Matthew Bertulli is the Co-Founder and CEO of Demac Media.
Demac Media is a digital commerce agency that Matthew has built in the last nine years, and today, is now an eight-figure business with nearly 100 employees.
Matthew is also the Co-Founder of Pela Case, a six figure – soon to be seven figure – E-commerce brand. He’s also an angel investor in many industries including E-commerce, a tequila brand and even a nightclub.
To top it off, Matthew has also just released his first book called Anything, Anywhere.
In this episode we discuss his nine year journey building Demac to a hundred employees and eight figures. He reveals what the early days were like and what led him to drop out of college. He talks about the moment that he decided to quit his job and actually start the business in the first place.
If you’re looking for some candid advice, take a listen.
Key Points From This Episode:
- Find out how Matthew started a business with just two employees.
- Redefining what success and failure is to you.
- Why losing everything is highly improbable.
- Viva the side hustle!
- Leading 100 employees: Matthews work philosophy.
- E-commerce trends: Doing things at the right time.
- Why it is up to you to discover the type of entrepreneurship you wan to pursue.
- Entrepreneurship in today’s culture of instant gratification.
- Asking for help, networking and realizing that you don’t know it all.
- And much more!
Links Mentioned in Today’s Episode:
Matthew Bertulli on Twitter — https://twitter.com/mbertulli
Matthew on LinkedIn — https://www.linkedin.com/in/mbertulli/
Pela Case — https://pelacase.com/
Demac Media — https://www.demacmedia.com/
Net Suite — http://www.netsuite.com/portal/home.shtml
Anything Anywhere on Amazon — https://www.amazon.ca/Anything-Anywhere-Future-Digital-First-Roadmap/dp/1619616211
“MB: Then we found as we got bigger, so crossing 30, 40, 50 employees, you start to cross these boundaries too. Like it goes form like less family, more village-y type thing that we started to allow, encourage and introduce the idea of wherever you do your best work, we encourage that. If that means that you should he taking a day or two off a week and going away from home or from wherever else because you want to switch up. That’s cool, that was just born out of my own – I work that way.”
[0:00:30.3] ANNOUNCER: Welcome to The Fail on Podcast where we explore the hardships and obstacles today’s industry leaders faced on their journey to the top of their fields, through careful insight and thoughtful conversation. By embracing failure, we’ll show you how to build momentum without being consumed by the result.
Now please welcome your host, Rob Nunnery.
[0:00:56.7] RN: Hey there and welcome to the show that believes embracing failure and sharing your honest struggle is the only way to achieve your . In a world that only shares successes, we share the struggle by talking to honest and vulnerable entrepreneurs.
This is a platform for their stories and today’s story is of Matthew Bertulli. Matthew is the Founder of Demac media, a company he’s built the last nine years, which is now an eight figure business with close to a hundred employees.
Matthew’s also the cofounder of Palo Case, a six figure soon to be seven figure E-commerce brand, he’s also an angel investor in many industries including E-commerce brands, a tequila brand and even a nightclub.
He’s also just released his first book called Anything Anywhere. We’ll be discussing his nine year journey building Demac to a hundred employees and eight figures, what the early days were like and what led him to actually starting the business in the first place. And the latest company he cofounded Pela Case and what he aspires that business to be.
But first, if you’d like to stay up to date on all fail on podcast interviews and key takeaways from each guest, simply go to failon.com and sign up for our newsletter at the bottom of the page. That’s failon.com.
[0:02:03.7] RN: So your company’s a leading authority in digital commerce. Just for a little context, how’d you get into E-com and when was this?
[0:02:13.4] MB: Demac started eight years ago. I grew up retail though. For me to get into E-com was like breathing.
[0:02:20.3] RN: Natural progression.
[0:02:21.2] MB: Yeah, my family owned retail stores and furniture home décor, baby. I’m third generation so like 55 years up in northern Ontario, those stores closed in the early 2000’s. I went to school and dropped out for computer science. I’m a software engineer by trade and then I was working for a company called Net Suite in 2007, 2008.
[0:02:41.4] RN: Yeah, I know Net Suite.
[0:02:43.4] MB: We IPO’d and I left to start this but I’ve been in some form of E-com since the late 90’s. This was just my own thing.
[0:02:43.4] RN: What exactly do you guys do here? How do you make money?
[0:02:56.6] MB: Yeah, I mean, the five word intro thing is we help you – play your intro. We help merchants build and grow E-commerce businesses so we are – the expanded version of that is, I work with a lot of manufacturers, a lot of brick and mortar retailers to either go online or build a bigger com of business.
A lot of the times it’s just somebody coming to us and saying “Hey, I want to do X million dollars now, I want to re-platform, I want new design, we need a whole bunch of shit.” Version optimization.
[0:03:25.9] RN: Traditional offline businesses though for the most part?
[0:03:27.8] MB: We get a good chunk of them that are offline, not a lot anymore that are like – that have no.
[0:03:33.0] RN: Presence at all.
[0:03:34.3] MB: Yeah. It used to be though. Like eight years ago, especially in Canada. When I started here, the idea of starting, like being in E-com, there was no E-com, it was a joke.
[0:03:45.0] RN: Now you have Shot the Fire.
[0:03:46.0] MB: I know, it’s like one of the largest E-com platforms ever and it’s like two kilometers down the road. Yeah, eight years ago, I remember eight years ago, actually talking to Harley and Toby and those guys too but they were getting going as well.
It was a little stupid. We were way early too, probably the first three years of this business, way too early.
[0:04:04.0] RN: In what sense?
[0:04:05.5] MB: Market wasn’t mature enough, you know, retailers here had no idea what this really was, they were unsure. All they’d heard about from the States was everybody was losing money.
