Connor Gross (00:02:22):

Whereas I know a bunch of my friends and even people in their 30s and 40s typically we don’t realize that that becomes an option until much later in their life. So I would definitely say, I always knew I wanted to go into entrepreneurship and start my own thing. Now, I’ll be honest, the way to go and approach it was always a little unclear to me. And I feel like even after graduating college, despite having an exit in college, I got a job for nine months because for me it was really to have cashflow, that’s what everyone else is doing.

Connor Gross (00:02:47):

And it took a good nine months before I really figured out like, “This job is awesome, but it’s not for me.” And ever since then, I’ve pretty much been all in drinking the Kool-Aid for entrepreneurship.

Robert Leonard (00:02:58):

What was your job after college?

Connor Gross (00:03:00):

I worked at a Shopify app, it’s called Privy. Basically, the school I went to in Northeastern up in Boston, we had this whole co-op program where you get full six month internships where you can work for any company you want. They give you a whole database of companies, everywhere from Google, to Apple, to Airbnb and whatever you want. But I always found it was best just to cold email a bunch of companies that I wanted to work for. And so my sophomore year, I got a really sick job at this startup company called Drift at the time.

Connor Gross (00:03:23):

They were basically just growing enterprise SaaS business. and I got to work with them on sales, marketing, all that stuff. Met a really cool guy from there, his name’s Dave Gerhardt and got to go and basically work directly under him for a full six months. And by the time I came for graduating college, I was like, “Dave, what’s up, man? I love working for you in college, can I come work for you full time?” Got an offer that way and worked with him for that full nine months.

Robert Leonard (00:03:44):

What were you doing as part of that job? Were you in sales?

Connor Gross (00:03:47):

I was in marketing. Basically, the nice part about doing a bunch of internships in college is you can figure out what you want to do. I did everything from customer success to marketing. I quickly realized I hated customer success and between sales and marketing, I figured I want wanted something that was a little bit more strategic, and that’s why I went down a marketing route versus an entry level sales route. We just did mostly product marketing.

Connor Gross (00:04:05):

There was a lot of coming up with case studies, talking about how the product benefits people, figuring out in a software product, what does the user see to begin with and how do we get them to go and use and upgrade more in the product. So a lot of that stuff.

Robert Leonard (00:04:18):

We’ll talk about your actual stories, what you’re building, what you’ve built, but just from a high level, have you utilized a lot of what you learned in that role and maybe even in your internship, in what you’ve built yourself?

Connor Gross (00:04:29):

Yes and no. Yes in the sense that there’s a ton of intangible skills that you really just can’t teach someone unless you’ve been there and done that. As examples, the reason I wanted to work for these guys specifically is because I know they want to come to market thing. And so I got my copywriting chops really proofread and got a ton of edits and revisions and all that stuff. So now if I have to go out and write a sales email or I have to go and put together a deck to story-tell to a customer, I feel very confident in my ability to do that.

Connor Gross (00:04:56):

Know from the standpoint that I don’t own any software businesses today and so there’s a ton of really tactical stuff, everything from webinars to product led, drip emails, things like that that were really tactical in my day to day job that I don’t really utilize that as much, but a lot of the core fundamental stuff of copywriting, storytelling, things like that that I went into the job trying to get out, I’m able to apply those to other areas in life, for sure.

Robert Leonard (00:05:19):

Back when you were in college, you had a successful business in a pretty interesting story about a phone wallet. Walk us through that story.

Connor Gross (00:05:27):

Basically, I got with Eastern my freshman year and I like said, my parents are entrepreneurial. So I was just like, “I want to start something in college. I don’t really care what it is. I could be selling anything from billboard space ads or water bottles, anything that runs the game.” And that’s just basically my direct review, which is why I called out those two product. But I ended up meeting up with one of my business partners earlier on in college and he had the same thought process. He’s like, “I want to sell something.” I was like, “Cool, me too.”

Connor Gross (00:05:52):

And we went around a bunch of student fairs and stuff, things like that. We didn’t really know what we wanted to sell, what we wanted to start a company out of. And the student fair was giving out the free pens, the free notebooks. And one of the things we noticed that they were giving out that we’ve never actually seen prior to college were the stick on the back of your phone cardholders. Basically they would have company logos on them like a Lyft logo or the local real estate companies logo on them. And what we noticed is everyone was using them.

Connor Gross (00:06:15):

Everyone would put them on because now this is really the first time in your life after high school where you have to carry around a credit card and you have to carry on a student ID and stuff like that. And what was crazy to us is we were friends with a bunch of these girls at the time and they all have $100 phone cases and they’re just slapping on this ugly thing on the back of their phone. And so we were like, “Huh, what if we made them slightly better to design and just try to sell those?” And this is when we were 18 so we had no idea what the hell we were doing.

Connor Gross (00:06:38):

And so we were like, “Let’s do that.” So we found some manufacturers over in China, we went on Alibaba, we got a bunch of quotes and stuff and found a supplier. We ordered 2,000 of these things to our dorm room. And so looking back on it, it was just a crazy experience because we got to that point we were making 40,000 unit orders. But when we ordered 2,000 of them and had nowhere to store them, our roommates who were helping us pick this stuff up from residents mail, they were like, “What are you guys doing?” And we were like, “We’re just going to try to sell these things.”

Connor Gross (00:07:03):

And so we went and tried to sell them all around campus. We didn’t even think to go and sell them online at first, we were just like, “Who’s willing to buy one of these things.” And our friends being good friends were all like, “Yeah, we’ll support you guys. We’ll definitely go on and buy some.” It turns out, we don’t have 2,000 friends. So after 100 sales and we were like, “All right, now what?” And it basically came down to like, “Let’s start a website. Oh, no one’s buying off our website. Let’s try Etsy. Oh, we’re getting a few sales off Etsy. Is there a bigger marketplace that we can sell on?”

Connor Gross (00:07:28):

And then we finally got to Amazon. And so basically, the progression of sales from when we started getting on Amazon to when we sold the business were basically, I think, that first year we did just north of 30K, the second year, we did about 150K, and this is, I think, I want to say 2017 or something that, they were about 150K, then we did 850K, and then we did 1.2, and then we sold the business that year that we did 1.2. So overall, there’s a lot of mini lessons and stories in there, everything from working for ourselves full time, and we can school for six months. We get to travel over China and work on some stuff remotely and do some supply chain stuff.

Connor Gross (00:08:02):

But overall, it was a really good experience because we were able to have this big exit right before we even graduated from college and it set us up nicely for post grad.

Robert Leonard (00:08:11):

Have there been anybody making those cases yet? I’m looking at it now from this perspective, 2022, I see those cases everywhere. Were you guys one of the first few people to go and put them on Amazon or were they already on the marketplace?

Connor Gross (00:08:24):

We were definitely early to Amazon, but I think what we did better than anyone else is we realized the technical keyword term that a lot of competitors will try to rank for is stick on cardholder. That’s basically what the keyword is. It gets a good amount of search traffic. There’s this other keyword out there called phone pocket, which basically was just a term that kids in colleges use. And we knew that it was a term because we were one of those kids in college. And so we put the word phone pocket a bunch in our description and our product headline and all that kind of stuff. And that got us really high in terms of Amazon ranking.

Connor Gross (00:08:54):

So now if you go to Amazon, there’s hundreds of competitors out there, but some of our oldest things are still the top one or two search results.

Robert Leonard (00:09:02):

Why didn’t you leave school? it sounds like the business was doing well. Why didn’t you just go for it?

Connor Gross (00:09:07):

I was having fun. Honestly, it’s a question I’ve gotten a handful of times from other people in the past. There were times when we were considering it, but I had hundreds of friends in college, I was doing a fraternity, I was in a bunch of clubs. I loved the idea of just messing around, having fun with my friends. For me at the time, and even still now today, the goal isn’t necessarily, could we have built a $10 million business back in college? It was more like, could we go and build a business and still have fun with our friends on the weekends and not really worry too much about school and things like that?

Connor Gross (00:09:36):

So I think anyone who was like, “Yeah, you guys should have dropped that.” I bet we could have built a way bigger business, but the nice part is with Northeastern, like I said earlier, they have these co-op programs, so it’s six months full-time internships for yourself. We were actually able to convince the school to let us work full time on the business for six months. That’s the year that we went from 150 to 850 in sales. So we could tell that it worked when we were full time.

