Mr. Beams - David Levine
Don: [00:00:00] Well, Hey David, thank you so much for joining us today, I appreciate that a lot.
David: Great to be here. Thanks for having me.
Don: Yeah, of course. So, one thing as a Ring customer, I was super intrigued when I heard about what you guys did with Mr. Beams. So your company was Mr. Beams, and I know you got acquired by Ring and then became part of Amazon, and just super excited to hear that story: how Mr. Beams got started, where did that idea come from and a little bit of your background would be great.
David: Yeah, sure. Mr. Beams, I tell people it started out of desperation and desire to fix something. It was a combination of both. In 2000, my wife and I relocated to Cleveland, where she's from, without a job, and I had always wanted to start something on my own. I had been working for Black and Decker and I learned product development and I really liked it. And I was introduced to a design firm, industrial design firm, here in Cleveland that had some really interesting ideas about how to turn power tools more into [00:01:00] mainstream consumer products.
And we started a company together, and I learned everything from there. At Black and Decker, you had somebody who did sourcing, somebody who did selling, somebody who did marketing, somebody who did packaging, and all of a sudden I was that person as a single-handed entrepreneur. So I learned all that.
Along the way, we made a bunch of mistakes. So despite having a few successes in getting into places like Walgreens, Target and on QVC quite a bit, we ultimately failed. I was out of a job and living in a city that I didn't think had a ton of opportunity. At the same time, a good friend from where I was before, in Baltimore, was going through the same thing. He's an electrical engineer. His name is Mike Wrecker and we decided we would partner together, and we both had a similar problem, which was we had closets that had no lights in them. And there was no electricity either, so you would open the closet door and not have anything.
And we love when you go to a hotel and you open the closet door and the light goes on automatically. So we thought we'd [00:02:00] replicate that. And LEDs were just starting to be used for illumination. Before they were just indicator lights and flashing lights, but all of a sudden they were being used for a brighter lighting application, so we decided to tap into that. My power tool company was based on alkaline batteries instead of rechargeable batteries, so we went in that direction.
Our first few lights, we didn't have enough money to tool them up, so the decision was made to just prototype them using 3D printing, and I just went and called on every company I thought might want battery powered lights - places like Rayovac and First Alert and Cooper Lighting. And it turns out the people who wanted the product line were right across the street from my office in Cleveland, a company, that's now owned by Thomas and Betts.
They wound up buying this product line for $50,000 for five products plus royalties, and immediately when I collected the check, I called Mike [00:03:00] and said, "all right, we're going to do this, but we're going to do this bigger and outdoor lighting," because outdoor lighting discussions was a bigger pain point for people. To put a wired light outside was expensive and sometimes dangerous.
So we immediately formed the company, which is Wireless Environment. We got the brand name, Mr. Beams, and I just put my head down and started trying not to make some of the same mistakes I made in the first company. Mike was working, so he was just part-time, and I just went over to China, found some partners. I found an industrial design firm, and we were off the races. To fund that company, we decided we would take as little money as possible. I did have some meetings where I would go into a big room and give everyone breakfast and tell them about our company, and I didn't raise $1 from those meetings.
Instead, I just went to friends and family. One friend, I bumped into getting lunch, and I told her what I was doing [00:04:00] and she said, "I'm in." It was friends and family that funded the whole thing. And we raised, I think our first round was $250,000. We would just put our heads down, get to the next milestone, which was usually a product ready to launch, see how sales were and then raise more money at a higher valuation, do it again. I didn't take paychecks many weeks, but as I say, the best negotiator is a person with no money and it, really , it was a great way to start a company. It's more of the Midwestern style, you know, you don't see that on the coast, but it kept us super focused.
We didn't go in the wrong direction too aggressively at any time. We just stayed focused on making good products.
Don: We very much resonate with that idea of bootstrapping and trying to keep the burn low and just sorting it out. I love your quote, "the best negotiator's someone with no money". That's good. So you literally flew over to China just to find someone to build the product?
David: I had a lead and , from my last company, I had some [00:05:00] contacts and they introduced me to an engineer. When you're making things over here, it's really helpful to have an engineer who can translate it into Chinese manufacturing. Things have developed so much that our own engineers that were working for Mr. Beams, that are working for them now, know exactly how to start with that in mind, but we didn't back then.
