Business owners are always told to think outside of the box. But what can they do now when the box has already gone? The COVID-19 pandemic has undeniably affected the business industry, most especially small-time business owners. At a time of uncertainty, we can’t think outside of the old box anymore because there is already a new box, and no one will know what size and shape it’s going to be. In this episode, Michelle Seiler Tucker speaks with Alec Stern—entrepreneur, speaker, mentor, investor, and known as America’s startup success expert—about his entrepreneurial journey, how the COVID-19 is changing businesses, and what business owners can do that will help them advance going forward. Bringing forward the importance of innovation, Alec explains why getting comfortable with the way things are closes businesses up. He further discusses the need to market and talk and listen to clients and customers, especially during this time. Leveling the playing field for small businesses against big competitors, Alec then shares with us the amazing things they do at Constant Contact to help business owners go to that next level.
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Innovation And Marketing For Small Businesses In This Time Of COVID-19 With Alec Stern
I am excited to have my very good friend, Alec Stern, on the show with us. Alec is an entrepreneur, speaker, mentor and investor. He has become known as America’s startup success expert for performing hundreds of keynote speeches worldwide. He’s been a Cofounder or a Founding Team Member of eight startups and five exits, two IPOs and three acquisitions. As a primary member of Constant Contact founding team, Alec was one of the original three who started the company in an attic. Alec was with the company for eighteen years from startup to IPO to a $1.1 billion exit.
Welcome to the show, Alec.
Thank you for having me.
It’s an absolute pleasure to have you. You and I have crossed paths many years on many different stages.
We’ve been to some of the largest conferences and shared stages together.
We have and investment panels too. I’m an investor. You’re an investor. Tell me how did you get started in entrepreneurship?
I got the bug when I was young because growing up in my family, they provided for us for sure. If I wanted something special, I had to go make the money and buy it myself. I became very entrepreneurial as a kid. I saw my mom start a business as an entrepreneur and would assist with things she needed as she was growing her startup and small business. It all began there. After college, I came to Boston. I worked for a large company and then someone senior was going to a startup and wanted me to join and come along. I didn’t initially because I had a big book of business sitting there that I wanted to close. Ultimately, I did join and we ended up going public. I got the experience of seeing something to grow and then have an exit. That started the bug for me to do several.
That was Constant Contact that you’re talking about right now?
No, that came later. I had several prior and a few after.
What was that first entrepreneurial business that you talked about? Can you say the name of it?
Yes. You wouldn’t know because they went public and then it got sold. It was called VMark Software. We were dealing with small businesses and we had a database that smaller businesses could use easily. We recruited applications to develop on our platform and then sell to small and medium businesses.
You said that you started entrepreneurial as a boy. What age did you start?
I was eight when I first got into the snow shoveling, car detailing and lawn cutting business.
I have a nine-year-old and I keep telling her, “If you want something, go work. Create a business, sell lemonade, do something. Mom is not going to give it to you.”
I had to learn that as well. It’s funny because I started recruiting some of the other kids in the neighborhood. I got more and more business. I’d go recruit for a new business. I would get some of the kids in the neighborhood to help me. I would get paid and pay them.
You were a leader from a very young age. You see a lot of kids that will go out and deliver newspapers or cut grass or do something like that. They typically don’t recruit other kids to do that.
“If you don’t innovate, the competition will show up and then pass you.”
My first job was I delivered a free newspaper. I read it once and I’m like, “It’s free. No one’s going to read it. Why do I have to deliver this?” My mom kept pushing me like, “It’s good that you have a job and they’re paying you.” I’m like, “No one’s reading this thing. It’s terrible.” I started delivering to the first few houses and the last few houses. Finally, I got fired. I didn’t want to do the job. I got fired. I started early in my entrepreneurial career. I was like, “No one’s reading this free paper. I’m not delivering it.” I got caught not delivering it. I was like, “I don’t want the job anyway.”
Your mom was an entrepreneur. What about your father?
My dad was in textiles and he was on the design side. He was involved in several patents and stuff, but more of the engineering R&D type.
Do you think people are born as an entrepreneur or do you think it’s something that’s a learned from generations?
I don’t think it’s so much of a born to be an entrepreneur, but it’s how people deal with things. Some people are street smart. They can assess the situation and adapt as needed. Others are more book smart and we read all the books on how to start a business and how to scale it. Both are great approaches to it. It’s like music. I’m a drummer so you either play by ear, you play by music or you do both. Entrepreneurs are the same. It’s the drive and ability or willingness to want to succeed. There are lots of characteristics that you could point to and people that are entrepreneurs. It’s more about are you the type that seeks the drive or do you want a 9:00 to 5:00 job that you leave behind you when you go home or do you want to quit that job and work twice as hard and do every job. Be the general store manager of your own business and wherever you have. It’s probably a combination.
