Derek Wall is the cofounder of HUBX which is a marketplace platform democratizing and disrupting the trillion dollar secondary distribution industry by empowering manufacturers, brands and distributors to sell anonymously direct to worldwide B2B customers. Within 12 months the company has achieved over $200 million of revenue with no outside investment. Prior to HUBX, Derek was involved with the founding teams of Ezequiel Clothing, Dita Eyewear, Techstore, Buynow.com, PriceGrabber, and VAULT.
In this episode you will learn:
- Using credit cards to finance a business
- Bouncing back from failure
- Building a team of passionate individuals
- Identifying gaps in the market
- How to filter through 800 resumes for talent
- What to ask during interviews potential employees
For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
ACCESS THE PITCH DECK TEMPLATE
About Derek Wall:
Derek helped launch Ezekiel Clothing, out of his house at age 19, and nearly 30 years later Ezekiel is a top surf and skate brand sold at top-tier retailers around the world.
Derek continued to excel in manufacturing as he went on to co-found a snowboard distribution and manufacturing company at age 23, which was acquired by a public company two years later.
In 1995 and at 25 Derek was a board member and instrumental in launching Dita Eyewear. Today Dita is one of the most respected fashion boutique brands and manufacturers.
In 1996 and at the age 26, Derek co-founded TechStore, one of the first online computer retailers.
In 1999 Derek co-founded eMarketplace, a publicly held Silicon Valley internet software incubator, which acquired TechStore giving a combined value of $189 million.
In 1999 Derek also helped friends get PriceGrabber off the ground, which was subsequently acquired by Experian Interactive in 2004 for $500 million cash.
He continued to prove his business prowess when he founded BuyNow – a subsidiary of Buy.com – which was later acquired by one of the top three internet companies in the world, Rakuten, for $250 million in 2010. Up until 2014, Derek was also Founder and CEO of VAULT, a Rakuten-company and the first online event-based fashion marketplace.
Derek now serves as Founder, CEO and CTO of HUBX, a marketplace platform democratizing and disrupting the trillion dollar secondary distribution industry by empowering manufacturers, brands and distributors to sell anonymously direct to worldwide B2B customers. Since launching, HUBX has exceeded all expectations – crushing $200M within its first year, and has amassed customers in 101 countries.
Connect with Derek Wall:
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FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello everyone and welcome to the DealMakers show. Today, we are going to learn from someone who is a high school dropout and has built a 200 million revenue business in literally 12 months. I think what you’re going to learn you’re going to be blown away. I’ve already been blown away by the conversations that I’ve had and the opportunity that I’ve had with him. So, without further ado, I would like to welcome our guest today to the DealMakers show, Derek Wall. Welcome to the show.
Derek Wall: Thank you so much for having me, and hello everyone.
Alejandro: Derek, life in San Jose. That’s where you were born and raised until you were 18 and the oldest out of six kids. How was life there growing up?
Derek Wall: It was different. I was there a few weeks ago, and it’s a completely different city. I grew up in the ’70s, which makes me old. I grew up in a family where my father was a startup guy in a semiconductor industry. So, I was exposed as an early young child of how to start a company, how to build cubicles, moving into a new facility. My dad was gone a lot. In the semiconductor industry these companies are raising big money in Japan, and Tokyo, and so forth. He was busy a lot. But he always brought me by his side on the weekends and during the weeks. It was a fascinating time because literally, those times, it was a technology revolution from a component perspective in the semiconductor industry, which is actually the driving force behind most and all technology today. There’s always a story he tells me. I’ll say, “Dad, how small were you and how connected and small is the valley.” He said, “Derek, when I was at one of the startups, we started a company called MMI,” which actually is AMD today. He would turn around and say, “Hey, Larry. We have this paperwork for this.” That is Larry from Wilson, Sebi & Grazioli, one of the highest keen law firms in Palo Alto today. So, it was exposed. But more importantly, as growing up, I did not realize about how it all worked until I started my first company in the late teens, and I realized that all my friends growing up, their fathers were big bankers, PE companies, venture capitalism, etc. It’s a very interesting time, and it’s a great story. I have many stories living in Northern California.
Alejandro: Definitely a good one here, Derek. Dropping out of high school. Here you are, looking at your father being wildly successful in this semiconductor space, and all of these people are highly educated. So, why did you drop out of high school? I mean, did your father think you were nuts? What was going on?
Derek Wall: All my siblings, four sisters, and a brother are highly educated. I’m not going to boast, but I’m probably the most successful. They do call me that black sheep. My father, while I was literally in the middle of my senior year in Northern California, my father decided to move our whole family from Palo Alto Los Cabos to sunny Orange County Dana Point whereby he actually started a technology company, the first company that actually monitored fetuses in pregnant women via a phone jack. Pretty crazy stuff. So, that’s pulling me out of school. Growing up in Northern California, I became proficient in surfing in Santa Cruz, and it was a natural progression. As I started surfing in Dana Hills, I became pretty good, and I met some great friends there. One of my best friends was #2 in the world; #1 at the time was Kelly Slater. He was getting paid like $60,000 a year from Rusty Argot. I don’t know if you remember it; a pretty big surf brand. They had financial problems, and they dropped them. This was in high school. There were a bunch of our buddies. Literally, the next day after he got dropped, there was a Bible sitting on the kitchen counter. I don’t know who grabbed it if it was me or someone and said, “Let’s start a company.” They pulled it up with was Ezekiel, which is sold today, surfing brand Nordstrom worldwide. We literally made hats and tee-shirts, got in a little CR-X and started driving around in the U.S. No matter if it was in Kansas, we went to surf shops. When Vinny walked in, everyone knew him. That was my segue into literally bootstrap, hocking in the Rolex inherited watches that we had and started with nothing. That’s why I dropped out of high school.
Alejandro: What an amazing story and this company is still up and running 30 years later?
Derek Wall: Yes, 30 years later. I’ve heard numbers. They’re doing 2, 3, or 4 million dollars a year globally, which makes me just blown away. You start something in the garage and literally when I left it after a few years; to me, the credibility and the vision of what we had. It’s been through a couple of different owners, but it’s really cool to still see it. I still get texts from friends with pictures where they are, and it’s in stores everywhere.
Alejandro: That’s amazing. You were talking about doing the door-to-door selling. I think that selling when you’re a founder, you sell it, and then you figure out how you build it. That’s the mentality; not the other way around even though there are a lot of people that do it the other way around. But in this case, going door to door, that probably taught you one or two lessons about selling. What did you learn?
