Average to Savage
Average to Savage

Episode · 1 month ago

Mike Chaffin | Average to Savage EP148

ABOUT THIS EPISODE

This is the one hundred and forty-eighth episode of the Average to Savage podcast featuring entrepreneur Mike Chaffin. Paul Guarino talked with Mike Chaffin discussing his career in business, working with Grammy Award-winning artist Nelly, and his clothing brand Three Commas founded by himself, Mark Cuban, and Nelly.  

Powered by Three Commas https://threecommas.com/

Follow Mike Chaffin https://www.instagram.com/mikechaffin/ 

This podcast interview with Mike Chaffin was originally recorded on June 28, 2019

...this is the average to Savage podcastwith paul Guerrino, everyone and anyone athletes celebs andmuch more. What's up everybody. I'm back for another episode of the averagesavage podcast. Our special guest today is entrepreneur mike schafer and mike,how's it going? Fantastic. Thanks for coming on. I appreciate it, Iappreciate you having me for sure. Let's go back in time a little bit. Sowhat were your college days like? I know you went to university of texasArlington. Yes, I started out like a lot of people at U. T. A. I started outin engineering which we all refer to as pre business once I hit my firstphysics course realized that engineering was probably not my strongsuit and end up switching into marketing. What made you switch themarket, you know, since I was a kid, I was always selling whether it was uhyou know lawn mowing service to uh car washing service. I was always out theredoing it and recognize that you know, hey I'm an entrepreneur at heart and wewanted to learn a little bit more and the marketing side and how better topush and sell my services And I know you went back to college eventually foryour NBA but what in between that you started your first company. So how didyou get started with your first company? Well right after college I, you knowlike a lot of people at the time, you know thought that my phone was going toring and I sat by for about 48 hours staring at a phone not ringing andrealized they're not coming to me because I have a college degree. So Iwent out and hustled, found a job in the software industry. And it was ayoung company and they were on a rapid growth path. It really learned a lotabout business through that process. Watch them grow from a $30 millioncompany to over $100 million company over a couple of years. And at thatpoint I knew I wanted to do my own thing. So I had my first failure with acompany called reunions data services,...

...trying to do basically what classmatesdot com did. And at the end of that process I had some mutual friends,starting a software consulting firm and I had enough technology background andsales background that you had one that was really strong on process reengineering and another person who was strong in systems development and feltI kind of rounded them out with the sales, so had joined them. And uh, youknow, we had a pretty good successful run growing it over seven years, Ithink we maxed out about 273 employees. Got you got shit. And what year wasthis around uh, started that around 93 you know, we kind of suffered the samefate. A lot of technology companies did at that time, around 2000 when uh kindof the market fell. And uh, you know, we outlasted the dot commerce becausewe were pretty heavy in telecom, so I think we outlasted them by about threedays uh proudly. And then from there just did quite a bit independentconsulting after we had sold that business off. And what what made you goback to school, like during the time I know you were running your business toowell, you know, at that time I looked at I was kind of filling spots on someof the consulting side and you know, the NBA was, you know, first offsomething that was needed from a credibility standpoint and you know,second it really helped, you know, kind of home some of my skills and s and youjust had a phenomenal network as well. So that was kind of the third reason Ijoined up and went through that program to, and I'm assuming like back then,like it just meant more to have like a Master's degree. Oh, absolutely. Andpeople look at that as a necessity on the management consulting side. Yeah,because I mean nowadays like everyone has an M. B. A. Or something, I mean, Ilook at NBA today is like the college...