Connor Gross (00:09:57):

And then after that we were just like, “All right, let’s just go back to classes and let this thing run on side.” And it did on autopilot for the most part.

Robert Leonard (00:10:04):

What were you doing during those six months that you were able to work on it full-time. What did you do that really moved the needle from 150 to 850?

Connor Gross (00:10:12):

The number one thing was just launches a ton more products. Our product catalog went from 10 to 80. And so we launched a ton more, which took up a ton of real estate on Amazon’s pages. That was probably the biggest needle mover from a sales standpoint, from an operational logistic standpoint, we got to the point where we redid our entire supply chain. So we got to the point where we weren’t even touching the products at the end of the day, it went right from China straight to Amazon’s warehouses, straight to the customer. That saved a ton of time for us. And then there was a lot of other stuff, making sure all of the stuff that we were coming in, we had processes for like hiring a virtual assistant to do customer support, somebody to come on and update all of our product photos and conversion rate testing for our product pages, things like that.

Connor Gross (00:10:51):

It was a lot of high level stuff, but hands down, the biggest thing that got us there was five to 10Xing our catalog.

Robert Leonard (00:11:00):

When you went back to school, I’ve heard some stories that entrepreneurs have the Shopify ding noise or jingle that goes off on their phone. Were you sitting in class and just looking at your phone and just seeing the sales roll in?

Connor Gross (00:11:14):

Well, yes but no. One could not have that notification on, otherwise my phone battery would die in like three hours. Keep in mind, and this is advice for anybody who wants to go start an e-commerce business later on, sell something that’s more than $10. Our product was eight or $9, I want to say, but costs us 30 cents to make. So we had really strong margins still, but they’re dollar margins, not tens or hundreds of dollar margins. And so we would probably get to the point, some days we would sell 400 products, no, probably even more, like 400, 500 products or something that. And so if I had that thing open up throughout the day, it’s just ping, ping, ping.

Connor Gross (00:11:52):

So instead, it would be a lot more of, I would open up my Amazon Seller app, and then based on the time of the day, I would’ve roughly a good idea in terms of where we’re going to go and end up with for sales of the day. So if I knew that we sold 200 by noon, I knew that it was pretty reasonable that we were going to go and get to 350 sales by the end of the day. But definitely for anyone listen to this right now, you should sell something more expensive. There’s more need to be made, sure. I’m an example of that, but there’s much easier ways for money to be made for sure.

Robert Leonard (00:12:18):

You mentioned that you had to travel, well, maybe you didn’t have to, but you chose to, to go to China in some other foreign countries. Is that just for supply chain and finding manufacturers? Walk us through what that was like a bit?

Connor Gross (00:12:29):

Yeah. The China one is a lot of visiting fairs. Like we would go over to Hong Kong and we would go to these big trade shows to try to find new suppliers, also to meet with existing suppliers and talk about product line expansion and stuff. And then on occasion, we would visit a manufacturer warehouse or something like that, or an actual factory. What you’ll notice when you work with Chinese manufacturers is when you show up in person, it totally changes their opinion of you, it changes their opinion of the business for relationship. And they’re willing to bend over backwards and give you way better terms in terms of paying for things and all that stuff.

Connor Gross (00:13:00):

I don’t know why, I don’t really know if it’s a cultural thing, but everyone I’ve talked to that sources from China says that when you show up, your business with them, even if you were working for them for three years prior, it’ll dramatically change. So that was a really big one. And then the other, it took a lot of convincing for the school to let us go on this co-op for ourself for six months full time. You’d probably not be super surprised when we emailed our advisor being like, “Hey, listen, these last two months out of this six month co-op, we’re going to go over to Bali and we’re going to go work from Bali for the next two months.”

Connor Gross (00:13:30):

And he was, “What?” And we were like, “Our sales have grown. We’re clearly doing work.” And he’s like, “All right, fine. But you have to keep the same meeting time.” There would literally be times, I want to say it was 3:00 PM Eastern Standard Time, that we’d have to wake up in Bali at 3:00 AM, because our advisor was like, “No, we have to still meet at 3:00 PM.” We’re like, “I think you’re just doing this semester with us, but that’s fine. As long as we’re over here for the next two months, we don’t really care.”

Robert Leonard (00:13:54):

Were you in Bali for just to work and live there or were you getting supplies there?

Connor Gross (00:14:00):

Oh, no. Purely lifestyle based. It was just like, “Hey look, this could be cool to work over here.” And keep in mind, this is after we fixed our whole supply chain. So prior to this point, we would be getting in monthly shipments of tens of thousands of units and have to sort them out, pick pack, repackage, deliver to the Amazon, things like that. Now, we’re like, “Oh, we run a location-independent business now, let’s go and do this over in Indonesia.” And that was a plan there.

Robert Leonard (00:14:23):

How were you as a student in school at this point? Were you straight A’s 4.0. Were you kind of more squeaking by? What was your school situation like at that point?

Connor Gross (00:14:34):

I graduated, I don’t remember the exact GPA, I want to say it was a 3.9 or something that. I think from my standpoint, the best thing I would tell anyone is, I don’t think GPA really matters that much. I personally have a really hard time half-assing things. The stuff that I’m learning in my intro to marketing class, my junior year of college, I’ve learned way more doing other businesses. I still don’t feel like I have it in me enough to go and just totally say, “Screw this, screw the class, I’m not going to go and work on anything anymore.” The thing that I honestly don’t tell most people is, when I went to Northeastern, I did not have the grades to qualify for that school at all. And I think I just did it ton of extracurriculars in high school.

Connor Gross (00:15:12):

And so, for me going into that school was like, “I can’t believe I got into school.” And I almost came in with a little bit of a chip on my shoulder, really wanted to go and prove that I belonged to some degree. And so any chance I had to get an A in a class or go above and beyond, I definitely tried to go and make a point out of it. But going back to the original question. Yeah, my motivation definitely waned a ton as the business picked up, because I would get into situations where I would get in an argument with teachers, they’ll go on for two lessons about how print media is really important in marketing.

Connor Gross (00:15:41):

And I would just raise my hand, be like, “Hey, there’s way better ways to do it. I’ll be honest, I think you’re wasting a lot of people in this class’s time by teaching them this stuff.” And this guy will be 70 years old, came from the industry back in the ’70s. And he’s like, “Absolutely not. This is the way business is done for small businesses.” And I was like, “Have you set up a Facebook page? And have you ever tried to go and run any kind of digital ads?” And I say this now that sounds super condescending and kind of a jerk. I wouldn’t try to be a jerk, I would just really push a lot of my professors to be like, “Hey, I know you guys are really good at teaching. This is your job. I think that it would be much more valuable if you talk to students skills that they could actually go and use on a day to day basis.”

Robert Leonard (00:16:16):

What you explained is exactly what I was thinking, is, how do you sit in a marketing class, like you said, where they’re teaching one thing that you’re literally implementing in the real world, in a real business, that’s actually working. I had a similar experience in my finance, my MBA, these teachers were teaching these very academic financial investing and concepts like about pricing models specifically. And I’m like, “That’s just not how it works when you invest. You cannot just run a model and say that something is worth this, this is just not how it works. In theory, what you’re saying makes a lot of sense, but in practice that’s not true

Connor Gross (00:16:48):

And the best way to go and communicate that with them, because if you start telling them they’re wrong, then they’ll just grade your test harder and they’ll just make your life worse. The best way to do it is honestly just take theoretical thing that they’re talking about and be like, “Cool, can you go and provide an example of how people are doing it in the world today?” And oftentimes, what I notice for most of my classes, they’ll be like, “Yeah, Sears is running their pricing models this way.” I’m like, “Sears is almost out of business, dude.”

Connor Gross (00:17:11):

They’ll say examples of a case study around like GE. And I was like, “Honestly, GE has not had a really profitable groundbreaking quarter since the early two 2000s.” So typically that’s the easiest way to go and communicate back and forth with them, is to be like, “Just give us more up to date examples, like 90% of the kids that are leaving your class today are going to probably go and work for a consulting firm or big tech company or something like that. They’re not going to be working for one of these P&Gs or Unilever or something like that. So how can they go and apply this to their own real world scenario?”