Derek Wall: That’s funny you said that. Literally, when I left the office yesterday, and we’re literally on fire on this new company, I was yelling at our Senior Vice President, a certain division. It’s public now so I won’t say it. I stopped at three potential customers and dropped off samples, and I sold them. I got home, and emailed and said, “Hey, we’re placing orders, placing orders, placing orders.” I think the natural progression, no matter how much you’ve done, those are the foundations that you need to grow your business. As an entrepreneur, you can never keep your eyes off on the fundamentals and the foundation of what you created, for sure.
Alejandro: Right, because, for example, in your case, you were coming from a family where your father was very successful in his own domain. Obviously, you had a comfortable life, so to speak. From having a comfortable life to going door to door and really hustling, that was quite a humbling experience.
Derek Wall: No, not at all. You know why? I grew up in an environment—people laugh at this. My dad would drive up to the office, and this was in ’78 or 1980, and my dad had this epiphany to go buy a bunch of Volkswagen Rabbit diesels. You know the old ones that are like boxes, and then they had black smoke running out because they’re diesel? He would go buy 20 of them in Europe and ship them here. That’s what he’d drive to work. But he would park next to his VP who was in a new Lamborghini or Ferrari. My dad was completely different, and I think what is instilled in me, it’s not about how you have it, what you have. It’s not about those things. Those are material things. He always told me this, “Derek, when you die, a hearse doesn’t have a U-Haul attached to it.” So, I did not know how successful my father was until I was in high school my senior year. My carpool lady picked me up and said, “Oh, my gosh, Derek. I just saw your Dad’s #1 paid in Silicon Valley this last year.” I didn’t know it. My parents sheltered me. Yes, did we have beach houses? Did we have this? Did we have that? But they were super, super frugal. I think that was one thing that I didn’t learn early on in my successes which now I actually learned and we can talk about it later. Yes, I was exposed to the greatness, but also the foundation of how we were brought up was completely the opposite.
Alejandro: The foundation is critical. So, definitely good lessons for you now that you’re a parent, and for me, now that I’m a father of three little girls. For all of the fathers and mothers that are listening as well. So, Derek, why did you decide to leave Ezekiel Clothing? You guys are killing it at that point. Then a couple of years later, you just packed the bags, and you go and start your next business. What happened?
Derek Wall: Two things. We can talk about this later. Two things I was taught. I was taught to literally innovate. I never wanted to be involved in stuff where you’re reinventing the wheel. I know so many people in this podcast have built better mouse traps. I was kind of crazy where I made rational decisions on wanting to conquer the world, where I wanted to try new things. One day, I was surfing in San Onofre in Southern California. I surfed with a really good friend of mine, Mark Freeman. Mark Freeman was a nuclear engineer at the San Onofre Plant. One day he said, “Derek, I want you to come see what I built.” So, I went to his house, and he had one or two huge machines, like these massive steel machines. He said, “Watch this.” He put something in the middle of it. He pushed a button, and it compressed it. He pulled it out, and it was a square board, but it looked like this huge skateboard without the detuned round. I said, “What is this?” He said, “Derek, it’s snowboarding. It’s the future.” This was around 1992, ’93 when snowboarding was illegal in most places in California, and most places. I tried it out. I looked at it. I saw one big thing, in Southern California is literally the foundation of surf, skate fashion in that whole action sports retail. So, all the biggies start out of there. The Volcoms to the Quiksilver to the Bill Evans, in Australia, and many, many. The connections that you have in that space was big, so I dumped every single penny I had, and we created a company called Crown Distribution. We launched our first brand called Purged Snowboards, and then PBS Bindings. Then 18 other brands. We started manufacturing a whole manufacturing plant in San Clemente, and we started dominating the world. We were one of the first. When you have all these guys that want to create their own brands, but they don’t have the facility. So, many brands were coming at us. We were doing OEM manufacturing. Fast-forward it two years. We had a few hundred employees. I was 23, the CEO and Founder. I sold it to a public company.
Alejandro: So, how did you guys capitalize the business?
Derek Wall: Credit cards.
Alejandro: And one quick question. You had 18 brands. So, were all these brands around snowboarding?
Derek Wall: Yeah. They were outerwear brands like goggles. We had gloves. We had clothing, apparel. We had a binding company, a boot company. We did not have the helmet, but we did have goggles and so forth. These things are literally like surfboards, so they’re cut, and they’re refined, and refined, and refined. There are a lot of upkeep and production to make them perfect. But when you talk about apparel when you’re talking keystone margins at 50%, 80% or 100%, we really were pushing the apparel to pay the bills, but also, getting the brand out there. What big windfall that we had is being an early on adaptor, being one of the first is when you had these kids come out of the woodworks becoming the best, you start sending them snowboards for free. They started getting pictures in magazines, and that’s what blew our company up because it was free advertising and we became a globally known company.
Alejandro: Yeah, free advertising, word of mouth. Nothing more powerful than that. So, Derek, you were mentioning credit cards. How crazy did you guys get with the credit cards?
Derek Wall: We dumped all of our savings. I think we had funded the company for—I think it was a couple million dollars—a few million dollars. I made some money on my other deals. But it was literally all our money. So, when you do R&D, you do molding, those things you don’t really plan for when you’re building stuff. There are a lot of changes and cost. We literally then partnered with Elon in Austria to do one of our low-end brands. They were able to take credit cards, but here’s the deal. This is what changed me in understanding negotiations. At the time, we had these brands. We had paper, four-color processing. It looked awful because it wasn’t like today’s standard. The biggest market for us was Japan. Japan was blowing up. Everyone in Japan wanted to distribute it. We had our marquee brands. I flew to Tokyo. I was invited to speak at a snow show. I spoke at a snow show. After that, every single distributor wanted to distribute my one brand. This was a changing point. I finally realized from a distribution perspective that these distributors had their own unique market, meaning this: Distributor A wanted to sell to the mass market, [15:44] which is Walmart in Japan. Or, Distributor B wanted to sell to all of the hot brand boutique snowboard or skateboard companies. I realized there were six markets in Japan. I went back to my hotel room after everyone wanted it, and I called my partner Larry, and I said, “Fax me,” literally. That were the words because there was no such thing as email. I think email was barely coming out in ’93. I said, “Fax me in 24 hours six or seven new brands with the graphics, with the sizes. Give me the cost. I’ll price it.” Within 24 hours, I went back to each one of these distributors in their office, and I said, “Here’s your brand to order. Give me an order today; pay 50% deposit today.” I did that six times. I flew back, and I think we had like 3.7 million dollars cash in our bank.
Alejandro: That’s amazing.
Derek Wall: I realized we had a product that wouldn’t serve all markets, but I realized we had the capabilities and manufacturing multiple lines that appeased the mass market. They wouldn’t compete with each other, and we wouldn’t have an erosion in the market. That is the money we ultimately were able to catapult our business and then sold it to a public company in 1994, ’95.
