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Guest: Rob Friedman, Chairman and co-founder, Auction.com
Episode in a Tweet: The amazing story of how two guys started a revolutionary real estate e-commerce company that has transacted more than $30 billion in real estate–online.
Quick Background: Rob and his high school friend Jeff started an offline auction company that did reasonably well. But then the internet came along and they decided to put some listings online. Things really took off when, after four years of badgering the owner, they bought the domain Auction.com for $1.7 million and rebranded the company. Today, Auction.com is the country’s (and possibly the world’s) largest e-commerce seller of real estate. And they hold a world record! The Auction.com platform was used to facilitate the largest verified e-commerce transaction in history based on current Guinness World Records information: The $96 million sale of Manhattan Towers, a two-building, 309,734 square-foot office property in Southern California.
Transcript: Download the full transcript here.
Key Insights on Becoming an E-commerce Juggernaut
Rob Friedman: One of the most important things I think you can do is identify great mentors in all aspects of your life.
1. To make the jump from entrepreneur run company to a fast-growing sustainable business, hire people smarter than you.
Oftentimes, the entrepreneur who starts the company is not the best person to run the company as a professional manager. In Rob’s case, he had enough self-awareness to realize he is an entrepreneur at heart and not a day-to-day manager. So, he hired well-educated, well-trained professionals and gave them the room necessary to manage the company. These managers, “all have equity in the business, they’re all our partners, and we’re all rowing in the same direction,” said Rob.
2. Visit/monitor your competitors and take notes on what you think they’re doing right and doing wrong.
As Rob was learning the auction business, he went to all his competitors’ auctions, whipped out a pad of paper and a pencil, and wrote down everything he thought they were doing right, and, more importantly, wrote down everything he thought they were doing wrong. “The things we thought they were doing right, we emulated, and the things that we thought they were doing wrong, we fixed. I can honestly say that our first auction was as good, or better, than the competition because we really took the time to analyze what everybody else was doing and then implemented what worked,” said Rob.
3. You can be self-educated and still be incredibly successful.
It’s easy to get discouraged thinking you’ve got to have an engineering degree from Stanford to start a successful company. Far from it. Rob said he is pretty much a self-educated guy when it comes to business. And his education came from reading the great business books, taking courses (like Dale Carnegie and Toastmasters), asking people for help, and entrepreneur coaching. “When I’m starting something new, I like to call people that are in the same industry area, like e-commerce, and I ask them questions. I tell them I’m not competing with them and I ask them for ideas or thoughts that have worked. If you’re kind and you’re nice, people want to help you,” said Rob.
4. Be humble and share your success.
“When your team is a winner, you’re the winner,” said Rob. Big, self-centered egos are not allowed at his company. Even with over 1,000 employees, Rob’s leadership team is very accessible and focused on sharing the credit. “I really believe in making sure that my team gets all the accolades they need. I don’t need the accolades as the leader; I want my team to be the winner,” he said. And this “share the credit” philosophy will help you get maximum performance from your team. “I think if you keep the team mentality as you’re growing the business, you’ll grow it exponentially because people want to work for you and people want to win with you,” said Rob.
5. You don’t have to learn from the school of hard knocks.
There are two types of people–those who can learn from other people’s mistakes, and those who have to make their own mistakes. Rob said he’s been a little bit of both but as he’s gotten older, he realizes the magic in learning from other people’s mistakes. “I can assure you if you have the humbleness to learn from other people’s mistakes, you’re going to get a lot further, a lot quicker, and make everybody a lot more successful,” said Rob. Just like you don’t have to reinvent the wheel, you don’t have to repeat other people’s mistakes when that trail has already been plowed.
Coaching Takeaways
1. Grow faster by putting your ego aside and hiring people smarter than you. The only way to create a virtuous cycle in your company is to continually hire smarter and more talented people. This compounding of talent will take your company far beyond what you could do if you keep too tight a rein on management.
2. Learn from other people’s mistakes–including your competitors’. Learning from the school of hard knocks is the slow boat to success. Study your competitors and other businesses to discover what they’ve done wrong, then focus on actions with a higher probability of success.
3. Share the spoils of success. Don’t get greedy and hog the spotlight or the profits. By liberally spreading the wealth and the credit for success, your team will go the distance for you and you’ll all end up in a much better place.
Transcript: Download the full transcript here.
