Colin Campbell - AI, Financial Strategies, & Building a Successful Business

Wayne Zell and Colin Campbell delve into Colin's entrepreneurial journey, the evolution of technology, and AI's impact on business. They discuss learning from failures, financial strategies, delegation, company culture, and planning a business exit, with insights from Colin's book.

Key Points

• Success in entrepreneurship often hinges on the ability to adapt your story and strategy to scale, hire the right people, and implement effective systems.

• Taking calculated risks and knowing when to exit can significantly impact the value of your business, with strategic buyers often providing the best opportunities for growth and higher returns.

• Leveraging technological shifts, such as artificial intelligence, can create unprecedented opportunities for innovation and wealth generation across various industries.

Timestamps

0:00 Introduction and guest welcome

0:50 Colin Campbell's entrepreneurial journey and influences

2:40 Technology evolution: Internet to AI

5:39 Utilizing AI in business and industry disruptions

9:10 Learning from entrepreneurial failures

13:05 Financial strategies for entrepreneurs: Liquidity and control

15:23 Building a successful business: Delegation and future planning

24:03 Company culture and scaling operations

25:05 Planning and executing a successful business exit

29:30 Financial considerations in selling a business

30:16 Colin Campbell's book and additional resources

33:30 Closing remarks

Quotes

"Entrepreneurship isn't a 9 to 5. It's 24 hours. You never not stop."

- Colin Campbell

"Don't let your identity become the company. You're the CEO of this company. That's not your identity. Your identity is entrepreneurial."

- Colin Campbell

"I'm a big believer in not getting rich alone. It's a lot more fun when you got people around you."

- Colin Campbell

Transcript

Wayne Zell: Hi. This is Wayne Szell, and welcome to another episode of Blueprint for Wealth where we feature special guests and special topics that are of interest to entrepreneurs all across the country and around the world. Today, I have a special guest, and I think you're gonna wanna stay tuned for the whole podcast. That's Colin Campbell. Welcome, Colin.

Welcome to the show.

Colin Campbell: Well, thank you for having me on. I really appreciate it.

Wayne Zell: Oh, I'm I'm excited to have you on. Colin is a unique, guy. He's got unique, characteristics. He's been a serial entrepreneur for over 30 years, and he's written a book called Start, Scale, Exit, and Repeat. What a great title.

Serial Entrepreneur's Secrets Revealed. He's cofounded and scaled a variety of Internet companies that have collectively reached a valuation of almost $1,000,000,000. So we know he's a successful entrepreneur. And having successfully navigated the exits of companies like is it called 2 cows?

Colin Campbell: 2Cows. That's correct. Yep.

Wayne Zell: 2Cows Interactive. I love the spelling. Internet Direct Canada, Hostopia, Geeks 4 Less, and the club domains. Campbell has not only cemented his name as a startup expert, but he's also collected an array of accolades, including spots on the Inc 500, Inc 5000 Rosters for several years in a row. And he's a sought after speaker in the world of entrepreneurship.

So I'm very humbled and very pleased that he's on this show. Maybe someday I'll appear on his. You never know. But, Colin, again, thank you. The first question that came to my mind is, you don't look very old.

How did you do all this? Where did you come from to create this mystique of being a serial entrepreneur?

Colin Campbell: Well, you know, it really does start when you're young. Right? Whether it's a paper route or selling puppy dogs at the flea market or working at the market, slogging vegetables. I grew up in a family, farm backgrounds, went to college in UFC here, and then right out of college, this thing called the Internet was starting to take off. And although a lot of my friends are just like, ah, it's just, like, for the geeks and whatnot, We thought there could be more applications, so we launched a company called Internet Direct.

And within 6 years, it became the largest Internet service provider in Canada. It went public, it was just a tremendous explosion of people just getting on the Internet. Now think about this. We're going back to the nineties.

Wayne Zell: Yeah.

Colin Campbell: Right? When in the early nineties and a lot of your listeners will not remember some of these terms and what not what I'm gonna say. But something called the World Wide Web had just launched through Mozilla, and that was in 1993. So pre that, it was all text, and it wasn't very exciting to a lot of people. But once Mozilla launched, it was now web based, and you had graphics, and you could download things, and it was more interactive.

It began to attract a lot more people into it. My brother and I had run bulletin board services, BBSs, so we're gonna get too geeky here. Yep. But No. No.

That's were ways those were ways you could connect on the Internet in Toronto, and we have the large 2nd largest in Canada, actually, bulletin board service. But what overshadowed that was this thing called the information superhighway, the Internet. And we were able to, launch an ISP in Toronto, go across Canada, and, eventually take that company public. And that's not the end of the story. We'll get to the end of the story on that one in a few minutes.