Connor Gross (00:17:40):

It definitely gets a little bit frustrating towards the end. I will say I still find college valuable from two standpoints. One, like what we talked about earlier, socially. I find that it’s definitely still worth it to have fun and go make friends. That was really cool for me. And the second thing is, from an insurance policy standpoint. So like, “Okay, if all my businesses go to zero tomorrow, I have this piece of paper that says I’m qualified for something and I won’t have too much of an issue finding a job after that.” And maybe this is coming from a point of arrogance, but I do think that college provides a good insurance policy and a good social program when it comes to learning the actual skills that you need to go and perform well either in a job or career. I think it falls short pretty aggressively.

Robert Leonard (00:18:19):

Tell us a bit about the sale of the business. How did that come about? What was that like?

Connor Gross (00:18:25):

Yeah. Basically, the sale of the business, our goal is going to the year of college, we were like, “What do we want to do with this thing?” And from our standpoint, it was like, “Well, we could go and turn down the retail route and try to get the Facebook ads work on our own website again.” Because remember, at this point, we were just really selling on Amazon. We were a one-trick pony on Amazon. We were like, “We could go and spend… ” We graduate from school, we do all that, and then we just spend the next two to three years building out this thing, building on a retail division, creating an actual brand, not just a product that people find on Amazon. And we could do that.

Connor Gross (00:18:54):

And we both looked at each other, I think we were drinking at a bar when we were talking about this, and we were just like, “We don’t want to do that.” I was like, “Do you want to do that? Because I certainly don’t want to do that.” He’s like, “Absolutely not.” And so we were like, “All right. Well, let’s just see if someone wants to buy this then because I don’t want to shut it down of anything, the cash flow, but it could also be nice to graduate from college and have a nice win under our belt or something.” So we decided to go and list it on one of these marketplaces. I want to say it was Empire Flippers, is who we used.

Connor Gross (00:19:19):

And so we list it, and it was like eight months of a lot of nothing. And we’re like, “Oh, I guess we don’t have that much of a sellable business.” And so every month or two, we would take a call with UPenn Wharton kids being like, “I want to start a D2C business, maybe I’ll buy yours.” And like, “Maybe, if you guys want to.” But then they couldn’t get the funding. And there would be other people who were our strategic buyers and run a portfolio of e-commerce brands, and they would just come around tire kick for a little bit, get on a call. And so at the end of the eight months, I was just like, “Honestly, this doesn’t really totally seem to be worth it.”

Connor Gross (00:19:50):

I was like, “Maybe we do this after school. It sounds we can’t really sell it, and I don’t really know what the next best option is.” Keep in mind, a lot of the businesses is on autopilot at this point, sales are still going up. We grew 50% versus like 800% the year before. And so it got to the point like, “All right, maybe we just won’t do this.” That conversation happened the beginning of December of 2019, a couple months pre-pandemic. And then on Christmas morning, we get a calendar invite for the day after Christmas for another buyer call. And then I was like, “I don’t really know if I want to do this.”

Connor Gross (00:20:23):

Anyway, I went out drinking Christmas night, with my friends and family. And I was super hungover on December 26th. My partner, Gio, texted me, he’s like, “We have this buyer call at 10:00 AM.” It’s like 9:46 and I’m struggling to get out of bed. I was like, “Ah, it’s just going to another tire kicker.” And I get on the call and the buyer is on the call too. She’s like, “Hey, thanks for taking the call. I bought your product three times before, this is the exact type of business that I want to purchase. Let’s do this thing.” And this is like five minutes into the call.

Connor Gross (00:20:50):

And I’m like, “Okay.” This is me thinking to skip this call. I was like, “Okay, maybe we go and do this.” She hangs up the call. We talk to the broker. We’re like, “Okay, what’s the deal?” We’ve had some tire kickers in the past. Do you think she’s actually serious?” And he is like, “Yeah, she sounds really serious.” I was like, “That’s what I thought too.” And on call, the broker’s like, “Yo, she just wired the rest of the money for this sale.” And I was “What?” I was like, “15 minutes afterwards?” Because we were on the call for an extra 10 or 15 minutes afterwards. And I was like, “Okay.”

Connor Gross (00:21:18):

So we reached back out to her. We were like, “Hey, it’s December 26th. I’m guessing you’re doing this for a tax benefit, write off this big purchase before the end of the year. But could we just have the sales date close on January 1st so we don’t pay taxes until the following year?” She’s like, “Yeah, I don’t care.” And I was like, “Okay, cool.” And my business partner came from an investment banking background, he’s like, “This isn’t normal. This is not how transactions go down.” And it’s crazy. We went through the diligence process, we went through the migration process of like, “Here’s the trademark, here’s the log in, here’s the software. Here’s the credentials.”

Connor Gross (00:21:49):

I want to say money hit the bank account like February 15th. And anyone listening to this right now who’s ever sold a business or bought a business just should know that’s not how things normally turn around. It just was for us. I don’t have a better answer than that. So this is February 15th, spring semester for our senior year, we have money in the bank. I didn’t want to say, like a week later we went to Cancun for spring break. And then the following week, COVID happened and we’re like, “Huh, that was a very weird sequence of times.” But the transition of our VAs, our trademarks, our logins and all that stuff was weirdly simple, which is nice.

Robert Leonard (00:22:20):

How has the business done with COVID

Connor Gross (00:22:24):

The things I know is, it looks they’ve had some stock issues. I’m not in the business, so I can’t really comment on it. It looks maybe they ran out some of the best sellers and they haven’t been replaced as much. I haven’t honestly kept in contact with the new owner that much to see what they’ve been up to. I know that originally, I was very excited to have sold when we sold, because I don’t know if anyone listening to this remembers, but there’s this two to three-month period in the beginning of 2020 when COVID happened where Amazon was not shipping any non-essential items in two days, it would take three weeks. And guess what? Cell phone card holder wallets are not essential items.

Connor Gross (00:22:59):

And so I remember seeing our product listings after we had sold be like, “This product will arrive in four weeks.” And I was like, “Who is buying a phone wallet that’s going to take a month to deliver anyway, when everyone’s stuck in the house?” I got to imagine that a lot of sales dropped, but then there’s also so many tailwinds with e-commerce that maybe it picked up again. I really don’t know that much.

Robert Leonard (00:23:18):

Do you ever go on Amazon and just check out the brand see what’s going on?

Connor Gross (00:23:22):

Oh yeah. It doesn’t look like much has changed. Honestly, I’m not entirely sure. Maybe if your strategy was to take in more retail on Amazon’s cash slow, I don’t know. Honestly, I haven’t really kept up to date with it that much.

Robert Leonard (00:23:35):

We’re talking on a real estate show here, we’re going to talk about some of your real estate stuff in a little bit, but a lot of times in a real estate transaction, you don’t know who’s on the other side of the table. Like when you’re selling a house, you don’t know really much about the other person. And when you’re buying, you don’t really know a lot about them. So did you know much about her? Was she a successful businesswoman? What was her story?

Connor Gross (00:23:55):

My understanding is that she’d run two to three e-commerce brands in the past, scaled those up. And she also did some Airbnb short-term rental management stuff. So just seemed like a classic serial entrepreneur hustler or stuff like that. I really didn’t know though, but that’s when all the negotiations started happening. It wasn’t really much of a negotiation because she paid full asking price. And I started chatting with the broker, I was like, “Do you think she’s going to close?” And he’s like, “She originally put down 50% for proof of funds before even taking the call, whatever. So she has money, she has some of the money.” But honestly, from my standpoint, maybe this is a weird thing to say, but we were never full time on the business for years.

Connor Gross (00:24:34):

I know a lot of people who will sell their business and be like, “This is my baby. Please take care of it. I want you to treat it like you would your own brand.” From my standpoint, we were doing almost more of an arbitrage play than a brand standpoint. We had a name of the company, it was called Cardly. And our friends and our family all knew it was called Cardly. And I’ll market it a little bit on Twitter and such that it’s called Cardly. But for the average consumer buying this brand, they were buying an item on Amazon, and typically they don’t care if it has a brand or not. I wasn’t too upset when we sold regarding, what is she going to go own do with the company?

Connor Gross (00:25:07):

From my standpoint, I was more celebrating the fact that like, “Nice, we’re 21 or 22. I got the first win under our belt. And now, let’s take this money and invest it into something bigger.” That’s where my mind was at.

