Derek Johnson Interview

At Yanik Silver’s Underground I met Derek Johnson – he was one of the speakers at the Young Moguls Pre-day. It was a very good presentation and brought up a few contraversial/interesting points which are discussed in the interview.

As you can see on my blog, the bulk of my interviews are done with people I met at the Underground Seminar – I really cant recommend it enough! It is life changing.

Derek Johnson is such a smart guy – I remember having a drink with him and others where he was sharing some tips about business with us Young Entrepreneurs. He told me if you cant sum up what your business does in one sentence and then say how it makes money in another sentence then you dont have a business. This really opened my eyes and made me realise that I had to be clear what my business does. What does your business do?

Get a pen and paper ready to take notes!

You’re gonna love this one!

Be sure to download it and listen to it over and over again. Why? Because repetition is the mother of learning.

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Derek Johnson Interview Transcript…

Aaron: Hi guys, it’s Aaron Darko from MillionaireAt24.com and today I’m with Derek Johnson. He’s a 24-year-old CEO of Tatango.com, which is a group text messaging service, and he’s also CEO of DerekMedia.com, which is a social media agency. Derek and his team at Tatango have been featured in the Wall Street Journal, Seattle Times, Mashable, TechCrunch, PC World, LifeHacker, and other national publications. Derek, are you there with us?

Derek: Yeah, hey, how are you doing buddy?

Aaron: Cool man. So can you just tell us, what was your life like before you became an entrepreneur? What was your life like?

Derek: Yeah, to be honest with you, I’ve always been an entrepreneur, from day one. Whether it’s been selling candy in elementary school on the playground, to washing cars, doing landscaping…I’ve never lived a life that isn’t entrepreneurial. So I think it’s just in my DNA; people joke that I was born with a cell phone. That’s just how I am.

Aaron: So what’s your mission? What inspires you?

Derek: I think building things and creating things. My first company I started was a high-end landscape/hardscape company, and I love getting out there and building something, whether that be a landscaping, a house…and I think now that’s kind of transitioned into building a web product like Tatango, that people all around the U.S. can use our product, touch it, and it influences peoples’ lives every day.

Aaron: Cool. So could you tell us how Tatango came about and tell us a bit more about what it is?

Derek: Yeah, so, Tatango in a nutshell is a way to send 10 or 10,000 text messages to a group of people at the same time, whether that group is a church, an athletic team, a fraternity, a sorority, a university, …even organization like a non-profit can use Tatango. And businesses. We have a lot of businesses that use it as a marketing tool. And the idea…it was about two years ago, I was in university, University of Houston, and I was speaking to one of my friends, and she was in a sorority.

One of the biggest problems that they had in that sorority was communicating with everybody at the same time in an efficient manner. So I kind of thought about it and I went onto Google and I looked for something that might solve this problem. I knew text messaging was the answer and I was looking for something to help her, and unfortunately – and fortunately – I couldn’t figure out or I couldn’t find anything that would allow someone like a sorority to text message all her members at the same time.

So about 15 days later dropped out of school, started building the website, got a business plan, raised I think it was $15,000 in seed capital, and opened up a company. And every since then, it’s been about two years, and now we have thousands of groups all across the United States using our service.

Aaron: Wow, that’s amazing. So you said that you dropped out of uni and then created it. So what was your thinking behind that? Because I know a lot of people, they’re at university and they’re thinking they’re not really passionate about what they’re studying, but they can’t quit cause they haven’t got anything to go for.

“My experience has always been that you do something and you go 120% on that one thing that you’re doing.”

Derek: If you add something in there, whether that be a relationship, whether that be another company, whether that be another idea, school, papers, things like that – it distracts you, it doesn’t allow you to take that 120% and focus it on one thing. So my focus has always been, hey, I focus on one thing and I hammer it out, and I make sure that is the best thing I can do. I knew I’d be cheating both my parents, the university, and myself if I was half-assing, and half the time I was doing school, half the time I was doing my start-up…I was not devoting 110%, 120% to each one. It was half of each. So from my perspective, I thought I had a better chance of making money and building up a brand – and building a career – going the Tatango route than I did going the university route.

