Gary Vee: $2 Billion Dollar Taco, Live Shopping, and Customer Service | E171

0:00One of the first videos I ever made was called Facebook Should Be Worried About Twitter. Because Twitter just come out, I was again fascinated by it. That video went viral. Blaine Cook was the first CTO. I met him for a taco at South By and he told me he was quitting and selling every share and did I want any. First I tried to talk him out of it. I said I think you're making a huge mistake. Second, I could see he was making an emotional decision. A couple weeks later on emails like do you want to buy it? I'm done. I'm like Blaine, he's like I'm done. And so me, Fred Wilson and Kevin Rose bought up all his shares.

0:30That was my first investment. And he left$700 billion, made$2 billion on the table. That's right. Just staggering. Several months later, my video went viral. Facebook, Dave Morin, asked me to speak at Facebook. Zucks was there. We had dinner that night. We hit it off. We started to get to know each other. And his sister, Randy, called me. Mark wanted me to call. Our parents are looking to sell some shares. They're going to buy a nice home near us in California. Would you like to buy some Facebook equity? I literally took 80 % of my savings and invested in Facebook.

1:00You're listening to part two of my incredible interview with Gary V. If you haven't yet listened to part one, be sure to check that one out first. Now, without further ado, here's part two of my awesome conversation with Gary. You took a company from$3 million to$60 million in a short amount of time. You saw things that people didn't see at the time. You bought keywords, AdWords, wine was$0.05. And then after nine months, it went to$0.10. sense. So what did you see that nobody else saw as really a first mover advantage with I think is so important sometimes in building businesses? It's what I see right now with live shopping on social.

1:38I'm going to assume that, I'm going to just look around the room, that people here know that TikTok shop exists, that people sell things on TikTok. Huge. I'm going to assume that people here know that, or this might be smaller, but you might know what whatnot is, live shopping. I'm going to assume that people in this circle know that China's been selling stuff on live social for the last seven years at scale. I'm going to assume that people are listening and watching, might have saw the viral video of that woman with the handbags who does a million dollars just by doing this. I know that all to be true.

2:07I also know that almost every single person in this circle right now is underestimating it. I know that 99.9 % of the people who are watching this right now don't understand it the way I do. I understand it for what it is, which is it's going to be massive, massive. that if you ask me right now, out of all the optionality in the world of how to make money in the next five years in America, that live shopping is at the tippy top of my list. That's what I saw with websites, email, and Google AdWords. I don't think I was the only person that saw it. I just think what I'm very good at is I view these trends like poker.

2:45And I view live shopping on whatnot and Fanatics Live and TikTok Shop and Meta will have to do it because it's gonna get too big. I view it like having the nuts in poker. I feel like I've got the best, like I know it's the best hand. And so if you know you have the best hand, educate me to your poker players, you go all in. Because you've won. Sure, they may fold, but you go all in. I know that. That's what I do for a living. What I'm good at is knowing what humans are going to do. And I know when it's the biggest hand, the best hand. And so the reason I was able to build my daddy's liquor store was having a website was better than having a catalog.

3:29Right? I wanted to compete with Sherry Lehman's, Zachy's, Morel's, Sam's Wine Club in Chicago, K &L in California. I wanted to have the specs in Texas. I wanted to have the best wine store in the country. What were those stores doing when I was in high school and college? They were buying full-page ads in the Wall Street Journal and the New York Times Wednesday dining-in section. And they were sending catalogs to the mail. I outflanked them by having a website and having an email newsletter. So my email newsletter in 1998, when 94 Dominus came out and Insignia, I would email everybody and they would buy from me.

4:09They would get the catalog from Sherry Lehman's four weeks later. Because catalogs are slow. Email is fast. Catalogs are expensive to make and ship. Email was free. So even though I had no money, I outsmarted them by knowing where the attention was because Wall Street had moved to email. But not everybody caught up. I believe social media is now, in my brain, 20 % of all social media content is live shopping. It's not yet, but it will be. And so I'm gonna move fast during this era on it. That's what I did with email, with having a website at all. And then finally, the big final atomic bomb, outflanking everybody on Google AdWords.

