222 - He was my first geek and he's now worth millions: Tom interviews Ilya Pozin - Screw The Commute

222 – He was my first geek and he’s now worth millions: Tom interviews Ilya Pozin

Ilya Pozin is a serial entrepreneur who immigrated to the U.S. when he was eight years old. Ilya started his first company in high school and that's where I met him and built his second company after moving to Los Angeles. After selling both companies, he founded his third company called Pluto TV, which Viacom acquired this year for three hundred and forty million dollars. So Ilya is not only an aspirational entrepreneur, but a prime example of the American dream.

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Screw The Commute Podcast Show Notes Episode 222

How To Automate Your Businesshttps://screwthecommute.com/automatefree/

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Internet Marketing Training Centerhttps://imtcva.org/

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[03:26] Tom's introduction to Ilya Pozin

[07:38] Don't play the game that you're super rich and go broke

[14:29] Time to leave the roost

[22:00] The idea for Pluto TV

[29:24] Getting startup capital from potential investors

[42:23] Doing good things for Mom and Dad

[45:25] Once in a lifetime opportunity and not screw it up

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Internet Marketing Training Centerhttps://imtcva.org/

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Episode 222 – Ilya Pozin
[00:00:09] Welcome to Screw the Commute. The entrepreneurial podcast dedicated to getting you out of the car and into the money, with your host, lifelong entrepreneur and multimillionaire, Tom Antion.

[00:00:24] Hey, everybody, it's Tom here with episode two hundred and twenty two of screw the commute podcast. This is a Momentous Episode. I'm here with Ilya Pozin. He was my first techno geek propellerhead I recruited at of CompUSA. I think it was in 1997. And if you counted up on all your fingers and toes, that's not even like half of the millions of dollars this guy's made because of his online efforts. I can't wait to get him on here in a minute or so now. Hope you didn't miss episode two Twenty one. Nicole Ηubert. She's a professional dog trainer. And that's a very lucrative field. And she is. She's trained my protection dogs and she has a big pet training facility in Virginia Beach area. So she'll take you into the dog world. Now, you should grab a copy of you, especially especially on this episode, should grab a copy of my automation e-book. That's our $27 e-book that we're thanking you and just giving it to you for listening to the podcast. But just one of the tips one of the tips in this e-book has saved me over seven and a half million keystrokes. And I am not exaggerating. And guess who turned me on to this tip in 1997? Ilya, that was short keys. Short keys has saved me. I'm complaining about having to type the same crap over and over again. And Ilya, who will bring on the minute, little smart aleck says just shut up. It's always he's telling me to shut up and he come back and in a few minutes and have the problem fixed and so I've been using that program since 1997, it just saved me millions and millions of keystrokes. That's just one of the things that he helped me with in this book another's an exchange server. He got me on that. That's an email thing and loads of other ways that I automate the business so you can find that at screwthecommute.com/automatefree. OK. And hope you while you're at it, grab a copy of our podcast app. It's in the app store and you can also go to screwthecommute.com/app where we have complete screen captures and instructions on how to use all the fancy features so you can take us with you on the road on your cell phone and your tablet. Now our sponsor's the Internet Marketing Training Center of Virginia. It's a distance learning school which teaches legitimate techniques to make a great living, either working for someone else or starting your own online business or both. Then we just got approved by the Department of Defense to participate in a scholarship program for military spouses. And we also give big scholarships to law enforcement, first responders and any kind of military veterans or active duty and their immediate family. So check that out at IMTCVA.org.

[00:03:29] All right, let's get to the main event. Ilya Pozin is a serial entrepreneur who immigrated to the U.S. when he was eight years old. Ilya started his first company in high school and that's where I met him and built his second company after moving to Los Angeles. After selling both companies, he founded his third company called Pluto TV, which Viacom acquired this year. Listen to this. Hope you're sitting down. Three hundred and forty million dollars. And that's with an M. Oh, man, this is awesome. And he knows Ilya knows. Next time I come to L.A., he's buying dinner. No question about it. So Ilya is not only an aspirational entrepreneur, but a prime example of the American dream. Ilya, you ready to screw. The commute.

[00:04:25] I am just so freakin thrilled for you that I had something to do with keeping you out of the corporate rat race to start with. And and you really took off with it. So. So tell everybody about what you're doing now and then the evolution of these companies that you built once you you left here.

[00:04:50] Yeah, so I think we actually have a lot to do with where I ended up, I remember think I was fifteen or sixteen work at CompUSA. And this guy walks with a set of questions. Goes around the whole store. Everyone says, go ask Ilya. And he walks up to me at the counter, I answer his questions. You didn't really care for the answers. It was all like a ploy for him to find a propeller head. Right. And then I remember you telling me you're like, look, I'll just double whatever you're making here. Come work for me.

