February 24, 2024

An online side hustle that replaces your $100K salary in year one!? It sounds like an impossible feat, but today’s guest was able to achieve this by launching an unusual ecommerce business—allowing his wife to quit her job and stay at home with their kids full-time!

Welcome back to another episode of the BiggerPockets Money podcast! Today, we’re chatting with Steve Chou, a serial entrepreneur, ecommerce influencer, and founder of MyWifeQuitHerJob.com. When Steve’s wife became pregnant with their first child, he was faced with the challenge of finding a side hustle that could replace his wife’s 9-5 income. Of course, living in Silicon Valley isn’t cheap, and replacing a $100K salary is much easier said than done. Despite these hurdles, Steve was able to turn one brilliant idea into a profitable business that has managed to grow every year since 2007.

If you’ve always wanted to start your own side hustle but are unsure where to begin, this episode is for aspiring entrepreneurs like you! Tune in to hear Steve share about the humble beginnings of his handkerchief side hustle, how to find ecommerce success in 2023, and achieving financial freedom without burning out. As always, Mindy and Scott bring their own financial expertise to the table and deliver some timely wisdom!

Mindy:
Welcome to the BiggerPockets Money podcast where we interview Steve Chou from mywifequitherjob.com and talk about starting a business that doesn’t take over your family time. Hello. Hello. Hello. My name is Mindy Jensen and with me as always is my, his wife quit her job co-host, Scott Trench.

Scott:
Thank you my, her husband quit his job co-host, Mindy Jensen.

Mindy:
Scott and I are here to make financial independence less scary, less just for somebody else to introduce you to every money story because we truly believe financial freedom is attainable for everyone, no matter when or where you are starting.

Scott:
That’s right. Whether you want to retire early and travel the world, go on to make big time investments in assets like real estate, start your own business or enable your spouse to quit their job, we’ll help you reach financial goals and get money out of the way so you can launch yourself towards your dreams.

Mindy:
All right, Scott. Today we are talking to Steve Chou and in the beginning of the show, I might give him a little bit of hassle for his current side hustle, which is selling handkerchiefs online. I should disclose that I am a handkerchief user myself, so my jabs at him are in jest and I’m not sure that they came across, but I really wanted him to explain why that was the product that they started selling when they had literally the entire catalog of the world to sell and they focused on handkerchiefs.

Scott:
At the beginning of the show, I really believed you that you didn’t use handkerchiefs, so you really pulled the wool over me and Steve over our eyes today.

Mindy:
Scott is full of puns in this episode, so if that’s your thing, stay tuned, you will not be disappointed. But before we jump into today’s show, we have a money tip. This is the money moment where we share a money hack tip or trick to help you on your financial journey. Today’s money moment is, take advantage of all of your work benefits. How? Read. Read the documents that your HR department provides you. Some companies offer a wide range of benefits outside of the standard healthcare and 401k, including gym memberships, tuition reimbursement, adoption assistance and more. But you won’t know what’s offered if you don’t read through everything. So make sure you read through all of your documents and ask your HR department questions because you could be missing out on some pretty sweet benefits. Do you have a money tip for us? Email [email protected]
Steve Chou is the founder of mywifequitherjob.com. He’s been featured in Forbes, the New York Times in MSNBC. He’s an influencer in the e-commerce space and got his start selling handkerchiefs on eBay. We’re going to talk about that. Steve, welcome to the BiggerPockets Money podcast. I’m so excited to talk to you today.

Steve:
I’m so happy to be here. And Scott, we met many years ago, it’s great to be back in touch again.

Scott:
Yeah, it was like eight years ago at FinCon, right?

Steve:
Yeah. You weren’t running BiggerPockets at the time. I think Dorkin was still on it, right?

Scott:
Yeah, I was so amazed when he invited me to the Cool Kids Club, which include you, Jim Wang, JD Roth, a whole bunch of other OG personal finance folks. So it’s an honor to speak with you again and thanks for coming back on the show.

Steve:
Yeah, happy to be here.

Mindy:
So Steve, let’s jump into your background and your money story. Where does your journey with money begin?

Steve:
Yeah, Mindy. I was always brought up to go to school, and this maybe is because I’m in a traditional Asian family, but I was taught to go to college, find a job, work at that job for the rest of my life. And then that’s that, get married, have kids. But what was funny is I ended up starting a business selling handkerchiefs and that led to a blog over at mywifequitherjob.com because I started documenting that business, which led to a training class, which led to a podcast, which led to a YouTube channel, which led to an annual e-commerce conference that I run. And I’ve just come to learn over the years that the way I’ve been brought up, it’s kind of wrong. Sure you can go to school and get a good job, but I think the only way to make life changing money today is to have some sort of side hustle.

Mindy:
Okay. You just said you sell handkerchiefs. I know two people who use handkerchiefs, my dad and my friend Ray’s dad. This seems like an outdated product to sell. Why did you choose handkerchiefs?