Robert Leonard (00:25:17):

How did you know how to price what the business was worth? You got the asking, could you have gotten more? Did she overpay? How did you even know what the price is? Did you rely on a broker of that?

Connor Gross (00:25:28):

Yeah, we had a broker. I’ll be honest, we priced it very aggressively. So typical Amazon multiples, if you’re a purely Amazon FBA brand, which FBA means fulfillment by Amazon, your private labeling products, typically, they’ll go a 3X EBIDA. I think part of the reason it took eight months to sell the business is because we were like, “Let’s do five.” Then the broker was like, “I don’t think you’re going to buyers at five.” And we’re like, “Well, let’s see.” So we priced it pretty aggressively. And I think that’s why it took so long to sell, but we were very happy with the outcome

Robert Leonard (00:25:56):

Fast forward today. You’re back in e-commerce. You’re doing a lot of other stuff too, but you’re also back in e-commerce with a car and boat e-commerce brand. So those continuously hearing e-commerce and how popular it is, breakdown for us exactly what an e-commerce business model is that’s not just built on Amazon, and then tell us a bit about what you’re building with your car and boat brand.

Connor Gross (00:26:19):

Totally. So there’s two main e-commerce processes that happen today. One is, a lot of the arbitrage game, which will be drop shipping. And so you’ll say like, “Hey, people want to go and buy this desk lamp. You can see that they’re probably willing to pay $40 for it. I’m able to find on Alibaba for $7, just going on Facebook ads, it costs me $15 to acquire a customer. Cool. I’m making the difference and I’m profiting there.” That’s the one way. It’s getting a lot harder to go and do that model. Typically, you’ll get priced out by people who are willing to go and accept a lower profit margin than you are. So that’s the old way that a lot of these YouTube gurus and core sellers will all go and promote a lot.

Connor Gross (00:26:55):

The way that we see a lot more these days is a lot more of a private label branded approach. So private label branded is basically, private label is a fancy way of just saying you have a brand. So if I’m selling Hydro Flask, Hydro Flask is a private label because I’m buying a Hydro Flask and not just buying a thermos. So that way, in my opinion, is the much better and long term way to go and scale these kind of things. However, it becomes super cash constraining. And so, what you’ll notice with the drop shipping model is, a customer goes on, they buy your lamp for $40. Cool, now you go and send $7 to your factory over in China and you make the difference. You’re getting paid and then you’re paying. So you have a really good cash conversion cycle.

Connor Gross (00:27:31):

With private label and building a brand and creating a like Hydro Flask route, it’s very cash constraining. So if you don’t have a lot of cash, it’s very tough to go and become a really big e-commerce brand because what you essentially have to go and keep on doing over and over again is, “Let me go and buy 1,000 water bottles. Cool. I just spent $10,000 for these 1,000 water bottles. Now, let me go and sell them. And you’re getting the money back one by one by one by one by one. And by the time you’re about 50% selling through all those water bottles, now you’re like, “Cool. It takes me 30 days to get more product in. Now, I have to go and buy another 2,000 water bottles because the company’s growing and I’m building my business.”

Connor Gross (00:28:04):

And so now all the profit and all the money you just made from this first 1,000, you’re reinvesting into larger inventory orders. And that’s not even to mention like the marketing costs, the overhead costs, hiring employees, things like that. Now, at some point, you get big enough to the point where you can negotiate terms with your suppliers and not have to go and pay them for 60 days, so you start getting paid before you have to pay them. You’re able to go and raise your prices a little bit if you have an actual brand and you can get a really good profit margin. A lot of the people that I chat with in e-commerce today will say do not even begin thinking about selling a product unless you have minimum 75% plus gross margins.

Connor Gross (00:28:38):

So like if this water bottle, for example, if I’m selling for $10, this water bottle cannot cost me more than $2.50 to make, otherwise you just won’t make it

Robert Leonard (00:28:47):

Since you were not private label with your wallets really. You had the brand, you had Cardly, but you weren’t necessarily a private label. Did it not take a lot of cash to start? And how did you fund that from the initial beginning?

Connor Gross (00:28:59):

Technically, this is where it gets a little confusing. We technically would have considered ourselves private label because we’re not necessarily doing arbitrage, we own the brand at the end of the day. An example of something that wouldn’t be private label is if I decided to go and sell Nike sweatpants on Amazon, that would not be private label, that would be more retail arbitrage. The question around cash flow basically in the early days?

Robert Leonard (00:29:20):

Yeah. How did you fund starting it? The first day, you guys decide, “All right, we’re going to do this business.” How did you fund it?

Connor Gross (00:29:26):

We built a seven figure e-commerce business with no more than $500 each that we put in. So basically, that $500 each, so $1,000 total. I want to say the cost per unit was $0.30. So we had a really good gross margin of 95% because just the value to perceived value was so different. And so we put in about 1,000 bucks. And we basically just didn’t take a paycheck for the first two, twp and a half years of the business because every dollar that we had coming back into the bank account was going out to place bigger and bigger inventory orders. And I will say, logistically, a nightmare.

Connor Gross (00:30:00):

It was so difficult to manage that cash flow. That’s why nowadays, you’ll see a lot of e-commerce brands, if they’re private labeling, almost none of them can survive without a line of credit from a bank. So most of the time now, you’ll see a lot of people going to a bank and being like, “Hey, listen, we sell $5 million a year, but I need this $250,000 to float my next inventory order, because if we liquidate all the inventory, now we’re set, then we’re out of stock for the next 90 days.” So a lot of people rely on line of credits from banks.

Robert Leonard (00:30:29):

Tell us a bit about what you’re building now, the e-commerce brand with car and boats.

Connor Gross (00:30:34):

I get very bored very easily, basically. I’ll put it this way. And after we sold the business, I was like, “I’m not doing anything for the next year, and I’m have to take this cash and I’m going to travel a little bit more.” And then COVID happened, of course, I was like, “Huh.” I’m just sitting in a house all day and I’m crazy bored. I was like, “What if we started another business?” And so I found one of my buddies, Nick, who’s super into cars. I was, “Hey, I got this car portrait from my friend the other day.” It was one of the really cool things. He has a BMW E30 that he loves. And he was like, “Maybe we can go and sell this, make a little bit more commercial.”

Connor Gross (00:31:05):

I was like, “Cool, I’m done. I’ll jump on, whatever.” Basically, we’ve just been selling either customer or pre-made artwork for cars, boats, all that kind of stuff lately. Motorcycles too have been a really popular fan base. And we’ve just basically been scaling up this business to the point now where we have a really big enthusiast customer base that loves the product and love displaying it, and the core and all that kind of stuff. And it’s definitely a very fun one to write about in terms of getting PR. It’s called Bespoke Collection, and we basically do either custom made prints of your car, boat, motorcycle.

Connor Gross (00:31:35):

We have people coming in who are truck drivers being like, “Can you do my semi truck?” We’re like, “Yeah, I guess.” And so we’ll do a lot of stuff like that. And then we’ll also do pre-made of our work of like Mustang prints, Teslas, BMWs, Ferrari, all that stuff.

Robert Leonard (00:31:49):

How are you actually getting these printed?

Connor Gross (00:31:52):

Technically, we do some drop shipping actually, because what we’ll go and do is, since it’s a custom print, we can’t necessarily keep stock of it, so we’ll go and have a designer in house go and create their design, whether it’s the motorcycle or whatever. And then will use a 3PL logistics company, a third party logistics is what it is. And they’ll basically go and print, pack and manufacture all of the stuff for us and ship it out to the customer. So we really just handle… we do the customer service, the marketing, the sales, whatever, and then they handle all the manufacturing for us, which is really nice.

Robert Leonard (00:32:23):

Have you had any issues with trademark and things like that for selling portraits of cars that already have brands?

Connor Gross (00:32:29):

Not necessarily. Something we thought about in the early days. I think the big thing, because we’ve chatted with some of these guys, we’ve chatted with like the BMW guys in the past. And because we created the graphic design, I think it technically falls under another class of artist interpretation. But if we specifically say, “Buy this BMW artwork,” which we do, then we can get in trouble. However, we’ve talked to their team a bunch of times and they’re like, “Honestly, as long as you’re not selling really crappy stuff, we don’t care what you do.” Because if anything like us running Facebook ads on BMW products is better for their brand.