So hired a gentleman over there, he introduced me to a factory, and these are the stories that I would always say, "yeah, that's more of a legend that doesn't really happen," but we designed our first product, had this company tool it up, and we were about to sign a big licensing deal. I still wasn't sure I wanted to take it to retail because that really burned us in the last company. You're at such a disadvantage when you're dealing with a Walgreens or a home Depot. So there was a company that had a very well-known lighting brand, and I was negotiating with them and they were about to take our product and market under their brand.
One person from their company was at a trade show in Hong Kong, [00:06:00] walking the aisles and saw our factory displaying our product as their own. It blew up the deal because then this company that we were going to license to said, "I don't believe that you invented this product, and the factory that I saw at this trade show said they invented the product."
Bogy: So what's the learning, David? If you were to do it again, what would you do differently?
David: You know what, Bogy? I felt like we did everything right. I've survived and I have prospered from handshake negotiations with Chinese manufacturers. And there are three people over there who are still really good friends. When they come here my family spends time with them and I go over there and spend time with their family. I just got a bad one and I'm not sure that I would do anything differently because by trusting and building relationships, I was able to get 90 day terms, which allowed us to not have to raise money for working capital down the road.
So , I probably could have been more clear with the first factory that took this to the Hong Kong [00:07:00] market and said , "you cannot show this. You agree that this is our design." I'll say it because, these guys, they did it; it was a GE brand, but it was a licensee called Jasco that's based in Oklahoma City who took this product. And now if you look at Amazon, they still list that product. It looks the same as our product. They just put a little square head on the front . Our first spotlight is the number one selling light on Amazon of all time, and we've out sold them a thousand to one, even with the GE brand and the same pricing. So it wound up working out in the long run.
Bogy: This is what you think of in a stereotypical way about the Chinese producers: that they'll copy you and go through even the same channels and underbid you, but I think the amazing thing is that you still outsold them and you found a way to be much more successful than they have, right. It didn't kill you in any way.
David: And the only way this product line survived, Bogy, and prospered was because of two great technology advancements: one Google and two Amazon. [00:08:00] Amazon was then a total meritocracy. This is 2011. We were their poster child because we had a no name brand in Mr. Beams and we were able to sell thousands and thousands of lights. People were buying multiples at a time, which had never been done with light fixtures. People buy multiple light bulbs, but not light fixtures. It was because we had a good product and we gave good content and the reviews were excellent.
Now, why we outsold a GE brand by so much? I still don't understand how that worked. But it would never happen without Amazon because you have 10 gatekeepers in the lighting industry. It's the buyers at Menards, Depot, Lowe's and so on, so we never would have gotten in. The second thing is Google because now people started searching, "how do I light a closet without wires? How do I give my dog light when they walk outside at night without wires?" Before Google, you couldn't get an answer to that. So those were the two things that allowed us as a no-name brand with no marketing budget to grow like we did.
Don: I like this story too because, I know [00:09:00] with my companies and I know other founders , competition is always something you're afraid of. "Oh someone's gonna take the idea," or "someone else is in the market." I always say, " There's always going to be competition, but that experience that you deliver is the differentiator." And it sounds like your story was right on; you had a very well-funded competitor , but the way that you went to market, the way you took care of your customers, those reviews you got - you were able to totally succeed.
David: And this ties into - why we were attractive to Ring, ultimately, was that we were good at taking advice from others. I think that's my strongest suit: never assuming I know more than others. The corollary is I always assume there's someone out there who knows more than I do, who I can learn from.
And in this case, when we were showing our product or trying to get some investors, one of them said, " I need a bigger idea to invest in. What's your bigger idea than motion sensing, battery powered lights?" After that meeting, Mike and I were sitting outside at a bar having a beer, and he looked up on the wall and it was an old building with this [00:10:00] old ornate light fixture. And he said, " if it was a historic building and you want to put up a light fixture, how would you do it? You're not allowed to drill through things and it's complicated."
We started thinking of this idea of a light bulb that had an integrated battery, and then he said, "how would you control it?" That was a moment that changed everything for us, because we started thinking about what we were doing as giving people light that they could put anywhere and control.
