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What do you do when everyone says no to your can’t-miss idea? You change your clothes, have a drink, and quickly reposition. Peter Machalek, currently the COO at TREC Brands, shared the mogul-filled story of how he started Adbloc Media right out of college.
He couldn’t wait to share his idea for advertising on ski chairlifts at a trade show. He entered in his suit. The attendees were in ripped tee shirts and sandals. Fortunately, he’d brought some casual clothes. His pitch was a sure thing. Would you like to make hundreds of thousands of dollars without lifting a finger or spending a dime? Everyone said no. Machalek was dumbfounded, perplexed. Who turns down free money?
The Ivey Entrepreneur Podcast is sponsored by Connie Clerici, QS ’08, and Closing the Gap Healthcare Group, Inc.
Transcript
You're listening to the Ivey entrepreneur podcast from the Pierre L. Morrissette Institute for Entrepreneurship at the Ivey Business School. In this series Ivey entrepreneur, and Ivey faculty member Eric Janssen will anchor the session.
Eric Janssen
Imagine this, you graduate from Business School essentially broke, sound familiar? All your friends have their perfect jobs lined up right out of school. And instead, you chose to leverage the last of your student line of credit and borrow money from your parents to start a new thing, because why not? You fake it till you make it and successfully negotiate a licensing deal against all odds, beating out a much more established competitor. You then invest the last of your savings to attend the industry conference, where you plan to release your big idea to the world. And guess what? While you're there, you find out that the idea you thought was so exciting and new, has already been done years earlier and failed miserably. This is Pete Machelek founding story of adblock media today's leading chairlift advertising solution, Peter successfully translated his passion for snowboarding into a successful business. And in this episode, we talk about how to get useful feedback and tweak your losing idea into a winning one. Which by the way, he started doing at that exact same conference that he failed that how to write a business plan that you'll actually use and do it in a single day. How to negotiate as the underdog, and get your very first sale. This episode is a masterclass for first time entrepreneurs. Get your notebook, get your pen, you don't want to miss a minute of this episode. All right, today, I'm here with Pete Machelek. Previously from adblock, he's going to tell us the story of getting his first company started and through to acquisition excited to have you here.
Pete Machelek
Thanks, excited to be here.
Eric Janssen
I want to hear a little bit about how and where you grew up and trying to dig a little bit just to see where the entrepreneurial Inklings may have started. So where did you grow up?
Pete Machelek
Yeah, yeah, that's a great, I guess, question starting point. So I was actually born in Poland. So I grew up for about six years in Europe, and I immigrated here with my family. When I was six, and I moved around a lot. I initially grew up in North York, and then grew up in Richmond Hill, or my family, did the Canadian American dream and bought a house? And from there went to school, University of Western Ontario. And yeah, that was that was kind of the path that I was on. But to dive deeper into the question you just posed, you know, it's interesting, because I never thought of myself as an entrepreneur. So growing up, I always thought that it would become an engineer, I was very creative. And I love to build things, I thought that it would follow in the footsteps of my father, who was actually a mechanical engineer. Failing that, it would probably be me going into finance, if it was something business related. I was great with numbers very gifted in mathematics and financial analysis, just thought that was my call. And that was my path. And I think over the course of my educational career, what I really realized is that I'm a very personable and social guy, and I thrive on other people's energies. And I love to bring people together. And I think that's when I got the inkling and the thought that perhaps finance and engineering and everything that I thought I was going towards, wasn't really meant for me. And I was meant to bring people together and bring ideas together and get them to the next stage the next level.
Eric Janssen
So your dad was a an engineer, was he trained in? Was he trained in Poland?
Pete Machelek
Yep. He was educated in Poland.
Eric Janssen
Got it. And then what caused them to come here,
Pete Machelek
It is the classic pursuit of the American Canadian dream, you know, at the time, this was Poland was just getting out of that Soviet era out of communism. I think unemployment rates were still very, very high. It was hard. It was very difficult for a train engineer to apply his education, and kickstart his career in what he studied. My dad was working like two to three jobs, same time. Yeah, it was a tough time. So a bunch of his friends actually did the same thing. And they they flew out, they came to Canada, they came to Toronto, and send back these ideas and notices of, hey, it's better here. You know, the work and employment opportunities a lot better here. So he took a huge risk and packed up and came out and spent a year away from my mother and, and the family. And shortly after, you know, we followed him and we came over and set up our new life. Interesting. It's like, I wouldn't think of my family as entrepreneurial. But when you look back to people who have immigrated,
Eric Janssen
who leave a country that they're comfortable in who leave their network of people, come over boat, plane, whatever, and start fresh. That's pretty entrepreneurial.
Pete Machelek
Definitely. And now thinking back to those moments, taking that risk for my father was massive
Eric Janssen
Leaps of faith.
Pete Machelek
Yeah, absolutely. And he he didn't know the line. You know, he was coming here with one suitcase, which is actually entirely filled with booze for his bodies as a present. But he made it work. He made it work and within a year you know, we came in fall to
Eric Janssen
Cool, cool. So it was, you went to Western thought you might do the engineering thing following your dad's footsteps. When did you first realize that there might be entrepreneurial Inklings? Was it at Ivey was it before Ivey?
Pete Machelek
It was definitely before Ivey because all throughout my high school career, I would play around a little in these various different businesses. I had like a lawn mowing business, I had a detailing business, these classic things that kids trying to experiment with, get their first foot through that entrepreneurial experience. So that was fun. I learned a lot through that. But really coming into Ivey, I had a big wake up call, I'm still thinking at this point that I'm going to be a banker, you know, or something to do in finance. And I realized how different I was no different my personality was, and I didn't fit into that specific mold, becoming a banker or consultant. And truthfully, I was lost. My colleagues, were getting internships with big consulting firms with big banking firms. And I was like, I don't really want to do that. That's not me. And things really started looking up for me when I partnered up with an entrepreneur that specializes in the real estate sector in the summer, and it was very late, you know, internships were committed to and I got my job, and I got employment, probably in July.
Eric Janssen
So you're in the you're well into summer,
Pete Machelek
well into summer, still haven't figured anything out getting a little nervous. And, yeah, I committed to do an internship with Peter Kobayashi is a great mentor of mine, who was actually a partner of mine on our blog. We'll get to that story shortly. But he really opened up my eyes into what could be done. I mean, on the entrepreneurial scale.
Eric Janssen
How did you find him?
Pete Machelek
Great question. So through the Ivey network, yeah. He actually recruited from within he was an MBA grad. He loved to recruit at Ivey, and saw posting, and he needed a specific project to be executed and filled. So we connected
Eric Janssen
so he posted it on his own company website or
Pete Machelek
Through Ivey, Yeah, through the Ivey posting job board,
Eric Janssen
Ivey alumni being loyal to the Ivey network.
Pete Machelek
Exactly.
Eric Janssen
Nice. Nice. So he gave you a shot. How is that summer experience?
Pete Machelek
Awesome. You know, he was a one man shop. You know, it was interesting to see that because up until that point, I was really thinking, Oh, man, you got to join this big company and learn from all these different people. And yet, here was an awesome opportunity to be one on one with somebody, a very brilliant man and get into his mind and truly, understand the way business works business ticks. So I saw this as a great learning experience and good opportunity.
Eric Janssen
Cool. So he gave you your first shot. Got a bunch of stuff in your toolkit, you go back to do fourth year, correct? Where the heck did the idea for adblock come from? Because if not, you did it right after graduation.
