ET48- Making Millions from Scratch in Multiple Verticals
How Serial Entrepreneur Andrea Lake Maximizes Her Mentor Relationships
Making a million dollars in one business is amazing. Making millions of dollars in multiple industries makes you a true rock star of entrepreneurship!
Andrea Lake is a rock star. Even better, she is happy to share her secrets. Secret one is to find someone who has already achieved the kind of success in your industry that you want, get them to mentor you and then shut up and listen. Learn like a sponge, follow the same path and pretty soon you too can be sitting pretty.
And even better, once you know this formula, just like Andrea, you can apply it to all different kinds of businesses and repeat your success over and over. Just be sure you in turn are willing to give a hand up to those coming behind!
Other website(s): www.AndreaLake.com
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Matt: Welcome to the Entrepreneur Talk Podcast. Today, I am very excited to sit down and chat with Andrea Lake. Andrea is a long time entrepreneur, a serial entrepreneur, somebody who has done a lot of cool stuff. Just a few of the things she’s done, you can find her at lessons.biz and stickerjunkie.com. She is the owner of the link distribution which has rights to distribute all kinds of cools brands for clothing, ones that are literally household names. So, thank you so much for taking the time, Andrea, to chat with me. Why don’t you kind of just kick this off with some of your background and how you got started on this entrepreneurial journey that you’ve been on for a while now?
Andrea: Sure thing and thanks for having me, Matt. My background? I started my first company when I was 18 years old. It was juggling toys called Rhythm Styx. This is quite well for an 18 year old. But after a few years, I started meeting people around T-shirt companies. I met one guy that was making $10,000/month profit selling t-shirts. I thought that is all the money in the world. I’m going to go do that as soon as humanly possible. So, I did. I put together a T-shirt company called Anti-Establishment. It’s actually not around anymore. It was various types of t-shirts exceedingly well. Then, I started to realize that where the real money was with selling chain stores. As soon as I started to sell chain stores, I got [inaudible 0:06:44.1] product. I’ve owned also a few different sales right from my [inaudible 0:06:48.6] over the years including the sales right for the merchandise for Minecraft, World of Warcraft, Walking Dead, all the biggest gaming and geek properties in the world that you can think of. At one point or another, I owned some rights of most of them.
Matt: Wow! I know I wanted to be an entrepreneur from early days too. One of the first things I sort of gravitated to was t-shirts. I don’t know. It’s one of those things you see everybody is wearing. They are like “Oh! Dude, I got cool designs.” I never made it very far in the business but what it did take to do it? How did you get started and how did you kind of come up with something different and get it out there? From going with the idea to the reality, there are quite a few steps in there.
Andrea: Luckily for you and for your listeners these days, I wrote a book called How to Build a T-Shirt Empire. My business partner, Dan Caldwell who started TapouT which of course took hundreds and hundreds of millions of dollars a year in sales, he and I teach a course on how exactly how to launch some T-Shirt Company like for real, no jokes, start to finish, check lists, goes straight on the box and you either find out that we have a concept that’s really concept and you make a lot of money out it or you’ll find out that you need to alter your design or tweak your concept before you throw your whole life savings into it. so, the way that I started out, there’s was a lot less competition back then but I even still today start new t-shirt companies and I just do stuff that I know people are going to buy. So, I ran a bunch of test of mark-up adventure designs prior to even actually printing any visible t-shirts and throwing them out online and see what people respond to unless they actually click the ‘buy’ button. I don’t usually produce product until I have a sale.
Matt: Now, that’s definitely a smart strategy. I heard there were some people who were sort of doing something similar on Facebook. They find a cause they thought might generate some sales. They do some designs and put them out there. I forgot the name but they were using some supplier that if you hit a certain minimum they will produce the shirts. If you didn’t hit the minimum, you just tell everyone “Sorry. No deal.” But, that’s sort of similar model. You probably had a lot more sophisticated production you can tap into if you hit your whatever minimum to launch a product.
