Flip the Switch Episode 10: Interview with Adam Dailey
Our interview today is with Adam Dailey, an NCAA champion, serial entrepreneur, motivational speaker and author whose unique resume and experience with running businesses made him one of our most insightful and motivating interviews to date. We talk about the influence of sports on his businesses,
Flip the Switch Episode 10: Interview with Adam Dailey
Sophia: Today on Flip the Switch. Instagram and What’s App continues to push Snapchat out of the market completely. Bitcoin prices surge to yet another all-time high. And Apple stocks bounce back just like we said they would.
Our interview today is with Adam Dailey, an NCAA champion, serial entrepreneur, motivational speaker and author whose unique resume and experience with running businesses made him one of our most insightful and motivating interviews to date. We talk about the influence of sports on his businesses, his new ventures, Air BnB and much more.
Let’s get into it.
01:06 AUSTIN: Welcome to Flip the Switch, presented by Power Digital Marketing. This is the very first episode of November, and it is very dark outside…
01:18 PAT: It’s very dark outside. Daylight Savings time happened over the weekend, so for those of you who are still farming in rural communities, you have an extra hour of daylight to do that. The rest of us just got our body clocks thrown off for no reason.
01:31 AUSTIN: And–my bad–this is actually the second episode of November, because of last week. So this is the first one of Daylight Savings.
01:37 PAT: First one of Daylight Savings…
Austin: That’s how calendars work.
Pat: Worth clarifying.
01:39 AUSTIN: All right. So let’s get into the brass tacks here. We’ve got some great news and trends to get for you guys. With the top companies. And also, we’re going to get into crypto-currencies.
On the back end, we’ve got an interview with Adam Dailey, a very, very successful entrepreneur with a very interesting story about flipping properties and Air BnB.
01:55 PAT: Yeah, it’s a super-interesting interview. He juggles a lot of different things. He’s a super-over qualified type of guy. Everyone knows an over-achiever. And he was the first interview we’ve had where we’ve really been, “How do you do all of this?”
So real excited for you guys to get into that a little bit, too.
So first things first, though. Let’s get into a little bit of our business trends and analyses. Austin, you want to cue up this first story for us?
02:20 AUSTIN: So Mark Zuckerberg just came out… very interesting news about Instagram and Instagram Stories. Also What’s App, which is another product they own. And the daily user activity has hit 300 million which is 2 times as much as Snapchat and that’s also 50 million in users… I’m talking about Instagram and What’s App. Up 50 million since July.
02:39 PAT: Yeah, that’s right. So this goes back to a conversation that we had had before. We’ve been talking a lot about how we feel that Snapchat is being pushed out of the marketplace because of solutions like Instagram and What’s App. And what we’re seeing is that that’s not just happening… but happening at an astounding level.
02:56 AUSTIN: Very rapid.
PAT: Yeah, looking at these numbers, there were only 250 million Daily Active Users–or DAUs–for Snapchat and What’s App as of June. And then as of the end of July, if I’m looking at this correctly, we’re looking at 300 million Daily Active Users. Which is an increase of 50 million.
To give you some context, Snapchat’s entire app only has 173 million Daily Active Users. So, you know, this just another aspect that we’re seeing right now really giving some validity to the notion that Snapchat is on it’s way out of the market.
03:27 AUSTIN: Yeah, and I think what Mark Zuckerberg has done is just with Facebook is they’ve perfected staying in the app. So it’s very seamless in terms of you can scroll through pictures. Or maybe look at memes, which is another thing that Instagram adds. And then on top of that you have your stories now.
So what Snapchat was very good at was bringing you those quick little pictures that you maybe got from your friend. Maybe a live update of where they’re at.
Instagram has done that. Just better. And now it all lives together.
03:47JOE: Yeah, I feel kind of bad cause I’m always throwing around the nail in the coffin thing for all these companies. Like SoundCloud and I’ve thrown this Snapchat stuff around like a lot, and it was semi-serious. But this is like next level.
You think about it and you’re like, “2 times the amount? How can they let that happen and still be around?”
04:13PAT: Yeah, how can you be a first mover in an industry like this and allow yourself to be just straight up out-innovated?
04:17JOE: Yeah, and it has to sting so bad that it’s by a company that offered them a ton of money and now they’re just being toppled.
04:27PAT: Yeah, and if you look at the number of Daily Active Snapchat Users from the first quarter of 2014 all the way through Q2 of 2017, you see sharp increases for the most part. Kind of that J-curve going through the end of Q3 of ’15. And then from there onward, you see it start to plateau a little bit towards the top. You’re seeing increases of maybe 8 million Daily Active Users per quarter. 7 million Daily Active Users for Q1 of ’17 to Q2.
Whereas a couple… you have Instagram and What’s App gaining 50 million over the course of 2 months. That’s absolutely insane growth and they’ve clearly scaled it better than Snapchat has because they’re getting stagnant at the 173 DAU mark, whereas Instagram and What’s App are at 300 million and continually surging upwards.
05:16 AUSTIN: And let’s touch upon the advertising aspect of this. These are 2 apps with a lot of daily users. And what do companies want to do? They want to market to these users. And what Instagram has done is created the ability just like Facebook to monetize who you’re advertising to. So you get a lot of information about your demographic. You get a lot of information about how much you’re spending. And who’s seeing your ads.
And then also–on the conversion side–is that leading to direct revenue for your company.
Snapchat’s actually had a pretty difficult time doing this.
05:46 PAT: Oh, they have horrible attribution…
AUSTIN: Right, their attribution… And it’d difficult from a company perspective to set aside budget when you can’t attribute if that’s leading to more sales. And this is the change that we’ve talked about with traditional marketing. Stepping away from billboards and TV commercials because the attribution isn’t there. And with digital now, we want that attribution.
I want to be able to say, “Hey, I spent 30 bucks, and this is how many leads I got.”
06:08 PAT: Yeah, and so along that same vein. Less advertisers are inclined to advertise on Snapchat because of the lack of measurability. Which is a concession or a luxury that they’re used to in the digital space as a whole.
