Justin McCurry doesn’t like much on his schedule. At most, he sets one thing to do a day. On Monday, that might be volunteering. On Wednesday, it’s likely grocery shopping. On Friday, there’s a good chance he’ll be playing tennis with his wife.
The rest of the time? It’s up to him. Pursuing a hobby, playing video games, doing yard work. It’s not the typical schedule for a 39 year-old with three kids. But that’s what McCurry has done since officially retiring as a transportation engineer in 2013.
In about a decade, he and his wife, Kaisorn, saw their portfolio balloon from a few thousand dollars to $1.3 million, yet neither of them had a job that paid close to six figures. And what’s particularly unusual about McCurry’s journey: He never had a passive income stream – other than his investment portfolio – that helped buffer his paycheck, boosting his ability to save. Instead, he did it all through cutting back and finding intelligent ways to squeeze savings, without sacrificing his lifestyle.
“I realized I had more paycheck than expenses,” said McCurry. “I just knew that saving money was probably a good thing,” as he tried to figure out what to do with the leftover funds each month.
When bloggers and FIRE (financially independent, retire early) voices talk about stepping away from the day job in their 30s and 40s, it’s also often coupled with side gigs that bring in dough, such as real estate or businesses that they built. It serves as a much-welcomed security blanket when managing a retirement that could stretch 50 years or more. For McCurry, though, it wasn’t about passive income streams or growing a sizable real estate portfolio. From 2004 to 2013, he and his wife lived on one income while essentially stashing away the other.
In the meantime, they had three kids, bought a house and have traveled the world.
Don’t Get Overwhelmed by the Size of It All
When McCurry first started saving, he looked at how long he would need to retire, and came up with a number that would let him step away from the job 20 years later. Even though he never was a big spender, the number seemed daunting.
“Knowing I would have to chug away for a decade or two,” said McCurry, “it’s almost like a pie in the sky.”
It made it difficult for him to see the benefits at first because that number was so large and the timeframe so long. This isn’t much different than when people set out for retirement on 40-year timeframes.
Researchers have found that the more someone connects with their future-self, meaning can view their future self with the same empathy and concern as their current self, the more they will save.
This ability to connect with the future self may be easier on this shortened timeframe. But it’s not guaranteed.
For McCurry, it became easier to handle as he continued to refine his plan, saving more than he and his wife ever expected they could. Then, after a few years, he started seeing the impact of compound interest.
He would place around $60,000 in the portfolio in a year, while the investments would return $100,000. McCurry soon realized that his 20-year plan had shrunk in half.
Cut Your Taxes
One of the most important ways McCurry saved was on taxes. At one point, he took the family’s joint income of $150,000, and managed to realize a tax hit of just $150.
His wife maxed out her 401k as well, while also doing the same in a health savings account and a flexible spending account. He then used a series of deductions, from the standard one to exemptions to child credits to reduce that income line to $28,950, leaving just a $150 tax liability.
McCurry took the approach that the tax breaks providing a discount to his savings. At the time, he would invest around $60,000 a year in tax-advantaged accounts. With that money, he locked in about $15,000 in tax breaks. That $60,000 investment, in actuality, only cost him around $45,000 if you count the tax break.
“It’s a little easier to save $45,000 versus $60,000,” McCurry said.
Design For the Worst Case Scenarios
One reason that McCurry’s timeframe shifted from 20 years to 10, despite lacking an additional income source, was simply because of the amount of buying he did when times looked bleak in 2007 through 2009.
He’s not like many in the FIRE world, constantly checking the portfolio, feeling the joy as the dollars increased, bringing him one step closer to quitting the day job. Instead, he mostly checks the accounts once a quarter, figuring out where he stands and if he needs any adjustments to his contributions.
“The last quarter in 2007, I noticed huge drops in our net worth,” remembered McCurry.
It didn’t deter him.
“I put as much as I could into the stock market each month, knowing I’m buying these shares at half or a third from where they were,” he added. “It was a buying opportunity of a lifetime.”
When the stocks began to turn in 2009, then his net worth went into hyper-drive. Since stepping away with $1.3 million, he’s now worth over $2.1 million, largely due to the fact that he now earns a little income from his blog, RootofGood.com (which means he doesn’t have to tap as much investment income) and the performance of his investments through a decade-long bull run.
But McCurry is savvy enough to realize the market will pull back at some point.
That’s where he taps his engineering muscle. As an engineer, you always prepare for the worst-case scenario. If what you’re building works under that scenario, then it will work, theoretically, in all other cases. When he looks at his portfolio, if the market drops 40%, then it would reach the levels he started with when he first retired.
He might spend a little less, but with a 3.25% rate of withdrawal from his investments, his family would be “totally fine,” he said.
Vail Resorts, a publicly traded operator of ski resorts, announced on Monday it would acquire Peak Resorts for $11 per share, all cash, which is more than double its $5.10 per share closing price, one day prior to the announcement. Peak Resorts operates 17 ski resorts, mostly in the Northeast and Midwest, including Alpine Valley in Ohio and Hunter Mountain in upstate New York.
One major beneficiary of the acquisition: the Sacklers, the family behind Purdue Pharma, the manufacturer of pain drug OxyContin. According to Peak Resorts’ latest annual proxy from October 2018, its largest shareholder is CAP 1 LLC, a company wholly owned by Sackler brothers Richard and Jonathan.
The Sacklers’ nearly 40% ownership stake, which includes preferred stock and stock warrants, is worth about $87 million based on the transaction. Some of the shares are owned by the charitable Sackler Foundation. The Sacklers became investors in Peak Resorts as early as August 2015.
Richard is the former chairman and president of Purdue Pharma. His brother, Jonathan, is a former board member. Nearly every state has filed lawsuits against Purdue Pharma and its owners, including eight Sackler family members, alleging the company caused a nationwide public health crisis around opioid addiction and opioid overdose deaths. One lawsuit alleges that Purdue Pharma had brought in more than $35 billion in revenues since 1995.
The Sacklers, worth an estimated $13 billion based largely on the value of Purdue Pharma, built their fortune primarily through sales of OxyContin, a highly addictive painkiller that has been called by the medical establishment one of the root causes for the nationwide opioid addiction epidemic.
Purdue Pharma owns the patent for OxyContin, and is the only manufacturer of the drug. According to Symphony Health Solutions, a healthcare and pharmaceutical data analytics company, roughly 80% of Purdue Pharma’s sales come from OxyContin. Due to the widespread rise in use of prescription and nonprescription opioids, the U.S. Department of Health and Human Services declared the opioid crisis a public health emergency in 2017.
The family used to be known for being generous benefactors of museums and universities worldwide, but their moniker has lost its luster. The Metropolitan Museum of Art in New York City announced in May it would turn down money from the Sackler family, though it will still carry the family name in the Sackler Wing. In July, the Louvre Museum in Paris reportedly removed the Sackler name from its Sackler Wing of Oriental Antiquities.
Sid Sijbrandij knows a thing or two about building, scaling and even walking away from companies. His current venture is doing over $100 million in revenue and is valued at over $1 billion.
Originally from the Netherlands, Sid Sijbrandiij is now the founder of one of Silicon Valley’s unicorns that is powering the web through developers worldwide. It’s not his first startup rodeo either.
Sid Sijbrandij recently appeared on the DealMakers podcast. During the exclusive interview, he shared his entrepreneurial journey, the process of finding cofounders, bootstrapping versus raising millions, his addiction to fast-growth startups, and many more topics.
Sid Sijbrandi seems to have always had a gift for spotting business opportunities.
