Episode 049: Dan Fleyshman - Youngest Founder of a Publicly Traded Company in History.

Legacy of Monsters an Apple Original series. The world is on fire. I decided to do something about it on November 17th.

This place.

It's not ours.

Believe me.

The most massive event of the year arrives. If you come with me, you'll know everything. I promise.

Oh my God. Go, go, Go.

Legacy of monsters streaming November 17th only on Apple TV. Plus.

This episode is brought to you by Michigan Economic Development Corporation. In Michigan, you can have both a rewarding career and a quality lifestyle. With plentiful career opportunities in world changing innovating industries, from electric vehicles to clean energy to biotech, with room for advancement no matter where you are in your career. Plus, Michigan offers a welcoming, beautiful, affordable and inclusive community for all. Live your best life you can in Michigan. Visit themichiganlife.org.

This is the Rise of.

The Young podcast, bringing you insights from the most innovative entrepreneurs and influencers of this era. Hosted by 17 year old entrepreneur, author, public speaker and branding expert, Casey Adams. Now let's get right into the show.

What up everyone? Casey Adams here. Welcome to the Rise of the Young podcast. Today we have with us Dan Fleshman. Someone who I look up to, has been a huge mentor for me and today I just want to kind of give you guys insights about who he is and kind of let you guys share his story. So Dan, really appreciate you coming on.

Absolutely.

Pleasure for sure. So first off, Dan, for everyone that may not know who you are, just a little bit about yourself. I'd love for you to share that.

So when I was in high school, I trademarked the catchphrase who's your daddy? For 17 different products, which ended up being 300 different classes of products. By 18 years old, we did $9.5 million in sales. By 19, we were in six department store chains and going through the roller coasters of being a young entrepreneur. 22, we decided to start energy drink under the same catchphrase. 23, we took it public on the stock market. And then for the next four years, I just didn't sleep and I just banged down every door. Got into 43 distributors, which helped us get into 55,000 retail stores in America. And yeah, that was how it all started. That first 10 years was just being relentless. And then after that, I won another feather in my cap and I started an online poker site. Within 10 months, we built the third biggest brand in the world, had a great run, and then boom, Black Friday happened and online poker was shut down in America. So after that, I never wanted to have all my eggs in one basket again. So I started angel investing so since then, I've invested into 28 different startup companies, and it's been good.

That's what's up. So before, like you said, you're 18, you started who's your daddy? What were you before that? Where are you originally from?

Born in Russia, left when I was a baby. Grew up in LA and San Diego. And in high school, I was working three jobs. My parents didn't have any money, so I was just saving up as much as I could to pay for my own college so I wouldn't be a burden. Yeah, working three jobs, selling candy at school and doing everything I could. Saved up 43 grand. Instead of spending it on SDSU, which I went there for a couple weeks, basically, I put it all into my company, and I thought the 43 grand would last me a year. And it lasts me, like five weeks, six weeks. Because we got boosts at the convention and we paid for this and that sample and this marketing. And it was. So we got lucky because we put ourselves in a position to get lucky, and we ended up getting that licensing deal for 9.5 million, which just kind of helped us go through the roller coasters.

Okay, so you said you were 18, started who's your daddy's? And you started with your money. So that was like the initial investment. So when did you started that? Was that just like, where did that money go? Was it building the brand? Was it getting in the retailers at first, or what was the initial start?

Mostly it was for samples because we needed shirts and sweatshirts and hoodies and hats, boxers. And we also tested, like, barbecue sets and other things that we thought we would try to license out. The lawyers took up a lot of it, and then the convention booths and just getting back and forth to the conventions. So most of it was for just setting up shop. We didn't really spend any money on marketing because there was no social media back then. There wasn't. So a lot of it just went to the actual physical products and. And getting in sales.

Okay, so it was. The energy drink was like the starting product. Correct.

Energy drink. We raised, you know, a lot of money. That was. We raised $3.75 million in one day.

Okay.

And that's where.

And that was back then. Okay. When you were 18, before social media, before anything like that.

Right.

So with raising fund for that forever, like, young entrepreneur listening. What's your kind of mindset on raising funding in the current world? Because I know you talk about, like you don't need. You have your book, how to start a business. With under $1,000. So what's your current mindset on, like, raising capital for a company?