[00:05:22] And then I thought it was a scam. Like literally So did my parents. But it actually gets worse because I get I get in my car, remember like I'm sixteen years. I could barely drive. I go up to your house to meet you. And your claim to fame is that you're this, you know, multi-millionaire Internet marketing coach. And I pull up to this shitty house. I walk past your roommate, go down to the basement and and I walk into literally a pigsty. I don't even know how a person lived down here. And and and I remember you. You know, you actually were the real deal. But I don't know how how you for anyone going and looking at how you live and operate. So this is why I work from this is where you're going to be working from. I literally thought it was a scam. And then it got more interesting to because that first I think that first day I was there, you wrote me a check. And then the top left corner of the check said Prankmasters. It's like, holy shit, this is literally like it. I like I just quit my job at CompUSA. I walked into I thought I'd literally like was I was looking for like hidden cameras. I thought there was. But but what's interesting and I still remember to this day. 20 years later. Right. I'm 36 now, but I remember you said, look, I can hire you as an employee. Or you could start your own business. And I can hire as a consultant. And I'll teach you everything about starting a company, forming a company, paying your taxes. You can hire. You can have other clients like me. And that's the path I chose. And that is honestly the spark of me becoming an entrepreneur. Because from there forward, I I always started my own companies. I never really worked for anyone. And I just went down this entrepreneur path from the day I got the check from Prankmasters.

[00:07:41] ou know, I you the checks still say Prankmasters. I swear to God. Yeah. See, one of the things, folks, as I keep the expenses low and you know, now I got this big, you know, honking place and everything. But but the the idea is you don't want to play the game, that you're super rich and then spend all your money making looking good, but then you're broke. So I was very frugal. I grew up very frugal. And I started my own corporation for 50 bucks from a book. And it was PrankMasters Inc., which was my entertainment company. So instead of starting a new corporation, I just said I'll do a deal doing business as Antion Associates. But the checks still say Prankmasters.

[00:08:31] Does anyone ever question you?

[00:08:32] Absolutely. And I love it. Now with with my reputation and how I'm known now. Oh, he's just eccentric. Don't worry about it. I've always been eccentric. So. So I'm glad that that didn't scare you off that first day. I'm sure you probably didn't tell your parents about it.

[00:08:53] Oh, God, no way. We need to dig up those photos, because I'm telling you, everyone listening. You have you know, there's I think there's a show called Hoarders like you literally where qualified.

[00:09:07] Well, you know, I really I don't think, you know, but this my whole living room was full of boxes because back then it was cassette tapes and stuff. And we had duplicate tapes in my whole living room, which was right by the front door was full of boxes, top, top to bottom. And so one day I got home and the front door was open as late at night. And I called the police because my roommate was at work. He said, no, I'm not there. And the front door is wide open. And so I called the police and they brought the dogs, you know, canines. And they're yelling in the front door, if there's anybody in there, we're sending the dogs in. And they. And they finally went in and nobody was there. And they're looking around like, yeah, you got robbed, you got hit. My roommate just forgot to lock the door and it blew en in the window.

[00:09:58] Yeah. I'm sure they walked downstairs. It looks like somebody rummaged through your whole house. And lo and behold, that's actually how you lived., you know, it works for me. So you've now you always had a nice, so nice place. You went from an apartment when you moved to Los Angeles. So you had a company called Ciplex, when you were in high school. That's when it first started. And then you continue that and grew that. That was your first business in L.A. Right.

[00:10:31] Yeah. Yeah. So. So, you know, following me starting the company. Thanks to you. My next company, you know, people always came to me for computer propeller head type work, fix this come build me a computer. And then in about ninety nine is when the Internet started to become a real thing and businesses wanted to go online. So naturally people start to come to me and say, Hey, Ilya, can you can you do you know anything about going online? Can you believe it's a Web site. Can you help us market it? And I don't know a thing about coding or designing. So I hired a couple buddies of mine from high school and formed a company called Ciplex, which, you know, I just it was literally the opportunity people came knocking. I didn't offer the service, but I saw that it was a growing business and I started a company. And, you know, after high school, I was just building Web sites for businesses and that was early, early days. And then, you know, when I when I went to college in Florida.

[00:11:27] And by the way, he was he had left me, went to Florida, and we were running the I.T. department down there, too, I think.

[00:11:35] And yeah, I was I was going to school full time. I was driving around a golf cart. You fixing computers on campus and then running Ciplex all on the side.