Whereas you have Instagram, and Facebook for that matter that monetize because of the really stringent target criteria that you can advertise with. But also because they provide very robust measurement that’s continually getting better.
That’s just an added revenue stream for these companies, which allows them and affords them the opportunity to innovate further and enhance the consumer experience.
And Snapchat doesn’t have that luxury because it’s not making enough money to do so. It’s a vicious cycle. It’s like because the advertising is bad, less advertisers want to advertise with them. But the advertising won’t get any better because they don’t have any money to do that.
06:53 AUSTIN: Or users. Cause it’s going down. And then, you know, just from a very basic user perspective of using both apps… I’m sure a lot of you out there have. Snapchat… the camera’s just not as good as Instagram’s. And it kills your battery a lot quicker. So it’s more difficult to open it, it’s difficult to close it. Your battery will die a lot faster. So these are things… mobile device is the most important thing that someone owns and if that’s… and if an app is decreasing your experience with that. That app’s not going get used.
07:22 PAT: Absolutely agree. So it’ll be very interesting to see if those numbers continue to increase for both Instagram and What’s App. And how that affects Snapchat… not just their market-share, but DAU count as well.
Moving into the world of crypto-currencies a little bit. We saw last week that Bitcoin reached it’s… again… we’ve been saying this every single week. Because it’s happened every single week. It’s highest price to date. Austin, can you shed a little bit of light on this for us?
07:45 AUSTIN: Yeah, so this… since we started this podcast, Bitcoin has just skyrocketed. And it’s just been pretty incredible to come on every week to be like, “Yeah, we’re up again. We’re up again.”
But I think every…
07:56 PAT: And then every once in a while we go down for a day.
07:57 AUSTIN: And then it’s going back up.
07:59 JOHN: You’re like the old-fashioned Bitcoin boy. Like on the box. Throwing the newspapers around. That’s how I feel like we are about Bitcoin now…
08:08 JOE: We’re just trying to let people know the news.
08:10 AUSTIN: So I think what we’re expecting is when something goes up so much, there’s gotta be a correction. Every single market, regardless of how long it’s going to last. If it’s a short-term or a long-term gain, experiences corrections.
And I think we’ll see that pretty soon. So to talk about what’s on the horizon–there is another hard-fork. We had one episode where we discussed that Bitcoin Gold was created. There is another hard-fork occurring on the 15th of November and it’s going to be called “Bitcoin 2X” and this is also going to be creating a different currency.
Where this is different than Bitcoin Gold, is Bitcoin 2X is going to have some value. So just like Bitcoin cash back in August, they’re saying that there’s going to be some value attached. So this is making a lot of people move their money into Bitcoin because you want to have the profit immediately off the bat. You get a quick flip. If you’re holding 2 or 3 Bitcoin, you’re going to get 2 or 3 Bitcoin 2X, so, you know, you want to make that quick buck.
And then also we’re seeing that also integrated in society and on top of that China hasn’t slowed down at all. So we talked about the Chinese regulating the market. That hasn’t slowed down at all. All those exchanges, they figured how to get around that. How’d they do it? They just moved their servers off-shore.
A lot of countries are accommodating exchanges because of the massive revenue that it’s bringing to their country in some way or another. They’re figuring out how to monetize that.
Or they just want to be a part of an industry and seen as someone who accepts this industry. Cause that could lead to long-term growth.
09:33 PAT: I agree with you there. I think that a lot of what China has done in terms of the international play with crypto-currencies has been predicated on trying to seem as though they’re a place where your wealth can grow. And that’s something that we’ve seen a lot of times with some of the more powerful countries in the world. That you want to increase the amount of business opportunity for people in your country. So that more people come to your country to do business.
Because what happens–especially in a very regulated country like China with a centralized government–you’re going to have very big… A lot of taxes being paid to the country. It’s a lot of government revenue for a lot of government systems.
And what they’re doing by leveraging the crypto-currency market has been really interesting to see. Especially given the fact that they denounced crypto-currencies only a couple of months ago. And said, “No ICOs. We’re not going to be doing that.”
10:19 AUSTIN: Yeah. And I see with that initial coin offering… in the Bitcoin world colloquially known as “alt-coin.” So that’s just anything outside of and then in theory, it’s just the other major coin. So what we’re going to see is the market cap has risen drastically and dramatically over the past couple of months for Bitcoin. Into 7000 per Bitcoin. And then once the Harford cap ends, I expect that market cap to drop. Why? Because as I said, people are going to want to make a quick buck on this. And then all those alt-coins…
10:49 JOE: Flip it leading up to the fork…
10:50 AUSTIN: Right, you know… when you get the fork you get the cash. And then you got to look and go, “All right. Look at all those alt-coins sitting over there at much cheaper prices. Now I can just drive all this money I just made on Bitcoin into these alt-coins. We’ll push that volume up.” Which will obviously increase people to start trading those. And then you just made a return again. So, you know, we’re seeing possibly 3 different ways and cryptos to make a return in a very short amount of time.
11:15 PAT: And it all leads off with initially buying into Bitcoin before the fork happens.
11:19 AUSTIN: Correct.
11:20 PAT: It’s been really interesting too. That price has fluctuated… just to give you listeners just a sense of what it’s fluctuated to. A couple weeks ago when we reported on this, it had just broken the 6000 dollar mark. Before that it had hit its “high” at $5800. Since then we’ve seen it surge to $6700. And now we saw it creep up over the $7200 range.
What does that mean moving forward? Is the question we’re going to need to keep asking ourselves as we cover this more.
11:45 AUSTIN: Yup. So… you know… just a quick recap here. We’re seeing a pretty dramatic increase in the price of Bitcoin, so it’s a scary time to enter. If you’re already in, great. If you’re not, maybe just be careful. Watch the news. Make sure you’re being very smart about that.