So now one, it's way easier than ever to raise money for so many reasons. One, they can see you can reach and get a hold of every single investor, angel investor, company fund in moments. When I was doing it, There was no LinkedIn. There was no Twitter. I couldn't tweet at people. I had Facebook messages. I didn't. I didn't have any of these things. There was no Instagram, Snapchat, nothing. Every social network did not exist when I started. When I was public on the stock market, none of it existed. It feels weird. It sounds like I'm old. I feel old just talking about it. But I'm 36, right. So it's weird to think that an iPhone wasn't here 10 years ago.

Yeah, that is crazy.

So there's two parts to it. One is I just don't think people need to raise money as much as they do in. Because you can create sales so much faster nowadays. There's so many more ways to launch a company and so much cheaper than ever before. You just don't need. When I was starting companies, you need six figures to just get started. If I want to start this device and I just want to start that as a company, I would need millions of dollars and a year of planning. Now I can source it on Alibaba. I can find a distributor to do the shipping for me. I can do so many things. Set up the corporation on LegalZoom, get my website on WordPress.com or Shopify or click funnels. Like, all those things are just so fast. It's just like I can't even. Can't even think of it. Like, why would you need that kind of money anymore? For sure.

Okay, so. So for now, when it comes to, like, who's your daddy? You said you franchise it to 55,000 locations.

Sorry, that's the only $1. Sorry. All right, so you said I'm a busy officer.

Totally. So you said you started User Daddy. You started with 43 grand. And then what was the breaking point from when it comes to putting in the stock market, like, the initial starting of it, like, when you started it, that was the grind part. How did you get in touch with the investors? But really, what was the journey from the start to then? You said 9.5 million. Was it acquired or what was that?

Was that just a licensing deal for the. Specifically, the journey was being putting myself in a position to get lucky. So I was at A convention called Magic, which is the largest clothing convention. And we had spent way too much money on our booth. It was like 11,000, and we only had 43 to work with because we wanted to be big dogs. And we got two booths, so we got 20ft instead of 10ft so we could be like big dogs. And we get there and the booth next to us was fubu, and they had like the whole walkway. And then there was Calvin Klein and they had like, looked like a half a mile worth of goods. So at that convention, we had started closing department stores and they were ordering from us right there on the spot. And a couple hundred boutique stores started ordering from us on the spot. But we didn't have enough money to manufacture those clothes. So we had a good problem because we had over a million dollars in orders in our first ever convention. But we didn't have a way to finance it. We didn't have a way to manufacture it, ship it. We didn't have a warehouse. We didn't have those things. So by putting ourselves in a position to get lucky was we met with the organizer of the convention itself. They recommended a couple guys. One of them stood out, who I'm still friends with 20 years later. And he said, hey, come to this show called ASR, the Action Sports Retail convention. It's in San Diego this weekend. You should get a booth there. How are we going to get a booth this weekend? People book their booths months in advance. So we just called up the convention. We're like, hey, we want to come this weekend. We're at Magic. We can just transfer our booth to you guys. They're like, oh, sweetie, we've been sold out for half a year. I said, I won't take anything. I just want to be in the game. Can you get us a booth, whatever? So they get us a booth that's right by the check in. So it's great for day one or actually like the first four hours, because absolutely every single person, 20,000 people have to stand next to you to check in. So it's perfect. We got to see everybody. They weren't really in the mode yet because they were in line registering. But every single person saw us in the entire world. Every industry person, they were there. But after about four hours, everybody's gone, doesn't exist anymore. Why would you ever go back to the registration booth on day two or three or four? So it was quiet. It was like crickets. However, why we got lucky. The booth next to us was Calvin Klein. And the president of Calvin Klein became Our new bff, because he was bored out of his mind. And we were like high school kids with a bunch of girls there. Like, all our friends were being models, and, like, we had a boombox there because we couldn't afford it. So we built this little booth that looked so much fun. And so it inspired him. And we learned a lot from him over the next few days. And he said, hey, whenever you're in New York, come to my office here at Empire State Building. Come see me. And we should talk more about the clothing line. The convention ended Sunday. Monday morning, we flew to New York, by the way. There was no cell phone. We didn't warn him, and we just went to New York.

Okay.