[00:11:48] Well, but those those years you were still the first person. I called if I had trouble. During those years and then and then you got to where you're graduating and then we had a talk.

[00:12:00] Yeah. And then Tom gives me a call and you know, after you graduate, you get a job. That's that's what you do. And Tom says, look, I have a. I'll make you a deal. Here's a salary I'm gonna buy you a house. I want you to move out to Virginia Beach, bring your girlfriend, your dog, whatever, and move out to Virginia Beach and come live in this house and come work for me. You know, if, of course, I asked him for pictures of the house because I want to come work. What was the last house. But this one was very different, Tom. Thanks for letting it much closer to where you actually are. And it was a beautiful, you know, is a beautiful mansion where you brought in students and taught them internet marketing. You said, look, I want you to be my right hand. Let's continue where we started in high school. And, you know, I took a shot and did it and moved to Virginia Beach and moved into the house.

[00:12:54] And then I don't know. I think I don't think we should reveal the the television show yet. Just in case we ever decide the development of what? The idea that we came out of it. Tell them about what happened.

[00:13:09] Move into the house and then every morning we, you know, meet my girlfriend. That time we went to Tom's house to to work. Tom was nice enough to hire her as well as and as an assistant. And like, I did the usual stuff. And I think it was. Was it a week after I moved?

[00:13:28] It wasn't long.

[00:13:32] We go back after a long day of work back to the house. And this is a two story house. And pretty much the entire second floor is down on the first floor. A pipe burst upstairs in one of the bathrooms and was apparently leaking for probably nine, ten hours at the office. And then we came in to the house and it was a complete disaster.

[00:14:00] And and then, you know, and I kind of remember you were like, the sky is falling.

[00:14:07] I was losing my shit. I literally just moved in. With us running around trying to figure out, like, where are the photos? Like what's damaged, you know, and and then luckily, you had an extra room and in your giant mansion and we ended up moving in with you. Which was. Yeah, it's fun to be working and living in the city.

[00:14:32] It was a little bit of a culture clash because I'm such a loner. But it was fun. And then and then. So that went great for a couple of years or so. And then it came time to to leave the roost, put it that way.

[00:14:51] So, yeah, I mean, look at it as you were teaching. And I was helping teach all these students at marketing. I I continued to run Ciplex on the side and apply the same techniques that we taught the students of how to do things like search engine optimization and writing articles and online marketing and all these various things. And for some reason and maybe it was part of this American dream that, you know, when my my family came here to the US, you know, I had this California dream, but I knew that one day I wanted to live in Los Angeles, even though I've literally never set foot in Los Angeles. And I began to optimize Ciplex.com for keywords like Los Angeles Web design. So what you Googled, you know, L.A. Web design or whatever, you know, we start to come up with the top and over time, the phone rang once or twice a week. And it got to a point where it was ringing two to three times a day. I remember coming to you. And I said, Tom, you know, this is there's a big opportunity. I can't meet with people. They're calling me. I don't even live in L.A. I think there's a real play here. And I. I'm sorry. But, you know, I gotta I gotta leave and I pursue this opportunity and move to L.A. and quickly grew that business from, you know, being a side business to doing about five million a year in revenue. But then it grew pretty fast.

[00:16:20] Yeah. You were doing high end Web sites and and it wasn't any kind of, you know, boo-hoo. He's leaving. Although I you know, I I missed you for sure. But it was that was the time. It was time for you to grow and spread your wings. And, you know, I kind of feel like if you know, if I'm if somebody is here for 20 years, you know, I'm holding them back. They're they're they're really not pursuing their dreams. They're not improving themselves. So it was you know, I was totally behind you. And then. A little bit a departure from what I do because I teach people how to do one hundred fifty dollar, you know, world class nights. But you were getting fifteen twenty twenty five thousand for them. Yeah, I don't blame you. You know, you had some really big clients.

[00:17:05] We did. We did projects from a few thousand dollars to hundreds of thousands of dollars. And and we we got to a point where because of our referral business and the online marketing we were doing, we were doing about two to three hundred projects a year.

[00:17:20] How many people do you have?