Steve:
Mindy, those are fighting words.

Mindy:
Oh, I’m sorry. How many people do you know that use handkerchiefs?

Steve:
All right, so here’s the backstory. When my wife and I were engaged to be married, my wife wanted the perfect wedding. And she cries a lot, not because I make her cry, it’s because whenever she’s happy, she starts crying. We paid all this money for photography for our wedding and she knew she was going to lose it at the altar. She didn’t want photos of her, drying her tears of joy, with a ratty tissue. So we looked all over the place for a handkerchief. We actually could not find anywhere in the US. Finally, we found this factory in China, but there was a minimum order of, I think 200. So we ordered 200, we used maybe a handful of them and then just to get rid of the excess, we listed them on eBay and they ended up selling like hotcakes. So fast-forward three years, my wife became pregnant with our first child.
She wrote to me and she said, “I want to quit my job and I want to stay at home with the kids.” And I’m a firm believer in that because my parents, I didn’t get to see them as much as I would’ve liked. Problem is she was making six figures at the time. We live in the Silicon Valley, which is very expensive, and you pretty much need two incomes to get a good house and a good school district. And that’s when we remembered the handkerchiefs from the wedding and we decided to open a store selling handkerchiefs. That’s the backstory.

Scott:
What was the store called?

Steve:
Our store is called Bumblebee Linens. There’s a story behind that name as well. So my wife, when she got laser eye surgery, she had to wear these bug-eyed covers to protect her eyes, and I just called her Bumblebee that entire time. And so that’s how we came up with the name. Pretty random.

Scott:
So you stumbled upon this space, looking back, why do you think it was so successful of a niche?

Steve:
I think it was successful because there is demand, unlike what Mindy says for handkerchiefs. I think the pieces of fabric in themselves aren’t in demand, but it’s all about framing the product in a different way. So we sell most of our handkerchiefs to brides and grooms who want their initials on it as a keepsake. We also sell them for funerals, we also sell them for baptisms, and there’s just all these uses for them. But if you just say handkerchiefs in itself, not that interesting. But if you frame it in a different way, all of a sudden there’s more demand for it.

Scott:
So it is a positioning element in terms of how you position an age-old product that’s been around for hundreds of thousands of years.

Steve:
I will say this, Mindy, you are correct. Most of our customers are over the age of 45, the people who collect handkerchiefs, who don’t buy them for weddings and that sort of thing.

Mindy:
So you’re targeting a specific person on a specific day for a specific use? You’re not just selling random old handkerchiefs?

Steve:
Random old handkerchiefs-

Mindy:
Well not old but like-

Steve:
They’re not used. They’re brand new. But there’s two classes of customers, the people for the occasion, and we get those people primarily through Google search because they’re actively searching for something. And then for the other people who collect them, we have a different way of positioning things. We tend to carry the styles that those people tended to use when they were kids or their parents tended to use when they were younger.

Scott:
Awesome. So what did this business look like from a revenue standpoint and how did it lead to what, I suppose, as your wife quitting her job and then staying quitted?

Steve:
Yeah, what was funny is, we managed to replace her salary of $100,000 in profit in our first year. And so what ended up happening is, as soon as she became pregnant, we started working on the business and by the end of her maternity leave, we had enough to replace her salary and she could have quit good conscience. Our backup plan of course, was that she would keep working, which was not ideal or we just live on my income. So we had a backup plan.

Mindy:
When did your wife actually quit her job?

Steve:
She quit her job as soon as her maternity leave was over. So that would put it around 2008-ish, 2008, 2009.

Mindy:
And she immediately started working at Bumblebee Linens?

Steve:
Yes. So it wasn’t glamorous. We were actually running it out of our house. Our garage was our warehouse. And so we set up these racks in the garage. And so what was nice about that, was that our baby at the time was going to bed at 7:00 PM And so from when our baby went to bed until we went to sleep, we would fulfill the orders. That’s incidentally one of the bonuses of running a business. You can time-shift everything. So even though it’s a lot of work still, you can work on it whenever you feel like it.

Scott:
So I have a question about this, you did this in 2008, 2009, somewhere around that time period?

Steve:
We started in 2007.

Scott:
2007, okay, great. And at that time, I imagine, the space was a little bit less crowded, this was more of a novel concept. It feels really crowded today. It feels like it’s packed. There’s no more niches or niches depending on what you prefer, to go and actually find an opportunity to stand out. How would you go about it today if you were starting over and trying to find an e-commerce niche?

Steve:
Yeah, so I will say this. I think today everything is a commodity for the most part. Think about how many apparel stores there are. Think of how many gadgets there are. Nothing is new and nothing, I would argue, has been new for a very long time. It’s really how you position the product. It’s really about the emotions that you can convey when you buy something. So let me give you an example. You guys familiar with the brand Dr. Squatch?

