The Art of Setting Up Successful Businesses

Hello everyone and welcome to the E coffee with experts brought to you by digital web solutions. My name is Matt Fraser, the host of E coffee with experts and on today’s show, I have with me, David Woodbury. David is the CEO of Rev7 which is a digital agency with a primary focus on supporting high-growth e-commerce and crypto startup companies. Rev7 is headquartered in the beautiful Black Hills of South Dakota. As a serial entrepreneur, David has created a startup Launchpad out of Rev7 that’s created three venture-backed businesses. Lately, he has been working within the crypto space and he’s focused on marketing strategies within the evolving ecosystem that is web three. His latest projects are folioBoost, which is a crypto fantasy trading game, and web 3D Genz, which aims to organize a gig economy for web three projects. When he’s not working, David is a regionally sponsored cyclist and can be found at some of the top gravel and mountain bike races across the country. Once again, David, thanks so much for joining us today. I appreciate it.

Hey, thanks, man. Glad to be here.

All right on. So David, where did you grow up?

I grew up in a suburb of Minneapolis and St. Paul collector, Lake, Minnesota. And, I spent most of my, my younger years in that area. And then after 911 hit, I joined the Coast Guard, and that sort of spurred my tour around the country. It was in nine different states so far, Nelson.

Oh, wow. That must have been an adventure, so to speak, of seeing different parts of the country in that capacity.

Yeah.

All right on. I know you’re an entrepreneur, you started several businesses off from your LinkedIn profile. Did you always know that you wanted to be your boss and start your businesses and things like that?

Well, I wanted to be a professional athlete, but I wasn’t born as a six-foot-five, 250-pound linebacker. But, my grandfather, I’d say is probably an inspiration for me. He was a small business owner. Started an industrial supply company in the Twin Cities in St Paul and then he had a couple of branches and sort of rural Minnesota. And as a young person, when I was like 18,19, 20, I would spend summers working in the warehouse or working in the city desk and retail sales, and just sort of watching his experience as an entrepreneur. And I think that really sort of got the bug going for me and realizing that you can build extraordinary wealth and there’s no cap, I guess, on your income opportunities as an entrepreneur. And that was always an exciting thing for me to strive towards.

So what was one of the first businesses you started?

Well, I tried to start a Jimmy John’s franchise, but I was 19 years old, and nobody would finance me and that would have crushed him too. So that was my first attempt going down to the banks and trying to get a loan, this was right before I joined the Coast Guard, so it was like 1989 or 2000. I attempted it and it didn’t work out so I didn’t move forward with that. After I had gotten to the Coast Guard, like many young people, I got into some credit card debt. I made some bad decisions with debt. And through that process, I learned how to repair my credit. And so my first business was a credit repair business. I was consulting and I had a bunch of clients where I was repairing their credit. And that was an interesting opportunity. I was doing it on the side while I was working at Verizon corporate. But there’s a need for it and I am learning from experience and applying what I had learned; I had figured out a way to increase my score by 100 points or something like that. So it was valuable that people get to

So you took a negative and turn it into a positive?

Yeah, I think that’s how most businesses start. It’s finding a problem, and then figuring out a solution to that process.

And the bigger the problem and the bigger solution, would you say ties into the bigger the earning potential?

Absolutely, yeah. And then is it scalable? And that was the thing with the credit repair, it wasn’t scalable, because it was just my time working on this. But it was my first learning experience, signing up a client, having a client, having some accountability like; “hey, I’m trying to provide this service. You need to start paying your bills on time. That’s part of the deal”. So yeah, it was a good experience. And I think, going from there, and then learning, like levels of scalability, like each business I’ve done since then has had maybe a little bit more scalability to it.

Okay, so you mentioned that you worked for Verizon. I was reading on your LinkedIn profile, the story of how you started one store, and then grew it to several. What was that like, that whole process? And how many stores did you grow the Verizon franchises you started?

I started there at 18 and this was in the mid-2000s. I knew wireless services and between 2000 to 2010 it was exploding and everybody was buying. And the technology was evolving. So the first phones I was selling, were just simple flip phones. And then there were camera phones, and then there were smartphones. And then pretty soon it was the iPhone. And so there’s this massive evolution and adoption to the industry. I started with Verizon corporate as a sales manager at a kiosk, it was the number two kiosk in the country. Then I opened a retail store and ended up running that to the number one store in the country for Verizon. And over those three years, I was making really good money, six figures as a young person, and when I found the franchise model for Verizon, I thought I’d saved up enough money now. I had a friend of mine from high school that had some capital to invest in. So he came in as an investing partner. I was the operator and had invested some of my capital as well. We opened one store and like most businesses, we took on an SBA loan. And within six months, we were able to pay off that first loan and so then we had the loan balances available. And with that, we were able to go out and build a second store. So we were essentially scaling the business with this loan. A key employee, his dad had recently sold his business for a large sum of money and he was interested in becoming an investor in our now growing business. He came in and we had an additional capital partner in addition to the loans and the things that we’re taking on. So from there, we just kept growing, and we had five stores in the Minnesota market. We had six stores in the St. Louis market, we had seven stores in the Dallas market, and then in 2000 the larger Verizon premium retailers, so somebody that had over 100 stores, came in and bought up the majority of our business.