Robert Leonard (00:32:59):

I was just going to ask too, how do you promote this? Are you relying solely on Facebook ads these days? Is that your main marketing strategy? I’m sure you probably do a little bit of SEO just given maybe the brands that you were able to sell.

Connor Gross (00:33:09):

We’ll do some Facebook ads, specifically on the holidays. A lot of the sales have honestly been really good partnerships that we’ve formed. We’ve partnered with companies like Hagerty, which is the largest car insurance company out there. We’ve partnered with Road & Track. We’ve partnered with Car and Driver, we’ve partnered with BMW Blog. A bunch of these guys who do a lot to push our products. And then we’ll either work with them on the affiliate model or it benefits them to go and promote it to their customers because we give them discounts for their customer base. So it’s a lot of partnerships which have been a really nice.

Robert Leonard (00:33:38):

How did you get into those partnerships with those people, some of the bigger companies?

Connor Gross (00:33:42):

So many cold emails. Honestly, that’s been the playbook. Like I will go on and I will just pull together off Upwork or Fiverr a list of 500, 1,000 emails off the biggest publicist. And then I’ll literally just email them at like once a week until I get an answer or a block or something like that. And it’s a lot of, “Your customer base wants this, we do that. Do you think that there’s an opportunity to work together. We’re happy to pay.” And most of the time, as long as we come in with a really cool story and allow them to do some photography and own the story a little bit, they’re totally cool with it.

Connor Gross (00:34:12):

I’ve noticed that one of the best ways to go and get PR whether it’s for yourself or for your brand is make the email subject line when you’re emailing these people the idea for the content piece that they can create, and they love it. Because it makes their job really easy and that sparks that idea of like, “Oh, that could be a cool idea.” All over 2020, a lot of the outreach that I was doing would say things like… What would it say? It would say like, “Here’s what car enthusiasts are doing when they can’t drive their car during a pandemic,” or something like that. I think I wordsmithed it a little bit, but it was something like that.

Connor Gross (00:34:42):

And the open was super high with their sponsors, like, “Oh, this is actually really cool. We’ll definitely promote it.”

Robert Leonard (00:34:47):

How are you keeping your emails, when you’re sending so many, from going to spam?

Connor Gross (00:34:52):

You use an app called Lemwarm, L-E-M-W-A-R-M. Basically, what I that’ll go and do to create the little private network of people who are able to go and mark your email as safe. And so you’ll spend usually two or three weeks just using the software before you even send any cold emails, and then it gets your deliverability up super high, and then you start sending the actual cold emails.

Robert Leonard (00:35:13):

In addition to starting the car and boat e-commerce business in April, 2020, you also bought a tiny house blog. How did a tiny house blog even come on your radar? And why did you decide to build it?

Connor Gross (00:35:25):

Basically, went on a little vacation with my girlfriend at the time to a tiny house up in New Hampshire, I want to say. Are you in Vermont or New Hampshire?

Robert Leonard (00:35:34):

New Hampshire.

Connor Gross (00:35:35):

And have you ever been to one of the getaway places?

Robert Leonard (00:35:38):

No, I haven’t.

Connor Gross (00:35:39):

Have you heard of them though?

Robert Leonard (00:35:41):

Nope.

Connor Gross (00:35:42):

Okay. All right. Well, check them out. This is free marketing for getaway. Super cool trip. Basically 40 little tiny homes up in anywhere from Vermont, New Hampshire. They have a bunch all throughout the country now at this point. I did a little getaway. I spent a good amount of money for two nights. It was a good amount, just saying relative for a tiny house. I want to say it was 500 bucks to stay there for two nights. And I’m like, “Huh?” This was like a 40 foot by like 30 foot thing. I wonder if we can just do the same thing and market it outside of cities where people want to escape into the nature for a little bit. I originally came back from that and I was like, “Yo, Gio, we’ve got to go and build 20 tiny houses,” or whatever.

Connor Gross (00:36:17):

The next day I was in a Facebook group, I think Trends Facebook group. And somebody was like, “I’m selling my tiny house blog. Here’s the online traffic or whatever. I’m selling so much cheap.” I think we bought it for 11, 12K, something like that. I sent a screenshot of it to Gio and I was just like, “Maybe we just do this instead.” I was like, “Building all this stuff seems like a lot of work. What if we just blogged about it?” And so the game plan has pretty much been like, “How can we go increase the traffic? How can we go and get better affiliates?” The cool part about tiny houses is that they have a super high RPM, revenue per thousand people who hit your site.

Connor Gross (00:36:47):

And so the playbook has honestly just been, get better affiliate links, drive more traffic to the site. And eventually, I think down the line, once we have a little bit more time, we want to sell physical products through it. So anything from tiny house plans, to like building a brokerage site for actual tiny houses to be bought and sold.

Robert Leonard (00:37:03):

You’re not actually doing blogging on this site, correct?

Connor Gross (00:37:06):

Oh no. No, no, no. We hired bloggers off ProBlogger and stuff like that.

Robert Leonard (00:37:11):

What do you plan to do long term? Are you going to sell it? You just mentioned a couple of different products and services. Do you think you’ll sell it before you get to that point or you think you’re going to build those out for first, then sell it, do you think you’re going to just cash it for the indefinite future?

Connor Gross (00:37:24):

Probably just cashflow until we have either the time or the tenacity to go and approach it with bigger projects. Right now, it’s just not totally worth the squeeze. It’s small project, we did it at the time because we just sold the business. And so this is actually the next thing that we got into, we bought it a month after selling the business. The most part will probably be just hold it and then once either we have more time or we can bring in somebody who has more time to go and set up that brokerage network for it, I think that’ll be really fun because then we can start listing a bunch of things, and that’s where you can actually probably make some serious money with it all because you can actually say like, “Hey, this tiny house cost $50,000. We’re going to take a 3% cut if we sell it.”

Connor Gross (00:38:00):

And so I that’s probably the long term strategy, but for now, probably just hold it, just sit on it for now.

Robert Leonard (00:38:06):

So is it running pretty much all by itself now?

Connor Gross (00:38:09):

Oh yeah. And nobody really touches it. We’ve got writer who writes weekly, they write a newsletter, they write a new blog post and then somebody who helps work on the SEO side of it all.

Robert Leonard (00:38:19):

And they just post it all for you.

Connor Gross (00:38:21):

Yeah. And we make sure they get paid. And then that’s it.

Robert Leonard (00:38:25):

When you went to buy a business this, how did you value it?

Connor Gross (00:38:29):

Again, typically what I was saying before about the Amazon FBA stuff is it’s typically three times EBITDA. Content sites very dramatically, but I’d say typically, it also still runs the gamut of 3X EBITDA. So if I say we bought it for, I want to say 11 or 12K, I think it was only making three grand profit a year, something like that. So making three grand profit, we said, “Hey, here’s three and a half times. Here’s what you would make over the next three and a half years.” And the guy was cool with it. Really cool guy, still keeping contact this day. And I think we used escrow.com to wire all this stuff, if you want, the nitty gritty of it.

Robert Leonard (00:39:03):

One month later, I think it was May 2020, you purchased another company called Hashtag Presets. What made you want to purchase this type of business and what is the business model with this?

Connor Gross (00:39:13):

This one’s interesting, it’s a totally digital business. We sell digital products, which is interesting with e-commerce because you get all of the advantages of never having to deal with the cashflow stuff like we talked about before. So that really struck my interest. I also had a very unique niche. Honestly, I would say though, from the results, just being totally open and honest, we got back most of what we paid for for the business, but it’s not doing as well today, mostly because, A, we just haven’t had a full time operator in place to run it all the time. And then B, it got very competitive, very fast. I bought it, doing a more due diligence and I was like “Huh, everyone’s doing this right now.” And it’s very tough to stand out.

Connor Gross (00:39:49):

So for that one right now, I’d honestly say we’re just kind holding it in the meantime, maybe thinking about selling it in the future, but it’s not necessarily something that’s been exponential growth. If anything, that’s been more of a learning lesson of make sure when I buy something in the future, I’m buying something with diversified revenue streams, and also something that has a diversified product line that’s not just dependent on Facebook ads, because if the most Facebook ads stop working, the business stops working. And we were able to milk a lot of it out of it for a little bit, but now I think we might shift the focus back to either product line expansion on it or just hold onto it and see if something comes up available in the future.