Scott:
No.

Steve:
They sell soap for men. Now if you ever watch one of their commercials and if you want to Google them, what they’re really selling is sex. So these commercials are of women going, “Oh my God, you smell so good, I just want to jump you right now.” It’s all PG. And then as a guy, you’re watching this and you’re like, “Hey, I want my girlfriend to pay more attention to me. Maybe I’ll start using Dr. Squatch.” But they’re just selling soap that you can pick up at any store. So there’s this book called Cashvertising where they talk about what is called the Life Force Eight. And if you can invoke these eight emotions and it’s like survival, keeping up with the Joneses, sex. There’s a number of them. There’s eight of these emotions that you can invoke. If you can invoke them in your product, whether it be through a commercial or story, you can sell pretty much anything.

Mindy:
Steve, can you tell us about your approach to e-commerce?

Steve:
So the way we sell today, and this is actually the way I teach it, is you want multiple ways of getting people to your store and you want to sell in as many different places as you can to just maximize your reach. Some people prefer to shop on Amazon, some people prefer to shop at boutiques and some people prefer to shop on eBay, for example. So I try to be on as many different platforms as I can. The way I like to get traffic is all inbound. So one prong of our store is SEO. So we put out content like these could be wedding crafts, it could be craft supplies, it could be just wedding tips or gift ideas and that sort of thing. People find us on Google, they buy the products after they find us. The second prong is paid advertising. So we advertise on Google, Facebook, Instagram, you name it.
And the third prong is repeat business. And a lot of people throw starting your own brand and all a brand is really, if you think about it, is just repeated exposure to your content and your products. And so the way we bring people back is, I try to grab an email as well as an SMS number and I just send them out content on a regular basis. And they might not be ready to buy when they get our content, but when they think about getting a wedding handkerchiefs, they’ll think about our store. So those are the three main ways we get our business today.

Scott:
Which one of those should you start with if you’re aspiring in this business, is it attack all three simultaneously or is there one that you recommend as the first lever to pull?

Steve:
If you’re just starting out, I would just pick one thing. And they all kind of go in different phases. So I know just from teaching my class that some people need quick wins. So if you want quick wins, you want to see a sale which will get you excited to continue on, paid advertising is probably the best way to get immediate sales. But you want to have a long-term way of getting traffic to your site. And so this is why I always advise, “Hey, in the beginning just pick one thing.” But always have content in the background and you don’t have to post that frequently, maybe once a week or once every other week, but over time it compounds. And I remember when we first started our store, I think it took maybe six months for SEO to kick in, but now that just generates free traffic for us every single month.

Scott:
What would you say to someone who says that SEO is dead with the arrival of AI?

Steve:
Yes. Okay. So I think honestly that SEO is going to change dramatically for content-based sites. But have you guys used the new Bing?

Scott:
Mm-hmm.

Steve:
Okay. So the new Bing, if you do an e-commerce search, you still have to go over to the site in order to make the transaction. The only hard part now is you have to rank in the top five in order to show up in the AI search. If you’re doing a content site, it’s going to be completely different because AI’s just going to give you the answer. So I think content sites might be in a little bit of trouble, I think e-commerce is safe for the time being.

Scott:
Okay, so it’s just a little bit more competitive, but the concepts don’t really change for SEO marketing for e-commerce sites, as long as you’re in the top five and are truly one of the best.

Steve:
And I don’t want to get too complicated, but there’s going to be apps for AI where you can actually program your site directly into it so you can actually make transactions on the AI. I plan on getting into that when that finally comes out.

Scott:
Okay. Awesome. We’ve talked about how to get started in marketing your site and we talked a little bit about positioning, but what are the steps or processes that you’d encourage or coach somebody who’s new to this, to getting started in e-commerce? What would they do first?

Steve:
I think the first thing that you need to do is you need to figure out what you want to sell. Because if you don’t have anything to sell, there’s no commerce in the e-commerce part. So the best way I would say to brainstorm products to sell, is to look at your own problems. Let me give you an example. I actually just got back from a trip from Japan and unfortunately it rained during one of those days. I was trying to hold an umbrella, use my phone, and then hold all the junk that my kids had bought at all the souvenir stores and it was getting a little bit out of hand.
Then I saw this guy and he had this umbrella duct-taped to his backpack and he was hands-free. I was thinking to myself, “Hey, what if I just made a contraption where it’s just some sort of harness that you wear where you can just plug an umbrella in and all of a sudden you’re walking around in the rain hands-free?” I don’t think I’ve seen that product anywhere yet, and I just saw it in Japan with this duct tape setup. Maybe that’s something that I would sell that would do really well.

Mindy:
Ooh, create that before somebody hears this show and steals your idea.

Steve:
Have you guys seen that ever? I don’t think I’ve seen that ever.