Whereas the competitors - GE had a line of battery powered lights , Phillips, they all were in this business - but they looked at it as a single product that they would throw out that would light up an under cabinet area or light up a closet even. We looked at it as saying, " if LEDs continue to get so much more efficient, that more and more applications can be battery powered without running out of juice, how would they be used and how would you control them wirelessly and how would they talk to each other?" At that point we found a patent firm in Boston, a very esoteric law firm. They [00:11:00] taught us, "let's take every idea you have and make a matrix and cross reference every idea with application, with channel. Every combination of that, we're going to write up in an omnibus patent." And I believe it was 2007/2008. We threw out this patent that is as thick as a phone book, but it listed every potential idea we had for, how this could work as LEDs get more and more efficient and as batteries get more and more efficient.
That was a main reason why Ring found us attractive: our patent portfolio was very rich.
Bogy: Whoa, in software, we hardly see any patents. From time to time we see entrepreneurs saying, "oh, I need to patent something." But you know, before anything innovative was immediately patented, and you really paid attention to how to encroach it and how to take advantage of it. Being such a young company, you thought about it so early and without it probably you would not have the same market value.
David: Yes. And again, Bogy , this law firm was brought to us by one of my investors who [00:12:00] was an HBS classmate. I know one of the things that you want to talk about is "did our investors help?" and they did. They were great in two ways. One, they never asked me, "when am I going to see money?" Not once in the 10 years I had their money did anyone call me. And these are like 24 friends and family. Not once did anyone call me and say, "when am I going to see some money?" they left me alone, and the second thing is they had good connections and they were willing to step up.
This law firm was really good at visualizing how to put a fence around things. But what we found after we spent a million dollars with them and on patents, and hadn't gotten a patent, is that there's a different type of law firm, patent firm, that gets you patents.
You have your strategic firms and you have your street fighters. Our problem was we stayed with a strategic firm when we needed to shift over to the street fighter. And like every good connection, it was my dad who was playing golf with someone who [00:13:00] was one of the head partners at Finnegan, which is the largest international patent law firm.
My dad called me and said, " I want you to talk to Chick , he'll probably help you." I can't even tell you how much time I wasted in my life with those phone calls , when I called the person and they either said, "why are you calling me?" or "I'm in a totally different arena."
But Chick was the right guy and we used Finnegan. They were all former patent examiners and they knew how to sit down with the patent examiner and get things done. And all of a sudden we went from zero patents to they were just rolling in.
Bogy: You mentioned street fighters, that Finnegan was a street fighter?
David: A patent gets rejected every time, the first time, and they knew how the patent examiners work. The easiest thing is to say no, throw it in a different pile, and say, "I did it." Then you have to actually set up an interview with them over the phone, and then you just try to set up a visit and you just keep working with them until you understand what claims they will accept.
Don: So David, just switching gears a minute, you've brought up Mike a few times; tell me about your co-founder. [00:14:00] Was he there from the very beginning?
David: Yeah, Mike was there from the very beginning. I met him when I was traveling in sales for Dow Chemical in the early days and I covered Baltimore. I had tickets for a baseball game. I called my college roommate who was living in Baltimore. He said, "I can't go, but my roommate Mike might be interested." And that's how Mike and I met. And then I was living in Baltimore, so we spent a lot of time together.
I moved away, and we reunited on this project, this idea. He's an electrical engineer who had a lot of experience in wireless communication. He had, very fortunately, started working in the Northern Virginia area and was with a bunch of startups that became big acquisitions for companies like Zebra Technologies, and we complimented each other. I'm product execution, sales, marketing, operations; he's technology. He's also the most easy going guy, so we were able to get through this together.
He was working part-time maybe for the first three or four years and [00:15:00] then joined full-time. We never worked in the same office. We were always separated and it just worked perfectly. When we were acquired by Ring, he became super valuable to them. He's one of the top 25 patent holders at Amazon right now because his patent portfolio really created a lot of opportunity for them.
Don: Wow, that's amazing! It's good to have a technical co-founder right?
David: Yeah, it is. And first of all, we're still really good friends, which is amazing, but I give him all the credit because I get a little fired up at times and he just stays really calm, and he's an ultimate team player.
Bogy: You were acquired and both of you went to Ring into executive positions, you stayed with Ring?
David: So we were brought in as the lighting group. So Ring had a ton of success with their video doorbell and then expanded into a two-headed floodlight with a camera on it, which was a very valuable product.