Nobody’s actually turning a profit online, it’s still a problem, a lot of news about a lot of retailers failing or even E-com only brands that are going under, like Nasty Gal. It does not help us out that much when these businesses fail.
[0:04:27.5] RN: When you say you’re early like that, the market wasn’t mature enough, how are you acquiring clients that early on?
[0:04:33.1] MB: Really early on, a lot of word of mouth. Because I came from the retail world, I spoke the language really well so I got a handful of intros out of the gate. So when I left Net Suite, I already had a bunch of companies that I was working with at Net Suite that I had been connected to. They made some intros, I went out and it was like a one man show.
[0:04:50.9] RN: Sure.
[0:04:52.3] MB: No business plan, no nothing. I’m going to go do something in this space. I’m just going to go talk to a bunch of merchants. About a year and a bit in, I connected with a company called Magento at the time, they were just getting going as well, The Valet. Turned out they were a rocket ship. We did a ton of business with them and I was the only guy in Canada that could do it, so that helped.
Built a couple of big partnerships really early on about three or four years ago, with Shopify. I’m a big fan of channel partners and I got that from Net Suite because that’s how Net Suite built itself – half of its business came from partners.
That was it, there was not a lot of sophistication in the first three, four years, a lot of it was word of mouth, not at all repeatable, not at all scalable. Scary as hell and not know we’re like you’re next, yeah, your next customer’s coming from.
[0:05:41.1] RN: On that note, when you started Demac, was it just you? Did you bring on employees right out of the gate? Did you have capital?
[0:05:49.4] MB: No, just me, my own capital.
[0:05:53.1] RN: How much did you have to put in before you saw a dollar back?
[0:05:55.4] MB: I was paid from like – we were cashflow positive from day one.
[0:05:56.6] RN: Got it.
[0:05:57.8] MB: Mainly because I can code.
[0:06:00.4] RN: You had no overhead from day one.
[0:06:00.9] MB: No, I’m the only overhead. Like can I pay mortgage? Yeah, when we IPO’d Net Suite, I’d left, got a couple of customers to pay the bills right out of the gate and then my wife joined to designer about six, seven months in. And then my co-founder, our CTO, he joined about a year and a half and that was like the first three people.
[0:06:24.5] RN: What were you doing in revenue roughly at this point?
[0:06:27.7] MB: I think, so year one, which was just my wife and I think it was $80,000.
[0:06:34.1] RN: Was she getting paid either?
[0:06:37.8] MB: No. That was like, pay our bills, pay the mortgage. I think year two, we jumped to three or 400 and then –
[0:06:45.2] RN: That’s what largely bring on.
[0:06:46.7] MB: Yeah, then we started hiring. By the end of year two, I think we were five or six people and it’s sort of like – if you look back over the last eight years, we’ve gone pretty consistently. Somewhere between 30 to 35% up to about 55% year over year growth, we kind of try and keep it in that band.
[0:07:09.4] RN: Not grow too fast.
[0:07:10.3] MB: Yeah, we have no outside investors, everything’s been bootstrapped, this is all our own cash.
[0:07:14.9] RN: Was this the first business you started?
[0:07:16.6] MB: It was the first real one.
[0:07:17.7] RN: Yeah. What was the biggest – I mean, did you have – after leaving Net Suite, did you have any kind of sense of fear starting it that would –
[0:07:25.4] MB: Dude, yeah. Especially coming like a family of entrepreneurs, we were in retail a long time.
[0:07:32.5] RN: Retail’s a tough racket.
[0:07:33.4] MB: Shit yeah, it’s not good. Now, you have to really know what you’re doing, especially if you’re just bricks. That sucks. Today it sucks.
[0:07:41.2] RN: Yeah. Is that impossible today?
[0:07:43.4] MB: Totally. I know a few.
[0:07:46.2] RN: Yeah, it’s crazy.
[0:07:47.5] MB: They’re just very good at uprooting stores. In Canada stores still work quite well. Guys like Amazon, they don’t have the penetration that they do in the States.
[0:07:56.0] RN: Yeah.
[0:07:56.5] MB: They’re getting there but we’re behind.
[0:07:59.2] RN: Got it.
[0:08:00.0] MB: Yeah, I think the idea of like fear and uncertainty, I don’t think it goes away either, I don’t – I think there’s this –
[0:08:07.0] RN: You still feel it?
[0:08:07.9] MB: Shit yeah. Anybody saying I was like totally lying, you’re full of shit man. I see sort of success and failure as this giant spectrum and it’s highly personal. You land somewhere on it and you’re constantly refining what your definition of both is right?
A failure to me today would have been like almost catastrophic in the early days. I may feel a hell of a lot more now than I did early on but I’m also probably taking more swings. I think that you know, looking back, we definitely had a whole bunch of small ones because we were only ever taking small risks.
[0:08:43.0] RN: They don’t want to bet the house right?
[0:08:45.0] MB: Yeah, literally. When you’re starting, literally about that.
[0:08:48.5] RN: House on the line.
[0:08:50.0] MB: I think now, yeah, it’s strange. It never goes away, if you’re not – I’m an avid mountain biker. The joke in mountain biking is if you’re not falling, you’re not trying hard enough right? You’re going to leave the bush with some kind of scratch or dent on you. I look at it no differently, I think that – if we’re not failing, we’re not trying hard enough to evolve. Then, failure is super subjective. It’s almost like –
Failure and success, those two terms are – I hate it when someone’s like, well this guy’s really successful, I’m like there’s not a definition to that. Exactly.