Mindy:
If I was going to see that, it would be in Japan, they are so creative. Japanese inventors are so creative with great products and like weird… Why would you ever think anybody would ever buy that product at the same time? But that’s a good one because I don’t need to use my phone and hold all the crap that my kids have now, but when I had a baby, I would try… You can’t hold your baby and an umbrella and a baby bag and all this other stuff. The applications are literally endless, Steve, and since you came up with that idea or announce it on our show, I think we should get a cut of the proceeds.

Scott:
Yeah, someone’s going to use it and they’re going to make a lot of money and they’re going to make it rain. So thank you Steve.

Steve:
There you go. Giving away all my ideas on your podcast. But it will make this episode a lot more special, so I’m all for that.

Scott:
Okay, so we’ve got this idea for the hands-free umbrella, how do we identify the market that we’d sell it to?

Steve:
Well, okay, so for that particular product it’s easy because everyone can probably potentially use that product. If I wanted to get really granular, I would probably target the northwest part of the US, so Seattle and Oregon where it rains nine months out of the year and maybe just focus on that market first and see how it goes.

Scott:
Okay, awesome.

Steve:
I’m surprised you haven’t asked about how to produce this.

Scott:
That is the next question we should have asked there, yes. How do I design, invent it and then produce it?

Steve:
Okay, so here’s the common misconception. The common misconception is you actually have to know how to design something in order to create it. But there’s all these factories, let’s just take China as an example. They’ve worked with the US for a very long time and they’re willing to make stuff for you under your own brand so you can actually sell it under your own brand like Steve Brand or whatever you want to call this thing. And so I would go and I would probably approach umbrella manufacturers actually, and I would say, “Okay, I want an umbrella that hooks into a harness.” So instead of putting the handle, I would just make it a cylinder and then I would find another harness manufacturer, maybe like a backpack manufacturer, just to stick a little hole, like a little tube on it. And so they could just stick the umbrella into the tube. And they are willing to make small modifications to their product for you.
The only catch is that you have to find the right size factory that will work with you because you do have to purchase a minimum order quantity. So if I were to just start from scratch here, I would probably go to the factory and try to get this made. And the first thing you need to do is you need to order a sample. You give them your specifications. This doesn’t need to be a schematic or anything, you can just draw it on a napkin, just go back and forth and say, “This is what I’m looking for, can you make it?”
And then you order a sample. A sample is going to be more expensive than in production because they’re making it custom for you. But then you get the sample, and sometimes you can get a number of samples from different manufacturers, all you got to do is just try to sell it. I would probably just go on maybe some Facebook group for Seattle or Oregon or I don’t know, who would use these. People who like to hike maybe and don’t like to get wet or maybe moms who need to carry their babies, just like you said, Mindy. I would just try to sell these and whatever it took to get me enough courage to actually place a bulk order of these items from the factory.

Mindy:
So I used cloth diapers on my children and one of the brands that I used was called FuzziBunz and I was watching Shark Tank and I saw the creator of FuzziBunz come on the show and share how she had $3.9 million in sales and $20,000 in profit. And they were like, “Whoa, those numbers are awful. What happened?” And she said, “One of my overseas partners knocked off my product and sold it out from underneath me. So there’s all of these products out there that aren’t really mine.” How do you prevent intellectual property theft when going overseas?

Steve:
So that definitely can happen and it has happened. I’ve partnered with an intellectual property lawyer to handle these cases, actually. I don’t want to get into the law too much since that’s not my area of expertise, but the answer is to register the copyright for that and trademark your brand, of course. If someone’s going to sell that under your own brand, that’s trademarked, that’s actually illegal and you can actually get them to stop selling that item. Similarly, if they copy your design and you have a registered copyright, you can prevent them from selling on a marketplace. Also, you can actually go over, and believe it or not, this kind of blew my mind too, you can actually prevent the factory from making it, if you register the copyright and the trademark in China, which is something that this lawyer does as well. So you can actually nip it in the bud over there. You just need to do these things ahead of time before you get too far into the sales.

Scott:
What does all this cost to get into it? I’m trying to get my first backpack hands-free umbrella product out, what am I going to be showing up in legal fees, production costs, marketing, before I earn my first dollar in revenue?

Steve:
That is a hard question to answer because I don’t know anything about this example that I just gave you guys, like how much it would cost. But how much does an umbrella cost? Maybe, I don’t know, $15 in the US. So which means that they’re probably paying less than three or $4 to make the umbrella, I’m just guessing. And then for the harness, let’s just say it’s like $4. So let’s say you can make this thing for $8, at quantity. And I’m just throwing out numbers here. But typically in a factory when I order something, I order a minimum anywhere from 200 to 500 units. So to make this product just back of the envelope, including customs and everything, I would say you probably need eight to $10,000 to make this product.