Wow. So number one; You mentioned you were a sales manager. So obviously you were a good salesperson. Did you learn how to be a salesperson, were you born a salesperson or did you take courses?

Well, I think by working in my grandpa’s shop I learned- I think sales is learning to associate yourself in the customer’s shoes the best way possible and to be as likable as possible. For example, I was selling industrial fasteners and things of that nature to construction workers and I didn’t have a lot of background in construction. I wasn’t a rough, tough guy that was out fishing every weekend and hunting every weekend, but I learned. I would go study fishing and hunting and I did it a few times, so I would have things to talk about and associate. I think that sales one-on-one is to be likable to your target demographic. And it was a little different because it was much broader. And it was just like everybody wanted these products. So it was more about speed. And then keeping them working and providing good customer service because people were constantly breaking devices. And so the service side of that business was really important if you wanted to bring customers back. But I would say the main contributor to Verizon’s growth was we were retail-oriented, and everybody was focused on just dealing with the retail customers that would come through the door. And the difference for us was that we went after b2b. So Verizon had these discount codes for employees back then of certain big corporations, like let’s say Home Depot, had an 18% discount. So we would go into Home Depot and talk to all their employees at an employee stand-up about the Verizon discount because it was a perk for Home Depot employees. We would go in and inform them about the discounts on devices. And we would end up slipping a lot of people from competitors like AT&T, Sprint, or T-Mobile back then.

So you leverage some of the programs of Verizon to grow the business by going after b2b?

Yes, it was just like standing there and waiting for customers to swing through the door.

Man, that is so smart. When did you know to exit the Verizon venture that you were in? Was it the offer on the table for the money or were there other reasons that you decided to exit?

There was another reason. In March 2011, Verizon got the iPhone, and sales as far as demand goes were exploding, but the profit margin on that device was like 10 cents on the dollar compared to other devices that we were selling. And so I was watching our profitability go down significantly, and I was watching, the larger retailers gain bigger contracts, and we weren’t getting it as a smaller retailer. So it was kind of a situation where I looked at and I think they’re going to squeeze out the smaller retailers in the space. So we either had to figure out how to scale the 300 stores or just get acquired. So I initiated the sale process. I found two of the bigger retailers and we had a little competing deal to sell the business. We ended up selling one of the markets to one and then two of the markets to another retail. So it was kind of a complex deal. But I was understanding that the biggest thing about building a franchise was that I didn’t control anything on the compensation structures. So that was like a pretty big learning experience. Verizon could change the compensation at any given time, which would really affect or potentially really affect the profitability of our business.

Yeah. Would you start a franchise again? I mean, you didn’t.

I wouldn’t say that I wouldn’t. I have a very good friend and he’s one of the top franchise consultants in the Country. And, he places people into like passive income franchises all the time. And so those are very interesting. From my standpoint, I tried to evolve my skill sets past retail, because as I was talking about at the beginning of this; Scalability is something to me that’s important with business models and so looking at most franchises require infrastructure like leases, buildings, materials, furniture, equipment, all that kind of stuff. And I like businesses now that are built on technology so the software can scale.

It is way easier to scale those things than traditional brick and mortar business. I found it very interesting that you started a cause marketing agency after exiting Verizon called Linked Cause. What was your motivation for doing so?