[0:09:29.8] RN: By his? Hers? Same with failure. I was talking to Dev downstairs. You know, before I even had him on the show, he was like dude, I’ve got like a really contrarian view on failure because he doesn’t think failure is a prerequisite for success.
[0:09:42.1] MB: No it’s not. Exactly. This is my first real company by most measures. It is successful, we’re still here eight years later.
[0:09:50.3] RN: Exactly. And like we just talked about, it’s the definition right? What’s failure? Does it have to be a catastrophe? Where you don’t have this business, you lose this business? No.
[0:10:02.1] MB: If something doesn’t work to the expectation that you had.
[0:10:04.5] RN: Exactly.
[0:10:05.3] MB: Whether your expectation was wrong or not is the right thing.
[0:10:07.6] RN: And whether you learn from that right?
[0:10:08.8] MB: Yeah. I’m with Dev. I think he and I have talked about this a few times. I don’t go into anything trying to fail. I think the idea that failure is a good thing is a little backwards. It’s like no, it happens.
But you should never be trying to fail quickly, that’s not –
[0:10:26.1] RN: Like the whole startup thing which is paralyzed by it right?
[0:10:30.1] MB: No, yeah, I mean fear of failure is ridiculous. Especially for young people with good circumstances, what are you afraid of?
[0:10:38.9] RN: What’s the worst that can happen?
[0:10:40.1] MB: You’ve got to go get a job man. Even if it’s a shitty job, you’re probably – you can pay your bills, you’re going to have shelter, you’re going to have food. I think when you look at – if your audience is you know, your typical north American entrepreneur, it’s probably somebody who’s baseline shitty scenario is not bad.
[0:11:00.1] RN: Yeah, exactly.
[0:11:01.8] MB: I knew that, I left a company that we went public. Okay, I have fear of failure. I quit Net Suite, started the company, bought a house and got married in four months. That was my summer. To the point that my father in law –at the wedding in his father of the bride speech – was like, you know, it’s something along the lines of, “Well he just quit his job so that’s interesting.”
Because I just knew, my worst case scenario is I got to go get another job.
[0:11:33.7] RN: Did you have shares Net Suite? Were you able to walk away with some cash?
[0:11:36.6] MB: Yeah, some cash, yeah. Yeah, I wish I would have kept them too because it just got bought by Oracle again. I think that I’ve always had this idea that the idea of – the thought of true failure, lose everything, ruin your life is so improbable.
[0:11:56.4] RN: It’s so improbable.
[0:11:58.2] MB: For most people, it’s improbable. I’ve never made a bet in this business or in any investment I’ve made or anything where it wasn’t somewhat calculated and it wasn’t backed up by some kind of – those stories of like the person who risked everything, bet their whole life.
That’s fucking stupid man. You shouldn’t do that.
[0:12:22.2] RN: Yeah, and I was talking to Saul and he was like, that’s just purely irresponsible.
[0:12:26.1] MB: Genuinely irresponsible.
[0:12:27.7] RN: Because we were talking about whether it’s right for somebody that’s an employee right? They have a nine to five, whether it’s better for them to burn the ships and just say screw it, I’m going to go start something and leave this job or if I should start something on the side.
[0:12:41.2] MB: Or you do a side hustle thing.
[0:12:42.4] RN: Exactly.
[0:12:44.0] MB: I think there’s a lot of – in the side hustle is the thing now.
[0:12:48.7] RN: It’s Gary V right?
[0:12:49.4] MB: Yeah, I’m pretty sure that half my staff here has got some kind of side hustle and I hope they do.
[0:12:54.0] RN: Okay, so you promote that, or not promote it but you encourage it?
[0:12:57.8] MB: Yeah. A friend of mine messaged me on Facebook two nights ago. Do you know Alex Icon?
[0:13:03.5] RN: Yeah.
[0:13:05.8] MB: He messaged me and he noticed that one of the people who has worked for me is no longer here. He’s like, what – that guy was with you for like three years, I’m like, he had an opportunity to go start something on his own, I can’t discourage that.
[0:13:16.7] RN: It’s awesome. That’s what you believe in right?
[0:13:18.4] MB: Go knock yourself out man. My philosophy with people here has always been, I liked sort of McKenzie and Boston Consulting Group and those guys did 20, 30 years ago. Which was, they want to create this massive alumni network and people would come and go, they do a tour duty at McKenzie and then they would go out in the world and come back in 10 years.
I kind of look at this place similarly, I would love it if there’s people that started here or came in here, left to go try something, did something, came back you know, learn something new, went out. I’m cool with that. I don’t expect people to stay in one place forever.
[0:13:56.2] RN: You just don’t expect them to do the side hustle during work hours?
[0:14:00.3] MB: Yeah, you know what? Even if you did and you still got your job done here, I don’t care.
[0:14:05.4] RN: Yeah, it’s performance right?
[0:14:06.0] MB: Yeah.
[0:14:06.5] RN: If you get the job done, who cares.
[0:14:08.2] MB: Yeah, the idea of like an hour of work is what’s the goal, is stupid. It’s some kind of outcome.
[0:14:16.2] RN: Do you operate your company with that in mind? Can you – let’s say you have an employee that’s 100% crushing their job, performance is a 10/10, 11/10. Do you care if they dictate what they do? If they want to stay home for the week because they’re crushing what they’re doing?
[0:14:33.9] MB: No.
[0:14:33.7] RN: You don’t care?
[0:14:34.6] MB: Yeah, I mean, we have almost a hundred employees, you walk through this place right now, I’d be surprised if there’s 50 here.
[0:14:40.4] RN: How do you balance that with like culture right? There seems to be a balance where if you do have an empty office here, have half the office there, maybe it’s not – the bond is not as tight as it could be?