During high school, he studied applied physics and management science. He chose a kind of program that blends the benefits of an M.B.A., with getting good at several engineering disciplines.
In his first year at college, he also started his first company.
The idea came from a fellow Ph.D. student that had made an infrared receiver you could use to skip to the next song on your computer (the only thing that played an MP3 song at the time). He started buying these infrared receivers from him and selling them in the U.S. You’d send him an envelope of dollar bills, and he would then send you a printed circuit board.
Ultimately, his two cofounders didn’t agree on growth plans concerning hiring more people. Sid wanted to hire faster, so he didn’t have to spend as much time on it, while his cofounders wanted to optimize for free cash flow. They ended up parting ways amicably.
The Two Most important Things for Launching with Cofounders
Sid has experienced several startups and says his two big takeaways when it comes to cofounding a company are:
1) To be smart with the shares
2) To be sure you and your cofounders are aligned in vision
For example, automatically making everyone an equal cofounder, even if they come in way later in that process, can be a mistake.
Sid says it is important that shares “are aligned with their contribution to the company. It’s very important if you start a company to have vesting of your shares as well.”
This helps avoid the free rides, because if someone leaves with all the equity, then people that need to invest like VCs are going to be like, “Why am I investing for just 50% remaining of the business.”
In the Netherlands, Sid didn’t find the goal of local companies to grow really fast. If you do want to grow a company really fast, he says it is beneficial to be somewhere like the Bay Area, where everyone just assumes that is the goal.
Not just your cofounder, but also your accounts person and your lawyer, and everybody else requires the growth mindset.
Passion for Growth
After graduation, Sid spent a few months at IBM and could have stayed there. He had an interest in strategy consulting, as well as building a recreational submarine.
He made a balanced scorecard of all the different ways to make that decision. One of the criteria being, “Is this a good story to tell in a bar?” He showed his dad who said it was a ridiculous way to decide on your career but was very supportive either way.
So, he called someone interested in a submarine venture. His pitch was, “Look, you should really hire me because I have a job offer from IBM. Otherwise, I’ll start working there, and we both don’t want that.” He got the job.
He built the first onboard computer for the submarine. Today, U-Boat Worx is one of the biggest builders of recreational submarines. If you go on a cruise, and they have a submarine, it’s likely from U-Boat Worx.
Still, after five years, it just wasn’t growing at a pace that kept Sid interested. He then went on to do a part-time stint on an innovation project with the government as a civil servant.
During this time, he really got to know himself, and how fast-growing companies with a continuous string of problems to be solved were what kept him interested.
Funding Your Startup
After starting and selling app store Appappeal, Sid turned open-source software GitLab into a fast-growing venture that is on its way to an IPO in 2020.
He took the proceeds from his previous venture, doubled it in bitcoin, and began bootstrapping GitLab.com.
Sid got the first few hundred signups through an article posted on Hacker News. Then together with his cofounder applied and got into Y Combinator. The race to demo day, where they would present in front of top tier investors, was on.
Compressing their three-month plan into just two weeks, the GitLab team had a highly successful demo day, landing Ashton Kutcher as an investor.
There was so much interest in their seed round, they rolled right into the Series A financing round. They’ve since followed that up with a B, C and D financing rounds, raising a total of $158 million at $1.1 billion valuation.
Today, some of their investors include Khosla Ventures, Google Ventures, August Capital, ICONIQ Capital, 500 Startups, and Sound Ventures to name a few. It doesn’t get much better than that as a hyper-growth startup.
In order to do this, Sid and his team had to master storytelling. This is being able to capture the essence of the business in 15 to 20 slides. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Embracing The Remote Work
Sid states they “don’t do in person.“ At Gitlab they encourage having meetings with webcam. They believe there’s something to see in the other person even if it is via video.
To put this into perspective, every day, employees have a company call, and it’s a thing you do with a limited set of people. In this regard, there are about 20 in each group, and they just hangout.
During the group calls there are all types of topics discussed that vary from movies to magazines. Topics are not necessarily work-related.
Sid and his team very much believe that their company is more than just, “Hey your work…”
As part of Gitlab‘s culture, the social interaction plays a key role and they have a lot of ways in which they facilitate this inside the company. Even if this happens remotely.
M&A Made Simple
Recently Sid and GitLab have been very active when it comes to acquisitions on the buy-side. That includes Gitorious in 2015, Gitter in 2017 and Gemnasium in 2018.
When it comes to acquiring companies, they’ve made the process incredibly simple, and are actively looking for more companies to buy.
In this regard, they like to acquire teams that have built a product before. Preferably a team that made a great product, but didn’t get distribution. Especially because typically they shut their existing product down.
To make things easier, they have an acquisition offer page. It even includes a calculator, so you can go online and calculate how much they’re offering.
Listen in to the full podcast episode to find out more, including:
When to pull the plug on your startup
The advantages of SAFE notes for raising money
How GitLab does meetings and culture around the globe
Each year for the past five, Forbes has searched the country for the 25 fast-growing, venture-backed startups most likely to reach $1 billion in value. Graduates include: food delivery service DoorDash, home seller Opendoor, luggage brand Away and synthetic biology company Ginkgo Bioworks.
This year, with the help of TrueBridge Capital Partners, we scoured the country again for budding unicorns. TrueBridge analyzed the finances of more than 150 startups, then our reporters dug deeper. That research caught problems at San Francisco-based Cleo, a parenting app with a troubled workplace and a CEO who lied about her age and background. The company was removed from consideration after our investigation, and its CEO resigned in mid-June. (The full story is here.)
FOUNDERS: Michael Gronager (CEO), Jonathan Levin, Jan Moller
EQUITY RAISED: $53 million
ESTIMATED 2018 REVENUE: $8 million
LEAD INVESTORS: Accel, Benchmark
New York-based Chainalysis makes cryptocurrency investigation software that can shine light on how people use bitcoin, ethereum, litecoin and more. Financial institutions use the technology to screen customers and comply with regulations designed to prevent money laundering, while government agencies such as the Internal Revenue Service and the Federal Bureau of Investigation can identify illicit transactions and investigate alleged criminals. Before teaming up to found Chainalysis, CEO Michael Gronager, 49, cofounded cryptocurrency exchange Kraken, while CTO Jan Moller, 47, built the Mycelium cryptocurrency wallet.
FOUNDERS: Arshan Dabirsiaghi, Jeff Williams; CEO: Alan Naumann
EQUITY RAISED: $122 million
ESTIMATED 2018 REVENUE: $25 million
LEAD INVESTORS: Acero Capital, Battery Ventures, General Catalyst, Warburg Pincus
In 2010, software security analyst Jeff Williams, 52, started dedicating resources at his consultancy, Aspect, to developing a program that would automate software security analysis. In 2014, he and former Aspect analyst Arshan Dabirsiaghi, 36, founded Los Altos, California-based Contrast Security to monitor the code within running apps and directly notify developers of potential vulnerabilities. “The work that previously had to go through security experts now goes directly to developers,” says Dabirsiaghi, now the company’s chief scientist. In 2016, the company brought in an outside chief executive, Alan Naumann, formerly CEO of online fraud detection startup 41st Parameter, to expand the business.
FOUNDERS: Lior Div (CEO), Yossi Naar, Yonatan Striem-Amit
EQUITY RAISED: $189 million
ESTIMATED 2018 REVENUE: $50 million
LEAD INVESTORS: CRV, Lockheed Martin, Softbank, Spark Capital
Cofounders Lior Div, Yossi Naar, and Yonatan Striem-Amit met during their service in the Israel Defense Forces’ elite intelligence unit, Unit 8200, fertile ground for many high-tech startups. While working on cybersecurity in the military, they came up with the idea for Cybereason, a cloud-based cybersecurity platform specializing in continuous monitoring and response to advanced cybersecurity threats. The company launched in 2012, and relocated from Israel to Boston the next year. “You provide value by helping a big organization not to be in the news as someone that gets hacked,” says Div, 41.