Wayne Zell: Okay. So tell me, you know, I I I've been working in the Internet since it started as well and before that. In fact, I worked in in my practice before there were PCs. So, you know, learning how to use a Xerox copier. But the Internet really has has exploded in recent years.

Where do you think it's headed?

Colin Campbell: So, like, we went through we've got through a number of paradigm shifts, and I talked about this in the book, start scale, exit, repeat. We had the opportunity to interview Jeffrey Moore, who wrote Crossing the Chasm inside the tornado.

Wayne Zell: Met him.

Colin Campbell: So just I mean, it's I I was just, like, so excited to be able to do this. He agreed to an interview, and chapter 3 is devoted to catching the wave. And in the nineties, we caught that ISP wave I talked about. With 2 cows, which was software download. We caught, the, software download sort of paradigm shift with, Hostopia.

It was email and web hosting for telecoms, like Vodafone and British Telecom. So that was really all about cloud computing, which evolved out of the 2000. Then you saw in 2006, roughly, you saw the rise of social media. 2000 tens, there's an app for that. 2000, I mean, 2000 fifteens, 2000 sixteens, the rise of the micro brands, ecommerce brands, 2020 audio chat.

You see where I'm going with this? And then there's the one Yeah. Then there's the big one, the big one that happened in 2023, which was the advent of CHAT GPT 3.5, and that it was really late 2022 when it first came out, but that has been a game changer. And let me tell you, this technological shift, this wave will make more millionaires than any other of those tech shifts that I've talked about. Even bigger than the advent of the Internet, we're gonna see so many people utilize AI, tell them accelerate their growth, whether they're in the AI business or not, by the way.

Wait. You don't have to be in the AI business. You could be running a business and applying AI to your business, or you can launch an AI business as well. I'd liken it to have have you seen the movie, Iron Man, Tony Stark? I liken it to Tony Stark slap you know, putting on that suit, and that's the capabilities we all now have as founders and start up startups.

Wayne Zell: You know, it's it's amazing. I looked at, your website, start, scale, exit, repeat. The yourcolincampbell.com website where you've got an Ask AI button on the site, and I did. I went into and it started asking questions. Some of the questions that you had listed there, which were really great, but then I asked some other questions.

And the the it took a second, and it produced, information that was extremely relevant and extremely useful. And that's what I'm doing that with with my my, my practice, of of being a lawyer. Everyone is going to use it. Everyone should be using it. And how you've applied it right there on your website, I thought, was brilliant.

Colin Campbell: Yeah. We're early on. It's still in beta. You know, obviously, these things are brand new. I've been doing a lot of work with custom GPTs.

If your users have not checked this out, if you're if you're have used if you've used OpenAI's Chat GPT, you can create custom GPTs, and you can make them personal, or you can actually make them put them on the store and make them public. And we we just published a workbook for start, scale, exit, repeat, which has breaks down each, chapter of the the book, the first section, start, and it creates exercises, which you can fill out on paper. But at the bottom of the page is a QR code and a domain name where you can scan the QR code or type in the domain name and go directly to a custom GPT. By the way, custom GPTs, Wayne, just just this. Custom GPTs that I created, not my not my team.

Like, in the pack, I'm not a geek. I only aspire to be 1. Okay?

Wayne Zell: Yeah.

Colin Campbell: I am not good at this stuff. Like, I cannot build a website. I can't transfer a domain name after 30 years in front of tech companies, but I could do custom GPTs. It's as easy as hell. We did a personalityprofileai.com.

It's phenomenal. It gives you your personality your disc profile in 16 questions. It also gives you, your your, Myers Briggs, and then it compares you to celebrities as well. And it's

Wayne Zell: my gosh.

Colin Campbell: And we just I just sat there for about an hour prompt engineering and working with this, and it's open to the public and it's free. Although, if you don't have a paid membership, they have a lot of limitations on on you know, you can use it for 5 minutes and then they want you to pay $20 a month. But it's something that I I I use a lot. I know we're go we're going down the AI bandwagon here. I you know, you know Yeah.

Wayne Zell: I'm I'm a huge supporter of it. I I think it's gonna change everything the way we do it too. I mean, as an estate planner and a business planner, people will create their own documents. The question is, are they correct? Are they appropriate for what they're doing?

But as as things progress, it's going to it's going to disrupt pretty much every industry that we're dealing with. Manufacturing, law, accounting, everything is gonna be disrupted. And I think it's really cool that you're doing it. Your your book, is spot on in terms of just breaking down entrepreneurship into, you know, simple steps. Start.