[0:14:51.5] MB: Yeah, we didn’t start out that way. Maybe we were lazy or we were just – we depended very heavily on strong culture from day one. It’s hard to define it but it was – we’ve always had this very familiar type thing going on here. A lot of our staff, especially the ones that have been here for six, seven years, eight years, they go to each other’s weddings. Like they are friends.
[0:15:13.5] RN: Family almost.
[0:15:13.9] MB: Yeah. That was like the bedrock of this place. Then we found as we got bigger, you know, crossing 30, 40, 50 employees, you start to cross these boundaries too. Like it goes from like less family, to more village-y type thing. That we started to allow, encourage and introduce the idea of like wherever you do your best work, we encourage that. If that means that you should be taking a day or two off a week and going away from home or from wherever else because you want to switch up.
That’s cool. That was just born out of my own – I work that way, I don’t do well if I’m in the same place for five days.
[0:15:47.9] RN: It’s the same way.
[0:15:48.0] MB: I need to – I work from home for two days. I go to like a client’s office, I’ll work out of there. Anywhere else that gets me an environment shift is good for my creative juice so I do it. It would be wrong of me to look, I work this way, why shouldn’t I encourage other people?
The culture impact is interesting in that there’s usually a lot of people here because most people like to come into the office. It’s usually like Monday’s and Fridays, there’s less people you know? It’s balancing at weekends, especially in a summer, crazy cottage country.
[0:16:19.3] RN: Yeah, what is that? I have a lot of friends up here that –
[0:16:21.5] MB: It’s like the Hampton’s for New York.
[0:16:23.4] RN: Okay, got it.
[0:16:24.0] MB: It’s like our Hampton’s. Same idea. It’s like a summer house here. I do think that you have to try and balance or blend people’s lives with personal – and I don’t believe in balance, I just think that there’s some kind of blend.
[0:16:37.8] RN: Integrated living.
[0:16:39.4] MB: Yeah, you know, some days there’s very few people here, other days, there’s tons of people here. We do a lot of stuff, like organize things, monthly events, socials, that kind of thing, that get people together. Just to continue to build those bonds.
[0:16:55.5] RN: You’ve taken it back then from just you, your wife, starting out to 100 employees. That’s a really, from a lot of people I’ve talked to, going from yourself to 10 employees, not crazy. 10 to 20, a little bit of a different skillset. But to a hundred, how have you had to have grown to be able to run a company that size?
[0:17:20.0] MB: I probably still haven’t.
[0:17:21.6] RN: Yeah sure.
[0:17:23.1] MB: I probably still missing a lot, a lot of pieces. There’s so many places to go with that question.
[0:17:27.9] RN: I guess, what’s been the toughest challenge in terms of –
[0:17:31.4] MB: Boundaries. Especially, so my wife, we retired her out of the business three years ago. We have an 18 month old daughter now so the timing is pretty bang on. Because we worked together for a long time, not knowing, there wasn’t a whole lot of boundaries between work and life because we were both in it and that was our business.
Now that she’s out of it it’s just trying to figure out, I shouldn’t – I don’t bring things home anymore right? Or, even if I’m working from home, there’s got to be some boundaries, especially with the kid now. I think –
[0:18:01.8] RN: What does that mean? You’re not talking to her about what’s going on in the business because you don’t want to stress her out?
[0:18:06.2] MB: Yeah. Now, she’s got a very different function in that she’s the primary caregiver for our child. I’m the primary caregiver for the business. That’s part of it, I think the other big one for me was just learning to let go of things.
That’s still a work in progress but I had a part of EO and one of my floor mates a few months ago, I think it was a few months ago. Said something along the lines of like, “When somebody does something, 80% of what you would have done but you didn’t have to do it, call that 100% because you didn’t have to do it.”
I think that as you scale and especially in team size right? There’s like, you know, I’m a really bad manager so I knew that early on. I’ve got to hire managers because that’s where I’m going to fall down. I’m a good leader, I’ll stay there.
The tactical level stuff, I had a lot of advisers kind of telling me what to expect but the personal stuff around just wanting things done a certain way or that kind of shit. I think that trips everybody up initially. Especially as you start, now it’s second nature. I say that but then every now and again I see something and I’m like, that is not at all what I would have done. It drives you nuts.
But I have to do it so that was – take the win. Or if it’s just wrong.
[0:19:26.0] RN: Have you tried to grow that skillset of being a better manager? Or have you just said fuck it, I’m going to focus on what I’m good at?
[0:19:33.1] MB: Yeah, I’m just terrible at it, yeah. Like my organizational skills is damn near zero.
[0:19:37.7] RN: I’m right there with you.
[0:19:40.1] MB: Yeah, I’m a much better leader so I have a good management team that we invested in and then built out and continue to do so. I’m grateful for that because that’s actually like, it’s also one of those things that I think that if I was doing it, my likelihood of screwing up will be so much higher. Just because it’s not my super power, not at all.
[0:20:02.7] RN: What is your super power?
[0:20:04.5] MB: I’m pretty good at seeing around the corner.
[0:20:06.7] RN: Like trends?
[0:20:07.8] MB: Yeah. Trends and like, especially in this industry, I spend a lot of time on it. So steering the ship, this ship in particular and then we’re pretty embedded in a bunch of retailers and E-com businesses. Just making sure that what we’re focusing on is the right thing at the right time.
[0:20:23.8] RN: Do you have an example of like, something that you kind of sense coming and how you were able to maybe guide the ship a little bit that way?
[0:20:32.4] MB: Yeah, a bunch of stuff. What I mean by that, what I’m really good at is knowing when not to do something. I’m not a big trend follower or jumper.
