SaaS Interviews with CEOs, Startups, Founders
She's Sold 20m Stickers and Will Do $100m By 2018 with Andrea Lake Ep 214
31 Mar 2016
Chapter 1: What inspired Andrea Lake to start StickerJunkie?
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 talk. Five and six million. He is hell-bent on global domination. We just broke our 100,000 unit sold mark.
And I'm your host, Nathan Latka. Okay, Top Tribe, this week's winner of the 100 bucks is Daniel Al-Soudini. He's based overseas. He's an employee at a current company and can't wait to break free. For your chance to win 100 bucks, Top Tribe, simply subscribe to the podcast now and then text the word Nathan to 33444 to prove that you did it.
Again, text the word Nathan to 33444 to prove that you did it. I give away 100 bucks every Monday. Coming up tomorrow morning, Top Tribe, you will hear from Ashish Patel. He just raised $16 million and his business is now getting 1 billion monthly active views a month.
Chapter 2: How does Andrea manage multiple businesses simultaneously?
Good morning, Top Tribe. Good morning. Good morning. Good morning. If you're being lazy and debating whether you're going to put your gym clothes on and do that jog, do it. Our guest today will get you through it. Her name is Andrea Lake, and she's a serial entrepreneur.
She's the founder of StickerJunkie.com, Yoga Junkie, delinquent distribution to which own the exclusive rights on merch to chain stores for Minecraft, World of Warcraft, Call of Duty, The Walking Dead, along with many others. She's now moved into educational tech on our platforms, MentorMojo.com and Lessons.biz. Andrea, are you ready to take us to the top? I sure am. Let's do this.
So first off, you are in your beautiful home in Sedona, looking at the red cliffs with your dogs, which I love. So first things first, what came first, Yoga Junkie or Sticker Junkie? Sticker Junkie.
Chapter 3: What strategies does Andrea use to generate recurring revenue?
We started that in 1999. Okay. Was that your first kind of foray into entrepreneurship? It was not. I started a toy company when I was 18, juggling sticks called Rhythm Sticks. And then I went into apparel and started anti-establishment clothing and delinquent distribution and then Sticker Junkie after that.
So help me understand these businesses as you were building them, were you building them to sell? Have you had successful exits? No, actually, I'm a buy, I'm a build and hold kind of girl. And I just create recurring revenue in the companies. And then I have other people running the other companies, except for the current ones that I'm working on. So how many companies you have currently today?
Currently today, six. Six. And which ones of those are you actually the active CEO in?
Chapter 4: What is the significance of the 20 million stickers sold?
Well, a couple of them, I still hold the CEO title. So, but that it probably would be better if I called myself the president and my operations manager, the CEO, but I'm still quite active in sticker junkie. I'm very active in lessons.biz and mentor mojo as well. So junkie. And what junkie? Yoga. Okay. So let's pick one of these to focus on and let's do it this way.
In 2015, which of these businesses did the most revenue? Sticker Junkie. Okay. That doesn't actually take my time. It's just because it's such a long established company. So Lessons.biz is the one that I currently am the most active on. Okay.
Chapter 5: How does Andrea differentiate licensing from sales in her business?
So let me do this. Let's real quick for 60 seconds on Sticker Junkie. What do you sell and how much revenue did it do in 2015? I don't usually say my revenue numbers, but we sold 20 million stickers in 2015. Okay. And are these real stickers or are these like Facebook Messenger stickers? No, they're actual real stickers that would have like the top podcast logo on them.
Ooh, look at that little sales pitch built in here. This is why you're successful. Look at this. Okay. So you sell, you sell 20 million stickers and are these, are these like, do you use the internet to do this or are you in like Bed Bath & Beyond at a checkout counter? So Sticker Janky was the first custom sticker website platform on the internet.
So you can go use our generator and make your own sticker from scratch right online in like 60 seconds. Or if you already have a logo, you can upload your artwork onto the custom artwork section.
Chapter 6: What marketing strategies are being used for Lessons.biz?