And on the flip side, alt-coins, ICOs as we talked about. Expect those to rise in volume very soon once the hard fork occurs. So just stay up-to-date on your news. Make sure you’re being aware of the technology, as always. That is the most important part of crypto-currencies. And, yeah, we’ll see where it takes us.
12:15 PAT: Absolutely.
Leading into our last bit of business trends and analysis here–we’re going to talk about Apple stocks surging upwards. Not just after the Q3 earnings report, which we talked about before. But about the iPhone X hitting stores. We saw a sharp, sharp increase in their stock prices.
But first, we just want to let you guys know that we did call this.
12:36 AUSTIN: Yeah, I think you called it Patrick.
12:37 PAT: I don’t want to brag, but I did call it.
12:40 JOHN: You’re like an oracle…
12:41 PAT: Yeah, except for…
12:42 JOHN: Like from “300.” You look just like it.
12:44 AUSTIN: Warren Buffet but just in 21st century form.
12:48 PAT: Yeah, younger…
12:49 JOHN: You mean Warren “Bitcoin” Buffett?
12:50 PAT: Warren “Bitcoin” Buffett. No this is something that we’ve been keeping a close eye on. Because what we saw initially was when the iPhone got unveiled by Tim Cook, share prices went down. People weren’t very impressed. I know that we weren’t hugely impressed with the additional features that were coming out with the iPhone X…
13:07 AUSTIN: Yeah, it’s to be expected, I think. Everyone kind of knew where they needed to go.
13:10 PAT: Yeah, exactly. But we saw prices go down. And digging back through some historical data, we saw prices went down every single time a new iPhone had gotten unveiled. Especially in the Tim Cook era.
Why? I personally believe it’s because he’s not as good of a showman as Steve Jobs. He doesn’t know how to get the investors and analysts as excited about it. And what we saw ever since then was every single time, the share prices have gone back up.
And what happened on Friday is that those share prices went up in a major way. We’re talking about anywhere from an 8 to 10 dollar increase per share. And for the first time ever, going into Friday trading day, an American company being Apple reached almost a 900 billion dollar market cap.
So first ever American company to accomplish that. It is incredible. And Ali-Baba is the only other company that has accomplished that task.
And a lot of analysts and investors on Wall Street are saying that Apple will be the first trillion dollar market cap company that is an American company. And in general that we are going to see. And a big point of contention that they had about why shares might have gone down initially is exactly what I was talking about.
They said, “We wish we would have known about the iPhone X features. We wish we would have known about these things.”
14:25 AUSTIN: I think what’s the most incredible part of all this is they’re earnings report… their earnings per share which came out and beat quarter 2. So quarter 3 beat quarter 2. And the mainstay of that were people were still buying the iPhone 6 and 6X leading into the 7. Or… sorry… they’re still buying the 7 leading into the 8 and the X. So people are not stopping to buy the Apple phone even though there’s a new one coming out. That is where they’re at in terms of society and as a brand. Where it’s become… down to the point where it’s just like a wallet. You have to have a wallet, right? Cause you need it to keep your cash. You have to have an iPhone because you need to have that social activity. Maybe you have your calendar in there.
They’ve become so integrated with society that they can continue to raise the price, and people will still buy it. It’s almost inelastic. To this degree of how much a human needs technology.
15:14 PAT: Yeah, and it’s because of the fact that Apple is such a consumer-facing company. We even talked about that but to recap, every new thing that they have done with their phones has been consumer-centric. It’s either been increasing the consumer experience, or increasing the consumer connectivity with other consumers. Think about FaceTime, FaceTime Video, FaceTime audio.
So what we’re seeing is a lot of that. And it’s actually paying off because it’s garnering interest within the public.
That’s why people always forget about this. No matter what Apple puts out, there is a border-line cult following of people that are going to buy it every single time that Apple releases it.
15:48 JOHN: I had co-worker who had Steve Jobs tattooed across his chest.
15:52 AUSTIN: Really?
15:54 JOHN: Then on his forearm he had an Apple tattoo. And every time something from Apple drops he buys at least 2 of them. So when the 3 series launch came out, he bought like 2 or 3 of them.
16:05 PAT: It’s like a 6 or 9 series at that point.
16:06 JOHN: Yeah. And he has the newest model every single year.
16:08 PAT: And that’s not an uncommon story.
16:10 JOHN: No, it’s not. That happens all the time…
16:11 PAT: You see these videos of people lining up around the block for the new iPhone release. Even though they saw exactly what it’s going to be, and they know all the features that are going to be on it. They’re still camping out for it like it’s a movie that people don’t know anything about.
16:24 AUSTIN: Apple share price at 174… just under 175. And last year around this time, I was checking out the share price and they were in the 100 to 120 range. So they’ve had about a 50 dollar increase. And before the 7 came out, they were actually in the 90s. So they had a dip below that. So they’ve had almost a 100 dollar increase in their share price year-over-year. Which is absolutely phenomenal. But it’s because of performance. They beat their quarterly revenue every single quarter.
16:54 PAT: They always outperform their earning per share expectations.
16:58 AUSTIN: And they continue to put out products that people not only want but need. And that is going to make them a long-term viable company.
17:06 JOE: People are scrambling too. I don’t know if you saw the Samsung commercial that came out today. It was like a direct hit against Apple. Straight-up using their product in the commercial. Using the logo. Basically calling them out, however they can.
17:17 AUSTIN: Right. And what they’re trying to do is what Samsung’s always done is “We had that technology first. Why don’t you want to buy our phone? We do all that.”
But they don’t have the brand. And that’s what it boils down to.
17:27 PAT: Yeah, there is the misconception around it that since it isn’t Apple, the consumer experience has to be worse. And in a day and age where consumer experience matters as much as it does, that’s not a concession people are willing to undertake.
And one last point that I would bring up too–analysts and investors on Wall Street–I’m reading this out of Bloomberg Markets right now. For those of you who would like to look it up after the show–are extremely excited. Not just about Apple’s Q4 earnings projections, but already their Q4 earnings to-date.