And they were getting more into cameras, and Jamie Siminoff the founder saw that his [00:16:00] cameras, they were all attached to wifi and mostly electricity, now they're solar powered or battery powered, but they were pretty much stuck on the house. He wanted an outer ring of security. Since our lights were wireless and used RF, which had a longer range than wifi, and also were easier on batteries, he saw the lighting team as creating a second ring of security around the house. We were left alone as a team in Cleveland to build lighting devices that communicate with the Ring video devices.
Bogy: And when you sold to Ring, did you still have shares in Ring?
David: Yeah, the deal was - and by the way , we have to talk about how this deal was negotiated.
Don: Yeah, I wanted to back up to that. How did Ring find you, or how did you guys get connected in the first place? And then how did that deal go?
David: Yeah. So, my wife's brother lives in Malibu and is big into CrossFit, and one of his CrossFit buddies was one of Jamie's Siminoff's early founders, one of his partners in the early days. And they just started [00:17:00] talking. Danny brought my name up and they decided to introduce the two of us. And Jamie had seen us. Jamie was in the green room at HSN, the Home Shopping Network, getting ready to get on to sell his Ring video doorbell. And Mr. Beams products were on right before him, and he was blown away by how the products were working and the number of lights we were selling. So, he knew about us. When the introduction came, he said, "yeah, let's definitely get together."
Shaq is one of their spokespeople, and it was at NBA finals when the Cleveland Cavaliers were in the NBA finals. So, Jamie came out and we had like a half day meeting on it. Firstly, it was, "can we partner on this?" and then it turned into, "well, would you guys be open for an acquisition?"
I called my friend, Brian Flynn, and Brian has done a lot of exits and he's in the heart of "exit land," which is Silicon Valley, where you guys are. So, I figured he would know somebody who could help me broker the [00:18:00] deal, and he said, "I want to do it. I'm going to do this for you. We're going to get this done together."
And he walked me through the process in just a brilliant manner; more psychologist than tactician, but it was a little bit of both. He kept telling me, "time is our enemy here." He had me up until 2:00 AM multiple nights for the six months that we were doing this . We started talking in June. The deal got closed November 1st; on November 2nd, Ring lost a big case to ADT because Ring had taken on an alarm business and that alarm business was previously part of ADT and then Apollo. It was Apollo had ADT to get rid of this group, and so Jamie hired them. Anyhow, the judge ruled the day after we closed that Ring had to take its alarm products off the shelf. So Jamie called me that day. He's like, "yeah, hey, I just want to let you know, I'm not too worried about this. However, had we not gotten the deal done yesterday, this deal would [00:19:00] have been iced. So Brian was right. You know, every moment counts.
Don: Wow. Did you shop it around at all or talk to other potential buyers?
David: This is a great story. So, Brian and I are working together in the early days and Jamie throws out an offer. I said, "Brian, this is great." Brian says, "no, we have to shop it around." And I said, "but this is Jamie and I, we're buddies and we're working this out together." It was really like, he and I, face to face on most of the negotiation. Brian said, "no, you owe it to your investors to shop it around." I said, "well, how do I do that?" So I went on LinkedIn, found anyone who was in the space and I reached out to them through LinkedIn, and I got a few responses, got a few meetings set up.
There was one company I was supposed to fly out to on a Monday and have this conversation. My wife and I are at a baseball game on a Saturday night. My wife is a really good advisor on this stuff. She's a great entrepreneur herself, and she said to me, "you can't do that. You can't [00:20:00] shop this around; what if Jamie finds out?" I felt the same way, but I believed in Brian more.
And in fact, Brian and my wife got on the phone because I was caught in between these two and Brian had the best line to her. He said, "how many hundred million dollar exits have you been involved with Lisa?" And that was like, whoa. At that point I was like, this is going to end badly for me! But it was one of the funniest lines I'd heard, and we still joke about that.
So I agreed that it was my fiduciary responsibility to my investors to do this. So I was planning on this trip to Northern California on Monday. That Saturday night, my baseball game is interrupted by a call from Jamie. He's like, "how dare you shop this deal around?"
Don: Oh, no.
David: Yeah. He's like, "you're using me." I have no idea to this day, how he found out or which company he found out about, but sure enough, as Lisa told me, he found out, and the deal almost blew up at that point. And we were able to bring it back in.
Bogy: So what happened? How did you react? You stopped shopping around?
