Web Masters Episode #46: Chris Jaeb

You surely know who Mark Cuban is. And you might know he became a billionaire by selling his company, Broadcast.com. But did you know he didn’t start the company? It was originally created by the guest on this episode of Web Masters,┬áChris Jaeb. Get the full story on this episode of Web Masters.


AudioNet (Broadcast.com) Begins the First Continuous Live Webcasts :  History of Information

Chris Jaeb:

So I went and talked to probably 50, 60 investors and everyone said, “Yeah, come back and talk to me at another time but I just don’t get it.” 99% of them said, “I just don’t get it.” I was introduced to this guy named Todd Wagner who was working in a class with my girlfriend at the time. She was in this class called Running From the Law and it was for attorneys that wanted to get out of the legal system.

So this counselor was basically counseling attorneys that had had enough of doing their legal work and were trying to say, “Here’s my way of getting it back into life in some way.” So Todd was in that class and she introduced to him and the idea was, “Hey, is this something you might want to get involved in, Todd?” He was a CPA and an attorney and it seemed like it could be something that he could help organize and put his skills around because I knew I needed legal support to do what I was doing fundamentally because all my deal was going to be was a bunch of contracts.

If I could write good contracts I could have a real company and I also knew that if I had a CPA it was doing the combination of the legal and accounting it could create that business foundation that I could grow a business from, which is something a lot of entrepreneurs just don’t get because a lot of us … because my dad was a banker. He really gave me, unknowingly, the essence of that financial and legal framework you need to create something that’s real.

Otherwise, you’re just a guy with an idea. So Todd was perfect. He had those pieces of the puzzle but he was just getting out of something he’d been doing for three or four years. He goes, “I like the idea. I’m going to take three months off. I’ll come back and talk to you when I’m back but before I go, I want to introduce you to this friend of mine I went to college with named Mark Cuban. He just sold his software integration company called Microsolutions. He’s got cash and he might be the kind of guy who would understand this.”

So we all meet at California Pizza Kitchen on Northwest Highway and Preston Road in Dallas, Texas on November 3rd, 1994 and basically I’m giving my pitch that I’ve given 100 times expecting the usual, you know, gut not understanding anything that’s going on. Within five minutes Mark says, “I’m in. I’ll do it. I’m your partner.” So I go, “What?” I’d never got to that part of my pitch. I didn’t know what to say at that point. I go, “Well, what do we do now?”

Aaron Dinin:

What they did was build a media company called Broadcast.com that eventually sold to Yahoo for $5.7 billion. Well, that’s what Mark Cuban and Todd Wagner did. The person that you just heard is Chris Jaeb. He’s the man who actually started the company. He wouldn’t stick around long after Mark took over but the initial work he did was the foundation on which the rest of the company’s legendary success was built.

Are you ready to hear the story? Let’s get dialed in.

[INTRO]

Aaron Dinin:

Welcome to Web Masters. This is the podcast that teaches about entrepreneurship by talking with some of the internet’s most impactful innovators. I’m Aaron Dinin, your host. I’m a serial entrepreneur and I’m part of a faculty in the innovation and entrepreneurship program at Duke University.

On this episode we’re going to dig into one of the legendary successes of the early web. It’s the story of Broadcast.com, which was Mark Cuban’s ticket to entrepreneurial stardom. While Mark certainly deserves all the recognition and praise he gets for what he built as well as the things he’s done since, he wasn’t technically the person who founded the original company. That honor belongs to this episode’s guest, Chris Jaeb.

We’re going to learn all about him and how he laid the foundation for what would become Broadcast.com but first we’re going to learn about this podcast’s sponsor.

Web Masters wouldn’t be possible without the support of our sponsor, Latona’s. Latona’s is a boutique mergers and acquisitions broker that helps people buy and sell cash flow positive internet businesses and digital assets. Those include things like e-commerce stores, SAAS apps, Amazon IPAs, domain portfolios and any other type of online work from anywhere internet business.