Well, I had a little bit of leeway with my financial situation after selling the Verizon stores. So I had read about Blake Makowski, the founder of TOMS shoes. I thought what Blake was doing was very interesting as far as, using a capitalist approach to potentially provide some good in the world. And so I thought that the one-for-one model was really interesting. And so, up until this point, I’d never built a brand or done anything myself. And we built a brand called Eat apply, and that was under the Linked Cause marketing umbrella. And what Eat Apply did was it partnered with local restaurants to donate a meal to a local food shelf, whenever somebody purchased a certain entree. The way we would position this is we provided some marketing materials. And then some web presence that would talk about the different restaurants involved. And, and then we were able to get a bit of local media attention into the markets that we were able to get restaurants to sign up. And yeah, it was pretty cool. We ended up donating, I think in 2013, we were a top 10 cause marketing campaign in the US. We ended up donating over a million meals to food shelves and hunger nonprofits across the US market. And then from there, as a business model, it wasn’t very successful because they cost so much to sign up the restaurants, and then they would stay on for a while, but a lot of times they decided to go do something else after three months or something. So retention wasn’t great. The cost of acquisition was high. And we were donating 80% of the proceeds to the actual food shelves. So there just was like a very tiny margin. But that kind of got me going with digital marketing and sort of stem the evolution and push into Rev7, which started just as a digital agency that we launched in 2014.

Wow. So you launched that in 2014. Was that the word evolve? Did you start REV7 or did you partner with someone or how did that venture come about?

I started REV7. And so with Eat Apply and Links Cause I had gone through an accelerator program, startup business accelerator programs, I felt neat. And I learned a ton through that process. Then I had this idea for Camp Native, which is a booking engine for campsites, all across the country. With REV7 being a startup agency I wanted to help companies that were going through these types of programs; startup programs and help them look for ways to scale. We started with a couple of clients and then I had the idea for Camp Native. I got Camp Native into an accelerator and then raised a million dollars of venture capital for it and by 2015, we were running Camp Native and not doing much with REV7. We were handling a handful of clients but for the most part, it was bringing Camp to market in 2015 2016. And then, through that process, I hired a CMO Chief Marketing Officer at Camp Native. This guy built chewy.com, the largest e-commerce exit in history. And then he built jet smarter, which was Uber for private jets by saying he built it, he was a rant, basically the head of digital marketing. So he’s written about an SEO for dummies in the book. From an organic search standpoint, digital marketing standpoint, one of the top people in the US with talents I was able to bring on. And after a couple of years at Camp Native, we were just sitting around a bonfire one night, and he was like; “we should really do something with that Rev7 agency that you’ve got, and I just brought him on as a partner and we’ve been building ever since. We went on a couple of additional startups. We’ve supported about 50 different brands, mostly high-growth eCommerce software companies, and then later into the crypto space.

Okay. forgive me I don’t know the name of the partner that you refer to.

His name is Brent Ronning.

Brent Ronning. Was chewy.com brought to REV7 as a client? And then was that incredible growth that I saw on the REV7 website, was it the biggest e-commerce exit in history, US history?

Yeah. So Brent started there as an employee. He was employee number six at chewy. And we ended up supporting it as well. But that was kind of the later stage. Brent took them from zero to 200k monthly in eCommerce sales in 12 months, at the time the largest link building campaign that it has been executed. And he did it through a massive blogger outreach deal. He organized over 2000 bloggers, pet bloggers, for that particular industry. And chewy ended up getting acquired by PetSmart. In I think it was 2018 for $3.35 billion.

$3.35 billion?

Yeah.

Wow. So PetSmart owns chewy.com?

Yeah, PetSmart owns chewy.com. And then Petsmart took chewy public and I think when they took them public it was valued at $8 billion. So it was pretty good. Pretty good selling for PetSmart too.

Wow, that’s amazing! That it’s just awesome!

Thing sidebar is Ryan Cohen, the co-founder of chewy is now the guy that’s running GameStop. So the stock manipulation and stuff that’s been going on in the last year. Ryan Cohen founder of chewy has been pretty involved with that whole scenario there.

With that? Oh, wow. That’s interesting. So REV7, who’s the ideal client that REV7 looks to help?

Right now we are only interested in decentralized applications being built like crypto startups. So kind of going back to my days and wireless. I saw it from 2000 to 2010. I believe that that’s going to happen in the crypto space this decade. We’re seeing incredible disruption to industries like finance and banking. So decent wise finances is an interesting opportunity where consumers can get a 10 to 12% interest rate on stable coins. And then instantaneous lending protocols through Defy. And then web three, if you’re on the internet and you look at like these social platforms that are out there. Web three is all about individual digital ownership on the internet. So that’s exciting to us. We are supporting anybody that’s empowering people to own pieces of the internet. And, own your data on your profile, all those types of things. Right now we’re mostly focused on our projects. Folioboost is the primary objective we’ve got right now and folioboost is a crypto trading game. So it’s like FanDuel or DraftKings if you’re into fantasy sports. What we wanted to do is to create a safer environment for people to trade and learn about crypto, we believe we believe 500 million people are going to come to crypto in the next three years. So creating a gateway for people to engage without maybe the substantial risks involved with the volatility in the markets that we have today.

