Keith Richman is a serial entrepreneur and currently the cofounder of Boosted Commerce. The company has raised $87 million from investors such as Crosscut Ventures, Spencer Rascoff, Torch Capital, and Elie Seidman to name a few. Prior to this he has also cofounded VOI Technology, Break Media, and OnePage.
In this episode you will learn:
- What Boosted Commerce is doing
- How he found his business ideas
- His top advice for aspiring founders
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About Keith Richman:
Keith is a successful entrepreneur, investor, and board member. He co-founded Boosted Commerce because he is passionate about taking products that successful sellers have developed and helping scale those products on a global level.
Previously, he was a co-founder of Voi Technology, a leading European based mobility company with operations in 34 cities across 11 countries. From 2005 until October 2013, he served as the co-founder and CEO of Break Media, where he developed an expertise in digital marketing across multiple brands and vertical. Prior to Break Media, he was the co-founder and vice president of OnePage, which was acquired by Sybase in 2002, and co-founder of Billpoint Inc., which was acquired by eBay in 1999. Keith currently serves on the board of directors of GrubHub (Nasdaq: GRUB), The Meet Group (Nasdaq: Meet) and Vostok New Ventures (Nasdaq: VNVSDB:SS).
Keith received a B.A. in International Relations and M.A. in International Policy from Stanford University.
Connect with Keith Richman:
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FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Definitely an exciting guest today. He’s done it multiple, multiple times. We’re going to be learning quite a bit – building, scaling, financing, exiting, and everything in-between. So without further ado, Keith Richman, welcome to the show.
Keith Richman: Thank you. Thank you so much for having me. I really appreciate you taking the time to talk about it.
Alejandro: So, born in Chicago and raised in LA. Tell us about life growing up.
Keith Richman: Life in Chicago was great. I left when I was seven because my parents quickly realized there was cold in winter, and we moved out to LA. Growing up in LA, I think comes in and of itself with a lot of commutations. I found it to be a wonderful way to learn about a broad range of industries, and to me, a very diverse group of people from a professional basis. I was fortunate enough to go to a private high school called Harvard High School, now called Harvard-Westlake, which gave a wonderful groundwork in terms of education and ability to think critically, which I think has served me very well.
Alejandro: Growing up, was anyone in your family building businesses or was an entrepreneur as well, or how did you get this crazy drive to build businesses?
Keith Richman: My dad was in real estate. He had developed a couple of buildings. The reality is – my mom will tell people that I always, from early-on, was always trying to find an angle because there was always something I wanted. And in order to pay for it, I had to earn the money myself, so I think a large part of the entrepreneurial came from wanting to have a video game or wanting to get a pair of shoes or something of the sort. You can’t really work in many places until you’re 13, so what do you do? You find ways to make money before that through various tasks around either helping in the neighborhood or, in certain cases, selling things. I always did those things or found whatever angle I could, some of which were completely awesome and aboveboard, and sometimes a little less so. Probably my favorite, which is – it’s funny. When you look back, and I don’t know if you have kids. I have three kids. If I heard that one of them was doing this, I think I would be both proud and shocked. My friend’s dad owned an arcade. I’m assuming people still know what arcades are when you go and put the coins in, the tokens in to play video games, and the arcade went out of business. They had tens of thousands of tokens that they had from the machines and the games. My friend and I, at age 11, realized that you could use those tokens in the arcade that was still around in our neighborhood. So, at first, we went and started playing video games until our eyes kind of burnt. Back then, it was Dungeons & Dragons. I don’t know if you remember – King’s Lair and those sorts of games. We then realized that it would be more advantageous for us to sell the tokens. So, we would stand outside the arcade and sell tokens instead of four for a dollar, six or eight for a dollar, and it was great. It funded most everything we wanted to do for a very long time until one day, as we were sitting outside the arcade, we felt hands on our shoulders. They brought us to the back. I don’t even know if they did it legally or not, but they confiscated our money and threatened to call the police on us. As 11-year-olds, we ran out, and that was the end of, I guess, my first true entrepreneurial venture.