[00:17:22] We got about forty, forty people working on these projects. And it was a very good running business. We got to work on a lot of startups, a lot of e-commerce sites. You know, everything from a dentist to go online to a brand new dating app or whatever that's coming out. And what was interesting about that is, you know, I ran the gambit not only for my own business, but also, you know, all the projects we took on, especially the bigger ones, the startups. I really got into the weeds of all of them. So it doesn't matter. It became almost kind of like statistical for me. Whether you were a dentist. We knew that you needed a Web site so you can bring potential customers in and get them to come to your office and you give them a free exam or something. And then they become your client. Right. And it doesn't. If you're a dating app, you need somebody download your app and then use your app and pay for whatever it is. Literally, it almost blurred into one thing. And there's just it just became this flow of we were building businesses for people, whether they were existing and we were improving them. The whole point was to bring people in, make more money, bring people in, make more money. And it wasn't just go to the website. We needed to market. We needed to grow the businesses. And, you know, we we did this for many, many years and doing hundreds of projects a year. It got to a point where it all almost became like the matrix Tom, you know, like it just didn't matter what I was working on. It was it was just a business and startup, existing doctor data, whatever it was, it literally was building another business. And it really was interesting because I got to use other people's money. Go to the best school possible. And watched all these businesses in every single sector grow. And it was right there at the forefront. And then one day, you know, I kind of caught the startup bug myself. And I said, look, there we keep working on all these clients. It's all starting to blur. Every client's the same. I got to move on to doing my own startup and and launched a company called Open Me, which was a gifting and greeting company. That was the first time I raised capital. We went out, raised half a million dollars of outside capital for Ciplex we never raised any money. We made we made good profit. We took that investment back in the business to work for further, further. But, you know, I ended up selling Ciplex to the CEO that I put in place. Zack, that was running it. And he gladly took it on and sold it and went to run open me, which was my first kind of startup venture and and got it. And I actually use Ciplex to build that company because we were really good at growth and startups. So I used that and ended up selling that company. Ciplex I sold for about a million and a half, open me I sold for six million. And then after Open Me is when, you know, the idea for Pluto TV sparked.

[00:20:38] Yeah, now. The reason I like Ciplex where, you know, I own the Web domain name. Killyourwebdesigner.com. So the reason I like Ciplex is because it wasn't the typical you know Take as much money as you can. You don't care if they make any money. You don't care anything. Just get the money for some fancy design that they they don't even know what they're getting. So Ciplex, like you said, helped them build a business. So that was highly reputable and you deserve the big money you got for that.

[00:21:08] Completely. And a lot of times people came to us and said, look, I have. Fifty thousand dollars, whatever it was. I wanted to do this and, you know, I looked under the hood, I said, no, you don't. That's not what you need. Like you could spend actually less and make a lot more. And you know Let's take this approach. So we weren't just taking service orders and, you know, responding to what people ask for. In fact, the biggest reason we grew so fast is in probably 80, 90 percent of the time when somebody came to us with a with a with an ask, we actually said, no, this is wrong. This is how to do it.

[00:21:44] Yeah. And you were honest about it. That's the whole thing, you know, which sets you so far apart from the typical place. It would just take every nickle you could plus more.

[00:21:54] Oh, yeah. Everyone else. We just had like a template proposal threw in what the client asked for in a few zeros. So it's not how things work.

[00:22:04] So how did you get the idea for Pluto?

[00:22:07] So I was working on one monitor, making YouTube videos for my daughter and sitting on my lap on my other monitor. And I got it to be a very painful process because I literally just learned how to change diapers. And I was by no means an expert of children's video. So I would I would look up a, you know, a clip and find a video. Sometimes she liked it. Sometimes she'd she said, no, pick me another one. And I'm trying to work for them. And I thought it to be a very painful process. And, you know, a lot of times I pick something that was inappropriate for her to watch so that I wouldn't when she was in front of regular television. Right. Watching you like Disney or Nick Junior or whatever it was, you know, she would watch for hours. And what I realized is the big difference between the Internet and video you find online and TV is television is highly curated. And you have professional people that know how to put together a channel or multiple channels of really good content. And their whole job is to get you to watch as long as possible.

[00:23:18] Yeah. Right. Binge.