Aaron: Absolutely. And I know, cause we met at Yanik’s event, I know that during your presentation you talked about that, and people having successful businesses whilst they’re in college, but still choosing to stay in college. And that’s a very interesting point cause there’s a lot of differing views, as you obviously would really know.

Derek:

“My impression of college is a holding tank for people that don’t know what they want to do, don’t know what their passion is, don’t know where they want to go.”

The second portion of that is it’s a great experience; you learn a lot, but I’m not talking about stuff in the classroom – you learn a lot about interacting with different people. People from different countries, people from different backgrounds. And I think that’s essential for an entrepreneur. But the schooling part for an entrepreneur – I just don’t see it being very beneficial.

Aaron: Yeah – absolutely, totally agree. So how did you raise the money? You said you raised $15,000 to start up Tatango, is that right?

Derek: Yeah. To be honest with you, the only people that are going to give you money up front are friends, family, and fools. And for me, it was family. My dad and my partner’s dad both invested I think $7500 into the company to get it started. And pretty much they were looking at it going, they’re dropping out of school, we aren’t going to pay their school, we’re going to put that money into a company, cause they thought it’d be a better experience than going to school.

Aaron: Right. So I was going to ask you, why did you decide to work for yourself? Why not get a job?

Derek: To be honest, I’ve never worked for somebody, so I’ve really never had that experience. It’s just ingrained I don’t think I’d be very good at working for someone. A lot of people like that. They like that security, they like that they know when their day ends and starts, where their paycheck comes from. I don’t like that. I like living on the edge pretty much every single day, making my own decisions. I love that when you work for yourself, if you want to work 10 hours and then add in an extra 4 hours that day, the result of you working that 4 hours is pushed down to you, it benefits you – you know, more revenue, more users, more personal branding, things like that. Where I think, where you work for a company, those 4 extra hours are distributed throughout the entire company, which makes it very hard to see your specific impact.

Aaron: Absolutely. I read that your Tatango.com has sent out over 50 million messages since it was launched. That’s incredible. So what do you think the key to your success has been with that project?

Derek: First I think, from a ground level, it’s been that we found a need and we satisfied that need. Tatango, there was a need, people can send text messages out in mass to people, we figured out that concept. And I think the second part, out of three parts, is that we kept it simple.

“Again, there’s a need that people want to send text messages out to a group – we solved that problem, we only solved that problem. We don’t solve other peoples’ problems; we don’t solve other problems.”

There are so many problems out there that I think entrepreneurs, they…all these problems are coming from different angles, they try to incorporate it into one company or one website app. You know, solve one problem, do it really well, and do it within one web app. And then I think the third one that we did really well is putting a face and a culture behind the company. Everybody on our site knows who I am, knows who our account managers are. They know where we work, they know what we drink – they know everything about us, which I think makes it very easy for people to put in a credit card number and trust a website.

A lot of websites, you don’t really know who’s receiving that money on the very end of the transaction, where I think on our website it’s very obvious that the money is going into these pockets and they’re spending it trying to increase user happiness and things like that. So I think we just made it very intuitive, simple, and that they could connect with us on a deeper level than just looking at our website.

Me and Derek Johnson - from Tatango.com

Aaron: Absolutely, and Mark Victor Hansen, he once said ‘it takes teamwork to make your dream work’. So when you started Tatango, was it just a one-man band or was it a collaboration of many people? And also how important is that, to have a team?

Derek: I think it’s really important. It’s hard to have a team, because obviously a team costs money, and everybody needs to live, but I think everybody brings different things to the table. I am not the smartest guy and neither is anybody in our company, but they focus on specific areas where they are the most smart in that area, and for me to leverage those individual people when I need them is essential in building a company.

Aaron: Absolutely. Another question I had was how can people get that winning business idea? How do you think, and how can you implant your thinking in others?

Derek:

“I wouldn’t force being an entrepreneur.”

I think that’s the biggest concern, is that people think that to be a millionaire you have to be an entrepreneur. That’s completely false; you can go work for somebody and become a very rich person. You don’t need to be an entrepreneur. I think entrepreneurism…you’re born with that. So I don’t think you can teach it. I think people like myself and you, you look at problems and you look at ways to solve them.