Alejandro: Wow. Definitely an alternative to selling lemonade, so good stuff.
Keith Richman: Yeah.
Alejandro: In your case, you went to Stanford and International Relations and International Policy. What got you into all this international stuff?
Keith Richman: It’s a great question. I graduated from high school in 1991. I think from ’88 to ’91 was really when there was all the talk about how Japan was going to dominate the world and how their infrastructure and their systems and their manufacturing were so much better than the United States and other economies. It was all around me, this learning about other countries and the way they do things. That manifested itself in a great interest, overall, in foreign affairs. I think even in high school, I wrote for our little foreign affairs magazine that we had. So, I became genuinely interested in it. Once I was at Stanford, that enabled me to meet so many interesting people who had a really broad and diverse range of experiences from people who had come from overseas who wanted to study in the undergraduate to – I did my Master’s in International Policy. I was sitting there talking about what was going on in Bosnia, but I was in class with someone who had served in the military in Bosnia. So, I was naturally less impactful in class as he was, but I got a great education out of learning what happens in the world and how things are interrelated, which, I think, has been a driver of my decision-making since then.
Alejandro: That’s amazing. Obviously, that got you into Disney, which was your first job, so what did you get out of Disney? What were the biggest lessons?
Keith Richman: My whole goal was to join the State Department, actually, until I talked to someone who had graduated a couple of years before me, and I think was in the State Department in some terrible country, essentially managing people who stamped passports. I realized that maybe I didn’t understand the career path too well in having a Master’s in International Policy. So, I basically went to talk to a couple of friends, and I went to the Career Fair, and I learned about Disney, which, at the time, had just gone through this amazing turnaround thanks to Michael Eisner, who had created all of these wonderfully structured programs for people graduating from university. To be honest, it’s a wonderfully easy sell, I think, in a lot of ways, or at least it was back then because you have this great brand; you have all these wonderful assets. Even today, when you say to people that you worked at Disney, people just have a fond memory of it, and that was a really big driver of why I thought it would be a good place to start a career. There’s a lot of EQ value in just saying you get to work at this company alongside all these wonderful things. Back then, it was where a lot of extraordinarily talented people were being incubated career-wise because of the infrastructure they had set up.
Alejandro: During this time, eventually, you got a call from a friend of yours, and you went to pay this friend a visit, and that changed everything.
Keith Richman: Yeah. I had a great first year at Disney learning and getting a great education, but I went to visit a friend of mine back up near Stanford, and he was at a startup, and he was pretty clear that being in this amazingly engaging environment of 40-some-odd people was a great way to get more responsibility and have a lot more control over your impact that you could have. That company was called Classifieds 2000. This was 2006. I joined in the business development role. I think maybe four months later, no thanks to anything I had actually done, but they were acquired by a company called Excite, which was, at the time, a large search engine and a strong public company.
Alejandro: Very cool, and it was the segue into your actual first baby. So, tell us about Billpoint.
Keith Richman: We were at Excite, and one of my colleagues and close friends at the time approached me and said that he and his wife were starting a business, and did I want to come along? That company became Billpoint, which was early-on in the payments industry. We raised money from Sequoia, and then not too long after, that company was acquired by eBay, which was a thrill and a great lesson in what you can do to build a company, build some momentum around it, and exit. I think what we learned was that there are times you want to sell, and there are times when you want to hold because that was so early in the evolution of how the world was going to change. I think if we had held on, it would have been an even greater outcome. You should never feel bad when you make money, but it was a very fast pathway from idea, product, execution, momentum to exit.
Keith Richman: But, in reality, I think patience would have been a real virtue for us back then.
Alejandro: Yeah, because we’re talking here about an acquisition that was north of 150 million, and it literally took from founding the company to the acquisition, and we’re talking about literally a year. Is that right?
