that relate to compliance consulting for car dealers? And lo and behold, we don't own a software company doing HR software. Well, we should build their websites. What does this have to do with? And again, there was no synergy.

and all that was it just The only synergy is that it's the same customer and they got a bigger checkbook to spend money in other places. So if you're already in there and you're doing compliance consulting for car dealers, when you come in and you go, hey, you need a website? Yeah, yeah, we need a website. we got that too. And you know, who's right or who's wrong? Sold again in 2014.

Jon Stoddard (04:39.342)
and then just recently sold again to Providence Group for multi nine figures. wow. Millionaires they made out with tons of money. Guys like me did great. And the company is thriving now. And if you go take a look, even today, it's called the Vera now. And like, yeah. And then the software part of that, I'm like, well, that was a deal years ago. So who's right? Who's wrong?

Yeah. It's my point is that there's just so many different ways of doing business and scaling and the trick, my trick has been to be do the version that makes me happiest. Well, how, you know, it's a part of negative art. How do you get into something you think it's kind of fun? And then all of a sudden, you know, it's not, I delete that from my

Well, I think, I think first of all is always have a goal what you're playing to like, you know, for me, when it was, when it was, I was young, was retired by 40 and I saw the website. Yeah. Very goal driven retired by 40. And why? Because like that seemed like a Hollywood movie and it seemed hard, but doable. And then like, from an ego standpoint,

But then to go, you have to make enough money to retire by four. mean, anybody can retire by 40, just move to Africa. Be an ex-pat. It's simple. But what I was like, no, no, I want a house on the ocean in Del Mar. And I got one in the house in Florida. I want a Bentley and this whole thing. I mean, like, well, how much does that cost? And so you pick a number and then like that becomes your obsession.

And they're like, I don't care if it sucks. You know, I don't, it's supposed to suck. I'm supposed to hate this. And so when I'm in Wisconsin and it's in the middle of winter and I'm freezing my ass off because I'm from California and I'm like, I, it sucks so bad. love it. I'm getting so close. And then lo and behold, I retired at 39 and a half. And I'm like, okay, I did it. Now where's the victory parade, man, unless you're Tom Brady went in Superbowl number seven.

Jon Stoddard (06:59.042)
There's no victory parade. You simply sit there in your living room and go, well, that kind of sucks. And the next thing you know is like, you don't have friends who played at the next level because all your friends you made on the way up. Yeah. I've talked to your ass anymore because like you're not one of them. You're sitting around with all this money.

Yeah, you get on a point that think like Warren Buffett and Charles Hanger are going to do this till they die is because they love doing it. They're working exactly what they love to do. Well, I think it's even bigger is that, you know, one of man's greatest driving courses is to live consistent with their identity, right? Like you got a you got a hat on right now. It looks like a cobra eating a baseball. Diamondbacks. Diamondbacks.

So you identify as a Diamondbacks fan. Now there's probably six or seven things in your life that define 90 % of your personality. Like I'm looking at 600 books behind you and a Diamondbacks thing and I'm like, this dude loves baseball and reading. Well, what if all of a sudden you couldn't, the Diamondbacks, you couldn't go to any more games and you couldn't read? Then you'd sit there and go, well, crap, I didn't even know that, but that was part of my identity.

And this is the struggle that entrepreneurs have is that their excuse becomes, well, I was this way for that reason, but then they really became that way. So when you retire early and you go, hold on. I used to have 200 employees, 20 offices, and I was very important. And now I've got all this money and I sit in my living room and nobody gives a shit. Even the people who used to work for me won't answer my emails because I'm not the boss anymore.

You're irrelevant. Yeah. And that's what Warren Buffett has faced with. I haven't met one person who hasn't had this struggle. It's just like, choose your identity. It will be created by the actions that you make. Yeah. So this 39, by the way, welcome to the top of the entrepreneur's are here with Terry Williamson. He's early.

Jon Stoddard (09:17.322)
Epic member and he's behind the scenes. If you watch any of the trainings, he's in there in the legs. Yeah. Yes. There's no doubt. I'm the guy. Yeah. So what do you do? What did you, how did you reimage yourself after this 39? I retired and, yeah. well, I sat on boards for about six years. and then at 45, I'm like, I'm pretty sure I'm brain dead already.

