How to Take Chances that Pay BIG in Your Business | Leveling Up (EP 4)

So today we are going to hop into Charge Tech where the CEO, Jeff McGinnis, is going to reveal his story around the business and how having a Ferrari has helped him build a 7-figure business, or how you can go from $0 to $5 million, how to go from $5 million and beyond. A lot of stories, a lot of experiences to share, a lot of strategies and tactics that you can take to grow your own business. So let's go ahead and hop inside and we'll learn more about his business. So Jeff, tell me about the interesting life of Jeff McGinnis. I mean, I look at your Instagram sometimes and you You're always eating donuts, you're always eating After Ice Cream. What's going on?

I'm just a regular guy, entrepreneur. I love cars, I love running business. Yeah, I live life on the edge, I live life fast. I drive a Ferrari, but I'm actually the slowest Ferrari driver you're probably gonna meet. He is, he is.

You know what's funny? All the guys look at him, right?

I used to drive a Prius, and I still have my Prius, and I was happy in my Prius, but Honestly, like having a nice car, it's a great networking opportunity. I go to Cars and Coffee all the time, and I hate to say it, but it opens up a lot of doors when people know that you have a nice car.

You were, you know, in finance before and before you decided to go all in on ChargeTech. So what was that inflection point? What was the story there?

Former Wall Street. I worked in finance out there. I worked at PIMCO, which is one of the largest actively managed funds. from 3:00 AM to 3:00 PM. So I did 12 hours at my day job. And then from there, I started Charge Tech and I rented a cubicle office space down the street. It was a rough year and a half to get the business going. I finally took that leap of faith when I saved enough money to give myself runway to give the startup a chance. I sacrificed a lot, obviously, to start the business, but I couldn't be more happy where I am today.

So in that 1.5 years, you said it was really rough. I mean, what was going on?

To get enough profit to be able to substitute your previous paycheck was the hardest. I mean, knowing what I know now, but I started the business trying to do an infomercial. I mean, that obviously wasn't the right thing to do and I didn't catch that right trend, but I literally did everything and whatever stuck.

Why wasn't the infomercial right?

Google actually set up a software platform so you could buy TV spots through a web-based platform on these channels. And I used it and I literally bought 10 million video views because I grew up thinking that Infomercials was the way to start a successful business. ShamWow and whatnot.

ShamWow, Shake Weight.

It completely bombed. I mean, even for Google, but everyone takes risks and whatever sticks, keep on doubling down.

So you were working 3 AM to 3 PM and that's, I'm assuming it's because markets open. What does your day look like starting at 3 PM? Can you walk us through the breakdown there?

I mean, back then WordPress was in its infancy stages, so it was figuring out how to do a website, figuring out Google search engine optimization. But 50% of my time was spent learning, actually doing the other 50%. And because we're in an e-commerce hardware space, I was actually talking with China and my suppliers and factories into the evening and usually started at You know, anywhere from 6 or 7 PM and didn't end till, say, midnight.

Wow, okay. So you went from 3 AM to 3 PM and up to 12 AM. So you basically got 3 hours of sleep?

Yeah, on average, like 3 hours of sleep for a good amount of time. Wow.

I mean, were you like single at the time? What did your mom say? Were you living at home? Like, what's going on?

I was living at home. I was single, and I was literally just so passionate about Growing and getting out of my current situation that it just fueled me to move on to the next thing. I sleep, you know, 8 to 9 hours a day now.

I guess on a scale of like 1 to 10, you know, sleeping 3 hours versus now, how much more effective do you think you are now that you sleep 8 to 9 hours?

This is Orange County. The usual workday, 9, 9:30, you leave 5 or 6, you go out, you go to happy hour, you hang out with your friends. If you're in the Valley, gosh, you know, from morning till night, you go out with your friends, but you talk about business, you learn more techniques, and you go to bed watching a YouTube tutorial on whatever it may be till like midnight, 1 AM. And literally, it's Friday today, but if we were in the Valley, the team would probably be having pizza and having drinks. Oh, they'd be cranking. Yeah, cranking. It's a different culture. I think there's no substitute for hard work and long hours.

What are some key lessons and I guess some challenges face going from $0 to $1 million?

I actually didn't even pay attention to when I hit $1 million. I looked at the bank account more than anything.

Okay, what were you looking at there?

As long as it was going up, to be honest.

Okay.

I'm like, you're moving so fast. And I was ordering more product. I didn't have a property— proper inventory management in place till, I don't know, probably till we hit $5 million.

But what is inventory management?

Inventory management would be, and actually still is, just Google Sheets and actually knowing how many pieces you have.