FOUNDERS: Paras Chitrakar, Jason Wilk (CEO), John Wolanin
EQUITY RAISED: $13 million
ESTIMATED 2018 REVENUE: $19 million
LEAD INVESTORS: Mark Cuban, Section 32
As a college student at Loyola Marymount University, Jason Wilk, now 34, blew through his budget, collecting overdraft fees. Wilk, an avid “Redditor,” saw that overdraft fees are a common complaint among users. So in 2016, he founded Dave, short for David, who beat Goliath, which Wilk sees as the big banks. The app tracks expenses and warns when a user’s account is in danger of being overdrawn. It hit a nerve: Dave was Apple’s “app of the day” in April 2017, and has been downloaded nearly 10 million times in two years. “Entrepreneurs can keep their ear to the ground for the next idea,” Wilk says. “Any idea that can be Reddit tested is a good place to start.”
FOUNDERS: Blake Murray (CEO), Alex Bean
EQUITY RAISED: $257 million
ESTIMATED 2018 REVENUE: $8 million
LEAD INVESTORS: Insight Partners, New Enterprise Associates, Pelion Venture Partners
Expense tracking service Divvy is taking on Concur and Expensify by offering its budgeting, fraud detection, and spend management tools for free. Instead of charging per user, Lehi, Utah-based Divvy gives businesses custom Mastercards and takes a cut of merchants’ fees to the bank when people make purchases. Founders (and high school buddies) Alex Bean and Blake Murray, both 35, have won over more than 3,000 corporate customers so far, including WordPress, Evernote and Qualtrics.
FOUNDERS: Luis von Ahn (CEO), Severin Hacker
EQUITY RAISED: $108 million
ESTIMATED 2018 REVENUE: $36 million
LEAD INVESTORS: CapitalG, Kleiner Perkins, Union Square Ventures
The world’s most popular digital language-learning tool, seven-year-old Duolingo has 28 million monthly active users. Most use the free version of its gamified courses. Revenue, largely from subscription fees from ad-free Duolingo Plus, is expected to double this year. CEO Luis von Ahn, 39, is a 2006 winner of a MacArthur “genius” grant and a former Carnegie Mellon computer science professor. Before founding Pittsburgh-based Duolingo, he sold two inventions to Google, including reCAPTCHA, the software that spits out the squiggly lines you type to alert a website that you are not a bot. An immigrant from Guatemala City who says learning English transformed his life, he’s driven to offer free language education to the masses. For our feature on Duolingo, click here.
FOUNDERS: Marcelo Cortes, Daniele Perito, Max Rhodes (CEO)
EQUITY RAISED: $116 million
ESTIMATED 2018 REVENUE: $100 million
LEAD INVESTORS: Forerunner Ventures, Khosla Ventures, Lightspeed Venture Partners, Y Combinator
In a bid to help mom-and-pop stores survive in the age of Amazon, Faire wants to take the risk and hassle out of wholesale purchasing. The San Francisco-based company helps retailers discover and buy new products online, and will accept free returns from them within 60 days for items that don’t sell. Today, it offers 5,000 brands to 35,000 stores. CEO Max Rhodes, a 32-year-old former Square employee, came up with the idea after he started working with a New Zealand-based umbrella brand and spent thousands of dollars to sit at a tradeshow booth to convince U.S. store owners to stock the high-end umbrellas.
FOUNDERS: Dylan Field (CEO), Evan Wallace
EQUITY RAISED: $83 million
ESTIMATED 2018 REVENUE: $3 million
LEAD INVESTORS: Greylock, Index Ventures, Kleiner Perkins, Sequoia
Figma wants to move design online, casting aside the old model of software downloads and siloed creation in favor of a browser-based tool where designers can work and collaborate together. Founders Evan Wallace, 29, and Dylan Field, 27, met at Brown University—Wallace graduated, Field dropped out with a Thiel Fellowship—and launched the San Francisco-based company in 2012. Five years later, Figma started charging professionals to use its product. (Individuals are still free.) Today, professionals pay $12 per editor per month and businesses $45 per editor month to use Figma. More than 5,000 teams, at companies like Microsoft, Volvo, Uber and Square, are users. “Design is like this viral infectant because once your competitor is well-designed, you have to be well-designed, otherwise you’ll be disrupted,” says Field.
FOUNDERS: Arun Chandrasekaran, Matt Elenjickal (CEO)
EQUITY RAISED: $101 million
ESTIMATED 2018 REVENUE: $16 million
LEAD INVESTORS: August Capital, Bain Capital Ventures, Hyde Park Venture Partners
Matt Elenjickal, 37, a logistics geek with an MBA from Northwestern University’s Kellogg School of Management, founded FourKites in 2014 to help companies know where their deliveries are, when they’ll arrive and what’s going on along the way. Its predictive supply-chain management software is now used by more than 260 of the world’s top shippers — and upwards of 500,000 loads per day — including Best Buy, Kraft Heinz, Nestlé and Smithfield Foods. “If you are a shipper, once the truck leaves your facility you have no idea what is happening,” Elenjickal says. “That is how supply chains are run even now without a solution like FourKites. You cannot compete against Amazon.”
FOUNDERS: Mathilde Collin (CEO), Laurent Perrin
EQUITY RAISED: $79 million
ESTIMATED 2018 REVENUE: $16 million
LEAD INVESTORS: Sequoia, Uncork Capital
Mathilde Collin, an alumna of Forbes’ 30 Under 30 list, got the idea for Front while at her first job after graduate school. “I saw how much time was wasted with people sorting through their emails,” she says. So in 2013, she launched the San Francisco-based startup to help companies become more productive with a shared email inbox that incorporates Facebook, Twitter and SMS, and encourages team collaboration. Today, Front has 5,000 customers including Shopify, MailChimp and Stripe.
FOUNDERS: Sung Ho Choi, David Gandler (CEO), Alberto Horihuela
EQUITY RAISED: $145 million
ESTIMATED 2018 REVENUE: $74 million
LEAD INVESTORS: 21st Century Fox, Northzone, Sky
David Gandler, 44, a longtime network sales exec, launched FuboTV in 2015 to tap into pent-up demand in the United States for overseas soccer leagues. FuboTV offered live streams of soccer channels such as GolTV and Benfica TV to start, then expanded programming through deals with beIN Sports and Univision. Today, New York-based FuboTV is generally a cheaper alternative to cable (starting at $54.99 a month) that offers more than 90 channels.
FOUNDERS: Chris Clark, Stuart Landesberg (CEO), Jordan Savage
EQUITY RAISED: $213 million
ESTIMATED 2018 REVENUE: $104 million
LEAD INVESTORS: Bullpen Capital, General Atlantic, Lone Pine Ventures, Mayfield Fund, Norwest Venture Partners, Serious Change
Ask Grove Collaborative CEO Stuart Landesberg, 34, who his typical customer is, and he’ll give you a specific answer: “A 29-year-old mother of two working as a substitute teacher in Lawrence, Kansas.” Even in the age of Amazon, Grove has carved out a $104 million niche in e-commerce by selling natural products, from laundry detergent to sponges, in easy-to-order shipments. Around 60% of its revenue comes from products not sold on Amazon, says Landesberg. But he wants to do more than sell Seventh Generation or Method soaps online. In 2016, Grove started to manufacture its own all-natural products that now make up nearly 50% of its sales. The key? Designing products that are easier to ship. Its glass cleaner, for example, is highly-concentrated and smaller than a tube of toothpaste.