4:53You need to have great customer service to build any business. So talk to us about this crazy story about this woman who wanted a case of I love this. Berenger White Zinfandel in the two and a half hours. So this was this is such a so anybody who owns a business, if you're listening right now and you want to make a point, a culture, do something in action don't make a fucking poster and put it in the hallway don't tell a story that happened in the past you and i have enough war stories where we can tell the kids do an action so i was building this store we're now on fire at this point this is later this like 2002 or three we built a new store i grew up in a smaller store then we built a big store as I was growing the revenue.

5:45I am the man on the floor. And this is the holidays. When I tell you from 18 to 34 years old, my December, and I mean all the first 24 days of December outside of when I was in college. But even then I came home way early because I was barely going to class. I would spend from 7 a.m. to 10 p.m. on the floor of my dad's liquor store. It was prime time, especially pre-internet. We are in the midst of one of the busiest days in the history of the store. And now we're doing internet business and we get a phone call in the order department. I'm running upstairs, downstairs. I'm keeping an eye on the internet and the store and I'm fucking a maniac.

6:36And we get this call from the son of this elderly woman. wasn't even her that her case got misshipped and this was like december 23rd or second or first i don't remember but put it this way she lived in jersey and that's one day delivery and i knew that if we put it back in the mail she wouldn't have gotten it for christmas and he made a big to do that she needed it for christmas i remember to stay like yesterday i knew that there would be a day that i wasn't going to be at that store i knew that i was going to have to build my own life at some point because I knew my dad viewed it like an immigrant which is oh this is your business but it's really not like I can't buy a home because I have no equity like I couldn't you know like I would inherit it when he would pass well I'm fucking gonna be 50 in 15 months and my dad's still working every day so you can imagine I was smart enough thank god at 22 to be like I gotta do my own thing but I remember I needed to do things because once I was gone I wanted them to know how it was built.

7:35I knew then. So, even though I'm on the floor and generating$10 ,000 to$20 ,000 an hour, just me personally, on someone like you that had high net worth that would come in and be like, I need three cases of high-end wine for the holidays. I was that guy. I decide to make a huge to-do about this case of Beringer White's Infidel. It's snowing. The weather's bad. and I decide to grab a case from the basement and I tell my inner team, just like this, in a circle, I'm like, I'm gonna go deliver this because we have the best customer service in the game. And they are stunned. I never, I don't go to pee for 15 hours during the day.

8:19That's how busy it is and how committed I am. And now I'm gonna drive to Bergen County, isn't that an hour? And that's without snow? The fuck are you doing, Gary? And I said, this is, I just remembered that this was my moment to make a point. So I did it. I drove. I enjoyed it. I listened to sports radio on the way. Got back. Everybody was stunned. Everybody was sweating. Brandon was like, you missed Mr. Thompson and Mr. Smith. And like all this money was lost. But it became a story. To this day, that story is being told to employees at our store about customer service. I might have lost$20 ,000 in sales that hour, but I've helped my dad make millions since.

9:01And I think more companies should understand that actions carry enormous weight. And I believe that every leader that's listening right now should think about what they care about most and instilling in their company and then should go out of their way for the most hyperbolized executions of those things so that it becomes lore. I mean, look at this. I literally did that action. And here I am 20 plus years later having the luxury to tell that story on an important platform like this. Think about that. This is the meta of the thesis. It's how you build it. It's how you fucking, how do you think everything built?

9:41Everything's based on stories. Why do you think religion exists? December 2008, and you have a meeting at ESPN. Your brother, AJ, is graduating BU. And you walk out of there with a couple of things. What did you walk out with, and then what happened next?

10:00I hope you're enjoying this video so far, but before we jump back in, I want to know if you've ever thought about what you need to do to reach another level of success in your life. Over the last 25 years, I've been an advisor to more than 50 companies. I've invested nearly 100, including Google Lyft and Seagate, and I also co-founded a company that today is worth more than$15 billion. I've been incredibly blessed in my journey, and at this stage of my life, I want to give back. I want to share the lessons I've learned so you can reach incredible success way faster than I did. In my own journey, I've learned that having the right mentor is a massive advantage to achieving our goals.

10:32I'm hugely passionate about mentoring others. I'm looking for a few hungry entrepreneurs who are excited to take action on their journey to incredible future success. So if that's you, I've got an opportunity. In the description of this video, there's a link where you can apply to work with me. All you need to do is answer a few simple questions. And if you're a good fit, my team will reach out so we can build a game plan together. All right, now let's get back to the video.