Alejandro: You were 21, and already a couple of hundred employees. Why did you decide to sell?
Derek Wall: In 2001, 2002, I started it. I sold it in ’04, ’05. The reason is because the market got hot. A company called Ryde just went public. It was becoming very fragmented, meaning everyone was building brands literally out of their garage, or they were doing OEM manufacturing at all of these massive billion-dollar facilities in Europe like Switzerland and Austria. I knew that we would get blown over if we didn’t raise money. Blah, blah, blah. It was something that was more of a project for me to see if I could make this work. I knew in my heart of hearts that I wanted to go and build technology. So, I sold out.
Alejandro: We’re going to talk about that. You sold, obviously, a bootstrap company in the millions. So, you thought you were on top of the world. So, I believe that after this chapter, you went and you actually helped—what is the name? DITA, to get off the ground.
Derek Wall: Yeah. DITA.com eyewear which started in ’94, ’95. The whole purpose at the time was going to be a surf and skateboard optical company, which today is probably a 300-million-dollar OEM manufacturing their brand. They own stores everywhere, New York, LA, Tokyo, London, etc. They’re the marquee brand. That brand does like 100 million, but where they make the other couple of hundred million, they bought a manufacturing facility in Japan where they’re handmade. So, the list goes like 25 household brands. They do the design and the manufacturing for them, and they’re doing amazingly. What happened was, I was a kid at 24, had millions in the bank. I moved to Malibu, and I lived the life of a kid that was irresponsible, spent money, and helped them get it off. That was my segue into meeting my wife, who was just graduating from UC Santa Barbara. Her brother was graduating from Berkeley in computer cognitive science. They’re from Northern California as well. At my soon-to-be in-law’s house, my brother-in-law, Bijan and I discussed that technology is the future, internet is the future. So, I abandoned everything in Southern California, and I literally moved up north before I was married, in my in-law’s, on their farm, and we started my first techno company out of a barn in Marion County which is cool.
Alejandro: That really sounds original.
Derek Wall: Yeah, I know. It was literally a barn on their—you know how Marion County is rural, and it’s gorgeous. We launched a company called Techstore. The idea and premise in 1996 was monetizing current computer distributors, the big ones, the tech data that do worldwide. I think combined; they do trillion dollars between all seven of them. We wrote all their APIs. We were smart enough. We flew there where they didn’t even have real-time inventory. It was literally the beginnings of it, and we built it into a tens and tens-of-million-dollar business with I think 10 or 12 employees at the time. We became profitable. We kept cost down, and we learned how to manage our PNL. It was a different era of internet. Obviously, it was before Version I. It really cut my teeth from a technology perspective. I learned so much from my now ex-brother-in-law. He’s the one that I contribute him for paving the way for me for being exposed from Day 1 in tech from the internet and understanding the right way to orchestrate things even though we were using older technology which is called Legacy today. Understanding the frameworks and understanding the methodology for development and the architecture of development. So, I spent two-and-a-half years. We built this company profitable. The idea—this was a good idea and a bad idea. I learned a lot. It was a dot-com boom. So, I drove down to San Jose, where I was born. I met with a dear friend of our family’s who is Robert Wallace, who is one of Michael Milken’s twelfth disciple, who has done billions of dollars in M&A. I said, “I think we’re on to something. Is it possible we can use this little Techstore that’s profitable to kind of shake it out into a public company and then become this software internet incubator? And we did. We raised a lot of money, and we acquired a lot of companies.
Alejandro: How much money did you raise if you had to guesstimate?
Derek Wall: I think we raised like 80 to 100 million dollars at the time.
Alejandro: I mean, that’s a lot!
Derek Wall: That’s a lot. So, he took over as chairman. He took over the reins. I worked on acquisitions and stuff. He mismanaged everything. Look. I can talk about the dos and don’ts and everything. The guy was 60. I was 29. You know, you have faith in people. Right?
Derek Wall: So, from a technical perspective when you are non-tech, you make mistakes because your assumptions are X, but they’re Y. I contribute it to my own fault being not involved. Being fresh in technology myself, but I’m a quick learner. We made some bad acquisitions. We were at the World Trade Center. We were closing the biggest round, and that was March 2001 when the stock market crashed 580 points or whatever. The biggest ever, ever. I think we were with HBS or who was it? What bank was it? I don’t remember, but they were closing in on like 150-200-million-dollar deal, and it all unraveled. When that unraveled, my life unraveled. The stock I owned that was worth hundreds of hundreds of hundreds of millions of dollars, that was gone. I margined my money. I got calls from my brokers. They didn’t have this electronic way, and they said I had margin calls. So, when the dust settled, I lost everything, literally.
Alejandro: So, how long did it take from that day being there when the deal was getting close to actually this day where you find yourself with nothing?
Derek Wall: I think it was within a month.
Derek Wall: When you have to cover margin calls, and you have zero evaluation, you have zero leverage, you’re living like an arrogant entrepreneur, young, 28, exposed to this money, or exposed to this data. You make that in purchases. You live a lifestyle that’s not real and isn’t sustainable. In my opinion, now, it’s stupid and frivolous. But, at the end of the day, these things have made me who I am today. It built my character. I was beaten down. I was kicked off my soapbox. I became a man again. I became humble, meek, and kind, and worried about others, because you know what? At the end of the day, it was like I finally realized, I am nothing. No matter if you’re big or small, I’m nothing. It was the best thing that ever happened to me because it was more of an epiphany, and I literally had to start from scratch, literally.
Alejandro: So, in those days, Derek, because for the folks that are listening—we have a lot of founders here that are listening. Many of them have already been through the ups and downs, or they are about to go through the downs. I’m sure there’s a ton that they can learn from your story because from your failures is where you really get to learn. I’m sure that those dark days for you were very difficult. So, what were those dark days like, and how were you able to bounce back?
Derek Wall: I’ll just give one analogy. After we went public, I resigned and left. My wife and I moved to Colorado. We built a huge home in the mountains. My father-in-law was a founder of one of the largest restaurant chains that everyone knows, but I’m not going to say it because—he got me to buy a market to get out of tech, to clean my mind. I bought this huge market for gazillions of dollars. I tied my home to it. I had all these assets, and when the stock market crashed, everything else crashed. So, literally, I signed my home, my life, everything at that point over to the banks. I rented U-Haul. I picked up my stuff and humbly moved back to Southern California. It was done. It was the most humbling experience of my life. I feel terrible for my ex-wife. I put her through h***. As entrepreneurs, we take major risks, but the ones that have had beatdowns, we take calculated risk. I’m hopeful to say that I’m in the calculated risk category now, but you never know if we get kind of squirrely sometimes. Right?