[0:20:43.6] RN: You don’t follow those constantly?
[0:20:45.2] MB: God no. Especially, like look at Facebook and commerce, they’re on their sixth iteration of it. I think we’re, just in the last 12 months, that we’ve really been getting into it. Because the four or five iterations before that, they threw away. Whereas a lot of my competitors were like it’s funny watching them spin their wheels on it. It’s too early guys.
[0:21:05.8] RN: That’s interesting because I think it’s contrary to like what for Gary Vanerchuk, he’s all about being on the test everything early.
[0:21:12.8] MB: On the latest thing.
[0:21:14.0] RN: Whatever the platform is, he wants to be like the early adaptor.
[0:21:17.6] MB: Yeah, that’s good for him personally.
[0:21:20.8] RN: Right, for his personal brand.
[0:21:22.4] MB: I think it would be difficult to push that message for say like a mid-market retailer or a mid-market brand. Not your big CPG guy does flush 50 million down the toilet. They don’t’ give a shit. They don’t know where half that money goes anyway.
But for those clients that every dollar matters.
[0:21:37.5] RN: Yeah, owner operator, where their business isn’t about a big number, it’s about bottom line, it’s a different game right? The owner operator needs to really be careful about where they deploy resources, time and money.
[0:21:50.7] MB: You know, in E-commerce in the last sort of six, seven years, it’s really started to evolve. Especially coming out of the financial crisis, there was a whole bunch of new business models, flash sale, private sale, your Groupon clones, there’s a bajillion of them. All of those, we stayed away from all those models, right?
[0:22:08.1] RN: Largely because I’d come from this world and I knew, okay, those business models exist right now because of a giant over supply of product because of the financial crash. Once that over supply is gone, that business model is done because no manufacturer wants to see their shit sold for 90% off right?
That’ snot the business they’re in. It happened right? Your fab.com’s, all of those private sale guys, they all crashed once the supply chain died. There was just no more excess inventories so we tend to avoid it a bunch of chase your tail stuff in this industry and we stick to – I’m a big fan of doing things at the right time. I even, you know, there’s going to be a big push you’re coming soon like virtual and augmented reality.
You’re going to see some – there’s going to be news about you know, the VR tremor, somebody building a virtual reality store and I’m going to go and then you know, you got a bunch of people who are going to read that and be like “Shit, we got to build a VR store.” Nope, not for another freaking three or four years.
[0:23:11.0] RN: Your strategy is to like, let them do that for three years, get the kinks out and then once it’s a mature product, kind of look at it?
[0:23:18.9] MB: Yeah. Because I largely work with mid-size owner operated companies. I do have a couple, like we have some guys that are much bigger brands that love to try out the latest stuff. Good for them. If you’re going to give somebody advice, it’s not that you know? There’s a bunch of low hanging fruit that you can do now that is going to increase your probability of success in the short term.
Which is going to let you get to the long term. Whereas, for most companies, to chase that stuff, you’re dooming yourself from the start.
[0:23:48.8] RN: Totally.
[0:23:51.1] MB: I’m an engineer man, everything for me is probabilities. Highest probability of a good outcome, do it.
[0:23:55.9] RN: Calculated risk.
[0:23:56.3] MB: Everything, it gets almost annoying. I am not a big bold entrepreneur like I –
[0:24:05.6] RN: Could you have ever taken like VC?
[0:24:07.5] MB: No. I am not saying that I won’t ever in the future but historically, no. Because I know the odds like I have looked at all the data and all the math and I look at them I am just going to buy a lottery ticket. I’ll buy one lottery ticket every week for 10 years and my outcome is probably, like the probability of me winning some money is better. I actually think there is a big VC who did do – I did a long blog, I wish I could remember what it was.
But it’s like your odds of building a billion dollar business are this – and I’ve never had the idea or the thing that I thought that could be a billion dollar business.
[0:24:47.0] RN: I don’t think anybody actually does right? They sit around and trying to think at it and don’t get started because of that.
[0:24:52.1] MB: I think some people have ideas that they set out. They know it’s big, it’s bold like the big social impact. I think Zuckerberg early on probably had a pretty good idea that he wants to connect the world. That’s a big ass idea, right? I never had that, so for me business was about other things like freedom and control and longer term planning, stuff like that. I knew that I was likely never going to build a very giant company.
[0:25:18.6] RN: Right on the note of freedom like time freedom you mean? I’m guessing or financial, both?
[0:25:23.8] MB: Both, all kinds.
[0:25:24.8] RN: So what I always run into so you have a decent size company now. How do you – it’s not a lifestyle business per say. I wouldn’t call it that.
[0:25:35.7] MB: VC definitely would though. On a VC test this is totally a lifestyle business to a venture capitalist, yeah.
[0:25:41.5] RN: That’s a great point but how do you balance that timeframe? Or do you feel like you actually do have time freedom or do you feel like you’re tied here?
[0:25:49.3] MB: No, I think I have put a lot of time in the last two years, my own time and money actually, in building out better leadership and better management of the company so that I wasn’t here. I am in the office two days a week but it’s not that I am working the rest of the day. But yeah, come summer time I am on my bike probably just as much I am working and it’s designed that way. It wasn’t always that way, like the first five years was a lot of hustle.
It was totally way more work than anything else. I don’t regret that. I always knew that I’m like, “Okay you have to put your time in”, right? My grandfather told me that, you’ve got to put your time in.
[0:26:29.0] RN: Everybody thinks you can do it in a year, in two years and you’re there.