FOUNDERS: Augusto Marietti (CEO), Marco Palladino
EQUITY RAISED: $71 million
ESTIMATED 2018 REVENUE: $5 million
LEAD INVESTORS: Andreessen Horowitz, CRV, Index Ventures, New Enterprise Associates
Kong acts as a gatekeeper to companies’ APIs (code developers use to build apps) and monitors how often they’re used. Augusto Marietti, 31, and Marco Palladino, 30, launched the company out of a garage in Milan, where they both attended university, and were constantly flying back and forth to Silicon Valley to fundraise. “At this stage, we barely had enough money to eat,” Marietti says. “We definitely lost a few pounds when we were first starting up.” Now based in San Francisco, Kong has successfully penetrated the enterprise market with 130 customers that include SoulCycle, Yahoo Japan and WeWork.
FOUNDERS: Jack Altman (CEO), Eric Koslow
EQUITY RAISED: $27 million
ESTIMATED 2018 REVENUE: $7 million
LEAD INVESTORS: Shasta Ventures, Thrive Capital
Lattice founders Jack Altman, 30, and Eric Koslow, 28, learned first-hand the impact of work culture while working at startup Teespring, which sells custom t-shirts. In 2015, they decided to do something about it, starting Lattice. The San Francisco-based company’s human resources software uses surveys to shift the focus of performance management from employee evaluation to career development. Today, Lattice works with 1,300 customers, including Coinbase, Instacart, Slack and WeWork. “Employees are looking for more meaning from work than ever before, and have more visibility into and access to other jobs than ever before,” Altman says. Lattice helps their employers step up.
FOUNDERS: Elton Chung, Lidia Yan (CEO)
EQUITY RAISED: $125 million
ESTIMATED 2018 REVENUE: $46 million
LEAD INVESTORS: Brookfield Ventures, China Energy Group, Sequoia
Cofounded by husband and wife team Elton Chung and Lidia Yan in 2015, Los Angeles-based Next Trucking is moving freight brokerage online. While other startups like Convoy and Uber Freight move cargo from point A to point B, Next Trucking focuses on drayage, or the “first-mile” of transferring goods from port to warehouse. “Drayage is a lot more complicated because it involves terminals and ports,” says Yan, 38. As a result, Next Trucking has doubled revenue every year since 2016, reaching $46 million in 2018. Yan forecasts revenue will hit $120 million this year, helped by large contracts with retailers Dollar General, Rite Aid and Steve Madden. For our feature on Next Trucking, click here.
FOUNDERS: Jack Conte (CEO), Sam Yam
EQUITY RAISED: $166 million
ESTIMATED 2018 REVENUE: $35 million
LEAD INVESTORS: Freestyle Capital, Glade Brook Capital Partners, Index Ventures, Thrive Capital
Musician turned entrepreneur, Jack Conte, 35, wants to break the “starving artist” archetype by helping creators earn a regular income. “Deciding to be an artist shouldn’t have to be a difficult conversation,” says Conte. “It should feel like a viable career choice.” Using Patreon, artists offer exclusive experiences in return for contributions from their subscribers or “patrons.” HBO’s Issa Rae, Humans of New York founder Brandon Stanton and comedian Heather McDonald are some of the creators currently using Patreon and by 2019, the company expects to pay out more than $1 billion to its users.
FOUNDERS: Denis Mars (CEO), Simon Ratner
EQUITY RAISED: $14 million
ESTIMATED 2018 REVENUE: $1 million
LEAD INVESTOR: Kleiner Perkins
The Proxy app is like having a set of keys on your smartphone: Your profile’s signal gives you access to any building where you’re registered, eliminating the need for traditional ID cards and keys. It’s a straightforward idea, but Australian-expat founders Denis Mars, 42, and Simon Ratner, 39, are confident that they’ve just scratched the surface of its potential. So far, San Francisco-based Proxy has proven popular with commercial real estate clients like WeWork. Mars and Ratner now hope to expand their technology (which includes the app, management platform and signal-reading hardware) to identity verification for ride-sharing and event check-in.
FOUNDERS: Ofer Bengal (CEO), Yiftach Shoolman
EQUITY RAISED: $147 million
ESTIMATED 2018 REVENUE: $50 million
LEAD INVESTORS: Bain Capital Ventures, Francisco Partners, Goldman Sachs, Viola Ventures
Israeli tech veterans Ofer Bengal and Yiftach Shoolman set up a fast-database service, in 2011, to help businesses looking to speed up responses on their apps. Redis Labs relies on what’s known as NoSQL, an alternative form of compiling data that is faster than traditional models. That lightening-fast processing speed has helped it sign on FedEx, Mastercard and other corporate behemoths. To scale up quickly, the Mountain View, California-based company offered a free, open-source version to hook developers. In 2013, it rolled out a paid version with costs starting at $5 per month per gigabyte. “You can’t do without open source if you want rapid adoption,” says Bengal.
FOUNDERS: Shivaas Gulati, Josh Hug, Matt Oppenheimer (CEO)
EQUITY RAISED: $312 million
ESTIMATED 2018 REVENUE: $80 million
LEAD INVESTORS: Bezos Expeditions, DFJ Venture Capital (now Threshold Ventures), Generation Investment Management, Naspers’ PayU, QED Investors, Stripes Group
Remitly is taking on Western Union with lower fees — estimated 1.5% on average vs. the money-transfer giant’s 5%. Matt Oppenheimer, who had worked for Barclays in Kenya, and his cofounders launched the business in 2011 to help people in developed nations like the U.S. and Australia send money cheaply to relatives in developing countries like Mexico and the Philippines. Today, Remitly serves 60 countries and processes $6 billion a year in money transfers, about 1% of the nearly $700 billion remittance market. Already one of the largest fintech firms targeting immigrants, the Seattle startup’s long-term goal is to branch out into other financial services, potentially including credit cards, personal loans and auto loans.
FOUNDERS: Xuan Yong (CEO), Mike Witte
EQUITY RAISED: $94 million
ESTIMATED 2018 REVENUE: $21 million
LEAD INVESTORS: Bedrock Capital, Founders Fund, Quantum Energy Partners
There are nearly 1,000 rigs drilling for oil and gas in the U.S. Each well requires the input of dozens of service companies and workers — everything from high-horsepower compressors for fracking, to miles of steel pipe, and millions of gallons of water and truckloads of sand. Cofounder Xuan Yong, formerly of Citadel and D.E. Shaw, believes RigUp can improve on the good ol’ boy network by more efficiently connecting the “hyperfragmented” market of roughnecks, engineers and business owners with the big oil companies that call the shots. RigUp pre-vets workers and vendors, and creams an estimated 4% off every contract made via its online platform. Yong isn’t worried about machines invading the oilpatch. “Even with A.I. there will be demand growth for labor,” he says. “Field tickets are still signed on paper and stamped.” For now.
FOUNDERS: Stephen Hawthornthwaite, Roth Martin (interim CEO)
EQUITY RAISED: $42 million
ESTIMATED 2018 REVENUE: $140 million
LEAD INVESTORS: Goldman Sachs, Lightspeed Venture Partners
Founders Roth Martin, a former art gallery owner, and Stephen Hawthornthwaite (aka “Hawthy”), a former investment banker, launched the footwear brand after listening to their wives complain about the lack of stylish, comfortable shoes. Rothy’s 3D-knitted round-toe and point-toe flats, made from recycled plastic water bottles, have gained cult status. In just three years, it expanded rapidly with direct-to-consumer sales online, reaching revenue of $140 million last year. For our feature on Rothy’s, click here.