What do you, what do you use for that now?

We use Skubana. We're unique. We're an Amazon business. We're an e-commerce business. And we also do a lot of B2B and B2C. We thought about building a software on our own, but to get a dev team in was just way too expensive.

Got it. Were there any moments in time where the business almost went under?

Yeah, I think mentally the business almost went under. And I think that, you know, Any business, it fails when the entrepreneur gives up. That's what happened. Yeah. I think from a financial standpoint, I've had some very rough experiences importing a container literally with my savings that was improperly labeled. And, you know, you're dealing with U.S. Customs and Border Patrol.

So what happens when you don't label something properly?

U.S. Customs and Border Patrol will seize the goods. And you're out and now you're going to the factory to figure out what happened and who's going to pay for it. And unless you have a team in China that's actively managing the product, I mean, you're literally buying thousands of pieces and containers full of product. And by the time it gets here, it's already too late.

So what kind of advice would you give? Because I'm sure there's a lot of aspiring entrepreneurs here that are looking to start some kind of physical goods or e-commerce thing. What kind of advice would you give someone that wants to start a physical products business?

Get an unpaid internship with somebody that knows how to do it well. If you want to learn internet marketing, go work for Eric Siu for free and get the guy coffee and do whatever it takes to try to get to his level. It's actually really tough. And honestly, for myself, any new industry that I want to get into, I could have done what I know now in probably a third of the time had I just really immersed myself in learning with The best of the best, be of value to somebody.

Well, let's talk about that for a second. How do you decide who you want to hang out with kind of thing?

I always want to learn, and I always want to grow, and I do enjoy positive people. I joined entrepreneur organization, for example. I just love interesting people. Time is so limited and finite, and you can only spend it with so many people. I prefer to spend my time with interesting people that make me happy.

And on that point, spending time with interesting people too, Jeff is really good at getting the attention of interesting people. So can you share a story about how you get attention from these interesting people and how you get them to respond to your emails?

I guess the biggest myth is that it's actually really easy to get ahold of influential, important, and busy people as long as you send them an engaging email or message that really appeals to them. And don't think about it for your own personal benefit. But what you could do for Eric, what you could do for Elon Musk, what you could do for, you know, I don't know, Warren Buffett. I would do a lot of research on who that person is and I would make the subject line of the email something relevant to something they just did. And I would quote it where they know I did some research. Probably the biggest competitor in my space, I literally sent them an email, said, you know, I think there's a good strategic fit in terms of our, both of our companies. It's easier for myself because we've made an name in the phone charging space where I could do the outreach and they instantly know who I am. But in an industry that I'm unfamiliar with, let's use Bitcoin or cryptocurrency, usually that email's a bit harder because I still have to make a name for myself. Email, cold email, it works. Do it.

Oh, 100%. Yeah, key takeaway there, cold email. You just have to be persistent with it. The reason why I have, you know, my co-host Neil Patel, the reason why I know him is from cold email. You go, I think it's 6 or 7 years back, it's from cold email, right?

So I actually handwrite my emails now. I think as marketers, whenever you have a communication medium, it gets abused and people are abusing email, people are abusing social media, people abuse TV and TV commercials. But I mean, on my cold email average, anywhere 70% plus open rates.

You have to make sure that you are, same thing with the billboard, right? The billboards that you actually notice, they're actually really well done and those are getting opened, right? 'Cause you're paying attention to them. Same concept with the book Purple Cow from Seth Godin. You go through a field of cows, you're not gonna see— notice the cows. But if you see a purple cow, you're gonna talk about it, you're gonna notice it. You are opening yourself to that, right? So that's basically what I'm hearing?

Yes, yes. And I always want to make myself attractive to whoever that person may be. And let's use Elon Musk, for example. Trying to get a hold of Elon Musk. Maybe he's really into crowdfunding. I would go to the website that he reads daily, maybe it's crowdfundinginsider.com, and I'd write an op-ed piece about crowdfunding. And that cold email that I sent him 4 months ago, he's gonna say, oh wow, that guy Jeff actually emailed me. And I'd love to be Elon's intern for a month.

I'd love that too. I'd love that too. So we talked about lessons and struggles from going from $0 to $5 million. How about $5 million beyond? Like, what are some challenges you've faced?

Everything's at scale, and we do crowdfunding. We've raised over, at this company, close to $3 million. and you're dealing with 15,000 backers. And when product is late, it's no longer responding to the ticket, but it's creating a Zendesk knowledge base FAQ so you can answer responses at scale. And it's no longer selling one product to this certain company, but it's creating a pitch deck that can get virally shared across your however many customers. And still to this day, understanding organization, understanding systems, and understanding people is that next tier, right? 0 to 5, you can bootstrap that. And then 5 to 10, then you're gonna need people, employee management. 10 to 20, 25, systems, developers.