But in what little thoughts I have, original thoughts I have left, I need to go back someplace that re-engages my brain. So I went back to business school. Yeah, I saw that USC, right? Yeah, I went to University of California, San Diego. San Diego, okay. I was living in Del Mar, a beautiful, beautiful area. And they had this new business school that entrepreneurs funded like Irwin Jacobs from Qualcomm and Ernest Wigg. And like just billionaires.

They threw in like a hundred million dollars and built this crazy, amazing campus. And I was like in the fourth class ever. We had 52 students in my class and it's just a school for entrepreneurs. So I went right back in. I got these 27, 28, 33, I'm 45 years old. People think I'm there to teach the class, but it was the most invigorating thing because it reminded me of when I, when I was younger.

And I was like, I remember when I used to think about building businesses and then I'd go do some stuff, not like get the funding, build the team, the, know, vet the idea. They just like think of stuff and go do it. And so I'm sitting there in my second year. I'm like, you know what? I'm gonna graduate and I don't know what I'm gonna do. So I took a social media class and like, I hadn't sent a text when I went there in 2009.

My first text was in 2010, not internet, not face, a text on your phone. But my last year in the spring of 2011, I said, you know what? I'm gonna start a social media marketing firm. Screw it. I don't even know what social media is, but the world needs it. So I did right there in school and I was doing multiple seven figures before I graduated.

Jon Stoddard (11:37.496)
My problem was I didn't know a thing about social media. Tell me how you did that because most of the times, you if you go, you want a hungry customer, that's your best pass. Right. Right. So you heard of proximity is power. So I was the only student who was in tech post angels, one the largest angel investing networks in the world. Gotcha. Yes. I happened to be at that point just

on the board, like the junior guy who vetted a lot of deals and did follow up stuff. But here I am with all these business guys. And so I would call up and say, hey Pete, you ever heard of the social media thing? Yeah, you need it. I'm gonna send you over a contract. we've done deals together, right? I'm investing in companies with them. So next thing you know, I mean, like one of my first deals, a true story.

was the University of California, San Diego. Why? Cause I walked in and talked to that person and I'm like, Terry, I had just sponsored some big pitch competition. Like they don't normally have students sponsoring like competitions and stuff. And I, so like, I would have a pretty high visibility guy. And I'm like, I'm doing this social media marketing thing. That's great. Sign us up. So.

This happens sometimes in business where you get a ton of, you get a deal simply because you were in the right place at the right time and there was a degree of trust. You may or may not be qualified, but it happens all the time. You gotta keep your eyes open for that too. mean, really. Well, you gotta be careful that you want that. Because like when I, I mean, it's no secret Roland's my partner.

right, so are one of my partners. So in early Epic, I would do Epic Elite and like people would come and say, how about half my company? I'd be like, okay. And so it was very easy to do deals, but then I ended up with deals that like, how am gonna add value here? How am I gonna do anything great? own 14 companies.

Jon Stoddard (14:03.33)
These are all people who trusted me to be able to help them. One, I'm not sure I can and not too much sure I want to. So, so it's very careful. Don't, you know, don't, and I didn't get my advice to people listening, especially Epic guys listening right now is like, it's passion, skillset, demand. Your zone of genius is at the middle of that passion, skillset, demand. Look for deals where there's a piece of that.

You're passionate about it. You have a skillset that supports it. And then there's demand for it. So now I only look at deals and I look at a lot of deals, but I only take deals or are interested in deals that are at the focal point of those three points. Now, those I get excited about. Those I'm like, man, I hope I get it. I was putting deals together that I hope I didn't get.

Like, nah, well, you want to give me 30, I want 40. And they go, okay, 40. I'm like, damn. And so that's what I think. And I in a very luxurious position, John, and that like at 39, I figured out that having a bunch of money didn't make me happy. That actually being fulfilled makes me happy. So when Roland and I decided to do some stuff together, we named our company.