FOUNDERS: Phillip Liu, Karthik Rau (CEO)
EQUITY RAISED: $179 million
ESTIMATED 2018 REVENUE: $25 million
LEAD INVESTORS: Andreessen Horowitz, CRV, General Catalyst, Tiger Global Management
SignalFx monitors cloud infrastructure in real time for companies like Yelp, Shutterfly and HubSpot. In 2013, Karthik Rau, 41, who previously worked at tech startups LoudCloud and VMware, founded the company with ex-Facebook software architect Phillip Liu, 51. While competitors collect and query data in batches every two to three minutes, SignalFx evaluates and alerts users to anomalies in two to five seconds. “The difference between getting reliable alerts within seconds and getting them in minutes is the difference of seamlessly dealing with an issue,” says Rau. “Or having all of your users on Twitter complaining.”
FOUNDERS: Paul Dabrowski (CEO), Michael Dabrowski
EQUITY RAISED: $157 million
ESTIMATED 2018 REVENUE: $20 million
LEAD INVESTORS: Founders Fund, 8VC
Gene-editing tool Crispr has unleashed a gold rush for new products made possible by cheaply and easily editing DNA. Synthego is cashing in by selling the genomic equivalent of pickaxes, shovels, maps and other tools. Its ready-made and custom kits allow researchers in academia and the private sector to rapidly develop gene-edited products, including new medical treatments. Its founders, brothers Paul and Michael Dabrowski, 34 and 38, previously worked at SpaceX as engineers and drew on that experience to bring a new way of thinking to biotech.
FOUNDERS: Umar Afridi (CEO), Sid Viswanathan
EQUITY RAISED: $13 million
ESTIMATED 2018 REVENUE: $48 million
LEAD INVESTOR: Initialized Capital
If you buy birth control from Nurx or hair-loss products from Hims, behind-the-scenes pharmacy Truepill will actually fill and deliver your prescription. The three-year-old startup’s founders Umar Afridi, 37, a former retail pharmacist, and Sid Viswanathan, 35, who previously worked at Johnson & Johnson and LinkedIn, see a growing market in bringing technology and efficiency to pharmacy. Although Truepill started with direct-to-consumer brands, it’s now making a bigger play to bring on corporate customers with pricey, specialty medications.
FOUNDERS: Benjamin Bercovitz, Filip Kaliszan (CEO), James Ren, Hans Robertson
EQUITY RAISED: $59 million
ESTIMATED 2018 REVENUE: $20 million
LEAD INVESTORS: First Round, Meritech, Next47, Sequoia
While many startups have tackled the “smart home” with varying degrees of success, Verkada has exploded in shy of two years on the market by offering big businesses, municipalities and schools a cloud-based system that combines hardware and software to detect movement and easily store and share surveillance streams. In 2019, the company founded by three Stanford graduates and the former cofounder of Meraki (a cloud startup since acquired by Cisco) signed on the city of Memphis — a nearly 1,000-camera contract — Juul Labs and Newtown Public School District, the district of the 2012 Sandy Hook Elementary School shooting tragedy.
Additional reporting by Susan Adams, Elisabeth Brier, Dawn Chmielewski, Lauren Debter, Michael del Castillo, Jillian D’Onfro, Christopher Helman, Jeff Kauflin, Alex Knapp, Alex Konrad, Christian Kreznar and Monica Melton
Cover Photographs by Tim Pannell for Forbes | Illustrations by David Wilson
Australian casino mogul James Packer agreed to sell nearly 50% of his remaining stake in Crown Resorts Limited to Macau billionaire Lawrence Ho’s Melco on Thursday. The deal will close in two tranches—one in early June and the other in late September.
Melco also said that it’ll pursue a larger stake in Crown as well as board seats, pending regulatory approvals. The $1.22 billion (A$1.75 billion) purchase price is a tiny premium—not even 1%—over Crown’s closing price Thursday. On Friday, Crown’s stock dropped 3% on the Australian Securities Exchange from the previous day.
Forbes calculates Packer’s net worth at about $3 billion, based on the $850 million he’ll likely receive (net of taxes), and Friday’s closing stock price. That’s a drop of $600 million since January when we published our ranks of Australia’s Richest. At the time he was the nation’s ninth richest person, worth $3.6 billion.
It’s quite a comedown for Packer, whose father was considered one of Australia’s most successful entrepreneurs. Kerry Packer, who died in 2005, owned Australia’s leading television network and the country’s biggest swath of magazines. Kerry had inherited a media company from his father, Sir Frank, and grew it into a broadcasting and publishing empire worth $5 billion. James Packer seemed up for the job, and was initially lauded for reinventing his father’s empire by selling most of the Packer family media assets to a Hong Kong-based private equity firm for $4 billion across two deals in 2006 and 2007 and moving into casinos. A decade ago, James Packer was the nation’s richest person. Five years ago, his net worth peaked at $6.6 billion. Today he’s worth less than half that.
This is not the first time Melco and Crown have done business. The two companies partnered in 2004 to develop and operate casinos in Macau. The partnership ended in 2017 when Packer sold his Macau assets back to Melco to focus on his Australia-based casinos.
Lawrence Ho, CEO of Melco, who like Packer is the son of a powerful, legendary entrepreneur (97 year old Stanley Ho, who retired last year), is currently worth $2.1 billion, according to Forbes. Most of his net worth is tied up in Melco, in which he owns an approximate 54% stake.
Currently, the biggest project for Crown is its $1.5 billion casino in Sydney, which is slated to open in 2020.
Earlier this year Packer tried to cash out of Crown. In April, Wynn Resorts, which was founded by billionaires Steve and Elaine Wynn, explored taking over Crown for $7 billion. But hours after Crown announced the proposed deal, Wynn Resorts issued a statement saying it was off due to “premature disclosure.”
Packer stepped down from Crown Resorts’ board in March 2018. Four months later, he resigned from the board of his family company Consolidated Press, which he and his sister inherited from their father.
According to the Sydney Morning Herald, Packer has been seeking a lower-profile life since stepping down from Crown’s board. “He definitely wants an easier life, and a less-stress life,” one colleague told the paper. “No doubt about that.”
Packer’s board exits were reportedly due in part to mental health issues, following a tough year when Crown exited its Macau and U.S. gambling investments.
Packer, who has three children living in Los Angeles with his ex-wife, Erica Packer, also finances Hollywood films via his RatPac Entertainment, which he cofounded with Brett Ratner, who directed the Rush Hour film series and X-Men 3: The Last Stand.
A Berkshire Hathaway shareholder arranges her shopping next to a large drawing of Chairman and CEO Warren Buffett, during a shareholders shopping event in Omaha, Neb., Friday, May 3, 2019, one day before Berkshire Hathaway’s annual shareholders meeting. An estimated 40,000 people are expected in town for the event, where Chairman and CEO Warren Buffett and Vice Chairman Charlie Munger will preside over the meeting and spend hours answering questions. (AP Photo/Nati Harnik)
Berkshire Hathaway’s shareholders’ meeting as in past years yielded various insights on Warren Buffett’s and Charlie Munger’s insights on the markets, politics, tech stocks, past mistakes and many other topics.