Andrea: Yes. That’s right but it is the same general formula. I actually just didn’t start it in Amazon store because Amazon does distribution and fulfillment [inaudible 0:09:18.0] directly through Amazon with t-shirts. I have a great company called threadmeup.com that we partner with. They have an extended line called Facil where they do all of their back-end order fulfillment. Tee spring is fantastic. Caught and Bureau if great. There is so many website to do this where you just don’t even have to touch distribution anymore. That is new. That does not exist when I’m coming through the ranks there. But really, everyone has ideas for t-shirts. Some of them are really very good. The whole deal is you just got to hustle. You just got to hustle. The t-shirts are bottomless market. Every single guy that I know own 50 t-shirts and if sees another one he likes, he’s going to buy it. So, there is really almost like a competition-less market because there’s so much demand for the product. It’s very low-barriered entry. Really honest to God, I know there’s a lot of people selling stuff right out there but the reason I started leaving that business because I was so tired. It’s being like “Come, get rich quick! Like I’m going to teach you how to be a gazillionaire.” I’m like “No! You’re effin’ not. You’re making all your money by selling products on the internet on how to make money.” So, I wanted to put out something and partner with celebrity entrepreneurs who made hundreds of millions of dollars in the vertical that we were teaching about. I have super detail-oriented actionable advice that you can actually go start a business with the information that you are getting. It’s like an MBA in learning to start a t-shirt company.
Matt: That’s awesome! Because I actually have an MBA and I guarantee they do not teach me real actionable items. I mean, I learned a lot but you couldn’t take anything from class and go out and make money with it. There was like 14 steps in between them never covered.
Andrea: Yeah. It was so funny and it was so surprising because I teach in business school 2 course across the country. I just taught at Harvard. I was teaching entrepreneurship and I was like cracking up because these kids are the best and the brightest. They are so smart and they are so quick and so clever but it’s not teaching them really how to go out and start their own business. MBA Schools are getting better at that but there is no really viable way to go learn how to be an entrepreneur which is exactly what mentormojo.com and lessons.biz, which are 2 of my e-learning platforms, aims to do. It actually just teach you how to be an entrepreneur like for real from people who are just not saying it or killing it and question it but really all they know is how to do marketing but [inaudible 0:11:46.4] actually have businesses that are making 8,9 or 10 figures.
Matt: Yeah. I definitely think at least from my experience, there is no other way to learn it than actually go out and give it a try. You fail. You fall in your face. That was bad. But, as long as you don’t spend your life savings on idea 1 and you’re willing to make changes and learn as you go and take advice from people who know what they are talking about as oppose to the people who are just selling you advice. You can really be successful if you keep at it for sure.
Andrea: Well, 100%, especially now. This is something that we teach in all of our courses. We teach people how to do a minimum viable product. There was no word in minimum viable product when I was starting out but it was just out of necessity. I just don’t have any money. But now, of course, there are brilliant books like Celine Startups by Eric Wis and any type of book about like exactly for real how to do very small test version of whatever it is that you are creating so that you can see whether or not it’s going to make money. I do that with all of my companies just to make sure they are going to go before I throw a ton of money into them.
Matt: Yeah. It doesn’t make sense these days to try and build the whole thing in secret and then pop-out to market fully ready to go only to find out “Uh! I didn’t guess right. That’s not going to work.” So, it doesn’t make a lot of sense. So, on the t-shirt idea let me ask you one more thing on that then we could move on to some of the other things that you’ve also done. But so, if it really comes down to “Okay. All I really want to do is to come up with a concept and the production and fulfillment. Everybody else can be done by somebody else – outsources.” Is there still room for totally unique ideas? I mean, there’s so many slogan t-shirts out there. Then, you sounds like already locked up the whole market for licensing. So, where do you kind of go? What’s left, I guess? What niches should people be looking at if they are looking for ideas to break into that?
Andrea: Well, you hit the nail on the head. Everybody always wants the new thing. You want to go after a really niched market. Licensing is super competitive. You don’t want to do licensing anyways until you’re doing – we didn’t even touch licensing until we were doing millions of dollars a year in sales of original t-shirts. You really have to understand your margins and your distributions, charge back, minimum that you are guaranteeing. I know a lot of people want to start out of the gate with licensing and they get a non-exclusive license and they just waste their money. Because if you are competing and you have [inaudible 0:14:23.4] licenses like Disney, you can just kiss that money goodbye because the people [inaudible 0:14:28.4] kind of secure the sales. So, what I would do, actually it’s exactly what I’m doing with yoga junkie, take a vertical that is emerging, that is very niche that you can reach into really deeply and fill the blanks in on what they are missing. It’s exactly what Dan did with TapouT. He got into martial arts when he was young, when he was small, and grew with the industry. It’s exactly what Jinx which is the company that I worked with some video games on jinx.com which is the largest distributor of the video games t-shirt and merchandise apparel in the world. But that didn’t mean anything in 1999. There are tons of things better emerging right now where people can get in on this trans at the bottom. You can build – there’s great startup drug which is fantastic company. It’s all these startups t-shirts. There’s way to print niche for the clothes that are really [cranks] and really relevant right now. You definitely want to do one directly to a niche that you are really passionate about because you will fill in the blanks there. If you have the coolest, newest thing, that is what people are looking for. That’s what the people really clamper.