Pete Machelek
Right. Correct. Yeah. So interesting that you say that because all throughout, as I said, throughout high school, I kind of had a little bit of that entrepreneurial spirit in me. At this point. I wasn't yet committed into starting this business. I was playing around with a number of different courses. Most of the courses in HBA two that I took were marketing, entrepreneurial, focused things that I was passionate and interested in. So again, I deviated heavily away from that finance a typical mathematics, finance, accounting direction that I thought I was going to head in the Tangier question, the idea for adblock itself that actually emerged Well, before when I was in high school, and I was snowboarding in Ontario, and it was negative 20 degrees at Mount St. Louis Moonstone. And I was sitting there on a chairlift by myself, looking dead straight at what was in front of me, which is a safety bar spinning above, bouncing low, it's a short lift, but spending about four minutes on the chairlift thinking to myself, why aren't they advertising to me right now? Why isn't there an advertising message here? I mean, this is the perfect audience to try and capture and you're locked in. I'm locked in, there's no OFF button, I can jump from the left. I'm inches away from potentially this, this medium that could promote something to me. Here's a missed opportunity that somebody should jump on.
Eric Janssen
This is also 2006
Pete Machelek
Yes, this is probably 2006 2007 somewhere around that timeframe.
Eric Janssen
People in despite the fact that it's 20 below are gonna whip off their gloves and dig through their jacket to find their cell phones
Pete Machelek
Correct. So long before the you know, social media aspect Internet of Things. You know, this is this is old school,
Eric Janssen
Literally nothing to do. But stare. Cool. So that this you had this idea. Why didn't we sat on it for a year, so why didn't you do anything about it back then?
Pete Machelek
Well, sorry, no, this is I got to think back now. No, this is well before because High School was 2003. So that's my mistake. We graduated University in 2008, I didn't jump on it at the time, truthfully, because I didn't think that was my path. I knew that there was an opportunity, I didn't have the confidence to pursue this yet. I think to your point, I needed a little more experience a little more knowledge on a more skill set in my toolkit. But then when I was in university, when I graduated, Mr. Kobayashi called me up and he's like, what are you doing for full time employment? I really enjoyed working with you. And adblock was obviously at the back of my mind, I was thinking, I'd really like to start this business. But financing is going to be tough, I got a lot of bills to pay. I just got out of school, you know, how am I going to cover those tuition debt? And the conversation when something like this, why don't you come work for me, in real estate, and I'll teach you the trade. But I know you're very entrepreneurial, because we've spoken about this at length over many, many beers last summer. If you come up with any ideas, pitch him to me, perhaps we could start a business together on the side. Now, I'm thinking, Wait a second, is a nice gray haired wise guy that potentially just wrote my check. You know, to do something with him, I got pretty excited, great an industry that I'm not really particularly interested in. But again, I can learn a thing or two in real estate. And number two, I got this mentor that's potentially want to partner with me on something. So I signed on board, started working with him. And within the first two to three weeks of us working together, I told him about a block. And he kind of looked at me said, Hmm, interesting. And you went back and probably did a soul searching. And then I think this was on a Friday. And then on the Monday or Tuesday, when he walked into the office, he pulled me aside, he goes, have you actually mapped this out? Like, do you know what the opportunity looks like? Yeah, a little bit, but not so much. And we sat there at the boardroom table for about six hours. And we did what we call the back of the napkin analysis. And it's brilliant, because we did it on on two sheets of white paper, him and I do in our own analysis, back and forth, just identifying, you know, poking holes, seeing what the markets like seeing whether this is a real opportunity that we can generate some some money from. And after the six hours, we looked at each other like, yep, this is something that can make us some cash.
Eric Janssen
So what was it exactly? Was it like a combination of, you know, who's the customer? What's the pain? What's the problem? how big the market was? What did you guys talk about for those few hours?
Pete Machelek
Yeah, it's a great question. So we definitely identify that there's a missed opportunity here for the same reasons I identify when I was on that chairlift. I mean, there's this ability to throw an ad here, nobody's doing it. So our assumption is, well, let's take advantage of that. People are selling advertising everywhere. Why can't we do this? The analysis was really centered around what is how big is the market? And what would we need to capture in order to make this a viable business order to generate X amount of millions. And we did it on a very simple basis. And Funny thing is, I actually did a little bit of research on this very early on that I shared with him. So I had all the stats are applicable to the local ski area, which is Blue Mountain. And I understood exactly how many carriers they had, I understand how many units would need to be outfitted on the chairlift. I also had preliminary conversations with product that I already identified, which was adblock. So identify this to be a good product instead of reinventing the wheel making our own we could license this product from this guy that designed it and owned it out in New Zealand. And, we're trying to come up with what will it cost us to outfit a chairlift and how much revenue can regenerate? So we did some quick research online to see you know, what an average posterboard is sold, you know, in a washroom, and we compared the audience and the environment of a washroom to our audience in our environment, thinking that, we could probably sell it for a premium given that skiers are a lot wealthier. They're much more premium audience and the traditional bar restaurant washroom patron, plus you're in a spectacular environment, doing something you love, you're not going to the washroom and do your business. Right. So there's that aspect as well.
Eric Janssen
So six hours. that's, it's interesting, because I feel that sometimes people can get caught up in overdoing it right? Like you didn't it sounds like you had done some homework before. So that six hours wasn't the first time that you sat down to think through how big the market was. You done some homework. At the same time, you didn't let it You didn't let yourself get buried in like, buckets of market research and I need to do more homework and more homework and more homework. It sounds like you guys sat in the room and decided after six hours like there's something here.
Pete Machelek
Yeah, and truly that pivotal point was when we determined what our net revenue would be on a per chairlift basis. And based on the numbers that I've collected from the Blue Mountain example, it was 60 grand. So a year we could generate 60 grand off one chairlift, we were to outfit it with our product, everything paid for so product covered, Commission's paid, you know, all sorts of other analysis that we factored into it 60 grand net. And when you extrapolate that, based on some research that we did across X amount of hundreds of chairlifts, just in Canada, you had a pretty viable business. So at that point, we looked at it and we said, Wow, okay, well, there's something definitely here.
Eric Janssen
Yeah. So I think we'll get into this a little bit more later. But again, back to effectuation. What you know, who you are, who you know. You worked with this guy that you already had a previous relationship with? So he knew that you weren't, he knew that you were somebody who's going to work hard, because you worked with them the summer before. So you had somebody willing to help you out? fund it. Actually, if you brought him a good enough idea, skiing, or snowboarding? Did you just randomly decide that you want to do something in the industry?
Pete Machelek
Yeah, no, it's a very good point. Skiing and Snowboarding has always been a huge passion of mine. It's the reason why I took a serious stab at this opportunity and identified it in the first place. I was sitting on a chairlift and I looked around, I missed opportunity. I understood that industry well, I understood the market, I've skied, and many parts of Canada and the states at the time, a little bit in Europe. So I understood the way that scary is operate, understood the audience extremely well, I was the audience. I knew what made the audience tick. What brands would be attracted to that audience? And it's such a diverse audience set, right? I mean, you have, you can hyper target in so many different segments, young guys, you know, the the old boomers that are very wealthy and affluent families, mothers with their kids. So, you know, is a diverse audience set. But yet, to your point, I had a good understand the market. It was a passion of mine, I loved it, I wanted to get involved in this business and pursue it. Because I was so fired up and excited about the market and the industry.
Eric Janssen
Yeah, I don't know if you're public, but I mean, checking out your Instagram, we've been friends for a while looking through your Instagram. It's like, I don't know, a third of them are ski pics, right?