Keith Richman: Yeah, basically.
Alejandro: That’s crazy. How come in such a short period of time is that possible?
Keith Richman: You know it’s really fascinating when you think of it from a product’s standpoint how much faster you could do it today. Back then, there was no base of technology that people were building off of. I think the reality is, 1) There was a period of time when everybody was excited about everything. 2) What we were doing got a lot of traction very quickly, and it was super strategic to eBay at the time. So there were a lot of reasons why it was the right idea, right time, right place. To eBay’s credit, they were very thoughtful and quick to pull the trigger on things that they believed strategic.
Alejandro: That’s amazing. And after you did the vesting and resting, as they say, once an entrepreneur, always an entrepreneur. And then, OnePage came knocking. What about OnePage?
Keith Richman: So the same sort of founding group left. We started a business. It’s funny when you think about how technology evolves over the years, but essentially, what it did, which served zero purpose today in the sense that it helped extract information from databases and make it easier to manipulate. It was another great lesson in the sense that we had a wonderful tool that became a wonderful product, but it was not necessarily easy to turn that into a big company because to sell tools at that time, in particular in the software space, was very regimented. This is for people who go way back. You would go to Gartner Conferences, you would set up booths, you would hire an enterprise sales team, and it wasn’t as much today where people are more sophisticated about how to think through IT and software. Ultimately, the pathway of doing all that became complicated, and we set up a number of OEM relationships, where we had established reseller partners. When it became clear that the company would only be so big, we ended up putting the company up for sale, and we were acquired by one of our OEM partners.
Alejandro: After this, it took about two years to go at it again. It was two years filled with poker and with traveling. Why did you decide it was the right time to take some time off? What pushed you through that?
Keith Richman: Back then, this was 2001 and 2002, and the dot-com bubble had burst. The last year had been rough in terms of selling software and trying to figure out the strategy around the company. So when the company sold, we didn’t stick around. It wasn’t a big enough opportunity to do that. I moved back down to LA partially because I thought maybe there would be something more fun there. Once I got to LA, I realized that there was a lot of the world that I still hadn’t seen, and I began to travel. I met my now wife. We went to a lot of wonderful places. Along the same time, because I had free time, as you said, I started playing a lot of online poker first and then real poker. I did really, really well for about a year and a half, and then if you remember, poker began to get televised. All these young people started playing, and they could play a lot more than I could, even though I wasn’t even doing much. Eventually, most of the money I had won, I lost pretty quickly. Then, I decided it was time to see about doing something again with my life.
Alejandro: And that was the time when you bought a website. Tell us about that moment when you bought the website, which eventually became Break Media.
Keith Richman: I had basically not been paying that much attention, frankly for about a year to a year and a half, and I went online to go see a video I had missed, a moment in pop-culture media. It was actually the Janet Jackson nipple slip at the Super Bowl, for those who remember. I hadn’t watched it. I was in the bath or something. It was amazingly easy to me how easy it was to find and how great the streaming quality was. The last time I had focused on watching a video had been two years before. The video player popped up, and it was slow and clunky. Here, not only did I watch that video, I watched ten other funny clips or interesting things that had happened. I started thinking about how that would change the way people consumed media. I found a website that I really ended up liking to go to and bought it along with a friend, and that became the genesis for Break Media. Looking back, obviously, starting YouTube would have been a good idea – with the same insight, it would have been a good outcome, but I wasn’t a deeply experienced product person, I guess. So, we built that company into an entertainment brand that provided video, at some point financial information, some things related, and then a bunch of entertainment-related news and information over the course of the next six years.
Alejandro: Whatever happened with the company?
Keith Richman: In 2013, we merged that business into a company called Alloy Digital. Alloy, at the time, was a public company that had just gone private and was investing into the digital ecosystem quite heavily. We became one of the leading players in the online video space and had a lot of success even until the world of media became quite challenging as Google, and Facebook, and the big platforms continue to take more of the ad dollars out of the market. But along the way – actually, I should mention that I had joined a couple of boards and had been relying a lot on my love for international to learn about what was going on in the rest of the world and had started spending more time thinking about what I could do that was combined to see more of the world and maybe start something new.