Matt: Clever and niche, indeed. That makes a lot of sense.
Andrea: Yes. There is really 2 reasons why people’s t-shirt companies fail. It’s either they are not giving enough exposure. They are not giving enough eyeballs on their website. The other reason which is the far more common reason is that their designs sucks and so, I get all the time. people are sending me designs. We are very candid in our 6-week course. We’re like “This is just not good. Nobody is ever going to buy this.” So, What I recommend that people do is literally take the design in your mind side like whatever your design is that you locked up and you think that every single person in the world is going to buy and go into a store that fit your target audience and then say, “Honestly, is this better than what’s in that store?” because it has to be as good or better than what you are hanging next to a shelf. If it’s not, then, you need to go back to the drawing board and hire better designers.
Matt: Yeah. That makes a lot of sense. If they are not going to pick your merchandise in the store, then what chance do you have of making sales? Right? You’re done.
Andrea: Yeah. [inaudible 0:16:49.2] figure out in the first place. There are a lot people that would just pick a not very good looking font, not very good looking spacing, and color combinations. It’s just like really bad artwork. So, it does have to be something where you look at it and say “I would buy that. I would take $20 out of my wallet right now and buy that.”
Matt: Makes sense. For yoga junkie, is that basically an apparel vertical store that you’ve kind of said “Okay. Yoga is a place we can go and make an impact and do cool stuff in. so, we’re going to take apparel to that niche.” Is that what’s that about or is there more behind it? What’s the story?
Andrea: Yes. It’s actually going to mirror very similarly the route of TapouT took where there are a lot of active wear brands in yoga but there are not a lot of lifestyle brands. There is certainly not one lifestyle brand that has been very successful just as a lifestyle brand. Most of them are making almost all of their money selling active wear meaning selling that actual yoga pants, top and jacket like Lululemon, you’re going to wear it to the studio. Their missing the segmentation of like a t-shirt that you would wear at the whole foods when you go grocery shopping that would identify you’re a yogie and it’s a very good feeling or an accessory line. We’re coming out with a food line of Dallas Adams that you would purchase on your way out of the yoga studio. So, yoga junkie is next because you are starving and that [inaudible 0:18:08.7]. I’m starving when I left the yoga studio. I want a really good, healthy, and yummy snack. That has 2 options. You can get like nut clusters and peanut butter pretzels or trail mix. Each one of those has either naughty or nice.
Matt: Is this something that would then integrate into yoga studios? They can sell your items right there on the spot.
Andrea: That’s right. You are asking earlier where to go with t-shirts. The answer is you can create a brand. You can even do it unbranded line which is what people who are just selling trend individual shirts on the internet that they are doing because you’re never going to create a brand that garners brand loyalty like Hurley, Nike or TapouT or No Fear, any of these brands that people buy because of its brand. That’s where there’s really a lot of money. It takes a lot more effort but then you’re selling into actual physical stores because even though it’s so compelling to start an internet company, it’s easy. It’s cheap, etc. it’s still like 80% maybe 75% but I think 80% of physical merchandise like t-shirts are still purchased in the store because it’s still isn’t impulsy. If you want to make millions and millions of dollars, you have got to be in stores. You don’t have to. There are exceptions but you certainly well massively increase your sales once you do go into the stores.
Matt: You think that’s going to be true even say 5 years out where all these stores you keep hearing about closing like Abercrombie and Fitch and Macy’s and all these other big department stores and smaller niche stores that are cutting back. They are not opening in a gasoline station. They were closing locations. Do you think still overall getting into stores is really the key to big success?
