99% Give up - Here's how you never quit. How I bootstrapped a 150M empire I Erik Huberman

0:00It's insane how many companies are out there that quote do digital marketing. The vast majority of them are horrible at what they do. Erik Huberman, founder and CEO of Hawk Media, one of the fastest growing marketing agencies in the U.S. I started in real estate a week before the whole banking industry collapsed.

0:28One piece of advice I got early into investing that is the best advice I got and the most simple advice is hard work is compounding. And I think that's what people miss. By year two, you're 32 % ahead of people. By year three, you're 48 % ahead of them. Businesses fail for two reasons. You get underwater financially, or one of my biggest mantras is work like most won't so you can live like most can't. Ladies and gentlemen, by way of introduction. So, Eric, when I read through all your different entrepreneurial ventures, I thought this guy must be breathing entrepreneurship. So and this made me wonder then, what were the earliest experiences and factors that set you up for such a life?

1:09Yeah, I mean, I grew up. My grandfather was an entrepreneur on my dad's side. actually both sides. I didn't know my mom's dad. He passed away when I was an infant, but heard the stories. And then my dad was an entrepreneur. So I think part of it was just taking it for granted. Like when all the male figures as a young boy, then your wife and all my dad's, most of my dad's friends all were entrepreneurs that you're just like, I guess this is what you do. And then, you know, my dad definitely, I think partially, probably unintentionally, because I don't think he ever really cared whether I built a business or went and work for someone.

1:42But the way he treated me really kind of pushed entrepreneurship. He got me really into the idea of making money early. He was very much about independence. When I'd ask him for things as a kid, like I want this. I asked when I was eight years old, I told him I wanted an electric guitar. And he said, good, get a fucking job, like verbatim. So to an eight year old, and I was like, okay, and to go figure out how to make money. Like it was just this always this push of like, you should go figure it out. And I think that that was sort of the early stages of, I just assumed that's what I would do as an adult is run my own business.

2:15I didn't think that I would always like, my thought was I would get jobs to go learn something so that eventually I could build whatever that would be. Did you did you already reflect back then on it? Or because it was just like how you grew up, right? Like your dad said, Okay, get it, like, make the money, get a job yeah i mean well like so six years old i knew i wanted to make money so i uh took a bunch of my parents stuff from around the house and put it in a trash bag and walked door to door trying to sell my parents things to their neighbors um and then eight years old when my dad said that to me i tried you know starting a lemonade stand and then i sold flowers and i would literally like run into the street in front of cars to so because i knew they wouldn't run me over or thought they wouldn't run me over and uh then would make them buy flowers from me for like five cents a piece And then I started buying and selling Beanie Babies, the little beanbag animals that went really popular and did really made thousands of dollars as an eight year old doing that.

3:09And all to buy this guitar that costs 150 bucks at the whole package. And so I bought it and then I bought a BMX as well. I saved some money for a car. But that really exposed me. But no, I mean, as a kid, I bought the guitar. I thought I was going to be a rock star. And I was really set on being a musician. and then about 12 all my friends started playing music and immediately were better than me and I was like oh like I like performing and I like playing but I don't like practicing I don't like I'm not that passionate about this and so I enjoy sort of the output but not the input and so I uh then I decided I was going to be in the music business and then around 16 I really realized that the music business was a tough one and I was like maybe I just go into business and And it's okay to have a hobby that is playing guitar, which still play today.

3:57I still enjoy it, but never got that good. I can, you know, hang out and jam with a bunch of people, which actually is just fine for me. Yeah. And how was school for you? Because I always think it's interesting, like for like founders, how they kind of relate to the education system. Yeah. So I was definitely the class clown and the disruptive one. I definitely had too much energy to be sitting there. I also learned really quickly and still do like I can pick things up really fast. Yeah. And so combination of bored, hyper energetic and learning quickly because sorry, I didn't handle boredom very well.

4:36And I learned quickly. So I was always bored at school. I was definitely disruptive, but I went to a really alternative school through high school, like first grade through high school that was founded by an Indian philosopher named Jadu Krishnamurti. He has a school in the UK, a few schools in India and a school in the US. And so it was a very spiritual school. I literally was doing meditation in first grade, which to be clear, first grade meditation is the teacher closes their eyes to meditate, the kids run around making faces. But I was exposed to all these kinds of things that it allowed me to be at a school where I was disruptive.