Alejandro: And you’ve joined great boards of great companies. Especially for the folks that are listening, as they’re thinking about putting together their board of directors, what do you think makes a board of directors be effective?
Keith Richman: It’s a really great question, and I guess it kind of depends on the scale and the stage of the company. I’ve been really fortunate, I think, in the bigger companies I’ve served on the boards that have had a couple of very seasoned board members that I won’t mention by name, but what they did for companies when they were going well was provide a guiding light and be a sounding board. When things became more challenged, I think what they did was really help the company focus and narrow and make sure that the board was paying attention to the things that would truly drive value and help see beyond the chaos. When I reflect on now, particularly now with Boosted and looking at what this company looks like or with VOI, what we’ve tried to do is come up with board members who are supportive but not overly supportive. You need to be challenged, and you want people to come at you with hard questions and make sure what is the true north of the company is the one that should be the true north of the company. You want people who have a diverse range of experiences because everyone who comes from your background and your point of view will likely be less able to provide those challenges. Fortunately, some of the board members that I have interacted with have just been phenomenal and have helped shape some of the directions of the companies in a positive way.
Alejandro: That’s amazing. And part of your next phase in your career was around investing, as well, and incubating ideas. I wonder, what do you think makes an idea great? What really makes an idea go from an idea to something magical? What is that transition that needs to happen?
Keith Richman: That’s a great question. I think a lot of times, it’s just force of will. You talk to a lot of people, and it’s easy to have a great idea. What’s that famous saying: ideas are easy; execution is everything.
Keith Richman: That’s very true, but I think the interim stuff there is taking the idea from “I have an idea” to “Where do I even start?” There’s a lot of talk about Silicon Valley and what happened in leaving, probably all warranted in reality. But Silicon Valley really does enable an ecosystem that teaches you that. And now, there are other places which do as well, I’m sure. Certainly, Los Angeles is one, and I spend a lot of time in Stockholm, and that’s one. The ability to say, “I’ve got a really good idea. What are the questions I need to ask myself? What are the questions I need to ask of others, and subsequently, who are the partners I need to find to take that idea into a reality?” Most people lose, actually not in the execution. The biggest filter actually happens, in my experience, in that first step where you know market, you know and have conviction on a space because you have experience, but you literally don’t know where to go. You don’t know where to go for engineering help; you don’t know where to go for funding, and that’s why these ecosystems that get created have done a great job of fueling more and more innovation.
Alejandro: Very cool.
Keith Richman: In my experience, just as a part of that was when it came to Boosted, which is our current company, I had a thought, and I believed strongly in the thesis I had, but my background was not in retail or selling products in any meaningful way. But I was fortunate enough because of the network in Los Angeles to have met a guy named Charlie, who had just run a 500-million-dollar retail chain that he founded called Charlie’s. It was because of my ability to form a connection with Charlie, talk through this overall thesis with him, get his ideas and background and how to improve it and make it better, that we were able to both have the confidence together to say, “This is a great idea that we have strong conviction in, and now, let’s take it to the next level.
Alejandro: Got it. Now, you’re involved with two companies, so that is VOI in Sweden and also Boosted Commerce. Why don’t we talk about these? And we’ll start with VOI, and then we’ll go into Boosted. VOI – how did VOI come about?