Derek Wall: Yeah. Those were the tough times. Literally losing everything. Everything.
Alejandro: So, how were you able to bounce back? I’m sure that ride back on the U-Haul with your belongings [crosstalk 27:47].
Derek Wall: So, obviously, this is what happened. I bought this market, and the stock market crashed. I thought I would be able to recover, but the markets were located—and it was multiple—in Denver Tech Center, which is across the street from one of the largest Enron buildings. It was across the street from MCI WorldCom. All these companies that probably some of the listeners don’t even know, but these were the companies that were caught up in fraud. These markets were contingent around 50 to 100,000-foot traffic within half a mile. Those people were fired because these corporate leaders went to prison. So, it literally ignited everything. But I knew that I was going to have problems. Murad, a good friend of mine from LA, through the midst of all this, he said, “Derek, what are you doing in Colorado? We just started a company called PriceGrabber. You need to get your ass here in LA, and I want you to help us.” So, I had the insight to understand to go back to tech because tech is where it’s at for myself. So, through the process of losing everything, and crashing, and everything, I was already building myself a safety net. I literally had to borrow money to fly there. That’s how bad it was. I lost everything. I went from zero. We started this. A couple of years into it did huge deals. I think PriceGrabber—I can probably say it now. PriceGrabber, we got it sold in 2005 to Experiment Interactive. Bootstrapped. We raised 700 Grand from just friends and family, and that was it. It was a CPC model. It was price-comparison, so they charged these dollars to these retailers to show in their comparison guide. So, it was very frothy. When the company sold, I think it was doing 81 million in topline revenue. It was netting 68 million net. Imagine.
Alejandro: I remember. I was one of your customers there. I remember I was here in New York City. I went to buy something in a store, and my brother said, “Hey, this thing is ridiculously expensive. Go on PriceGrabber so you can compare with others. That was mind-blowing to me.
Derek Wall: But behind the scenes, the frothy—it was a Google CPC Adword model where it’s cost-per-click. So, in the middle of all that, Scott Blum, the founder of buy.com called me and said, “I have something that I need you to look at, and it’s concerning to me. I need your help to help me find a solution to it.” So, this was my segue into starting a company with Scott Blum. Buy.com at this time was only a couple of years old. They had some major problems. They went public. They raised like 300-400 million dollars with SoftBank. They crashed. The company was resold. I think it went up to like 4 billion dollars, and I think Scott bought it back for 20 million dollars. So, I walked in, and literally, he said, “Come to the board room.” I looked at the board room, and I saw a screen. He said, “I want you to look at that, and I want you to think about that, and I want you to solve that solution.” I said, “What solution?” There were so many numbers on the board. This was a digital board in real-time. So, the board they built was a customer board that showed how many people were on the site, what categories these people were on the site, and what the convergences were at checkout, and how many orders a day. I think it was over 10 million users at the time I looked at it on the site that second. I looked at the bottom left-hand corner, and I saw orders and then conversions. They were converting a half a percent.
Derek Wall: So, 10 million people or 9.9 million people were going to Buy.com, looking at whatever, and abandoning the site. So, I said, “Well, we need to recoup and figure out where these customers are going.” It was kind of premature for tracking. We started figuring out what they were doing. I think the premises was is that they were going back to shopping guides because Google shopping didn’t even exist at the time. So, we decided to start a company called BuyNow.com, and it was a shopping comparison site. It was going to compete with PriceGrabber, NextTag, Bizrate, Shopzilla, all the old shopping guides. All the ones that got bought out for a half a billion dollars. All of them did.
Alejandro: So, basically, that gave you the opportunity to say, “Okay. You come. You do this thing, and let’s see if you can help us to address this.”
Derek Wall: Buy.com. Yes, 100%. I said, “Scott, give me an IT guy.” He said, “I have the smartest guy in the world, Jason Bosinoff, the kid that got 100% on his SAT. GMAT was like 100%. The guy was a Brainiac. We started building the site within three months. Then I had an epiphany. I said to myself, “Why are we rebuilding something that already exists? This does not make sense. Why don’t we go to all these shopping guides, nine of them, pull their API of data, do deals with them where we give you 20% for a referral. We keep the 80%. Then put these shopping competitors at the time on the product page. So, if they’re selling a computer, back in the day, it would say Circuit City, Best Buy, Amazon. Back in the day. So, it would show the lowest price by them, or you can buy it at Buy.com. The theory behind in my theory was that these people are going to other shopping guides, and they were abandoning and shopping elsewhere. So, fortunately, and I still can’t believe it, everyone agreed which made sense. It’s a qualified referral to their customer like Best Buy. So literally, when a customer went to a computer page and they clicked on Best Buy, at the time, I think the average TCP was $1.25 a click. PriceGrabber charged Best Buy a $1.25. PriceGrabber kept 25 cents. We kept the dollar. We launched it probably within 30 or 40 days. Our first day, we were processing 300,000 clicks. I think it netted $200,000+ a day.
Alejandro: Did you guys have architectural issues with so many users going so fast?
Derek Wall: No, not at all. That is when we started building this layer of simple architecture structure where we were actually housing the architecture into one big database, but it was drawn equally. It wasn’t redundancy. The pipeline wasn’t getting filled up. It was delivering what we wanted. It was like an ad platform. So, everything’s cast, and it just delivers, and it updates. At that price, updates pushed our database on a skewed level. That was emerging technology, but it worked. Through that time, we literally and fundamentally changed Buy.com from losing money to making money. This stupid little feature. So, for the next year-and-a-half to two years, we have this huge competitiveness overall in the market where shopping guides were dying. No one was using them because big brother, Google and Amazon were leading the way for shopping. That drove down TCP from $1.25 to two cents. Then it wasn’t even worth it because we were making from hundreds of thousands of dollars a day to $5,000 a day. I remember, and those are the very true facts because when you run into things that change, it changed drastically. That’s when we essentially turned Buy.com into Marketplace. We invited the 20,000 sellers through the feeds of PriceGrabber. We contacted them directly to say, “Do you want to sell on our site? We’ll make it CPA, which is Cost Per Acquisition. No PCP. You’ll love it.” That’s how we created a shopping guide/marketplace at Buy.com, and it was super, super successful because now we can charge 18% on a computer. Back then, a $300 computer. Do the math. It’s like 60 cents acquisition.
Alejandro: Got it.