Fulfill your ventures. Yeah. I didn't know Roland was a partner in that. That's cool. It's he plus me. And we're just like Roland. We're only doing deals that make us happy, that make a difference. not just to get as many as that we would like make a difference. mean social good or fake make you feel good. it, well, I'll give you a, instance, we're doing a, a FBA role, Amazon FBA roll up.

lot different than most portfolio. There's, there's a hundred portfolio companies doing the same thing. Ours is around a niche. So we're doing it in the dog space. So the company is called we go doggo.dog. I thought I'd break the cycle on.com. It's.dog. And that the, the lead piece of that is charity based. So the first thing we went out and said is who is a massive charity that we can associate ourselves with?

Jon Stoddard (16:27.416)
where we can give. So like literally today, which is April 24th, 2021, forgive me killing your evergreen portion of your podcast, but just for reference. we're sponsoring the pay it forward campaign for bestfriends.org. So we're paying the adoption fee for $2,000 in shelters across America. And for me, it's like, wow, one, we're building this really great

hyper niche brand around dogs, doing all these acquisitions around it. But like, we're giving away a ton of the money. So if you can build business and save dogs, my wife is full-time philanthropist. She's built in, it's called the Sunshine Factory here in Montana across the street. It's a Ronald McDonald house. There's sick little kids and their families and these kids get life flighted in and she...

built in a house firm. know, families stay there for months. So what my point is is that it's easy to keep the passion part of the Triad of Life, passion, skill set, demand, if it's something you really care about. Yeah, it's like two things. My daughter right now really wants a new puppy. Yeah.

We've got one dog already and it's my wife is saying no, cause she has to take care of it. I go, no, wait a minute. I'm the one that walks the dog, runs the dog. I feed the dog and your son cleans up the poop. Well, we got, we got three dogs. One of them walks on its front legs and wears a diaper, had a spine injury as most of his life. The other one is blind and the other one is a puppy mill mama. And so.

it's easy to have a dog brand and be doing a roll-up around something I already love. Yeah. And is that, do you see a payoff in a sort of way? And I'll give you an example. you're familiar with Mr. Beast, guy in the video. Yeah. So the more money he spends and gives away, the more subscribers he gets. Yes. That's a thousand percent.

Jon Stoddard (18:50.766)
There are several, in fact, in the dog space, there are several big brands, big, big brands that started as charity only. so they started as nothing, literally we're a charity and they built it into multi eight and nine figure businesses because that becomes their identity. So absolutely yes, that's one of our, it's great for building the brand. Like that gives us brand value.

Like one of the things we do is really big Facebook groups. So yeah, but our Facebook groups, just talk about, we don't sell stuff. We have a half a million people in great Facebook groups. We don't sell anything. There's never an offer dropped in the group. It's just building goodwill. And now when we go in there and we have something that they might be, like we just did a...

of a report on dog anxiety. Like humans are going back to work. There's record numbers of dogs in houses. The dogs are anxious, right? How do you help an anxious dog? When you leave, they've seen you home every day for, in your pajamas for 500 days in a row. And now you're gone all day. Yeah, I'm not going anywhere, but my dog follows me around the house. 100%. So there's separation anxiety. So we prepare a report.

We put it out to a half a million people and lo and behold, tens of thousands of them want it. Now we exchange an email address for that and that can take them over to the paid part of our business. But it started as a pure gift and we didn't ask or force them. There's no, hey, today only 50 % off this because you're a Facebook group member. So those two pieces fit together. And I would argue that in just about any business,

If you have a charity that's actually related to the business, that's great. But even, even if you don't having a charitable component, and I don't mean, mean 1 % of profits, I mean, and something visible and it's not even, it's not even like holding up a check. It's like, what did you do with that? Yeah. You know that, have you seen those commercials, those sock guys companies? said, you know, the, the number one request of

Jon Stoddard (21:14.414)
clothes donation is socks so every sock pair they sell they give away a sock to the yeah i'm saying it's a business model for sure charity is a business model but people also understand when it's authentic versus self-serving yeah trying to duplicate you know tom shoes or something i get well do me a favor set up your 501c3 audit your financials and release them