David: No, I said to Jamie , "this is the number I told you I [00:21:00] know I can get by my board, and you didn't produce this number. For that reason I have a fiduciary responsibility to shop it around." And we were able to work out a deal where we got closer to that number
Bogy: Good! So it helped with negotiations. You got the number up from the original offer.
David: Yes, and I think it ended up being fair. In fact, when I spoke to Jamie right before I left in May - right now it's early July, I left in late May after my three years plus we're up - Jamie said to me, "I consider this acquisition a 10 out of 10." So I think both sides feel they got a fair deal, and I think they did. We created a lot of value for Ring and Amazon. I tell people that Amazon bought Ring to get at Mr. Beams, which is the furthest thing from the truth, but I like it. And 90% of the people who I had three and a half years ago when we did the deal, when we were acquired, are still with the team and doing great: so much opportunity, they've learned a lot, they've grown. It's been a great experience.
Bogy: So, going back [00:22:00] to the question I asked earlier, were you motivated to sell to someone else because you had shares of Ring after the sale to Ring? You know, Ring would be sold to Amazon soon after.
David: So, yeah, part of what was attractive in this, Bogy, was that 25% of the deal was in Ring shares. Jamie Siminoff is one of the smarter more strategic - he's a phenomenal entrepreneur. Every time I talked to him, I would learn something new and was blown away by his approach. So, I had a lot of confidence in him and in Ring, so I thought that was a good place to be. When Amazon acquired Ring, I had no idea that the negotiations were going on. Jamie came out for another basketball game so we would celebrate the deal. And he told me while we were in line waiting for hot dogs, he just said, "oh, by the way, Amazon's acquiring us," and I was like, "you gotta be kidding me."
It increased the value of that part of the deal and it locked Mike and I up for [00:23:00] three years. So we vested over three years, and it just made sense. It made sense to be there.
Bogy: But did you anticipate this , you and Brian when you were discussing, "what is the deal structure," or was it proposed from the beginning and he said, "I pay part of it in shares"? Or did you actively think about taking part shares, part cash. And when would it make sense? You mentioned that you believed in the founder, right?
David: I believed, yes. But cash is cash, right? So yeah, at the beginning , Brian helped me establish the idea that we would only take up to 25% in shares, that it had to be 75% or greater cash transaction. There still was a decent amount of risk, and we were giving up a company that was growing at a very fast pace and showed no signs of stopping at that point. So that was what we established.
We felt like Ring was going to be a good opportunity for us, but part of the problem was we couldn't get enough data on them, enough financials. It was a fast-growing sloppy [00:24:00] company at the time that was growing so fast that they couldn't keep up with the financial side.
Bogy: Yeah, that's fascinating. Okay, interesting.
Don: When you did the sale , not asking for numbers, but how did you determine your valuation? Because that's something that founders are always struggling with when they're starting these kinds of discussions. What did you think about?
David: Mike was saying to me, at one point, "I think it's worth this," and I thought he was way overestimating it. I tend to be more of a realist. I also brought in some guys who do M&A and asked for some valuations; I hired a couple of consultants. We came out to a number and finally, I convinced Mike, I said, " if we can get this number, will you accept it?" And he said, "yes."
As I was unpacking my office when I left last month, I saw the notebook where I wrote those numbers, finally got Mike to agree to that number. Yeah, so, they always say it's better to sell a day early or a month earlier or a year early than a day late, so I just felt like it was time. I had a lot of [00:25:00] pressure on myself of "will I ever see a dime out of this company?" I mean, I was pulling a salary at this point and Mike and I were pulling some profits that we were making, but it still wasn't a real success.
I felt a lot of pressure. I needed a success under my belt. My investors who had their money tied up for 10 years, I wanted to get them out. I thought, let's take this, let's learn from Ring, from Amazon, and then let's do it again down the road. So that was a big part of it.
And, my investors got anywhere from eight to 14 times their investment. One of our investors was jumpstart. Jumpstart is a Cleveland based public/private VC firm, without a better term for it, and of the deals they've done over 14 years, we're the second best outcome. They had invested in a company called Cover My Meds, which was an absolute grand slam, but we were their second best investment so far.
Don: Wow. That's great.
Bogy: So what was the time period between you selling to Ring and Ring to Amazon? [00:26:00]
David: It was, we sold November 1st and Jamie told me about the acquisition, I think it was early March, and it went through in mid April of the following year.