Pete Machelek
Of course, at palpi pal nets.You know, that's my alias that was coined many, many years ago. And my friends are you are palpi. I try and chase the powder in the big mountains every winter.
Eric Janssen
So surprise, Pete starts a business in the snowboarding skiing space. Okay, cool. So sometimes we talk about founders of companies having a call it a hypothesis or like a strong opinion about things that they know to be true or things that will be true. Was that was there anything like that for adblock things where you were like, we know that in the future, there's this trend that we just like, so strongly believed to be true. Is there anything that like, at a gut level, you just like, knew?
Pete Machelek
Yeah, so one of the things we felt as if, you know, we, we had good grounds to believe in this. And just to take a step back, the the business model that we were working off of, and then we're gonna develop was without a chairlift without skiers, there was no business, we had a product we've identified was potentially a really, really good fit, we didn't have the product yet. There's a whole story around that and securing the distribution rights for for North America for that. But we had an idea of a product that we wanted to bring to market here in Canada, and in the US, and we needed serious. And the business model that we were working off of was that we were gonna install the product on safety bars for free, we were gonna cover the full capex, the the installation, the investment, that will be entirely on us. But as a result, we'll be able to sell advertising space and essentially license the safety bars from the scarier sell the ad space and give a small kickback back to the scarier. So our whole business model was based on a notion that I'm gonna use your safety bars, generate revenue, and give you a rev share, give you a kickback. Now, in our eyes, and in our opinion in that moment, who the hell wouldn't go for that?
Eric Janssen
No brainer,
Pete Machelek
No brainer.
Eric Janssen
That was as we say, that was Plan A,
Pete Machelek
That was plan A, no brainer.
Eric Janssen
Sitting there idle right now you're making no money from it? Why not?
Pete Machelek
Exactly why not monetize that asset? We have a fantastic product. We're gonna get it installed. We're gonna go sell a ton of advertising, we're gonna give you a kickback. So our initial pitch and our initial approach, you know, what we actually coined this was make hundreds of 1000s of dollars without lifting a finger or spending a dime. Think about that. That would resonate with anyone.
Eric Janssen
Yeah. Reminds me of the new couple of buddies who are in sales at these new restaurant delivery companies like I think about in these in Toronto, there's there's a bunch of them now Uber Eats but ritual is one that's really growing quickly. And Got to be a salesperson for some of those early days, like literally you do nothing. We have this network, we're going to get people to order. They just pick it up, you literally set up a shelf and do nothing. To be fair, there's probably a lot more to it than that. But yes, sounds beautiful. Sounds easy. Yeah. Sounds easy.
Pete Machelek
Sounds like a great pitch.
Eric Janssen
Sounds like a great pitch I'm in. So talk about to use our terms analogs and anti logs, so analogs things that. So you've got this couple pieces of paper business plan, you've done your homework, you know the market, you've got a guy willing to support you, you've actually had preliminary conversations, you've got your pitch nailed down. Was there anything out there that you saw that you liked, that you wanted to sort of mirror some of it after? And it could be in adjacent totally different industries? You had already mentioned, like bathroom advertisements? and inversely or the other hand, is there anything that you saw that you didn't like, other, again, could be similar businesses in that industry, someone that had done it in a different place that really screwed it up? or other things that you picked up in the advertising world that you were like, ooh, never gonna do that. So good things you wanted to copy bad things you want to stay away from?
Pete Machelek
Yeah, great question. So the bad things that we want to stay away from, I mean, a big part of it really rusted on the product, the product was everything to us. And you got to remember that me walking into this idea. I'm like, going to design my own, dad's an engineer, let's put together this product, scratch, build it from scratch. Now the reality was, you know, you go and consult your good old uncle, Google, and Google spits out some good feedback. And some of the feedback I got was, well, there's some products out there that already exist, really two products that I found during my research. One of them was a company called ski lift media that was based at a bank in Canada. And they had a very rudimentary to like structure that they were wrapped around the safety bar. I don't know how I got my hands on one. But I convinced the guy to send me a sample. And he did. And when I saw this thing, I was not impressed.
Eric Janssen
Pause for a second, because typically, I was a student entrepreneur, too. And that first time when you Google something, and you find the thing, often people are like, That's it. That's it, someone's already done it. It's a Canadian company who's literally doing the thing that you wanted to map out. You didn't drop it there.
Pete Machelek
Yeah. Great question now, and at the time, and again, we'll get to this later. But at the time, my focus, and this is a narrow focus and narrow way of thinking through this business. But I believe that I wanted to be the guy for Ontario. I only cared about a few scares in Ontario. I found my analysis to be like, yeah, I could probably make, you know, half a million dollars off this business just in Ontario. It's a good little business.
Eric Janssen
Got it. So you weren't deterred? Because no one was doing it in Ontario. Correct. The fact that someone was doing it seemingly Oh, okay, with a bad product out west. And that was an opportunity. Yeah.
Pete Machelek
And truthfully, at the time, I was like, Well, let me take a look at this product. Because if it's good, perhaps I could just use an Ontario. And this could be something that I could replicate in this market. And away we go. All right, I got a business.
Eric Janssen
Cool. So you keep going. There was the one product.
Pete Machelek
Yes, so the one product that was sent over to me as a sample. Horrible, very bad. I mean, it's it's I was not impressed at all, but, you know, continue doing the research. And there was a product that seemed really, really sharp. It was it was very sexy, seemed like it had a sleek design, you know, website, collateral, anything that it could find on it seemed really, really good. It was a product out in New Zealand, other side of the world, you know, called adblock, horrible name, but regardless, it was called adblock. And I reached out to the owner. And at the time, the the company that essentially owned the license or own the distributorship for the product. It's called Alpine media limited, good old Grant metzen, we still call them to this day, the mad scientist who came up with the product and with a design, and we had a number of discussions back and forth.
Eric Janssen
So you're calling New Zealand at this point?
Pete Machelek
Correct that I mean, first emailing, you know, so I'm still in school, right? I'm gathering some research trying to see whether this is viable. And so yeah, some punching out emails, I'm trying to work with us, you know, much older, much more experienced gentleman on the other side of the world and trying to see, you know, whether he'll sell me his product. So it was an interesting learning experience and exercise. Funny enough, at the time, there was actually another Canadian company based out of Toronto that was already chatting with him. It's a media company that was trying to do the exact same thing as him. And all this happened within six days me finding out that news happened within six days of us meet Peter and I, my partner in the business, doing that back of the napkin analysis in that boardroom.
Pete Machelek
That company in Toronto just to clarify, they were talking to adblock to license the tech, they weren't Doing it independently. They were like, talking to him at the same time.
Eric Janssen
They were a media company. They were doing all sorts of things media related. They've already got all the property, all the brands, yeah, yeah, they got the relationships with brands, they got a lot of things going on. Yeah. So talk about kicking the plan, but still persevered, I was really, really driven to try and win this guy's trust, and try and license this product from him. So I came back into the office with Peter. And we sat down, I told him, Pete, we got to jump on this right now. There are other people talking to this guy, this is the product that I want to use, here are the reasons we need to put a plan in front of him, we need to get on the phone, we need to bring him down here. We need to fly down there, whatever it is, but we need to be the guys that do it for Ontario, and maybe even Quebec. And that was kind of my position. And obviously we analyze the whole scale of media opportunity. We said, Well, these guys are doing it and I was why don't we stick to the eastern industry or market or ski market. As a side note, skiing in Canada is only really happens in Ontario, Quebec, Alberta and BC, skiers and so that was our focus, East Coast, Ontario and Quebec. And sure enough, you know, we we acted quickly, and we put a plan together. And fast forward, you know, several weeks and we won the exclusive distributorship rights for all in North America. Not only Ontario, Quebec, but all of Canada and all of US
Eric Janssen
Some kid still in school. You're you're still in school?