And if you can show that you are in fact giving away millions of dollars, now people will believe you. Otherwise it's just some BS version. What was first? you, the Facebook group, did you buy that or the Amazon? We do all, first of all, all of it at one time. Again, we have the resources and so, you know, we have the ability to scale businesses really quickly and

Gosh, I think we've added 29 employees in the last 60 days or so, put an office in China. So we did it all as a coordinated strategy. So you're talking about a nine figure business right now. Well, that's, yeah, that's what we're trying to, what we're trying to do is because there's this whole Amazon FBA consolidation. We're taking advantage of the ridiculous multiples there by spinning something up very quickly.

that's different than the hundred other guys doing it, doing the consolidation. The other hundred guys are simply buying any and every private seller brand they can get to combine it together in a portfolio model to either go public or to sell to a bigger group or something. I just think that the actual way to do it is to actually build a brand through consolidation.

And I'll give you a quick, for instance, on waste management years ago. There was no company called waste management. In a year, they bought 150 garbage companies around the country. They put them all together. It's called waste management. But they all had garbage and that was what they would come consistent with them. Wasn't that Wayne Huizinga too? Yeah, that's him. And then he went on to do the same with AutoNation. So AutoNation was a client of ours.

Jon Stoddard (23:38.006)
ships, he simply bought them all put them all together. It's auto nation the world the nation's largest auto chain. So my point was when it came when it comes time to do consolidation in markets, private equity guys come in, and they're agnostic to the business. They just want the revenue, right? And they want to combine that together. They're like, we'll buy potato chip company, somebody who does oranges, somebody who makes cars and somebody who does blue jeans.

and we'll put them all together as centralized management, but the EBITDA we create will give us leveraged returns. I just think it's a faulty strategy. I like building a kind of a core brand and then having acquisitions around that because there's an accretive value for doing the same thing at a bigger scale. And you can also exit not going public or...

to some other private equity funds, you can exit by selling it to actual businesses who would like to spare a million customers. Yeah. I got a question. If you're buying an FBA business, it's doing 5 million, another one doing 10, it's unrelated. Is there a software that could consolidate the tracking of the information in there? Yeah. First of there's a billion pieces of software. I actually just bought, we just bought

to software companies, which will be pretty public news here very quickly. To not do just that, but to do the data analysis on the Amazon business. There's a hundred tools that do it right now, depending on what you want to look at. But it's everything from inventory management to Amazon pay-per-click to all the metrics on any part of the business to reviews.

rankings, that kind of stuff. That's already been totally done. that's beautiful. Yeah, I read a story about Walmart when he started to say, look, I'm going to dominate the small cities because, you know, people buy towels in San Diego, they don't buy beach towels in Nebraska. And I don't want a centralized, you know, location deciding that. No, well, one of the one of the and again, I can't announce the name, but we're going to market here in about 60 days.

Jon Stoddard (26:03.894)
what it does is it does Amazon ranking geographically. It's kind of like what you just said. It will, it will, people don't buy people in sunny places, buy more sun tan lotion dark places, right? Yeah. So this software lets you apportion your, your inventory. you know, based on that. So

The technology is out there, but the problem with Amazon businesses, they really are seller driven. mean, there really are nuances of it. A lot of the big payback from consolidation is you get to fire all the headquarters staff and bring them in. so that works in a lot of places. Cause if you bought two companies and you had two CFOs, well, they both just manage money.

Doesn't matter. We don't need two. So you either keep the best one or you keep the cheapest one, but you get rid of one. Well, it doesn't work that way with Amazon because the knowledge about the specific products and the ranking techniques and all that stuff are so nuanced that you can't just apply a corporate solution. So, no, our team looks all day, every day at just dog stuff. Our acquisition opportunities are just dog stuff.

When we're doing product dev, we understand dog products inside and out. We're doing supplement brands and a new dog water bottle and a dog care backpack, you know, but the thing is, this is all we, this is all we do. We all have dogs. Everything is dogs. Any of the acquisitions we do are dogs because we think there's a home-filled advantage for understanding something at such an intimate level.