David: Yeah. So, in Ohio, I had people who had never left the state of Ohio, and I'm not saying they were not worldly, but people here like it here. They go to school in the state and they move back, so them getting acquired by company out of Santa Monica was a little bit of a shock, and for a couple of them, when we went out to visit headquarters, it was their first time on an airplane. Then, all of a sudden, three months later, I have to tell them "now we're part of Amazon." It was shocking. And the only people we lost - you know, I tell you, we retained the vast majority of people - the only people we lost were people who were uncomfortable with all this change. It wasn't for any other reason, they just wanted a more stable situation. They were tired of being acquired.
Don: That brings up another question for me; what were your other criteria other than valuation in terms of being sold to Ring ? With my company, one of our criteria was what happens to the employees, right? There's [00:27:00] always other factors than the money.
David: Yeah, so number one was what happens to the employees, and that gives me the greatest sense of satisfaction: the opportunities that people have right now. The second thing was "will our technology be used?" Because, when I go back to that company we sold our five samples to for $50,000, they never really made it happen. They never executed. They weren't the right company to do it. Well with Ring, we knew Jamie is super aggressive. He gets things done and he thinks very big, so we knew that they'd be using our technology.
You know, Don, after that, it seemed like a good cultural fit. Ring is very different than Amazon. Ring was just a wild west, entrepreneurial type of culture, which we really liked. It was figure it out, get it done, just like we were. And that was an amazing merge of two cultures. They always say culture is the hardest thing during an acquisition and it usually doesn't work. This was perfect. Now when Amazon got involved, it was a very different story, [00:28:00] but the culture helped us get really comfortable with the deal.
Don: Well, it sounds like you had developed a relationship with Jamie too, right, leading up to it? So you had a feel for that.
David: Yeah, but part of the problem, and Brian tried to diffuse this, was I would say to Jamie sometimes when we got into kind of a heated discussion, "Jamie, look, we're going to be working with each other. Let's, try to figure this out in a, in a calmer way." It was a very contentious negotiation, and so by the time you're done, it's hard to drop the boxing gloves and then go out and have a beer with the person you were just slugging back and forth with. So, that made it challenging. I know we gave Jamie what he wanted, and we were able to merge the organizations. If Jamie and I weren't able to have that really tight relationship our organizations did. And we soon felt a part of the company.
Bogy: And, in the next step, you moved on to Amazon and Jamie is in Amazon as well, or he's no longer?
David: Yeah. Under Jamie they [00:29:00] acquired Blink. I think it was before they acquired Ring and Blink is a more of an alkaline battery camera company, not as sophisticated as the Ring products, but doing great. And again, they were a Boston company that bootstrapped just like us. We were talking to Blink before we talked to Ring. I was trying to get them to lend us their camera technology. They were trying to get us to lend them their lighting technology, and then they started talking to Amazon and everything shut down.
Jamie's really built an incredible infrastructure. The Ring, and Don, I know you're a customer, the Ring app is, I think, the greatest piece of customer centric software that I've witnessed. It just is constantly getting better and revising, and that fits with the Amazon culture, so they saw that and they left Jamie alone to build this customer experience. Jamie still gets emails from customers every day; his email's on the box. He answers all of them or sends them to somebody. So, he's done a [00:30:00] really magnificent job, I think, growing the business and staying customer-centric. Ring is a lot bigger than it was when Amazon acquired them and I think it's looked at as a really good acquisition.
Don: David, I always like to ask, what was the first thing you did when the acquisition went through when you sold your company?
David: The first thing I lost where my heart palpitations. Going up to the deal, I was going to the doctor. I'm like, "I don't know what's happening. I'm having these heart palpitations and I'm in pretty good shape." Finally, the moment the deal was done, they went away. So you talk about what stress can do to you. And it was intense. Don't get me wrong. It was really fun and doing it with Brian , side by side made it really a great experience, but it was also like, "is this going to go through? Am I going to make anything out of this?"
So I didn't do anything. Someone told me, "don't do anything for a year after you sell your company." Like don't buy a house, don't buy a boat, don't buy a car. And I took that to heart. I just kind of lived my life, tried to adjust to the Ring [00:31:00] culture. I got home that day, my daughter had made a cake for me and they had a nice celebration. That was great. They were in the middle of it the whole time. They were, at the time, 14 and 12, so they couldn't help but be a big part of it.