Further Buybacks On The Cards
It should come as no surprise that Buffett and Munger are considering further buybacks of Berkshire stock. With a large, and growing, cash pile and limited deal opportunities to date, they are likely to use cash to repurchase Berkshire shares as the fallback option. In fact, the pair used answers to certain questions, such as regarding Brexit in the U.K. to remind the audience that they are very willing to make acquisitions in Europe should they see the right deal at the right price. They feel that Berkshire is typically considered for deals in the U.S.. Yet, internationally they have more work to do to have Berkshire in consideration for a large business sale. Still, the emphasis on buybacks suggests that there is little in the deal pipeline for now, though of course that could change quickly. Buffett and Munger would love to see more attractive deals, but absent attractive opportunities, stock buybacks are the default.
Another Bite Out Of Apple?
Buffett and Munger were both very positive on current holding Apple, and Apple CEO Tim Cook was also at the event. It seemed clear that Buffett was quite willing to up his Apple stake at the right price.
Various objections such as potential regulation of Apple’s app store were raised in questions, though Buffett didn’t dismiss those concerns entirely, he mentioned that what has hurt the most is that the stock has gone up. That, the CEO’s presence and the fact that Buffett didn’t go out of his way to make the detailed bull case on Apple all suggest he make be angling to up his stake at the right price, even though Apple is currently Berkshire’s second largest public holding behind Coca-Cola.
A More Flexible Approach To Value Investing
Over his lifetime, Buffett’s investing approach has evolved and it continues to. In his early years, Buffett loved buying so-called cigar butt stocks, as popularized by his early mentor Ben Graham. This means stocks that may have been poor companies, but were trading well below the value of assets that could be sold realizing a profit for investors. Such deals are harder to come by now. As such Buffett looks more for great businesses at reasonable prices, a direction that Munger has clearly prodded him in. However, now Buffett talks of value investing in broader more creative terms, such that any stock where the likely expected cashflows exceed the price can be attractive, even if not cheap in on the traditional metrics and ratios associated with value investing.
So though Buffett’s approach continued to be refined, its core principles remain the same in looking for great businesses at attractive prices with sound management in place. In reviewing Buffett and Munger’s comments, one is left with the feeling that they are seeing few bargains in this market and buybacks paired with watching and waiting for certain key holdings such as Apple to fall so they might add more is the current strategy. Aside, from the comments at the meeting, the fact that the company is sitting on over $100 billion of cash and short-term securities at the end of 2018 reinforces that Buffett and Munger aren’t seeing the opportunities they would hope for in the current environment.
Articles educational only, not intended as investment advice.
If you want to know the best place to keep up with technology for your business, follow my weekly tech roundups for entrepreneurs each week. You’ll learn because I’m always learning.
So what have I learned? Businesses that invest in the right technologies are assuring future growth and success. I’ve also learned that there are a few apps, services and technologies – about ten categories in all – that are critical for small businesses in 2019. So in honor of National Small Business Week, I thought it would be helpful to share.
Customer Relationship Management
Don’t be fooled by CRM. People like to complicate this stuff and it’s not that complicated. It’s just a database of every person and company who you do business with – from prospects and customers to vendors, suppliers and partners. A great CRM system will integrate with your email and calendars and ensure that nothing falls the cracks and everyone in your company is sharing the right information. It will be mobile, include workflows and automation and integrates with tons of other great apps to do marketing and other functions. If implemented the right way (which is easier said than done) it will be an instrumental asset to your organization. There are many great CRMs for small businesses. I recommend looking at Salesforce.com, Microsoft Dynamics and Zoho CRM.
Managed Service Providers
If your inventory, order entry or other business critical application is older or located on your internal server you need to move it out of your office and into the hands of a managed service provider. Well-managed service providers will ensure that your data is secured as best possible and will likely have better security tools that you have internally. Your applications can be accessed by your team from anywhere and on any device. Many of them rely on public cloud services from Amazon, Google and Microsoft and that’s fine. With internet speeds hitting 5G, a well-managed service provider will deliver the performance, reliability and accessibility of your data at a cost that makes sense. Recommended providers include Right Networks, CloudJumper or any number of information technology firms.
If your accounting application is located on your server, it won’t be for long. That’s because most accounting vendors are moving quickly to the cloud. It makes sense for them, and for you. You pay a monthly fee and they get a revenue stream. In return, the software provider can provide faster support, upgrades and technical services. Cloud applications are also much easier to integrate with each other. Today’s cloud accounting apps provide the added benefit of doing invoicing, cash receipts or retrieving reports from any device, anywhere. It’s a crowded field of cloud accounting options so do your due diligence and lean towards good companies with big communities. I see QuickBooks Online, Xero, and FreshBooks being used often by business owners.
Back in the day, there wasn’t much you could do with a scanned invoice or document other than file it away. But with today’s Optical Character Recognition technology there’s a growing crop of applications that can extract data from any scanned document – from vendor invoices to airline receipts – and put it in a format so that someone in your office can easily review and then import into most popular accounting applications. This saves time, improves accuracy and cuts overhead. Recommended applications: Bill.com,EntryLess, Expensify.
HR platforms are exploding and, in my opinion, any company with more than five employees should have one. Why? Because they’re affordable and with a good HR platform your employees will be able to – usually through a mobile app – track payroll, update forms, schedule vacation, alert for sick days and even manage their performance reviews. The more your employees use the application, the less administrative time will be needed by your office staff – and that means less overhead and more productivity. Check out: Paychex, Gusto and BambooHR.
Back in the day, there were telephone calls, instant messaging, text messaging, emailing and lots and lots of yelling. Yes, we’re still yelling. But the good news is that today’s office applications have brought all those other things together under one umbrella so that your employees can conduct their communication, document management and collaboration activities – including video calls, file storage and sharing, messaging as well as alerting and reminders – from any device and wherever they are. Not only that, but today’s collaboration and communication systems have powerful searching tools to find old conversations and exchanges. The systems can even be configured for outsiders to access too. Applications that focus on collaboration include Microsoft Office 365, Google G-Suite, Box.
Our company, like many small businesses, uses contractors and employees who frequently work out of the office. The thought of maintaining an on-premise phone system seems expensive…because it is. That’s why, for the past ten years, we’ve been using a virtual phone service. Our service provides a toll-free number, dial by name directory, voicemail for all users including transcription and archive recordings and…well, you get it: a total phone system (even hardware) that makes my small business look like a big business. I pay by the mailbox (about $12 per month) and love it. Recommended applications: Grasshopper, VirtualPBX and Ooma.
E-Commerce and Payment
If you’re in retail then please pay attention to this word: convergence. It means getting a point of sale system that not only works in your store but works online too. That’s because you want to sell your products both from your store and over the web because that’s what successful retailers are doing to thrive. The best point of sale systems not only use tablets (a must for good customer service) and integrate with popular payment services, but they also provide the ability of setting up an ecommerce site that relies on the very same database you’re using in-store. Recommended applications: Paypal,Square, Shopify,Magento.
Yeah, yeah, I’m leaving some stuff out. Like email apps (but don’t we all have them by now?) and project management solutions such as Basecamp and Asana.
There was once a time when everyone in my company would be saving multiple versions of multiple documents and spreadsheets on their laptops, desktops and our servers. That…was a mess. But not today. Today, we all save to a cloud storage service which synchronizes the files (that we choose) to our respective devices. Everything is updated and I no longer fear what happens if someone leaves their device on the subway. To me, a business without a cloud storage service is a business that’s losing money. Applications that focus on this space: Dropbox,Microsoft OneDrive, Google Drive.