And because there's 2.5 or so million Amazon sellers, we're just very selective at making sure the ones that we get fit into our corporate. Yeah. Do when you buy an Amazon business, FBA business, do you some of that manage it there or they want out or? Well, no, that's what I'm saying is that what's happening on the consolidation in the industry right now is portfolio.

Jon Stoddard (28:24.472)
companies, usually private equity guys, they're firing everybody. They're firing the management team. Now, if you've ever done acquisitions, and I've been part of and done many, you know, the first question I ask is who are the key players here in this company? Yes, there's a thousand people that work here, but I bet there's four guys that can't leave. And so it's a very specific strategy. The strategy shouldn't be

fire everybody because we don't need you. with Amazon businesses, usually the top guy got the business where it was. It's very difficult to just luck out on a product anymore. Right? Yeah. I mean, yeah, it's about getting, how do you get that product above 30,000 other listings there? mean, whatever, it's like exaggeration, but it's 30,000 listings.

Right, I'll give you an example. So my partner, Epica Lee, Sam, JT, he's a 30 year old Wiz kid. He's my partner in this business. His last business, was with gaming. He had a gamers company. know, all these, I call them kids, but know, 20 somethings that like video games. So like he was very successful. He owned an e-sports team, but he was the number one guy in the planet.

for the earphones. Literally like who is the guy who does the earphones? Well, it was him. I literally sold $15 million a year, $20 at a time, but he made them specific for gamers. So now that he had the brand at being one of the top gamer brands, when he added the product, he already had two and a half million gamers in his community.

So how you compete is by going out to your gaming community and going, hey, we got these little headphone things. You're going to love them. They're the best ever. I built them specifically for gamers. Yeah. Now you have to have everybody else. Yeah. You have to have that, that brand and that community because you know, it's Amazon's customer, right? So you have to absolutely. Now you don't have to, but if you're going to compete in Amazon based on organic SEO and Amazon pay per click.

Jon Stoddard (30:46.862)
You're gonna, there's very little chance. mean, somebody wins that battle. It's just probably not gonna be you. But the trick is can you bring your own traffic? Which is why you buy Facebook groups of a half a million people so you can bring your own traffic and you build email lists and you have influencers and you do these kind of off Amazon traffic generating maneuvers so that you can build these big communities so you don't have to compete.

with giveaways and pay-per-click and SEO and all the normal ways that everybody has to compete. Yeah, I got a question about, there's a phenomenon happens. So we do reggae raises for my company and we don't particularly like sending our company to do a listing on start engine or Republic CEO. He said, look, if you're to spend money, you know, let's say you spend $500,000 and

you're going to send somebody to start engine and they're going to find, that drone looks really cool. I'm going to spend my money over there because they did a better job of marketing. You're back to the days of that marketing goes, well, I just don't know where 50 % of my money's been spent.

First of all, absolutely true. And what I think is building, well, gosh, let's just take an example. It's a poor one, but we'll try anyway. The Kardashians, right? The Kardashians spend $0 on marketing. Why? Because they're influencers, they get it for free. get 75 to 80 million Instagram followers or something. It's crazy. It's crazy. That's why Kylie Jenner's a billionaire.

She spent $0 on marketing. So that's simply it to an extreme. So my argument would be, you know, the days of like profitable Facebook ads, I mean, it's really hard. Google, it's an auction system. Obviously marketers and corporations are gonna screw that because they can outbid everybody. Google AdWords? Go compete for the word lawyer in Los Angeles and see what it cost you per $600 a click, I'm gassing. You can't do it, you can't do it.

Jon Stoddard (32:57.196)
Right? So now it's always finding the next thing. Like now it's TikTok ads. We're doing it. We're running literally right now running TikTok ads. Why? Because the costs are so cheap. Amazon sponsored ads. The most profitable division of Amazon is sponsored ads. It's on an auction system. So I think it's a losing strategy to play the paid media auction game. You can do it short term in the beginning, but very quickly you get past the tipping point.

and you're gonna lose money. So I think a better strategy is do the Kardashians thing and build a community of people who love it and then make sure that you can reach them easily without having to pay. Yeah. So I take it you have some celebrity influencers, dog loving celebrity influencers? We have several. We just signed up. There was a show called

an Amazon show called The Pack. And it's a combination of amazing race meets survivor. Yeah, yeah, no, it's the skier. What's her name? Lindsey Vonn. Lindsey Vonn, yeah. Yeah, yeah. So the guy who got second place in that, he has a blue mohawk and his dog has a blue mohawk. So we just did a book deal with him. We're actually publishing his book, Amazing Story, and we're paying for all of it. And he's an influencer with us. Beautiful.