Okay. So we show up to New York. We literally just walk into his office, and he shared it with fubu. And we go in or, like, just ask for this guy Carlos. And they're like, you have an appointment? Like, oh, yeah, he told us to come. And he happens to be walking by. He's like, boys, like, I didn't expect you to be here. Yeah. And we get lucky because the CEO in Jordache was there, the CEO of Macy's was there, and they just happened to be there. Mary J. Blige walks by again. This is like, 1999, 2000. And so it's all just kind of happening because we put ourselves in a position to get lucky. And we were almost so blind to normal protocol of calling them first and making an appointment. We just went. We just sat there. And I think our enthusiasm is what got him excited. He ended up leaving Calvin Klein to work for us and getting us into those six department stores. He became the reason we existed.

That's awesome. So that was, like, the major turning point with that company in particular.

Yeah.

Okay, so when it comes to that entire process, what was the breaking point to starting the poker thing? Or did you do that while you were still running that company?

So I didn't start the poker site until 2008.

Okay.

I resigned 2007 to start the poker site, and we launched 2008, leading in 2009. That was simply because I had loved poker so much, and I realized a lot of things during my journey with the energy drink and the clothing. And I saw a void in the market where I never planned to be the biggest poker site. I wanted to be the coolest. I never planned to be the biggest energy drink. There's 900 drinks, and Red Bull, Monster and Rockstar have 97% dominance. Right. Wanted to be the best tasting energy drink. And we Won flavor of the year year one and year two. So I set out a goal of being my niche, of being the best tasting. And then that would lead me to be in 55,000 stores, never going there saying I'm gonna be Red Bull. That's insanity. Right? It's okay to have big dreams, but it's also insanity to go fight against a 16 billion dollar a year company. Same with poker. There's two poker sites that have 4 million and 8 million dollars a day in revenue. How am I a company that raised 2.5 million total gonna go fight with people that are doing 100 million, $200 million $300 million a month revenue? So the poker site to me was, I saw a niche of one of the main sites called Bodog, switched away from poker to focus on sports betting. And they were the cool kids. And since there was a void now of being the cool kids, I thought, well, what if I bring on Playboy Playmates like Sarah Underwood, Dan Bilzerian, Steve Aoki, the dj, like bring them as characters to be the face of my poker site. Yeah. And then fill up with a bunch of poker pros to build around them. And it worked. We got lucky. I mean, there's so much excitement about something fun in the poker space.

So when you say like you brought these people onto it, obviously that comes down like the network you have. So with that in particular, like before that, were you always building quality friendships or how did you really build your network? Because I know a lot of people that watch my stuff and listen. They always ask me about networking, how to connect with people. So what was your intake on networking then and now with the social media world?

So networking has never been easier. I can network with anybody in seconds. Just like how this happens, right. You just DM them, you comment, you're around, you know what events are happening, you know where things are going on. Like networking now is just so, so easy. But some people take it for granted. They think that they can just do electronic networking and it's the same, it's very different. Yeah, having those. The reason I throw so many live events is so I can see, feel and touch everybody. And I can impact them, cause memories to them. They think about elevator nights and they think of the fun that they have at it. They think about the world's largest pizza festival or a charity event. Those cost me a lot of money. I don't charge for these things. I. It's like me building relationships on a at scale.

Yeah.

But I have to because of all the different things that happen in my life. So if you want to be the best real estate kid in Milwaukee, throw a real estate mixer once a month, spend zero to a couple hundred bucks. You don't have to buy them drinks and food, just get a bar on a Tuesday night or a restaurant Tuesday night. They'll be happy to have you in their back room for sure. And whether there's 17 people or 100 people there, you become the guy or the girl. Like you become that person so you can force your networking. But they want to be there. Those 17 people or 120 people, they want to be at the real estate event. They want to meet those people. Yeah, but if Casey Adams is the one throwing it, he's the guy, right?

Yeah.

So you can create your own networking in a real life setting so that you tie in your social media with real life.