Pete Machelek
No, no, that's, that's when I graduate, graduate, I graduated.
Eric Janssen
So you fresh out of school, three days or three weeks or three months or whatever. How did you do that? Like, how did you I don't know whether this guy was just using it for leverage and telling you that he had somebody but didn't. But like, how did you? And another dude from a real estate company convinced these guys to go with you over the company who already had the brand signed up?
Pete Machelek
Yeah, so great question. And it wasn't smoke and mirrors, we actually met with that company. And they tried and collaborate with us.
Eric Janssen
You met with the Toronto correctly.
Pete Machelek
Yes, so we actually met with him. And we wanted to see whether there was some way of us being able to partner together and do this properly. So we explored all avenues, which is why I was actually dragged on and we took some time to finalize this deal with grant out in New Zealand. You know, it's it's a great question. I mean, a bit of it is, I mean, a big part of it is hustle. But the reality is what really want us grants trust, is the proper plan. And over those next weeks and months, we put together what we felt was a stellar plan. And to get to that stellar plan, we consulted a lot of experts. So we great point, Peter, and I had no clue about the media industry, we didn't know how to sell advertising, we didn't have experience in that space. You know, he had some good business knowledge based on all the businesses he ran in his real estate business, I was fresh Ivey grind, like we're both very well educated, we have a good understanding of business models, but we didn't know how to sell advertising. So the very first thing we did, and this is a key lesson that I will still repeat to this day, you can do it all on your own. Surround yourself with people that can help take your business further. And one of our very first partners is a guy by the name of Steve Palmer, which his claim to fame is he started echo advertising. And he was the first boutique creative shop that won a massive account, which was Budweiser, and in their their entire business at the time. So he was a guy that knew and understood advertising and media. And Peter actually knew him because they golf at the same Golf Club. So he kind of said, you know what I think I know a guy that knows a thing or two about this space, let me give him a call, give him a call. We took him out for beers. At this time, we already had a sample in their hands. We gave him the short spiel just showed him the product. He wasn't even a skier, we just told him about what it was. And some of the features that we felt we should highlight to a media guy that would be beneficial and that we felt we'll be able to ward US media business. And he just said, This is amazing. I'll never forget this. He goes, guys, I know exactly what this is. I don't need to hear more, how could I be your partner. And we instantly made him a partner. He invested a bit of money with us. So he had some equity in the business. And he was the guy he was our third pillar that understood the media industry that would help us open some doors and would essentially be a mentor, you know, slash advisor on that side of things. So going back and building our plan. When you look at management team again, this guy fresh out of school, you know, not a lot to say not a lot to write IV grad though IV grad though very important, but not recognizing New Zealand right. But all of a sudden we're building our executive team. We're building our management team and we got Peter Kobayashi is running A few businesses understand business really well. Steve Pulver, you know, very impressive resume as it relates to the media and advertising industry as part of our team. So I think that helped a lot bringing the right people in, you know, from an advisor or partner perspective. We also had another guy that joined that in a similar capacity.
Eric Janssen
And was that part of the pitch that you put in front of adblock at the time?
Pete Machelek
Correct.
Eric Janssen
Got it? So So you had you had the media company side covered with this new partner?
Pete Machelek
You got it! Absolutely. We did.
Eric Janssen
Yeah. Did you put in money? Did you personally put in money?
Pete Machelek
Peter, and I both put in a bit of money. When I say I put in money, the Bank of mum and dad? Yeah, it's, I owe a lot of my success to them. A lot of the the proceeds and the dividends that are coming out of the sale of that business since we sold have, of course, gone back to them. But yeah, the Bank of mom and dad's support and finance that nice.
Eric Janssen
I'm wondering how common that story is because, like you I paid for my own school. And then with my remaining line of credit, like days before the line of credit was up, I had, I don't know, 30 grand in room, took it all out and use it as a downpayment to buy my first rental property. He was like, however, you can get it. Yeah,
Pete Machelek
yeah, exactly. Cool.
Eric Janssen
Okay, so you now get the exclusive license to the North American product, you must had a bunch of help negotiating that deal. That's a pretty big deal.
Pete Machelek
Yeah. So I mean, the heavy lifting was Peter and myself. I mean, we both worked on that. The entire relationship, though, was driven by me. And the way all communication was done through me, I had the relationship. I mean, this is all phones, Skype emails, I establish ownership with this guy, Peter, let me really champion it. But really what sold grant on us was our big picture approach. So we were fighting for initially Ontario and Quebec. And what we fail to appreciate and understand about the media industry, is no big brands are going to come and buy your media, if you only have little select piece markets. nobody really cares about just Toronto, who really cares about just Montreal, if I'm allocating budgets for my media spend as a big advertiser, like if you're Rogers, Coke, or Pepsi, you want a national program, and you want to spend a ton of money in one swoop, you don't want to spend a lot of time buying these little media properties. So again, this is something that we learned from Steve Palmer and doing some research in this space in the media industry. But as a result, what we really need to create was a national network of scariness. No longer was this in Ontario, Quebec endeavor. This is like we need all of Canada in order to attract the big brands. So we went back to grant and we said, Look, we're not we're not thinking small scale. We're thinking all Canada. And then we're going to walk into the US and roll this out across North America, where you're in North American guys
Eric Janssen
Got it. Got it. So now you've got, you've got a product. You've got maybe not brands signed up, but you've got access to brands. Do you just graduated? Now? Well, what? Yeah, where do you go from here?
Pete Machelek
Yeah, so you know, the product piece is most important, because without a product, how's the media? Well, general concept. You can't just put a sticker on safety bars. So it was important to get the right product. You gotta get serious. How you gonna get those chairlifts? Right? How are you going to be able to license those those chairlift? So we..
Eric Janssen
Sorry, before we get to the sale of the product for a second. I'm jumping ahead. Because the product is a really important piece. It was a it actually is a big differentiator, but you're gonna come back to it when you talk about it.
Pete Machelek
Absolutely. Yeah, you're on the right train of thought. But I think it's important to tell the story of how we walked in and how we had those meetings, and then how we differentiated our positioning.
Eric Janssen
I was jumping ahead. Yeah, I'm embarrassed.
Pete Machelek
No, no, no, it's it's good. Because you're thinking on the right path. I love it. So we took those meetings. And sorry to take a step back. We again did some research good old uncle Google told us that the best way to talk to as many skerries as possible face to face is go to a scary a trade show. Makes sense, right? I mean, they're all there, get them all at once. So perfect timing because there was one that was happening at Mount snow in Vermont. This is at the times by January so we've secured the exclusive distribution rights for a product in Canada in the US. Now keep in mind, this was 2008 and we are now in 2009. And we're just having conversations with scares in their winter season. guide so this is a busy time for them. This is busy time for them. Now. We weren't anticipating getting this product on that winter. We're thinking the following winner.
Eric Janssen
So that was built into your plan.
Pete Machelek
Exactly. 2009 2010. This is still preliminary research of getting things off the ground. I mean, we knew it was going to take a while, especially due to the seasonality of the nature. So we walk in into that trade show. And again, pitch is a no brainer, right? Funny enough, we actually walked in there looking all suited and booted. I think about you know, banker consultants, ties, suits dressed to the just came
Eric Janssen
From Ivey, you got to look the part
Pete Machelek
Exactly right. That's what I figured everybody does business that way.