What are you, the street smart, or the book smart or both?
I’m both, reading situations, people and visualize the outcome of situations. I do a pretty good job of that and assessing what’s needed in each of the different situations. Having studied business and stuff and reading some books, I’m not obsessed with the reading of the books as much as putting things into practice and testing it myself. It’s a combination of both.
How many businesses all together have you been involved with?
I may say 8 to 10.
How quick can you assess business and decide if that’s a business that you want to take part in?
These are the main three or four things. How big is this market? Is it a large market that you’re addressing? It may start with a small vertical in the market and then expand to others. How is it being addressed with the products and services that you’re considering? Is there room for improvement? Is it something that hasn’t been updated or anyone enhancing the way things are done? Do you know your exact target market? If so, go get feedback from them. The faster you can go out and talk to them about what their goals, their objectives, their vision are. What do they want more of, less of? I want to increase revenue.
I want to decrease the amount of time I spend on things or decrease my expense or whatever the major things that they’re feeling. I want to say top of mind to my customers, I want to drive them back in. I want more revenue. I want new customers. Whatever the things that they’re achieving. If you then show them what you’re doing or you want to be doing and why I didn’t see there’s an opportunity there, you’re onto something. It’s an execution play. If it’s a good idea and the target market feels that they wanted or needed, then you got to let it be able to execute it better than the others that are out there if it’s not new.
Is that mostly in startups that you’re referring to or are those existing businesses here?
Everything we’re talking about is startups. I’ve invested in and gotten involved in existing, but most of what I’m doing is looking for new ideas, either products or services that could be done better or new products or services that don’t make sense. That’s all of what I’ve said was around assessing the market fit. You could apply some of that to an existing business, but I’m talking about going out, how to get started if you have an idea and how fast can you tell if it’s a good idea. What’s your target market telling you? You’ve got to go out and assess. If they see a good fit, then there’s potentially a good opportunity.
Do you do what Kevin Harrington does where he sees an idea and then he goes out and tests it immediately on Facebook and some of those social media platforms to see how the market reacts to it? Do you do the same thing?
I don’t want to speak for Kevin. He’s a friend and I’ve known him for years. There’s a product that’s already been built and they’re coming to say, “I forgot to go to market,” and immediately get it out there, get feedback, and test it. Even earlier than that, you might have an idea. How do I take this idea and source out the idea? That’s what I was talking about. You take an idea forward. You bring it to your target market. You get feedback. You go off and build. Based on feedback, you’d build something they want versus working in a vacuum and creating something because I know what they want. I used to be one of them.
You don’t know who they are now. You got to go and bring a prototype or bring an idea or a service or something to them and get their feedback before you’re going to go too far with building it. He may even start earlier with somebody with an idea and then help build the idea into a product. Usually, it’s consumer-centric and products. These could be products or services. When you’re going out to do the testing of it in the market, certainly going out, pushing out things out on social and the direct response through social or TV or commercials, or what have you is what Kevin and his team and others have succeeded at.
Do you look for a particular industry or a particular service or are you pretty much industry agnostic and it’s a product that you think will have a huge market share?
I’m in a lot of industries now. Most of my career has been in software for the most part. Constant Contact was one of the first to SAS offerings on the IBM platform, one of the first two SAS offerings for small businesses. SAS, as everyone knows it now as Cloud or SAS. There are so many things you can go out and pay a subscription for and use, rent the software if you will. A lot of that I look at and do now is through a venture fund that I’m a limited partner in called G20 Ventures. A group of twenty, G20 Ventures, and it’s here in Boston and on the East Coast, we look at software and different unified communications, ad tech and a bunch of areas for tech which would feed through that. For myself, I’ve expanded out beyond tech, which was most of my career. We’ve got an innovation think tank that is creating manufactured products for consumer medical devices. There’s some B2B stuff. We’re creating our own companies and products. We’re looking at large markets that haven’t been disrupted in years and create new products.
Has that changed now with COVID as far as what you’re looking at? What was once popular is not. Ford is manufacturing respirators. You’ve got all these companies stepping out and manufacturing all these things that everybody needs now. Has that changed what you’re looking at or are you innovating as well into that?