5:12I was definitely the bane of the existence to the teachers that took themselves really seriously. But the ones that more were like Krishnamurti's disciples and people that studied him, they were just like, you're going to be who you are. And like, it was kind of like what you would think like sort of a hippie upbringing would be where they're like, you know, free spirit. Like my, like physics was a great example of this. My physics teacher, Larry was, you know, I would pick, we would have a class in the first five minutes. I'd understand the concept. And then I'd sit there for an hour while he taught everyone else the concept.

5:41So after a little while, and he knew me growing up there, he's like, just go out and go for a run or go hang out and, you know, go for a walk, whatever you want to do. Like you just come back and do well on the test. And I don't really care if you sit here and, you know, do do this. So he saw like I had that ability to have that like independent, not independent, but unique and focused type of learning with the better teachers. And then there were other teachers that hated me that, you know, I was in the principal's office all the time. I have several suspensions, all that kind of stuff. but the right teachers I really resonated with.

6:12And again, I graduated with a good GPA. I went to school at Arizona, University of Arizona, really because I wanted the opposite. Like I had a graduating class from high school of 11 kids and like this small hippie town, small school thing. And then I went to like a huge, massive party school. And frankly, academics were never hard for me. So the social aspect really wanted to get out of that, which definitely did. Where did you grow up? Because now you're based in California, right? Yeah, I was always in California. I was born in L.A., but I moved up to this place called Ojai when I was six. And it's near Santa Barbara.

6:45It's about an hour and a half north of L.A. and just a little inland from the beach, like 30 minutes. So it's a small, little, like, mountain hippie town. When you went to university then, how did you manage to, like, kind of accommodate with this new scale of people and the interaction? Was it easy for you to catch up to that? I don't know if easy or hard is a word. It took time. I mean, I definitely like I was always an extrovert, but I was an extrovert in a high school of 40 kids, 42. So it's like I I I look back at some of the stuff I did my freshman year in terms of just trying to meet people and make friends and that kind of stuff.

7:19And I was getting my cues from like shit I had seen in movies. And like I didn't know asking a girl out like I actually thought like asking a girl to dinner was what you did. So I would see if girls wanted to get dinner and they're like, yeah, sure. We can go to the student union and grab some food. Like, it was just like, what are you asking? Like in college, like that's not like it wasn't normal. But I didn't know that because like I had three girls in my high school graduating class and I knew them all for a long time and I did not date any of them. So it's just like, you know, it was figuring that out.

7:49But I'd say it took me probably a good year and then started to get the hang of like, oh, this is how normal social dynamics are. And it wasn't again, it wasn't. I think I can tell you because I'm still friends with some of those kids from freshman year. They just saw me as like, you're a nerdy kid. Like, that's all it came off as. It wasn't like some crazy, you know, dystopian, like where the who the hell are you? It's just more like, oh, you're kind of a nerd. That's funny. But I was also social and outgoing. And, you know, so it was there was a nice combination there that allowed me to ramp up.

8:18But, yeah, I look back and still get a little like cringe about like I said that. Yeah, that girl must have been like, what are you talking about? And again, I'm still friends with some of these guys that laugh about how I was when I first came in and like kind of how I grew up through college, which, you know, there's a lot of debate about the value of college. And for me, that chance to grow up socially was hyper valuable academically, whatever, honestly. And I wish that it was more valuable, but yeah, socially it was hugely valuable. Yeah, I think, I mean, that's what I hear more and more, right?

8:48That people are saying that it helps you basically to grow up and then probably like also to build relationships and connections in general that you, because you're very close with a bunch of people, I mean, talking from my own experience. And then later on, like you figure it out after uni, probably more. Because then what was your kind of your first business venture in the widest sense? College, I really always wanted to learn professionally, too. I was still on this idea of I'm going to go work for other people to learn things so I can build my own business. So freshman year, I worked in a real estate office because I thought that might be what I wanted to get into.

9:19My dad was in it. I had grown up around it. And then I didn't like working there. So then I went and I knew I'd heard over and over again that sales was super important. So I got a my sophomore summer of sophomore year, I started selling kitchen knives door to door at a company called Cutco. And I was like their dream employee because I didn't come in like I need a summer job and they reached out or whatever. I came in like, oh, I want to I want to absorb everything and do everything you're telling me to do and follow every playbook so that I can learn how to sell. And so I just literally like I followed everything they said to the T and grinded and became there.