Yeah, that's what we started doing like six months ago. We had a bunch of events. We had like two in San Diego and had like one or two in la. And that's just because I was at Ty's house and the time you spoke there and like he was like, throw an event. So we just started doing it. We've had like six or seven now. We had like around 200, 250 people. And most of them, some of them on the smaller scale. But like that's, I totally agree with you because I mean that's grown my network. That's, that's what we ran into each other multiple times. And I just feel like that's a main thing. We've all done that from social media, you know, like a swipe up or like, hey, come to this event. So that's definitely something valuable that. I'm glad you brought that up. So with that being said, I know I wanted to bring up networking. So when you started the poker site, you had the people represent the brand. Was that something where like that the marketing strategy was you have these people and then you have them like correlate to the brand and then that's how it kind of started getting traction.

Yeah. So I started getting people that could go onto television. So the poker players that I signed were high stakes poker players that were young and cool and the TV shows needed them to play on the their shows. And I'd make them all wear a patch where they weren't allowed to play. So they had the victory poker patch on their shirts or on their hats. Otherwise I wouldn't let them go play on the show. Every single show needed them. So I knew who was already playing on Shows, and I made them in demand, and I said, I'm gonna make them more famous. The shows will want them even more. So it was all, like, tied together. And then by placing Steve Aoki with a poker pro, it causes them to, like, grow together also. And same thing. The shows want them, the magazines want them. So they're on the COVID of. I can't even count how many magazines. Yeah, because all the tie ins.

Okay, I see that. So with the poker, how long was that? Because you said there was a Black Friday, they shut down poker. Well, when did you start? And then when was that, like, Black Friday event alive?

For about two years until Black Friday hit.

Okay, so during those two years, was that something where that was, like, your main focus that you crushed over two years? I remember you talking about that at Epic Mastermind. So the poker thing, what was like, the max users that you guys had on that?

We had millions of users, but there was tens of thousands real money on any given day. Okay. Because what happens is you get millions of users, only about 10% deposit real money. That's who you care about. And then there's a churn. People deposit 50 bucks, they lose it, they leave. They deposit 100 bucks, they win a bunch, they leave. So there's a lot of churn. But I. I know on the day of Black Friday, we had 41,000 real money players that we funded that day.

That's insane. So talk about setbacks, I always like to bring those up as well. So you said they just shut down online poker. So that was something, like, unexpected that you didn't. There was. No one knew, and it just got shut down.

So my competitors got shut down. I didn't get shut down, but because my competitors got shut down, I spent the next few days wrecking my brain. And I realized I should just close down also, because if they don't pay these people back, then there's gonna be a big black mark or black eye on the industry. They didn't pay people back for years. I pay people back all within four days. So to me, it was a tough decision, but also, there was no decision. Like, this is what I was gonna do. I'm gonna pay everybody back, and I'll reconvene if it ever gets regulated properly.

Okay. And I remember you saying you went to, like, so many different media outlets just like, publicly stating that fact that you. Yeah, that's insane. And that was. The four days was just like, from day one, it got shut down, and then four days later, you would have already gave back all the money. That was like a regrouping situation. So that happened, like, after got shut down. What was your kind of mindset on that when it comes to, like, the setback in your life? Or was it something you just kind of came through simple as possible?

Yeah, I kept myself as busy as possible because I always say, don't sit on the floor and cry about it. If I think about it, I should have sat on the floor and cried. Like, I just lost them tens of millions of dollars in one day and it's over. Over somebody else's mistake, you know, them being bad guys. So I kept myself as busy as possible by doing all those interviews, by consulting for other companies, other casinos, by just keeping myself active. I didn't let it affect me. It's like if you break up with a girl, like, if you just sit on. Yeah, you just want to sit home and cry for three days, right?

Yeah.

It's the obvious thing to do. You just want to sit and cry and think about, what did I do wrong or what did she do wrong or should I get back together? You just go through this whole racking your brain and you're just going to sit and cry and fester. Let it go crazy in your mind. Or you go out there. Not saying, go out and date other people. I'm just saying go out there and, like, live life. Go to work or bury yourself in. In books, whatever. Just go do stuff so you can move on with your life. Otherwise you're just gonna sit on the floor and cry about it. And those days of you just crying, they do not ever come back. Our life is so short, you. If you lose one or two days to crying, like, it's physically impossible to ever get that time back. And so you don't want April 16th and April 17th of this date of this year to be like, if you look at a calendar, that's just a life I lost for nothing.

Yeah.

