Sam Seliger is X-Team's Head of Strategic Accounts. Based in California, Sam has had a long career in business development and sales. He also started his own company, invested in another, and became a mentor at a prestigious management school. These are the business lessons he learned along the way.
Hi Sam, thank you for taking the time to talk to me. Tell me about the business you started. Why did you start it and what's it about?
The business is called Lemonlight. I started it with a friend and another acquaintance after working at a SaaS company called Chownow. Both my co-founders and I saw a hole in the market: a lot of people were looking to sell SaaS to local businesses, but weren't providing tangible value.
So we came up with the idea to film high-quality, low-cost digital commercials for these businesses, and a recurring revenue business model by distributing those videos as ads.
Nothing revolutionary or mind-blowing, but because of our efforts in the first year we were able to bootstrap the business. It remains profitable, has grown to over 30 employees, and pre-COVID was on track to have its best year ever. I am on the board of directors and still advise the company in my spare time.
So you're selling high-quality, low-cost commercials to local businesses. Got that. But you're distributing those videos as ads too? How does that work?
That was the original business model. Film high-quality, low-cost commercials in various cities around the country. My business partner and I had a massive database of local businesses with verified email addresses, so we spent an entire year just flying into a region, driving around, and pitching random people.
The original idea was to get monthly recurring revenue from distributing the videos online via social media, YouTube ads, etc. So we’d make up for the low margin on the video production by running the business’ ads for them.
This didn’t work out as planned. As anyone who has ever done marketing knows, it’s extremely difficult to prove ROI. Most small, local businesses do not have a massive budget for ad spend. It’s hard to make a dent with a restaurant when you can’t tie actual customers back to the ad spend. It’s a little easier for something like a gym, since they typically ask where they heard about the establishment on sign-up.
Over the years, like any other business, Lemonlight has adapted and grown. The company no longer focuses on distributing any advertisements — solely on video production. The average cost for a high-quality brand video or commercial went from $1,500 in the first year to around $15,000 today. This is simply because the team works with larger businesses now.
What was the biggest challenge growing Lemonlight? The biggest problem you had to solve?
Although we started with a massive database of around ~800,000 leads with personal email addresses, we eventually exhausted that list. So we had to come up with a new solution for outbound sales.
In the beginning, our other co-founder (and current CEO) Hope Horner handled all of the marketing initiatives. She would do email blasts for myself and Chad (the other co-founder), setting us up with meetings as we flew/drove around the country. Once we exhausted our lead list, I had to come up with some ideas.
This was about 7 years ago, and during that time many business owners were in the process of figuring out how to use Facebook pages properly. A lot of them signed up their business using their personal email address. I had a friend of mine build a scraping tool for a small amount of money that was able to successfully scrape 300+ leads per hour.
This basically saved the business in the first year. I don’t know how else we would have come up with a large database of new leads to go after, as buying databases is typically not a great idea.
You're also an investor. Why did you decide to invest and what type of investing do you do?
My only active angel investment is in a Brazilian jujitsu clothing company, called É Nòis. It’s an investment of both time and money, as I helped the guy who started the business ramp up marketing and sales efforts. We were able to increase revenue by 100% in my first year involved with the business. Now that it’s running pretty smoothly, they don’t really need my help all that often.
How did you come across É Nóis and why did you decide to invest?
I’ve been training in Brazilian jujitsu for about 6 years, and one of the guys who started my gym is also a businessman. He founded É Nòis ten years ago, but it started mainly as a lifestyle brand and a way for him to design uniforms and T-shirts for the gym. Eventually, he decided he wanted to expand it and make the brand bigger.
The founder is a super smart guy, but he is a lawyer by trade. So I came on board to help him out with various sales and marketing efforts. COVID has put a major damper on the business for now, as most people are unable to safely train due to the pandemic. Having said that, we have plans to expand and/or exit whenever the craziness in the world dies down.
You also said you mentor at UCLA Anderson?
Yes. The CFO of my previous employer was also a professor at UCLA Anderson, a top-10 business school in the US. He took a liking to me and invited me to give a guest lecture at his class. He teaches the entrepreneurship path at Anderson, and usually has me come in to speak about either sales strategies or how to build software, or both.
In my official mentorship capacity, I am responsible for advising students at the Anderson Accelerator, judging student businesses on a bi-annual basis, and participating in panel discussions. This is all quite hilarious to me as I barely escaped undergrad, and I have no desire to go to business school.
As a mentor, what are the best students like? Are there unifying characteristics that link them together?
It depends on what the student is asking me. Normally, I’m brought in for advice on how to build software — so I’ll answer that. The best students are ones who are taking the Entrepreneurship path for that specific reason — they truly want to start a business after leaving the program, or potentially even during the program. Those who are knowledgeable about the pitfalls of developing software are infinitely easier to speak with than people who come from other industries.
I spend a lot of time walking people through the global landscape of development options, how much things should cost, and where people might be able to find folks to work with. I would say that >90% of students don’t actually end up pursuing their projects after graduation, which is about right. Starting a business is easy; making a successful one is extremely difficult and only for people with a strong will.
Finally, as an entrepreneur, what’s your single best piece of advice you’d give to someone who wants to start a business?
Be prepared to fail. Be prepared for challenges. No one becomes successful overnight, and there are no shortcuts to hard work. The younger you are, the higher your risk tolerance should be. If you don’t go for it now, when will you do it?
Exactly! Thanks a lot, Sam. Best of luck with your future endeavors.