So folioboost; How did you get the idea for it? Like a fantasy trading game for EA is such an original idea, in my opinion.

So just like anything that I’ve done in the past, it’s finding that pain point. And so I started as the owner and CEO of REV7 back when COVID hit. I was receiving the PPP deal from the government, and then the EIDL deal from the government, and in my decade-plus in business, I had never seen the government give away money as I saw then. And in my mind, it raised a red flag of looking into what is going on here, and how much money was printed? So back in 2020, when all this was happening, I started monitoring that pretty closely and I noticed, I think it was 18 months, and I think we’ve printed 40% of every US dollar ever originated in the last 18 months. Yeah. That was concerning to me. And therefore I began looking at, different places to invest money that weren’t necessarily in US dollars, because their money devalued, in my opinion. And so crypto was on my radar, I had invested for the first time in Bitcoin in 2017 like most people are at the top of the last wave and then lost a bunch of money as it went crashing down in 2018. But I’m just holding it because I didn’t make a really big investment. It was speculative back then. But ended up doing a lot of research on the market, ended up investing, putting a decent chunk in 2020. And then just letting it kind of ride. In January, I felt like I was probably the next Warren Buffett because my investments are up like 500% because Bitcoin had gone up so much between August 2020 and January 2021. And then I started looking into the different trading tools that were out there. I started active trading and I was able to take a five-figure investment and turn it into well over seven figures by April of 2021 by using leverage tools that are made available through a lot of the different trading platforms that are out there. So leverage is Dep protocol. But the problem is if there’s a big capitulation event where crypto goes down by multiple percentages; in my case, it was 35%. It had to go down 35% and then you’d have a liquidity event. A liquidity event means that if auto sells your crypto to cover your part of the staking you have to get that leverage, right. So anyway, kind of a complicated process, but I had learned all this stuff very quickly, and I was exposed myself to it and a lot of people were exposed to it. And on May 19, Bitcoin crashed from 42,000 to 30,000 overnight. Seven figures were the crypto in one night.

Seven figures of crypto in one night? Gaining or losing?

Losing. I lost a huge amount in one night. That experience was kind of a kick. It felt like I was playing with these tools and I didn’t know what I was doing. Recently I was asked to join as a Partner in a crypto Hedge Fund which I decline because the focus was on folioboost. I have improved my trading skills significantly and the thing that I wanted to do with folioboost is to teach people about the different tools out there and how the market is manipulating how it works, but without having the exposure to these major capitulation events. And the other thing that I noticed is that, I became somewhat of an influencer of my network and the State of South Dakota has put me on retainer to go speak at all these different events about crypto. So a lot of people are coming up to me about a lot of different projects that they want to invest in now. There is a lot of focus now on all these dog crimes, and mean crimes are what they are called. There is this amazing utility technology being built in crypto today. And I wish we could educate people on what those good projects are versus something that just Elon Musk is pumping on Saturday night live. So my mission with folioboost is to create an educational platform that also provides a safety net for people to trade. It has the upside to it. The reality is people want to take $100 and turn it into $10,000, I help them figure out how to do that. With folioboost, if you are a good trader, you will be able to do that.

Will folioboost be a place of resource for learning about crypto, what crypto is, and the different types of crypto? I could ask a hundred questions about that because I don’t know anything about crypto. I started Bitcoin mining a long time ago and I thought; why is anybody going to trust anything but physical currency? But I was wrong. I dismissed it and I regret it. For someone who wants to learn about crypto; will folioboost become a resource hub for learning and education?

I wouldn’t say it’s necessarily going to be a resource hub. We want some resources there, but it is going to be mostly researching the actual projects. So we are pulling in current market caps, API and we want to make trading fun, the actual trading side of it. There are a lot of resources out there if you want to consume in-content. There are good YouTubers, there are bad YouTubers just like in any other industry. Tons of resources exist on that side. For us it is about educating people on like; “Hey are you a good trader? How do you stack up? Are we giving you transparency in a fantasy environment?”

Ok. So you are learning how to build currency in the game and hopefully take that and apply it in the market?

In our circumstance, our game has a buy-in, so we have created our currency. Let’s call it boost-token, and so the way it works is, as you buy the boost-token, you enter a game. You compete in that game. Let us say the buy-in is $5 the top 25% of traders are rewarded on a tiered basis. The winner may walk away with $500 depending on the value of the tokens and you can exchange that for $US. So it is a rewarding competition. You do have some skin in the game and there are rewards if you do well with your picks. The way we do it we give you a $1,000,000 fantasy portfolio budget and you deploy that into 7 different crypto projects. So you are going to research the projects you want to submit the budget in. You submit into the competition and it lasts let us say 3 to 5 days the competition might run. And at the end of that its stack value, meaning how much your $1,000,000 was able to increase. The interesting thing about folioboost, even if Bitcoin is down 50% and the whole market has crashed, we still have winners. Because it is how you stacked up and how you picked against other traders.