Yeah, so we get his community and we're here helping dogs. Well, what better way to have a guy who's had a dog who's helped him, who has an amazing story, tell the story of helping dogs. And that's a lot better than us doing paid ads to Chewy.com or something, right? Yeah. Yeah, so that's what we're doing over here. It sounds like, I gotta tell you, I know that you

love dogs, you got your own dogs. It sounds like it's a forever business versus, my God, I'm just going to wait for the F you offer from private equity. Well, no, no one. I already had the F you offer a couple of times in my life and I took it. we're fine. So I sold out. John, I sold out guilty. Right. So, but that puts you in the position where you don't have to sell out. So I'm not saying that

Jon Stoddard (35:21.25)
you know, when the right number comes along, we won't be like, yes, but it'll be yes. But here's the conditions. If the charity stays alive, you make these contributions. We have these charity partners over here. We sit on the board of the charity. Like the bigger you are, the more successful you are, the more you call the exit rules. Yeah. We got acquired by like, I don't know, Chewy. Then

I would do this at a massive level. Well, why would they want us to do that? Because we've done something they can't. Not Chewy, because they have mastered the online world, but Petco. Petco's putting, they announced they're putting 300 million into e-commerce. Why? Because of Chewy, which is owned by PetSmart, which did 3 billion last year online. Might be a good business move to not be barned to noble, right?

Yeah, let's, let's Amazon take. Right. So we come along, they can't buy chili, the last bet smart, but, they could buy us and they wouldn't have to build it. It's already built. We simply scale it into Petco. Yeah. just using them as an example. It's cheaper to buy us. Then to try to build it yourself, because if you could, you would have already, or you're just dumb.

And if you're listening to the CEO of Petco and you're listening to me, guys, you're messing it all up. There, just said it. I don't care. Yeah. So many things to do. Are you the driving force behind this project? No, that's what I'm saying, John, kind of circling back to the beginning. I really enjoyed building KPA into something huge that I really didn't enjoy sitting on boards and being fancy.

And I really did enjoy digital marketing. And now I really enjoy e-commerce. The only requirement is that I've got to be here doing it myself. Now don't get me wrong. Like I got time to talk to you because I have amazing people I trust. And it's like, there's a whole level of decisions I'm not involved in, but acquisitions, hires, products, kind of the important stuff that I love.

Jon Stoddard (37:46.392)
I get to see how all the pieces fit together. So it's kind of like jigsaw puzzle plane at a grand scale. I like that puzzle analogy. Absolutely. And then in the e-commerce world, it's wide open. There's not a lot of dudes like me out here wanting to play in this because all the fancy dudes are doing Bitcoin, right? Stuff like that. Cannabis and Bitcoin. And I'm like, nah, man.

I'm doing it on dogs. I got a bunch of other holdings. do cannabis. got hemp. got some wine stuff. got hair filtration, doing some stuff with some epic guys. I just started working with a guy doing billboards. It's a different deal. I mean, he's a great serial entrepreneur. I love it. said, if the guy was a startup and I didn't know him, I wouldn't even join him. But he's done three or four other companies. And I said, look, I'll have, you know,

I'll come as the board advisor now. How's your successor been at acquiring these FBA businesses? mean, what's that funnel look like? You got to reach out to a hundred that Roland talks about Epic or is it? Yeah, no, we're not playing that game. It's all relationship-based. Yeah. So what we did first, it's a hub and spoke model, which is built the core, which is we go doggo.dog. And I think we got 12 products.

coming out in the next seven weeks, coming out with supplements, hemp oil. We got a dog travel seat and travel bag and a water bottle and some stuff. So build the core brand, then build all of the community traffic assets. So email list, Facebook group, stuff like that. And then get all the data analytics, the software part straight.