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In my intro at the beginning of this and a lot of Web Masters episodes I describe myself as a serial entrepreneur. It’s really just a way of saying I’ve tried starting lots of businesses and some have turned out better than others. In reality, the words entrepreneur and serial entrepreneur are basically interchangeable because I guarantee anyone who built a successful business has tried building more than one.

That’s certainly true of this episode’s guest, Chris Jaeb. He’s like a textbook example of a serial entrepreneur, constantly iterating anew business ideas and learning as much as he could after each success and failure. As a result, the story of creating the company that would ultimately become Broadcast.com isn’t really the story of Chris having a single brilliant idea and then executing it to perfection.

Instead, the story begins much earlier and takes the form of lots of different ventures. The first of which was a car business.

Chris Jaeb:

I had a 20,000 square foot warehouse when I was 24 years old with my best friend. We imported gray market cars from Europe, BMWs, Mercedes and Porsches. We knew nothing about the business. The more business we did the more money we lost. It’s the best crash course in what not to do in business in two years time you could ever imagine.

So after two years I was a half a million dollars in debt plus we hadn’t paid our payroll taxes at all. A guy came in, the IRS agent said, “Okay, you owe us a half million dollars. When you going to pay it?” We go, “Oh, no problem. We’ll pay you over the next six to nine months.” He goes, “No, you need to pay me in the next 10 days or we’re going to close you down.”

My partner and I looked at each other, we go, “Is this the business we want to be in for the next five or 10 years or do we want to think about something else?”

Aaron Dinin:

Yes, the necessity of paying taxes is an important lesson every entrepreneur learns at some point, hopefully most of us don’t learn it the same way Chris had to. Of course leaving the car business would ultimately be good for him but success didn’t come immediately. In fact, Chris spent a lot of time after that experience wandering through the proverbial entrepreneurial wilderness.

Chris Jaeb:

So, at that point it became very clear to us we did not need to be in the car business for the rest of our lives. I just stopped at 26 and started for three years just reading, learning, really voraciously reading about things that I was curious about and interested in. Not really having a job, per se.

I had a friend that was an artist and I took his T-shirts basically to small boutiques at the time around New York and Boston, just traveled the country and was selling T-shirts for a while. I was just doing anything I could just to make a buck to live on, basically.

And then what came to me was I would meet with this guy. It was really cool. He was a colonel in Vietnam. He’d just got out of the Army and he had his own data company or it was a spreadsheet company. They would do budget analysis for companies and he had one of the leading edge, at the time, little software integration companies and he would meet with me every week. I would meet him at Denny’s at 6:30 in the morning and then we would just talk about ideas.

Aaron Dinin:

Did any companies come out of that?

Chris Jaeb:

After about a year and a half we came up with this idea … I was huge into sports. Me and my friends would watch every sport, baseball, football, basketball. We’re just fanatics. We’d play them all day. We’d watch them all night and it was just what we did.

So what we came up with is because I wanted to get into the sports business somehow. I’d try to think of a promotional item I could sell to a sports team and we came up with this palm sized balls that were AM radios that were shaped like a baseball or a basketball and we’d put Dallas Mavericks on one side and Dr. Pepper on the other side.

The first 5000 people who come into the stadium it would be like a promotional item from the team, just to incite more people to come to the games. So I did that for about a year and a half. I got the Chicago Bulls and Sports Mar. I had Dallas Mavericks and Dr. Pepper and a few other teams.

Aaron Dinin:

Those seem like some impressive partnerships. It sounds like that business was going pretty well then, right?

Chris Jaeb:

It really became apparent to me really quick that the bigger boys could source that product quicker than I could and easier than I could. They had better relationships with the teams and I was going to be out of business in no time.

So what I started thinking is, “I need to figure out a way to get the rights to basically distribute the product outside of the stadium and figure out a way I could sell it,” because you had to get a license arrangement with the teams or the leagues to do that. So I found this guy in New York City that had a micro ear radio and he was broadcasting the games inside these stadiums.

And what my problem was when I’d give these radios away and it was the same thing he was running into is people would get a nice radio or a pretty cheap nice radio. In the stadium they’d try to turn it on and they couldn’t hear anything and they never thought it was working but it was only because the signal wasn’t getting inside the stadium.

