Ep28: Brandon Gaille – Do Your Research Before Spending a Dime

Guest profile 

Brandon Gaille is an entrepreneur who has founded five multimillion-dollar companies over the past three decades. Currently, he runs a self-named Internet marketing firm that helps clients acquire more customers through SEO and pay-per-click (PPC) advertising. He also has a thriving online course that teaches people a blogging system that propelled his blog to more than 1 million monthly visitors in less than two years. The man and his businesses have been featured in the nationally and globally recognized business publications, Fast CompanyForbesInc.Entrepreneur, and AdweekHe is also the host of The Blog Millionaire, one of the most popular business podcasts on the Internet. On a personal note, he lives in Houston, Texas in the United States, with his wife and two sons.  

 

“Let go of a loss and then accept it and move on right away.”

 Brandon Gaille 

 

Young tycoon falls from riches to rags to ‘code blue’  

Brandon built several million-dollar businesses in his 20s, earning him the reputation of having “The Midas Touch”. But as he approached the age of 30, he began to suffer inexplicable health problems, resulting in losses of mental and physical agility. With a move from Texas to the United Kingdom, he aimed to take a break, recover from his illness and return to the USBut after a year and a half, he had burned through all the money from his earlier victories because, without the same body and brain power, he had apparently lost the ability to make money, evidenced by some rapid and severe mistakes. He returned to Houston and was admitted to hospital several times. After several “code blues” (announcement used to call a team to a patient needing resuscitation, most often due to respiratory or cardiac arrest), years of seeking a diagnosis and dozens of specialists, he was told he had the rare disorder, dysautonomia 

 

Hits pile on as pregnant wife diagnosed with cancer  

 The discovery that allowed him to be treated and lift his mental limits could not have come sooner. His wife had just become pregnant and was handed a diagnosis – stage-3 inflammatory breast cancer (this means it has spread beyond the breast, making it harder to treat than cancer at an earlier stage). Luckily, he was functioning well enough to be there for his wife. Their child was born healthy and his wife was declared clear of cancer a year later and has been cancer-free ever since. Brandon says such experiences have equipped him well for dealing with challenges and losing it all and he adds that health plays a big role, which makes for a great lead in for his worst investment ever story.   

 

“I have a good idea about dealing with failure … and health plays a big role.” 

 Brandon Gaille 

 

It started (and ended) with a blog  

Several months before this, one of the staff at his small marketing company asked him to look at her blog. His company was progressing fairly well, but looking at her blog made him realize his need for his own because he felt he was treading water and doing too much of his company’s work. So he delved into the world of blogging, researched all the good ones and reverse engineered what they were doing wellHe then launched his own blog and after four months it was getting more than 100,000 monthly visitors. All the while he was wondering how to monetize it. 

 

Busy blog sidelined as new idea blinds the boss 

At first he was using his blog to get more clients for his marketing firm, but his ultimate goal was to monetize the blog as another revenue stream to set himself free from his firm. At the same time, he came up with another business idea. Subscription boxes were hot and his contribution would be a motivational book on CD about how to get a mindset for success. He called Motivation in a Box, and like many entrepreneurs, he thought it would be an instant hit as each month customers would get box on how to get charged up and build their business.  

 

Investor forgets testing and jumps right in 

All the excitement made him completely forget a crucial step – the testing process. Ready to go (he thought), he simply decided it was going to work and was too impatient to test it. He jumped right in, hired a firm in China and they designed the box. He accepted the minimum order and had a thousand boxes designed and shipped to him. In his haste, he even paid the extra freight cost 

 

 

“I need all those boxes because the orders are going to be coming in like crazy. 

 Brandon Gaille 

 

Then he contacted a company that publishes audio books. He saw he would get a discount if he ordered at least 500 so he again said: This is a no-brainer, ordering more than 500 audio books to fill the first 500 boxes, along with tissue paper and logo stickers. Everything was perfectly packaged down to an expensive thank you note that would be in every box. The unboxing of subscription boxes apparently was a big event in those days and he wanted to ensure that the first time someone saw his box they would be blown over. He desired this even though he had read a blog posts that suggested when starting out, you could keep costs low by using the free postal service materials and envelopes. The advice had said to simply send what the customer is ordering and to avoid worrying about all the extra expense 

 

Own best practices ignored

In the grip of his “winning” concept, he ignored the dangers and almost every astute practice he had always focused on, including that of slow testing process before launching a new enterpriseHe received all the goods and took his staff off what they were doing at his marketing firm and had them packaging the new products. He said he neglected a lot of basics because all the multimillion-dollar companies in his 20s were online businesses, whereas this venture was about physically shifting products. Even at that stage he still thought was going to be a hit.  

 

Usual online revenue boosters unable to save the day 

Brandon employed all his expertise in AdWordsFacebook advertising, and SEO, and got stuck into advertising but he still couldn’t make the sales. He had redesigned the landing page several times, but after two to three months, he only had two or three sales. He acknowledges however that doing badly when a business is wrong at its foundations can be a saving grace.  