Scott:
How much does it cost to hire a lawyer to register in the US and China?

Steve:
Oh, the trademark and the copyright and that sort of thing? I would say to get a trademark, if you want to do it yourself, I think the fee is like $300 to register a trademark. You know what’s funny, we actually didn’t register a trademark for a very long time. Most people are worried about getting knocked off, but what they don’t realize is if you’re getting knocked off, you’re already doing pretty well. So this cloth diaper person, I would imagine that they’re still doing… If they did a good job of branding, and cloth diapers is one of those things that you have to keep getting them over and over and over again, it just means that that person probably didn’t do a great job of branding, because I know especially in the cloth diaper space… I want my kid to have the best chemical-free cloth diapers, and those are things that I would put in my value prop. And that Chinese person who got knocked off, I’m willing to bet that they didn’t do a good job, they’re probably just competing based on price.
So you want to focus on the benefits and whatnot and then people will buy from you, because as I mentioned earlier, everything is a commodity. It’s really how you portray your product and the value props and the emotions that you can instill. So if I were that person on Shark Tank, I might say, “Hey, you’re probably seeing our product cheaply knocked off from China, but what you don’t realize is that it was probably produced with chemicals or whatnot.” I don’t know. I would find out more.

Scott:
By the way, our umbrella idea’s already been done. There’s like several different hands-free umbrellas out here-

Steve:
Oh, no. Are they really?

Scott:
There’s one that attaches to a backpack. There’s one that attaches to your head and it’s like a chinstrap kind of thing.

Steve:
There you go.

Scott:
It was a good… But they’re all low rated. They’re all like four stars or below on Amazon. So maybe there’s a better product out there.

Mindy:
Let’s talk about reviews. When you are on Amazon or a similar website where you see a product and it has three reviews, you instantly think, “I’m not going to buy that because nobody else has bought it either.” How do you get reviews if nobody’s had your product and how important is it to have reviews if you haven’t sold anything yet? It seems like a chicken and egg thing.

Steve:
Correct. Yeah. So if you’re selling on Amazon, that is absolutely the case. And if your goal is to sell an Amazon, what I would recommend that you do is sign up for the Amazon Vine program. This allows you to give away up to 30 units. And these are people in the Vine Program that are… Their job is actually to review stuff. And you can get up to, I would say 25 to 30 reviews right off the bat. Now usually what happens is as long as you have some amount of reviews, that’s good enough. Three is a little low, but if you start out with like 25 and they’re good reviews, that’s usually good enough and you have to be very deliberate about asking for them.
So in Amazon there are these tools that you can use that automate the asking for reviews, and then you just build up gradually that way. On your own site, however, that’s a different story. You don’t necessarily need to have reviews in order to make sales. It helps of course, but the important thing to remember is that if you are selling something with no reviews, you don’t advertise the fact that you have no reviews, likes or shares. You literally just hide those counts and you’re okay in the beginning.

Scott:
I’ll give you a personal example. When we launched Set For Life, my book, five or six years ago, you can’t just have your friends and family write reviews. That’s unethical. It’s not in the bounds of there. So what I did is, I said, “Everyone who buys the book on Amazon, send me a receipt and I’ll give you this bonus content.” It was a webinar that I was going to do just for those folks, a spreadsheet, whatever. And then I said, “Thank you so much, here’s your thing. And by the way, I would be very grateful if you left me a review on Amazon.” And I sent a personal message to over 2000 people over the course of a few weeks. And many of them, not all of them, then left a review, often a five-star review. I think that controlling this process is really important in the early stages of launching a product, because you want to get your customers, your happy customers, the ones that you know, to leave you a good review, most of the time. What is your response to that approach?

Steve:
That is brilliant. In fact, I always leverage my email list and people tend not to leave reviews organically. I would say the review rate on Amazon, probably around a percent or two, single digits. So anything you can do… And on Amazon, if we’re talking about Amazon, you’re technically not allowed to incentivize someone to leave a review.

Scott:
I didn’t say, you have to get the bonus content, you have to give me a review to get the bonus content. I said, send me your receipt. Everyone who buys at the launch will get bonus content for free. No review, no trade whatsoever. And then I said, “Thank you so much.” I asked a little bit about the person and then I asked at the end, “Would you mind giving me a review?” There was no incentive for it. It was just a, “Please leave me a review,” which is what Amazon wants. They want you to leave a review.

Mindy:
But he got the email because he said, “Hey, send me your receipt and I’ll send you the bonus content.” Then he’s got email that he can then say, “Hey, thank you so much. I’m glad you liked the book. Could you leave me a review?”

Steve:
That’s ingenious. That’s what I’m doing with my book right now actually. I’m actually not really selling the book, I’m selling the bonuses. I’m giving away a three-day class on e-commerce, a two-day class on how to make money with content, and I’m doing this six week family-first challenge where I’m going to help people with their first side hustle. And you get all that stuff instantly when you pre-order the book. So it’s similar. And then I’m going to use that list, Scott, once I have their emails, you’re right, to ask for reviews once the book is out.