So he and I put a plan together where we’d say, “You know what? Why don’t we make it so we rebroadcast every NBA game in every arena and when you put our radio on you could hear not only a game that you’re at but you could hear any other game that’s being played at the time.”

Aaron Dinin:

What you’re hearing here is the core of the idea that would ultimately become Broadcast.com, which started as the ability to broadcast sporting events across alternate media platforms but it wasn’t quite the right time for the idea just yet, in part because Chris hadn’t found the right partners.

Chris Jaeb:

After a really short period of time because I’d been in the car business and realized how shady characters and lack of dependability and craziness does not add to quality of long term business opportunity. This guy was not really very aligned with the things I knew to be true.

So he had one investor that came in one time and he needed money to live on. He wanted to get his business going. He would bring these guys in that were Mafia guys, that were just the worst of the worst and I’d look at these guys in a heartbeat because where’d I’d been in the car business, say, “I cannot do this.”

They would sense it. They knew I knew that they were not the kind of guys that we were going to do business with anyway. One guy tried to throw me off the top of a building one time. I’m like, “Are you kidding me?” Just because he knew that I was not going to be a part of it and I wasn’t going to let this guy invest in it. So after a short period of time I said, “I’m out of here. You go do your thing. I do mine.”

Aaron Dinin:

Almost thrown off of a building. Yeah. That doesn’t sound much like the kind of people worth partnering with. So Chris left New York and moved back to Dallas, Texas where he started working for a company called Affiliated Computer Systems.

Chris Jaeb:

What those guys did was, there was a thing called outsourcing, still is to some degree, where a big computer company runs data centers and they go to other companies and say, “Rather than you run your computers, we’ll run your computers.”

And so I started working as an entry level promotional marketing guy for those guys and in a really short period of time I was writing contracts and understanding how they were writing contracts to basically take over third party data centers for big companies like Southland Corporation, 7-11, all over the world.

What they ended up doing is they acquired a satellite network as part of their agreement and that satellite network we were always trying to sell time on because it was never even being used. It was 10% of capacity. So in a really short period of time I got the math and when every contract I was learning the cost of moving really large and small amounts of data in real time around the world.

I did the math, realized, “Oh, they’re digitizing video. Oh, they’re digitizing audio. Oh, I could take one bandwidth, one channel of video in a broadcast satellite environment and if I put four kilohertz into six megahertz of video spectrum I could get 400 or 500 channels of real time audio distributed all over the world. For $10,000 a month I could own that bandwidth for a certain number of hours a day in a way that could be super cheap to do it.”

Aaron Dinin:

Okay, I suppose that’s interesting to know but what does one do with that kind of information once they know it?

Chris Jaeb:

I put a proposal together to the NBA, major league baseball and the NFL and said, “If I put this network together would you let me retransmit their signals?” They said, “We’d support it because we love the idea of getting signals all over the world but the rights holders own those rights. We don’t own those. So you have to go to the individual teams.”

So that’s what I started doing. I would go to the rights holders of all the radio stations for every team and they knew nothing about the internet and I’m basically telling them, “You might not have anybody around the world that’s listening. You could tell everybody that your signal’s getting all over the world and if this does turn around and we start making money I’ll share whatever we create with you 50% and you can back out of the contract whenever you want. Two weeks notice and you’re out.”

So it was something they could use as a promotional tool. I’d figured out enough of talking to those guys what it would take to get them to say yes.

Aaron Dinin:

What kind of teams were you getting the broadcast rights for?

Chris Jaeb:

So I got the Dallas Cowboys station. I got the USC, all their events. I got about 15 contracts together but I couldn’t get any investor to really say, “Oh, I get what you’re doing. I’m willing to help you build it out,” because it was just so far out there. Basically there wasn’t an internet standard for the audio even at that time.