[00:23:21] Exactly. And that was. And linear TV like the channel based TV. Right. Not like Netflix on demand linear tv dominate. It still dominates. It was dominating then and that's how people watch because a lot of times people come home and they don't know what they want to watch. Right. They just want to be entertained. They hit the guide button. They pick a channel and put on whatever HDTV or some reruns of Friends or whatever it was. Right. And what I done is there was nothing like that on the Internet for some reason. Everything online was all about search. Right. And and what I realized, the search is really good if you know what you're looking for. But it's a completely horrible experience if you don't know what you're looking for. In fact, I'm sure all of us who are listening to this have found ourselves in front of Netflix or whatever. We watched sitting there browsing title after title for forty five minutes just to figure out what true. Yeah. And literally what put in front of a TV, you just hit guide and you've literally watch it. Right. So. So I built a prototype where I plugged into the YouTube API. And by the way, any startup you do, you want to validate the idea first? So this is and this is what we built. We did this for Ciplex all day long. Clients came to us with a lot of money said I want to build this and said, no, hold on. Let's prove it out first. Give us a little bit of money. We'll do a test. We'll see if users like it. And then we'll iterate and we'll go from there. So so my my hypothesis was let's take YouTube videos, plug into the YouTube API and curate them into channels and and let's take stand up comedy and make a stand up comedy show. Let's take kids videos and create a kids' channel. But not only just a kids channel of all kids content, because kids are two and kids are 15. Let's create a kids' channel for toddlers and teens, etc. Right. So we built about 70 80 channels. We had like hockey fights and helicopter police chases. It's a really cool stuff and we put it all together in a guide and and we did something crazy. We removed all the player controls. You couldn't fast-forward, skip, rewind, nothing. So you would go to Pluto.TV. You would you would pick the channel and we would drop you into. We would force you into a schedule. And if it was 8, 10 p.m., you would watch exactly the same clip in the exact frame. We would drop you halfway into the video if that's what would if it was halfway into the video at 10:00 p.m., we was on a schedule. We drop you halfway in. Even though we didn't have to. Right. Because all the content is on demand. You essentially created this linear continuous viewing experience that was synchronous. So you watch the same thing as everyone else, which became kind of social. And and what we saw the numbers right out the gate were staggering. Back then, this was in 2013, the average person YouTube puts out their stats and they put out a stat that the average person came to YouTube and watched 1.2 videos per session. And right out the gate we put out Pluto and we saw that the average person was watching twenty eight videos back to back because we curated. Good content. We you know, like I I hired contractors from YouTube content.

[00:26:42] This is all free to.

[00:26:45] It's all free. All ad supported. And and we knew we were onto something because, you know, when when you're literally, you know, multiple and increasing YouTube's numbers and our average person was watching for 30, 40 minutes in the videos are like two, three minutes long. So. So on YouTube, they were watching for three, four minutes. And we knew that we had something serious. And, you know, we took that prototype and continue to evolve it. You know, I partnered with some people, built out a team and started building apps for different, you know, for iPhone and, you know, improved the website, made it professional. And then, of course, you can't really build a business off of YouTube's content because it's not your content to monetize. So what we started to go after the same content that, you know, that the content owners put on YouTube, we went to them directly and said, look, we'll give us the content directly. We'll license it from you. And and, you know, we'll make money from advertising and we'll split the revenue with you. We'll give you rev share. And then they said, yes, they didn't care because their content was already all over the Internet. So why not put it in another place? And, you know, we started to write bigger and bigger and bigger checks and then, you know, Pluto continued to grow, grow, grow.

[00:28:06] All right. Now, a couple of things. How do you come up with the name?

[00:28:10] So it's funny where we're all brainstorming a name. And I was always a fan of a name like Apple from a marketing perspective. You know, I'm naturally a market guy. And to me, whenever I'd go to business, I think how do I market the business first and foremost? And what I love about Apple is it's so easy to remember. It's top of mind. And whenever you go to a grocery store, you buy an apple. You subconsciously also think of Apple. So I was always against names like Ciplex, you know, like my original company name or or companies like Hulu or Netflix that kind of like make something up, you know, like. And we were living in an era of like, let's throw an extra consonant at the end and call it Digg or something else. Right. And I just I thought that was so like you couldn't say it on the radio and TV in a commercial. You had to spell it out. I just wanted something that's so easy to remember. Everyone already knew, but we could still owe. And and right around the same time, Pluto was being demoted as a planet. Wouldn't it be great to give it a new life form as you and the future of online television? And I went to Pluto.TV and it was available I think I bought it for 600 bucks and Pluto was formed.

[00:29:27] There you go. All right. So now the next thing I want to explore is the. You can only go so far. You dumping your own money. All right. So when you got the startup capital, what's the process? What did you do exactly? Where did you go to put your projects in front of potential investors?