[0:26:32.7] MB: It’s because there is a lot of bullshit in media. It’s like, “learn how this guy built a $10 million business in two years.” I’m like, “Fuck off man, that’s not the message that you should be teaching new entrepreneurs.” It’s patience and grit and resiliency and these are characteristics that I think when you look at the 10 year overnight success is a really big one. If you look at all the data, there was a startup data study done a couple of years ago.
Which looked like the average – like the demographic of entrepreneurs and how many of them the average successful entrepreneur have built a business over a certain size was some like 45 years old, right? It’s not a –
[0:27:11.3] RN: Well all those characteristics you just named patience, grit, etcetera. I don’t feel like that’s the younger generation now right? Because they’re all instant gratification.
[0:27:20.4] MB: But I don’t blame them because that’s what you hear, you know? If you look at what sells in the media, if you are going to read Tech Crunch or Mashable or one of these guys and you’re in the Valley, this is the thing. It’s like move as fast as possible, raise a bunch of money. I think the idea of slow is starting to come back. There are a lot of good companies out there that are starting to push the message of like you can build Evergreen businesses.
You don’t need to try and get out as quickly as possible. That’s probably not the best goal actually. To build a company like to go into it knowing where the exit is. If you build a great business, there will always be an exit. We set out to build this company. I don’t think we are going to sell this but if we do a great – if we build a great business there will be opportunities to sell it if we want to. Or there is other exits like you just get yourself a board spot and have a management team that runs it and you benefit from that.
[0:28:16.8] RN: What role should they go with Demac?
[0:28:18.7] MB: I saw the same thing I saw. When I started this company, I landed at Net Suite and then we were less than 200 employees. I think they are 5,000 now but I’dd come from a company that was 30. I’m like, “I just want to build a business that I just want to go to work at” and that was always my personal thing with this place. I still like coming in here, I love it. Yeah, for me it’s some amount of impact. So I like helping retailers because I watched my family struggle.
So I love that part of it. The space is really interesting to me. My team is great. So there is this great connection there. It’s a bunch of things. I don’t have this one, “I am doing this for blah.” For me, it’s this mixed bag of stuff that I enjoy most days. There are days where I throw something off the top of the building, maybe myself. But those are days. I think that the ups and downs – I just expect it.
[0:29:18.1] RN: I was going to ask, so nothing is rainbows and butterflies all the time, right? Entrepreneurship is probably harder than anything else. You can go get a job and have security and not worry about it at all. You could worry about losing your job but if you are doing a good job you don’t have to worry about it – whereas in entrepreneurship it’s up to you.
[0:29:37.9] MB: It’s lonely as hell which is why I like things like Mastermind Talks, they’re so awesome because you end up there’s this thing that you have in common with other people. It’s not a lot of them and especially one of the things and the reason I joined EO last year was I joined EO and I joined EO Quantum Leap to try to find other guys or girls that were building companies that were bigger, that wasn’t like a five man operation. Because I had different problems that I did when I was 10 people.
Like HR and shit and legal and stuff that’s constantly there now because there’s just more of it right? So seeking out your peers it was and is still a big part of this.
[0:30:20.6] RN: When you are starting out did you have that network of people you can lean on and get advice from?
[0:30:27.0] MB: Yeah, much larger now obviously but I definitely did. Totally an unfair advantage.
[0:30:33.5] RN: Who helps you get started? Who did you go to if you have a question?
[0:30:38.1] MB: Yeah, the first thing that pops in mind so there is a guy named Bernie Lee who actually recently has sold his last company. He is using his solar space play. When he was starting this company, he was actually at Novia Capital, which is a venture capitalist in Montreal. He was a friend of my co-founder’s like childhood friend. So we were building this place and early on we would just tap him for everything like, “What do you think of is?” because he was in this position where he is evaluating 100 companies a week.
The volume of deals at that time was so big that his perspective was wider than ours and you wanted wide perspective until we had our own. Then in Toronto we were coming up right around the same time as a whole bunch of other companies. So I joined early on I was one of the first 12 people to join this thing called Lean Coffee Toronto. It’s like 2,000 members now and it was just other business owners that we would meet once a week on Tuesday mornings at somebody’s office and somebody would bring coffee and we were all talking about The Lean Startup, that book at that time.
[0:31:41.7] RN: That was big at the time.
[0:31:43.4] MB: Yeah. So what ended up happening that was there that was this group of people that were all building companies in around the same size, similar industries, everything was digital or tech all in a local geography. That we wound up helping each other quite a bit. So every now and then we still have an alumni dinner too, which is kind of fun.
[0:32:04.6] RN: So you had to seek that out and –
[0:32:06.3] MB: Oh yeah but I think that was – I can’t remember who told me that but you just have to know that you don’t know everything. Not even close right? Not even anywhere near – and when you are a young guy like I was in my late 20’s, 28, 29 I don’t know somewhere in there.
[0:32:27.3] RN: But you had a fair amount of business experience at that time?
[0:32:29.8] MB: Yeah, I was working. I am a grade A university dropout, so I had three months in and I was like, “Screw this.” I took a job it was the dot.com boom but I’ve been working since I was 16. I got a job at an engineering company when I was 16 years old. It was in high school. So I have always been working in a professional capacity but the entrepreneur thing was fairly new. I guess I have always just liked to ask for help because I would rather learn from somebody else’s mistakes, than do it on own.
[0:33:02.9] RN: It’s hard for a lot of people to ask for help.
[0:33:05.5] MB: For sure. You don’t want to inconvenience other folks and everybody is busy these days.
[0:33:10.4] RN: I think it’s two ends of the spectrum. Some people will send template emails out to a 100 people to try to get a mentor, you know what I mean? And some people would just refuse and try to figure out on their own.
[0:33:20.9] MB: Yeah.