They are very excited about this, not just because the new iPhone came out, but because they released it right in time for the holiday season. And so they’re expecting Apple to outperform their Q4 goals. They’re expecting the share price to continue to go up after the iPhone release. Which again is something that I talked about before.
And then to Austin’s point, something that he’d talked about before is he projected–this is true–he said hot-take on our first episode, a hot-take: Apple shares will be at almost $190 by the end of Q4.
If we continue on this pace, we’re going to be doing another segment exactly like this talking about that.
18:25 JOE: We’ll have a celebration podcast.
18:26 AUSTIN: Yeah. Well, yeah. I wish I owned a bunch then that’d be a celebration. But I think this could hit $200 after the first quarter earnings come out. And as we talked about, this is performance based. This is a company that continues to generate cash. And they keep their money in cash, so they’re very cash which means they can do a lot of stuff.
18:46 PAT: A lot of liquidity there.
18:47 AUSTIN: I would expect them to continue, to innovate and provide the user with the technology you want and this is a brand that’s going to be around for a very long time.
Whoa. That got me fired up. That was a lot of information.
How about we switch gears here. We’ve got a really great interview coming for you now. Adam Dailey. Let’s do it.
19:10 PAT: All right. So we are very excited to have with us in the studio today Mr. Adam Dailey. He’s a serial entrepreneur of various different businesses worth a million dollars or more. A C-level executive. A 9 time NCAA champion. Professional speaker. Experienced world-traveler. And the published author of the book called “How to Run Away from Home and Bring your Family with You.”
He’s been featured in the Wall Street Journal, Sports Business Journal, USA Today, The New York Times and has even earned himself a spot on the Inc. 500 to top it all off.
That is a mouthful. Adam, thank you so much for taking the time to join us today. We really couldn’t be more excited to have you on.
19:42 ADAM: Yeah. Thanks for having me here.
19:44 PAT: Absolutely. So, I’ll go ahead and let Austin kind of kick things off.
19:47 AUSTIN: Definitely. So there was a lot of points that Patrick just hit on the way in. But we’d love to hear a quick story or just a little information from yourself on what sums you up. And what you think of when you are sitting here with us telling your story.
19:58 ADAM: yeah, I mean, I guess people regard me as a good juggler cause I have various businesses that are out here doing different things. And I started doing this a few years ago. Kind of went all in on one business and then realized after that more or less exploded, I wanted to be doing different things. So some of it’s lifestyle–I’ve done some of the things I’ve done based on where I want to be, where I want to put my time–and some of it’s based on where I see opportunities in the market. And trying to get it all done. Cause there’s only so many hours in the day.
20:32 AUSTIN: Cool. So kind of touching on a bit of your background there. I know that you’re an NCAA champion and I was kind of wondering if you could give us a little background into how that played into your Ludus sports business. Kind of how that came to be and why you felt that was significant.
20:48 ADAM: Yeah, I mean it was a direct correlation, to be honest. Because I got access to a bunch of Olympic tickets because I ran the Olympic trials in 2000. So a long time ago. I’m dating myself here.
But so that gave me an opportunity to buy a bunch of tickets to the Olympic games for the 2004 Olympics. I did that, not knowing what I would do with that opportunity. And then about a year later, I had the opportunity to buy more tickets. And so I went all in. Bought a bunch of tickets. Not knowing what I was going to do.
And I ended up buying some hotel rooms. I went over to Athens on my own. As a true entrepreneur would. And just kind of figured out… thought that I could couple the tickets with hotel rooms. Sell them to the guys I’d been competing against and their families.
Who were going to make the Olympics.
And ended up making some money during that summer. And after that, just kinda had this business. I had nothing else going on. I’m like, “Well, I’ll go do the winter Olympics in Italy, now.”
And that just sort of spawned this business that ended up doing really well over the next couple of years.
21:47 AUSTIN: So you were… I would say that’s kind of turn-and-burn business in terms you have tickets and then the hotel rooms. So were you packaging up those together? Or what was the deal on how you became middleman?
21:56 ADAM: I was wheeling and dealing everything I could. I would package them up together, and put them in packages. I would sell the tickets for what I could. Sell the hotel rooms for what I could. I mean, my clients were sports agents. The families of athletes. Corporate clients. Federations. Anyone and everyone. Celebrities. I had all kinds of things and I would sell whatever I could.
That type of commodity expires. It’s like rotten bananas, right? So the next morning, a hotel room no matter what you paid for it is worth zero. So for us it was… I just wanted to sell it for more than I bought it for.
22:25 AUSTIN: You’re capitalizing on a market niche where people… like you said it’s going to expire. And you took advantage of the fact that they had to get rid of it no matter the price. I would say that’s pretty impressive how you came up with that game plan and then executed and had the wherewithal to actually take the chance to go out there and pursue that opportunity.
22:43 PAT: Yeah, absolutely. And it goes back to what you were saying about looking for niches in the marketplace. Finding a gap. And it has to be something in an industry that you understand. So you obviously understood the logistics of not just athleticism and athletes, but booking the right hotels and stuff like that. Just little stuff that I think the common person might not think of as much.
23:02 ADAM: I didn’t really understand anything in terms of having an advantage over the marketplace. I think what I did was I saw an opportunity that scared off most people. Which at that time was international business. I mean, I knew that by going to Greece for a year and living. And setting up an office. I could create opportunities for myself. And I didn’t know exactly what those opportunities were. But I knew that once I’m there, I’ll figure it out.
And the same thing a year later. I moved to Italy and set up for a year and a half. And so I think it was less about me knowing about hotel rooms–which I knew nothing about, honestly, when I started. Me figuring out, “Like, look. No one else has the guts to really go and setup the way I’m thinking about setting up.”
23:39 AUSTIN: So I think about… this is pre-Facebook and so marketing material, marketing platform. What was kind of your go to in order to attract clientele?