Derek Wall: So, that was very successful. Our whole team worked their butts off to get the company sold to Rakuten. At the time, Rakuten, and it still is today one of the biggest companies people don’t know of. Rakuten is the largest internet company in Japan. Rakuten is in Japan only. There are 93 million—don’t quote me on this. I don’t want someone to bash me. 93 million in population and I think Rakuten’s customer base is 90 million. It’s like 100% penetrates and 99% penetration. Their segue was into the globalization and creating Cross Border initiative. They went out and bought on every single continent large retailers like Buy.com. In Europe, they bought Priceminister in France and in South America. They bought a huge company in Brazil, etc. Their initiative both was to empower these manufacturers, change their name to Rakuten. At the time of acquisition, I did not want to be involved because I knew that probably 100s of our employees were definitely going to get canned for restructuring. I had to stick around for a year or two just because of my agreement. I said, “I want to start a new company, and I think I want disrupt something that I believe is big.” This is something that I’m excited to talk about because as an entrepreneur, you have to know your market. Niche markets will kill you. My idea was to revert back to the 20 years’ experience in the fashion and apparel surf, skate wear. All these cool brands selling at the cool boutiques like Fred Segal’s in LA, or Henry Vandal in New York. They didn’t have a place to sell online. The idea was to give them this platform, marketplace, empowering these manufacturers to sell their products online, and it’s kind of cool. So, we worked our butts off. We built a team. Rakuten took equity. I took equity, and everybody else took equity. We went on our merry way. We launched 3,000 brands across every category: men’s, women’s, kid’s, houseware.
Alejandro: Very cool.
Derek Wall: So, here’s the problem. Every single brand on our site, I was reading message boards, “What is this overpriced s*** made in China?” Everyone thought it was from China because they’re nonbranded, no one knew of it, was less than 1% of Americans that even knew these brands. This was the turning point of my life. I spent so much money on marketing, was giving away coupons: 25 for 25, friend’s referrals. I was spending money in keyword search, which I thought were big search results. The golden goose back them was getting like 10, 20 search results on Google a week. You type in Nike; it’s tens of millions. So, I could not find the customer, and it was going to cost a lot. So, I had an epiphany. If you think about it in a marketplace, when you have virtual inventory, you have a depository of inventory that is sitting in a database which I call this virtual inventory. I had an idea: where do you find the customers in the world? So, I flew to New York, and I pitched this to Bluefly. Bluefly at the time was the #1 fashion flash-sale fashion site. They’ve accumulated 3 to 4 million to 1% of Americans that spend gazillions of dollars. They know these brands because they’re boutique brands. At the time, I was involved with a clearly capital and private equity firm to acquire Bluefly, take them private, and then take over. I wanted to help them, and the idea was empowering Bluefly with a boutique section. We literally exposed our APIs to them. They pulled inventory from all the brands. We were the only ones in the world that had this data. Real-time inventory from 3,000 of these small brands to niche. We turned it on, and it turned into $300,000 a day in revenue. We went from $10,000 a day to $300,000. So, I was like, “We are onto something.” Literally, when a brand loads up inventory in bulk, it was syndicated on Bluefly. When Bluefly sold it, it decremented the inventory. The brand got an email, “You got an order at bulk.” They didn’t know where it was coming from. So, my initiative was to essentially build this channel advisor but make more money. We were making 25% commission, and I got ***** by management, by Mickey, the founder of Rakuten to say that publicly. I really don’t care because it makes me upset that their empowerment around people is to foster innovation, foster entrepreneurs in their company, and I think that’s *******. I was innovating. I started something. I was creating a dashboard for small businesses. I was empowering them by providing APIs to what they called our competitors. They were so upset at me that I would expose our API crate orders from a competitive-type company. You’ve got this small little vault that has inventory that could be applicable to 40, 50 hundreds of websites worldwide. It could be a cash register. Ching. Ching. Ching, Ching. Zero marketing cost. Let other people sell it. Let us process the orders. We do the logistics. It got so bad that I walked.
Alejandro: Wow. So, you walked from all this success?
Derek Wall: I walked because I wanted to make a point. I built something. It was not pride, but as entrepreneurs, you go through—I spent six months trying to figure out how to find the 1%. We did TV ads. We did this. We did that. We’re burning money, but we’re trying new things: celebrity engagements, etc. But I was exposing a part number to a buyer, and we’re splitting the profit on it, and it was the right lady that lived in her 10 million-dollar-house. It couldn’t get better than that. We’re exposing the product and the brand. Our mission statement was to do that, but I was chastised by empowering a competitor. For me, I felt like I was lying to our brands. I was lying to them because they wanted me to do organic. I wanted to drive revenue for them, and that was the place for it. So, I literally walked.
Alejandro: Then, I guess from working with a larger corporation—it’s really interesting that you’re touching on this because many of our listeners are perhaps going to receive an investment or a strategic proposal from a larger player. From working with such a large corporation, what was your biggest lesson, and perhaps something that the folks that are listening could apply to their own journey?
Derek Wall: Are you asking a question starting something organic within an organization?
Alejandro: Either starting something as an instructor [crosstalk 43:18].
Derek Wall: Like a spinout?
Alejandro: Anything that is associated to a large corporation where they have a stake. What was the biggest lesson there for you?
Derek Wall: I would have never done it. I think the biggest lesson I had was I would have structured it completely different. So, the articles of the corporation gave them full control. This is unique. I’m U.S. grown. I’m from the Valley. I believe in speed. I believe in making swift decisions, not hasty decisions. These companies want to have meetings, to have meetings, to have meetings. It created red tape, and then it just creates frustrations. So, my biggest lesson was that I got sucked into the culture of the empowering entrepreneurs. They want to do this. I was the first organic subsidiary in the U.S. I’m home grown. The biggest lesson: if I were ever to do that again, I would make sure my I’s and T’s are crossed, and the expectations between the decisionmakers, and myself, and our team are 100% inline because this is what happens, and I think this is what happens at Rakuten. I think they failed to make good acquisitions because they look at data. They are now owned by [44:46], so they have over a billion users. So, that’s their name to claim the fame. They have customers, over a billion users. They look at data derivative from their Asian culture or even in Japan. They look at what has been successful in their culture. They are sold on it. They do not look over it. They are not willing to receive constructive criticism. It’s their way or the highway. This has nothing to do with just Rakuten, but larger corporations because listen, every big company is derivative from one thing. What’s the metric? It’s KPIs. As they review KPIs for certain product lines, certain categories, certain services, that is the Bible. When they implement their international one into a market into the U.S. where we launched, it’s a flop of 180 degrees. We don’t do business this way. 1) I’d be very hesitant to organically partner this way. I would never do it again, but if you do, I would definitely make sure the expectations are written out clearly. That is probably the biggest lesson I learned for sure.