Eric Janssen
Of course, you're doing business you got to look business
Pete Machelek
Now. Side lesson here, know your audience. So you got to appreciate that the scary industry, they're like, khakis, ripped t shirts, if that. Some of them were golf shirts, you know, like sandals, if it's the summer like, they're just super casual. And it's Phil like, it skews heavily to old white male like 5060 plus. So just an old boys club, they all know one another. They're all very, very casual, super nice guys. But it's essentially ski bums that started working as lefties. It's scary, and then slowly migrate into management positions that are now running the skier is. So that's the story.
Eric Janssen
So new guys roll in,
Pete Machelek
you guys roll in, suited and booted. I gotta tell you, I don't think I've ever turned around so quickly from the doors thing. God, I brought in some spare change of clothes. But we shot straight up to our, to our hotel rooms left the blazers behind, you know, put on put on some golf shirts and went back down. We didn't want to look like the silly guys that had no idea about anything in the industry. So we came back, we're dressed a little more appropriately for the audience. And we used our pitch.
Eric Janssen
Do you get a booth? Or did you just
Pete Machelek
No, no, we're a briefcase. That's what they called it, we're just walking around. We didn't get booth space at this time. Again, try to limit our financing, or limit our cash outlays and spending. So we started walking around. And one thing that I was good at, at that point was sales, and really reeling people in full confidence young 22 year old Ivey grad, right? walk up to anybody and start a conversation. It was fantastic. And it proved to be a great asset in these scenarios, because we ended up chatting with about 15 to 20 pretty important senior managers at a variety of scenarios all over North America. And we use our pitch. Hey, john, let me talk to you about something. How would you like to make hundreds of 1000s of dollars without lifting a finger or spending a dime?
Eric Janssen
It's funny what the right motivation will do to to go talk to strangers, because I wouldn't say that I some people are totally comfortable doing it right being at the conference and just randomly walking up to people. I'm not if I'm honest, I don't love to do it. But when it's your own business, when like deals are on the line, you got line of credit or parents money or your own money in this, you better believe you can turn it on for whatever however long you need, like you just become a different it's a different gear when it's your butt on the line.
Pete Machelek
Yeah. And to add to that, I think there was a great deal of excitement. So you got to appreciate that we thought we're selling the best thing since sliced bread. Right? Like we're, you're gonna be so fired up about hearing about this. So our first so again, as I was mentioning our first three conversations. Here's the response. Ah, Peter, don't even talk to me. No, no, sorry. I don't have time for this. We were dumbfounded.
Eric Janssen
Free money. What do you mean? No.
Pete Machelek
What do you mean? No. What are you talking about? A couple of nice guys from Canada finally told us guys. What are you doing? Are you in the gauntlet? Like, stuff has been done before. It has miserably failed. Peter and I both looked at each other like, yeah, we just get this license for adblock. And now we're screwed. Yeah, turn white. Create and have our business, even at the expense of this trip. What a waste. Okay, tell me more if you don't mind. Good, sir. Well, there was there's this product in the 70s and that product in the 80s. What was wrong with them? Well, a few things. Number one, they all fell apart. They did not work properly. You got to appreciate this. scariest negative 20 out in the elements, thermal cycling aspects of the environment. It's raining one second, it's snowing the next. I mean, these things are there to stay, right. It's high sun, high UV exposure. These things need to be designed really, really well to go through all those elements. Number two, you're not the first ski bum so identify a great opportunity and try and make money out of this. Yeah, Pete, a lot of people stared at that safety bar and thought I can make money off this, let me do it. Well guess what they came to us, they promised us a ton of cash, and they never delivered. Wonder why that is, it seems like a great idea that advertisers would actually buy our partner Steve Palmer, who knows advertising and media claim that this is amazing. There must be something wrong in the model in the previous model of how they approach this. And number three, is we don't want to make this an intrusive media for our audience, they spent a ton of money to come to this spectacular environment and get away from ads. Now, where it is where we're opposed to advertising, and I don't want some local pizza shop or real estate agent, to showcase you know, his brand now, that's not the nature and the brand of our resort of our ski area.
Eric Janssen
Right? They're thinking like cheesy local one off pizza shop.
Pete Machelek
Exactly. Well, that's what they were used to. Right. That's what they got from these previous entrepreneurs.
Eric Janssen
Right. So how did you, we push a lot get outside of the building and talk to people you said that you talked to them before? At ski hills? How did this not come up before? Like, was Peter at this point?
Pete Machelek
Yeah, so So we talked to a very small market, right, because I don't have the ability to go out and travel, you know, all over different markets. So we spoke to local scariest Blue Mountain, and Mount St. Louis Moonstone. Local to Toronto, they've never experienced these sort of products. Nobody's ever targeted them with this sort of opportunity. So they were outliers, I would say, but a lot of businesses in the States as an American scary a trade show. So there was a lot of representation from the States some representation from Canada, from Canada, but in general, they saw a lot more of this down there. Got it.
Eric Janssen
Okay, so, ideas did everybody packed up and went home?
Pete Machelek
Yes, spoke to a lot more people just to get their feedback, you know, document and all this However,
Eric Janssen
What did you like? How did those conversations go get into the like, if you can recall, because these my students, now we're going to have to do part of the courses to do customer interviews, like do you need to go out and have a conversation with customers? What questions did you ask when someone says, stupid idea have been there done that, like turning your back and walking away isn't so helpful? So how did you get to something that you could like, Oh, that was the thing that was wrong with it? Yeah, get there.
Pete Machelek
Dig deep, you know, ask a lot of why a lot of how, how is it done? why it wasn't done that way? What didn't you like about it? What's important to you? It's also interesting to note that the responses that we received, varied based on the role and the title of the person we spoke with. So marketing managers, for example, were very aware of messaging. And we're very reluctant to showcase cheesy advertising. Whereas operations managers didn't really care about the money or the marketing opportunities that were coming. They care more about the operational integrity of their chairlift the chairlift shuts down because one of these products falls apart. I mean, that that is the livelihood of the skier. So they can't have that. That's way more important to them.
Eric Janssen
Right. Interesting. So how did you document where'd you put it all?
Pete Machelek
Notes? After speaking every single person title name? Yeah, we got business cards, obviously. I mean, look, everybody in the ski industry is super friendly, right? So they would chat with us. They just didn't want to chat with us about our product, right. But if you're nice about it, and you ask some good questions, and if you want some feedback, and they recognize that you're an entrepreneur, they were generally pretty good about it. And they gave us their, you know, three, four or five minutes. It's also a case from a sales perspective, it is a case of reaching them and speaking to them at the right time. Right. So obviously, if they're engaged in something else or another conversation, you're not reeling them in and try to have a conversation about a product they don't care about, you know, catch them at lunch catch when they're getting a coffee. Hey, could I chat with you about something casually? We took a very casual approach to it after a while, after a few of those negative initial interviews or conversations, regroup, regroup. What do you think of this product? Here's what we're thinking of doing. We think we could generate a ton of money for you guys. You're not gonna have to spend anything. What do you think?
Eric Janssen
Yeah? Did you play the young entrepreneur Carnot all the F find it's a balance, right? Sometimes people want to send emails, like, almost like a sympathy email. Like I'm a, I'm a student entrepreneur, I'm just doing some research. I don't really know if I'm gonna start this. We call it the, the reluctant hero. Yeah. Versus I'm an entrepreneur. You know, this is my, this is my venture that I'm working on.