23:48 ADAM: Man, I mean it started off old school. Brochure–50 cent brochure that was sharp. I mean, 30 pages or something and we bought 10,000 of them. And I got all this mailing list. And I sent them out. And I think… I feel like I first heard of SEO in 2005 or something. And I was like, “Why aren’t I attracting people to the website? I just can’t figure it out.”
And then I’m like… nothing was optimized on my website whatsoever. And so that was a big key around 2005 or so. When we started actually optimizing. I think we started doing Google AdWords a year or two later. Which back then was pretty cheap as well. So…
24:25 AUSTIN: So how many Olympics’ did you go through? You said the Winter Olympics after and then were there any additional Olympics?
24:32 ADAM: I mean, I haven’t missed an Olympics since…
24:34 AUSTIN: Oh, really? So you’re still going?
24:37 ADAM: Yeah. I mean, I don’t go in the same way. That business kind of hit its max in 2012. We had about… I think around 2200 clients and did $7,000,000 in revenue. And it was a big, big, big production. And that was the height of it. So…
24:54 PAT: Okay, and just to clarify, when you say clients you mean direct consumers that purchased from you? Or are operating on a BtoB level as well?
25:01 ADAM: That’s a good question. I don’t even remember that, to be honest. But that’s probably people… I’m probably counting a tour client as well as maybe to people I just sold a room to.
Probably how that was defined back then.
25:17 AUSTIN: Cool. And you mention too that it kind of reached its cap you felt… What was an indicator of that for you? And what were you observing that made you feel that way?
25:26 ADAM: Well, I mentioned we hit 7 million dollars in revenue. And our break-even point was 8 million dollars, so that was not good math for us. And we lost a million dollars. Me… I lost a million dollars. So that was a big look in the mirror moment of, “Man, this is not as fun as it used to be.” Used to be going and living in Europe and travelling and going to international events, and now I’ve lost significant amount of my net worth. I’m bummed. I don’t know what’s next, and…
And it just so happened I was kind of banking on the London Olympics being something really special, because the next few Olympics were in these places that people didn’t know much about. In terms of Sochi, and Brazil and whatnot. It had some question marks around it, so…
26:09 AUSTIN: Yeah, the 2012 Olympics were pretty great. I actually had a chance to go there. So I was an intern at the time for a media company and had a chance… I actually had a really great time and I’m sure you had a fantastic time at that as well.
26:21 ADAM: (laughing) No, I lost a million dollars man…
26:25 JOE: (laughing) We don’t know how much that hurts…
26:26 PAT: I’ve never had a million of anything to lose before.
26:29 AUSTIN: So, we’re there now and the Olympics were great, but now you’re in this very difficult situation. What is the next step for you when you hit that wall, and how did you overcome it?
26:40 ADAM: I ended up selling the company. Selling it to another guy… another group out of Austin, Texas. Ended up moving into Austin. I was in a pretty bad funk for a while. Just trying to figure out what was next.
And I figured that would be a good move for us in terms of my family, in terms of our business… We’d done 7 million… they’d done I think, about 10 million. So we were like, “Okay, so this’ll be about a 17 million dollar company.” And it just… it got worse to be honest. In terms of the business, our expenses were… I think my expenses were about 80 grand a month, his were about 140 a month. But by combining us we would be under 200. And we were, like, 250 a month. And we just could never figure it out.
So after that we went and… I kinda realized I needed to change the pace. And I needed a different industry. And I needed to get out and do something different. And that’s where I kind of dreamed up this idea of “why don’t I cash in all my frequent flyer miles that I’ve spent over the years accumulating through this business? Where I’m spending millions and millions of dollars on credit cards and accumulating these miles.
27:43 AUSTIN: How was that conversation with your family when you said, “Guess what? We’re closing up shop and we’re heading out.”
27:49 ADAM: I mean, I was sitting on a plane when I figured out this is what I want to do. And I’m looking at one of the airline magazines. And so I called my wife right away. I’m like, “Look, I have this idea.” And she was just like, “Cool. I don’t think you’ll go through with it. If you want to go through with it, I’m down. But you get crazy ideas like this all the time.”
So it was almost a challenge. I’m like, “I can do this. I can take a year off. I can figure it out.”
28:10 JOE: She underestimated you.
28:11 ADAM: Maybe, maybe. I get underestimated a lot.
28:15 AUSTIN: So on that trip it was something that led to a lot of other businesses that now you’re a part of. And things that you talk about to this day.
What were some key points, there? Or key activities that happened to you on that trip? Or thoughts that you had that’s blossomed to where you’re at today and what you do today?
28:33 ADAM: Yeah, I mean one of the things… kind of the revelations I had was,” I don’t ever want to be all-in on one business during that trip.” Because I was so all-in on this one business and it just didn’t work out for me. And I was enamored with the idea of other friends and associates who had these various businesses–some of them passive, some of them active–and I’m like, “Oh, that’s what I want to be like.” Fast forward now, I look at some of my friends who are super-focused on one business, I’m like, “Oh, that be really nice to be really just honed in on one business. But that and just seeing that the way different markets work.
We looked at places like New Zealand. We spent a couple months in New Zealand. I’m like thinking about business opportunities. I’m like, “What business opportunity? What’s the most amazing business opportunity you could have in New Zealand that can go to 5 million people?” Right? There’s 5 million people in New Zealand. So no matter how successful you are… if you create a product every single citizen uses, that’s your rate. And same thing, I was looking at different opportunities and the US is way ahead in a lot of ways. Obviously, we know that. Especially with technology and some of the things that we do.
But it’s also… it provides an opportunity because a lot of the world, I realized… and I’ve lived over seas a lot too. But I realized that people are afraid to break things abroad. And so that’s another big opportunity. Is everyone’s afraid. “Oh, the government says we can’t do it like that,” so no one’s ever… No one’s ever tried and nobody ever will.
29:55 AUSTIN: Mm-hmm. So, that’s kind of all what you’ve described as a “sabbatical” of sorts. Where you kind of took some time with your family travelling. And not just looking at business opportunities. But was this somewhat of a spiritual experience for you? Where you were thinking… really doing a lot of introspective learning and trying to think about what the next move is from that level?