Scott:
And it’s the same concept for selling anything on Amazon here. Now that we’ve brought it up though, what is this book? What’s the title? What’s it about? Can you give us some insight?

Steve:
Yeah. So the book is called The Family First Entrepreneur, and it’s about how to achieve financial freedom without sacrificing what matters most, and what matters most is different for everyone. For me, what matters most is family. For other people, what matters most might be doing things that they love, and it’s about doing more while working less.

Scott:
Awesome. Will the book highlight some of the topics we talked about today? Will it go into depth about how to build an e-commerce business?

Steve:
It’s not e-commerce focused, it’s more about getting that side hustle off the ground. We talked about AI earlier. I really do think that AI is going to disrupt a lot of jobs, and I feel like the way of the future really, in order to be safe from getting disrupted with AI, you really need that side hustle. Because I know in my area right now, a lot of my friends have actually lost their tech jobs. There’s mass layoffs going on right now, and if they had that side hustle, they would have something as a backup plan. And who knows, maybe that side hustle, maybe that little handkerchief business that you started could go on later to become something much bigger. But you have to get started. The first half of that book is really about getting the courage and understanding the need to have that side hustle and how to brainstorm ideas, like how we did earlier on this episode. And then the second half of the book really is about getting traffic and making it sustainable without killing yourself.

Mindy:
Ooh, let’s talk about that because you ended up on the Today Show, a small little program that a couple of people watch in the mornings. And after you were featured, it was a blip that you were just like, “Hey, they sell handkerchiefs, bye.” And then all of a sudden you are swamped with orders. At the same time your wife’s like, “I don’t want to do this anymore. I’m burnt out.” And I’m making light of her saying that because this sounds like, “Oh wow, what a hard problem you have. So much success.” But in reality, she’s been doing this. You didn’t start the company, instantly go on the Today Show, and then she’s like, “Forget it, I’m done.” She was running this for several years, six or seven years before the Today Show. And then you jump on the Today Show and all of a sudden there’s this avalanche of orders and she’s like, “I’m so burnt out, I can’t breathe.” How did you go from growth at any cost, to let’s pull back and have this relationship with my wife again? How do you not just ditch the business?

Steve:
So first off, she cried and those were not tears of joy. So what ended up happening is… I think most people don’t realize that when you get a sudden influx of sales like that, and it was seven x the amount of sales sustained for I would say about a two-week period, because the show was getting re-aired in different regions and it was probably the most miserable… I mean, I was overjoyed at the business. I don’t know if you guys remember the pets.com commercial or back in the internet, there’s this company that got a bunch of orders and they were cheering and then all of a sudden they got millions of orders and they had their heads down on the table. That’s how we felt because we only had three employees. We only had me, my wife, and one employee at the time to fulfill all those orders.
Like you mentioned Mindy, early on, I think my ego got in the way. It’s something like when you’re not used to making a lot of money, you want to put the pedal down in the metal every time. And so I was setting these insane goals for revenue and we’d hit them and then I would just move the goalposts the next year. Meanwhile, we’re making a lot more money than we’re spending. And that’s when my wife broke down. She was like, “Why are we doing this? We already make more than we spend. Why are we killing ourselves to hit some artificial goal that you decided to make?” And I think the reason why was, because I’m in a bunch of these mastermind groups with other entrepreneurs who are just so successful that I wanted to just keep up with them. And it was only after my wife broke down did I realize that, basically I have an ego problem. I’m doing these things, and I lost track of why we started the business in the first place, which was to hang out more with family.
So the way I resolve that today… Actually, let me just tell you another story real quick. I belong to this program called the Mayfield Fellows Program, and it’s this group at Stanford where they try to breed students to get funding and create the next billion-dollar business. So just to give an example, Kevin Systrom is a member of that group. And every year they have this retreat and we go around and we talk about what we’ve been up to, and everyone’s like, “Oh yeah, I just had a $400 million exit. I just had a billion dollar exit.” And it always comes around to me and I’m like, “Yeah, I’m still selling hankies,” and that always hurts me each time.
So I had this ego, and I think a lot of us have this ego and don’t admit it, but the way I resolve that today is we dropped all income goals after my wife broke down. And what I do today is, I just pick one thing to work on for the year and I work on it to the best of my ability, and whatever happens, happens. So this year is the year of the book. Last year is the year of the YouTube channel, and I managed to hit 200K subs. The year before that it was TikTok. The year before that it was Google Performance Max ads. So every year I just do one thing, I go all out on it and I try to do it well. So that’s how I have managed to quell my own ego.

Mindy:
So did you pull back on making new goals? Did you pull back on the actual goals that you had already set? Did you hire more people?