[00:29:47] Yeah, that's a that's a great question. So, you know, I raised money for my last company, but it was only $500000 and it wasn't a lot. When you look at how much startups are raising. But what I remembered about that process is when you're the CEO of a company and you're raising capital, you're focused on raising capital. And it's a full time job in itself. And then somebody's got to also run the business and grow the product and manage the team. So I knew that for for this venture, for Pluto, even though the idea was mine. I knew that I wasn't going to be the person that's going to go out there, raise millions and millions of dollars. They're much better people for that. And I also knew that I wasn't the right person to be the CEO of a big media company. Like, what do I know? I barely even watch television. I had an idea for a problem I wanted to solve that worked. But I needed somebody with more experience. I wound up partnering with my partner, Tom, different Tom. But seems like the name Tom is in your life. Yeah. And I ended up partnering with Tom and who was actually the CEO of Threadless out from Chicago and Threadless was the company that partnered with Open Me, the startup that I read in order to take their designs and turn them into greeting cards and gifting products and things like that. And Tom was leaving Chicago and moving to L.A.. And I said. Hey, you know, take a look at this little prototype I put together. It's working. The data's coming back phenomenal. Why don't we partner on this and work on this together? And at first he was like, come on, I'm just moving here. This is the first opportunity. I can't just jump right in. And after a little bit of convincing, I got him to join and we partnered up and became co-founders. And and and we started to go after capital and time out she came, you know, being a very successful, seasoned entrepreneur, he's had multiple exits. You know, he's built companies and got them acquired. He worked for VCs. So he's raised millions and millions of dollars. He knew exactly where to go. He already had a great reputation. When you have a good reputation, a lot of times when you're building an early stage company, investors don't even care about your idea. They they care about who you are. And they back the team, you know, rather than the business, especially early, early on when it literally is just an early idea.

[00:32:23] And Tom had that reputation where he had, you know, investors that said, look, anything you're working on next we'll back. And we ended up raising our, you know, our series A, which is like our first official round was about twelve million dollars. And, you know, and we ended up getting that capital overall through through there before we got acquired. I think we raised just over 50 million dollars. And, you know, our investors were were strategic companies like Samsung and Scripps. Now, Discovery all the way to, you know, institutional investors like US Venture Partners and the Pritzker Group in, you know, big VCs, things like that. And when you're raising capital, there are definitely a lot of lessons that I was luckily by Tom's side because I wanted to learn how it's going. And, you know, there's good investors, there's bad investors, there's smart money. There's you know, there's dumb money. There are people that are helpful. There are people that are hurtful. So you don't just go out there and just take a check. And you've got to be smart. It's just like almost like putting together your your team, your employees in a similar way. You put together your investors.

[00:33:40] So you actually attended pitch meetings and things like that?

[00:33:45] Yeah, absolutely. And that was that was a fun process. And we had so many nos. We had no after no after, no. And I'm sitting there going, like, how like, why are people turning us away? And, you know, look at the numbers are phenomenal. And people were just at first they were against the thesis because everything online was going on demand and everything online was going subscription. Right. This was when like Netflix and Hulu and everyone and their mother were launching like paid on demand subscription services and we were going no no no. We're not paid and on demand. We're free and linear. So like they thought we were rebuilding television from like the old antenna days. And and they thought we were like, what do we do? We're going back and time here.

[00:34:34] But there's a lot of people kicking themselves right now.

[00:34:37] Oh, for sure. But then but then what happens typically when you raise capital is you have one one credible investor that says yes. And then tables completely turned. And now, because they they're credible and they've validated you. Everyone now wants it. And, you know, it's so for us that that was a USUP out of out of the Bay Area. They said yes. Heavily on Tom's reputation. But they also like like me and the business of the thesis. And they said, look, we're gonna take a bet. I knew. They said, yes. And I kid you, not Tom. Like that same day we were shooing the way capital people were knocking on our door. And we were we we went from a no one no one's gonna fund you two. All right. Now we get the pick of the litter. We get to work and put together really good strategic investment team and let's get the right people on board. And once you're validated, it's really all about reputation with your investor. Once you're validated, everything changes.

[00:35:49] And so then how many years till this big deal came?

[00:35:52] Six years, actually. Yeah. So. So we we launched a company, we launched Pluto, I think it was April of. Well, we built it in 2013 for about a year. Right. And we we launched, I believe, in April 2014. And about five years after we launched it, we we got an offer that we brought to our board and reports, you know.

[00:36:21] And they came to you does out of nowhere?