At that time I wasn’t even thinking of doing it on the internet. I was going to basically take signals, retransmit them in the local areas and then redistribute them to the PCS phone network. So you would have an old style cellular telephone and you would dial a number, a 900 number and you’d pay per minute to listen to the games that we retransmitted locally, which was a lot of work but for the diehard fans that wanted to hear some of these games that were otherwise not available, it was better than nothing and paying $10 per game really wasn’t that big a deal. I thought.

So after about a year working on that I went to the FCC actually and got the right to set that system up in Austin, Texas. They called it an experimental license. They gave me a right to redistribute all these signals in a UHF spectrum.

Aaron Dinin:

So how did that turn into what Broadcast.com became known for, which was broadcasting sports on specifically the internet.

Chris Jaeb:

Within two months of me getting that I became aware of the internet. This is late 1993, ’94 and I started reading George Gilder. George is a really leading edge thinker about digitization of the world and he was really understanding that the faster the chip processing speeds got the more data we could send in smaller bandwidth, meaning you could compress and decompress faster and you could get smaller amounts of data in a really small amounts of bandwidth.

But fundamentally what that told me was no matter what my cost of distributing a signal is today, in 1993 his book just proved the case that over time technology was going to make every part of that equation almost go to zero and it is exactly what’s happened. Basically don’t worry about your cost of distributing audio and video in 1994, get your rights, build your business and then from that, over time if you stay in business long enough you’re going to see your cost decrease to the point where you’re going to make money just on that difference is pretty significant.

So basically I started putting a plan together where I would use the internet rather than this third party system but there was no software to distribute the audio on the internet. Basically, I was saying, “Okay, I’m going to develop an audio software and I’m going to create an environment that’s going to make it possible to put all this stuff online.”

Aaron Dinin:

It’s at this point that Chris gets introduced to Mark Cuban through a shared acquaintance named Todd Wagner, which is the story we heard at the beginning of the episode.

Chris Jaeb:

We all meet at California Pizza Kitchen on Northwest Highway and Preston Road in Dallas, Texas on November 3rd, 1994 and basically I’m giving my pitch that I’ve given 100 times expecting the usual, “blah  blah, ” a guy that’s not understanding what’s going on. Within five minutes Mark says, “I’m in. I’ll do it. I’m your partner.” So I go, “What?” I’d never got to that part of my pitch. I didn’t know what to say at that point. I go, “Well, what do we do now?”

Aaron Dinin:

So what’d you all decide to do?

Chris Jaeb:

So he goes, “I’m going to give you $10,000 and I’ve got some stuff I got to do right now but when Todd comes back we’ll figure out what’s next.” Mark gave me that check. On that check it said, “10% for 2% non-dilutable interest in the company”.

So when Todd sees that he goes, “We can’t do that, dude, if he already owns 2% of the company non-dilutable that means when we bring other money into this company he’s going to own 2% no matter what. That’s not fair. It doesn’t work.” So Todd and I go over to Mark’s house for about three months every Wednesday, we’d just haggle with him.

As you can imagine, everybody’s got their attitude. He thinks one thing. I think another and we’re all just yelling at each other half the time. The other time we’re just trying to figure it out. In the middle of that real audio software comes out.

Aaron Dinin:

Real audio was created by a company called RealNetworks in 1995. It was a groundbreaking audio streaming format that first made streaming accessible over the internet.

Chris Jaeb:

Now we don’t even have to make software. All we got to do is to take the programming, use their encoding system and distribute it and everybody can use that same on the receiving side so they can hear it. So Mark says, “I’m doing it with or without you guys. Chris, I don’t need you. Todd, you’re perfect. You’re an attorney. You’re an accountant. You can run the company. You’re the operator.”

Todd goes, “That’s not going to work. Chris and I are partners. We’re going to work a deal with Chris where he can have what’s fair and we’ll go from there.”

Aaron Dinin:

What was your feeling about Mark moving forward on the idea either with you or without you?

Chris Jaeb:

To me, it was just another idea. I had 10 other ideas like that I was ready to go on. So I go, “You know what? I’m not that interested in this one. If you guys want it, take it. I’ll take 10% of the deal. Give me $2500 a month as a draw until we figure out what’s next and we’ll go from there.”