The stuff we’re innovating now, some of it is essential and will be essential going forward. Hard related medical device, for example, that’s going to be essential and we’ve got a walking cane and reaching grasper combined, which is essential. Nothing is changing and what I was doing before to what I’m doing now and what I’ll do going forward. I think to your point, there are several areas of disruption available for people. The whole distribution model of how we moved goods and services around the world even in the US has changed. The products and services that are being made, there are new categories and things as you’re referencing that will be opportunities.
There are lots of areas, but there’s still something to be said for how we’ve done business in the past to how we’ll do it in the future. There will be changes there as well. As we’re doing here, there are all kinds of new things that will be supplemented into the way we do business. For a retailer on the main street somewhere, it’s going to always be wait until someone shows up, market to drive them back in to show up. You might be doing things virtually. I’ve been coaching a lot of businesses even throughout this. While we’re sitting and sheltering at home, there might be a gallery that has a storefront full of art that’s locked up because they can’t have anyone come in.
I’m like, “Bring the art home. Bring the art out to a live session. Bring the artists on the live session and have them talk about what got them into painting and so on.” Do a curated art show and have them talk about the artwork. Do it live and have one of your customers come on, have your customers do a watch party and lo and behold, someone buys a piece of art somewhere in this sphere of our connections on social, there’s a way for you to unlock the treasures of, in that case, the gallery, virtually. There are a lot of things that will change in how we can do business and broaden our reach as we’ve gotten accustomed to doing these Zooms. My mom is 87 and asked me if she can have a Zoom account.
It was on one of the news shows that Zoom hit like, I don’t know, $1 billion or $500 billion or something like that. During the COVID virus, everybody’s Zooming right now, so it’s good for them. You’re talking about what I always talk about, which is a pivot. I tell my clients too, “You must pivot right now. You can’t do business the same way you’ve been doing business.” You mentioned art. It’s funny because on my last show, we had a gentleman that has Artscape. Artscape is a virtual reality for art. There are 3,000 different artists that he works with that licensed to Artscape. You put the painting up and then you use the app on your phone and it makes it come to life. It’s cool. There are so many different things that business owners can do. Don’t paralyze, don’t freeze, take massive action and pivot. Figure out how you can pivot.
There are a couple of things are lost. When everyone moved home, the businesses closed down. The assumption is, “I’ll get back to my customers when things come back alive in our town or our neighborhood,” or what have you. Now’s the time you should be doubling down and staying in touch with your customers. Most people have left those behind. The point is now, they want to hear from you and have more time. What can you be doing in your business that is an extension of your business adjacent to what you did before, but now do it a little bit differently? Even like restaurants, where they could be putting programs in place where do you want a meal in the box? That’s takeout. Do you want a meal in a box that you bring home and you cook with the chefs live on a Zoom with the family?
Here’s the box of all our food and here’s the prep you do before the show. When the show starts, we’re all going to get on there. The families are going to all cook. You can be doing these virtual experiences. The chef comes alive. No one gets to experience most chefs. Every chef, at least the ones that I know here, maybe not have TV shows and everyone knows them as personality, but they have an opportunity. They have such great skills. They make amazing food. To imagine seeing them on a live, helping you cook your meal, talk through the meal, pairings and all kinds of stuff. You could have a weekly family cook together. Industry by industry, you’ll find all kinds that you modify it a bit.
It’s funny that you mentioned restaurants because we have a restaurant right here in New Orleans. You’ve been to New Orleans. We have a restaurant called Commander’s Palace. Have you ever been there?
I know it by name. I might have been, yes.
I was a world-famous restaurant so many years in a row. Everybody knows about them. I always ask my clients, “What business are you in and what business should you be in?” They’re in the experience business of creating experiences and connecting people. When the restaurant closed down, they came up with this genius idea of having a wine and cheese tasting online. My girlfriend bought it from my husband and me. It’s anywhere from $100 to $500 and includes like 3 or 4 bottles of wine and cheeses. They had like 300 people on the last Zoom call from all over the country. They have people from Paris. Even if you can’t get their wine and cheese, you can go out and buy a similar wine and cheese and still be part of the experience. They went out and asked their clients, “What do you need?” The clients were like, “We miss everybody. We miss our friends. We miss connecting.” That’s what they went and created. Your idea is brilliant.
It’d be like every restaurant, if they want to get into the experience side that way, everyone’s pent up to want to go to these restaurants again, “When are we going to be able to go back out and have a nice dinner?” Some of the restaurants, it’s like, “Why don’t you offer for $100 gift certificate now, I’ll give you $150 in a product while we open?” One restaurant raised $30,000 by selling these gift cards. Everyone wanted to support them and help them. That saved the restaurant because they needed the funds to do stuff before they were going to get there, PPP, monies and some other things. We always say, “Think outside the box.” The box has gone. There’s going to be a new box. We don’t even know what size and shape it’s going to be. Start thinking about what you can do that would move you and advance you toward how we’re going to do this going forward. These experiences that these restaurants that we talked about in the gallery and all kinds of other businesses, that could stay in the mix. They can broaden their reach and they could do the experience beyond who’s walking into the restaurant.