So I think about that a lot because a lot of friends and family passed away. And so I don't let time just go by. I don't like wasting time. I keep phone calls short, I keep meeting short. I keep everything short because I got a lot of stuff to do in a very limited amount of time.

Definitely. So, that being said, regarding the timing of social media, you were one of the pioneers, I'd say, regarding just how you've done marketing. I know we've talked about some stuff, but with social media kind of blowing up to the size it is now in 2018, talking about, like, when you first got started. When you first saw it, what was your initial thought and how did you see the future of it?

Well, I first saw it with MySpace.

Yeah.

Before your time.

Yeah.

MySpace was amazing. Like having your own live website with functional features and music in the background and movies playing when people came on. And it was easy to build, it was awesome. Way cooler than some of these other platforms now, but they messed up because they allowed spam. So what happened was after a couple years, every nightclub promoter, every record label would just bombard your inbox before I could literally direct message household name celebrities and get responses back. And like, it was unreal because it was so fun and cool and like, interactive. I used to send my cases of energy drinks to people from MySpace. I'm still friends with a lot of them now, 10, 15 years later because it was so functional and so cool. But nowadays you have super, super, super fast platforms that cause people to have add, so. So I like to make really fast, very aggressive, very blunt content. What I mean by that is people are just skipping through Snapchat. They're just skipping through IG stories. They're just skipping and sliding this way. Everything is so easy to skip past that you have to grab them in the first few seconds. A lot of people like to do marketing where it's like a slow lead in and this happens. And then here's the. No, you have to put the ending and the beginning now. Otherwise they're not gonna stick around because they're just. They're in an ADD society. So I like to use social media for what it is. It's a way to keep track and keep up with everybody, inside and outside of my city or my industry. There's also a way to continuously deploy information about what I'm doing, whether it's charity, business, investments, live events, whatever it is, it's my voice, and I think people need to use it as that. Instead of always sell, sell, sell. They have to provide as much content in between so that when they do sell, people aren't numb to it. There's too many people that are just like, always, swipe up, swipe up, swipe up, sell, sell, sell, sell. When people become numb to. If that's all the content is, if you're providing good content in between all that, it makes people much more likely they're gonna convert at a much higher rate doing those things less.

Okay, I see that. So when it comes to just social media, I have a lot of young people that watch this, whether that be they don't have money to Start a business. And I wanna talk about your book for a second. So regarding the young entrepreneurs, and I always like to ask this question to people that I have on my show is if you could go back in time, obviously to when you were 17, 18. So like my age. With the current state of social media, what would be like three things you'd want young people to know just from your perspective of having business experience.

Sign very simple contracts with everybody, even if they're half a page, one page. I don't care if it's your mom, your best friend from high school, your brother in law. You have to have basic, what's called MOUs, memorandums of understanding and SOS. Scope of work. If you tell people, this is what you're going to do, this is what I'm going to do, and this is what you're going to get, this is what I'm going to get. It removes so much headache and so much wondering. Let me give you an example. Let's say you and I started a company together in high school, and now you're 18 and we open up a lemonade stand. Lemonade stand starts crushing it, right? We're both doing it together, we're there every day and we start selling merch lemon T shirts with lemons on them. We build this cool little thing. Three months goes by and we're doing like six grand a month out of this little lemonade stand. We're just crushing it. We're 18 years old and then Harvard calls you and says, casey, we just got you a full ride scholarship to Harvard. I'm not gonna stop you. You gotta pick up and go to Harvard, right? So you go to Harvard. A couple months goes by, I open up five more locations. I'm selling thousand dollars a day worth of lemonade shirts, now we got six locations. Do you own 50% of the company?

Okay. No consequences.

What happened? Yeah, technically, maybe you do kind of, sort of, I don't know. Do you know? I don't know because we started this company together and it has both our faces on the lemonade stand. It has our name on it. And then you went off to Harvard and you're gonna be there for the next four, six, seven, eight years and I'm gonna be in Wichita, Kansas selling lemonade. I just opened up six locations for us and you had nothing to do with it. What happened? So having a scope of work, having memorandum understanding, like knowing what we're both gonna do and what the situations are, it removes that like awkwardness that happens so often. The reason That a lot of boys and girls break up. Boys and boys, girls and girls, same thing. The reason a lot of people break up is not communication. The reason that same thing happens in companies is the president thinks like he's doing everything. The secretary, she really feels like she's doing everything. The director of sales, he's building the entire business and we wouldn't exist without him. The chief financial officer is like, all these guys would be in jail if it wasn't for me because I'm keeping the taxes and accounting.