Ransomware has become a billion-dollar business and that makes sense: it’s finally a way for clever hackers to actually make money with their malware. We read about the stories of hotels, transit systems and city governments brought to their knees by security breaches like this, but we don’t hear of the thousands of small businesses that are also affected. To protect yourself you need to use a good cloud backup service, keep your operating systems updated and use a good security application in your company. Recommended applications: Carbonite (for backup), Malware Bytes,Barracuda.
What else am I missing? You tell me and maybe I can expand this list in a future column. In the meantime, take a moment to review the techs, services and apps you’re using in your business. Have you got all the bases covered?
Author’s Note: I have not been compensated by any of the companies listed above to be mentioned in this article.
Ray Reddy has raised millions of dollars in startup funds, sold a company to Google and is taking on the local business gauntlet in an innovative new way. Yet, he chose to exit Google and Silicon Valley to launch his latest venture.
In his exclusive interview on the DealMakers Podcast, Ray Reddy shared the pros and cons of the valley and his fundraising strategies.
The Art of Business
Always curious, Ray wondered if business was like math and science. He attended the University of Waterloo to study computer science, then a Masters of Business and Entrepreneurship and Technology.
He says he learned some good foundational principles, how to approach complicated problems, and how to learn quickly. Yet, when entering the business world he found that very little of what he learned had any practical knowledge of applicability. He says “it’s much more about common sense and experience than it is about definitive approaches and how to solve some of these problems.”
After school he went straight into corporate strategy at BlackBerry, doing M&A and venture investments. Yet, he has always not only had a lifelong craving for learning, but a passion for building something and building something that he found had a purpose.
What Google Gets about M&A
The mobile phone was starting to consume other portable electronics. It quickly began to absorb portable navigation, portable GPS, handheld units, and portable media players. Yet, no one seemed to be addressing it. Ray Reddy decided to go solve it himself and built a team of people to go after it.
That startup became PushLife.
Prior to the iPhone, they focused on building an experience that made it very easy for people to move content back and forth between their phone and their computers, specifically music. It took normal phones, and it gave them an iPod-like experience on Android, BlackBerry, and Nokia. PushLife ended up licensing software to major carriers.
It was so successful it was acquired by Google. After the acquisition, he was at Google for four years. First in the Canadian Google office in Waterloo. Then out in Mountain View at Google‘s headquarters.
He ended up running the mobile commerce team for one of their products. Then towards the end, Ray was actually part of the launch team for Google Shopping Express, which was their same-day delivery effort in retail.
The difference with companies like Google, according to Ray, is that they do hundreds of acquisitions a year. They really turn it into a mass production factory. It’s very organized. There are no games. They are very straight-up. From Ray‘s perspective, it doesn’t feel like anyone is trying to overly optimize a negotiation. It makes a lot of sense because the transaction is the beginning of the relationship.
Ray‘s opinion is that Google‘s M&A process is designed in a way to get a group of people that are energized and that deliver a lot of value over the upcoming years. Contrast that with some other acquisition approaches and the result is quite different.
Eventually, Ray found a big new problem to solve. He ultimately concluded that structurally, a big company wasn’t set up to solve this problem, even with all the resources a company like Google has.
Toronto vs. The Valley
Ray moved his founding team to Toronto. Not that the Valley isn’t a really interesting place. He says “On one hand, it is the capital of technology worldwide, but I think there’s also some really weird dynamics there.” The biggest one being that you’ve got a very high concentration of very wealthy people, and they’re all early adopters.
He points to the collapse of the entire on-demand space, everything from on-demand valets to cleaning services several years ago, and a massive false-positive from the Valley.
Because when you have places like Palo Alto where average household incomes are north of $2 million, you can fool yourself into thinking that there are enough people who will pay a big premium for convenience.
As Ray states, “the types of investors living in the Valley are not at all sensitive to paying a $10 delivery fee for having a $10 item brought to them.“ That doesn’t seem weird to them. When you look across average neighborhoods and cities in North America, that’s not necessarily true. You lose sight of that in the Valley. You lose sight of the average person.
Ray says “So, if you’re trying to build a mass market consumer product, you just have to be very careful of false-positives that can come from something working in the Valley“
Then the team went and looked at the reality of building talent there, and hiring, and cost, and a lot of those other things. They decided to move to Toronto instead.
Ray’s latest startup is Ritual which is a social ordering app that taps into networks of co-workers and colleagues for fast and easy pick-up and pay at a wide variety of local restaurants and coffee shops.
He has already raised $120 million in capital. Greylock led the Series A out of the Valley. Insight did the Series B out of New York. Georgian Partners led the C round out of Toronto.
Rather than waiting until funds are imminently needed to close a round, he says “I think about it differently which is you should always be talking to investors. Always having an ongoing conversation with investors.”
He’s always talking to the next stage of investors and trying to build that relationship. Fundraising comes down to trust, and do they trust your judgment? Do they trust that you can do what you say you’re going to do?
For Ritual, it’s never been about the investor that gives the highest valuation. It has been about who do you want to work with and who do you want to build this company with and spend time with.
He’s had a relationship with each one of those investors for about 9 to 12 months before the round. When it came time for fundraising, it was a no-brainer each time.
Today Ritual has a team of about 300 people globally.
Listen in to the full podcast episode to find out more, including:
The process of selling your company to Google
Benefits of launching in cities outside of Silicon Valley
Ways to build relationships with investors
Success factors behind marketplaces
Retention as the critical factor for ultimate success in business
Alejandro Cremades is a serial entrepreneur and author of best-seller The Art of Startup Fundraising, a book that offers a step-by-step guide to today‘s way of raising money for entrepreneurs.
Mark Zuckerberg has had plenty of difficult days in the past year, but this past week was a good one for him. The Facebook CEO’s net worth jumped $5.5 billion in the week through Thursday April 25, mostly due to investor glee about the $2.4 billion in first quarter profit that the social media firm reported on Wednesday.
The 34-year-old is worth $71.3 billion, $20 billion more than at the beginning of 2019. He is now the 5th richest person in the world, up from No. 8 in March when Forbes published the annual world’s billionaires list. The positive quarterly earnings report overshadowed news that Facebook is setting aside as much as $5 billion to pay a fine to the Federal Trade Commission over privacy issues.
Zuckerberg’s gain was by far the biggest of the week, but he is in good company. The fortunes of Zuckerberg and four other tech billionaires, including Amazon’s Jeff Bezos, rose by a collective $13 billion in seven days.
A day after Facebook released its first-quarter earnings report, Amazon announced a quarterly profit of $3.6 billion, an all-time record for the e-commerce giant. Amazon’s share price rose 2.2% in the week through Thursday, causing Bezos’ net worth to surge by $3.2 billion. The 55-year-old CEO, who owns a 16% stake in Amazon, is now worth $157.8 billion.
Bezos announced earlier this month that he will transfer approximately 4% of the company’s stock to his wife, MacKenzie, as part of their divorce settlement, which is expected to be completed around early July. Jeff Bezos would still be the world’s richest person while MacKenzie will become the third-richest woman.
The net worth of Steve Ballmer, Microsoft’s former CEO, rose $1.7 billion in the week through Thursday as the software giant’s share price increased by 4.7%. Microsoft smashed earnings estimates with a quarterly revenue of $30.6 billion, boosted by its commercial cloud business, which has grown 41% year-over-year. Ballmer, Microsoft’s largest individual shareholder, is now worth $48.3 billion. Cofounder and former CEO Bill Gates only owns just over 1% of shares, having sold or given away most of his stake in Microsoft, but the stock uptick did bump his net worth by $600 million.