Robert Leonard (00:40:23):

I know you’re pretty active on Twitter and there’s another guy named Andrew Gazdecki that’s very active on Twitter as well. And given that you acquire so many businesses, I’m sure you’ve probably come across him at some point. So have you considered micro acquiring any businesses from him?

Connor Gross (00:40:40):

Yes and no. I always have considered it, I think the big thing that I want to go and be mindful of is now that we’ve bought this tiny house thing and this hashtag thing, it’s like, what’s our end goal with those? And I think ultimately in hindsight, I would’ve been much more strategic about what we bought versus didn’t buy. And I think with MicroAcquire, you’ll notice there’s a lot of really good businesses on MicroAcquire. There’s also a lot of businesses that people spun up in the last three or four months and they’re just like, “Let’s see if someone will buy this.” The multiples are pretty crazy on that stuff.

Connor Gross (00:41:08):

One framework that I’ve learned just from following a lot of people who are much bigger than I am that run a lot of businesses is when assets are really expensive, you’re better off building them, when assets really cheap, you’re better off buying them. I think right now today, January 19th of 2022, assets in every, this is a real estate podcast, so assets and everything from real estate to software to any business you want to buy are very expensive. And that’s not to say that they’re not deals everywhere. We just bought a storage facility three, four months ago at this point. So you can still get a good deal anywhere, but when they’re very expensive, you’re probably better off building or starting your own thing.

Robert Leonard (00:41:46):

We are a real estate show, so let’s talk about that, that storage facility. That’s exactly what I wanted to talk about next. We’ve actually had a couple big names in the self-storage space on the show recently, Paul Moore, who wrote a book all about it with BiggerPockets, he was just a few episodes ago. And then Nick Huber was a few months back. I don’t think you had much real estate experience other than now what you’re doing with self-storage. So why did you decide to funnel the profits from your other businesses into real estate by jumping right into the world with self-storage?

Connor Gross (00:42:18):

Good question. I have been trying to follow this framework, make money online, invest money offline. And so for me, that is pretty obvious from where I’m sitting, because I can start a business, scale it up in a year and have a seven figure payday if I do things correctly. At my age, you can’t necessarily do that in real estate unless you’re using other people’s money. And so for me, I wanted to go and take the money that I’ve made from either selling my last business or cash flowing the profits from my current business and reinvest in just something that’s a lot more stable and I know can just either appreciate or have cash flow that I don’t necessarily just have to worry about an algorithm change messing up my day. And so I think when it came to for self-storage, like you mentioned earlier, I try to stay involved a lot on Twitter.

Connor Gross (00:43:00):

And for me, it was really I saw all these people making money with it. They were like, “You’re competing against small business owners.” And that was really enticing to me because I’m coming from the e-commerce background where I’m competing against marketers all over the world. Now, with the storage facility we have in Dallas, I’m competing against five people on a five-mile radius and they’re all above the age of 60. And so for me, I’m cool, I’ve playing that game every single day of the week. And what I really started noticing when we were digging into it is the value add deals are insane.

Connor Gross (00:43:26):

I’ll just give you the numbers of the one that we just bought. Basically we bought one for $393,000, we bought it through a wholesaler. So we had to close really quickly. We paid all cash for it basically and now we’re actually just getting to the point, we’re trying to do an equity recapture in the business, but we paid all cash. And the rents for this business were, I think, it was about $4,000 a month or something like that. Forgive me if I don’t know the exact cap rate that we bought off on the top of my head, was about $4,000 a month. When you look at the way the business was being run, this is absurd. The owner was tracking rents on a whiteboard, would not accept any credit card, would only accept cash.

Connor Gross (00:44:01):

Hasn’t raised rates on some tenants in 30 years, occupied, I want to say about 10% of the units just with her own stuff. So there were a ridiculous amount of value add opportunities from without even having to go in necessarily clean up the facility at time. Now, we did put in about, I think we’re 30 to $50,000 in CapEx, so everything from a couple new doors, some security cameras, we redid all the landscaping, trying to give it a little more curb appeal. Right now, this is January 19th, so last month, we collected over $8,000 in rent. So we more than doubled the NOI of the business in three months just from raising rent from people and then filling up the units even more. So now, when we go to actually do this equity recapture, we should have a significantly increased valuation of the overall property.

Robert Leonard (00:44:47):

Yeah. If you bought it for 400,000 say, I know it’s 393, but let’s just say 400,000, and you’ve doubled the NOI, assuming the cap rate holds steady, which it probably has and a relatively short period of time, you just doubled the value by doubling the NOI.

Connor Gross (00:45:00):

And my thought honestly, and maybe I’m wrong about this, because you’ll have people listen to this podcast who know way more about real estate than I do, I’m thinking the cap rate’s going to go down as well too, only because everything that I’m seeing on market from a cap rate standpoint, and this is crazy with self-storage, is a six like cap, which sounds ridiculous. Even if you’re in some of these tertiary markets, they’re really, really low. I think we bought it, whatever the math comes out today, I think roughly let’s call it, I want to say we bought it at 14 cap, something ridiculously high like that, but I think it’s because the wholesaler knew that he’s still got a good chunk of change off just flipping it.

Connor Gross (00:45:33):

But yeah, I’m pretty happy with the outcome of it. And now in my mind like I said there’s a lot more of these out there in the US, and I say this sparingly because I know that when more and more people get into self-storage, eventually more people are going to start building stuff and then eventually you’re not able to charge as much, but there’s a lot of opportunities out there. We just bought this stuff for time, they don’t care about making the most money out of it, there’s a lot of value to be created.

Robert Leonard (00:45:57):

Yeah. I completely agree. I think cap rates probably will go down and compress, but even if they don’t because cap rates are out of your control. In reality, there’s nothing you can do about cap rates, but NOI is something you can control. And just by doubling that like you did, you’ve already doubled the value in your property. And then if cap rates compressed which sounds like they probably will and I agree, then you just get even more value from it.

Connor Gross (00:46:18):

Exactly. That’s my exact thought.

Robert Leonard (00:46:21):

I know you said you got it through a wholesaler, but how’d you even get connected with that wholesaler? I know you’re relatively remote, you’re all over the place, depending on, you said you’re from New Jersey, you went to school in Boston, that’s in Dallas. So how did you even get connected with a whole sailor for a property in Dallas?

Connor Gross (00:46:37):

This is actually a really good story. I was up in Rhode Island at my buddy Gio’s place and we went for a walk, just talking about what are the things we want to accomplish between now and the end of the year, and next year, whatever. And this is on end of August. So we just got back from a little Europe trip or whatever. And we were saying, “Hey listen, we want to buy a self-storage facility. We want to buy one. And we want to have one in closing before Thanksgiving.” So we set a very aggressive deadline of, “We got two months, we’re going to find one and we’re going to buy one.”

Connor Gross (00:47:04):

We get back to his place, he’s got an indoor gym, whatever like that, so we start working out at his place. And he’s on Facebook, he’s like, “What about this?” He’s in a Self-Storage Investor Facebook group. And I looked at it, it’s in Dallas, he got some more information from the wholesaler or whatever like that. And it’s like, “Yeah, the group work, it seems decent. It’s in Dallas, it’s got decent value added stuff, but let’s go check it out.” The downside is, this was, what date was it? This August 30th or something like that, the wholesaler only had the contract until September 7th. And so he is like “He needs to sell now and he needs all cash now.”

Connor Gross (00:47:37):

So we finished up the workout, get a few questions answered from this wholesaler, basically bought standby tickets to Dallas. So that day, we went from, “We’re going to do this before Thanksgiving,” to three hours later, we’re flying to Dallas. We get to down to Dallas, we check into a hotel. And we’re only there for two or three hours at this point. This is the next day by the way, we took morning flights the next morning. We check into the hotel and we get a text from the wholesale, he’s be like, “Hey, I already found another buyer, sorry.” And we just call him immediately, we’re like, “Dude, we just flew down here, is the other guy down here?” He’s like, “No.” We’re like, “Is the other guy sending you the money yet?” He was like, “No.”