Pete Machelek
It's interesting that you say that because perhaps to my detriment, I never did. I actually took on the approach on the other side of the spectrum, where I tried to appear older, more experienced, I carried myself with a lot of confidence. And I tried to prove to all my prospects and everybody that I chatted with, that I was designed and then meant for this, this role in this job. You know, this idea and that was gonna Bring them a lot of money. And I was very confident my ability to do so. So it was never down to I'm a young entrepreneur, please help me out. And that's what you're getting at. Yeah, but it No, I was all No, no, no, I'm going for professional professional.
Eric Janssen
I'm not just a student trying to figure this out like this is legitimate. Exactly, yeah. Okay, so you got a bunch of feedback, you recorded it, you've got it all written down. Peter's not gonna leave you as a partner. He's still invested in this. So where you got this feedback? Where do you go from there?
Pete Machelek
We went back to our hotel room and drank a lot of beer. Of course, at the bar. And we really needed to retool, we needed to figure this out, because to your earlier point, we know that this concept works. It's worked in New Zealand for seven years, at all the serious, much smaller market, there's only seven or eight of them. But it's been working for advertising for serious there. There were 18,000 of these units deployed in Japan, chili bought product, like this product was working for is away, there is a wire is away. There is a way we just needed to figure out how to position this properly and sell it well to the serious. That's what really, that's what it really came down to. So did we give up? Hell no. I'm not giving up on this isn't my passion. I gotta keep going. I want to be that ski bum that makes money off selling ad space on chairlift safety bars.
Eric Janssen
So somebody borrows money from his parents gets on his first flight goes to the first conference, where's this new polyester suit? Yeah, it looks the part gets rejected 100 times and decides
Pete Machelek
No. classic tale of an entrepreneur like it. So you gotta have thick skin, you gotta have the grit. But we we came back to Toronto, and we hit that same boardroom. We said, what do we really have here? And based on all those interviews, and all those conversations we had, what is the most important thing to all these different decision makers that would make the call in something like this? So we looked at what we have, we have an incredible product that is extremely well designed, like extremely 16,000 of these have been deployed since 2001. Without ever coming off with near zero failure rate,
Eric Janssen
Best product in the market. Best product in the exclusive access to it in North America.
Pete Machelek
Exactly right. Start with what you have. This is what we have, this is what we have. So then we started looking at why did other entrepreneurs fail?
Eric Janssen
Why did they Why did it what do they do? That didn't work?
Exactly. So one of the biggest issues that we face, which actually spoke to a few of the pain points or the concerns that these decision makers had, one of them was it was Joe Schmo local ski bum at in Banff, that would drive around Banff and try and sign up the three ski areas that were in the vicinity and sell his rudimentary product to them. That aided design was shit and was going to fall apart. But be more importantly, he didn't have national scale. So my previous point, and what we learned from the media and advertising world is if you don't have that national scale and a national network to offer Rogers, Coke and Pepsi and Budweiser, they're not going to care. They're going to take you seriously.
Eric Janssen
It's got to be the the brands that look better on a chairlift versus Joe's pizza. But that's that's a totally separate piece.
Pete Machelek
Yes, you're absolutely right. What I'm talking about right now is is the money aspect. Got it? So Joe Schmo zpizza, it's not going to spend they got three grand to spend the season on their total advertising budget, right. Rogers, millions and millions of dollars to for media buys. And I could probably dedicate 200 grand to an ad block program. Whereas local real estate agent, not so much. The other aspect? Well, you just touched on and you absolutely nailed it. From a creative perspective. owners and marketing managers. They don't want Joe Schmo zpizza on there. They don't want the local real estate agent average. This isn't. This is why as a tangent as a sidebar, this is why I truly believe that shelter advertising by shelter advertising and bus benches never took off. Because from an early start, they catered to those real estate agents. That's really all they could attract. Nobody really thought that that was a great media for national, you know, brands, right?
Eric Janssen
So I didn't think of this. We didn't get to it earlier. But you really you're building a marketplace here, right? Like you needed, you needed the ski areas to sign up to give you the inventory. You also needed the advertisers to agree to have their ads on the inventory. So why did you start with ski areas versus advertisers?
Pete Machelek
Great question. And you're right, there are two sets of customers in this business. Without a network, you got nothing. And the overwhelming response and advice that we receive from Steve ball over and over The other advisors that we've spoken to that we've accumulated over this process in the media industry have told us if you walk into any major meeting with any major brand and say, Yeah, well, in theory, we got this network, they're gonna, the first question is great, what scares are you on? Well, we're talking with so and so and so and so get out of my office,
Eric Janssen
right. Those, the meetings with the ski people are probably a little more, quote unquote, easier, maybe a little more casual. You're right, if you get a meeting with coke or BMW, and you don't yet have those properties secured, you're not going to get a second meeting.
Pete Machelek
You gotta you got to be serious, you got to be able to walk into those doors and say, This is a physical network in place or ad blocks are installed. We're ready to sell this to you. Otherwise, you may not get a second chance.
Eric Janssen
Right. Got it.
Pete Machelek
Yeah. Okay. Yeah. So on on that last point, attracting the big national brands took care of that concern, that pain point that marketing managers and owners had, my guests are coming to my ski area to enjoy their time here. They don't want to see Joe Schmo his pizza, yeah. However, Coke, Rogers, Budweiser Corona, they could come up with pretty creative, tailored content that's specific to the ski industry, that will be well received and potentially even enjoyed, when you're so bored on the chairlift for seven minutes. That's exactly the way we needed to frame this. And that's exactly how grant had so much success in New Zealand. He went after the national brands that had the big budgets that were able to tailor really, really sharp creative, specifically to the ski market. So not, you know, just a logo and, you know, in a simple tagline, really, really cool stuff that spoke to the environment that the guests were there seven minutes, on average, on the chairlift inches away. It's not a not a home ad, it's like a magazine ad, get tons of depth of sale, you can literally read through it. Some of the most successful campaigns were riddles, or just to put this into perspective, multiple ad blocks would exist on a safety bar. So if it's a quad chair, servicing for people that actually before ad blocks, very successful campaign was a storyboard wines, like building off the other. So, you know, john and Susie and Eric and Pete would sit on the chairlift and they'd say, Hey, what's on that one interacting with one interacting with one another? And how great is that to an advertiser, when somebody actually when when the audience comes together and communicates, and enjoys? The experience is you got nothing else to do? Right.
Eric Janssen
Okay, so I see this unfolding now. So how do you? How do you get your ski hill signed up?
Pete Machelek
Yeah. So we understood what needed to happen. And that was really repositioning our messaging and repositioning our pitch. And this wasn't a case of make hundreds of 1000s of dollars out lifting a finger or spending a dime that was implied. Yeah. If you want to partner with us, you're going to give us money and great we really needed to do is communicate the true benefits of our product and our different approach to this concept that has failed in the past. So we came up with another tagline. And our pitch was this is not the same old, same old, this is chairlift media done. Right.
Eric Janssen
Nice. So you've, you've seen this before, but this is this is different than the way that you've seen it before.