Wow! That is fascinating. So if people want to join folioboost where would they go? You might as well mention that.

folioboost.io is our site right now. We are in product development right now but we will be launching in the first quarter. We have a whitelist there and anybody who joins that white-list is going to get free boost tokens and we are giving away $1,000,000 in crypto this year. And the first signups are going to get free entry into that competition. It is going to be $25 to buy into it. So if you sign up now on the white list you have an opportunity to get a chance at the $1,000,000 portfolio for free.

That’s amazing. What advice David would you give someone just starting in business? Based on your experiences.

Find a good mentor, would be one. Somebody that really; there are so many mistakes that can be made in the business. For me, it was my Grampa. He sat me down and said; I remember this conversation was over lunch. And he said, “You either eat your lunch or somebody else is going to eat it”. It’s interesting advice. Make sure that you are taking care of yourself in business. And that’s an interesting piece because we always end up thinking about the business first, maybe employees first, maybe the clients first. But ultimately if you are not taking care of yourself with the input like education. There are different levels of that, there is physical. Like lots of entrepreneurs they quit working out and they quit exercising. For me early in my career that was what happened. I was 100% in on my business and did not have a lot of balance. And lately, cycling has become a big part of my life. And I lost 35 pounds. I got back in shape. I have more energy. I work fewer hours and I am much more productive. And it is because of that balance in my life. So I think it is very important for entrepreneurs to understand that just invest. We have a choice. Like last night I had the choice of figuring out which Netflix series to watch or listen to an audiobook. And I was just scrolling through the different Netflix things to watch and decided there was nothing worth my time right now and so I downloaded a new audiobook and listen to that for an hour before I went to bed. And we are faced with those choices every day and how you decide to invest your time is the most important commodity you have. So if you want to get better at something, there is always the information out there to do that. We live in this unbelievable era of humankind where information is free and it’s available. Anything you want to do, right there.

You can learn almost anything you want to. In the city that I live in, with a free library card you can get access to LinkedIn learning for free, which is US$50 per month. I have been taking advantage and have so far taken over 60 courses there. So I get what you are saying. You can always improve yourself. What have you enjoyed most about starting your own companies?

I think I am a very good zero to one guy, I call it and that is zero to a million. Figuring out the first pathway to the customer, the strategy, and the pitch. In my space, it’s raising venture capital. The outreach sucks I don’t like that part of it. Like trying to get into meetings. But once I get into the meetings and get to present my vision, as I just presented folioboost to you. That to me is exciting because I have so much passion for what we are creating. Anytime I have started a company in the past, I try to just light that fire in the early stages. As an entrepreneur, you are the only one that can sell that vision nobody else cares. Like your energy and your persistence, I am bringing that to market. It’s like you are starting a freight train. It is really hard to get it started, but once you get going it is also hard to stop it. The momentum is so powerful. I like being the conductor on the freight train and I love stoking the fire to get that thing going.

That’s an amazing analogy. I have told my wife about it before. I am happy that I am not the only one that thinks that way. Where can people learn more about you if they want to connect with you and learn more about folioboost? I am then going to ask you five rapid-fire questions if I could?

Sure. You can connect with me on LinkedIn at linkedin.com/cryptocowboy. Recently I have been getting on Twitter, never had much of a presence there, but with crypto, we decided it was a good place for me to be. I am cryptocowboysd, sd as in south Dakota on Twitter. I am very active and it is all things crypto. So if you are interested in that industry and you want to learn about it. I have a lot of good content that I am retweeting and talking about. So those are my channels.

So I’ll ask you five rapid-fire questions if I may. Number one what is your favorite color?

Blue.

Where did you go on your last vacation?

We went to Utah for a bike race. National park area. Southern Utah.

What is your favorite meal of the day, breakfast, lunch, or dinner?

Probably Dinner.

What time do you usually wake up in the morning?

Around 5:30

What is your favorite type of music?

It changes all the time. I am an in-the-moment kind of music fan. Right now I am listening to a lot of house music for recycling. But I am also a big fan of Country music and I like country rock.

Well David I want to thank you so much for being on the show today. It has been a pleasure having you and learning about you. I am just very grateful. Thank you very much.

Thanks for having me, man. Good to meet you as well.

Ok. Bye.