How $1m in Personal Guarantees Led to $500M IPO 15 Years Later

Scot Wingo

In Episode #697, Nathan interviews Scot Wingo. He’s the CEO of Spiffy. He’s also a 4-time serial entrepreneur and industry thought leader in ecommerce and on-demand economy realm. He’s appeared on CNBC’s Today’s Show and contributed his expertise to The Wall Street Journal, New York Times along with many other publications. He previously founded Stingray Software which he sold to Rogue Wave Software, AuctionRover which was sold to GoTo/Overture, and ChannelAdvisor that went public in 2013, under the stock symbol ECOM.

Famous Five:

  • Favorite Book? – The Hard Thing About Hard Things
  • What CEO do you follow? – Jeff Bezos
  • Favorite online tool? — LinkedIn
  • How many hours of sleep do you get?— 4-6
  • If you could let your 20-year old self, know one thing, what would it be? – “To trust your instincts and invest even more in your own companies”

Time Stamped Show Notes:

  • 00:44 – Nathan introduces Scot to the show
  • 01:29 – Spiffy is an on-demand car wash and detail company
  • 01:33 – Customers pay for car washes and Spiffy is full-stock
  • 01:59 – Spiffy is a pay-as-you-go model
  • 02:02 – Some customers would request to have their car cleaned on a regular basis so they’re currently working on a subscription plan
  • 02:30 – Having your car cleaned is addicting
  • 03:02 – Spiffy started in 2014
  • 03:17 – Scot was 46 in 2014
  • 03:26 – Scot loves building a company
  • 04:00 – In 1999, AuctionRover started
  • 04:14 – AuctionRover is a search engine for auction sites
    • 04:16 – Scot always had a plan to develop software for sellers
    • 04:20 – After getting acquired, they developed the software which turned into ChannelAdvisor
  • 05:43 – They’ve raised $3M for AuctionRover
  • 05:53 – AuctionRover started to get acquisition offers
  • 06:16 – Scot was a fan of Goto
  • 06:45 – Stingray put Scot in a position where it had to work
    • 07:32 – Scot had accumulated personal debt to run Stingray
    • 07:55 – Scot was 25 when he founded Stingray
    • 08:03 – Scot had Stingray for 3 years before selling it to Rogue
    • 08:11 – Acquisition price was around $7M
    • 08:27 – It was software and Scot had a 30% margin
  • 09:07 – Scot added $3M through fundraising
    • 09:55 – Tim Draper was on Episode 129
    • 10:17 – AuctionRover’s acquisition price was $20-50M
  • 10:43 – The negotiation with Goto to buy back AuctionRover
  • 11:18 – Scot bought back AuctionRover for around $1M
    • 11:37 – They bought it back in 2001
  • 12:00 – When Scot IPOd ChannelAdvisor, everything was new to him and he had never taken a company that big before
  • 12:07 – Scot’s dad was a business person and was on Fortune Magazine
  • 12:58 – Scot always has a higher goal
  • 13:37 – “If you’ve raised a venture capital, you’re going to have an exit”
  • 13:47 – Scot wanted to see what an IPO process looked like
  • 14:02 – Scot raised capital for ChannelAdvisor
  • 14:14 – ChannelAdvisor helps retailers and brands sell on eBay, Amazon and other channels
  • 14:26 – ChannelAdvisor raised a total of $90M before the IPO
  • 15:08 – ChannelAdvisor’s market price on Day 1
  • 16:03 – Scot brought in a COO to help him
    • 16:11 – After going public, the COO was promoted to president
    • 16:20 – Scot felt he wasn’t learning much more and the president wanted to step into the CEO role
    • 16:27 – Scot felt it was a great time for the president to mature and take on the CEO position
    • 16:47 – Scot just simply sent a letter to the board about him leaving
  • 17:35 – Scot is more of a tactical entrepreneur
  • 17:47 – “I just really like solving hard problems and scaling businesses”
  • 17:55 – Everytime Scot would have a career change, it was in a different space
  • 18:05 – Since Spiffy is consumer oriented, Scot believes he can scale it faster than ChannelAdvisor
  • 18:27 – Scot’s goal for Spiffy
  • 19:35 – Scot had 2 physical car washes after selling his 2nd company
  • 19:44 – Spiffy was an MVP in 2014 when it was launched
  • 20:09 – There are reasons why customers don’t like detailing
  • 20:40 – 70% of Spiffy’s revenue is from out-work consumers
  • 21:11 – Spiffy just crossed the $2M runaway and is growing annually north of 100%
  • 21:33 – Team size in the office is around 20 and around 60 technicians
  • 22:06 – Spiffy has raised $7.5M on their series A
  • 22:18 – Scot still gets excited raising funds
  • 22:38 – Scot’s aspiration for Spiffy is bigger than his checkbook
  • 23:55 – The Famous Five

3 Key Points:

  1. Always aim higher when it comes to your goals.
  2. Going through multiple exits boosts your learning and experience.
  3. Always trust your instincts.

Resources Mentioned:

  • The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
  • Klipfolio – Track your business performance across all departments for FREE
  • Hotjar – Nathan uses Hotjar to track what you’re doing on this site. He gets a video of each user visit like where they clicked and scrolled to make the site a better experience
  • Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
  • Host Gator– The site Nathan uses to buy his domain names and hosting for the cheapest price possible
  • Audible– Nathan uses Audible when he’s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books
  • Show Notes provided by Mallard Creatives
  • FYI

    FYI, the annual run rate was $2M not $200M