Average to Savage
Average to Savage

Episode · 9 months 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 podcast with paul Guerrino, everyone and anyone athletes celebs and much more. What's up everybody. I'm back for another episode of the average savage podcast. Our special guest today is entrepreneur mike schafer and mike, how's it going? Fantastic. Thanks for coming on. I appreciate it, I appreciate you having me for sure. Let's go back in time a little bit. So what were your college days like? I know you went to university of texas Arlington. Yes, I started out like a lot of people at U. T. A. I started out in engineering which we all refer to as pre business once I hit my first physics course realized that engineering was probably not my strong suit and end up switching into marketing. What made you switch the market, you know, since I was a kid, I was always selling whether it was uh you know lawn mowing service to uh car washing service. I was always out there doing it and recognize that you know, hey I'm an entrepreneur at heart and we wanted to learn a little bit more and the marketing side and how better to push and sell my services And I know you went back to college eventually for your NBA but what in between that you started your first company. So how did you get started with your first company? Well right after college I, you know like a lot of people at the time, you know thought that my phone was going to ring and I sat by for about 48 hours staring at a phone not ringing and realized they're not coming to me because I have a college degree. So I went out and hustled, found a job in the software industry. And it was a young company and they were on a rapid growth path. It really learned a lot about business through that process. Watch them grow from a $30 million company to over $100 million company over a couple of years. And at that point I knew I wanted to do my own thing. So I had my first failure with a company called reunions data services,...

...trying to do basically what classmates dot 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 and sales background that you had one that was really strong on process re engineering and another person who was strong in systems development and felt I kind of rounded them out with the sales, so had joined them. And uh, you know, we had a pretty good successful run growing it over seven years, I think we maxed out about 273 employees. Got you got shit. And what year was this around uh, started that around 93 you know, we kind of suffered the same fate. A lot of technology companies did at that time, around 2000 when uh kind of the market fell. And uh, you know, we outlasted the dot commerce because we were pretty heavy in telecom, so I think we outlasted them by about three days uh proudly. And then from there just did quite a bit independent consulting after we had sold that business off. And what what made you go back to school, like during the time I know you were running your business too well, you know, at that time I looked at I was kind of filling spots on some of the consulting side and you know, the NBA was, you know, first off something 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 you just had a phenomenal network as well. So that was kind of the third reason I joined 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. And people 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, I look at NBA today is like the college...

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

...energy drink at the time. It was a, you know, it wasn't a long lived venture, but fun. It was based off one of his songs. We've been a little bit skirted in the restaurant business a little bit and took some hits there, but after that we're looking into C. D. B. Space right now we have three comments clothing line, which is uh entrepreneurial brand with Mark Cuban. And uh right now we're working in the software space on a basically a digital thank you app, so to speak. There's a Blockchain based app that allows people to ask for favors and reward friends with their own personal currency for favors. Were you there when he had the Reebok deal? Yes, actually, um we were in negotiations with a few shoe lines to come up with a deal and Reebok was really trying to jump heavy into that space and and gave us the most attractive deal and came out with the air dirties at the time. Yeah, he was like one of the first hip hop artists to get his own shoe right? Yeah, it was, you know, a lot of athletes were doing it and he was, you know, it just launches wetsuit and uh he was doing very, very well and Reebok wanted step in that space, and I think one of the things that, that happened during that time is literally within days of signing the contract, Adidas acquired Reebok. Well, that's crazy, and at that time Adidas didn't have the same vision and you know, pretty much that's where the relationship decided to just go our separate ways. Well, isn't it crazy now that all the brands are doing it with hardest now? Absolutely, the one thing with Natalie, he has been a pioneer. A lot of artists get their career directed Nelly since I've known him over the last 15 years, has directed his own career and you know, he's topped the country chart twice, you know, he's done a lot of first in the industry, and you know, I always think he 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, we were talking about nellie on hitting the number one on the country charts, because you know how, like Little Zannex and Billy Ray Cyrus have their song 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, you know, ST louis is known for three things and uh, you know the arch Lindbergh and belly and for those who don't think that is one of the three, I need to go over to africa and see a bunch of kids wearing ST louis cardinal hats and they have no clue the cardinals are, that's good and they're just 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. Mark and 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 had known each other in the past and you know, I'm from Dallas. So I'd always reached out to Mark and sent belly's calendar and uh, you know, if you ever had friends or anything that needed access to it. And, and one day, Mark reached out wanting to do uh, you know, kind of a web store was, you know, just some fun shirts and quotes and everything and I stayed up over the weekend, worked through coming up with cool logos for him, you know, Mark Cuban clothing and sent it to him and for those that know Mark, he's a man of few words and he'll respond to every single text and so I sent him the logo designs and ask him which one he liked. And he just responded, no. And then had three thomas and I had no clue what he meant. I replied back with three question 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 more designs and you know, he wore the shirt on shark tank one time and mike judge just happened to see it, wrote it into...