10:55well i first walked out with five thousand dollars i couldn't comprehend how i you gotta remember at this point i'm still making less than a hundred thousand dollars a year even though i'm 33 years old and built this huge business immigrant life again if you don't live in an immigrant business you don't understand but like i built this huge business created hundreds of millions of dollars in revenue over that course of a period of time and i'm still making very little my dad's making super little too but he owns the business so i'm starting to think about my next chapter my brother's about to graduate and we're bouncing a lot of ideas daily fantasy sports which probably would have done well uh something that looked like groupon and living social that probably would have done well something that looked like buzzfeed that probably would have done well but those would have all taken time to build and i really didn't have any money and aj surely didn't and because i just invested in facebook and twitter so all my liquid was gone And so consulting, getting paid for action was a better cash flow option.

11:55And it's amazing. And I get this random email because at this point I'd amassed a lot of followers on Twitter. But it's still early. It's still the first couple of years of Twitter. And ESPN asks if I could come in and consult on how to grow their social, their Twitter specifically. What year was this? This is 2008. Steve Bornstein was CEO or he had left? It wasn't at that level. It was way lower down. It was three to four levels below that, maybe five, if I'm thinking properly of their org at the time. It was marketing, but it wasn't even like, it was definitely not the CMO, let alone the CEO.

12:34And I don't even think it was the number two in marketing. It was a lower level, but the guy had the ability to write a$5 ,000 check. It was just nothing for a corporation, so it was lower level. anyway I go in I sit in a room like this I consult for a couple hours I enjoy it to no end and I leave and they literally it's like old school like you got to check back that or and I call my brother as soon as I'm in midtown because it was in midtown or something like that I call my brother I said I got it we're gonna start a consultancy I didn't even call it an agency yet wasn't really an agency but I couldn't believe that it was 2008 going into 09 and I couldn't believe the biggest companies in the world didn't understand social media because I've been committed since 06.

13:17And that's probably one of the first times I've learned about timing. I'm just talking about it right now with live shopping. I'll say it again. I don't think I'm Andreessen Horowitz invested in whatnot a long time ago. I'm not a genius. I just feel like in this nanosecond that everybody's underestimating how big it's going to be. And I didn't understand that. I didn't understand that it would take that long for people to get it. And as it got bigger, it got slower. Right? I didn't know that. Entrepreneur land information and action goes faster than it does in corporate land. And so I was like, wait, there's an opportunity.

13:53They still don't get it. And so that's why I decided to start VaynerMedia. Which is also blown up. Yeah. I mean, VaynerMedia started in the conference room of Buddy Media. My friend Mike Lazaro. Yes. And you got equity for building a website. I got equity for giving a quote, not even building a website. Which I wonder, and they sold the company to Salesforce for a billion dollars. Yep. That was a good outcome for a quote. For me, I did extremely well. I literally made seven figures to give a quote because at that point I'd written a book called Crush It. That was the first time I'd hit the scene outside of the wine world.

14:26And very quickly after there, I was starting to be viewed as an angel investor with the super angels, Tim Ferriss and Dave Morin and Chris Sock and Kevin Rose and Travis Kalkin. And I was definitely in the game, Calcanus. I was in the game in that era, 2006 to 2012. It was a very good era for my personal brand with books and speeches and investing. And VaynerMedia is something I'm very proud of. We literally started it in a conference room. And it's a$350 million a year revenue business now with 2 ,000 plus employees. And we're definitely the most progressive contemporary agency in the world. And it's also been the foundation of my other behavior.

15:06I started Rezzy inside of there with Ben Leventhal. 2014. I started Empathy Wines, which I sold to Constellation with me and John, two former interns in that company. 2019. And then VFriends, which I believe, and it's fun to put this on video to look back on in 20 or 30 years from now, but I'm in the midst right now of building an intellectual property. I'm very affected and inspired by Pokemon being worth$100 billion. dollars. I do not think people realize how big that company is. I also am very inspired by Jim Hudson, a real creative force who really wanted to leave a deposit of good on the world, Fraggle Rock, Sesame Street, Muppets.

15:47And so, yeah, I'm building VFriends and a lot of the talent that works inside of VFriends came from Vayner. So, Vayner has been an incredible company, but it's also been an incredible incubator of talent and osmosis of like how I want to do things and I'm very excited about it. I'll tell you back in my life in 1999, I'm on my honeymoon with my first wife in Hawaii at Huala Life. I don't know if you've been there or not. Oh, actually I have. I spoke to Brian Jordan there. And this guy next to me is reading a magazine that no longer exists, the industry standard. And I said, hey, are you on the business?