[00:36:23] Yeah. Yeah. I mean, it's it's very common that they say companies get bought. They don't get sold. At least what it's a good outcome. And that's why we would never looking to sell. We literally we didn't hire a banker. We didn't go out knocking on doors saying, hey, we want to sell. Our business was growing. It is still growing to this day. So fast that, you know, we we weren't looking for to sell. We had a really successful, fast growing business. But we actually came to Viacom for a content deal. Right. So with stepping back a little bit, what's interesting is we started out with a bunch of short form clips, right. The same things we got on YouTube. But what we really wanted. What we knew television was really about was like movies and TV shows, but nobody wanted to give us movies and TV shows on a rev share basis. They wanted us to buy it and content's really expensive. And even though we raised twelve million dollars in our series A, you can spend it all on one TV show. So so people kept saying, no, no, no. And eventually we started writing big enough checks for the short form content. They started to give us a chance. And when that happened, you know, the way Pluto works is we're ad-supported. Right. So the more people watch, the more money we make, more money we make, the more we share with our content partners. What we share with our content partners, the better the content they give us, the better the content they give us. The more people watch. Right. So it became this is kind of turn wheel the cycle that that kind of fed itself. And we kept negotiating better, better content would get kept getting people to watch more and more apps and products kept improving. And all of a sudden we're you know, we're out there writing millions and millions and millions of dollars for content. And and and, you know, the company grew very, very fast. And one of the biggest owners of content is a company called Viacom. And we came to Viacom for content. And they said, well, you know, we're not interested in giving you our content because we we want our own direct to consumer content solution. But what if we what if we buy Pluto? We said, well, you know, we're not we're not for sale. But, you know, we have fiduciary responsibilities to our investors. And, you know, if you're serious, put put something together and we'll bring it to the board. And they and they did. And we agreed agreed to to move forward in the diligence process and really examine and turn over every rock and make sure this is exactly what everyone wants. And, you know, fast forward to like a few months. On my birthday, actually, on January 18th, we the deal moved forward. And then it was officially approved by the government, because when you're when you're dealing with a big media company, you need to go through. I think anti trust approval. So whatever they do and that was approved in March and that was when the deal officially closed. But it was announced and in January of this year.

[00:39:31] And then now in these kind of deals, typically some of the executives are asked to stay on or part of the deal they must stay on. What's what's the situation with you?

[00:39:43] Yeah. All of us. So. So, you know, they what's amazing about Viacom and and Bob, who's their CEO, is he is he's really an incredible CEO. And there's always this fear as an entrepreneur to get acquired by big corporate company. Right. Because there are always stories from other fellow entrepreneurs that, you know, X, Y, Z bought my company and killed it. You know, they screwed it up. So that was obviously by my big fear, because Pluto's growing really fast. And, you know, I think we had a real opportunity to become a massive household name. And there was this natural fear of being acquired by a large corporation. And you know, which potential turn to business, that's a different direction. But I was completely the opposite of what happened. You know, the Viacom team knew that they had a that we were growing fast. The last thing they wanted to do is get it our way and screw it up. So they wanted our team to stay. They they wanted us to continue doing what we're doing. And we became a subsidiary of theirs. And. You know, everyone stayed on board. You get to grow the business. And now we're growing even further and they're providing us with more money, more resources, of course, their content. Recently day they merged with CBS. So now it's Viacom CBS that owns Pluto. So we got think we're going to. We're hopeful to continue to grow the business and we now have more ammunition to continue being the leading free television service in America. So I'm I'm on board. You know, I'm I'm sitting there. I'm watching my baby grow, and I'm here for the ride.

[00:41:23] Yeah. So so this is in perpetuity. Sometimes they say, you got to stay with us for a year or two. So it's open end at this point?

[00:41:32] Yeah. I mean people get different employment agreements, you know. I mean, obviously they're they're all confidential. But it's important for for the founders to be there. It's important for the executive team to be there. Yeah. So I think all of us, if not most of us, if not all of us are on board.

[00:41:51] So I'm still the same location.

[00:41:53] Yeah. Yeah. It's funny actually where we we keep moving to different offices, but we grow so fast that we just packed the place like sardines. So like the like now where I think we've got I don't even know how many people, maybe a hundred fifty or sixty people in a fourteen thousand square foot office. It's not enough. We've got multiple locations across the world and it's you know, it's it's where we're growing fast. There's growing pains. But it's not a bad problem.

[00:42:28] Well, that's that's great. Now, I had the great fortune of having dinner with your mom and dad before this all happened. And there they were. You know, I've loved them ever since I've known them. You were able to do some some good things for them, right?

[00:42:43] Yeah. Yeah. So, I mean, my parents were always nervous about me going down this entrepreneurial path that you put me on, Tom. So they moved. They moved to the US. They wanted me to, you know, go to college, get a normal corporate job and, you know, kind of do what what the average person does. And I went against the grain and went down a riskier path. And they were definitely nervous, but obviously supportive. And and, you know, once this deal happened, I knew it was my turn to give back. You know, it's you know, when they left Russia, they both had master's degrees. They had amazing jobs, a great life, like, you know, just good, good place to be. They sold everything. They had five thousand dollars in their pocket. And we moved to Maryland and they did it all for me and my brother, you know, that they gave everything up and that that really stuck with me. It's still with me. It's a lot to really be so selfless. And look for a better life for your kids. And so when when this company sold, it was my turn to get back. And, you know, I made my dad retire early. I moved both of them out over here to to L.A. to be closer to the grandkids. Got them in a house, you know, paid for everything. And right now, they're in Mexico and on vacation. You know what? My dad, a cool car, you know, all this stuff. Like, they're they're just they're they're blown away. I've never seen my dad cry before.