So we acquired three companies in that space. And so now we have all of the core of it together while we network. And for instance, like this, I don't know if there's any big dog brands looking, but we're already influencers in the space. So we go directly to either the person who has it or who's good friend runs a big dog brand.

Jon Stoddard (40:08.108)
We're not worried about the good ones being gone because the good ones don't want to sell to Amazon portfolio companies. Yeah. Is there a danger of Amazon, you know, to be in the house and seeing the numbers out there and they go, you know what, we're going to come out with our own brand. Well, Amazon has their own brand now. It's one of the biggest in the world. Amazon basics. The big fear is that they don't want the competition of consolidation.

Somebody putting up brands together to compete with Amazon basics, for instance, would be bad for Amazon. They could simply say, we don't allow that. It's a private marketplace. We're shutting all your stores down. And that would be really, really bad. Yeah, that sucks. You guys have, at the point, are you applying most of Epic's strategies of buying no money out of pocket or using other people's money? Or do you guys have a fund to do that?

Well, first of all, 100 % funded by us. Yeah. So we own 100%. Second of all, I will answer that question by saying, Roland Frazier is my partner. Yeah. So you can imagine how much money we've spent.

Jon Stoddard (41:27.69)
It's so close to zero that we'll round it to zero. Yeah. All right. Well, that's great. mean, there's some acquisitions we're working on here. we love the business. It's doing $5 million, $2.4 million, and even a, I'm in the software business. I've in software all my life. So it's kind of an IT software business. But he is moving off to a new company that has potential to be a

you know, a million dollar business. So he needs capital to move to the next business. And so many different ways. Yeah, could have a 10 minute conversation, but I already think of seven ways that you can get that for no money. I will say this to any Epic elites listening. Most of the deals I've done are with Epic elite members. Yeah. And I don't mind mentioning, like I said, we're looking at cannabis and hemp and all that. That's what I'm gonna say his name right now. Paul Newman.

Paul, I love you brother, I'm gonna send you this. And it's because most people think of deals as like us versus them. Like what his company is doing for the world? It's unbelievable. I mean cannabis to actually cure people. Like hemp, air filtration. I mean, this is just, and this is really the heart of their company.

Now, why would he want to do something with me? Well, one, I'm all about kids. They're sponsoring the air filtration system at the Sunshine Factory. It's amazing. I'm all about dogs. They're about helping dogs. So when we come together to do a deal, simply, it's not like how much money, how much money, this and that, the money will all work itself out. But what it is is like, what are you doing? What am I doing?

How do we do that together? And then when both parties are motivated to find the solution, not because I win, you lose, I risk, you don't risk, that's how all of my deals get done. Yeah. I gotta say, man, we're already almost 50 minutes into this. I gotta tease you. You teased me a little bit about seven ways to do that. We're just looking at some like family offices and some.

Jon Stoddard (43:47.246)
Yeah, maybe it's private equity growth. Just borrow the money and purchase it. You said there was like seven ways. Is there anything? just thought of seven immediately. Yeah. Yeah. I just opened the loop on that, John. Yeah. Okay. So now you want to know like what's a way? Yeah, I do. Okay. So the real thing is the motivation of the buyer. He says he simply wants capital. Does he want it all at once? Does he need it all at once? Does he need a huge chunk of money? That's the first question that I need, right?

Yeah. So he wants a big portion of it. There's two things that changed to two things that kind of changed his thinking just in the last couple of weeks. One is a private equity firm came to him and offered him some money for it. And we said, you know, he told us the conditions on he goes, he hasn't been through due diligence yet. So they will probably lower it there. Any multiple in the payout.

and they want 66 % of it and they want him to stay on for three years at 40 hours a week. So that's not really an offer, but he's bowied by the price. And the other thing is wife gotten in a car accident, head on with a drunk driver three weeks ago. So he had a life changing event. It's like one of those tickets in your life where you only get 20 punches and be very serious about the punch. and this is a life changing event.

more money in the pocket and he's got this other business that he's trying to start and it's actually taken off. Yeah, yeah. So it's all about motivation and the thing we know about private equity guys is just about money. So you're probably not going to sculpt the deal with private equity guys, but there's a lot of strategics. So what you simply want to do is be the in between, between him and the strategic, right? If you can be the strategic, it's even better.

