Russ: This is the BusinsessMakers Show, heard on the radio and seen online at http://www.TheBusinessMakers.com. It's guest time once again on the show, a repeat guest, because with me I have Marc Ostrofsky, a guest - I believe it was in late 2006. Does that sound right to you?
Marc: It's close enough.
Russ: All right. Marc Ostrofsky, serial entrepreneur, domain-name expert, and now author with a quite successful book, "Get Rich Click". Marc, tell us about "Get Rich Click".
Marc: When you make money, a lot of people come and say, "Can you help me do it, or how can I do it?" And it got to the point where I said, "You know, I'm just going to write a book on the subject." And I thought about it for a long time. I don't do anything - as much as people think I act quickly, just the opposite when it comes to business. And I probably bought the domain seven years ago from someone.
Russ: The domain Get Rich Click?
Marc: Get Rich Click C-L-I-C-K. People hear "quick" but it's not. It's C-L-I-C-K. And I said I'm going to start compiling all of these great stories of how other people make money online. We have five or six different businesses. Each one has a different business model in a world where the internet has changed the way we all do business. You couldn't do this, what you're doing, without the internet and all of the technology that's there. It drives down the price and allows people to come out and do what they do best. So that's the type of story you would read in here. Here's the old way it was done, and here's the new way, and here's what you can get from it. So it's very much a little bit more than layman's approach to how people are making money online and how you can too.
Russ: All right.
Marc: And it's done really well.
Russ: All right. Well, now that's interesting that you sort of compare how they do it now with how they do it then because I introduce you as a serial entrepreneur because you made money before the internet as well.
Marc: Yeah, I was in the old world when it was a lot harder. But I think the symmetry that I bring from my past is that I know what I know and I know what I don't know. And a common thing is I hire people to know more than what I don't know. And it's kind of a core of issue with me is to hire your weaknesses, know what you don't know and always hire the best you can find to get the job done.
Russ: Okay. Well, clearly you have to rate right up there around the top with people that have adjusted to the new digital world, the internet world. I mean, in the very beginning - and a lot of your success was tied to actually understanding how valuable domain names are going to be, right?'
Marc: Well, let's back up even further than that if we can, Russ. The initial businesses were - there was the deregulated telecommunications industry, and buyers needed information about sellers, and sellers needed information about buyers. And I put together magazines to teach them, whether it was paid telephones, operator services, long-distance services, Voice-over IP, phone cards, all of it. And it was a niche that I figured out if I know more than they do, I'm probably the expert of the two, and if I know how to reach to the real experts in the world, I can package that information as a producer. So I've always been a producer. And I was asked yesterday, "What do you do?" I'm kind of a producer. I produce events. I produce magazines. And now I'm moving on hopefully into television.
Russ: Okay. And when you were in the print publication world, you ended up selling those publications, correct?
Marc: Yeah, I had a magazine called - started as Payphone, A Private Payphone, became Payphone Magazine, became Public Communications Magazine, and then it morphed into Telecom Business, which kind of went along - as the industry grew, it was the business of telecommunications. And at that point I hit a grand slam and everyone jumped on board. Built it up quickly. Had a huge tradeshow in New York and sold it to a public company.
Russ: Cool. But okay, then back to the internet. You did anticipate the value of certain domain names very early, right?
Marc: Yeah, we always talk - everyone goes back to the one you're known for, right. A baseball a player is only as good as his last homerun. Not being a baseball player, mine's based on business acumen, I guess. And the subject we're talking about is business.com. And business.com was a domain I wanted early on in '94 when I learned about the internet, and that these names were valuable. So I learned it from my sister, who was a professor at University of Texas. I came back to Houston. I looked them all up, and I started buying dot-com names that were available. I bought ebusiness.com. It was available. It was $70.00 for two years. I bought eradio. I ebluebook. I bought e-everything I could think of. But I really wanted business.com. So I went online. As a logical extension, every newspaper had news, weather, sports and business. So I looked those names up. I went back and said I want business, and I called the guy, and I worked with him over six months. And he sold it to me, and at the last day he doubled the price, so it ended up being $150,000.00.
Marc: And we decided to release that to the media to create - let people know that these are assets.
Russ: Right. That you had paid $150,000.00.