No, I didn't do anything, Don. I really didn't. I didn't buy anything. I just was glad. It was a huge relief. I called Mike. Mike was on the plane just about to takeoff to go to China. And I called him after we all hung up with the lawyers and he said, "does that mean it's done?" I said, "yeah, it's done." He couldn't scream, he was on the airplane, but that was a great feeling.
David: Yeah. I wish I had something better for you.
Don: No, that's fine. I've had that advice told to me, I think a lot of people. And it's somehow okay just not to do anything. I had the same experience. Just like don't do anything crazy. Just kind of let it soak in, right?
David: Yeah. And I love these old Broncos, Ford Broncos, from the sixties and seventies. And every time I'm in Santa Monica and I go out for a run, you see them [00:32:00] with the surfboards on and the top down. I wanted one of those and I was on this auction website, and I got permission from my wife. They were like $50,000.
I had permission, which is, you know, which is a rare thing. And as I'm looking, I saw this 93 Saab convertible on the auction for $2,000 and the auction was ending in 45 minutes. I looked at it and I'm like, "I love the Saab 900 turbo with the original design." I said, "I'll get more out of that car than I will out of the Bronco."
So I wound up bidding on it and I got it for $3,500. It was in California and I had to get it shipped home. I caught more heat from my wife for spending $3,500 on that car than you would imagine, even though I was approved for $50,000. And the funny thing about this car, as they're transporting it I get a call from a number in Kansas, and it's a state trooper who says, "we pulled over the trailor carrying your car, and we had the dog sniff it and it sniffed positive for [00:33:00] narcotics." And I told him the whole story , and I even told him the story about my wife getting mad at me. And he said, "well, you don't sound like a guy who is dealing in narcotics. However, there's no other reason someone would transport a car like this halfway across the country unless it's carrying something.
Don: Oh man. Good story.
Bogy: I love Saabs. That's a great car. I have an old one, an oldie as well.
David: They're amazing. And they're unique over here. I don't know how they are in Europe.
Bogy: In Europe, they are not unique because Saab stopped producing, right? So in Switzerland, where I am, they said I cannot even utilize this car because the Chinese, we're going to buy Saab out and the deal never happened because they wanted to get the portfolio of patents and GM did not want to sell them the patterns, just the production lines. Basically, the deal was off, and then my garage said, "Hey, we cannot support it anymore." So there's no maintenance, you know, I have no place to go. So they said, "we can utilize it, but you have to pay us [00:34:00] 1,500 Swiss francs so we can get it off your hands because we sent it to Africa" or something. I said, "what! This car is great!"
So, actually I had to manage some other way. But it's 2021, it was 2010, and I still have it.
David: Yeah, they're great. They're great.
Don: Yeah. I have sincerely enjoyed this, David. Thanks so much for this conversation. Before we wrap up, any last thoughts for a founder who's in the middle of things with their company and trying to figure out their next steps for acquisition?
David: I do think having the right advisor is huge. So, I had screened some advisors on this and someone introduced me to somebody who I thought was going to be good, but then when Brian said, "I want to do this for you," there was no question to me. I tell the guys who work for me, be the hero in the R rated movie, don't be the hero in the PG rated movie. The guy I think I would have hired would have been a good PG rated movie hero, but the guy you really want to get behind is the guy who's going to use every weapon and every tool to get a job done and has the experience and the [00:35:00] confidence.
This deal would not have happened without Brian or someone just like Brian. The advice that I got was not just strategic. When I got caught shopping the deal, it could have blown up, but Brian knew that. He knew that it more likely would create a more competitive situation, and he was right on that. He helped me through the incredible psychological toll that these deals are, and especially the waiting and the "do I hold out?"
As I mentioned, it's not important to know everything. It's important to know the people who know the thing you need to know. So, to take a step back, besides just having the right person next to you in the deal, always assuming there's someone out there I could tap into who knows more about this, who's going to put me in a better position to succeed, is the most valuable thing that I've been able to learn as an entrepreneur.
Don: Yeah, that's great advice. Well, what a story? Thanks for sharing this with us, it's super cool.
David: Thank you. I haven't [00:36:00] been asked this story too many times, so I appreciate you guys being interested.