9:55I broke every record they had that summer and was like their top set, one of their top sellers, uh, that time. And I then, uh, got promoted to open one of their offices and a month before I opened the office, a friend of mine called me with a business idea. This was now at the end of my junior year and said, I'm, you know, we want to, we need to filter. There's a new law in California to filter storm drains. And I figured out the mechanical process to do so, but I don't understand sales or marketing at all or how to get customers. I need a partner. Will you come join me? I went, yep, called my boss.

10:27I'll never forget. I went to, I took him to breakfast and said, I'm sorry, but I'm going to have to bow out. And this is again, a month before I'm supposed to open a territory. They've invested in me. We're ready to go. They're counting on my sales for that summer. And I just go, and I've already figured out, like, I didn't leave them in the lurch. I called the territory above North and South of me and said, do you guys want to expand so that you can both take over what I've done? And then, yeah, I remember I'll never forget the line and I'm still friends with him, but he said, I wish you understood the meaning of commitment.

10:54And I was like, that hurts because I know where you're coming from, but I got to chase what I'm going to learn. I'm going to learn a lot more starting a business than I am opening a sales office. So went and started that business, did it for the summer, started debating. This is a time when it was starting to get really popular to drop out of school and pursue your business. And this was like, you know, right after Facebook had gotten big. And this was 2000, summer of 2007. And so I looked at it and at the end of the summer, I got our first contract. We had built this thing out. was starting to make money.

11:25And I went, I don't want to, I'm not really passionate about storm drains. My partner was because he was a surfer and always got rashes and stuff in the ocean here in LA because of the storm runoff. And so he really loved what he was doing, but I didn't. And so I decided to give my equity back to him and just say, it's cool. This has been a fun summer, great learning experience. I'm here if you need help, but it's yours. And I went back to school and left him to it and he built it to be a multimillion dollar company. Like it really took off. And then I, you know, and that was cool to see. But then I, and I learned a lot, but then I decided to go back into real estate and graduating from college.

12:00I started in real estate a week before the whole banking industry collapsed in the United States and the whole great recession. And so with a commercial agent made$350 that year living in LA post college and went into debt and was just like, this isn't going to work. And that's what threw me into building online. I started building an online music company. Okay. So quite like a detour in a way that you did, but were you, were you at any time thinking like contemplating kind of like which direction you want to go? Because it seems like you like just immediately jumped at it and just kind of tried and figured it out on the way.

12:35It's more the latter. I think it's more, you know, I've just, it's all about trying things along the way. And then like, Oh, that worked. Like the hypothesizing of like, oh, I want to get into this or that. Like I made fun of marketing majors in college and thought it was a dumb degree. And now I have a 300 person marketing agency. Good luck trying to figure out what you're going to end up doing unless you're a very focused, like you're doing a very defined degree. Like if you're, you know, going into medicine and you study and you become a plastic surgeon, you're probably going to be a plastic surgeon for a while.

13:06Like that, you know, you go get your law degree. Actually, I'd say I don't know how many people that get their law degree actually don't go into law, but you go into specific vocations and you study specific things you're going to, but I studied business management. So like, it was kind of like, who knows what I'm going to get into? We'll figure it out. And, you know, again, went from real estate to music, to t-shirts, to women's active wear, to running a marketing agency and a venture firm. So, and that was all by 26. Yeah, exactly. Because that's what I was actually wondering, like, how old were you when you set up the real estate business that then crashed?

13:39Yeah. That was 21. Where did you get that confidence from? Oh, I didn't start a business. I just worked. I went to work at an agency as a commercial real estate agent. So it's just now there was no salary. So it's like, you got to go make the money you make, which I always liked. I had a job in high school. I worked at a health food store in my hometown. And after like eight months, they had told me they'd give me a raise after six. I was making minimum wage. And after eight, they hadn't given me a raise. And so I went to the GM and said, what's going on? And I found out that my manager was taking credit for all my work and claiming that I was doing nothing because he was giving me his work and then telling the boss that he did it and I didn't do anything.

14:15And so I just was like, I don't want my future to be decided by politics. And, you know, God forbid I end up working for someone that sucks. I don't like this. So I'm just going to do my own thing. And whether that's build a business or be in sales, the numbers speak for themselves. In sales, like I closed the deal or I didn't. I'm sure there's other things to worry about. But in and then in entrepreneurship, I don't like you. Yes, your problems are sometimes other people's faults, but you run the business. So figure it the fuck out. And so I liked being, you know, where the buck stopped, so to speak.