Marc: That I paid that much money for it. And - but we weren't going to put my name on it. We were trying to promote another company as the broker for the deal. And the press just tore me apart. I mean, it was horrible. Some fool bought a domain name for $150,000.00. The worst headline was, "A fool and his money were just parted." Some jerk bought a domain name. Let me tell you what a domain name is. Some people just have too much money. It's kind of like they say of these new Birkin bags. You know the bag I'm talking about? There's a bag that Hermes makes that's like $75,000.00, and it's all the women talk about because very few of them have them. Whatever.
Russ: So I'm curious. I do know for a fact that you did sell business.com for a nice return. Did you go back and find the writer who called you an idiot?
Marc: Oh, yeah, that was another whole long story. We didn't have internet back then as it is, so I couldn't find the guy that wrote that one, but I had several others that wrote nasty pieces. I call them nasty grams. And I wrote back and said, "I think I won the bet, but it's up to you." I kind of got the last laugh. The long and the short of it was we sold that name for $7.5 million to Business.com LLC, which turned into a major search engine. They then sold it to another company six years later for $345 million.
Russ: My goodness.
Marc: Because they had huge revenue attached. And I owned three some odd percent of that sale because I had traded some of my equity for some of the sale of the company, the ownership.
Russ: Okay. Now, on domain names, I mean, do you talk and give suggestions and advice in here about finding your domain name if you want to "Get Rich Click"?
Marc: Yeah, there is still a market for domain names, but it's very, very different than it was. As in any market, things change.
Russ: So it's hard now, is what you're saying.
Marc: Yeah, the domain business.com still has huge value, or mutual funds, which I own, has still value. The question is who should own it. It's like real estate. It's the highest and best use. So the person who has the most to gain by owning the name is who should own the name, and they have to figure - you have to get them to figure that out so that they would want to buy it or come up with some other way to get the traffic.
Russ: And so you've helped people figure out that they might need a domain name.
Marc: I've sold names to people. I've helped people like Jennifer Hudson get her domain name back because she didn't know how, and we became friends. Barbi Benton, you remember from the old days. I helped Barbi get her name back. Once in a while I get a call from someone that I'm wanting to help, and it's just a few clicks to figure out who owns their asset.
Russ: All right. Now, your expertise certainly comes through loud and clear here, but it's certainly been noticed by others, my goodness, you appeared on the TV show "The View", what, about two or three months ago?
Marc: Yeah, two or three months ago I was on a number of TV stations promoting the book, and ABC in New York liked me enough to put me on "The View"
Russ: Which is unbelievable. I mean -
Marc: Yeah, it was fun. It was fun.
Russ: Well, tell us about it.
Marc: The one show I didn't expect to get on, "Today Show", "Good Morning America", all of the rest of them you kind of expect to get a hit somewhere, and it's a shot in the dark. You don't know who will pick you up. When I went in for this one I was, like, I don't know why I'm here. This is the one show. And they liked me. They said, "You look gay, but you're not gay. You're perfect." They ______ to dress like Nate Berkus. And I did. I did. I wore this light-colored sweater and real easy going, and let the ladies run the show, and just sit back and try and get a word in.
Russ: Now, did they rehearse at all?
Marc: Not really. I mean, you go through with a producer. They assign you a producer. The producer goes through what's going to happen. We go through the questions on the first show, and then the goal of the first show is to get invited back to the second show, right.
Russ: Which you did.
Marc: And we talked about that before we started here. But there's a lot of inside stuff at "The View" that people don't know. What's you're back behind the wall on the second floor that's right over the studio, it's like any other office. It operates. They're moving. They're talking. What's going to go here? Who is going to address that? Which question is going to be asked by this person? The run through is kind of like that.
Russ: Did you even meet the ladies prior to being in front of the camera?
Marc: I met the ladies behind the stage. There were a couple of things I had planned, if I could do it. One was I had to neutralize Joy Behar because I didn't want Joy Behar throwing me a zinger. So I went up to here, and we were right next to each other in line waiting to go out, and I kind of tapped her on her shoulder, and I said, "Hi, Joy. I'm Marc. I'm going to be on today." She said, "Nice to meet you." I said, "The producers tell me most men can't handle you, but they told me I could." And she just went, "Huh?" I had her right then and there. Had it. Nailed. So that was good. And then we had some other fun issues that went on.
Russ: Well, I also understand that right after appearing on the show, sales of "Get Rich Click" went through the ceiling.