Michael Dell, chairman and CEO of Dell Technologies, is now worth $40 billion after gaining $1.4 billion in a week due to a 6.6% stock uptick. Last December, the computer maker returned to the public market six years after Dell took the company private. Dell Technologies’ market capitalization was $46.7 billion as of end of day Thursday, up from its $34 billion listing. Dell’s net worth has nearly doubled over the past 12 months.
Larry Page, the cofounder of Google and CEO of its parent company Alphabet, got $1.1 billion richer, with an estimated fortune of $57.6 billion. Shares of Alphabet, which will report its first-quarter earnings after the closing bell on Monday, have increased 2.2% since last Thursday. It has been a busy week for Alphabet’s “Other Bets.” Wing, which became an independent Alphabet business last summer, recently got approval from the Federal Aviation Administration to deliver goods by drone. Wing plans to start drone deliveries in Blacksburg, Virginia, later this year. Loon, which uses high-altitude balloons to provide internet access to remote areas, raised $125 million from a SoftBank subsidiary on Thursday.
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Anthony Martin, 36, has created financial freedom for himself that many people can only dream of.
He generates $1 million in annual revenue at Choice Mutual, a one-man insurance agency he founded, by selling a very specialized niche product: final expense insurance. It covers burial expenses, so someone’s family doesn’t have to pay the costs, with a payout that is typically in the range of $10,000 to $30,000.
Six years ago, Martin’s life was very different. Working as a manager at an insurance agency in Roseville, Calif., Martin wished he had more control over how things were done. He eventually realized what he really wanted was to be his own boss. In 2013, he took a leap of faith and started the agency from his home.
Martin is one of a fast-growing cohort of entrepreneurs who are breaking $1 million in non-employer businesses, the government’s term for those that have no full-time employees except the owners.
The number of nonemployer firms that generate $1 million to $2.49 million in revenue rose to 36,161 in 2016, up 1.6 percent from 35,584 in 2015, according to the U.S. Census Bureau. That number is up 35.2% from 26,744 in 2011.
So how did Martin grow his agency to $1 million? Recently, he shared his strategies with me. Many of his approaches are instructive for anyone who is selling a consumer product or service online.
Here’s how he pulled it off.
Focus on an area you already know well. It’s easiest to get a running start in a new business if you have already worked in the same industry. By the time he went into business, Martin had already racked up years of experience selling final expense insurance, so there was no need to get a crash course. It was easy for him to explain his product to customers because of that. “I have a very thorough understanding of all of the options out there,” he says.
Find an efficient way to attract customers. Although Martin knew his product well, he didn’t have experience in marketing, so he sought outside help. He hired a company called SellTermLife.com to build a website for him that would rank well in Google and help him get leads, through a customized marketing plan. He put up the website in June 2016.
Even with expert assistance, it was slow going at first. “It took me six months before I got a single lead from Google,” he says. Nonetheless, Martin kept showing up at his desk every day to build up his website. “You’re really going for a long-term play,” he says.
It took stamina to stay committed during those early months. The battle to get market share wasn’t the only one he was waging. For entrepreneurs, he believes, the real fight is to keep showing up for your business, even when it would be easy to slack off. “The majority of the fighting you’re doing is completely against yourself,” he says.
After Martin got his first lead, his momentum accelerated. Two months after that, he started getting daily leads through his site—and now it brings in many more. “It feeds me a never-ending flow of ready-to-buy customers,” says Martin.
Offer top-quality content. In working on his marketing plan,Martin had learned from the team at SellTermLife.com that it was important to publish high-quality, informative content to attract people to his site. As readers clicked on practical articles he wrote on topics such as state-regulated life insurance, life insurance for 89-year-olds and buying insurance for your parents, the site gradually built a strong organic rank in Google.
Here again, sticking with a niche subject he knew served Martin well. “You cannot find another website that sells this type of insurance that has anywhere near the level of in-depth, accurate information about this product,” says Martin.
Creating robust content took a serious investment of time, given that Martin did not have a writer on retainer. Every day during the week and for five to eight hours on the weekends, he’d create articles that address commonly-asked questions about final expense insurance. The articles attracted people who were already seriously interested in his product and also helped him to “own” certain search-term keywords, including “long-tail” phrases—such as questions customers might type into a search engine.
To figure out which keywords mattered most, Martin researched which ones were most commonly used, relying on tools such as Google’s keyword planner and SEM Rush. He also tapped his own knowledge of the field. “After selling this type of insurance for so long, I know the words people use,” says Martin.
Automate your leads. Martin’s site enables people to “request to apply” for the insurance by filling out a form. By the time a prospect has filled out the form, Martin knows he or she is serious.
To avoid losing track of these leads, Martin set up his site so the leads automatically go to his customer relationship management (CRM) system. Once it feeds him their contact information, he reaches out by phone, prioritizing the newest leads. “The person who has submitted a lead most recently is always the best person to call,” he says.
Thanks to this system, Martin never has to chase anyone down to get them to listen to a sales presentation. “I’m in a really unique situation in the world of selling insurance,” says Martin. “I actually don’t really sell anymore. For all intents and purposes, I’m more of a cashier. I just take orders.”
Embrace remote work. Many insurance agents spend a good part of their day driving to and from appointments with customers. Not Martin.
When customers decide to buy, Martin guides them by phone through a remote application process that the insurance companies have put in place. Sometimes customers sign documents using a program such as DocuSign. Other times, they use a voice signature on the phone.
Working virtually in this way helps Martin make the most of his time every day. “I’ve never met a person face to face to process the deals,” he says. “It’s all done remotely.”
Stay focused. Some of Martin’s contacts have recommended that he sell Medicare supplements or cancer plans. He always says no. “The reason I’m really successful in this space is I have been hyper-focused at being the most expert authority you can imagine on this type of insurance,” says Martin. When he gets an inquiry from someone who wants to buy insurance outside of his niche, he refers the prospect to a trusted industry colleague.
Martin does not look for reciprocal referrals, finding that leads that arrive this way are generally not as inclined to buy as the prospects who come in through his own website. “Right now if I had to choose between serving a customer who has said ‘I’m ready to apply. Please sign me up,” or a referral who has a question, I’m not going to make as much money from a referral,” he says. “That’s why I tell people ‘Don’t refer people to me.’ I allocate my working hours to people who are ready to sign up.”
One thing that helps Martin attract business is having a large number of positive online reviews. He requests reviews from customers automatically using TrustPilot’s automated system.
Keep overhead low Martin started out working from home in Roseville, Calif., but when his website traffic started to increase dramatically in March 2017 and he saw the business’s full growth potential, he realized there would be tax advantages to locating to Nevada, which has no state income tax. Licensing costs were also lower. He rented an office there for $2,500 a month.
Having the space is important because soon, Martin believes, he’ll need to hire other agents. “I have so much web traffic and so many leads that if I want to continue to monetize a lot of what is possible, I will have to hire agents to process those deals as well,” he says.
In the meantime, Martin keeps the rest of his overhead to about $500 a month. That covers his errors & omissions insurance, licensing fees and CRM subscription.
Protect your most precious resource. In a one-person business, where you have no one to back you up, staying healthy is essential.
Although Martin works long hours as he grows his business, he always finds time to work out. Rising at 4:30 a.m. every morning, he goes to a gym where he can do strength training and play basketball. Then he heads home for breakfast and starts making phone calls from his office around 7:30 a.m.
On the weekends, Martin and his wife, Christelle, love to enjoy the outdoors with their German Shepherds, Bear, and his new adopted sibling, eight-week-old Olive. “I could definitely sleep more,” Martin says—but his life is too full of good things at the moment to spend much time hitting the snooze button.