I think most people in the U.S. and around the world, I don’t think look at problems the same way you and I do.

“So I guess my advice, if somebody isn’t an entrepreneur and wants to be an entrepreneur, is look at problems and see every single problem – everybody has problems all day long – see if you can solve those problems, and see if you can put a monetary value to solving those problems, and if you can then you have a great business.”

Aaron: Absolutely. Totally agree. For entrepreneurs on the call who are listening, they might have an idea but haven’t taken action on it yet, and mainly it’s because they don’t know where to go, they have no a plan. So what do they need to think about and plan for once they have that idea?

Derek: The list is endless, in regards to planning. I think the biggest misconception right now is that you just have to get a lot of users, you have to get a lot of people to your website and you can figure out about revenue later. I think the biggest thing entrepreneurs need to figure out from day one, or day negative five, before they even start the company, is how is each person that you solve problems for, or each person that comes to your website, how are you going to make money off that person? How are you going to develop a business? You can’t look at Facebook and Twitter, and all these websites that you hear about, because really those are the companies that won the lottery. They’re the ones that are very, very lucky, that didn’t really need to figure out a business model. Unfortunately, there’s only 3-5 companies like that, that you can name off the top of your head – the rest out there had to figure out how to make money from day one. Or at least, day thirty, where they could raise a little bit of capital, float themselves for a couple of months, but their goal was to stay alive, and to stay alive you need revenue.

Aaron: Absolutely. Also, when you started Tatango, you basically started it for non-profit, right? Then it turned into a business.

Derek: Kind of, it started as a non-profit – it wasn’t supposed to be a non-profit. But we put ads within each text message, and it just didn’t work out. The scale wasn’t there, even though we were sending millions of messages – the scale wasn’t there. So on my part, that was a bad decision doing that, but we learned a ton and we realized that we were solving a problem, that people would pay anywhere from $24-$149/month to use our service.

“I think most people undervalue their service; they say ‘ah, you know, I don’t think it’s worth it, nobody will pay for it’ – well, if you think that way, I think you have a bigger problem on your hands; I don’t think your company is going to survive. I think people need to put a value to what they’re doing.”

Just like you put a value to your time, I put a value to my time. If you’re spending your time on a product, a website, a landscaping company, anything, people should pay for that time.

Aaron: Absolutely. One thing I did notice is, Will Smith once said that ‘if you focus on the money, that’s the surest way to make sure you don’t get it’. So what’s your advice to people who want to get started, to build a business, but not necessarily focusing on the bucks, focusing on solving that problem, as we touched on?

Derek: Hey, 100% focus on solving that problem and the money will come. You can even look at Facebook and Twitter, they solved a problem or figured out a demand that was there, and how they could harvest it, and the money did come. But obviously they had to raise hundreds of millions of dollars to float themselves to get to a point where the money did come.

“So focus first on solving the problem: find the problem, solve the problem, and focus (the same day hopefully; don’t wait 3 years to do this). Figure out how to monetize.”

Monetization…1999, 5 years ago, that was kind of an un-sexy word, it was like ‘ah, who cares about this whole monetization’…you know, well now people do care, now you have to focus on it.

Aaron: The main reason why people don’t do anything is fear. Mainly, in my experience, people fear both failure and success. They’re afraid that it might not work, and they’re afraid that they might get lucky, like Facebook, like Twitter, and they won’t be able to handle all that success. That’s why they don’t take action. What is your advice for those people who are just sitting on the fence?

Derek: You know, I’ve never heard the second part, but I’ve heard the first part, more than I would like. That people are just afraid of failure. I think that’s the biggest misnomer, is that people in America, and even where you guys are located…failure is not that bad! And I ask a lot of students, a lot of young entrepreneurs, and they go ‘Well ah, aren’t you afraid of failing?’

And I go, ‘okay, if this completely failed, everything failed, everything just burned down to the ground…the worst thing that would happen is I would have to go back to university’.