So for about two years I get $2500 a month. I go and teach people to acquire broadcast rights. Basically, I teach people at Broadcast.com how to do that and out of that $2500 I took $1250 and paid a software guy to develop e-Ads, which was the first fee per click advertising company on the net.

Aaron Dinin:

What you just heard Chris explain doubles as the fundamental truth of entrepreneurship, ideas are worthless by themselves. To Chris the company he was fighting Mark for was just another idea of many. What matters is execution. So he gave away the idea that would become Broadcast.com while turning his attention to his newly created advertising company. In other words, Broadcast.com wasn’t successful because Chris had a good idea. Broadcast.com was successful because of Mark Cuban’s execution.

Chris Jaeb:

I got 10% of the company. I had the option of having more if I was going to work full time but Mark never wanted to make it look like I existed because he wanted to be perceived as the founder. It was his approach more just to say, “I’m going to acknowledge that you started this company but beyond that, nobody even knows you happened,” which to me was fine.

I have no negative energy around it whatsoever because the reality was is Mark came in, he put his (beep) of money into it, blew it up and it made my X go to who knows, 100X, 2000X. I am very supportive of everything Mark did to get it going.

Aaron Dinin:

Yeah, obviously it doesn’t sound like you’re taking credit that the company doesn’t become what it becomes without Mark.

Chris Jaeb:

In no way, shape or form. Mark was super progressive and the guy was brilliant and still is from a business development perspective. He was really good at just startup 101 because what he did really well was he really boiled it down to basics.

He would (beep) with us. He’d say, “You guys got start a companyitis. You guys got the disease of making it look pretty. You just got to go get your (beep) first customer. Go get your first customer, then get your second one. You learn from the first to make it easier to get your second.”

It seems so, yeah, simple but the reality was when you’re an entrepreneur you do those things you love. You don’t do the things you need to do to get your first customer.

Aaron Dinin:

So Mark Cuban launches an internet radio company called AudioNet. It’s the company that started as Cameron Audio Networks when it was founded by Cameron Christopher Jaeb, our guest. It’s the company that eventually became Broadcast.com and it’s the company that ultimately sold to Yahoo for $5.7 billion in 1999, making it Yahoo’s most expensive acquisition and turning Mark Cuban into a billionaire.

As for Chris and his 10%, obviously it got diluted along the way but he still came out all right in the end.

Chris Jaeb:

Fast forward, 1999, Broadcast.com goes public and has one of the best public offerings at that time in the history of the stock exchange and it puts me in a situation where it’s like, “What do I really want to do with my life?” I went from having nothing really to now having enough from my advertising company to do pretty good to now with Broadcast. going public never really having to work again.

It really went really quick from who am I, what am I doing to what are my priorities and what do I really want in life? So that’s what happened in 1999, basically. The internet stock went so sky high after it went public it sold to Yahoo and my idea at the time was to sell a certain remaining half of my stock years down the road but I just sold it all because I felt like it was such a freak of nature that any of that was happening.

And surprisingly and not surprisingly enough six months later the whole thing just crashed. So if I would have held onto my stock I would’ve ended up with probably one fiftieth of the cash and I would have been just another working guy.

Aaron Dinin:

So do you think it was just luck that you decided to sell all your stock?

Chris Jaeb:

I believe it was because of a lack of greed. Every bit of that was a freak of nature and a bunch of luck on some level, but there was a lot of work it took to get there but at the end of the day to set your limit on what’s good and not is huge I think in business in general because otherwise we always want more rather than realizing when enough is enough. And if we have enough we’re going to do fine. And I think if we have that approach and that level of consciousness and contentment it makes life a lot easier and it makes you a lot more satisfied as you move through your life rather than always feeling like you need more to be okay.

I don’t know where I got that from. It was probably just sort something that was part of a past life. I didn’t need to become more to be good enough because I think there was an awesome other part and as you go forward it’s like, I really lost my desire to make more tech stuff, to make more money, to have more money. I just literally sold everything I had. I put all my money in bonds. So I wasn’t even in the internet or even in the stock world in any shape or form. Most conservative form of investment, got married and moved to Kauai and had two kids for the next 13, 14 years of my life. And it was just totally checked out.