They can come out of this crisis bigger, better, stronger, more scalable than I ever wore before it, in my opinion. You can go down and do this for every single industry. I always tell my clients people get stuck. I always say when you’re in your fog, it’s foggy. It’s hard to read the label from the inside of a bottle. You need an outsider’s perspective to do so. Sometimes these business owners need to hear from somebody like you or somebody like me or somebody that they can bounce ideas off of.
The other key thing is that we’ve walked through a period of time, before all of this hit everyone’s on their hamster wheel, the day-to-day, the tactics. We’re going through the motions and the cycles. They often say, “Take time to work on your business, not in your business.” This opportunity has given people the chance to step back and look at things strategically. One of the questions I asked someone, “If a business was the way it was before, and you were on your day-to-day rhythm, where you’re at a plateau or do you see scale opportunity in your business the way you’re doing it before?” Ninety percent of them say, “No.” It’s like if you’re happy with the amount of business you were doing, it’s family-run. You’re providing for your family. You’re paying for your kids’ colleges. You’re getting that second home, maybe the boat later or whatever.
“People can get comfortable and fail to see the bigger picture and opportunity.”
If you’re happy with that, you have the right lifestyle and you can provide the way you want for you and your family, then that is your scale. You don’t have to worry if you go beyond that. Most people say, “I want more. I want to grow this. I want to maybe open a second location. I want to do all kinds of things.” This is your opportunity to say, “Were you on the path to doing that or not?” Most would say they weren’t. That’s okay. When people hear the word pivot, they think that it’s, “I’m over here. Now I’m over here.” It’s like, “What’s adjacent to what you did before? It’s an adjustment.” You might have some adjustment and you might find the bigger opportunity sitting right next to what you’re doing now.
We call it a congruent pivot because it doesn’t mean leave this business and go start another.
Everyone jumps to that. That’s not the answer. It’s probably sitting so close to you and because you were so caught up in the tactics in the day-to-day, you didn’t see it.
If you’re in your fog, it’s foggy. Things are not clear. When I wrote my first book, Sell Your Business for More Than It’s Worth, in 2013, I did the research. It used to be the 85% to 95% of businesses would go out of business in the first 1 to 5 years. When I wrote Exit Rich in 2019, I did the research again. I wrote this book with Sharon Lechter. I did not believe it. I had my team go back and research it over and over again. That number has changed dramatically. It’s now 30% will go out of business in the first 1 to 5 years. Now, over 27 million businesses, 70% of businesses will go out of business after being in business ten years. Did you know that?
I knew the stats. I didn’t realize there were that big.
You hear about the big box stores like Toys R Us, JC Penneys and Kmart. The number one reason that all these small businesses are going on to businesses because they stop innovating and they stop marketing.
You raised a good point about we can’t sit on our heels a bit or sit back on your skis instead of putting yourself forward and attacking the market and trying to stay ahead of everything. Constantly innovating and looking for new ways to improve. What happens is competition shows up and then passes them by because they were comfortable the way they did it before. It’s always worked this way. That’s one more business that’s been around for a while. It’s all songs brought in by them.
You don’t wander into the ground and closing up. They said, “It always works this way.”
I’ve had several that I’ve tried to try to work with to get them to think outside of what they were doing and expand on what they were doing. People can get comfortable or don’t see the bigger picture and the opportunity.
They’ve stopped asking and listening to the customers or clients about what their needs are. Whoever makes it easiest for the consumer to do business with them is the one who’s going to win. Look at Amazon. Amazon is winning because you can order anything you want from your bed wearing whatever you want to wear.
It’s going to be there in 2 to 4 hours.
People have to innovate. Let’s talk a little bit about Constant Contact. How you got involved, the process, and then you had a huge exit. My show is all about Find Your Exit.
I wrote out a testimonial for your book, which is somewhere in the inner cover or something.
Thank you for doing that.
You and I will share close to both of you and you guys are amazing. You guys did a great job with the book. I had done several startups prior to that were dealing with small businesses and different aspects of small business. The founder of an idea was also doing something similar. We had a joint mutual friend that was an entrepreneur that had some success. He had said on a couple of occasions, “You guys should meet.” We happened to be at our joint friend’s wedding sitting back to back but never met. He got caught up in all the love of the marriage and whatever, the wedding itself and didn’t make the connection. After he came back from his honeymoon, he said, “I’ve got to connect you, guys.”