You know, it's interesting. How do you think about in your book, we've got start, scale, exit. Those are all really, really important and very obvious. The repeat is the one that that really sort of got my attention. Tell us about repeat.

Colin Campbell: Yeah. So repeat is the part that most people don't talk about. And you know, I I started the book with a story. You know, it's a great story. One afternoon, we had sold a company. We had a check for eight figures, and we were celebrating.

We're in the war room with the whole team, and we're celebrating the sale. And, you know, one of the members of the team said to me, he said, what are you gonna do now? And I looked at him, and I said, I dunno. And honestly, I was thinking, you know, am I gonna go by a boat? Am I gonna go by a house?

Am I gonna go by a sports team? You know, these are the silly things that go through your mind. But what I really wanted to do was go back and do it again. And that's what the repeat is all about. And the thing is, we we found, we did some research, and we found that most entrepreneurs, one time entrepreneurs, are getting stuck by their first success.

They'll sell a company and then they never do it again. And you know, it's such a big deal to them that, maybe they're thinking, you know, how could I ever do this again? How could I ever repeat this? You know, if the if the odds of me making a billionaire out of me were a hundred to one or a thousand to one, and I you know, I won the lottery. Well, I can't repeat that because you can't win the lottery twice.

But entrepreneurship is not a lottery. There's a system. There's something that you can repeat. And that's what the repeat is all about. It's take it's taking the learnings and the playbook from the first exit and then applying it to the second and the third and the fourth.

And just to give you some context, you know, I'm a big believer, you know, when I sold my, when we sold Internet Direct to AT&T, we also in that deal, we, we sold our contracts. And that was a five year earnout. And I realized very early on that an earnout is not a sale. An earnout is just an extended employment agreement. Right?

And you know, I remember walking back to my office and I said, okay, I'm gonna wait till I can take a company all the way to the finish line. You know, I'm gonna wait till I get a check for the company and, you know, I'm never gonna do an earnout again. And that's exactly what we did. And when we sold Hostopia to Pipet, publicly traded deal. We got a check for the company.

And we also started selling, we also bought some other companies, and one of them was called 2Cows. And this is a software download company. And we bought it and we scaled it, and then we sold it to Tucows. And you know, I'm telling you this because it shows the development of the playbook. We bought, we tried an earnout on Hostopia, and then we sold that to Tucows, and we got a check.

And then we tried getting a strategic buyer like GoDaddy. So, we're not talking about serial entrepreneurs. We're talking about people that have a system in place. People that can move quickly. And my recommendation to people is that when you're exiting, you have to think about the valuation.

And there's a there's a there's a formula. There's a systematic formula for each type of buyer. You got financial buyers, you got, you got strategic buyers, and you've got, competitive buyers. Financial buyers is basically a venture capitalist or a PE firm. They're coming to your business because of the return.

And return for them is typically around 25%, 35% return on investment. So that's that's a time value of money calculation. And if you go back into the transaction, this means they're looking at a multiple on earnings or EBITDA of usually somewhere around 3 to 5 times. You've got competitive buyers. Those are people in the industry.

They're probably 5 to 10 times. Why? Because they got to get that return, and, you know, so you're getting just that's your fair value. And then if you have a competitive bid you know, when we sold to GoDaddy dot club domains Mhmm. It was interesting because it was half competitive and half strategic. So it was competitive in that they already had people running their domain tlds.

They ran dotusand.bizand

Wayne Zell: Sure.

Colin Campbell: Dotco. So they didn't need our team. So they were able to eliminate our team completely, which don't, you know, don't don't freak out. Everyone in my members of my team wanted to be wanted to be bought out as well because they all had they all had a piece of the company. They all had a piece of

Wayne Zell: the company. Everybody was an entrepreneur in the company. Everybody was an owner of the company. So they had an owner mindset, an entrepreneur mindset.

Colin Campbell: Correct. Correct. And I'm I'm a big believer is is I'm a big believer in not getting rich alone. It's a lot more fun when you got people around you. You're getting rich as well.

So that and, also, it does create that owner mindset. So they eliminated the expenses. Then you've got the 3rd type, which is strategic buyers. And GoDaddy, I called them a strategic buyer as well because they came in and they bought our company because they have massive distribution. They have many more registrars they sell their TLDs through.

They have they have a much larger operation, and they can leverage dotclub. They sell turnips.com.net. They can leverage that, and they can sell it to to a much broader audience. So when they're coming to buy us, you know, it was a long process. I think it was about two and a half years.