16:26He said, yeah. I said, what's your name? I said, my name is Ron Conway. And so talk to us about Ron. Ron affected me too. And then as part of the story, tell us about how making bad decisions on emotions is a terrible strategy. And you can talk about playing cook from Twitter and how you got that deal and then talk about Facebook, Mark Zuckerberg, your dinner, and then his... You got it. So that whole Silicon Valley era for me started with, so now I'm right about email. I'm right about the website. I'm right about out Google AdWords in 05 and here comes YouTube and I and I see see that and I'm like fuck I'm gonna build my dad's store with this so I've used the tool of web I've used the tool of search and email and here comes video online and I start using the tool I start my library tv on February 21st 2006 less than a year after YouTube comes out and I want to take a moment right now and give a huge shout out to Eric Castor.

17:27Eric Castor was my lead developer. One of the most progressive things I've done in my life was the day I started working in my dad's store full-time, May of 98, I told him from the day I started, I will take nothing in my salary, but we need to hire a computer guy. That's what I called developers back then. We need to hire a computer guy. And by 2000 or 2001, I was able to finally get to a place where I was able to hire Eric Castor and then later, John Casamanos, who's still our CTO. And we're a fucking liquor store in New Jersey, and I have literal developers full-time on my staff. It was so progressive.

18:02It'd be like if I hired astronauts right now. Like, it just made no sense. Anyway, I want to give a shout-out to Eric Castor, because without Eric Castor, a lot of this does not happen. He was the one that sat closer than you and I are sitting right now at my desk and was like, read TechCrunch, read Metafilter, read White Web, read Dig. he was the one that showed me web 2.0 and during that journey he showed me YouTube because I asked him two years earlier if I could do videos on the site and he said no too expensive to host now we found this they were hosting it so now I'm doing YouTube I explode this is where my career really takes a turn the wine show explodes and then I'm now really starting to get into this tech stuff and how do I use it to build a wine store but it's still wine store, wine store, wine store and then Google buys YouTube.

18:53And one point, you remember this. That number, I don't think the kids can, now everything's inflation. You remember that number? 1.45 billion. Do you remember how everyone reacted? It was insane. I'm saying it right now because I want you guys to hear and be affected by it. It'd be as if you woke up tomorrow and TikTok was forced to sell and sold for a trillion. It's like you couldn't, we didn't see numbers like that. Yeah. Everything was, big numbers were hundreds of millions. I mean, Flickr sold for$40 million to Yahoo, and that seemed like a trillion. Flickr was the precursor to Instagram. Anyway, I'm just like, holy shit.

19:30And now I'm a little bit older, and I'm reading more business magazines, not just wine. And I read a Wall Street Journal article about the sale, because I was fascinated. I felt different this time. I was like, fuck, man. I feel like my talents are not being maximized. I'm using these things to build my dad's business. There's got to be a way. I just felt different I was just reading everything about it and one article specifically it references Ron Conway and it says angel investor I've never heard the term in my life angel investor Ron Conway made a gadrillion dollars I don't remember how much he put in or what he got but it was staggering it was like for his$100 ,000 investment made$4 million or I don't know it might even be it was just staggering I don't remember the details I just remember immediately going from print because it was I think the journal to computer and Googling, not Ron Conway, Googling the term angel investor.

20:22Googling it. Ironically, very apropos. And I'm like, huh. And I literally, again, said to myself, I'm gonna be an angel investor. I'm gonna build up some savings. I had some savings at that point. And one of the first videos I ever made that wasn't a wine video was called Facebook should be worried about Twitter. Because Twitter just come out. I was again fascinated by it. And I promised myself after the Ron Conway article that the next time I felt it, that I would invest. And the next time I felt it was Twitter. And that video went viral. Blaine Cook was the first CTO of Twitter. Developer, thank you.

21:11And I met him at South By because now I'm going to these conferences. and he Twitter, I don't know if you, were you in the mix? You remember this? I was in the mix, but not, didn't invest in Twitter. Do you remember that Twitter would go down all the time? It was, yeah. Down all the time. It was the hottest app in Silicon Valley, but it was down, down, did not work all the time. They did Ruby on Rails early on. It was complicated. He was getting so much heat. I met him for a taco at South By and he told me he was quitting and selling every share and did I want any? first, and I'm really proud of this, back to being a good person.