[00:44:23] Oh, man. You got your brother a job.

[00:44:26] got my brother a job at Pluto. Yes. He got an MBA from the University of Texas and moved him out here. So now kind of you know, I was I was the person who planted a flag in L.A. but now everyone's got everyone here. Now we're all one big happy family.

[00:44:46] Well, you kind of you know, not only did it payback for your parents, but you did it for your daughters, too, because they didn't have anything to watch until you made Pluto. Oh, man. So good catching up with you. I could talk to you all day, but I'm just so, so, so thrilled about what's happened for you and the family and just thrilled about it. But you're still buying dinner. Next time I come out.

[00:45:15] I got this one Tom.

[00:45:17] Yeah. And then I'm not paying for a hotel either. By the way, in this big new house you got tell us about that.

[00:45:24] You know, it's a nice house. I got it. I think I could find an extra room for it.

[00:45:28] Yeah, OK. So what kind of what's in the future? What's a guy like you do? Thirty six years old and got it made. I don't see you being the type to just sit around.

[00:45:40] No. I mean, look, I think this is a once in a lifetime opportunity. I think naturally as an entrepreneur, we have a very high risk tolerance. Right now, I have a family. You know, I'm thirty six and I have to take this once in a lifetime opportunity and not screw it up, because the last thing I want for my reputation is to have this great outcome and then go spend all my money doing some stupid shit.

[00:46:07] Literally, you could buy a G5 jet.

[00:46:10] Yeah. Yeah. So so you know, for for me it's a I want to. I'm learning this new this new place of kind of being an investor. Right. So I've never really invested. I've always invested in myself. Now I get to look at, you know, how do you manage your money? How do you grow your money? How do you how do you make sure you don't lose it? How do you bet on the right entrepreneurs? How do you make the right investments and make sure that, you know, this outcome that I have last generationally and my kids are taking care of their kids and taking care of them and so forth.

[00:46:54] Don't make it too easy on them because then they won't be tough.

[00:46:59] That's not happening.

[00:47:01] You know, the way the world is right now, everybody, you know, kids can't do anything. You know, they don't.

[00:47:06] It's not going to happen with me. So, you know, so I'm you know, there's always new ideas I'm cooking up and they're great investments. I look at and I'm making it. This is year one and already doing well. And, you know, and I hope to kind of conquer this category with that's really, to be honest, really exciting to me, because I've always been the startup guy for 20 years. And now I'm in this new field, this new category that I've never been in before. Right. I'm an investor. I have to manage finances. I can't. I don't even like I'm the last person you want in, like, an Excel spreadsheet. Yeah. And and I didn't even know what an IRR was and how to calculate whatever, you know. So I'm learning all this and it's it's it's actually very mentally stimulating.

[00:47:58] Well, yeah. And then you got to be careful, too, because people will come out of the woodwork, want money and managing things for you and all this and all of a sudden you're broke like Willie Nelson.

[00:48:11] Yes. Yes. So even so, that's. It's an interesting place to be because, you know, I don't know enough. And and there are a lot of bad deals out there. How do you how do you make good decisions in that in that space? It's not easy. But luckily, you know, I have a lot of fellow entrepreneurs and people that are friends that I trust that are more successful than me. And that's something that I've done. You know, starting with you and and going all the way, you know, to today is I love to surround myself with people that are smarter and more successful than me. It's the only way you can you can really grow in. And and trust me. They know better. Where to put your money and what to do with it. How to not split up then. You know, someone trying to sell you into some kind of deal.

[00:49:01] Exactly. Exactly. Yeah. It's been so great catching up with you, man. So what's the best way? Somebody wants to get in touch with you.

[00:49:10] Probably LinkedIn is the best and easiest way, it's something that I check very often.

[00:49:15] So we'll put that in the show notes. Give the best to the girls and I can't wait to collect on my dinner. My goal in life now.

[00:49:36] I'll take it wherever you want to go to. Thank you for everything you've done for me.

[00:49:39] Congratulations, man. Okay, everybody, we will catch you on the next episode. This has been a really great time for me and a momentous episode. I'm just thrilled. All right. Everybody see ya later.

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