...the script of Silicon Valley. And at that stage we decided, you know, let's do a little bit more with this. So so we spent some more time with logo, gotten really involved because you know, just from a fashion sense standpoint and reach. We thought he believed in the brand, believed in the concept and really helped come up with some new designs that we plan on launching in the spring. Yeah, yeah, yeah, that was going to the next question. How did you guys get the name? But you answered it And uh, what about like what's, what's the long term goal? Is that, is it again 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. He also, you know, invested heavily in, they uh, are not heavily but invested in a fulfillment center. So we got great rates and it's really helped out other 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 went out 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 saw your also involved in stadia adventures, what is that all about ST Louis University as a professor there that basically rebuilt their entrepreneurship program And I think went from unheard of to 9th in the nation. And you know, he basically looked at the, one of the problems with a lot of accelerators, they focus on any, you know, the best technology is the best anything that comes through. So you could have, you know, a car wash technology sitting next to esophageal transplant. So when you try to sit there and playing judges advisors and everything through this process. Yeah. You know, there is that no consistency...

...of people you can bring in well, they focused on sports and esports and I've been involved for a couple years now and they do two cohorts a year And now they get through about 4000 applications to narrow it down to 10 companies, those 10 companies come in and present 100 20 130 judges. And these judges are everywhere from the head of Innovation at Nike Head of Innovation of under armour to professional athletes, professional sports teams. It's really a great group of judges and the amazing thing that the founder of State he has done is really integrate the judges as a family. So he encourages all of us working, talking together in between cohorts and it really has developed a family anytime anybody needs something, They can reach out whether someone just judged once or mental seven and they get a call back. So it's been a phenomenal experience. And uh, I always love when these technology platforms come and people say, you know, hey, we're the first and everybody's kind of looking each other, you know, we just saw three in the last part. That's crazy. 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'm not a gamer myself, but uh, the audiences is absolutely amazing. And the 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 than facebook, bigger than a lot of the social applications out there. So that's been fascinating as well as, you know, it's, it's a data driven, you know, sports is becoming more and more data driven artificial intelligence stepping in, really trying to define the consumer and, you know, it's frightening knowing that you have cameras at the stadium and that camera is 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, the gender, here's how many season ticket holders actually showed up to their games. 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 someone play video games. Oh and the funniest thing nearly 10 years ago was pushing me and I hate to say this, but I laughed at him. He's like, you know, we need to make this software where people can watch like me play snoop and, and individuals play each other. And he called it out way before twitch. And I looked at that at the time. I was like, who wants to watch someone else play a video game? And I couldn't even fathom that. And you know, I have to humbly say he he was right and he was right long before anybody else. Yeah. Even I remember one day I turned on ESPN and they were doing a draft for like the two K league like good basketball. Yeah. Crazy sports teams and the price. So inflated sports teams are trying to figure it out. And when you've got these, you know, executives that have no idea about gaming coming in and trying to figure out, you know, the game or experience, it's tough and you know, your first inclination is by a gaming league or by by a gaming team and uh, you know, it's a challenge. Try to pull in that knowledge. Yeah, for sure. You probably just have to hire like a 15 year old, can they give the best business, you know, business advice on evaluation at that age? I don'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 companies poorly I will say um that that's probably the biggest challenge. And I tell you the one person who, you know...

...is definitely a role model in that category is Mark, he knows how to say no better than anybody out there And you know, that's one of the biggest things you gotta learn, you know how to do because I remember what it's like being on the other side when you're needing help with your startup and you know, I have such passionate helping people, but you know, you could spend 80 hours a week helping other people get their business off the ground and realize that you haven't taken care of yourself. And that's one of the hardest things to basically have that discipline to say no. Yeah, definitely, definitely whatever you learned from like creating your first company to like your current business ventures, I tell you sales, your forecasted sales are never going to be what's expected and 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 a cash crunch as the last time, you know, when you least want to be asking for money. So it's really managing that and watching the right numbers. I think so many people get their companies started and they're just, they're not prepared and 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 think some 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 as a time waste. So, you know, I advise everybody this in school that's thinking about going down the entrepreneurship path, build your network and build it aggressively and make sure and look at every relationship and figure out how you can give value to that relationship before you ask, like with Mark, you know, I probably sent mellie schedule for a year and a half, two years before we...

...ever met face to face to talk on his apparel store. But you know, I was genuine and I didn't have any need for him at the time, but it was a relationship and someone that I respected that, you know, I invested the time and so I definitely recommend they do that as well as be a sponge on day to make sure it's something that You're interested in and that you have the time to devote if you're just planning to make it a 9-5 thing, you know, it's probably not the right situation for you. Yeah. Even going back to what you're saying about the being in college. I remember just like email people and when you say you're like a student, they're more willing to help you than if you're obviously not a student Well, and I think people love giving advice and it's genuine, but once you, once you're out of school they look at you asking for a job or asking 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. You ready 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 good question. I mean, I have heard right with me a million times, but always when you see that audience and how energized they get when, when he sings that when that music first comes on it's amazing. So the energy is wrapped around that and you know just when you see an artist performance, you know the history behind it. It's I think there's more of an emotional tie there for sure sure. 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 be interesting and make me laugh by more than a thing would probably be two chainz and looking at what he's doing in the world's most valuable or most expensive ist. So he, I think would be funny as all get out to work with. All right, I like that. What do you think?...

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

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