Aaron Dinin:

It’s easy to write off Chris’s story as a case of right place, right time. He sold an interesting idea to a really good entrepreneur who was able to turn it into an enormous success and Chris was able to passively ride that success to millions of dollars and a nice retirement in Hawaii.

But let’s look more closely. First of all, the company that became Broadcast.com wasn’t Chris’s first idea. Remember he had a gray market car dealership. He was selling a friend’s T-shirts in New York. There was the branded radio giveaways at sporting events and let’s not forget about whatever company it was that almost caused him to get thrown off of a building.

So it’s not like he just lucked into millions of dollars. Chris spent a solid 20 years putting in hard work and learning the skills he needed in order to become successful. Perhaps the best example is the advertising he began building from the money Mark was paying him. It was a company called, e-Ads, E-A-D-S and it was a pioneer in digital advertising.

Chris Jaeb:

Out of that $2500 I took $1250 and paid a software guy to develop e-Ads, which was the first fee per click advertising company on the net. Exactly what DoubleClick was doing. We were right there at the exact same time but they were still selling on an impression basis when I was selling on a fee per click basis.

They actually had the … I don’t know if it’s the trademark, the copyright or whatever, they owned the right to do the fee per click piece. So I was always concerned, even though I’d started it, had it in operation so I felt like that was going to give me …  that I had the business precedence of doing it, not just saying I had a trademark on it.

But anyway that was a separate issue. After about a year and a half I stopped working at Broadcast.com and the internet advertising company just took off because needless to say, fee per click compared to traditional cost per 1000 impression for advertisers was a no-brainer. And we were proving our numbers.

I’d go to people and say, “Okay, Adobe,” or “Okay, Microsoft I’ll send you 2000 people. You know you’re going to sell lots of those and I will guarantee. I can give you those people on the front end and just show you what the numbers are and you cannot help but buy advertising from me on the back end.” So it was the easiest sell you could imagine.

Aaron Dinin:

So that was what? 1996, 1997? It was pretty early for a pay per click web advertising company, right?

Chris Jaeb:

The interesting part about that whole deal was that was one of the first advertising companies online. So I was literally having to go learn how to make an ad banner and tell an advertising company how we needed to make this really small, file size wise, which made no sense to these guys whatsoever.

So that it could be clicked on and it wouldn’t create so much overhead when somebody clicks on it it bogged the system down. Then I had to go get a software guy to basically monitor all the clicks and to keep people from trying to cheat the system because as soon as we would put an ad up on Joe Blow’s sport site, Joe Blow starts clicking on it because he knows every time he clicks on that and he doesn’t get caught he’s making money.

So we were the early stages. I’m sure the same thing Kevin was doing too, was learning how to find the fraud. I mean, we were sending 2000, 5000, $10,000 checks to these little kids in Romania and Russia and China and some of these guys were cheaters but some of them had developed these really smart little web environments that were badass.

So it was a great early stage of the internet sort of seeing how the system works and some of it was a really cool comment on human nature because what would happen is people would cheat a little bit and they wouldn’t get caught and then they’d cheat a little bit more and then they’d cheat and then they would get hungry. So it was so cool for us just to see the nature of man. Some were, they’d get a little bit, then they’d get greedy. If they never got greedy they probably could have kept it low enough where we’d have kept paying them for a long time.

But anyway, after a really short period of time we ended up developing a really smart algorithm that would catch cheaters, toss them out of the system and we created a really clean way of sending really high quality clicks to advertisers. It’s what made us unique. It’s what created the value for our service.

Aaron Dinin:

And what happened to that company? Did you just shut it down once you got your big Broadcast.com payout?

Chris Jaeb:

I just closed it down. I could have sold it but to me once the internet bubble crashed it was going to be twice as hard to sell all the advertising and I didn’t need the grind and I had enough money. I just paid everybody in the company really well and we said, “It was a great four year run, just time to figure out what’s next.” And I even gave them all the opportunity, “If you guys want to build this and grow this at this time I’ll give it to you. I don’t need it.” They didn’t feel that they had the expertise to want to do it so we pretty much just folded in 2002.