Right.

The CEO is so frustrated because he's doing everything for everybody. The new hires, like, I just fixed the company so everybody should thank me. You see what's happening? Yeah. Everybody thinks they're doing everything when they're all just doing what they're supposed to be doing. And so a lot of times people just don't have the communication and it causes these conflicts. Because if you think you're doing everything and I think I'm doing everything, you both think I should deserve a raise and I should have more equity and you think the same thing at the same time. When it finally does come to a head, it causes a lot of conflicts and breakups. And all that would be solved if I just said, look, you're going to have 10% of the company. This is what's going to happen. I'm going to have 22%, I'm going to do this, this and this. That guy's going to have 10%, he's going to have five. By just having clear cut things and saying you got to do this simple basic communication would solve so many relationships, personal and business. Wow.

That's the truth. Alright, so last question before I let you go, man. So overall, through everything kind of you've done experience, I always also like to touch on the fact of just like persistence because obviously from the starting point to now, you just kept on doing things. So when it comes to just like persistence and consistency, how have you developed that and what's kind of been your three pillars that you've kind of always stuck with? When it comes to like characteristics, you.

Say so persistence is one of the most important things without being annoying. It's the follow up is one of the most important things that I like in entrepreneurs, that I invest in, people that I partner with, people that I work with, vendors, staff. Persistence is not something that you can train but you can mentally train for, if that makes sense. You can't train somebody to be an entrepreneur. You have to want to get up every morning and go do Something. Not getting paid, not knowing if you're ever going to get paid and go wanting to grind morning, noon and night and sometimes not sleep and have the frustrations of the world on your back and have to, like, loan money to your staff member who had a sick cat. You can't train that part. You have to really want that. Right. You can train the concept of persistence by training your mind to say, okay, I have to do this, this and this. I have to follow up with him, her and him. I'm going to do this, this and this. So you can put yourself in a position to create persistence and to create follow up. And that will make entrepreneurs, investors, CEOs, partners, vendors, buyers happy with you because you're following up without being annoying.

Okay, well, cool, man. Definitely. I noticed that whenever you talk about simplicity, and I like that, do you think that's something that a lot of people kind of get misguided with, is like, they make it too complicated to even move forward with? Because I know that's where you say it's like, have a clear, simple one page thing. Is that something you think is very critical in every aspect of things?

Yeah, because I think every single time I sign my book, I write one thing. I write, just get started. Because everybody just talk, talk, talks all the time. They make it so complicated. Like, oh, I'm gonna start a podcast one day and this is what's gonna happen. Okay, go start a podcast today. Cost a couple grand to get this machine. That machine, that machine. You need a camera, you need a website. You can go to Spotify and Apple and itunes and get started.

Yeah, that's what I did.

Right?

Just get started. I started like end of December because I was watching. I set up a meeting with Gary Vee or whatever. He's like, oh, you gotta start a podcast. I was like, okay, well, let me start it. All right. So he's always talking about it. I set it up. I had a guy set up in like a day and then I started busting out episodes. Now we're on 49. This is what this is. And I just started. Now I have people hitting me up for like, oh, let me help you with this, let me help you with that. Just from, like starting it, you know, I had no idea what the industry.

And there's millions and millions of people that are talking about starting a podcast.

Yeah, that's the truth. Well, cool, man. Definitely. I really appreciate you coming on and that we've been connected for the last year and a half and I definitely appreciate every second I've had you on and I definitely look forward to continuing this man. And for everyone that's watching, listening, if you want to check out Dan's book, How to Start yout business for under $1,000, I personally read this amazing great content. All the link will be in the description, social medias, everything. So definitely everyone watching, really appreciate your time. Make sure to stay tuned. See you in the next episode.

SA.

Monarch Legacy of Monsters An Apple Original Series the world is on fire. I decided to do something about it on November 17th.

This place.

It's not ours.

Believe me.

The most massive event of the year arrives. If you come with me, you'll know everything. I promise.

Oh my God. Go, go, go.

Legacy of Monsters streaming November 17th only on Apple TV.