When you put that in perspective, it doesn’t sound that bad, and that’s why I can take such huge risks and try different things, because really failure doesn’t mean very much to me. There’s other stuff like crashing your car that is much worse than failure, or breaking up with your girlfriend…that’s much worse than business failure, because business failure you move on, you do the next thing. Girlfriends…it’s tugging at your heart, things like that. I just don’t see it as a problem.

“So I would encourage any entrepreneur out there, if they’re thinking about starting something and they’re concerned about failing, is write down what would happen if they failed. And I think most people will write down stuff that really is so trivial that I don’t think it matters.”

Derek Johnson

Aaron: Yeah, totally agree. Another reason is people don’t have their reason why, so they haven’t got any motivation. They may have an idea, but they don’t have a reason why they want to do it. So when you started Tatango, did you really have a reason why or was it, purely and simply, I want to solve this problem?

Derek: Purely and simply, I want to solve this problem.

“If you have that kind of self-doubt, or ‘I don’t know why I want to do this’, don’t do it. It’s not worth it. You won’t like the life that you’re going to be heading down. You have to know from day one whether you’re going to do this as an entrepreneur or be an employee – and both are completely fine, both are completely different lifestyles; you just got to know which one you feel most comfortable in.”

Aaron: What’s your biggest obstacle that you’ve overcome in your entrepreneur journey since you’ve started?

Derek: I think that’s one thing with entrepreneurs, is, I don’t look at the big obstacles – I look at the day-to-day obstacles, because each day we’re faced with stuff that could bankrupt our company. We’re faced with stuff that is life or death for our company. I think, as an entrepreneur, you just kind of fight through each one every single day and you wake up knowing that today is going to be a tough day, until you make it. So I don’t have specific examples, but trust me, every single day there’s things that happen that it’s like, ‘wow, that could have gone completely a different way’.

Aaron: Yeah, and another thing about entrepreneurs, as we have to solve problems, as you said every single day…we need to develop a strong, thick skin, as they say, to handle these problems.

Derek: 100%. You know, you have to be…again, if you’re passionate and motivated, and you’re solving a problem – if you’re thick skinned, it doesn’t matter what anybody says about it. You’re just going down your path, and you know that it’s going to work.

Aaron: Exactly. What’s the best advice you’ve ever been given?

Derek: That’s a hard one. Best advice I’ve been given… You know, I don’t think somebody told me, but I’ve kind of emulated Gary Vaynerchuck. Great guy. He’s worked really hard on his personal brand, being, you know, the wine expert. From my perspective, I took kind of his cue, and spun it to be the young college dropout entrepreneur, and I think that’s been a huge asset to our company, to our brand, to getting meetings, to getting conferences, and has made my life much easier.

Aaron: Excellent stuff. So who do you look up to, and how have they impacted your life?

Derek: I think the person I look up to most – and again I talk, and I converse and I ask questions every single day, to every single person that I know, whether the garbage man or the CEO of a huge company, everybody knows something so you’ve always got to be talking and asking questions – I think the person I look up to the most is my father. The reason why is because he’s a hard worker. He’s not the best at math or spelling or anything like that – neither am I – but he makes it up in hard work.

“I think the American dream is built off hard work, and I think if you work your ass off, and you’re not that smart and maybe don’t have the best idea, if you work your ass off you will become very successful…at least in my experience.”

Aaron: I totally agree. No one ever got a bag of money fall on their head while sitting watching TV. [Laughs.]

Derek: Exactly. [Laughs.]

Aaron: So can you share a bit of your strategy for personal branding? Because I know you’re very big on personal branding, and you’re obviously great at it.

Derek: I think that the biggest thing that I want people to know out there, and I’ve kind of coined it the Derek Johnson Principle – and that’s because nobody was really talking about it – I mean I don’t have time to really come up with a really interesting name for it, is I see too many people focusing on one aspect of their life.

I’m on Twitter, on Facebook, on YouTube…what I’m interested in as a person or a fan or a follower, is who you are as a person, a rounded-out full person.

I see too many Twitter streams and it’s all about business, or it’s all about their girlfriend, it’s all about their car. Okay, well, that’s great, I know you love your car, but what’s your family like? Do you go to church? Do you go skiing? What other stuff are you doing?