Or did you care more about the freedom that was going to come as a result of that trip?
30:17 ADAM: I wanted out of what I was doing. I just wasn’t happy where I was in my life. And geographically for that matter. And I just knew… I didn’t know what I wanted to do, so I said, “Look, I can go and San Diego and hang out and be depressed and write this check for my mortgage every month and by groceries and pay for my kid’s school. And just spend all this money.
Or I could probably spend the same amount of money and go spend a month in Paris, and spend a month in Barcelona. And I… using my skillset of travel and contacts and whatnot, I think I can do that. And I’ll probably spend the same amount of money, but I’ll have this experience. And I’ll figure it out. I knew I needed time to figure it out, so I’m like, “Why just sit in my home and figure it out? Why not hit the road and figure it out?”
So that was kind of where I was coming from. I just knew I needed a change of pace. I didn’t know what it was, and I felt like I’ve had some of my biggest revelations of my life while I’m traveling, you know?
31:12 AUSTIN: Yeah, and you felt that that was a lesson that was worth spreading to other people too. And that’s evidenced by the book that you wrote, “How to Run Away From Home and Bring your Family with You.”
I just kind of wanted to ask a question about kind of what’s the nature and scope of that book? If you had to kind of sum it up really quickly for our listeners?
31:29 ADAM: I mean, it’s a little bit of like, you know… How I got to that point. I tell a little bit about my personal story. Like, here’s where I got to where I got, so people can have some context.
It’s a little bit of how-to. And it’s a little bit of just like, overcoming objections. Because that’s where I realized, everyone has a reason why they can’t do it. And most people use the crutch of family as their main reason why they can’t go travel abroad. Or why they could never go do a trip like this. “Oh, my kids have soccer. Or we have school. Or I’m involved in this. Or their friends. Or they’re too young. Or they’re too old.”
And I felt like I saw that a lot, so I had 4 little kids, all under the age of 6. And so anytime anyone throws anything at me like, “Oh, I could never do that. Because I have this.”
And I’m like, I can trump you all day long on the reasons why you can’t go. So…
32:21 AUSTIN: And how is your family experience after that? Would you say that brought you closer together? Would you say that it’s difficult for them to assimilate back into US society? Or what was kind of a takeaway from that?
32:31 ADAM: Yeah, I mean, kids will adapt to anything. So most… kids for the most part barely remember what it was like to have a house. Have their own toys. So when we came back, we ended up moving to San Diego at the end of it. We were in Austin before that…
32:46 AUSTIN: Nice choice, by the way…
32:47 ADAM: Exactly. And when we came to San Diego we were looking at houses and they were empty houses. And so we’re like, “Kids, what do you think of this house?”
“This house sucks. There’s no furniture.” We’re like, “Well, we’ll get our own furniture” and they just had no context of “What does that mean? We get our own furniture?” Cause they’d been staying in furnished places for the last year. And they didn’t know what it meant to unpack your bags. And they didn’t know they had all these toys in storage and clothes. The oldest one did, maybe.
33:15 AUSTIN: Right. Was this 2014?
33:16 ADAM: We ended in August, 2015. So we started in 2014 and ended 2015. Cool, so you know, fast-track 2 years now, and here we are sitting. And you’ve definitely come around and chosen some different avenues for business.
Let’s talk about your Air BnB business and what goes into that.
33:33 ADAM: Yeah. So, I mean, during that trip I had a couple properties that had been just traditional rentals. And one of them wasn’t renting. And so I knew enough about the summer in San Diego that I was like, “I can’t have this go empty.” I’d been working on this project. It was an old Victorian house that I bought in Little Italy. A nice part of San Diego. And I’d spent a lot of money fixing it up. And I was like, “I gotta get this thing rented so let’s just… let’s rent it for the summer.
And so we were trying to rent it for $7000 as a commercial lease… as an office. And we ended up that summer making 10, 12 thousand dollars a month. And then someone offered us $7000 in the fall, and we’re going to keep with this Air BnB thing. So we kept that going.
I ended up doing it with another property that I had a long-term renter in. When they left. And then we bought the building next door to it. So we just… it’s kind of the arbitrage of I like real estate in general, especially in places like Southern California where the appreciation’s so strong. And then it’s the opportunity to get… in terms from a sales aspect, you’re always selling, right?
You get inquiries coming in all the time. So I liked the deal flow of it as well. And I like to be able to enter the properties whenever I need to, between people, and see what’s going on. So…
34:45 PAT: And to operate that business, is this through an app? Do you have a website where you’re getting in touch with potential customers?
34:52 ADAM: Yeah, I mean, that’s kind of where I’ve struggled with it a little bit because for the most part I’m waiting for the fish to jump in the boat. And I’m not doing all the things you guys talk about in terms of driving in potential leads and especially on the BtoB level. There’s conferences always coming in. And if you can be more pro-active and advertise to those people coming in, there’s a huge potential.
So that’s why I kinda… for me it was about inventory, right? I have 3 places that are 4 to 7 bedroom, really premium places. But I was like, “I need more inventory in order to devote more time.” So we sold one of the properties last month and bought a hotel. So that way… it will run kind of as an Air BnB type of place, but it’s got 20 units instead of 7 bedrooms basically.
35:34 AUSTIN: So are you using Air BnB at all for any of your other properties? Or is that your main middle-man if you will to find potential tenants?
35:42 ADAM: I use Air BnB. I use booking.com. I use VRBO. I use all the tools I can get. I don’t care where the client comes from. Everyone has their own benefits and some of them cost more than others. But at the end of the day, it’s just a sales channel. I mean, we use the word “Air BnB” all the time to define this market. But really, VRBO is a good example. Probably 40% of the business, 35% of the business comes from VRBO.
36:08 JOE: So going back really quick, you said you bought hotel that has 20 units that you only put through Air BnB and VRBO? Is that a normal thing?