Steve:
I’m actually anti-employee, which is also a little controversial. Like if I can, and my background just happens to be engineering, if I can write a piece of code that can replace something a human does, I will do it. So we just happen to be living in this great era right now with AI. And I know it’s still kind of new, we’re in the beginning of the year, but I think today more than ever, you can probably get a lot more done with fewer people, with AI or software than you can in any time, in recent history. I used to be an engineering director and I used to have a group under me and they were great workers, but what I didn’t like dealing with were a lot of the emotional issues of being a manager. And most people don’t realize that when you have a large team, there’s a lot of overhead involved that goes way beyond the work. I used to just hate whenever I went to an event and people would ask me, “Oh, how large is your team?”
Because I sincerely believe that if all you want to do is make a couple of million dollars, you can do that with one or two employees. If you want to start the next Amazon or the next Facebook or the next BiggerPockets, then yes, you need a lot of employees. But for most family first entrepreneurs, you can probably just get by with a lot of automation.

Scott:
I think that’s a great point. I think there’s always two sides to the coin here though. And we recently had Codie Sanchez on, and she listed areas that she stays away from, which included e-commerce, consulting, a lot of these businesses that I think are right up your alley, and you have a very contrarian viewpoint to her, which is ironic because-

Steve:
I know that’s her contrarian thinking.

Scott:
But anyways, what would you say to that, to her philosophy and her instinct to stay away from Amazon or e-commerce or these types of businesses?

Steve:
I like her philosophy, if your goal is just to make money, because she specializes in boring businesses. But for me, if the business is super boring, then why are you doing it? So for me, it’s more than just the money. It’s something that actually keeps me interested, satisfies my ego at the same time and makes money. But you’re right, I agree with Codie, if your goal is to just make money. I might do real estate, for example, or I might run that laundromat, but do I want to run a laundromat? Do I want to run a car wash or an ice cube dispenser? That does not interest me at all. And I think a lot of entrepreneurship also has to do with longevity. You need something that keeps you interested. You don’t have to be passionate about it, but it has to be interesting in a way so that you want to keep going. So that’s my philosophy. We just have different viewpoints on that.

Scott:
Walk me through this concept of longevity. Is your business going to have longevity for the next several decades without you running it? Or is it automated and ready to go? I wonder if Codie would also argue her businesses have longevity. I would love your take on that.

Steve:
Yeah, that’s a good question and I don’t really know the answer. All I can tell you is I’ve been running our linen store for 15 years now, and every year there’s been growth. And for the blog, I’ve been running it since 2009, and both are seven figure businesses. Who knows what happens in the future? And I would argue that we’re ripe for disruption for a lot of these things. And maybe Codie is safer, I guess, because she’s going after Staples. But here’s what I always think with her stuff. If she manages to build a huge audience of people who are trying to do these boring businesses, there’s really not that many barriers to entry for that. So if enough people do it, then it will be harder. And maybe at that point it won’t be boring anymore and you actually have to leverage some creativity or some marketing to get more business. I think it’s kind of unknown. I don’t know.

Scott:
I think they all work. And you can be successful in this world with e-commerce, with consulting, with real estate, with any variation of real estate investing, with a boring business, with a tech business, with a public company, with a private company, with private equity, with venture capital. I mean, there’s people winning in every single one of these fields. And I think it’s just a matter of what resonates with you. And I think that your approach to dealing with, not building businesses that are centered around large amounts of people and operating overhead and those kinds of things, is very attractive and should be to a lot of people out there. And it’s something that you can run and run as a lifestyle business and provide a very, very good life and keep for many, many years if you maintain it and nurture it over time. And so I think it’s worth considering for a large portion of the population.

Steve:
I mean, I optimize for sleeping at night. If I can be self-sufficient in a way and depend on a computer which never complains, I would rather do that, because if I have a lot of employees… And we have this problem at Bumblebee Linens sometimes because we do have employees to pack and fulfill orders. Let’s say two of them decide not to show up, we’re in a little bit of trouble. So I kind of deal with both types of businesses at this point, and I would always like to err on the side of automation and robots as opposed to… That sounds terrible now that I’m saying it. Because if you’re in control of more of your stuff and you’re already making more than you need, that’s the ideal business for me.

Scott:
One last question that I have for you, which is, you surrounded yourself with entrepreneurs in this mastermind that are talking about $400 million and that kind of stuff, how did you arrive at enough? How would you recommend somebody else arrives at that word enough? Because I think that a lot of investors struggle with resetting dual posts.