Connor Gross (00:48:08):

And we’re are like, “All right. We’re here, we have the cash. Give us a shot at least to look at the facility.” And he’s like, “All right, that’s fair.” So we look at the facility, we’re like, “This will do.” Basically, we couldn’t pull an inspection, we couldn’t do any of this stuff, we couldn’t get a survey done, anything, which big risk in hindsight, but I think it’ll be okay. Knowing what I know now is probably dumb, but I still think it’s okay. And we basically turned around that night, called the Uber. We asked ourselves the question because it was our first real estate deal, “If not this then what?” Because it checked all the boxes that we needed, had value-add opportunity, lower rents than most of the competitors in the market, bunch of stuff that.

Connor Gross (00:48:43):

We were like, “If we’re not doing this deal, what deal are we doing?” Because we started getting cold feet towards the end. Called the guy back, said we’re going to do it. We offered a little bit more than the other guy offered and that’s why we were able to get the deal and signed everything the next morning. So it was a ridiculously fast turnaround, but one of those things where I’m very happy that we did it because if not, I think it’s very easy to say, you get a little cold fee and you don’t want to go and move as quickly. I think it gave us the confidence to know that we can do this at other self-storage facilities as well. And for me, it’s always been a really important concept, to gets skin in the game.

Connor Gross (00:49:16):

Before I was like, “I want to get into real estate. I don’t know how to get into real estate.” Now it’s like, “No, not only am I in real estate, I did this big value, I’d play on this one deal. And now I’m going to go and repeat this across several other self-storage facilities throughout Texas or the rest of the US.”

Robert Leonard (00:49:30):

On this podcast cast, I talk a lot about my deals, which are long distance, but not in self-storage or commercial real estate, I’m mostly in the small residential real estate, so rental properties, but I’m doing long distance too. And people are really interested in that. Every time I talk about long distance stuff, people always reach out and people are really interested. So I’m curious, how are you doing this? How are you managing this property now? I understand how you got it. You flew down there, all of that, but now you’ve acquired it, how are you managing it on a day to day basis now that you are all over the globe?

Connor Gross (00:50:02):

It’s honestly not as bad as you would think. So we’ve got a call center set up, the software that we use, we use their call center and they basically will go book rentals for us. You’re down to Mexico right now, literally no exaggeration, was sitting on a beach last Friday, today is Wednesday and get three emails on my phone that our call center booked three units for us. And I was like, “This is the coolest feeling in the world.” I was like, “I did nothing and we just filled up three units that were open at the facility.” So the call center handles a lot the customer inquiries and things like that. We’ve got a part-time property manager who will go through one to two times a week for a couple hours, help clean out units, help sweep the facility things like that.

Connor Gross (00:50:40):

That’s honestly most of it. We’ll do a lot of the marketing by ourselves on our computer just because we don’t need to be there in-person, but mostly, it’s having a property manager who’s available on site, not full-time just part-time, and then also call center to handle most of the customer questions.

Robert Leonard (00:50:52):

Did the property manager come with the property or did you have to find them yourself?

Connor Gross (00:50:57):

She came with the property, which I’ve heard a lot of be careful with this kind of stuff in the past, just because they might have a bad habits from the previous owner, but she’s worked out really well for us so far.

Robert Leonard (00:51:07):

You publicly post about your goals on your website and the first one you have listed down is to own $5 million worth of real estate in 2022. Part of the activities that you have listed to get to that goal is to make 125 offers and 2,500 cold calls. I did a little math and that’s just about 10 and a half offers a month and seven and a half cold calls per day, every single day for the entire year. How did you come up with these goals and how were you actually implementing them on top of all the activities that you’ve listed to hit all your other goals and the things you’re doing with your other businesses?

Connor Gross (00:51:44):

Probably not the answer you want to hear, but the best answer is, I made it up in terms of how did I come up with a $5 million number? Just thought it sounded like a cool number. And it was partially, it sounds like a cool number, it’s also partially, I don’t know if I can get much bigger than this without requiring a bunch of other people’s money. And right now the goal is to aside from debt and using banks and stuff like that, I think I can reasonably get to five million without having no money to buy food and calling my uncle and all this stuff. So that was mostly where the inspiration for the five million came from in terms of the activities. It’s a lot of outsourcing stuff. It’s a lot of bringing in people to be like, “Hey, do you want to go and get experience in real estate? I’ll pay you if you get a lead or I’ll pay you for your time or whatever like that.”

Connor Gross (00:52:27):

And so reinvesting a lot of the profits that we’re making from the storage facility that we have right now into acquisition and deal finding and stuff like that. So running Google Ads, calling people, things like that. So I’d say it’s honestly, I think most people make the mistake of either not setting goals or they set a goal and they don’t know what it takes to get to that goal. I wanted to be very realistic about, “Cool if this is my goal, then I need to go and do these activities. Because I think at some point, real estate just becomes a numbers game. You just have to go and do enough outbound reaches, underwrite enough things, make enough offers.

Connor Gross (00:52:57):

And then eventually someone’s tired, someone doesn’t want to run their business anymore, they’re going to say yes. And so for me, what I always tend to find is I’ll do monthly reflections of, “Cool, my trending towards where I want to be with my goals.” And if the answer is no, then I say, “Okay, well what have I done to get at me there?” And it’s what you and I were talking about with the fitness stuff before, everyone knows how to get in shape. You eat better, you work out more, you maybe eat a little bit less if you want to lose some weight, but the fact of the matter is, if it hits January 31st and I’m like, “Huh, I don’t have a six pack yet.” And I’m like, “Well, what did I do? Why didn’t I go to the gym at all and went out and drank with my friends every night?” That makes sense.

Connor Gross (00:53:32):

What I don’t want to run into is a situation where it’s December 31st, 2022 and I’m like, “Well, I don’t own any more real estate. Why did that happen? Oh, Connor, I didn’t make any phone calls or I didn’t have to make any offers.” So that’s what I’m going to try to change, we’re tracking some of that with HubSpot CRM and things like that.

Robert Leonard (00:53:50):

A problem that I have is working on too many things at once. So that’s something I’m really, really trying to focus on in 2022. And to me it sounds you have a lot going on, potentially too much. I can’t say it’s too much, only you can, but what are your thoughts around focus versus doing a little bit of everything? Do you think you could be more successful at one of your ventures if you focused your entire time and energy on it?

Connor Gross (00:54:15):

Absolutely. Yeah. It goes back to that college question you asked earlier, why don’t I drop out of college? Could have been way bigger, I have more fun doing more stuff. The honest answer is, do I think I can do way more in the real estate space, the e-commerce space, whatever, if I’m only focusing on one thing throughout the entire week? Absolutely. And I would make big bets around that. For me though, I just have a ton of different interests, and I think the thing that helps me not burn out or get very pigeon brained is dedicating certain days to doing certain things. Also making sure that whatever business I’m starting, whether it’s real estate, e-commerce, even having a podcast and having cohost on the podcast, just making sure that I have one of the person who’s involved with it with me, is that way I know specifically, what are my responsibilities?

Connor Gross (00:54:57):

What are their responsibilities? I actually don’t run any businesses where it’s just me because I know then I’ll be the last line of defense if something goes wrong. It’s really nice to have someone else there who can also shares some of those responsibilities.

Robert Leonard (00:55:09):

What has been the most influential bug in your life?

Connor Gross (00:55:13):

Books that I’ve actually started and finished entirely, two that I really especially from an e-commerce standpoint, one is DotCom Secrets by Russell Brunson. Really good, explains this whole concept around value ladders, and how to go on psychologically influence people. And the other one is one I actually just finished up this year and it’s actually a pretty trendy book now, so you might have already heard the name or someone else mentioned it, but $100M Offers, that one’s really good too. And then one I just finished that’s also trendy this year is The Involvement Act. I get very skeptical referring books that I say I liked, seem like an ego boost, whatever, but I didn’t actually finish.

Connor Gross (00:55:49):

All three of those books, I could not put down, I read cover to cover. And they were all super great in terms of reframing some mental models that I had in my own head.

Robert Leonard (00:55:58):

I’ve read DotCom Secrets and I enjoyed it. Almanack of Naval is probably my favorite book of all time.

Connor Gross (00:56:04):

Oh, yeah. Cool.