So what I encourage people out there to do is draw a pie chart, or draw a round circle, I guess you could say, and divide up that circle in regards to time, and maybe time in a month, time in a week. And, say, 25% of my time I go skiing, 25% of my time I spend at church, 25% of my time I spend at work, 25% of the time I have a bottle collection and I love bottles, or something. That should be what your Twitter and Facebook and YouTube look like; 25% should be church, 25% should be family… That’s when I go to your Twitter, I should be able to see there’s a certain portion of your life that represents X and Y, and I think people are just completely missing this point right now. And it’s the kind of thing that, you know, you go to an event or you go to a mixer, or you can go out on a date, you know you’re not just going to talk about where you work, what kind of car you drive, things like that… You’re going to kind of give your date or potential businessperson a whole view of who you are as a person, and I think people aren’t doing that on Twitter and Facebook for some reason.

Aaron: Absolutely. I mean people on Twitter are just spamming you their business. Every time I check my Twitter stream it’s always a link to their business or something.

Derek: Exactly. Correct. You know, you’ve got to build that – it’s called a personal brand for a reason, because it’s personal.

Aaron: Exactly. People have got to build relationships because no one does business with someone who just spams them and says, “Buy my stuff.” So what keys, what strategies do you have on getting noticed? I know we talked about Twitter and stuff, but how can people actually get noticed so they get PR and stuff like that?

Derek: Again, I think being passionate, focusing, being the expert at one thing – you know mine is college entrepreneurship – and that makes it very easy, so when a reporter writes an article about college entrepreneurship, they have one person in mind. If I was the expert at ten different things it wouldn’t work as well.

“So I think stay focused, put yourself out there as much as possible, people want you to come speak, write an article, do a podcast – jump on there, get as much face time with everybody, as much as you can. And then I think just be real.”

I see too many people that – you know, I’m friends with them, and in public they speak a certain way, but when they go on stage they speak a completely different way. You have to be consistent in your own brand, and I think anybody that’s seen me speak, I speak exactly the same to my friends as I do on stage, and I think that’s why people like hearing what I have to say, cause it’s real and it’s not filtered.

Aaron: Yeah, absolutely. Well I can attest to that, cause I was listening, [laughs]. I was there. So when people are starting out, how important is it, and what strategies do you have on networking and collaborating with like-minded people? Cause often it’s very lonely when you’re first starting out in something that’s completely new.

Derek: Sometimes, you know, networking is great but sometimes people take it to a little too extreme. They think that, ‘yeah, just because I’m going out and networking, I’m going to become rich or I’m going to solve this problem’.

I think what you have to figure out is, what is the result of your networking? And if you can’t figure that out, you shouldn’t be networking. Just like if you’re on Twitter and Facebook: if you don’t know what the end result is, or what you’re trying to achieve, you’re just Twittering and Facebooking for fun. And that’s great for a person, but if you’re in the business world, you need to have a goal – an end goal.

For some reason, whenever I go to a networking event, I have goals. I say ‘I’m going to meet three people that could use Tatango, one person that might be interested in Derek Media service, and then two people that I find interesting’. That’s my goal. I don’t just go there willy-nilly and just kind of walk around, talk to people and collect business cards. I don’t set up meetings, also, …you know, this is very frustrating. There’s a lot of people out there that just set up meetings so they can say ‘I did meetings all day’. Well, what was the point of that meeting? What did you get out of that meeting? If there is no point, then don’t waste your time and don’t waste my time, or the person that you’re meeting with.

Aaron: Totally. Exactly. [Laughs] It’s so true. When people go to seminars and they have no clue of what the outcome is that they want to have. Thank you for sharing that. I’m glad you shared that. So, about goals: what are your goals and what’s the importance of having them? And how do you achieve the goals you set for yourself?

Derek: That’s a good point. My goals are…I’ve wrestled with goals for a long time, trying to figure out what works, what doesn’t work, and what works for me is setting daily goals. And again, this is only for me. Try what works for you. It’s kind of like an exercise regiment. For me it may work really well waking up at 6am and going running, maybe you don’t wake up at 6am. So you have to figure out what works specifically for you.