14:45So that's that's where that job came from. I was like, I got into real estate because I was like, I, you know, if I sell a building, I make money. It's that simple. I don't really care about anything else. Don't tell me what time I have to be anywhere. And I worked harder than anyone. And I remember, and I've quoted this a lot, but a good example of where my dad taught me, I called him super proud like a couple of months into the real estate gig. But at the beginning of the Great Recession, it was bad, but you didn't know what that meant. Like, especially me, I'd never worked. God forbid the market's down and, you know, these banks went out of business.

15:16Like, don't companies go out of business? Whatever. And so I'm still grinding and called my dad and he's like, how's it going? I'm like, it's, you know, you know, just getting ramped up, but it's fun. I'm, you know, I'm in the office at 6 a.m. every day. I'm the first one in. I leave about 7 p.m. I'm the last one out. I am grinding. And he's like, 6 a.m.? I'm like, yeah. He's like, what's wrong with 5 a.m.? God damn it. But that was the chip on my shoulder that was created by the way my dad raised me that stayed with me. That it's like, you can always put more in. You can always work harder. If not, you're being lazy.

15:46When you were working that hard, was it also to prove something or to also... Yeah. Where was this ambition coming from, you know, in a way. It was to prove something. I mean, my dad was a pretty successful guy. So there was part of me that like, success wouldn't have been making a decent sound. At that point, though, I take that back. At that point, it was more just, I wanted, like, I, that was my priority. I wanted to make something of myself. I wanted to grind and work. I had been thankfully taught that. And I, this is something I hate to say kids these days, but I hear so much about work-life balance these days in your 20s.

16:23I didn't think about it at all. I had fun. Don't get me wrong. I went out. I went out to bars. But the idea that I was striving for balance versus I'm here to work first and then when I have some time. I'm not making real estate calls at midnight on a Friday night, so I'll go to the bar. It's fine. But when it's time to work, it's time to work. And that's what I was taught. That's how I was brought up. And so I don't know. And I went through waves, I will say. When I started building my own companies, I made excuses for myself. were like, oh, you know, I can start at 10 a.m. I don't need to start at nine.

16:54But then there was a point with different business partners in different times where I realized the more effort I put into this, the more I get out of it. And so I went from, you know, finding like that balance to like, I'm going to put everything I can into this when I found that something was working, which by the way, I think that's talking a lot, but I think that's an important lesson I learned that a lot of people haven't experienced. When you see that your effort creates results and you get that instant gratification of like i spent instead of you know starting work at a nine i started at seven but then i ended the month and i made a shit ton more money and everything went well it's really easy to get up and go at seven and work those extra two hours a day when you have that reward like you know i see guys like mark walberg talk about his you know routine and rob dierdeck who's awesome we've done a bunch of work with like they get up at 3 a.m and they go to the gym and they do this and that and everyone's like how the fuck do you get have that energy they much just be unique.

17:48I'm like, they're not unique. They've been rewarded is my view of it. Because when you see the reward for doing that, you wake up and you're excited because you know that you're about to put in time that's going to be rewarded and it's easy to find the energy. Yeah. I think the funny thing for me about ambition is also that people from the outside, they always think that it is like it's ambition towards something very specific, you know, either like money or any form of success. But how is that for you? Because it seems more like an intrinsic state then totally intrinsic it's my wife said it to me a couple years ago that was super true like i grew up a competitive video game player and like played video game through college and then was like i got to stop this shit um that's like if there's only one thing i get addicted to and it's video games like never had a problem with substances or anything else like but yeah um but business to me is the same it's this achievement thing it's like an addictive addict i'm addicted to achievement and it's like, I want to hit the next level.

18:45I want to achieve the next thing. And I, my life in general is kind of that way. Like I'm running the LA marathon this Sunday. I hate it, but I'm like, but I want to check it off. And, uh, I, you know, honestly, the only reason I hate it is because like, I have a young daughter and everything. And I like, I like spending time with her and the idea of going and running outside for three to four hours every Sunday to get my long run in has been a pain, but, um, but yeah, it's, it, you know, I've just found that like the striving for achievement and the progress and then having the achievement and then looking for the next achievement has been a really uh positive way for me to go through life i've really enjoyed that both personally and professionally yeah i think this uh feeling of reward is probably the best fuel that uh that you can have but it's not the reward like the outcome isn't necessarily it like the the if like good example so my wife's very pregnant too and is like hey you might not be running this on Sunday if I go into labor.