Great. There's a framework that you can use, especially for a physical products business. How does an entrepreneur juggle multiple projects?

It's always about delegation and automation, but on Gmail you can have that tab where you can see when it's just addressed to you. I basically, unless you personally like text me or you send a message to me, I try and build a team so that everybody's CC'd on something and I don't have to worry about it. And then I can just review on a weekly basis. I literally have a sticky note that I keep on my laptop, and I won't go home until I finish whatever is on my sticky note.

You talk about building a great team, right? So what's a story of you going out there and finding the right talent to bring into Chargeback? Because it's hard in a less known kind of city, right?

The biggest thing is somebody that immerses themselves in whatever they're interested in. If somebody is a big YouTube, you know, media person, then they love doing YouTube, then Come on over to ChargeTech, we'd love to have you shoot videos for us. Whoever's a good fit for ChargeTech isn't a good fit for the next company, isn't a good fit for the next company. What's worked well for us in terms of hiring is actually building the relationship over a couple months and cultivating these people to know that it's a right fit rather than putting up a job posting, you get 'em, you hire. That hasn't worked for us, but I mean, what works for us—

Why hasn't that worked?

The culture fit. Definitely. And now we try and be as transparent as possible upfront on who we are, what's going to happen, and if you don't like it, then—

Bye-bye.

Yeah.

You started to change your warehouse in the back. You held inventory before, now you have a hockey goal set up there. So what's the story behind that?

I think our team, maybe half of us are hockey players, and so we turned our warehouse into a shooting gallery to play hockey. We're trying to have fun. Obviously Google has, you know, the most enviable campus. We have snacks, we have whatever it takes to really keep your team happy because, I mean, you think about how much you spend at work, and if they aren't happy, you definitely see it in the way that your customers are being treated. You see it in your marketing materials.

Mm-hmm.

And, um, Yeah, life's too short. Enjoy what you're doing. Entrepreneurship's so much fun, and even just like growing a company. We always talk about numbers and like how much people are doing, but it's a big scoreboard.

Yeah.

It's like, I do it for the passion of what I love, but I do it for that score, and everybody wants to win, and everybody wants to be on a team where they enjoy who they work with. I love the sport of growing a business.

Awesome. One thing I want to add, so you have another thing that you're working on with one of your best college friends, right? So, you know, talk about the kind of the challenges and the benefits of working with friends.

Yeah, I've actually known my right-hand man here at Charge Tech. I've known him for the last 16 years. Both of the people that really run Charge Tech and run my other company, they were my groomsmen at my wedding. And one of them actually was really emotional at the wedding, and he spoke in front of, you know, 300+ people, and like he just broke down into tears. But I think that's the hardest thing. I don't want to say it's hard, is that mixing friends with business.

Mm-hmm.

And at the end of the day, I'm always 100% transparent and upfront with them, from numbers to performance to— they will tell me, Jeff, you're being a jerk, you're probably— you're not being a good leader right now and also being empathetic with people. And if people can't take candid feedback, you know, Sheryl Sandberg always talks about it at Facebook, then the organization is going to take a hit.

Yeah, I mean, you strike me as a guy that's really even-keeled and really patient with people. I don't see you ever raising your voice or anything like that. So do you think that plays into you having such a long-standing working relationship with your buddies?

Well, there's always like anger, but I think that what hurts most, and even in our culture, is disappointment to know that If I let down my friend or my friend let me down or whatever it may be of customer service, that burns more than somebody yelling.

Right. So yeah, that makes sense. So I mean, I think the lesson is on a case-by-case basis, right? Because I do work with some friends in some capacity and some work out, some don't work out. I think it all depends on how you gel with people. And I think Jeff's done a good job of doing it. So thanks so much for doing this.

Yeah, absolutely.

So some of the key lessons today, I think for me, are around the difficulties of having a physical products business. It's not as easy as most people think. Most people think you can just have a product and slap it on Amazon. There's a lot of headaches that go with it. So if you are really interested in building physical products business, great. You can learn from Jeff. There's a lot of other podcasts out there as well. But it's also interesting for, for me to see how he reaches out to influencers, how he starts out. When basically you can go from 0 to 100 when you're a nobody and you can become a somebody just by adding value to people. So there's a lot more to this. And if you like stories on entrepreneurship and marketing in general, just hit subscribe and we'll see you in the next video.