I was coming in to talk to Randy. He had a product. I came from a solution perspective. We got a meeting of the minds going and connected on how we wanted to help small businesses from a different perspective. We wanted to level the playing field for small businesses against big competitors. Amazon and others were out there. They had enterprise tools. They had agencies. They had teams. They had resources. They had whatever they needed. Main Street small business had nothing. How can we level that playing field? If we were to provide this self-service, easy to use the tool and eventually suite of tools, could we level that playing field? Let them create these great looking emails and do other things later.
What we needed to do is go out and talk to the target market and understand what they were looking for and what they wanted to do. They said things like “I’d love to stay top of mind to my customers. I’d love to be able to drive them back in. I’d love more revenue at car customers to tell others and drive new people in.” When we were able to say, “If we were able to provide you an easy to use tool that all you have to know is what you want to say when you want to say it and to whom. Everything else was taken care of for you. You can put your colors in, your logo and your message.
We do all your tracking and everything. Would you see that as being a useful tool for you? They all got wide-eyed and said, “Yes, that would be great.” We knew early on that we had an idea and we’re onto something that could help that target market. It was a question of going off and building it. We didn’t stay in “stealth mode,” which a lot of companies do. I put that in quotes because they close because they oftentimes want to be so close to the vest and don’t want to talk to anyone. They’re afraid someone’s going to take the idea. You don’t have to give away the secret sauce, but you’ve got to get out there and show them something that they can give you feedback on.
We did that and we started building the product. It wasn’t finished. We got it in the hands. I went out and found for customers that would take the product. I always say, “Don’t go to people you know, don’t go to family, don’t go to people you’ve done business with before. Go to total strangers in your target market and you’ll get brutally honest feedback.” We did. We got those four. They told us what they thought. If they found a bug or it wasn’t working right and other features they wanted. They ended up becoming our first examples of case studies and testimonials.
We started on that track. It was three of us in an attic. It was Margaret, Randy and I. They were both technical. Margaret was our software architect. Randy with the original technical idea and both were extremely bright and deep on the abilities on the tech side. I was on the go-to market on the business side. We had to figure out what was our go-to-market look like. We got a lot of nos. We got a lot of people telling us no one’s going to use email for marketing. They already have an inbox. They’re not going to use some other tool.
What year was that?
It’s 1997 to 1998. We’ve got a lot of this no. It’s also a small business. Who’s going to go down the main streets? If you’re a small business, you need an army of salespeople. The only one that’s doing that is ADP, Intuit and others. We heard it all, but we stayed focused on this. We saw what we could do, how excited they got and how wide-eyed they got with what we were working on. That kept us motivated to keep going. The question was how are we going to get this going en masse? It was me, myself and I on the team, going out, talking to small businesses. I couldn’t do that or go to the main street around the world, wasn’t going to scale. The answer is not to hire 100 salespeople.
We ended up working through 100% through a channel strategy with alliances, partnerships and finding where small businesses were hanging out and then plugging ourselves in with our solution, our offering and the best practices to those organizations who then would expose us to our target customer. The flywheel takes time to get going through channels as it does even direct. The important point was that we were able to land a lot of those key partnerships, get ourselves exposed to the target customer and start to see some flow of customers come in. That flywheel got going and it allowed us eventually as we were building up and scaling to do our marketing and drive customers directly to us.
You’ll hear radio ads and TV ads. We were first. Imagine 15% of all startups are something brand new and innovative. It didn’t happen before. Airbnb and Constant Contact in the same mix. It wasn’t another tool for small businesses. Once we go that flywheel going and we did do our marketing, we had to market the category first in email marketing. Others started to show up as competitors and this was some years later, but they were getting the benefit of our marketing dollars. We were educating people on the category. We had to do that first. Second, we marketed and did ads around our brands. It was a long, fun journey. We were an overnight success in eighteen years. We went public at year ten roughly and about eight years later, we sold for $1.1 billion.
There were three of you that started it, right?
When you said that you used other channels, what kind of channels were those? Can you tell us some of those?
All indirect relationships, one to many scenarios, not direct. Direct one to one is if I walk to a small business, I tell them about it and they buy. We had tons of different channels and categories that we work with. Anyone that’s reading, the average business will have fifteen channel categories for business. I’ll ask people, “Are you working through other alliances, strategic partnerships, channels to get to your target market?” Many are not. There’s an opportunity for everyone in your business to work through others. In the case of working with small businesses, bringing a product and suite of products like Constant Contact to market, there were 100-plus channels that we worked through. The one that everyone that’s reading shares is an association and member org.