He said it can be dangerous to have 100 sales, as that kind of borderline effort can keep a business hanging on instead of turning into a major loss.  

 

New investment causes amnesia about booming blog 

In his heart, he wanted to win back his investment of US$7,000 but the level of distraction he was under meant he had completely forgotten about his blog that was showing such promise. He was sure the boxes would pay off and was quite reluctant to give them up. He notes that even after the first weeks of AdWords testing, he knew it was going to fail. But he kept going for another two and a half months when he could have been focusing on his blog, which had climbed quickly from zero to 100,000 monthly visitors, and which was sitting on the Internet doing nothing as Brandon wallowed in denial of obvious failure.  

 

Santa delivers Christmas cheer of unsold inventory 

So after those tortuous three months, he finally let go and decided to forget about the $7,000 investment. The boxes themselves served as a physical reminder to never make the same mistakes because he had almost 1,000 boxes piled five-feet high in the corner of his office near another witness, his assistant. The boxes sat there for 13 months so when Christmas came the next year at his office building’s management had a contest, and as part of that, he decided to give hundreds of boxes away as Christmas gifts. He dressed as Santa and his assistants dressed as elves. They went to neighbouring offices introducing themselves and explaining what their business was and gave out the boxes for free. Everyone loved it and he even scored a clientfrom whom he acquired a six-month contract, the payment of which came to exactly $7,000, his initial investment 

 

“That three months doesnt seem like a big amount of time in business or in life but the fact that those three months came right after my blog was just taking off and for me to just say: OK, Im just going to not pay attention to this (blog) and focus on something else (the boxe idea) without testing it’ … was a really bad decision. 

 Brandon Gaille 

 

Brandon’s lessons learned 

  1. Let go of a loss, accept it and move on right away: On top of his own experience, Brandon listens to Tim Ferriss’ podcastIn one episode, he was talking about all the things he learned the previous year and one of the questions Tim asked himself was: “Do I need figure out a way to earn the money back that I had lost?”  

 

  1. Understand the value of your time: As a small-business owner or solo entrepreneur or just managing your own finances, you have to understand the value of every hour of your time. Brandon was focusing on the $7,000 and not realizing that tens of thousands of dollars were being lost, not just because of his own time but because he had two employees that were spending all their time on the boxes instead of his marketing company or the blog he had that was quickly growing in popularity.  

 

Andrew’s takeaways  

  1. Bear in mind the concept of opportunity cost: What could I be doing with my time? And opportunity cost really does come down to time. Youve got a certain amount that you can allocate of your own and also of the people that work for you. 
  2. Beware of “The Entrepreneurial Seizure”Michael Gerber talks about this in The E-Mythand a condition of the mind in which people setting out to set up a new business get so excited about their idea that they fail to research it sufficiently.  
  3. Always separate research on return from research on risk: One way to do this is have two people working on each item, or an investor should make a clear separation by saying:  

 

OK, get all excited about the return and all of that, but now take your return hat off and put your risk hat on and say what could go wrong?” 

Andrew Stotz  

4. Never underestimate emotional factors: In this story, they are at play for the investor and at play for his employees. When you switch gears and go in another direction when there are opportunities right in front of the company, that can be very frustrating for employees, and sometimes they can shake everyone to the core.  

 

One preventative measure 

Stick with the area of your business that is a proven money-maker …  

Nowadays Brandon takes the 80-20 rule to a new level, because with his rare conditiondysautonomiahe has to sleep 13 hours a day, every day. He has two young boys and a wife and managing all that with only so many hours during the day, its very important that the 80-20 rule now becomes the 90-10 rule 

 

I focus every single hour on the things that are proven commodities. 

– Brandon Gaille 

 

… and keep going back to it to see how you can build on that 

 He continually goes back looks at areas where he is making money, the most money, and tries to figure out how can he take this a step further. He asks how he can expand on where he is making real money without going over to a new, unproven idea. Make the most money out of what youre already making money on before moving to something else.  

 

Brandon’s final words 

  • Think about your past failures  
  • Talk about them 
  • Dont be afraid to break them down because in those failures youll learn the most  
  • Embrace your failures, learn from them and then get on with business and life 

 

 

There hasn’t been one time where I’ve had breakout success that didn’t  have a failure happen right before it that pushed my thinking  outside of the norm that I had before the failure. 

– Brandon Gaille 

 

Andrew’s closing remarks 

  • Focus your time, stay focused, and focus on what’s generating the income and optimize that and then, don’t get distracted. 

 

 

Resources: 

 

Connect with Brandon Gaille: 

 

Connect with Andrew Stotz: 

 

Further reading as mentioned in the podcast 

About the author, Andrew

Dr. Andrew Stotz, CFA is the CEO of A. Stotz Investment Research, a company that provides institutional and high net worth investors with ready-to-invest stock portfolios that aim to beat the benchmark through superior stock selection.

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