Steve:
Yeah, so first off, I’m stuck in that group now. Actually, I don’t have to go to the retreats I guess. But I recommend that you first hang out with people that are in line with what you want to be. And so the question of enough really you got to remember why you started these things in the first place. And for me, my wife constantly reminds me because I’m always off trying to do some other thing and she’s like, “Okay, remember the reason why we started these businesses are for this.” And we actually have this document in place where we talk about not getting carried away. So I don’t travel more than maybe five or six times a year and we pay ourselves what we need to live, and then we treat the rest like gravy. And when you treat the rest like gravy, then all of a sudden making that extra money doesn’t matter as much.
And I already mentioned before how I keep my mind interested. I always have to be working on something just to keep my mind stimulated. So that’s why I just choose one thing to focus on for the year. And so the question of enough is going to be different for everybody, but I would think that the people… Since this podcast is called BiggerPockets Money, I would imagine the finances, you have to figure out how much you spend to make you happy. How much would you need to earn to make you happy? Pay yourself that first, treat the rest like gravy, and I think that’s a really good start.

Scott:
I love it. And the way you get there is, I think through a combination of all these things we talk about, your side hustle, a business that you can create, your active income from your job, how you invest it in stocks, real estate or whatever other asset class and love it. Cover what you need and have some gravy and you’re done. It’s that simple and that hard. And the approach that you talk about, Steve, is one great way to get there.

Mindy:
Steve, this has been so much fun. I always love talking to you. Where can people find out more about you and pre-order your book so they can get all that free stuff you have?

Steve:
Yeah, if you’re interested in learning about e-commerce, you can go over to mywifequitherjob.com. I offer a free six-day mini course. It’s a video course and by the end, you should know whether you want to do it or not. If you want to pre-order my book, that can be done over at thefamilyfirstentrepreneur.com. And I wish I picked a different domain because I always have problems spelling entrepreneur, but it’s the family first-

Mindy:
I was just thinking that same thing.

Steve:
Thefamilyfirstentrepreneur.com, and I’m giving out three amazing bonuses as I mentioned. First is a three-day workshop on how to get started in e-commerce, specifically print-on-demand, because print-on-demand, if you guys aren’t familiar with the business model, this is where you create a design and someone else fills the order. It’s a very easy, low cost way to get into e-commerce and I call it like a gateway drug. You’re probably not going to make life-changing money with this business model, but it’ll get you excited into trying these other things that we talked about like the umbrella idea, which is already taken. The second workshop is how to make money with content. So I have a blog, a podcast, and a YouTube channel, which collectively make over seven figures, and if you guys are interested in that, there’s a workshop on that. And then I’m doing a very interactive six week family first challenge where I’ll be in the Facebook group going live and basically helping you figure out what your next hot hustle’s going to be, because I really do think it’s important to have something on the side, even if you’re fully happy with your full-time job.

Scott:
Awesome. Well, we will link to all of those things. You don’t have to worry about the spelling too hard on the show notes, so go check those out.

Mindy:
Thank you, Steve, and we’ll talk to you soon.

Steve:
Thanks for having me.

Mindy:
Holy cat, Scott, that was an awesome show. I love Steve and I love that he is so giving of his information. We created a whole new product on this show, the umbrella backpack holder, except it already exists.

Scott:
But it’s not done well. No, at least that doesn’t seem to be for the reviews. I don’t want to insult whoever the backpack umbrella inventor is because it’s clearly selling something. But yeah, Steve’s a very smart entrepreneur. I love the fact that so many other of the financially independent guests we have, he not only has been successful in his career, but he’s settled on enough with his portfolio and prioritizes his lifestyle. And I think that, again, that’s a hard transition. We emphasize it here on the show, but it’s remarkably hard to find those people that do embody enough in their career and are happy and content and not necessarily striving for the next bajillion dollars or 400 million exit or whatever it is.

Mindy:
Yeah, I really liked his answer on that. I love what he’s doing. I don’t think that we gave his bumblebeelinens.com website address when we were talking to him, but the handkerchief I think is an interesting business model. I love that they’re focusing on specific people. They have an idea in mind. They grew too big, decided, “Hey, that’s not what we need. We’re going to step it back a little bit.” And now they do have enough and they are focusing on more of a steady, I don’t want to say slow growth, because they’ve been running this for 16 years and every year has grown, but it’s more sustainable. Instead of this frantic mad rush, how much money can I grab, sort of thing.

Scott:
Yeah, I think he’s found the right pattern for his business.

Mindy:
Oh, look at that. I told you in the beginning, Scott’s got pun after pun after pun, and he just brings it all the way to the end. All right, Scott, should we get out of here?

Scott:
Let’s do it.

Mindy:
That wraps up this episode of the BiggerPockets Money Podcast. He is Scott Trench, and I am Andy Jensen. In honor of Steve’s wife who quit her job, we’re saying Bumblebee. BiggerPockets Money was created by Mindy Jensen and Scott Trench, produced by Kailyn Bennett, editing by Exodus Media, copywriting by Nate Weintraub. Lastly, a big thank you to the BiggerPockets team for making this show possible.

 

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

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