...degree back in the 80s and 90s, youknow, it's just a requirement. Yeah, definitely, definitely. Now going into,how did you meet up with NElly and become his business manager? I actuallywas through a friend. And and a lot of luck, I just happened to be at afriend's office uh, when a friend of his friends, uh, you know, basicallyworked for nelly was in his security and he was having some issues with, youknow, his staff had grown significant as an artist. You know, you're rapidlygrowing and adding a lot of people around you. And uh, you know, he had agene line called apple bottoms that was uh, you know, just starting off andthey were starting to struggle and you know, he wanted someone to come in fromthe outside That had no connection and kind of take a look at his business andwe went through and saw some opportunities to fix Apple bottoms andwe went from a $2 million $120 million dollar company over the next, I want tosay about five years, 56 years. And then from there just started workingdoing, you know, he's really pleased with those results and just continue tostay on board working through other projects and launching other businesses.Some successful, some not so successful. Yeah, definitely, definitely. And whatwas it like going from like a tech field to like kind in the musicindustry? I know you're on like the business side of it, but I tell you itwas a learning experience, you know, the business world, you had muchtighter schedules and stuff happened during the day and you know, it wasjust, uh, that business space I knew and then stepping into the business toconsumer, you know, there's a lot of people always trying to grab your roleor play that, you know, trusted confidant to the artist. And uh youknow, it's a very aggressive industry. Yeah, definitely, definitely. What aresome other ventures you executed familiar with him? Uh we went throughfull life cycle with this pimp juice...

...energy drink at the time. It was a, youknow, it wasn't a long lived venture, but fun. It was based off one of hissongs. We've been a little bit skirted in the restaurant business a little bitand took some hits there, but after that we're looking into C. D. B. Spaceright now we have three comments clothing line, which is uhentrepreneurial brand with Mark Cuban. And uh right now we're working in thesoftware space on a basically a digital thank you app, so to speak. There's aBlockchain based app that allows people to ask for favors and reward friendswith their own personal currency for favors. Were you there when he had theReebok deal? Yes, actually, um we were in negotiations with a few shoe linesto come up with a deal and Reebok was really trying to jump heavy into thatspace and and gave us the most attractive deal and came out with theair dirties at the time. Yeah, he was like one of the first hip hop artiststo get his own shoe right? Yeah, it was, you know, a lot of athletes were doingit and he was, you know, it just launches wetsuit and uh he was doingvery, very well and Reebok wanted step in that space, and I think one of thethings that, that happened during that time is literally within days ofsigning the contract, Adidas acquired Reebok. Well, that's crazy, and at thattime Adidas didn't have the same vision and you know, pretty much that's wherethe relationship decided to just go our separate ways. Well, isn't it crazy nowthat all the brands are doing it with hardest now? Absolutely, the one thingwith Natalie, he has been a pioneer. A lot of artists get their careerdirected Nelly since I've known him over the last 15 years, has directedhis own career and you know, he's topped the country chart twice, youknow, he's done a lot of first in the industry, and you know, I always thinkhe does it a heck of a lot more quiet...

...than other artists we have. For sure.For sure. Actually, when I was talking to J erving on the last podcast, wewere talking about nellie on hitting the number one on the country charts,because you know how, like Little Zannex and Billy Ray Cyrus have theirsong right now. Yeah, so once again, he was one of the pioneers of that before,they did that this year, but he's done a lot for the ST louis market as well,you know, he's well loved there. And I remember at one point they said, youknow, ST louis is known for three things and uh, you know the archLindbergh and belly and for those who don't think that is one of the three, Ineed to go over to africa and see a bunch of kids wearing ST louis cardinalhats and they have no clue the cardinals are, that's good and they'rejust marry known. That's crazy. That's cool. So yeah, going into three commas,the clothing brand you started with nelly and Mark Cuban, correct Yes. Markand I 1st and actually marked approach because we did a lot new peril industry,our success with apple bottoms and everything. And Mark and nelly hadknown each other in the past and you know, I'm from Dallas. So I'd alwaysreached out to Mark and sent belly's calendar and uh, you know, if you everhad friends or anything that needed access to it. And, and one day, Markreached out wanting to do uh, you know, kind of a web store was, you know, justsome fun shirts and quotes and everything and I stayed up over theweekend, worked through coming up with cool logos for him, you know, MarkCuban clothing and sent it to him and for those that know Mark, he's a man offew words and he'll respond to every single text and so I sent him the logodesigns and ask him which one he liked. And he just responded, no. And then hadthree thomas and I had no clue what he meant. I replied back with threequestion marks and he just said there are three commas in a billion dollars.And I thought that was absolutely clever. We went through did some moredesigns and you know, he wore the shirt on shark tank one time and mike judgejust happened to see it, wrote it into...