Marc: Oftentimes when people are going to do a news production, they're sitting there thinking what are the first things I'm going to say to lead into this, called a lead-in. And I had met these people a month earlier and I'd given them a book, and her husband loved it. She told me her husband loved it. So I said to her right before we went on the camera, "It really is the best business book ever for making money. In this economy, it's the best business book you're going to find to teach you how someone can make money with no money." And as we air, three, two, one, go, she goes, "This really is the best business book ever for making money." And when I got off, of course my staff said, "You would not believe what the numbers are doing. Call back in an hour." And then within 24 hours we had sold 10,000 books.
Russ: My goodness. What a story.
Marc: Yeah, the power of the medium. It really worked.
Russ: That's cool. I'm going to be back with Marc Ostrofsky after this. This is the BusinessMakers Show heard on the radio and seen online at http://www.thebusinessmakers.com.
Russ: This is the BusinessMakers Show heard on the radio and seen online at http://www.thebusinessmakers.com. Continuing on with Marc Ostrofsky and the stories surrounding "Get Rich Click". So it's kind of interesting. I've followed you for quite some time. I know that you were successful very young. I remember you telling a story about selling a very popular jewelry when you were a student at UT. But tell our audience how did you get from back there, young Marc Ostrofsky, to where you are today.
Marc: You know, it's not quite a straight line. People think it's a straight line. It can't be. It isn't unless you're - you know, the first line of this book, the first paragraph says, "There are seven ways to get rich," and there are only seven ways: inherit it, marry it, invest for it, get lucky, work for a company, break the law, steal it, deal it or con, or be an entrepreneur. The entrepreneurship is the only way to really get rich in this country, unless you're going to do one of those other ways, unless you're lucky enough to marry it. And you're going to work awfully damn hard for someone else. Entrepreneurship is it. I took that and read Forbes and read Fortune and read Entrepreneur and read Inc. religiously
Russ: When you were young?
Marc: Oh, yeah, that was my bible was Entrepreneur Magazine. And learning how these other people are doing it, and then applying it to my situation. Learning what they're doing, how they're doing it, why they're doing it. It's the who, what, when, where, why, how and how much. Every question in business, answer those seven, who, what, when, where, why and how much. There's not a question you can ask that doesn't fall into one of those categories to then get you to what it should become. So I started selling things. I had things I owned. I had things I borrowed. I had things I bought. It seemed always easier - it was much easier to sell something I didn't own because I could return it.
Marc: So the story you referred to, say, for one minute, I went with a credit card to a jewelry while at college 30 years ago. I'm 50, can you believe that? Thirty years ago.
Russ: You're doing well for 50.
Marc: Thirty years ago. Wow. And I asked the guy, "Would you sell me this $2,000.00 worth of jewelry wholesale?" He took the credit card; I took the jewelry. It was my dad's credit card, by the way. I don't know if I told him or not, but I wasn't worried. I then took the jewelry to the sorority houses, setup a jewelry show, sold $1,000.00 at wholesale for $2,000.00, which means I made $1,000.00, and I had $1,000.00 to pay him back. I went back. I gave him his $2,000.00 and the profit on what was missing, and I kept the rest, and it worked. It worked really well. So it just seemed to be the way to do it. So I never was in a business where you had to own all the inventory unless it's a large-margin business.
Marc: So one of our companies, we can talk about them, you know Blinds.com really well.
Russ: Oh, absolutely, yeah.
Marc: So Blinds.com does like $75 million or $80 million this year. It's going to skyrocket next year, and the company has no product, no warehouse, no inventory, no blinds. But yet we sell $80 million a year. How can that be? We have a system that we know where they are. We know what they cost. We take the data. We put it together. We collect the money. We outsource it. We drop ship it, and we clear the difference.
Russ: Well, that reminds me when you were on the show five years ago, your recommendation to an aspiring internet entrepreneur was to find a business and a product that you can sell before you have to buy.