Alejandro: Also, one of the things here, like when you’re dealing with a publicly-traded company, going back to what you were mentioning: KPIs. For them, revenue is everything. In many instances where you try to monetize so quickly and so early in certain projects, you’re killing the creativity around it.
Derek Wall: Yes, but let me tell you this. I think doing this in Rakuten brought me to another level for the way my brain works. So, we can talk about that in a minute.
Alejandro: Yes. I want to talk about your next chapter now with HUBX. I know that you spent after this, obviously, you walked away. You were very disappointed from this experience. But obviously, you brought with yourself a ton of lessons that you’ve learned.
Derek Wall: Yeah.
Alejandro: Basically, for about three years you were doing some angel investments, mentoring some startups before you actually started now your most recent company which we’re going to be talking about. But I want to ask you. During those three to four years being involved with founders and investing in companies, you got some exits too. What were some of the patterns from the founders that had the most potential? What were some of these ingredients?
Derek Wall: I think the most ingredients start at the top, and it starts with the founders. Two things. 1) When I look at a company for investment, I’m not investing in the idea. I’m not investing in their technology. I’m not investing in the patent-pending. I’m not investing for any environment that they’re in or the location. I’m investing in the entrepreneur. One thing that I look at is someone that is so smart and dedicated and is humble and has built, that literally takes the backseat and allows his organization rise. That is the best leader. So, those are really two critical things for me as I look at an investment. It’s a passion and desire. It is. It has nothing to do with the product they’re in. Maybe 90% not; 10% yes. I actually have to believe in their product, but more importantly, it’s the founder or founders. How they think. How they interact. How do they work in stressful environments, and are they problem-solvers, and are they willing to change? Are they willing to make swift changes? Those are the ones that are the gold in my mind from an investment standpoint for sure.
Alejandro: Got it. Let’s shift gears here, and let’s talk about HUBX. From zero to 200 million in 12 months. How did you do that? First and foremost, how did you get started with this business? What was the trigger for this idea?
Derek Wall: Just a few years ago, I was 46. I spent three years going through a crazy divorce. A good divorce. We’re great now, but I was going through a divorce, and I wanted to get my mind mentally back in the game. I told everyone in my family that I have one more thing in me. I grew up in Silicon Valley, and then I grew up in LA. So, all my friends—we were pre-Bitcoin of knowledge. My good friend in high school is Roger Ver, Bitcoin. My whole life—I know everybody at Bitcoin, Blockchain. I was enamored at all this stuff and then involved, but for me, my decision was I want to do one last deal, but I wanted to do fundamentally a couple of things. One was I wanted to use all my experience in the past. I’m fascinated around e-commerce even though it’s not sexy. I’m fascinated on international transactions. I’m fascinated with distribution, and we can talk about that in a minute. But more importantly, I wanted to build a company that had the foundation of a team that their primary goal was having complete respect for one another. I finally realized before I even started HUBX was that my desire was to build something that I could say without a doubt in my mind that I know I can do. I don’t know how big of an exit. I don’t care. How can we make this profitable? How can we disrupt? It turned into this mindset. How do I do something in 30 years and build it for young kids, and let them taste success? Mentor them, but in my own company; in our own company, and it’s a family. So, I was enamored at the distribution. My best friend moved from LA to Miami. Had a distribution company. He said, “Derek, can you please, please just spend a week or two with me, and I want to sell my company.” He started it 20 years ago. It’s definitely not sexy. He moves a lot of revenue. Blah, blah, blah. I was able to take, as I said, “Okay. I understand logistics. I understand distribution. I understand e-commerce. I know B2C. I’ve done B2B in my wheelhouse. So, I was invited to go to Harvard HBX, and take a class with Christian around disruptive innovation in large companies, broken companies, barbaric companies, broken from a technology’s perspective, people that are working spreadsheets, like that. That came down to distribution and so forth. In the middle of school, I came down with the thesis that distribution was broken. There’s a multi-trillion-dollar industry out there that needs to be fixed. My thesis was written on how what HUBX is today. Now, the identifiers of why I made this decision, and then I jumped in head first. 1) I believe that B2B commerce is broken from a manufacturer’s perspective, but then I think manufacturers or B2B sites are broken from a platform and technology’s perspective. So, I would like to talk two things about that, and you guys will get it. So, you have the Alibaba’s. They expose the seller, and they expose the buyer. There are 32 billion dollars a year that happens from a transactional off these sites because they know each other. It’s one of eBay’s biggest problems from the consumer’s perspective on controlling data and controlling people to buy outside of their platform. With Amazon, I don’t know, but I’ve heard it is tens of billions of dollars where people are gathering and buying product outside of their platform. The idea was to create this anonymous platform that was driven by technology, that empowered manufacturers, that empowered these vendors, that empowered distributors. It was the most unsexy business that I’ve ever done. But it’s turning into an ATM. It’s changing things. People are talking about it. So, as I dug deep down granular, I knew that these businesses were buying on spreadsheets. I knew they were buying on part number. They weren’t buying on sexy images. They weren’t buying on pictures. They weren’t buying. So, in class, I tested it. I built a very flat HTML ugly—and I have pictures of it somewhere. Our site today is still ugly which I’ll share some stuff with you if you guys want to see it. But I wanted to create this idea around part number. My mom, who’s been around with me forever, and my dad, I showed them what we’re doing at Thanksgiving, and they’re like, “There’s no way you can be processing at the time a million dollars a day or 800,000 a day on peer data and peer part numbers from leading tier one. That’s the market for us. So, the goal was to test it in school. I created this platform. We launched it. I tested it. I launched vendors. Did this thing. After school, I even tested it. My thesis was about this. We did it under some weird domain. We produced 60 million dollars in this beta test. So, in November 1st of 2018, I decided this is a valuable business. This isn’t just a niche. Just like Amazon started with books, we started with computers because I know it really well. I started building the technology company. We built the technology company. If you want to ask me questions around that or my biggest problems or biggest successes and things I’ve learned?
Alejandro: On HUBX, Derek, I want to ask. Obviously, this sounds like of like Amazon, but B2B style. Would you say that’s accurate?
Derek Wall: Yep. 100%.
Alejandro: Okay. Really cool.