That’s one category and there are many subcategories underneath. You can look at your chambers. You can look at the associations that are in certain verticals, for example. Every business we’re in, there’s the association of local, regional, national. They have networking groups that your target customers meeting, and they also have their conferences and they look for thought leadership and best practices for speaking. We’re speaking on all the stages to get access to our target market. That’s the one everyone shares.
There’s so many that deviate from there. Complementary businesses, for the case of email marketing, would be the CRM or the POS system, the donor management system or the different things they use to run the business. We could be a plugin to take the information they’ve gathered to turn around and send communications out through email for them. There are all kinds of different categories. There are tons of bloggers and influencers talking about your industry. If they like your product, they want to tell their listeners so you can go down the line and find a ton of different categories.
I got Steve Forbes to endorse Exit Rich, so that was good. Kevin Harrington writes the foreword, so that was good. How many noes did you get? I always tell my clients, “It takes so many noes before you get that yes.”
I treat noes differently. To me, no means not now. I hear a no and it means it’s not now for us to work together. Oftentimes, I would circle back around with people, stay in touch, update them on what we were doing, give some highlights to what we were doing and then those noes became yeses later. We got a bunch of them. As I mentioned earlier, there were a ton of noes that we got for all different people that we were circling to look at possible investment or loan or are possibly becoming like a strategic advisor and what have you.
““No” means not now.”
You were in the beginning. You were like before anybody was doing it. There was nobody.
There was no one doing it for small businesses. We were the first. Understandably there’s some of that about people not seeing something like this. To my point earlier, not being able to sell it to small businesses effectively without an army of people and a big war chest of money to do so. Channels came into play to help us with that scale.
I’m a huge Constant Contact user. I have been for years. When I heard you speak on stage, I’m like, “I’ve got to meet him.” Tell me about the exit. Did you plan the exit because you all went IPPO and then you said eight years later, you sold?
There’s planning around the IPO the ten-year mark and you start thinking about that. When your business model and your success start working directionally for how you’re managing your revenue, your expenses, several customers and all kinds of those metrics started growing. There was a logical path to potentially go public. We were fortunate to be able to do so. From there, the business was growing. There wasn’t an expectation that there would be anything beyond that. Things happen for reasons. We partnered with somebody and we had good success. We pour gas on the partnership and had more success. They came around and said, “We want to buy you.” We were a great fit for all the things they were offering. We fit an area that they didn’t have an offering for. It was a logical fit for them to want to acquire us and they did.
Dirts International, which was a house of brands, about 40 other acquisitions prior. We fit there, continue in the journey of someone who is starting a business. They did everything from what you need to, domain, you need your email accounts with that. You need a website. You need eCommerce. We were in the nurture and staying top of mind engagement area for the customers that they had acquired. They had all the tools leading up to staying top of mind and being able to work with their customers. They had millions of small businesses. It was a perfect fit and not anything we sought out and said, “These are the guys.” We didn’t know them. We started the businesses around the same time and they always stayed in touch. We’re able to work through a partnership that was successful. The rest was history.
Did you have an M&A advisor assist?
We were partnering. We’re doing business. It was successful. We weren’t suiting to have someone to help us find a buyer. We were doing great. Our revenues when we sold were $450 million with 750,000 customers. We had 1,500 amazing employees, 8,000 partners. We were on our way and things were going great. It wasn’t a situation where we were looking to find somebody who was going to shop around the business and see who would be a good target. We partnered with somebody. We had great success and it led to the acquisition.
That was great for you all. That doesn’t work for everybody. A lot of business owners need advisors. It’s a great partnership. When they bought you at $1.1 billion, did they buy a percentage or did they buy the entire business?
They bought the whole company. Once we came into the family, we were both public. We went private and then fell under them as a public company.
How long did you stay on?
I stayed about a year in a consulting role. I didn’t have any real responsibility during that time and moved on.
You could retire, but yet you still keep plugging along and putting out some great businesses?
We created an innovation think tank with some people on the manufacturing side. We’ve spun out three businesses now. Two are generating revenue and the third one is a medical device. It’s going to take a little more time. I took some time off but didn’t have it in me to stop. I’ve got a lot of ideas and work with some great people that have ideas. I wanted to play in the space a bit more there, spend half my time paying forward, speaking around the world, doing 10 to 15 podcasts and summits and lives a week. Being out there to share early days lessons learned and some of the things that we did in different companies.