[0:33:22.0] RN: For somebody that is not necessarily surrounded by people with an entrepreneurship background or business owners, what would you recommend for somebody to try to reach out and get some guidance? If somebody is going to come to you, what would actually make you pay attention and not just ignore the email?
[0:33:40.8] MB: You know what’s amazing? It’s more than an email. I’m pretty sure my assistant deletes all of that because I don’t ever see them but when somebody reaches out either they phone in or they’ll hit me on someone of the social networks or something. I’ll typically look and respond but I think that you will be amazed at how a few people probably don’t even reach out. That still and I would say I know a lot of entrepreneurs now and it’s amazing how many people are like, “Yeah nobody ever”.
And in the public profiles, right? They might reach out and ask for a tweet or some kind of shout out or something. But nothing, no questions of substance. It’s some kind of help around promotion of some shit or like they want access to one of my customers is probably the biggest one I can get.
[0:34:29.0] RN: Yeah, I could imagine.
[0:34:30.0] MB: I think there’s never been a better time to be in an entrepreneur because the amount of resources available now is amazing.
[0:34:38.1] RN: Versus 30 years ago, yeah.
[0:34:39.9] MB: Yeah even five years or ten years ago. I think to comment earlier, somebody like Gary V, I don’t agree with everything that he says. I don’t think everybody does but what I do like is that he’s a motivating force for a lot of people. I think it is up to the person to seek out the kind of entrepreneur that you want to be and knowing that there isn’t one flavor.
[0:35:04.0] RN: It’s knowing who you are, right? It’s taking the time.
[0:35:06.5] MB: Which is harder work. That is probably the hardest work.
[0:35:09.7] RN: Always a work in progress.
[0:35:10.8] MB: But yeah, I think don’t buy into the hype is the thing that I’ve tried to deal with. I just tried to avoid the hype.
[0:35:18.3] RN: Yep, take the message but decode it how you want to right? So on this note of people reaching out. If somebody did reach out to you and you could tell there’s something to them. They had potential and they had a burning desire to create something for themselves and start a business like you did with Demac eight years ago and you can only give them – you have five minutes with them. You could only give them one directive, one action item as a step one to go do, what would you tell them?
[0:35:46.8] MB: So they haven’t started yet?
[0:35:48.3] RN: They haven’t, they don’t know what business to start, they have no idea but they –
[0:35:51.6] MB: Alright, first thing. Make sure you are going to sell something that somebody wants.
[0:35:55.5] RN: True. Simple as that, right?
[0:35:57.2] MB: Yeah, God I don’t create some product that –
[0:36:00.5] RN: You don’t know if it will sell?
[0:36:01.7] MB: Yeah, that’s – it happens too often. I think Dan Moore tells something like this the other day. I was watching a video from him. It was one of the points he made and I feel like it’s one of those, “No shit Sherlock.” But we’ve done some angel investing over the years and it’s amazing at how many pitches I have seen where I’m like, “Are you sure that’s actually a problem that somebody is going to pay for that?” You know?
[0:36:27.0] RN: People trying to solve problems that don’t exist.
[0:36:28.5] MB: Yeah, I think to start there. Everything else after that is a lot easier.
[0:36:33.6] RN: So how can you find out if it’s something that people actually need or will buy?
[0:36:36.9] MB: Yeah, I think there is a number of ways depending on what you are trying to build. With software, there is the whole product market fit thing like customer development. Talk to your potential customers. That’s number one so go talk to people. That was the thing that attracted me to the lean startup model really early on, was that simple thing like how novel the concept –
[0:36:56.8] RN: So simple that nobody did it right?
[0:36:59.0] MB: Right and then codify it, there is a system built around it. So that’s my number one thing unless you’re one of those people that has this big gigantic vision and you are trying to solve world hunger or some shit, that’s a different thing –
[0:37:14.0] RN: Yeah, that’s a different barrier.
[0:37:15.6] MB: Yeah, that is a totally different thing. Go for it man, somebody has to but hey, I am not just that one.
[0:37:20.9] RN: Yeah and there’s nothing anybody could tell you that could help you. You just have to go do that. This might be a tough question, who’s had the most profound impact on your life if you had to name one person.
[0:37:36.2] MB: Probably my wife. She did not come from a family of entrepreneurs. She came from a family of like everybody has a really nice job. I think she provided a lot of balance. Personality balance and thinking. I am a fairly, ambitious, positive, like everything is rosy person and she is very good at keeping me grounded and keeping me like, “Have you thought of it all the way through?” She asks the questions that I was not asking myself and she always does and she always did.
And then introducing different values to me, like taking time to actually stop and appreciate something that came from her.
[0:38:19.1] RN: Being present?
[0:38:19.8] MB: Yeah being present and being grateful, a bunch of things that I think I have gotten from her that I probably should give her more credit for. But yeah, I think that has made me a much better entrepreneur than anything tactical or anything that is specific to business.
[0:38:36.8] RN: Got you, so your self-awareness to –
[0:38:40.7] MB: Yeah, the self-awareness thing, totally her and by far the most valuable thing for me to try and culture and nurture over years, still is. To the point now where I am getting pretty good at really early on like, “Yeah that is not for me” I am not going to be good at that or –
[0:38:59.5] RN: To understand yourself more and you understand what you like.
[0:39:02.3] MB: Yeah, I am coming up on 36 years old now and I feel like I still don’t know jack shit. But when I look at my 24, 25 year old self I’m like, “Okay I thought I knew everything at that age” now I know I don’t but I am not yet wise. I think that is still a couple of decades away but I think the self-awareness thing has proven to be really useful, particularly in scaling the business. Because I know what I am not good at and I am okay asking for help.
[0:39:32.9] RN: You know who to surround yourself to?