Derek Wall: Here’s the deal. Just so everyone knows this, every manufacturer, computers, mobile phones, desks, clothing, hardware, computers, B Links of the world, fashion, whatever, they’re produced by manufacturers. Do you know that 62% go to retail and the rest are to jobbers, they call them, or these brokers, and they’re losing their margins? Even the Kate Spades of the world, they’re sending spreadsheets to get bids for it. So, there’s a huge broken market, and it’s called secondary distribution that we’re tackling. So, low and behold, we launched the company. I got on a plane. I flew to Lenovo. I flew to Dell. I flew to every refurbishing center, and I said, Here’s my story. My story is to empower manufacturers and distributors. Distributors like tech data. They do 100 or 300 billion a year each in revenue. They buy all Apple. They get stuck with billions of dollars. There’s no outlet for it. They send it in a spreadsheet. You get Dick that buys it and puts it on eBay for $199. It screws up pricing globally, and it might be 100-million-dollar lot, and one product out there is screwing up his market. Our business model empowers the manufacturers and distributors to move the access inventory. They price it. They control it. It’s literally like Amazon, but it’s B2B, but here’s the great thing. This is the coolest thing in the world. When we started this company, we wrote our core values. One of our core values is on our site. It says we’re something about a driven, innovative company. Our best ideas are yet to come. Within six months of launching, I had this idea about anonymity. So, it would be not losing that customer to the seller because they’re in the know. We vet the customer. We vet the seller. We’re in the midst of it. We’re the merchant of record. We do all the logistics, but it keeps them anonymous. We built tools for these customers to communicate to the vendor anonymously. So, if I’m a customer and I want more stock, I can click a button. The vendor is notified that this customer is—but they don’t even know who the customer—they drop the price. They place the order. This customer wants—modern inventory, they load it, they buy it. 500 customers don’t like a price, then they click “I want a price drop.” Vendor logs into his dashboard and notifications, and he sees 500 people waiting for a price drop. The vendor literally drops the price, SMSs, notifications go out, it’s amazing. We’re creating this ecosystem around anonymity that doesn’t expose it, so it protects us, and that’s where we’re winning on it. Over the last 12 months, I think we’ve seen a huge increase of revenues because we are really disrupting a market like no ones ever done before, but we are, from a technical perspective, we’re 100% technology building very innovative tools that have never been done. I, as an entrepreneur, don’t like to reinvent wheels. I like to lead and blazing my own path with testing data and so forth.
Alejandro: Really cool. It seems that you guys have obviously hit product/market fit and the revenues are a good testament to that. I want to ask you, with this massive growth, why didn’t you raise money?
Derek Wall: I didn’t need to.
Alejandro: Why was that the case? How did you support this crazy growth?
Derek Wall: Thursday’s my finance meeting, and I’m actually looking at my balance sheet. You saw my GA. We have 30 to 50 million dollars in cash just circulating in our business. Everyone on this podcast, there’s a right way to start a company; there’s a wrong way. The Ubers of the world, there is this smaller niche of the world. It’s to your desire if you want a partner, but raising money, there’s nothing wrong with that. I have so many friends that are VCs, and they’ve been begging me to raise money, which is even possible because I think we will, but I wanted to do something that was crazy. Everyone thought I was crazy not to raise money. But I wanted to prove a point. I think proving points is one thing, but then again, we have the money to do it. I didn’t want to get diluted at the time, 5 or 6 million dollars when you incorporate a company and you have an idea. I wanted to have revenue growth, proof of points. The three biggies are knocking on our door, and we’re not home. We’re not answering the door. What’s unique about it is it’s different than Rakuten. It’s different than Alibaba. It’s different than Amazon. I’m only using tools to disrupt a market that’s a trillion-door industry globally. I don’t know what our exit’s going to be. I don’t know what our decision will be. I’m open for discussions all week.
Alejandro: Look, I think that it’s like everything in life. Every stage or every time in history’s different. So, the next Facebook [crosstalk 61:25].
Derek Wall: They’re calculated. I’m back at Harvard Business School. We just did a case on Kareem. Prior to that, we did a case on Nasty Girl who went bankrupt. I’ll tell you this. The data is so critical in this time of infancy to make drastic, but yet not drastic decisions. So, there are theories around cases about early decisions will affect your company in the long run. I say no, but I say yes at the same time, but every day as an entrepreneur, you’re always at a section of left or right. Probably like everyone on here, we make hundreds of decisions. People are in mobs. What I do is answer it, answer, answer, answer. You answer it with best thought. Or you don’t even know the answer. I believe that the decisions we make today become the foundation. But more importantly, what I’ve learned from doing this, it’s the team, not me. The biggest thing my dad ever taught me is this: you do that, you will be successful. Ever since day one of my life, I’ve done it. I am definitely not the smartest guy in the room. This year, my biggest hurdle ever, and I blame myself is we ran into some technical problems because I hired a CTO, and he misled to me. He lied to me. We drew out the whole schematic of how I wanted the architecture and the CQRS that was very flexible. Yes, what the day we launched because we launched very fast, our company just crumbled. Just was breaking. I literally pulled down our whole code, everything. I balled for an hour.
Alejandro: I can imagine.
Derek Wall: It was nothing like we had agreed. I exposed it to him, and then the next day he quit. Last year, I took on the role as CTO. I just want everyone to know on this, whether you’re technical or nontechnical—I’m nontechnical, but I’m very, very technical. I don’t code, but I understand probably 99% of it. Don’t put your head down. I trusted someone. I was out there as a CEO selling our business. Going and meeting with big manufacturers and doing deals and customers and this and that. Don’t keep your eyes off the core of your foundation. If you’re a technology company, be involved. Don’t not be involved.
Alejandro: That’s a great piece of advice because in many instances, as the founder and CEO, you have so many different fronts that you have open that it’s just so easy to get distracted and get your eyes off the ball.
Derek Wall: Yes. It’s been seven months now I’ve been CTO. It was amazing that I saw our team—they rise. Leaders rise. We’re in Miami. I moved to Miami because I believe that it was a tech center in a fragmented, broken thing where there’s amazing talent. There are so many smart people here. However, we’re a small little company. We’re a small startup no matter what our revenues are. We’re hiring one employee per 800 resumes.
Alejandro: How many people do you guys have now, Derek?
Derek Wall: I think we’re at 118.
Alejandro: Wow! That’s incredible. In how much time did you hire all these people?
Derek Wall: Over the last year.
Derek Wall: I think we launched the company with like 14 developers, me, and a few other people. But then we have logistics. That’s a whole other can of worms. Last year, we shipped to 101 countries. The starting of this company was so complex, infrastructure-wise, but it wasn’t an infrastructure. It was technology and legal infrastructure, meaning I had all the TSA at my home. There’s so much fraud in Miami and these money laundering laws. Blah, blah, blah. Legal documents and tariffs and customs through each country is 101 whole new things. So, from a technical perspective, but it was more of a tangible structure issue of putting up the company, the fast, simple, easy measurement. You have to scale, but there’s so much back [66:07] work to do to get these things live. That is where we started right when we started building code too. To onboard these customers is not like you log in. By the way, we’re 100% digital. We don’t even take credit cards.