36:17 ADAM: No. Again, we’ll sell it through any channel. Like, I have Air BnB… I have a couple of Air BnB places on booking.com, for example. And we’ll get it through Expedia and whatnot. But we’re trying to create more of a community aspect. And we see Air BnB as a viable sales channel. I mean, there’s a ton of the marketplace that goes directly to Air BnB instead of anywhere else right now. And I think that’s going to continue on that trend. And even for putting the entire hotel on there, is what we’re planning on doing. So instead of… cause Air BnB is also about extraordinary experiences. So if you can go find a 20 room hotel with all your wedding party… or with your… everybody from Power Digital Marketing, next time you go to a big conference. And book out a whole hotel. And do catered meals, and throw parties on the rooftop. Isn’t that better than going down to the Radisson or something?
37:05 AUSTIN: Yeah, you know it’s funny… I think about this and it’s that personalized experience seems to be entering into basically every vertical at this point, you know? And it’s that gratification at a personalized level. And that’s what Air BnB has become. They recently said that they’re going to start getting into hotels. So like what you’re talking about. And that’s pretty much what you’re doing. And then using their platform to put that together. It’s very interesting to see all this Air BnB stuff and then outside of that, you have a couple other businesses, am I right? Or what’s kind of on the horizon for you in terms of your other businesses and ventures/
37:38 ADAM: Yeah, I mean I still have a business that brings people to the Olympics. It’s more of a BtoB play. It’s more corporate businesses and large groups. And we take people to Oktoberfest and the Olympics and World Cup. I have this company that I’ve been trying to launch for while that was a beer marketing company. That’s more of a referral, like affiliate company at this point.
And then the hotels is really what’s been taking my energy. As well, I do the speaking and writing and stuff on the side. But it doesn’t… it’s not enough to support our family at this point.
So really, I’m all-in on this hotel right now. Just because it’s a lot of work. Kinda making it look good. It was a crappy hostel and we’re basically making it a boutique hotel. So it’s a bunch of work.
38:23 PAT: Out of curiosity, how do you find the time to manage all of these different things that are pulling on your attention? You have a family that obviously lives in town. You’ve started several different companies. You sit on the board of San Diego’s E.O. chapter. You’re consistently booked for speaking engagements, other appearances.
Not to get too Tim Ferrisy here, but how do you kind of manage all that time?
38:44 ADAM: I don’t know. That’s a good question. My answer would be way different than my wife’s answer too. Cause she would not think I’m very organized in any way. But I mean I try and prioritize just kind of at the beginning of the week. The beginning of the day. You know, I think a lot about revenue generating activities–we call them “RGAs.” That are just like… by doing this is it going to make me money. Short-term. Not everything I do has to make me money, but if I’m choosing between 2 things or 2 projects… I should probably choose the one that potentially is going to make me some money.
And I try and focus on things that I like doing. I mean, I like real estate. I like Air BnB. I like the Olympics. I like beer. I like speaking. So all these things, I can’t imagine doing if I didn’t have some passion with it.
39:28 PAT: Yeah, that actually answers a follow-up question I had too that I was going to ask. Is there any one of these areas where your passion might lie more than others? Or is it kind of just dependent on what the situation and context…?
39:37 ADAM: You know, it’s… Like I said, 10, 15 years ago I was a different person than I am now. So right now, I’m really interested in real estate and in the scalability of what’s happening in this accommodations world in terms of Air BnB and the way people are traveling. And I think there’s a lot of interesting things happening. And I think it’s happening so fast that like… like the LA Olympics are in 2028. I’ve had a few people talk to me. They want to hire me to help consult on what they should do in terms of setting up an operations base for, like, you know, the Sweden House, or something like that. And I’m like, “You have no idea what’s going on in 2028. And neither do I.”
Like, how could we predict…? I’m not going to go knock on the Hilton. Because that Hilton could not even be there in 2028, right?
So that’s the way our business used to work. Is that we’d go take out an entire hotel and spend a million dollars reserving this hotel. Non-refundable money. And we’d take the risk. And then we’d sell it out, and try to make more than a million.
And that business… I think the way people travel is changed so significantly. And I’m kind of fascinated with that. From a technology standpoint, from a real estate standpoint, right? From a sales standpoint? That there’s all these models and all these people. You mention what’s going on with Air BnB and I think it’s a bit of a land-grab right now. So I’m interested to see who’s grabbing what.
40:56 PAT: And then, you know, as far as… cause you talk about how you’re these consumer trends essentially in the travel industry are consistently changing. What do you do to stay on top of those constantly changing trends and just stay informed? Especially when you do have as many other ventures going on as you do?
41:09 ADAM: I mean, I’m not trying to figure it out, to be honest with you. Like, I’m happy to play on the consumer side and kind of hedge. That’s why I like the hedge of real estate, right? If everything changes, then at least I have this corner. That I think will hopefully be worth more than I bought it for.
But it’s changing so fast that without being an Air BnB size and it’s hard to really make an impact, I think. Unfortunately.
41:37 PAT: So it’s a little bit easier for you to play… kind of like empathize in a sense. Put yourself in the consumer’s shoes and say “What would I want out of an experience?”
As opposed to pre-emptively go and over-analyze a market and see where a niche might be. Is that right?
41:51 ADAM: I mean the niches are where it’s at for sure. And I think a lot of these businesses are scaling specifically to be acquired by Air BnB. Which I don’t think is a stupid move. I think it makes sense. But we don’t know exactly where this is all going. And that’s where I think it’s just fascinating… You want to be at the table. You want to be… have a hand and be playing at the table. Even if it’s at the $5 table, you still want to be looking and seeing what’s going on.
But I think it’s hard to know what’s going on in the big picture.
42:17 AUSTIN: Yeah, we’re seeing a connection between Air BnB and a company such as Google which we talked about this in previous episodes. Where companies are basically being built to be acquired at this point. If you can go to the boardroom and say, “Can’t Google do my business?” then you basically don’t have a place to play without getting acquired. So you can get acquired or you can get pushed out.