Everyone gravitates to Constant Contact, but there were several that make up some of the learnings that I have. It’s not a judgment. It’s great that it had such a household name and business-hold name. There was a lot of experience beyond that comes into the mix. For me, it was also being able to take all those learnings and test in different markets. I’ve tested things in the nonprofit space. I’ve tested things in B2B, B2C, consumer and a medical device. A lot of it carries over, which for me has been a personal challenge to test things beyond tech. It’s been great that it all applies and I can help, work with small businesses and startups to take it to the next level.
You consult small business owners as well. Do you have a consulting company?
Yes, I do. There’s creating breakthrough mentor opportunities. I don’t take on many. Some I’ll jump on the board or I’ll be a strategic advisor, or I’ll be a mentor consultant. It depends on the role. We’ll work through and see what makes sense. I have been helping some. It’s picked up a bit more these days a little more time. I’m always open to that.
What’s your number one tip for business owners? Number one, if you picked one thing, one tip to tell our audience, what would it be?
It’s one of the first things I always lead with when I’m talking to them is what’s the one core thing that you can do to be successful in your business? We all sit there and get wide-eyed about what we can offer our target market. We want to add all of these things. I’m going to do this and I’m going to do that. I call it the bicycle wheel syndrome. If you had a bicycle wheel and every spoke is another idea. We all want to offer all those spokes on that wheel to our target market. I would ask what’s the one spoke you’re going to start with, you’re going to have success with because if you have success with doing the first one if you can execute that first one, you’re going to get feedback.
You’re going to get case studies. You’re going to get revenue. You’ll be able to then hire and do some marketing. You can do all kinds of things when that flywheel of revenue kicks in. You’ve got to nail the first one and then you’d go to something adjacent to it. Some of those people that are adjacent. Eventually, you get two crazy ideas that are completely different. If you look at large companies, the ones that have succeeded, that have expanded and gone outside of even that first core thing they did, they’ve all done it very logically like Nike. They started with sneakers.
They did sneakers initially for basketball. They did for tennis and other things. They broadened those two complimentary things around the sneakers, like the sweats and the running clothes and what have you. They went to other industries like golf, where they’re doing cleats, golf clubs, bags, balls and all kinds of other things. You can’t do golf clubs and basketball shoes at the same time when you’re starting. It makes no sense. I’ll oftentimes talk to startups and some small businesses. They’re doing that. They have all these grand plans and ideas. It’s almost like when they’re sharing all the ideas, it’s like, “Stop me when I tell you when you’re interested in.” I’m like, “I want to know what’s the first one that you’re going to succeed at. We can put the others on the shelf for now. We can talk about those when you’ve had success.”
It’s like the book, The One Thing. Have you ever read the book, The One Thing, by Gary Keller from Keller Williams? What’s your next big masterpiece if you’re going to exit?
I worked out of a few. One of them is I’ll demonstrate. It’s a walking cane, like a normal cane. People can’t bend down and have mobility issues, so we added a Grasper.
Do you have a patent on that?
We have several. It’s a cane and a grasper combined. It’s called the Reacher Grasper Cane.
Is there anything else on the market like that?
No. We have the patent for a concealed grasper inside of cane.
Is that on the market now?
It’s on Amazon and also ReacherGrasperCane.com. It’s essential. We brought it to the market. We’ve tested it through a bunch of different channels, channel strategy. People are buying it directly as well. That’s one of the things from the innovation think tank.
I want to buy that now.
The grasper helps you takes stuff off of shelves. People are buying it for the quality of the grasper because most of the ones out there don’t work as effectively and they break and so on. This is the best one that operates like your hand and picks something up. It can hold a little bit of weight, five pounds. Someone in the supermarket being able to reach something off a shelf without having to ask or whatever. I’m walking down the aisle and they don’t have the mobility to be able to reach something. It gives them alternatives.
I can use that in my kitchen when I can’t reach stuff.
When you’re walking around the house, it’s used a lot. My mom had both knee replacements and she was going out to the car a few years back. She was fumbling through a bag, got her keys, dropped them on the ground. She couldn’t bend down to pick them up. She had to wait. She was calling and trying to get someone to come to the car, but no one’s around in her building. Finally, 25 minutes later, someone walks by and she yelled to them to come over, to pick up the keys, to hand to her so she’d gone her way. She’s got the Reacher Grasper cane, drop something, converts it to the grasper, picks it up. She puts it back as into a cane and goes on her way. That’s some of the things. Disrupting two markets that have been around for a long time, but no one’s innovated. Create the best grasper, create the best cane and then we put them together.
“Accomplishments are something to build on, not rest on.”