Alejandro: Wow, that’s amazing. Then, let me ask you this because this growth is just unbelievable. What would you say has been the biggest challenge for you guys for the business so far?
Derek Wall: My decision on letting the CTO lead and not being on top of him.
Alejandro: Got it. That makes complete sense. When you’re hiring Derek—Miami has come along. It’s growing like crazy like the startup scene and all of this, but it’s definitely not like a Bay Area or New York City.
Derek Wall: Yeah, it’s not.
Alejandro: How did you go about hiring all these people in 12 months?
Derek Wall: Friends of friends that I know because I run with everyone. I tried the recruiter route where you pay $25,000 a hire. Probably lost 100 Grand doing that because no one worked out and I fired them. I automated two tests. We took actual code to resolve that our team has resolved for our company. They are challenging code, but they’re not too crazy. Then we do a Meyers-Briggs test. We understand like are they personality, and do they have the same values. The biggest thing that I’ve learned in companies in general, every single employee we hire, it comes to me right after they’ve been vetted by their department. The only thing that I do is I ask them questions. I want to know who they are. I want to know what they enjoy outside of work. I want to know why they want to work at our company. I want to know little things, and they’re triggered questions for me to really identify.
Alejandro: What’s the question that you listen to the most for the answer?
Derek Wall: I’ll give you an example, and this poor kid. I wanted to write him and tell him that—well, one of my first questions, obviously, after I hit the salutation of “Hi. How are you? Where do you live.” Blah, blah, blah. “Why do you want to work here?” Yesterday, a poor kid who—the guy scored 100% on his test, brilliant kid said, “I’m here because I know that I can make more money here than my other job.” The last question I asked him, I said, “Where do you see yourself in three to five years.” In general. I got personally, this, that. He said, “Making a lot of money, whether it’s here or not.”
Alejandro: That’s incredible.
Derek Wall: These stupid keywords. You can learn a lot about people. Then, honestly, every single hire comes to me. Our people in tech come in and say, “Yesterday, we had four interviews. We had four people go in my office at the end. I talk them for literally ten minutes. One girl that we’re hiring, I spent an hour with her. She’s just this rock star. Then my guys come in, and they talk to them from a technical perspective. I talk to them from a human perspective in laymen terms. It matches. It’s like one-to-one. That’s how we’re building our team. It’s that old bootstrap mentality. The smarter you hire, the more pool of developers that come apparently available through their friends because smart people hang out with smart people. Right?
Alejandro: Absolutely. So, let me ask you, Derek. Really quickly here. I want to get your thoughts in a world where the vision of HUBX has been fully realized, what does that world look like?
Derek Wall: Simple. Amazon started with book. HUBX started with computers. End of story. I think we globalize marketplace that’s untouched. So, we’ve been vetted by the Big Three. Amazon’s been one of them. I think they’re enamored on how we built this. Big companies are run by crazy KPIs, and people sometimes don’t know what they’re doing, and so forth. It allows companies like us, a baby, to really disrupt them. I think we continue to do what we’re doing. I would like to share something. The really interesting thing is out of the 101 countries that we ship to, it’s multi-faceted. It’s not one section or sector. We got a picture the other day with a big HBX sticker on the back of a donkey in Africa with 25 notebooks from one of our distributors. The guy was walking computers into each village and selling them one by one. One village to one computer till they had internet connectivity. Then we have all these global giants that are buying us these huge retailers here in the U.S. We’re international. We have these small mom-and-pop stores and retailers. South America’s huge and so forth. The unique thing is for me, 30% of our sales are in the U.S.; 70% is international. It’s something that big companies—this is my segue into my answer, like at Amazon, they don’t know how to penetrate these global markets and I think we’re creating a niche. The best thing that I saw last week—we just launched mobile phones by the way. At this tradeshow in Columbia, HUBX was there and had a huge booth—not even huge. There were 40 people in line for three hours straight waiting to talk with people, and every single one was a vacant. So, what I figured out was this—and then I’ll shut up. It was 9.9 billion phones in the market. We started with computers, which is around 700 million. It’s smallest niche. We actually own the worldwide rights to Lenovo factory refurbishing’s and so forth. We have a massive facility in Arkansas, but mobile phones are big. No one’s repackaging, refurbishing, making used phones like new. That’s the market that we are hitting, and they are flying. Our mobile revenue is growing 100% week over week.
Alejandro: That’s unbelievable.
Derek Wall: We want to learn from what these are going, and then we will find other categories on our own. To answer your long-term is we want to become this massive mall that is driven from storefront outlets by brands and manufacturer. No matter if it’s a manufacture direct where it’s sold by—seven vendors are selling them in that same product category. We actually take over the world. I think that’s what we want to build.
Alejandro: Taking over the world. I love it.
Derek Wall: That’s the goal. It sounds ambitious, and I’m not being arrogant or narcissistic, but I mean, that’s the goal for me.
Alejandro: Look. At the end of the day, Derek, you have to always shoot for the moon, and even if you miss, the stars are there. It’s all about thinking big, and that’s a try. I really love where you guys are heading with this. Derek, one question that I always ask the guests that come to the show. You’ve been at it for so many rodeos. We’ve had the opportunity and the pleasure to really discuss them all, and for listeners to really have an insight into what that looked like that journey. Now, if I had to ask you, Derek, that you had the opportunity to speak with your younger self before launching a business, what would be that one piece of business advice that you would give to yourself and why?
Derek Wall: Don’t be hasty.
Alejandro: And if you could further expand on that.
Derek Wall: When you said younger, I thought about arrogant Derek. The guy sitting on a soapbox making hasty decisions, that was not humble, that was all about me. My decision-making was for me and my family. It makes me almost teary to think that was me. The change is a fundamentally 180% direction of how I am today for the last 15, 20 years now. I realized one thing. Building companies isn’t about one person. Building companies is with a team. That’s it.
Alejandro: Yeah, absolutely. You can go at it faster alone or farther when you go with a team.
Derek Wall: Exactly.
Alejandro: Makes sense. Derek, for the people that are listening, what is the best way for them to reach out and say hi?
Derek Wall: Anywhere. LinkedIn. Twitter. I haven’t used my Twitter in 20 years. There’s one post on there that says I’m the Kim Kardashian of tech because I had so many followers and then I never did anything with it. Reach out to me at firstname.lastname@example.org or shoot me a message on LinkedIn or Facebook @derekwall. My residence is in Miami, Florida.
Alejandro: Amazing. Well, Derek, thank you so much for being on the DealMakers show today.
Derek Wall: Thank you so much, guys. Everyone, have a great time.