...the script of Silicon Valley. And atthat stage we decided, you know, let's do a little bit more with this. So sowe spent some more time with logo, gotten really involved because you know,just from a fashion sense standpoint and reach. We thought he believed inthe brand, believed in the concept and really helped come up with some newdesigns that we plan on launching in the spring. Yeah, yeah, yeah, that wasgoing to the next question. How did you guys get the name? But you answered itAnd uh, what about like what's, what's the long term goal? Is that, is itagain to like retail or like stay online. Uh, Marks, always an online guy.And uh, so that's our preference between amazon and our online store. Healso, you know, invested heavily in, they uh, are not heavily but investedin a fulfillment center. So we got great rates and it's really helped outother companies and that's, that's the thing with Mark, he does a great job,you know, over and above all the other sharks at supporting his ventures. Uh,he has an individual there that really builds relationships with amazon,looked at fulfillment being issue for a lot of shark tank company. So he wentout and found uh an up and coming film in house invested and help them grow.So they do a great job of supporting us. Yeah, yeah, that's awesome. So I sawyour also involved in stadia adventures, what is that all about ST LouisUniversity as a professor there that basically rebuilt theirentrepreneurship program And I think went from unheard of to 9th in thenation. And you know, he basically looked at the, one of the problems witha lot of accelerators, they focus on any, you know, the best technology isthe best anything that comes through. So you could have, you know, a car washtechnology sitting next to esophageal transplant. So when you try to sitthere and playing judges advisors and everything through this process. Yeah.You know, there is that no consistency...

...of people you can bring in well, theyfocused on sports and esports and I've been involved for a couple years nowand they do two cohorts a year And now they get through about 4000applications to narrow it down to 10 companies, those 10 companies come inand present 100 20 130 judges. And these judges are everywhere from thehead of Innovation at Nike Head of Innovation of under armour toprofessional athletes, professional sports teams. It's really a great groupof judges and the amazing thing that the founder of State he has done isreally integrate the judges as a family. So he encourages all of us working,talking together in between cohorts and it really has developed a familyanytime anybody needs something, They can reach out whether someone justjudged once or mental seven and they get a call back. So it's been aphenomenal experience. And uh, I always love when these technology platformscome and people say, you know, hey, we're the first and everybody's kind oflooking each other, you know, we just saw three in the last part. That'scrazy. Is there anything like that stood out to so far that you've seen?They have had a variety. I've learned a lot about these sports, you know, I'mnot a gamer myself, but uh, the audiences is absolutely amazing. Andthe technologies and the, just the social side of it's incredible. I mean,you look at what Fortnight's done and the audience they draw bigger thanfacebook, bigger than a lot of the social applications out there. Sothat's been fascinating as well as, you know, it's, it's a data driven, youknow, sports is becoming more and more data driven artificial intelligencestepping in, really trying to define the consumer and, you know, it'sfrightening knowing that you have cameras at the stadium and that camerais just on your looks doing, you know,...

...demographic analysis. So, you know,major League baseball can see, you know, okay, here's the average age, thegender, here's how many season ticket holders actually showed up to theirgames. I mean, it's amazing the amount of data we're looking at today. Yeah,yeah, for sure. For sure. You're going back to east sports. Like I think it's,I still don't get like the people watching people play on twitch. I mean,I get it, but like I just don't, I don't see myself ever watching someoneplay video games. Oh and the funniest thing nearly 10 years ago was pushingme and I hate to say this, but I laughed at him. He's like, you know, weneed to make this software where people can watch like me play snoop and, andindividuals play each other. And he called it out way before twitch. And Ilooked at that at the time. I was like, who wants to watch someone else play avideo game? And I couldn't even fathom that. And you know, I have to humblysay he he was right and he was right long before anybody else. Yeah. Even Iremember one day I turned on ESPN and they were doing a draft for like thetwo K league like good basketball. Yeah. Crazy sports teams and the price. Soinflated sports teams are trying to figure it out. And when you've gotthese, you know, executives that have no idea about gaming coming in andtrying to figure out, you know, the game or experience, it's tough and youknow, your first inclination is by a gaming league or by by a gaming teamand uh, you know, it's a challenge. Try to pull in that knowledge. Yeah, forsure. You probably just have to hire like a 15 year old, can they give thebest business, you know, business advice on evaluation at that age? Idon't know, you never know. Um going to like everything you're doing right now,like how do you balance like working with all these people and companiespoorly I will say um that that's probably the biggest challenge. And Itell you the one person who, you know...