Keith Richman: Again, I live in Los Angeles, and I had come out of my home one day – I live right next to UCLA. If anyone is familiar with living near a big college campus, there are amazing qualities about it, but one problem with it is that it’s hard to get through a campus. Most of the roads are closed. I had dropped one of my children off at soccer at the intramural fields, and usually, that meant taking a 15-minute car ride just around UCLA if you wanted to go get a cup of coffee or just go sit down somewhere. Then, I saw this scooter, and all credit to Bird, I said this is going to revolutionize how one gets around my neighborhood. That was my first thought, and I took it, and I loved it. My second thought was this is something that would be really amazing to have in Stockholm, where I had been spending a bunch of time. I called up a friend of mine and somebody who runs one of the companies I’m involved with, and I said, “Who else is thinking about this? Who else has seen this?” They introduced me to the CEO, Fredrik, who two days later was on a plane to see me. He flew out to LA, and we spent the whole weekend looking at the ecosystem. I basically sent him back, and I said, “Look. We should go do this. It’s a European company. You’re amazing. I can tell already after two days. You should go run this thing, and I’m going to help you raise some money and be involved as I can.” What ended up happening was as I had more free time, and he built this out, it became very clear that one, he was a special individual and had the ability to do things that not a lot of other entrepreneurs can, and that the market was even bigger than we both had thought, which led to me getting more involved on a day-to-day basis than I ever had expected to, but really driven by the fact that he had created a culture and a brand that were so special to be around, much like I remember Disney just feeling great being associated with something, which is a great motivator for anybody in a company including investors and myself at that time.
Alejandro: Absolutely. How much capital has VOI raised to date that is publicly available or disclosed?
Keith Richman: I actually don’t know offhand, but we certainly raised over 125 million.
Alejandro: I think I see here on Crunchbase; it says 197 million, but I don’t know if that’s accurate.
Keith Richman: That very well could be accurate. It’s a capital-intensive business. But it’s also one of those businesses now incredibly well-positioned because of COVID. There are winners and losers thanks to COVID. It’s had an unbelievable six months and profitable most of the time with technology adapting, so that scooter lifetime has been increasingly growing, and so not only do they last longer, they’re more efficient during the day; they’re more environmentally friendly.
Keith Richman: Now, there’s an emerging resell market, so I think VOI is well-positioned for success. It’s really thanks to the team that Fredrik put together. Frankly, finding early fundraisers who believed in it knowing it would be a capital-intensive business and still wanting to put money in to be along for the ride, which we were lucky to find early on.
Alejandro: Amazing. So, let’s talk about Boosted Commerce, which is your other baby, like the one you’re dedicating probably the most amount of time now to. So, tell us about Boosted.
Keith Richman: Boosted is an amalgamator of eCommerce businesses. Primarily our time right now is spent looking at Amazon third-party sellers, but we’re also looking at the ecosystem, in general, including companies that sell on Shopify or other platforms. Essentially, our a-ha moment was as I was going back-and-forth to Europe, I kept being sick, and I started taking a bunch of immunity supplements. Because they’re ingestible, I got interested in what I was taking and looking at what I was buying at Amazon. I quickly recognized that these were brands I had never heard of, and I reached out to one of the vendors I had been buying from and was surprised to find out it wasn’t a big nutrition company, but it was a 24, 25-year-old kid from Iowa who had created this brand, understood that you could create third-party businesses on Amazon, and not only built it to something like 7 million in revenue, and 2 million in profit, but had just sold it. That was eye-opening to me. As I dug more and I talked to a lot more sellers, that was when I called Charlie; we realized that there was this unbelievable opportunity to basically as a whole world be your product development group. The hardest part of starting anything is product/market fit. Amazon and the tools and ecosystem around it have evolved such that suddenly anybody and be an R&D person, and they can do research as to what their problems are, what’s the need in the marketplace. Some are big; some are niche. They could do the really hard work of creating the prototype, selling it, developing an audience, making sure people like it. We knew that with our backgrounds, we could take those products that they were selling and make them better. We could either source them cheaper, potentially. We can improve the marketing. We could kind of knowledge arbitrage. The idea behind Boosted was to identify those products, find brands and products that are proven product/market fit that people love and buy them, and apply a bigger infrastructure to grow the businesses around them.
Alejandro: For example, for the people that are listening, what ended up being the business model of Boosted?