That goes back to my earlier statement where I said, “Business owners need to innovate.” It’s an industry that’s been around forever, but they haven’t innovated it.
How many times have you seen the aluminum cane with the gray handle and the gray tip that gets handed to in any setting of hospital or PT or wherever you go? There’s a better way. We were able to create it. It’s award-winning. It’s also got some innovation awards and best of the show at a couple of the utility conferences and stuff.
Anything else around you that you want to demonstrate? I will have you back on the show. I have one funny story about Constant Contact. One of the first times I ever used Constant Contact and I know you don’t want to be identified with Constant Contact.
Not true. I’m very proud of it and it’s still going strong and I have great things to say about it.
One of my first email blasts we sent out to business owners. It was a cold list that we send out to business owners. We sold a multi-multi-multimillion-dollar company from that list from one email. The owner’s son called us up and said, “I got your email. We’re thinking about something. Come see us.” That one email generated a seven-figure commission.
You probably paid three figures to use it a year.
I’m still using it and loving it. I left one time, but then I came back.
You were staying in touch. You stay top of mind, people receive it and they’re thinking, “We were thinking we need to sell or whatever. We want to buy something, whatever it is.” They share with others and said, they want to buy, let me forward this to them. Your message is like, “Let’s reach out and talk to her.” It’s important on the engagement side of customers that you stay in touch. Email is great in the marketing mix and some people can supplement other things like social or maybe direct mail or whatever other things they’re doing, some ads. It plays an important role as one of those marketing touches as you do on a regular basis.
We have a list of probably 30,000, 40,000, 50,000 businesses. We mail it every week. Next time when you’re ready to sell your next masterpiece, hopefully, you’ll think of me. Any last-minute words for our audience, words of wisdom?
One of my other mantras is accomplishments are something to build on, not rest on. Oftentimes in the course of a day, we might have that five-year vision of something we’re shooting for. What are you doing now that’s going to get you success, getting you closer to that vision? Every day we have to look for multiple successes. The key thing is when you have success in the day, so let’s say you picked up the phone and you call it a prospective client. They were very receptive. They love the call. They want to have a follow-up call with the team or want you to come out or whatever it may be. Most people would like to put their feet up and celebrate. I say to you, “Don’t. That’s a great accomplishment, build on it. Now make another call.” The energy from that success got to be felt through the phone or if you go see someone, you’re going to have success again. Don’t celebrate, make another call. When you finish that day after having a lot of success then celebrate.”
It’s the momentum. You want to keep that momentum growing. One final question, who’s your mentor?
My mentors are on the main street and in particular, even on the urban civic main streets. I do a lot with small businesses. Anywhere I go, I walk the main street. I walk in and I talk to them. I get motivated every time I get to speak to a small business. That’s who I look up to and all the hard work that they’re putting in to be successful, especially in the inner city. I spent a lot of time with inner-city, small businesses and also anyone with new ideas or several accelerators. I say to our audience, “We all have a skill that we have something we can provide and give back, go talk to your local businesses or go into an inner-city and work through some of the accelerators that are working on ideas with those people and lend a hand, lend your expertise.” That’s what motivates me. I’ve had the chance to meet everyone you can imagine. We’ve been on stages with some of the best and even as of late, many on stages together virtually. I look up to everyone that way, but I am charged by seeing what high schoolers up for new ideas and especially in the urban setting, the universities and others as well, and then also the main street. That’s my mentor.
You and I have a lot in common because I always say that I’m like a kid in a candy store. I get so excited to see how someone’s built a multimillion-dollar or $1 billion company in their garage or a kitchen table, out of nothing. I get inspired by you. How can our audience contact you? How can they reach you?
The best thing is my website, AlecSpeaks.com. They can learn a little bit more about me and there’s a place if they want to book a speaker that will motivate your audience or if they want to talk about mentoring and have breakthrough opportunities occur. There are some different ways to reach out. My social channels are there as well. They could connect with me on social and stuff.
It’s been a great interview. Thank you so much for being here with me.
It’s my pleasure. Thank you for having me.
Thanks to all our audience. Thank you, Alec.
Thank you so much.
Thank you, Alec. It’s been an absolute pleasure to have you here. Thank you for dropping so many golden nuggets, so many great tips and strategies. Thanks to our audience for tuning in. Make sure you go check out, FindYourExit.org. That’s where you can find out more information about Alec Stern, his bio and his contact information. Thank you again. I’ll see you next time.
- Alec Stern
- Constant Contact’s
- G20 Ventures
- Sell Your Business for More Than It’s Worth
- Exit Rich
- The One Thing
About Alec Stern
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