Yeah, I do daily goals, so on my Google Gmail kind of thing I use Tasks, and

every day before I get out of bed I sit there and I go, ‘what do I want to get done today? What do I want to achieve?’ and it’s been working pretty well, at least for me.

And then I have those kind of overall, reaching goals that are kind of always in the back of my head whenever I make big decisions, but the majority of how people become very, very rich is going through daily goals, every single day, knocking off things to do, and it starts amassing itself, and starts becoming bigger and bigger: goals bigger, things to do, bigger people to meet, bigger deals to do… So that’s the way I do it, is do it step-by-step, day-by-day.

Aaron: Yeah, definitely. So how important do you think it is for an entrepreneur to attend events in their industry?

Derek: Again, it comes down to what is your objective? For a start-up, and let’s say they’re in pre-launch stage, I would lock yourself in the basement and don’t talk to anybody, and focus on getting the product out there. Once you get the product out there, then focus maybe on getting people to use the service. So if you think that going to these conferences, people will use the service, then go to the conference.

I rarely ever go to tech conferences that I’m not speaking at because of the fact that people in the tech industry don’t use my service. People in the church industry, or people in the business industry – retail, franchise, things like that – they use my service. I will be at every single one of those conferences, but the tech world, for me, it doesn’t make sense. So again, you have to figure out what that end objective is.

Aaron: Absolutely. Totally agree. So, I ask this question on most of my interviews, and it throws out some interesting answers, so here it goes. If you were stripped of everything you had today and had to start all over again, what would you do, and more importantly, how would you build your credibility?

Derek: So if I was stripped of everything…and had to start all over ago… What would I do? Is there anything different that I would do? Yeah, I would 100% focus on revenue from day one. We’d be a much bigger company right now if we did that. And, again, I listen to a lot of people and I take a lot of advice from all kinds of different people, but I still sometimes don’t listen to that advice, for some reason, I think that’s just the entrepreneurial way. I think if I were to do it all over again, I would listen to way more people, people that have had experience in the industry; I would take their advice and their comments much more seriously.

Aaron: Yeah. So, DerekMedia.com – how did that start? Cause I read on your blog that basically you as were getting requests from people at seminars about social media consultancy and stuff, so can you talk a bit more about how you started that?

Derek: Yeah, it was crazy because we were at a point in Tatango’s life that we either need to raise some capital or lay off some employees, cause we weren’t growing as fast as we thought we would, but we were still growing. We did get a lot of inquiries about doing social media, so instead of laying off those talented and very valuable employees, we decided that we should start another company, that their assets and what they do best could be leveraged to make some money to keep them in the company.

So six months later, we rep athletes, politicians, brands, all kinds of really cool companies, and help them with their social media efforts, whether it be Facebook, Twitter, YouTube, contest giveaways, things like that. It was just one of those things that, out of necessity, we needed extra capital, we wanted to keep our employees, and we decided this would be a great way to make sure that they can keep their job here. So it turned out well.

Aaron: That’s great. Really good. Social media is huge, so how has social media changed the way we do business?

Derek: Yeah, social media, the way it’s changed business… Five, maybe ten years ago, the only way that you could ever get out to the masses was to get the approval of the mainstream media, whether that be television, radio, or newspapers. Now, we don’t need that channel, we don’t need their approval anymore. There’s kids out there that have a million views on their YouTube channel – they now are creating the mainstream media. They are the channel, and I think that is both scary and great for big brands.

Ford, Coke, Pepsi, companies like that – if they don’t believe in their brand, they’re scared as hell of social media, because now the message is not crafted by their marketing team. The message is now crafted by the people, and distributed by the people. If they have a great brand, that lends itself too to be positive because of the fact that, now, Ford, Pepsi, Coca Cola, they don’t even need to pay for their advertising. They’re letting people in little towns all across the United States advertise for them.

I think if you look at the statistics, it’s something like 18% of people trust advertisements, and then 84% of the people trust peer recommendations. So it’s amazing because what Coke is doing is they’re pulling money away from advertising – letting us do it – and they’re getting 84% of people trust peer recommendations, where only 18% of people trusted what Coke ever said.