And then we just print the logo that you already have created. So either way. So give, okay. So you sell 20 million stickers. And like, if, if I wanted to get one, like a sticker for the top made on average, what would it cost me? Like what would I have to pay you? It depends on quantity and the pricing would go anywhere from like a dollar 20 down to 9 cents.
It just depends on the size and the quantity that you're getting. If you get 10,000 stickers and that's a far, far less expensive than a hundred stickers at once. So is it fair to say the maximum amount of revenue you did if you sold 20 million stickers is somewhere around 20 million or 22 million bucks? It's fair to say that would be exceedingly high.
I'm trying to get... I'm like, okay, how can I trick Andrea to get her to the revenue number? Well, let me ask her. Let me act like I'm going to buy stickers and go backwards. Okay.
Chapter 7: What are the pricing models for Andrea's courses?
You actually get as low as two cents if you buy in high enough quantities. Oh, wow. It's good. All sticker companies do well because every business that exists needs stickers to market and promote themselves. And imagine it's probably a fairly high margin, right? It is. It is especially, you know, most all sticker companies own their own equipment and their presses.
And so you're doing your manufacturing in-house. So the costs are quite low once you once you surpass your fixed costs. And are you just again, you're you're really using this as a from a cash flow perspective. If somebody like Vistaprint came to you and offered you five million bucks today, you wouldn't sell it. I would sell it if, yes, I would sell it actually. At 5 million?
I would sell, it would be a little bit more than that, but that would be a good ballpark. You've clearly thought about that number.
Chapter 8: What advice does Andrea give to aspiring entrepreneurs?
Help me understand how you got so clear on what number you'd sell for. Well, normally if you're exiting a company, you would do, that's a hard physical products company. You would do like a five times EBITDA evaluation. However, we would get a slightly higher valuation because, um, with sticker junkie, we would sell to one of our competitors that already has their in-house production down.
And so it's not going to actually, they're not going to actually have as high of costs as we have because they would roll it into their current payroll and their current insurances and their current economies of scale. That's exactly right. So it would just be an additional revenue stream for them. So it would be slightly higher.
So you think you'd probably get something between like a six to eight X EBITDA? Oh yeah, it's you and your numbers. I really don't like to talk about it. No, I just, I love numbers. I think they make the world go round and they don't involve humans. So there's no emotion. It's just, what's the freaking number? Okay, cool.
So, and I know nothing by the way about physical products, which is why I'm curious. See, SaaS businesses, which is what I'm good at, is it's always top line annualized revenue, which people like you probably hate because you're like, how are these valuations so high for like this thing that exists in the cloud? Well, do you know what? Yes.
I have a lot of friends that own big data companies and massive, huge companies that have very high nine and 10 figure valuations. And they are, they are frankly not worth that, but it is okay because everybody is playing that game. And now that I'm doing these tech platform companies, I am perfectly fine with a 32 X. Is that why you got into it?
Cause you're going, Oh my gosh, this is a better ATM. No, actually, the reason I got into it is because I saw so many people selling products on the Internet of how to make money that were not tangible. Yes, that were broke as hell themselves, that were not tangible and that were charging a lot of money.
So I wanted to go down the most common routes of entrepreneurship that people in this country actually go down and pair each different vertical with a celebrity entrepreneur who's made hundreds of millions or billions of dollars in that vertical and then do like three.
super focused checklists and very actionable products to where if you want to start a t-shirt company and you learn from me, cause I owned the rights on Minecraft and my business partner, Dan Caldwell, who started tap out, like we can actually tell you how to massively increase your sales and reduce your costs. What do you mean you own the rights to Minecraft? I don't know what that means.
I owned the sales rights to chain stores. And so I was the person like if a chain store like Hot Topic wanted to purchase Minecraft or Walking Dead or World of Warcraft or any of those games, I was the exclusive rights holder to sell it to them. And what business did you do that selling under? A delinquent distribution. Oh, got it. I thought you said, I thought, okay, I'm confused.
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