Pete Machelek
Exactly. And let me tell you about the first time we went back, which there was actually a trade show a month and a half later, we acted quickly. Secondary trade show in February one was in January, the first in that we went to secondary one was in February, we went back. And the approach that we took was we're gonna walk up to every single person and nip this in the bud, immediately. And some of those conversations were the same people that we saw, you know, a month and a half earlier. And I'll never I'll never forget the experience with these two with an owner and director of operations or VP of operations at a skier you walked up to them. And we said, we started the conversation by forgot the name Alicia, calm. JOHN. JOHN, I'm going to talk to you about something today. He definitely don't want to hear about soon as you say that they're kind of intrigued. Don't think about pink elephants. Don't think about pink elephants, thinking about pink elephants. So immediately, curiosity. Okay. And when you whip out adblock, that's a chairlift advertising device. Ah, immediately, right, man, like, I don't want to talk about this, like I know, I know you don't. And I recognize that you had really bad experiences with past failed attempts. And I recognize that these are the pain points that you've experienced. reiterate them because we've had multiple discussions and we understand what they went through. And then we tell them what our block. Here's why I box great. It's been it's been designed in New Zealand. It's existed on chairs for the last nine years, whatever it was at the time. 36,000 of these are deployed all over the world, including Japan, Chile, and New Zealand and Australia. We have testimonials and best practices this thick, thick as a 1000 page book, how to do this properly in North America. We have a great Product partner, best part about it is we have a national approach, we're going to attract big national brands that are going to be able to spend good money and create and deliver really good creative content to your to your guests. We packaged it all up really, really nicely. And over the course of the conversation, as we were pitching, you could see their expressions change. You could see they were buying into this, it was it was amazing, like, talk about a 180. You know, like, we practically had people give me a call when you guys are back in Toronto, I'm really interested in this, or really helped. And this is just a side the side a side note. But we, for the for the operations managers that were mainly interested in its durability and performance. We actually created this device where we'd put the block on a fake safety bar. And, you know, we brought it out and set it up. And anybody that will come by we called it the adblock challenge. we'd give them a hammer. And we'd let them go at it in the trade show and try and break the thing. And nobody could. It was really that well designed. Nobody could break it. So I mean, talk about a way to get through to them. Like, after they did that like okay, yeah,
Eric Janssen
I believe in it saw it for themselves firsthand. Yeah. Cool. Cool. So that was the beginning of getting them.
Pete Machelek
Yeah, our repositioning really worked. We knew that we had the right message. From then on. It was it was a big, you know, follow up initiative with the people that we've already met that we chatted with, that we knew we wanted to work with. And it was a case of good salesmanship. So we don't have the budget of fly around everywhere. And you know, try and take meetings. I'm a big believer being novel, and doing shipping things to people like a letter physicals letter, old school thing that physical, old school things.
Eric Janssen
So this wasn't like you read a lot about growth of books like Predictable Revenue, talk about the different functions in sales. So your first thought wasn't, okay, now I need to go hire a junior person to cold call 30 ski resorts? You didn't do that. You didn't take the shotgun approach. You went pretty targeted?
Pete Machelek
Truthfully, I would have been that guy. And yeah, and it's a very good point. One of the other strategies that we've identified very early on was, we did not need so the Canadian market, which we started with, we didn't have plans to go into the states immediately, we wanted to roll this out in Canada, and have a proven model that we can replicate in the States. That was our strategy. There were 200 scariest total, to be exact 188 in Canada, that could technically do business with us. But we didn't need all of them. You know, Mansfield, or the local single scary a chairlift that only attracts 15,000 skier visits a year probably doesn't make sense for Rogers or Pepsi. But Blue Mountain, Mount St. Louis trombe la Whistler. So those profiles, you know, that are that are the big players, the big hubs that attract audiences, from the major urban centers where big brands want to target and want to spend money on those were in our target audience, there was only really 30 of them.
Eric Janssen
Got it. So you went using more modern terms super ABM style you identified with laser focus the 30 that you needed. What did you do then? Like you had find names, emails, addresses? What do you You Do?
Pete Machelek
Yeah, so in this day and age, it's actually really easy to get contact information, you know, do a search on Google or we are part of these associations. Now. We paid membership dues, so we had directories of all these people, we talked to a bunch of them or talk to a bunch of them already. So we've identified the ones that we need to speak with. This was a multi contact approach. So it wasn't just speaking to the marketing guy wasn't just speaking the operations guy. Everybody was an enterprise space cell. Everybody within the organization you know needed needed some sort of buy in. This wasn't one guy making the decision. So we Yeah, it's it's we didn't cold call them, we didn't email them, we decided to kind of go old school we sent them these pretty impressive, we call them pizza boxes, we delivered and shipped out our product. As a sample, there's actually three samples included in the package. One of them was affixed to kind of a fake bar that was supposed to resemble a safety bar. And the other one was completely broken apart. Like the pieces, the individual pieces of it, so somebody could see exactly how it's put together. And some lenses that had the actual ads printed on them. And in the lenses. There are two strategies. One of them was display, a self promo message. So a marketing guy, look how exciting This is. Now you could promote your ski school, your restaurants on site, you know all the vertically integrated services that you're responsible for. And then the other strategy was, yeah, look at this BMW ad. We are going to attract the big players. So it was very and of course expensive. You know what every package after all said and done probably cost us with shipping, 6070 bucks.
Eric Janssen
Okay, so but one prospect that's expensive. It was Yeah. It's not cheap, not a junior person hitting the phones. It's that's expensive.
Pete Machelek
But we had 30 targets, right? super focused, guess what our response rate on that was?
Eric Janssen
What's the response rate on email? First?
Pete Machelek
Email, I mean, just a general response rate, if you're going to cold call somebody a response rate on an email is what nowadays like 15%? Maybe Maybe it's incredible and super focused. And you've maybe been to the ski resort and like have a canoe, maybe exactly sub 6%? Sure, yeah. So we our response rate, I mean, if they wouldn't call us, let's just say, we reach 100% of those targets Well,
Eric Janssen
In some fashion. And so we had a qualified conversation with them corral.
Pete Machelek
So part of it was, as soon as we called people took our call and said, first of all, thank you, that was one of the most impressive direct marketing pieces I've ever received. And number two, because of our messaging, and the way we framed it, and what we presented them, the product was exciting, it looked great. And then the way that we position things, they took our call and said, this is great worth a conversation worth a conversation. So have those skill areas. You know, the ones that were interested, you know, great discussions, great discussions and phone,
Eric Janssen
did you go see him in person would you vote off phone,
Eric Janssen
we had to keep the budget down Lean Startup?
Eric Janssen
Sure. So first season, then of the 30, or so that you targeted Now, many signed up.
Pete Machelek
So we sign it's interesting, we use a few different metrics. But we had, we had about three to four months to get this off the ground, because by the time we got everything together, and it was now summertime, we needed to get this in time get these get these agreements in place with the ski areas to go to market, sell the advertising for that first season, and install this stuff. I thought that was an endeavor in and of itself. So we call it this was like March, April, or we began the process right at the tail end of most scary as and of their season. And we needed to get everything buttoned up by call it August, September, we signed 16 of the top 25 scariest within those three to four months.
Eric Janssen
Crazy.
Pete Machelek
That's ridiculous. And that's just to put this into perspective, that's 16, maybe not all of them, we didn't have those conversations as trade shows. But in general, from our initial outreach and discussion, the research that we gather, that's I'm never going to work with you to I have now signed a contract and my partner,
Eric Janssen
wow, through literally listening, feedback. iterating changing the messaging, emphasizing, like the product that you showed them from day one was the same product, you just need to change the message, change the rap or change the positioning. That's incredible. That's awesome. Thank you. That's awesome, man. Congrats. So we'll fast forward a little bit cuz I want to start wrapping up. I have a couple of questions I want to finish off with. Um, but so where is it now? I mean, great early traction. good story to get the first couple fast forward, you know, even today, where's that block today?