Marc: That's correct. They're in New York, in San Francisco, in L.A., in Houston, most cities have an import area. Here it's called Harwin. And they're importers, and people that buy - you can now find them online. You can go online and look for bulk buying at a number of websites, but even eBay has a bulk buying area, where someone says, "I have 1,000 of these. I want to sell them." There's a tradeshow for excess inventory. The goal is to know where to get it. That's the key. The golden goose is know where to get the product. Know what it will cost. Get a picture of it off the internet or one that you take. Sell it. Collect the money. Then go buy the product and ship it. Better yet, have them ship it for an extra $5.00, so you don't have to deal with it. So instead of $20.00, we're going to send you $25.00. Please ship it to this address. As long as they don't keep that address and compete with you, that works. If they use that address against you in the future, if it's something someone might buy more than one of, you're giving them your client, and you don't want to do that.
Russ: Absolutely. Now, do you refer to that technique in the book?
Marc: Yeah, yeah, yeah. The second chapter is called "Reverse e-Commerce". It's how you sell it and then buy it. It's a fun business. That's one tactic in the book. Another one - and we talked about inventory. Now, at Cufflinks.com, it's a small company. It's a niche. It's $5 million a year. We have a huge margin on our product, so we can afford to buy them in bulk overseas and warehouse them because they don't take up a lot of room, and it's easier to deal with. We don't have to use a third party. Other parties use us. There are people who sell cufflinks, and they e-mail it to us, and we drop ship it. We collect the data and own that client, and we send them their check. That's called an affiliate.
Russ: Really cool. So let me sort of end in this same question as last time. Today, if you had like a young 18-year-old kid watching right now saying, "Man, I want my own internet business," I mean, I guess step number one would be to buy the book and read it, right?
Marc: I recommend the book. You don't have to buy it. You can usually find it at the big bookstores and online.
Russ: All right. And what other general advice might you give them?
Marc: Well, you got to get in the game to learn the game. You can't walk in and be the quarterback of the big football team. You've got to grow your way. You've got to figure out where you want to be. I tell people right now I'm into this reverse - the thinking that takes you from Point A to B, go backwards from B to A. Reverse engineer is the word I was looking for - any topic. If you want to lose weight, you know I got to lose this much weight by this date, here's how to do it. It's eating - it's pretty simple. It doesn't mean we will. We know how. If you want to own your own company, here's how you do it. Here are the things and steps to take to do it right. If you want to sell something, find out how other people are doing it and copy what they're doing. Don't tell me, "I'm not going to sell those watches because everyone else sells them." Well, everyone else sells them because they're making money, so don't say that. That's the one thing you don't say.
Russ: All right.
Marc: But you've got to get in the game. Start with eBay. Start - find something to sell. Everyone says to me, "I want to get rid of this." I got an e-mail last night from a friend that said, "I'm looking to sell this. Who can sell it for me on eBay?" It was a 60-year-old woman that doesn't want to deal with eBay. But she'll take 20 percent less if you'll sell it for her and you'll fulfill it for her. So there are people, most anybody, that you could go to and say, "Can I sell things out of your house that you want to get rid of?" Start with yourself. Find something. Describe it on eBay. The better description, you'll get more potentials. The better photographs you'll get more potentials. And then they have ways to upsell you on the listing. Do you want bigger letters, do you want bigger type, do you want bigger this, do you want different colors? You have to figure that out, but sell things on eBay. Learn to do that.
Russ: Really cool, really cool. All right. But lastly before we let you go, is there another book being sort of cooked up right now?
Marc: Oh, there is. This book was bought by Simon & Schuster. I sold it for $1 million. So Simon & Schuster is launching "Get Rich Click" January 3, in two weeks. And they're going to launch it in a bunch of countries. I just got notice two days ago that China bought it. So I know it's in Australia. I know it's in New Zealand. I know it's in India. I know it's in China. A bunch in the U.K. And they're going to launch this book and redo it over there, a new cover and everything. And the new book being done right now is called "Word of Mouse". And "Word of Mouse" is not as specific to small-business people as it is to a generation. I wanted the next book to be less straight about business, even though it's all business, but it reads so anyone can get it and enjoy it, like a megatrend. The way - it says, "Word of Mouse: Technology and Disruption in How We Buy, Sell, Live, Learn, Work, Play and Communicate". So everything that's changing and how it's changing and why it's changing, and where you can be to plan to partake in this new revolution.
Russ: Cool. Marc, I really appreciate you coming back and being on the show once again.
Marc: Any time.
Russ: You bet. That's Marc Ostrofsky. This is the BusinessMakers Show heard on the radio and seen online at http://www.thebusinessmakers.com.