...is definitely a role model in thatcategory is Mark, he knows how to say no better than anybody out there Andyou know, that's one of the biggest things you gotta learn, you know how todo because I remember what it's like being on the other side when you'reneeding help with your startup and you know, I have such passionate helpingpeople, but you know, you could spend 80 hours a week helping other peopleget their business off the ground and realize that you haven't taken care ofyourself. And that's one of the hardest things to basically have thatdiscipline to say no. Yeah, definitely, definitely whatever you learned fromlike creating your first company to like your current business ventures, Itell you sales, your forecasted sales are never going to be what's expectedand your expenses are going to be twice as much as you forecast. And then uh,cash flow is king and you've got to really watch that when you get in acash crunch as the last time, you know, when you least want to be asking formoney. So it's really managing that and watching the right numbers. I think somany people get their companies started and they're just, they're not preparedand then at times there is a risk you have to take and not a lot of people,you know, want to throw everything on the table to risk. Yeah, definitely,definitely. Um, what advice would you give to a young entrepreneur? I thinksome of the best things people can do, especially when you're in school,you're the least riskiest person to talk to other executives, you know,everybody wants to give advice, but once you graduate, they look at you asa time waste. So, you know, I advise everybody this in school that'sthinking about going down the entrepreneurship path, build yournetwork and build it aggressively and make sure and look at everyrelationship and figure out how you can give value to that relationship beforeyou ask, like with Mark, you know, I probably sent mellie schedule for ayear and a half, two years before we...

...ever met face to face to talk on hisapparel store. But you know, I was genuine and I didn't have any need forhim at the time, but it was a relationship and someone that Irespected that, you know, I invested the time and so I definitely recommendthey do that as well as be a sponge on day to make sure it's something thatYou're interested in and that you have the time to devote if you're justplanning to make it a 9-5 thing, you know, it's probably not the rightsituation for you. Yeah. Even going back to what you're saying about thebeing in college. I remember just like email people and when you say you'relike a student, they're more willing to help you than if you're obviously not astudent Well, and I think people love giving advice and it's genuine, butonce you, once you're out of school they look at you asking for a job orasking for sale or something. And at that point it goes back to, you know,you need to learn to say no more. Yeah, for sure, For sure. All right. Youready for some fun questions. They're gonna go from average to Savage.Excellent. Bring it. All right. What's your favorite song right now? That that's actually a really goodquestion. I mean, I have heard right with me a million times, but alwayswhen you see that audience and how energized they get when, when he singsthat when that music first comes on it's amazing. So the energy is wrappedaround that and you know just when you see an artist performance, you know thehistory behind it. It's I think there's more of an emotional tie there for suresure. Who's one person they never worked with that you want to work with?Oh, that's actually a great question. I I think someone that would beinteresting and make me laugh by more than a thing would probably be twochainz and looking at what he's doing in the world's most valuable or mostexpensive ist. So he, I think would be funny as all get out to work with. Allright, I like that. What do you think?...

The hardest part is of being anentrepreneur? Uh as you're growing a business constantly begging for moneyand then making those tough decisions on employees because as your businessgrows, some people just don't grow fast enough with it. And you know what youbelieve in wealthy, you know sometimes you got to remove people head of headof what you want. Well, I appreciate you coming on and could you go topeople know where they can find you on social media? Uh yeah, you can find meon linkedin, I'm also on facebook as well and twitter and instagram so allright, once again, I appreciate you coming up paul great hearing from youand great talk to you. I can't wait to hear James. Thanks. So I can make funof them. Alright, awesome. Thanks. Yeah.

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