He first came to us and was, like, giving us this earnings multiple. I'm not allowed to talk about this in too much detail. Right. He's a nice guy. I won't mention names, but this earnings multiple is actually and I'm like, no.

No. You don't understand. We can raise prices a dollar a year forever. You know, we can, we're we're we're our renewal rate's high. We have the highest usage rate.

You know, we have all these statistics. And, by the way, I like to use one liners when we get into the exit and practice them. Right? I think I repeated that. We're gonna raise the prices a dollar a year forever for about two and a half years in about 6 6 different meetings with different executives.

Don't assume they all know. We actually did raise the price a dollar a year for 2 years in a row, and we lost no customers. And at that point, they said, okay. That's it. Here's the check.

And they just

Wayne Zell: wrote the

Colin Campbell: check, and it's game over. And you're talking about a a huge multiple on earnings, well beyond what you could ever get. I remember selling Hostopia. It was a publicly traded deal, so I can give you the numbers on that one. We sold for 17 times EBITDA.

Okay? Our tax rate, the George w Bush tax rate was 15% on capital gains. Right? We're a c corporation running 36% federal, 6% state, running 42% tax rate on earnings, and, we were running, 15% on capital gains. It would have taken us 20, 25 years to make our money back on that sale, just based on the different tax rates.

So there's a tax argument for start, scale, exit, repeat. And then we really try to deconstruct the whole start scale exit, and I love to exit. I love that I love that section, but I love repeat more because if you can repeat it, oh my gosh. Just so much fun.

Wayne Zell: Yeah. I mean, I think I've gotta get this book. Everybody's gotta get this book. Colin, how do we get this book?

Colin Campbell: Alright. We are today, it was interesting. I just did a a LinkedIn post that we are in in the on Amazon. We are in the top 50 for starting a business, for the Audible book, for the hardcover book, and for the Kindle book. All three books.

I think we're the only book that's got 3 in the top 50 on Amazon, and we had number 1 on small business last week on the Kindle.

Wayne Zell: Wow.

Colin Campbell: And we have a we have a a softcover coming out, is coming out very, very shortly. So, you know, we've got 4 different ways to get it on Amazon. You can buy it at any bookstore. We did a, we just was we just got a a deal done with Hudson's and WH Smith for all the airports as well. So hope you're driving through the airport.

Hopefully, you'll pick it up at Hudson's or WH Smith if it hasn't sold out.

Wayne Zell: I'll be there tomorrow. I'll pick one up. Be in the airport tomorrow. This has been great. It's it's inspiring to, to talk to you about start, scale, exit, and repeat.

It's such a it's such a memorable title too. And, I think everybody is going to benefit from buying this book and listening to your podcast too. So go to colincampbell.com if you wanna get more exposure to the AI the new beta AI, to the blog, to the podcast. It's all there for you as well as the book. And, I can gladly

Colin Campbell: It is colincampbell.com for my myself, but also startup.club. Startup.club is the one where we have the where we have we post the podcast. And we don't they're not they're they're not really podcasts. They're like live shows that we do on Clubhouse, and and we're starting to experiment now with Chatter for Meta and Entree, which is another one. But, yeah, no startup dot club, join the mailing list, you know, and we we've got, I think, like you probably, we've got 8 speaker 8 authors booked already for September, October.

We're booking November net right now. Authors and successful serial entrepreneurs. That book, 200 interviews, and only 50 of them made the book. And let me tell you this. This book was a compilation of stories that draw conclusions.

And it wasn't just about successes, but also failure. It's all about decoding, what it takes to start, scale, exit, repeat. And, it does really we we, you know, we wrote it for the, ADHD entrepreneur. 57 chapters, 200 callouts, 30 illustrations, 4 color code. It's color coded throughout the book, and Forbes is, it's I think it's their most successful book they've ever published, at least in 2023 and 2024.

It's also won 1204 I can't compete with you

Wayne Zell: on my, on my book, I can't compete with you, but I I, definitely, I I think it's it's a book that everybody needs to have on their bookshelf. So check it out. Start, scale, exit, repeat, startup.club. Right? Yep.

And colinccampbell.com.

Colin Campbell: That's true.

Wayne Zell: So don't forget the c. It's very important. Thanks for being a special guest on blueprint for wealth today. I really appreciate you.

Colin Campbell: Thank you.

Wayne Zell: Alright. Everybody have a good week. We'll talk to you next week, hopefully with as as exciting a guest as Colin. Stay tuned. Have a great week.