Pete Machelek
So adblock about two to three years ago now. And I'm kind of losing track of time, but we decided to sell the business. For a number of reasons, I'll just touch on them quickly. Right now. We were always a one media company. And we could not compete in the marketplace, we found a really great suitor that played in a similar space as us in the out of home sector that could take our media, bundle it with their basket of goods, and basically absorb our business and take it to the next level. And I think the key lesson here is in an entrepreneurs life, there always comes a time when somebody could take the business and the concept to the next level. And that really wasn't me. I was the guy with the idea. I was the brains and hustles and putting all the pieces together and get it off the ground. But to take it to that next level really required a new skill set and a new company. That's when we decided to sell
Eric Janssen
you end up selling the company.
Pete Machelek
Yeah, we ended up selling the company. It's still I mean, the product still exists. It's under business now known as a rec media recreation media. Interestingly enough, we kind of parcel the business and this is a separate podcast. But we grant metzen, our product partner three years into the business. We were so successful with adblock that we did a reverse takeover of his business, and completely acquired the global distribution rights for the product itself. We then sold the product on a licensed basis to other markets, mainly in Europe. And we parcel that business and we made a completely separate so there was adblock media, which was responsible for media sales and the media network song to advertisers, and the global adblock global, which is the product business selling product to entrepreneurs like us and other markets, too scary as to whoever buy it.
Eric Janssen
That's awesome. That's awesome. And which one Which one did you sell?
Pete Machelek
So we sold the media motion to wreck media. And now this is a very interesting structure of ownership. But wreck is a minority partner in the global business as well. So we've written tained an equity stake in the global business. They are a partner of ours in the global business, but we are technically doing that together
Eric Janssen
Got it. What a cool story at something I didn't, I didn't get to that I think is important just to touch on quickly. And then I want to wrap up here. How did you get to setting the culture that you wanted? I asked that because we've known each other for a while, you're certain type of guy that I get along with really well. How did you go about attracting the types of people that would get along with you? And how were you? Or not maybe intentional about the culture that you created there?
Pete Machelek
Yeah, that's a great question. Be yourself, you know, and believe, and resonate the values that are true, and that are important to you. You know, when when we started building our company in attracting employees, I wanted to show everyone I don't want to put on a front. So my employees knew exactly the type of guy who was very passionate about skiing and snowboarding, loved to have a good time. There wasn't there's no bullshit, you know, everything out in the office if you needed to, we're very open. And we were a small, tight team, we had five employees max at a certain point. So, you know, it's not like there's several layers, you know, organization. But yeah, just just do the things that you wanted to do. And, you know, I just recalled the story that we share, you know, before we got on here, the huge fan of soccer and World Cup, and one year, and this is a bit of a entertainment strategy that we adopted. Naturally in the sales industry, you have to entertain, you know, anybody and everybody and media personnel are very used to this. So we wanted to do when, when was this, I think is in Brazil, all the games were being played, the World Cup games were being played during our work timezone. So we organize what we call the traveling office, we grabbed all our employees at the time and brought them to a bar, and we create a cool story around like CTV interviewed us about because they thought it was clever, a lot of people you know, in offices are sneaking out of the, their, you know, their, their workplace to try and catch the games, not us, we brought all our stuff to the office, Wi Fi was stable. And we actually invited all our customers to do the same, like, hey, if you need to work, and you want to catch the game, do so the same way that we are and was awesome. That's awesome.
Eric Janssen
That's awesome. being authentic. And bringing that self to work is just so so important. Cool. I want to wrap up with a couple that I asked all of our guests here. So where do you do your best thinking?
Pete Machelek
Probably on the chairlift?
Eric Janssen
Surely still.
Pete Machelek
I do especially when I ski or snowboard alone. It's incredible. We can issue on the on the chairlift. I'm just Zen mode, you know, alone with my thoughts. You know, it's fantastic. I also do really, really good thinking in the pool. I do a lot of swimming. I'm into triathlons. So I do a lot of training and during the week, and it's very therapeutic for me and no music. peddling in the pool, trying to get laps in some great thinking and meditation goes in there. No phone, you can like sneak out to check your phone.
Eric Janssen
Exactly. That's great. What advice would you give your 20 year old self? So if you could look back to Pete mahalik in HBA to fourth year university, you're just about to embark on adblock. What What advice would you give yourself?
Pete Machelek
Yeah, it's a great question. Wow, there's so many we need another hour. The big one is trust your instinct. There was a point in AD blocks life where we were on top of the world. And we secured some really, really good clients. And I thought, is it too early to sell. This is like a really good opportunity to driven so much value, it's been exponential. And I thought to myself, now's the right time to sell. And it kind of hurt us in the end, because we saw a bit of a dip in sales and company took a different direction. And I would have really liked to sell at that point. You know, I obviously stretched it out and had a great ride with the business. But I think that we would have been able to achieve a greater return for us and our investors if we were to sell at that point.
Eric Janssen
So trust your gut,
Pete Machelek
trust your gut, for sure.
Eric Janssen
Is there anything you wished you would have learned sooner either when you're in school, or something that you wish you would have learned before you started?
Pete Machelek
Yeah, entrepreneurial journey. So my, my approach to sales, and I think sales is such a crucial skill set for any entrepreneur to have, well, you're selling yourself, your idea is just so important in establishing and developing a business. And my approach to and I'm lucky I'm a personable, very social guy, you know, it gets along with almost everyone. And my approach is certainly to sales has always been an art. You know, I'm just going to go and get along with everyone and sell my stuff. And it's worked out pretty well for me. But what I didn't have an appreciation for until probably the last three years was the science behind sale, selling and sales in general. And I think there's a great deal of science that goes into selling and knowing that I think would have taken our business a lot furtherearlier on.
Eric Janssen
Cool. And then finally, if there's one thing that you are best at or your superpower, what would that be?
Pete Machelek
Getting shit done. I got GST, GST, GST. It's actually a term that you coined, but it's the classic persona and the the characteristics of an entrepreneur, if something needs to be done, I don't wait around or delegate, if I can get it done myself, whether it's a marketing video that needs to be put together for a prospector client, you know, or installing 10,000 ad blocks, you know, get it done, you know, and that's kind of my approach to everything, potentially, to my detriment, some of the things I do should be outsourced. But again, I'm a very hands on operator, and more often than not, it puts me in a really good position.
Eric Janssen
Yeah, I've seen that and working with you for we worked together for three years, three years, three or four years. And I think summarizing, you'd say like, done is better than perfect. You know, like, could it be done? meticulously, maybe, but like, would it have ever even gotten done? Or would it be done now? No. So Screw it, I'm gonna do it. I'm gonna get it done to a point where I'm happy with it, and we're gonna ship it and you've been really, really good at that.
Pete Machelek
Thanks. Yeah.
Eric Janssen
This has been great. I'm glad we were able to finally get the story of adblock down recorded for history. This is like your time capsule. I love it. I'm
Pete Machelek
I really enjoyed this. It's also a great walk down memory lane for me, you know, such good time, such a great experience and great part of my life. So I really appreciate you bringing me out here. And I had a good time.
Eric Janssen
This started when we were we were in we flew. So it was it Denver. Yeah, we flew somewhere. We're in the back of an Uber together. And you started telling me the story. And I knew I knew it roughly but didn't know the full thing. And when we got into the details, it was like, Ooh, this would make a good story back of a cab back. I always get stories. Come on back. Cool. Hey, man, I appreciate having you here. Thanks for making the trip in and a lot of fun.
Pete Machelek
Thank you. Thank you.
Introduction/Outro
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