Keith Richman: Very practically, we are going out, and we’ve now acquired, I think, seven businesses. They’re all cash flow producing businesses. Our goal is to grow the profit of those businesses. We sell on Amazon; our products are sold on Amazon. We have some products that are sold on Shopify, but we’re basically an eCommerce company that currently sells everything. We sell thank you cards; we sell skin care products; we sell some supplements. By the time this podcast is live, we will be selling non-slip tape, bath mats, some other products in the home goods space that we can’t talk about necessarily, but it’s all things that are top sellers in their respective categories on Amazon. Most are things that we think have a brand that can carry far beyond Amazon if and when we choose to invest in that. What we’re really doing is building an infrastructure to be able to quickly identify, acquire, and scale businesses within the eCommerce ecosystem.
Alejandro: Apparently, for a business like this, you don’t have to raise a whole lot of money. Is that right?
Keith Richman: Yeah. It’s funny because it’s almost the exact opposite of VOI, which is super capital-intensive upfront. Here, we’re putting out money for the businesses, but the businesses are actually cash flow. So raising money becomes something that you have to be, and you have the ability to be pretty strategic about. I think we’ve been fortunate enough to find people that want to invest with us who bring a lot of knowledge and brainpower to what we call the Boosted Brain. We closed around, not too long ago, we brought in Torch Capital, where John has been a leading investor in a lot of eCommerce and B2C companies. We brought in a company here called Crosscut Ventures in LA. They’ve just seen a tremendous amount of success. We’re helping companies think through how to scale. We brought in a lot of people we know from the LA and other ecosystems who have ability thinking throughout a scale and finance business, because unlike a lot of the other things that we’ve done, we have clear visibility in the multiple hundred million of revenue because we’re buying it. We know we have the infrastructure to be able to enhance it quickly, the stuff that we are buying. It’s an exciting time because we think we’re getting in early on these next generations of consumer staples and brands.
Alejandro: Got it. Imagine if you go to sleep tonight, and you wake up in a world five years later – a tremendous snooze – in a world where the vision of Boosted is fully realized. What does that world look like?
Keith Richman: It’s a great question. I think in a perfect world, what would make us most happy, and what we do think about as our guiding light is that we will have brands that people like and love to some extent when possible, and that have super-high NPS value and that we are generally recognized as the company that is the best operator of at scale, Amazon-related, and Shopify-related, and other long-tail brand-related businesses. That all comes with being marketplace experts and also being brand-building experts that we have the skillsets to do.
Alejandro: One of the questions I typically ask the guests that come on the show is – in this case, in your career, and your entrepreneurial journeys are remarkable. You’ve done so many things; you’ve seen so many things, and you’ve also invested in different companies. So if you had the possibility to go back in time and have a chat with your younger self, perhaps that younger Keith that was willing to listen, and that younger Keith that was thinking about starting a first company coming out after the acquisition of Excite, perhaps. What would be that one piece of business advice that you would give to yourself knowing what you know now, and why, before launching a company?
Keith Richman: Yeah, it’s a great question. My answer is going to be a little clique in the sense that I think the best advice I could have gotten back then is: be more patient. Building businesses, when you read in the news, everything seems like it happens overnight. You quickly realize that true value is built over a period of time and long-term, and there are going to be a lot of bumps in the road. The reality is that those bumps are incredibly intimidating when you’re in the moment. I remember the first company, one of the reasons we were excited to sell to eBay was that we were running into a lot of those bumps at that exact moment. The reality is patience, a solid group of people around you, and that can include investors can be wonderful in terms of leading to the ability to see through that and create vast opportunities for yourself and the company.
Alejandro: Very profound. For the folks that are listening, Keith, what is the best way for them to reach out and say hi?
Keith Richman: I’m actually super easy to reach. Just [email protected] – feel free to shoot me an email.
Alejandro: Amazing. Well, Keith, thank you so much for being on the DealMakers show today.
Keith Richman: Thank you so much for having me.
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