21:48First, I tried to talk him out of it. I said, I think you're making a huge mistake. Second, I could see he was making an emotional decision and he just went the whole way. And a couple of weeks later on emails, like, do you want to buy it? I'm done. I'm like playing. He's like, I'm done. And so me, Fred Wilson and Kevin Rose, if I recall properly, bought up all his shares. That was my first investment. And then a couple months - And he left$700 billion at$2 billion on the table. That's right. Just staggering. And then several months later, because I've become friendly with, my video went viral, Facebook, Dave Morin asked me to speak at Facebook.

22:25Zucks was there. We had dinner that night. We hit it off. We started to get to know each other. And sister Randy called me one night when I was in Miami at a speaking engagement said, our parents, Mark wanted me to call. Our parents are looking to sell some shares. They're going to buy a nice home near us in California because they were still in Connecticut. it. Would you like to buy some Facebook equity? I said, absolutely. I'm just game chair. I literally took 80 % of my savings and invested in Facebook. Congrats. Thank you. I've never sold a share. Promised myself that night that as long as Mark was the CEO, I'd never sell.

22:58You've invested in over a hundred companies. What do you look for when making an angel investment? Early on, I went for the horse. Then I went for the jockey. Now it requires both. The horse was the idea. Biggest mistake I made as an investor early on as a kid, a kid in my 30s, was if I liked the idea, I could see how I could run it to success. I didn't realize I was a good operator yet. Then I learned that that wasn't always working. Then it was about the kid. But even with the best operators, if you're operating a bad idea, that also will work. So now what I look for in angel investing is the jockey and the horse, the operator and the idea.

23:34Yeah. And so what's the best way to pitch you? I read what you're going to say. And what I would give is my answer is very different. What you're going to give is your answer. What's your answer? My answer would be to come in prepared. And if you have to get in the door and you don't know me, you can create a ridiculous PowerPoint presentation that blows you off of your chair. And I'm good on the preparation. We'll talk about that in a few minutes. but I prepared materials for people that they have to respond, right? Because you know when you open this document, holy shit, did this take 40 hours to prepare or more?

24:10This thing's like a Rolls Royce. It's a Ferrari on steroids. And if someone's putting that much work into it, it shows the amount of thought, progress. It's brilliant. I've received a few of those sometimes. A lot of my deals, most of them, 99 % of them come from people I know. Yeah. Right? And so it's a self-selecting process. Of course. But every now and then I get something ridiculous in the mail. We've never invested in a cold deal like that, but we've come very, very close. Interesting. Yeah, mine's the opposite. And this goes back to self-awareness. This goes back to like, you got to know yourself.

24:41Like, I always say everything works. Everything works. Like, there's a version of success and happiness that comes in so many different sizes and shapes that it can work. For me, I don't even consume Dex. My team knows this. To really prepare for me, I need to have the dialogue. I need to have the feel. For me, at this point, to your point, so much comes from word of mouth, different angles. But what really gets me is if somebody says something that I believe in that I can follow up with a couple of questions and they can answer it. For example, what cliche happens to me is I make a big stink on something like this about live shopping.

25:24Now I'm going to get pitched. This is real. That's what I was thinking when you were saying that. I said, oh my God. I'm going to get bombarded. Yeah. I won't look at most of those emails. I won't go for the Rolls Royce deck. I will go for the person that finds me somewhere or I get a meeting through a person because if somebody co-signs someone, I'll take that meeting. But it's not what they say to me. It's my follow-up question. I really tend to invest in things I know. More and more, by the way, as I get older. And so I know what I'm talking about with live shopping. So to me, I enjoy the back and forth because the other thing I think I do well is push.

26:03I push well in dialogue to like real places. And most people can't answer those real places. You know this. A lot of founders are very good at the surface level conversation. But when you poke and prod, they fold like cheap chairs. What the craziest thing is you ask someone about, they talk about run rate. Run rate doesn't apply to the cash in the bank. So I always ask, what are the gap revenues? You know how many CEOs know what their gap revenues are in the last three years? Less than 1%. And for me, the meeting's over, right? I mean, if you don't know your finances well. And so for me, you're referring to things that are a little bit further along.