Robert Leonard (00:56:05):

And the second one you mentioned, $100 Million Offers, I haven’t read that yet, but I have it on my list. I think I might have bought it already, but I haven’t read it yet. So I’m interested in diving into that one.

Connor Gross (00:56:14):

It’s one of those where… I follow Alex Hormozi who wrote it on YouTube and Twitter and he’s got really good content. One of those books where you get it in the mail, you’re like, “Is this really the book?” Because if anyone has seen it, it’s almost a textbook size, but it’s only 100 pages. So this is an obnoxiously large hardcover book with 100 pages. You can read it in a day, if you’re a slow reader, read it in a week and it changes the way that you think about sales and marketing. It’ll totally reconstruct how to go and take down buyers objections, how to go and set up your funnel, all your offers, all this kind of stuff. It’s really, really helpful.

Robert Leonard (00:56:46):

There’s another book, it’s like the Naval Almanack, but there’s one for Charlie Munger and it’s a similar, I haven’t seen the $100 Million Offer book yet, but the Charlie Almanack book is similar. It’s like a textbook size, but it’s not that big, it’s just not a ton of pages.

Connor Gross (00:57:02):

Well, isn’t that one, correct me if I’m wrong, and I’m not opposed to spending money for books, isn’t that $80? Because I want to buy five books at one point, because I’m always sort like, “Just buy them, if I read them, I’ll get good insights, if I don’t, it’s 50 bucks, whatever.” And I went to go add that one, that one’s like 80 bucks and I was like, “I’m going to hold off on this one until I finish these other four, whatever first.”

Robert Leonard (00:57:23):

Yeah. I think when I bought it was 50, but it might be like 70 or 80 now. Yeah.

Connor Gross (00:57:28):

But definitely taking Charlie Munger’s advice for $70, yeah, 100% worth it. Just when you benchmark it compared to a bunch of other eight, $9 books, you’re like, “Wow, $50 for a book, a little expensive, but I got to read that one.”

Robert Leonard (00:57:43):

I know we just chatted on your podcast with me as a guest not long ago, which I’ll put a link to that episode in the show notes for anyone that’s interested in checking it out, but I like to wrap up the show by turning the tables and letting the guests ask me a question. So Connor, to wrap up, what question do you have for me?

Connor Gross (00:58:00):

Honestly, the one thing that you just said where in 2022, you’re focusing a lot more on one, maybe two things instead of doing all this other stuff, because what was interesting about our call on our podcast a while ago was you’re doing this podcast stuff, you’re doing RV rentals, you’re doing the single family rentals, long distance rentals, what’s your new focus for 2022? What are you trying to make your thing in 2022?

Robert Leonard (00:58:21):

I don’t know yet, that’s the problem. The thing I know is that I’m focusing. My focus right now is too focused, I don’t know what I’m going to actually be focusing on. Honestly, I’m still trying to decide. It’s thankfully, what you said, January 19th, so thankfully, we’re not too far into the year yet. I’m hoping by the end of the month, maybe I’ll know. Even just 19 days, I’ve gone back and forth probably 100 times on what exactly it is that I really want to focus on. A lot of the stuff that I do, the podcast, the rentals, the RV stuff, a lot of it is pretty streamlined, not to say that it doesn’t take some of my time because it does, but it’s pretty streamlined. It doesn’t take a ton of time. So I just need to find that one thing that I want to focus on.

Robert Leonard (00:59:01):

And it’s an interesting dynamic of, do I want to only do something that I can make money on or do I want focus on a hobby? I’ve wanted to know how to code for probably a decade now. I’m turning 27 next week, so literally probably since I was 17 or 18, I’ve wanted to know how to code and I’ve just never taken the time. So I’m wondering, should that be one of the things that I just dive into now? I probably won’t make any money from it, but is it a hobby that I just want to learn? So I don’t know yet. We’ll see. The only thing I know that I’m focusing on is trying to focus.

Connor Gross (00:59:31):

There is a really good interview with Tim Ferris and I think it’s Derek Sivers, and I think that’s a really good one, I might be saying his name wrong. But basically Derek had some quote throughout the podcast that was specifically around focus, where he’s like some story around, there was this cow in a barn, and for anyone listening to this, just listen to this podcast episode afterwards, because I’m going to do a terrible job explaining this story. But there’s this cow on the barn, on the right side of the cow, he had water, on the left hand side, he had hay. And he had enough, there was an infinite supply that he could drink as much as he wanted to, and he could go and eat as much as he wanted to and become a really fat cow and just live his life that way.

Connor Gross (01:00:07):

Cow ended up starving and dying because he couldn’t make up the decision on if he wanted to drink the water first and then eat the hay or eat the hay and then drink the water. And I think he wanted to do both at the same time realistically. This is just an interesting story, and I’m telling the story from a standpoint of someone who works on five or six businesses right now. But it’s an interesting way to think about focus where the moral of the story is, you can do everything that you want do. If you want to get big in real estate, you can get big in real estate. If you want to go into future podcast, you can go do podcast. It’s very difficult to do everything you want to do at the same time.

Connor Gross (01:00:37):

And I think a lot of people, our age, you’re 26, I’m 24, we don’t realize how long life really is and that you can go and just spend two to three years doing something and then start an entirely new career, and you’re still young seller. That’s what Gary Vanerchuck talks about all the time. And so I think to your point about focus, it’s find the thing that you want to do that will maybe enable doing other things to be a lot easier. And so an example of that could honestly probably be, how do you make this a top 10 podcast? Because then once you have the top 10 podcast, then you have the network to make investing in real estate a lot easier, the cashflow would make investing in real estate a lot easier. So just thinking through stuff like that, I always found that to be a really helpful story.

Robert Leonard (01:01:14):

Yeah. I would definitely be that cow in that story for sure. And when I was prepping for this interview, I was thinking about Gary Vee when I was looking at this focus, I’m like, Gary talks about how he juggles, he’s only happy if he juggles seven, eight balls at once, and he’s like, “Listen, I’m going to drop one or two of these balls and they’re going to smash on the ground, but I’m having fun doing seven or eight balls at once.” And I was just thinking of you doing a very similar model.

Connor Gross (01:01:39):

Yeah. For me, it’s all about honestly, entrepreneurship is 1,000 times harder than having a job. Anyone who say quit your job and start your business, I think he gives a horrible advice to anybody who has a job, because you don’t realize that this game is entrepreneurship game, it never turns off. It’s not 5:00 PM Eastern Standard Time and I’m closing the laptop, this is always going. And so I think anybody who has the advice of just go and start your business is lying to themselves. And so for me, the only way that I think I can really have fun throughout all of it is to satisfy my curiosity and start a bunch of stuff. Even if some of the stuff like I talked about, like the Hashtag Preset thing that we bought, isn’t doing that well, I’m going to have some strikeouts.

Connor Gross (01:02:15):

It’s not always going to be pretty, but with enough ad bats, you’ll eventually find the stuff that you really enjoy doing, and also the stuff that can make you a lot of money, which is cool.

Robert Leonard (01:02:25):

Connor, for people who have enjoyed this episode, want to connect with you, I know you’re big on Twitter, so tell us your Twitter handle and everywhere that people can find you.

Connor Gross (01:02:33):

Yeah. Honestly, the best two spots where I put out the most content is Twitter @c_gro. And then my own podcast, like if you want to go check out Robert’s episode two, it’s called The Next Generation Podcast. You can download it anywhere that you listen to podcasts.

Robert Leonard (01:02:45):

I’ll put a link to Connor’s Twitter and my podcast episode, and just as general podcast feed in the show notes below for anybody that’s interested. I’ll put a link to the books that we talked about as well for anybody that’s interested in checking those out. Connor, thanks so much for joining me.

Connor Gross (01:02:59):

Yeah, man. Thanks for having me on.

Robert Leonard (01:03:01):

All right guys. That’s all I had for this week’s episode of Real Estate Investing. I’ll see you again next week.

Outro (01:03:07):

Thank you for listening to TIP. Make sure to subscribe to We Study Billionaires by The Investor’s Podcast Network. Every Wednesday, we teach you about Bitcoin, and every Saturday, we study billionaires and the financial markets. To access our show notes, transcripts or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only. Before making any decision, consult a professional. This show is copyrighted by The Investor’s Podcast Network. Written permission must be granted before syndication or rebroadcasting.