Aaron: Yeah, and I remember when that Gary Vaynerchuk spoke at Yanik’s event, he said that when Bruno was released, the next day the film viewings dropped dramatically because everyone went on Twitter and said how rubbish it was. So word of mouth is much more powerful than traditional advertising.

Derek: Exactly. And the movies are a great example of, you know… Plus the speed to get out to the market is amazing. I can Twitter during a movie, and all my followers now know what I think of that movie, where ten years ago it would have taken 5-10 days for a review to come out on TV.

Aaron: Yeah. And another point is, social media opens up a lot of opportunities to people. For example, Justin Bieber, he got found on YouTube, so anyone can do it, and this is part of the reason why I started my site, is to make people realize the possibilities that are in this with the Internet these days.

Derek: Yeah, totally true.

“Anybody can do it, it is free, all it takes is hustle and it takes your time. So if you have those things, you can build a super brand.”

Aaron: Yeah. Definitely. So are there any resources that you recommend for entrepreneurs.

Derek: There’s so many out there. I would just be as open as possible, so read as much, talk to as many people as you can. If people want to talk to me, my phone number is 206-334-4012. Call me, text message me, I’ll help you out.Read books. Look at case studies. Focus on just absorbing as much information as you can, because everything in the world…nothing is new.

Everything has been done before in some form or some fashion. You’re not reinventing the wheel. You’re putting a little spin on the wheel, most likely, with your product, so don’t reinvent the wheel in terms of your work and the ideas you have.

Aaron: Definitely great advice. If you had to give one secret about making money, what would it be?

Derek: I think the secret is, is not to focus on the money. It’s to focus on building something that interesting. Because, you focus on the money, then your users get backseats; the product gets a back seat. Focus on the product, focus on solving that problem as best as you can, and the money always follows.

Aaron: Yeah, so true, so true. So you were a 23-year-old dropout of University of Houston entrepreneurial program. What did you learn in that program?

Derek: You know, not very much, to be honest. I learned from the people in the program, the people that were in my class; there was about 30 students, and these people came from all kinds of different walks of life. So I think from my perspective it was more of a cultural realization and getting to bounce ideas off different people, more than what I learned specifically in class from the teacher.

Aaron: So it was social dynamics that you profited from, basically. So how did you raise half a million dollars in investments for companies from private investors and the Bellingham Angel Group?

Derek: To be honest, it was my personal brand.

A lot of people don’t understand this, especially young entrepreneurs, is that when you’re raising money, you’re not just raising money for your product; you’re raising money for people to invest in you. Because they realize that if shit hits the fan and things change, the product is not going to fix itself, the product is not going to morph into a different company or split off or do something different, it’s the entrepreneur.

I think from my perspective, ever since I’ve been hustling on the playground fields in elementary school, I’ve been building my brand. So I went in there and talked to the Angels, they already had heard about my work ethic, they heard about my last business –

“It’s all about that personal brand. So, focus on your personal brand. Make your brand as strong as possible, and then really, raising capital should be relatively easy.”

Aaron: Yeah. So basically so when you go and pitch for any amount of money you want, basically you need to have a clear, strong message – is that what you’re saying?

Derek: Strong, clear message and you have to be an upstanding citizen, because even if you have the best idea in the world, if you’re not a good person or if people don’t trust you, then there’s no chance of you ever raising money.

Aaron: Absolutely. So you have to conduct business with integrity and honesty. So do you have any last tips for people on success, life lessons you’ve learned, anything?

Derek: I think we went through most of them! I think the biggest one is start small. With technology nowadays, with outsourcing, you can build something very big, very cheap. You don’t need an office, you don’t need a secretary. You answer the support calls for the first year. Start very, very small. And then you don’t have to give a lot of your company away when you become very big. When you become very big and you’ve given all your company away, it’s kind of depressing. So focus on being small, nimble, agile at the very start, and then as revenue starts coming in, then you can focus on growth.

Aaron: Great. Great tips. Thank you very much, Derek, for sharing this valuable information. It’s going to help.

Derek: No problem, hey, thanks for having me on!

Aaron: No worries man. Great catching up with you.

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