SaaS Interviews with CEOs, Startups, Founders
EP 462: $8.8M 2015 Sales of iPhone Repair Parts with CEO Chris Koerner
29 Oct 2016
Chapter 1: What inspired Chris Koerner to start LCDcycle?
This is The Top, where I interview entrepreneurs who are number one or number two in their industry in terms of revenue or customer base. You'll learn how much revenue they're making, what their marketing funnel looks like, and how many customers they have. I'm now at $20,000 per top. Five and six million. He is hell-bent on global domination. We just broke our 100,000-unit soul mark.
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Chapter 2: How did Chris achieve $8.8 million in sales in 2015?
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Chapter 3: What strategies does Chris use for customer acquisition?
nathanlatka.com forward slash assistant, totally free. Nathan Latke here. This is episode 462, and coming up tomorrow morning, you're going to learn from Steli Efti. He's the CEO of Closed.io, and they're doing over $200,000 in monthly recurring revenue, have more than 500 customers, a minimum output of $400. He gets into the details, and he says at the end he won't sell even for $40 million.
Why? Good morning, folks. Nathan Lago here. Our guest today is Chris Kerner. He is a lifelong serial entrepreneur, 29-year-old, father of four small kids, and founder of LCD Cycle.
Chapter 4: How does LCDcycle manage its supply chain?
He's a former motivational speaker and won Alabama's Entrepreneur of the Year Award. His company supplies wireless repair shops with wholesale parts and also recycles broken iPhone screens. Chris, are you ready to take us to the top? I'm ready, man. Let's do it. All right, very cool. So you're 29, four kids. How are you doing a business and being a father at the same time? I'm Mormon, man.
I mean, that's just what we do.
Chapter 5: What are the financial metrics of LCDcycle?
We turn it out. You Mormons are freaking machines, man. Very cool. So tell us more about the business. What year did you found it in? So I founded it on January 2nd, 2013. Okay, 2013. Yeah, basically, so if I back up a little bit, I opened like a smartphone repair shop when I was in college at the University of Alabama. That was in 2010 when I was a senior.
And we quickly grew that to about three locations.
Chapter 6: How does Chris balance entrepreneurship with family life?
And then I ended up selling it to a competitor. For how much? I wanted to stay and I sold it. It was kind of embarrassing. You sure you want to hear it? Dude, it's, you know, no one ever talks about this because they feel like if they don't sell for like a hundred million bucks, they can't talk about it. Every entrepreneur, even Elon Musk, his first sale is like for an embarrassing amount.
It's like 10K, something ridiculous. All right. All right.
Chapter 7: What lessons has Chris learned from his entrepreneurial journey?
So it was kind of a weird situation because they had a shop and I had three. And so there was two partners on their side and just me on my side. And so they basically took my stores, my branding, my name, my URL, and then they added theirs to the pot. and they abandoned their name and brand and they took on mine. And then they gave me like 30 grand and we basically split up the equity 33, 33, 33.
Yeah, that's great. So it was kind of a little bit of cash, a little bit of equity, and then they also popped in their location as well. So it was more of a merger than an acquisition. Got it. Cool, good.
Chapter 8: What future plans does Chris have for LCDcycle?
Okay, so walk us through how you make money. I'm on your website right now, lcdcycle.com. It says, have you shopped for this before? I click no. Then I see a map with four or five locations. Walk me through what's going on here. Yeah, so those are distribution centers.
We started in Huntsville, Alabama, and then we quickly realized that it was really easy for us to acquire customers within a one-day shipping radius. That's why Amazon has eight or nine distribution centers. Um, so we, I moved to Dallas person. I moved my family to Dallas. We opened a new distribution center just to see if, you know, we can get customers more easily in the Texas market.
And we were, so we ended up opening Michigan and Orlando and we ran those for about a year and a half. And we kind of planned the locations, took on a bunch of new customers. And then just a few months ago, we ended up closing Orlando and Michigan. Um, we kept the customers, closed the locations and I would just service them out of Dallas and Huntsville. So yeah,
So we actually only have Huntsville and Dallas open right now. Yeah, maybe I'm wrong here. I don't want people to get confused and think you're like kind of a food truck for iPhone repairs. You're actually servicing the repair shops with goods. Is that right? Yeah, it's all B2B. There's about 13,000 repair shops and we supply them parts. Got it. Yeah, that's perfect. Okay, so walk us through.
This is always an embarrassing number. What was your first year revenue back in 2013? Actually, so this number isn't as embarrassing as the one I already gave you. I'm actually kind of proud of this number. So first, we opened on January 2nd, so 2013 was a full year. We did 2.1 million that year. Oh, that's great. That's great. 2.1 million. Okay, good. And what did you do in 2015?
We did 20, okay, so I skipped a year, so we did 2.1, and then 2014, that was 2013, 2014, we did 4.8, and then last year in 2015, we did 8.8. That's great, and so what's driving a lot of the, oh, sorry, you said 8.8, right? Yes. And what's driving most of this growth? Is it just more distribution channels hearing about you, or what? You know, it's kind of old-fashioned.
We just get on the phone and we cold call the heck out of people. Just cold calling non-stop. What we first did was just scrape data. We went online and we literally spent months just scraping every single repair shop in the nation. How? What sorts were you using? So I actually used this tool, and I don't use it anymore, but it's great. It's called Places Scout. Okay.
You can also use it for SEO, but it's kind of a lead gen tool. And at the time, it was a program you actually downloaded. Now it's all web-based. Um, so we use place scout, we scraped everything and then I just kind of wrote a script. I hired some VAs, the VAs did all the cold calling at first and now it's all in house.
But, um, yeah, I mean I launched the whole business on VAs and a script and a spreadsheet. That's great. So 8.8 million top line. Okay. Your biggest costs I imagine are the actual goods. What's gross margin typically? Um, our gross margin percentage is like 31%. Okay. Is that average? Is that good or bad?
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