19:38I'm like, yeah, that's fine. Like, it's actually not like, even if I didn't run the marathon on Sunday, I'd have like a little like, that's pretty funny. I trained for a marathon and then never actually ran the marathon. It's way more about the journey for me than actually the like the actual final destination, the progress I need, like if I'm not progressing, then I'm frustrated. But as long as I get the progress, the actual result isn't that important to me. Yeah. And then after your first like kind of business ventures. How did your journey lead to founding Hawk Media? I skipped through it because I don't want to take too much time on it, but yeah, built the music company after two years, hired a CEO to take over.

20:13Then I built a t-shirt subscription company, sold it after a year and a half, joined an incubator called science that had just launched dollar shave club, helped them with their portfolio companies, then launched a women's activewear brand with them called Ellie. We sold it a year later to Valley total fitness. And then I started consulting and advising. And that's when I saw like the marketing ecosystem is really tough because the best agencies that everyone knows will only work with the biggest companies in the world, the Fortune 2000. Other than that, they're not interested. They have high minimums, long contracts, which leaves everyone else to work with a giant landscape of bullshit agencies and bullshit marketers that don't actually know what they're doing.

20:48And so it wasn't and still really isn't a company that had a big brand that anytime you're building a business and you need marketing help, there's a go-to company that can jump in and make sure that you're at least doing best practices and things are set up right and you've got the boxes checked, so to speak. And so that's what I set out to build. And that's what I started building 11 years ago because I was just frustrated that with the companies, like even my friends' companies that I knew about, that none of them could get access to great marketing and do it in a way that's actually easy to work with.

21:18And so I just went, I'm going to build that. So we built Hawk Media, call ourselves your outsourced CMO and marketing team. And basically we dive into a business, look at what they're missing in their marketing org, and then can spin up whatever they need. And then it's out of cart. We can have in flow as the needs change. So it's really, that was a concept. It's 11 years later, 300 people later, you know, we've worked with over 5 ,000 brands. It worked. In fact, most of the time we get in trouble is when we try to get too creative and not just stick to what worked from the beginning. Wow. and what was it that was that you considered as broken in the marketing landscape back at the time where you were like okay there's actually a gap where uh you can provide a better service yeah so it's it's it the funny thing is like people would ask what was our secret sauce and it's like being decent at marketing and doing what we say we're going to do like right there you're in the 99 percent like they're most market like the problem is there's no barrier to entry to create an agency you literally i you could anyone can start an agency tomorrow put up a website say they're an agency and there's really no validation for that.

22:18And it became sexy to do so. So you have this bad cycle of it's easy to start and it's sexy to start. So everyone dove into it. And thankfully, I think the past few years has weeded a lot out because it became a harder industry. But I know like if you're a decent salesperson, you can talk a big game, sign clients, you might churn through them in three months, but you just turn into this cycle, which this is where people get in trouble when the market gets tougher, but when the market's good, you can probably outpace sales with, and you can build a business that makes you enough money to keep it going.

22:50Like it's not going to be a big business, but so what ends up happening is you, you know, even in the past 11 years, where you've gone from 24 ,000 to 90 ,000 digital marketing agencies in the United States and like 430 ,000 nationwide worldwide. It's insane how many companies are out there that quote do digital marketing. But again, the vast majority of them are horrible at what they do. And so the way to compete is be great at what you do. And then frankly, build a brand that you have that reputation to, which we have pushed and fought for in every way we can for the entirety of Hawk. That's been one of my main focuses is when someone looks at, do I work with Hawk Media or someone else?

23:29It's an absolute no brainer that they should be picking us. Yeah, that's very interesting. And when was the moment where you said like, OK, I might be on to something? the first moment right away um i was consulting and like again i sold the lap my last company i was just advising and consulting for some brands i saw that i couldn't find a decent agency to actually execute for them and so i just hired a small team using my consulting fees to bring in a little team and then went back to them and said now we can do it and they said great hired us and like my revenue doubled in the first month and then just ramped from there so first year we did over a million in revenue second year two and a half third year five fourth year 10 like just ramped and no no investment no outside funding it was all bootstrapped profitable from the beginning and just went and it's been that's been it for 11 years what was your um secret in a way was it you also hired like really great people that then excelled in the positions so yeah there's a few things one i quickly brought on uh the ceo that ran my music company i convinced him to come over and join me because that music company what like why i left was i just didn't see that it was going to be a huge business.