And I think that’s kind of what we’re seeing with real estate too. Is Air BnB’s getting to the point where they’re personalizing people’s experiences and where they’re staying? And it’s moving at such a rapid pace that you need to keep up the times with Air BnB.
42:50 PAT: Yeah, and kind of going back to what Austin was saying too, it’s really changing the game in terms of how these start-ups even come to be. You know, a lot of people… the big 5 especially when they were up at Silicon Valley, they were filling needs that hadn’t been filled before. And trying to disrupt the marketplace.
And now they have the purchasing power to acquire all these smaller companies to ensure a) that they don’t get pushed out, and b) that they are the providers of every need in that space.
And from what we’re hearing from you, that’s similar to what’s happening with Air BnB.
43:18 ADAM: Yeah, I’ve been approached by a few people who their business plan is to be acquired by someone like Air BnB. And they’re… if you look at some companies, they’re building their platform, their user interface to look like Air BnB. And I’m like, “They’re doing that obviously, so one day when they get absorbed, it’ll look and feel like it.” Or it looks more, quote-unquote, “official.” Cause it parallels that platform.
So I think it’s a big game and they’re changing things. Like you said, now they’re really into experiences. Air BnB’s going after experiences.
And they’re acquiring property, right? Which that used to be the tagline, right? “They’re worth more than Marriot but they own no properties.”
Now they own properties. So I don’t know where it’s all going. But it’s fun to watch, for sure. And I like being on both sides of it. I mean, I use that for a year to travel with my family. So I understand the platform really well. I understand it from an owner’s perspective as well–in terms of I was able to get deals when I was traveling. I would go find a place that was 500 bucks a night and I would end up getting it for 120 bucks a night. Because I know that owner mentality. I know what to say. I know the pain they feel when you get close and they have an empty room. Which a hotel doesn’t feel that pain, because it’s just some guy at the front desk. A property manager for an Air BnB place doesn’t feel that pain because you’re actually cutting into what he makes, so it’s interesting to be on both sides. And like I said, it’s fascinating to see where it’s all going.
44:39 AUSTIN: Yeah, and in the right location an appreciating asset can be so valuable. Being on the west coast, most of the property that lines the west coast is appreciating at all times. As inflation occurs. And taxes go up. That property’s going to continue to rise as well.
So very interesting to see you’re decision to stick into the real estate market. Let’s see here, final questions wrapping up. Definition of success and fulfillment for you? How do you feel to this day? You’ve overcome a lot of adversity and now you’re at this point where you’ve got a functioning business and has this made you truly happy and fulfilled?
45:10 ADAM: Yeah, success probably has something to do with fulfillment. I think of success probably being hungry when you wake up in the morning. And excited to go attack the day. And content when you sit down at dinner that night with what you’ve done and who you’re sitting with. I think it’s probably a combination of those things for me.
45:30 PAT: It’s super-interesting hearing everybody’s answers, cause these last 2 questions that we ask are pretty much universal across all our interviewees. And we just like to use that to see how people in different industries prioritize things and what they care about. And what they might wish that they would have known before.
And leading into that, this is my question really–because I like to ask this. Talking people on a one-to-one basis, what’s one piece of advice that you would tell your 20 year-old self if you could… if you know what you know now. Sorry, I phrased that terribly. I ask it all the time, I promise.
46:07 ADAM: I think… it’s a good question. I think I probably would have maybe–I hate to say it–maybe worked a little harder in my 20s. But I messed around a lot. I see the hunger that my competitors have that are 10, 15 years younger than me. Not only the hunger, but the time. I mean, I have to be home at dinner every night, to help my wife wrangle our 5 children. And if I’m not, it has to be a really good excuse.
So it’s like… I can’t work 18 hour days. I just can’t. And so when I’m competing against guys that can, I gotta beat them in other ways. So I look back and I’m like, It’s a shame that I decided to build my business in a lot of ways at the same time as I decided to build my family. So I would have probably buckled down a little more.
(laughing) That being said, I don’t know if I would have taken that advice in my 20s. And like I said, I lived in Europe and I had a great time, and I saw the world. So I… there’s not much looking back I could regret about that. I would also probably think I would find a way to fail faster. Because when I did hit that London in 2012, it was somewhat advanced in my professional career at least up until now. Maybe not in the big picture. And I was like… it hurt. And I would have much rather lost 50 grand as a 25 year-old or 30 year-old versus a million dollars as a 35 year-old or whatever.
So for me I knew… business is all about ups and downs. And I’d never really had my ass kicked until that point. And so I just wish I would have had my ass kicked earlier. Honestly.
Found a way to fail and just get over it. And deal with those feelings. And embrace them or whatever you want to say. But, yeah, fail faster.
48:01 AUSTIN: Yeah. I love that. That was some really great points. You talk about your family. Very important you get to have that. And then also it’s very important to fail fast and continue to grow. Because as we just talked about, things are moving very rapidly and it’s difficult to keep up.
Adam Dailey, thank you so much for coming on Flip the Switch. It was a pleasure.
48:16 ADAM: Yeah. Thanks for having me. It was awesome.
48:20 PAT: All right, you guys. We really hope you enjoyed that interview with Adam Dailey. I know that we all did. Got a lot of good insight. Not just about business and entrepreneurship, but about traveling, prioritizing and also his new business venture. From our end that’s going to wrap things up for this episode. Thank you again so much for taking the time to tune into Flip the Switch, presented by Power Digital.
Really quick plug for our social handles. If you should ever have questions for us… If we can help you in any way. Or if you just want to bounce some ideas off of us for what might make the show better, hit us up on our social that is @flipswitchcast for both Instagram and Twitter. Again that is @flipswitchcast. And we’ll always make sure to get back to you right away. From Austin Mahaffey, John Saunders, Joe Hollerup. I’m Pat Kriedler and we’ll see you next time.