Because you're like, listen, screw the valuation. I know what it's worth. I'll give you this due diligence. Don't worry about it. I'm going to check 12 things. Right now you have this free cashflow. Now you can either go into kind of stall mode, which is then I'll just pay you out of free cashflow. It's no problem. And you go, but I want more than free cashflow. Great. We'll do a little mezzanine then. I think I can go out and I can raise, you know, X million at Y dollars.

Jon Stoddard (46:05.614)
And the mezzanine guys are looking for deals. And so right now you get the debt, get 75, you get all of it is debt with 25 % convertible to equity. Mezzanine deal guys love that. The guy gets his money. You make sure that the cashflow covers the payments. That's all. And now you have growth. Now, if you don't need him to grow the business, let him go. If you need them, hey dude, I just need you around to be able to answer questions for 90 days.

great. All I like to do is calculate what growth I can bring to the business, not astronomical, spend everything you got, but to accelerate the repayment of the debt. Yeah, yeah, yeah. I look at the 20, what can I build in 24 months and we'll pay this thing off. For 24 months, he got his chunk, I got the debt, some of it's convertible to equity.

I can pull a couple of levers. I can do a little debt reduction. I can add a product feature. I can go to a new market. We'll simply accelerate it, not to blow up the world model, kind of the de-risk model where I know I can do it based on my skillset. And then for 24 months, I basically worked for him. Now when I get done, I own the whole asset or I own 75 % because I did such a good job. The mezzanine guy converted to equity and we're good.

Yeah, so that, yeah, I love it. By the way, I do have another Epic partner, Sabree Savin, that's in IT, works for Deloitte, does consulting for them. So you are very correct about working with others in the Epic group and the strategy working with, you know, how we're doing this. And that's, I have been talking to number of mezzanine guys from axial.net, you know, that group where you can, course. So that is.

Now, just one more and I'm let you go. Yeah. Well, I got a message about Epic and I'm gonna let you go. Yeah, no, no, no. I love it. Let's say the guy came back and he's like, man, I love this business. It's my little baby. I hate to let it go. I would probably do an ESOP. And then you can do, ESOP will let you take about half of the free cashflow out of the business, fund the old partner leaving, and then you can redistribute the equity to the people who are there.

Jon Stoddard (48:30.146)
which is a mate and it's all funded by profits from the company. It's basically the most, the best from a tax standpoint, way to transfer wealth from one generation of owners to the other, if you want those people to stay in the company and they don't have to pay for the stock. And I need the CTO Oleg to stay in the company. Absolutely. That's what I'm saying, John. So if you had an Esop where the other guy's like, how much do you want? Well, I need five million. Well, great.

Now you can have a fiduciary come in and say, the eight different ways I've looked at this company, I believe its value is X. Now a bank will loan against that with up to 50 % free cashflow going to the contribution of the retirement of this debt, at which point the stock transfers to the people you want it to go to. So the guy leaving, he guys kind of get his thick around, he gets some of his money. The guys who stay love the dude because they didn't just sell and walk away.

They get stocked for free over time. The company retires the debt. Meanwhile, your personal holding position increases. Now, that's about a three, four, maybe five year strategy. But again, it all goes back to what does the guy leaving want? Yeah. Yeah. Beautiful. Look, this is Terry Wilmson. This is why I joined Epic Deletes. There you go.

Hey Terry, thank you so much for the time. appreciate it. One thing, the reason I said yes to this podcast, one, cause you're a good dude. Two, because I saw the interview you did with friends of mine, Dom Wells. We're doing a deal with him. And more importantly, I want to create the actual network of Epic elite guys that like when you look back in five, 10 years, we only do deals with each other. it's so powerful. That's so powerful. Yeah.

All right, my friend. Thank you, Terry. I appreciate it. If anything I can do for you, let me know. Of course. Take care. right. Cheers.