Aaron Dinin:

So it almost sounds like had the Broadcast.com stuff not happened e-Ads could have still have gone on to be a huge success.

Chris Jaeb:

I agree. It would have more like a DoubleClick because we were a little bit more leading edge. They were doing more traditional stuff because they had the bigger advertisers and they were really working from the cost impression down to the fee per click.

I was probably working more from the fee per click into almost a cost per sale model, which I still feel like has a lot more value than either one of the others because at the end of the day I would much rather prove that I can create a transaction than just create an identity unless people want branding, which is a totally different deal.

Aaron Dinin:

What Chris is talking about here is a pay per action advertising model, which in the late 90s would have really made e-Ads one of the first companies operating in what ultimately has become an enormously profitable industry. What this tells us is that well, we obviously can’t know for sure what would have happened to Chris’s advertising company in some sort of alternate timeline that doesn’t include Broadcast.com’s huge success.

It seems fair to say Chris’s luck wasn’t entirely a fluke. After all by the time he got his big payout for Broadcast.com he was already operating a profitable business that was at the leading edge of another huge market. And for what it’s worth, Chris still managed to make some good money off of e-Ads, which remember, was spelled E-A-D-S and owned the domain name eads.com.

Chris Jaeb:

Aerodynamic Defense Systems. We had the URL, eads.com. So we were out of business. Now it’s 2009, 2010 and we knew that E-A-D-S was the URL they wanted. They came, they offered us $1 million for it in 2005. We go, “nah, we’re not going to sell it.”

Five years later we’re out of business. We’re thinking why don’t we sell it back to them? And we offered it to them. They go, “Nah, we’re not interested.” Then my software guy goes, “Why don’t we make it a porn site? It’ll make them want to buy it because everybody’s going to go thinking it’s them but it’s just porn.” Within two weeks they offered us $2 million.

Aaron Dinin:

Okay, so maybe that extra $2 million he made off of e-Ads was mostly luck plus a little creativity too, I suppose. Either way, it took a lot of work to get to that point, along with one other really important factor.

Chris Jaeb:

It was me having faith in me. It was me believing it was possible. That was the only thing that made it possible for me to believe that when I was first learning about data transmission that I could come up with a company that could make it possible for anybody in the world to hear anything in real time globally.

To believe that I wanted it enough to know that other people wanted it and to have the faith that I could figure it out. Now, I think that’s true with any entrepreneur, they have to believe in themselves enough to know that they can learn as they go and they can put the pieces of the puzzle together. If you don’t have that confidence or that faith I feel you just never really get going.

Aaron Dinin:

Belief in yourself. According to Chris Jaeb, that belief, more so than an idea or skill or luck is what’s most critical for entrepreneurial success. After listening to his story what do you think? Let us know. We love hearing from our listeners. You can find us on Twitter. We are @WebMastersPod or message me, I’m @AaronDinin. That’s A-A-R-O-N-D-I-N-I-N. You can also find lots of other articles and content about startups and entrepreneurship over on my website, aarondinin.com.

I’d like to thank Chris Jaeb for taking the time to speak with us and share his story. He’s actually come out of his semi-retirement/seclusion recently and has begun working with young entrepreneurs. I’ve got to say, even though we couldn’t fit it into the episode during our conversation Chris had some incredible insights about sales and customer acquisition. So he’s worth talking to if you’re looking for some great mentorship.

Also, worth talking to, especially if you’re interested in buying or selling an internet business is the team Latona’s. Remember you can reach them at latonas.com.

Before we wrap up I also want to make sure I thank Ryan Higgs, our audio engineer for his work pulling together this episode and one final thanks to all of you for listening. To be sure you get the next episode as soon as it’s released don’t forget to subscribe to Web Masters on your favorite podcasting app. If you do I, promise you’ll hear from us again in just a few days. Until then, time for me to sign off.