Andrea: 100%! And I’ll tell you why, especially if you’re in this exact industry for t-shirts because you’re still for the most part catering to teenagers and trendsetters and make physically want to go visually see everything that’s there. Plus, they are kind of seeing the vibe of other people in the stores. Some of the stores that you can’t duplicate buying the exact items online like Macy’s or a store like that, there is sort of really nothing special to me about Macy’s. it’s not niche enough. Its way too generalized. I can go on Amazon and buy just about anything that’s on there [inaudible 0:20:45.7] but a store like Hot Topic is going nowhere because the cool kids still want to go into that really cool physical location and see what’s hot because if they don’t know something’s that’s on trend right at the moment, they can just step one foot into a Hot Topic store and immediately see what’s going on within the areas of their own interest.
Matt: Got it! So, the concept is basically start small, sell online, build a brand and when you hit a certain volume, that’s when you start talking to the buyers who control access to the niche stores that you want to get into as physical retailers.
Andrea: I actually will do both almost simultaneously. If I was starting brand new tomorrow, I would throw out some designs online probably using Tee Spring or Thread me up and I would actually get 30 shirts physically printed or 36 shirts like 12 each of 3 different designs and take them to a location where your target audience is. So, let’s say you’re selling to golfers. I would take it to a golf [inaudible] or to wanderlust if you’re selling to smaller yoga events. See if there’s t-shirt actually sell. See if people actually open it because everybody will tell you that they are going to buy something from you. I actually physically interviewed Damons John a couple months ago. He said “You got to see if your friends are going to open their wallet and pull out $20 and hand it to you. That’s when you got something good.” I was like “That was brilliant but it’s true.” You got to see if your friends are going to open their wallet and hand out $20 because that’s when you knew you have something really good because all of your friends will tell you it’s good.
Matt: Yeah. It’s easy to say “Yeah. I’d buy that. Not today thought.” Okay, wait a minute.
Andrea: Yeah. You can join our class and then we let people raise their hands during our live Q and A calls and have us evaluate their designs. You got to have some thick skin because we will tell you “Your logo is not very good. You need some work.” Because it’s not helping anyone to tell them that you think their idea is good or their designs are good when they could still easily make them so much better.
Matt: Well, exactly because then they go along thinking “Oh! I’ve got to figure it out. I’ll just start spending money and try to scale it up.” And then they are like “Why didn’t it work? Because everyone said it was good.” Well, they were lying.
Andrea: Yeah. We had a couple of very star contrast people in our class. We told 2 people that I’m thinking of the exact same thing that the designs are not very good and if they needed help. One guy did not change his design and his company didn’t increase their sales. The other guy completely re-did everything and start. it just took everything with punch a bit advice. We had one dream clothing and now has a beautiful line and great designs. So, you really can if you just – My whole universe anyway is about mentoring. That’s why I started mentormojo.com and lessons.biz. if you have somebody that has done exactly what you want to do, this is what I always said. I close my mouth. I listen to what they were saying and then I execute it on everything that they told me to do because that person already made millions of dollars doing exactly what I want to do. So, my best business advice is to find a great mentor in your vertical, whatever type of company you have, and listen to what they say.
Matt: Yeah. It’s so funny. The people go so far to pay literally thousands of dollars for coaching right? And then they ignore everything. what is the point? I don’t understand. Anyway, good luck.
Andrea: I know. I’ve been down that road. I don’t want to make it sound like I am a perfect score. I had amazing mentors but I always wanted to sound like I knew what I was doing and so I wouldn’t actually tell them a lot of my pain points. It’s kind of embarrassing that I didn’t understand a lot of that. So, it always was better when I would just check my ego at the door like I don’t know what I’m doing and I’m going to do what everyone tell me to do because I want a car like that and a house like that and to go on vacations like you do. I need to figure out how to make that happen.
Matt: Exactly. So, tell me a little bit more about Mentor Mojo. How does that work? What do you get? How do I start? all that kind of stuff.