[0:39:34.3] MB: Yes, so there is less ego. Know what you are getting at, not good at, go ask for help there.
[0:39:40.0] RN: What are you most excited with Demac moving forward? What’s on the horizon that has you really pumped?
[0:39:45.2] MB: Right now we’ve been building our own brands which is kind of cool. So last year we launched – we required half of the company out in Saskatchewan called Pela. So we make – this guy out there, we came up with a compassable plastic so it’s made from plants. So right now we are actually making iPhone cases out of this stuff. So I am a bit of a tree hugger. It’s a personal thing for me but I love the idea of taking products that you can’t make or that are going to be disposable.
And keeping that from winding up in landfills and oceans. So compostable plastic. So Demac’s vision for the next decade is we’re going to home grow our own brands whether we acquire them or we build them. In very specific niches that are personally, like we’re really interested and passionate about. It’s taking what we’ve learned and what we do and applying it to some other things. With Pela, it’s not exactly the niche that a lot of people are going to rush into because it is not a giant market yet.
But that is a business that is growing 20 to 40% a month and that’s movement based too. It’s all online. We’re going to be getting distribution going soon, like wholesale. That is a movement where we’re creating fans too. It’s so fun to watch how people buy into the vision of the business. It’s not just the product. It is not commoditized. It’s a freaking iPhone case which is about as commodity as it gets. But if you read the reviews that we get and we publish them all.
We get user generated content without asking for it. People just send this shit into us because they are so pumped about it.
[0:41:30.4] RN: I think that is an important point on like social impact. On doing something good for others in the planet and nowadays I’m sure you have seen this a lot is that it’s gotten to be almost as a gimmick for a lot of companies.
[0:41:43.9] MB: Yeah, they try and layer it in somehow.
[0:41:46.3] RN: Exactly like “Oh we do this” but you can tell if it’s honest and coming from a good place or if it’s just a gimmick.
[0:41:53.2] MB: Yeah, there’s like that we know we’re authentic but I think most consumers now are savvy enough that they can always tell if it’s like you’re a brand trying to introduce a cause. Whereas if you are a brand that is a cause there is totally a difference. Pela was started and so Jeremy was the guy that started it and then we acquired half of it. Just because I personally bought into vision. For him it was like his story was he was on vacation in Hawaii with his kids.
His kids were picking up plastic off the beach and he’s like, “What the hell? Why is there so much freaking plastic in the sand?” and then when you look into it you realize there is a shitload of plastic in the ocean and if you’re a water side guy, it becomes a very real problem. In Ontario, we grew up on lakes here and we have an insane amount of lakes and it’s the same problem. There’s a lot of garbage that winds up in our lakes.
So I heard about this and I am like, “What a crazy concept. How many damn phone cases gets sold in a year?” and they’re all made up of plastic and silicon or something. Something that is just not going to degrade at all and this guy came up with the material. He’s like, “I started with a phone case because it was the one that I like to forefront but there’s so many applications for this” and that’s what I bought into. So I think –
[0:43:06.2] RN: So that’s the vision for the company?
[0:43:08.3] MB: Yeah, the vision is to replace plastic. That’s a huge vision, yeah but I am slow burning it because the market from what we’re seeing is there’s a lot of people that are very much – they buy into that but they are small in number but they’re loud in voice. I think this is the other idea that I’m like, “If I am going to build something right now I really want to build an extreme audience.” So they are extreme in their views but they will drag the average with them.
It will take time but they will totally drag their friends with them and we see our referral program kicks in a lot of activity. It is really interesting to watch. Once you get one of them and they’re highly opinionated and they care about the environment and they tell everybody. It takes no effort at all to get them to tell everybody. But I think that that only works because we are really, really genuine in that. Look we are trying to make a better version of this.
We have a case that our saying, our company motto is “Believe in better.” So we’d make a case, we stamp that on it and it works. It works because it is, it’s real. It’s not a gimmick.
[0:44:18.3] RN: Genuine comes through right? People can sense through the bullshit.
[0:44:22.9] MB: Yeah, we genuinely care. It’s a crazy idea, yeah.
[0:44:24.7] RN: It’s a simple business content right? Yeah alright man I want to respect your time so I’ll let you run but thanks so much for sitting down and thanks for hosting this in your office. It’s a beautiful office.
[0:44:34.8] MB: Yeah man, it’s cool. It’s good to have you, yeah.
[0:44:36.0] RN: Alright, until next time.
[0:44:37.3] MB: Enjoy the rest of your day.
[0:44:37.7] RN: You too man, see you.
[END OF INTERVIEW]
[0:44:41.7] RN: Alright, so you could find that @mbertulli on Twitter and of course, all the links and resources Matt and I discussed including more information on his companies, Demac Media and Pela Case, can be found on the page that we created especially for this episode. That will be on failon.com/022. Next week is a fun one. We’ll be sitting down with Dan Martel next week. He’s an award-winning Canadian entrepreneur.
Has exited three different venture back startups with the most recent one being Clarity which was acquired by startups.co. In 2012, he was named Canada’s top angel investor. He completed over 33 investments with companies like U-2-Me, Intercom and Unbalance. We’ll be discussing how he got a start in business and why being in jail actually led to a completely new perspective on life as a youngster. Just talking Dan you can tell he loves what he does.
He loves helping people, he’s an amazing guy, you don’t want to miss it. If you are finding value in the podcast and has the wheels turning a bit, please email me at firstname.lastname@example.org and let me know what your biggest struggle is and as I continue to build on Fail On with the simple goal of helping people embrace failure, share their struggle and actually decide once and for all to create change in their lives – I’d be really grateful if you could help me with a couple of things.
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