Andrea: So, Mentor Mojo and lessons.biz are 2 different companies but they are both e-learning for the clothes platform. Mentor Mojo is generalized advice across multiple different vertical [inaudible 0:25:25.7]. if you want to know how to raise money, Jonathan Teal is the number one first investor in Instagram and Twitter and Snapchat and Kayak and Tinder, he is the most ridiculous venture capitalist, he will tell you exactly what you’re looking for when people are raising money. Of if you want to go and start a services company, Beck Bamberger from BAM Communications and PR Companies. No matter what vertical you are doing, if you are in food in beverage, we have Cary Chessick from restaurants.com. we have the founders of [inaudible 0:26:02.7] which is of course a multi-billion dollar company teaching you how to do tech companies. So, its generalized advice across many different verticals. That’s it. with lessons.biz, it’s kind of the opposite of that. It’s very specific, detail-oriented. If I sound a very specific vertical bunch of entrepreneurship, the first one of course is T-shirt. Dan and I teach that. The next one will be restaurants. After that, how to make a ton of money as a personal trainer. So, we’re just walling down the most common verticals of entrepreneurship that people in this country start businesses for because they have the passion for it but they maybe don’t know about a lot of business. I don’t know a thing about business when I started my t-shirt company. I just knew that I wanted to start a t-shirt company. I think that happens a lot – with restaurants, maybe somebody is a great chef. And then, in each of the verticals, we partner with celebrity entrepreneur who’s done hundreds of millions of dollars in sales in that vertical. We are targeting like Gordon Ramsey Or Bobby Flay for the restaurants. Jackie Warner, who is a friend of mine, or Jillian Michaels for the trainer. We are always partnering who really knows their stuff so that we have the best content possible.
Matt: Awesome! That makes a lot of sense. Again, the whole point is see and go and learn from somebody who has already done it, proven they understand it and can take you from zero to a hundred a lot faster than you’re going to get there on your own or by listening to the advice of Uncle Nate who had sort of related business but did okay.
Andrea: That’s right. I always have great advices from [inaudible 0:27:38.5] too. When I was starting out, we find somebody that was doing 5 to 10 times more sales that I was doing at that time because when I first was starting out, of course I would’ve loved it [inaudible 0:27:49.5] appropriate fit. I wouldn’t even have been able to utilize the type of knowledge that you would be giving me when I was 18 years old starting my first company. So, I look for someone in t-shirts that was making a million dollars a year in sales when I was making zero to $20,000. After I passed the million dollars in sales, I was looking for somebody that was making 5 million and then somebody that was making 25 million so that I could just scale into the next sort of issues that I would have for that next growth phase.
Matt: Yeah. It’s got to be not only a fit in the industry but in the size and everything else too in order to get the best advice. There’s lots of people who can give you sort of general advice. But for the best specific, do this then do this advice; you really want to find somebody that’s tied to the same path that you are trying to go down. Did you approach them and just kind of say “Hey, I’m Andrea. I’m hoping for some help.” Or did you have a relationship? How did that get started?
Andrea: I did. I approached them. I was really direct about it. I just said “Hey. I want to do exactly what you are doing. I had a bunch of questions. I’d love to buy you a coffee or take out to lunch.” And then, once I found really good personality fit, most entrepreneurs really want to help the up comers. They really do especially when I didn’t feel like there’s lot of competition in that particular space like t-shirt, I had people that had huge t-shirt brands that we’re helping me that I was starting out. I didn’t feel like there was a lot of competition in the space. They weren’t concerned about giving away some trade secrets. Dan actually when I first met, he was in mixed martial arts clothing, and I was in video games sales. So, there is no problem with sharing knowledge because people that play Minecraft and like UFC are going to buy both shirts. They are not going to buy just one and not the other. So, you usually can find somebody in your exact same vertical that just maybe doesn’t feel quite like direct competition. Like if you have a restaurant, you can get a mentor that’s like 3 counties over. There’s no competition. Somebody is not going to drive to Dana Point to eat and you’re going to miss that meal when you could’ve been having it in Carlsbad.
Matt: Right! Not likely you’re going to be taking dollars out of their pocket having your restaurant. Awesome! Well, this has all been super cool feedback and stories and advice and tips. I feel like we could probably go another hour or hour and a half but I will try to respect your time here. I appreciate you coming on. So, for people who are looking for more, I know you’ve hit quite a few of the sites already, but where’s the best place or the place that people should check out first to find you and check out some of the things that you talk about? Of course, I’ll put all the links in the show notes. But where would you like them to go first?
Andrea: Probably the andrealake.com and sign up on that mailing list. I’ll keep you posted on everything. if you are an entrepreneur, definitely sign up for Mentor Mojo and sign up to the mailing list of lessons.biz because we send a lot of really good content for free, a lot of good videos. A lot of really good information about various specific things that you could be doing in your business to increase your sales.
Matt: Awesome! Awesome advice. Well, thanks so much for taking the time. I really appreciate it. Have a great rest of your day!
Andrea: Hey! You too. Thanks for having me.