The Jay Kim Show #42: Kent Wu (Transcript)
Today’s guest is Kent Wu. Kent is a serial entrepreneur who was the founder and CEO of airsplat.com, a company he recently exited, which is the largest airsoft retailer in the US. Airsoft, for those of you who don’t know, is a sport similar to paintball in which participants eliminate opponents by hitting each other with spherical nonmetal pellets launched via replica weapons called airsoft guns. Airsoft technology is used by many law enforcement agencies and military units for force on force training drills.
After his exit, Kent recently launched his new company, which is called Milk and Eggs, which is a farm direct artisanal fresh food delivery service which is rapidly expanding in Southern California. He shares with us today his exciting entrepreneurial journey and key insights and lessons he learned along the way. Let’s jump right in to the episode.
Jay: Hi, Kent. How are you doing? Thank you so much for coming on The Jay Kim Show. We’re excited to have you.
Kent: Likewise. It’s great to be here and great to be speaking with you again, Jay.
Jay: It’s been a while since we caught up last, but maybe for the audience, you can give us a quick intro. Who is Kent Wu, and what do you do for a living?
Kent: Sure, so I guess you could call me a serial entrepreneur. Started my first business in 2001. We did relatively well for about 15 years. We made it into Inc. 500 about, I think four or five years in a row, and also made it into Internet Retailer’s Largest 500 Internet eCommerce, so I started that back in 2001, exited that, or sold it in 2015.
Kent: It was about, close to 15 years.
Jay: Nice, so you’re a serial entrepreneur. Your first business you, 15 years, you were very successful, exited, and now you’re working on your second business. Let’s just run through what the first business was and then we can just talk about that for a bit.
Kent: Sure. Fine with me. The first business was called AirSplat, and we sold airsoft guns, paintball guns. Essentially we focused on shooting sports. Anything tactical, anything shooting. It was predominantly male, but it was a lot of fun for a lot of, I guess a lot of us, including the people inside the company. That’s what we focused on.
Jay: Right, so airsoft guns, maybe you could give a little bit of background on that because, so for me personally, I’m not really a, I don’t know, gamer or someone that actually does this type of sport, but obviously paintball is, a lot of people have heard of and I think that I’ve even tried paintball a few times myself. Airsoft is something that I’m not as familiar with, so maybe for our listeners that might not be familiar with what airsoft is, you could give us a little quick primer on what airsoft is.
Kent: Sure, sure. By all means. Airsoft is essentially the little plastic pellets, six millimeters in diameter, and the big thing is that they really enjoy the military simulation aspect of the sport. There’s a lot of role playing, a lot of sportsmanship, a lot more shooting, less so much, it’s very strategic whereas paintball is much more tactical and what they call speed ball, where it’s a force on force. We sold both, so we were intimately familiar with both sides of the equation.
Jay: Okay, so now, is there a lot of crossover in that community, or are they seen as competitors? Like, “Okay, you’re a paintballer, I’m an airsofter,” like how does that break down?
Kent: Yes. That’s a great question. Initially it was not a lot of crossover, and paintballers looked down upon airsofters, until maybe, I want to say about 20, the early, 2013, 2011. Airsoft actually was on the same level as paintball, at least in popularity. At that point, there were people that had transitioned both ways, and people, it’s like skateboarding and BMX-ing or biking. It’s just dependent on the users. There were some, there was a certain segment that transferred both ways and there were certain people that were just die hard, one side of the, very, very polar. One side of the spectrum.
Jay: Right, okay, so now, let’s take a step back now. You said you started that business in 2001, so how did you get into this sort of business? As someone that not only is not really a gamer and really educated on paintball or airsoft, it seems even more foreign to me how you would even get into a business like this. Were you a airsoft/paintball enthusiast? Is that how you got into it? Tell us a little bit about your early days as an entrepreneur.
Kent: Sure. Initially I was not an avid player on either paintball or airsoft. I had played both once or twice. Really what spawned the company was in 2001, which is when I started the company, this was, as some of you guys may know, some people may remember, have been around long enough to remember this, but that was during the dot com bubble that had blown up. There was a minor recession during that period, specifically in the eCommerce space. I had gone to school specifically for, it wasn’t computer programming or computer science, it was more cognitive, user interface design, somewhat peripheral to computer science, but I still ended up being in the IT industry.
The recession affected me, and I essentially couldn’t find a new job. At the time I was AOL-Time Warner, so I was there for, I was in the You’ve Got Pictures department. It’s the forgotten child of You’ve Got Mail, so You’ve Got Mail, and they’ve got the You’ve Got Pictures, and they had a cooperative partnership with Kodak. Essentially You’ve Got Pictures, it was the second tab over, under You’ve Got Mail. It was there for a while.
Kent: Yeah, I know. It was fun. It was pretty cool. I was there for a short time and the recession came around and they essentially closed our office. We were down in Irvine, Orange County, and they closed our entire branch, our entire department. It was gone. I spent a few months looking for a new job, and my decision at the time was okay, I’m going to give this a good try, and out of necessity I can’t sit around idly forever, so after, I told myself after four months, if I’ve found nothing, then I would just start my own business, because I really had no choice.
I remember, two months into that, a friend had come to me and said, “Hey, have you tried this thing called airsoft? It’s really cool. It’s just like paintball but it’s better.” Looked at it and said, “Okay, wow. This looks pretty cool, so let’s try selling this.” This is 2001. Yahoo was the number one search engine. It was a very different time. Google was just starting. eBay was huge. I formed a company and started selling online, on eBay as well as on our own website.
Jay: Now when your friend approached you, was it, it was specifically like, “Okay, let’s try to sell this,” or was it like, “Hey, have you ever heard of this sport? Let’s try to play it?”
Kent: Yeah, it was more of the latter actually. Believe it or not, it was more about the, “Let’s go play,” but in my mind, I’m sitting there going, I’ve got nothing to do. Playing is great and all, but I got to do something with my life here, right? I got to find a job or I got to find a career. I felt like there was opportunity, at least in this space. It seemed like it was early on enough, and you say this a lot, but I feel like I was very fortunate, very lucky to have been at the right place at the right time, noticed an opportunity and really just took advantage of it. We did really, really well. Yeah.
Jay: Let’s talk also about when you, so you started off working for a large corporation, and that was obviously what felt safe and felt like the right thing to do. You’re based in California and working at one of the largest tech companies back then. How was your parents and family with you, during this time, when you, obviously they were probably happy when you joined AOL-Time Warner and probably worried, concerned when you lost your job. Then during that transition time when you said, at some point you were, put a stake in the ground and you said, “I’m going to do this entrepreneurship thing,” how did that conversation go with your parents?
Kent: That’s a great question. My parents have always been very supportive and to some extent they could see the bigger picture, so they knew two years after graduating, early 20s, you’re still very early in your career. They both had MBAs, and I, this is one of my big regrets is not getting an MBA myself, but I always told them I wanted to go back and get an MBA. They always actually discouraged me from doing so, saying that you can always go back any time you wanted to, so go do something now. Anything, just go do something.
When I said I wanted to start a business, they talked to me and asked me if I was sure about it, that it was endless hours and that it was very hard work and that it was sometimes unrewarding and sometimes very relentless and sometimes very punishing, and that if I did want to do this that I would have to commit to it at least with a full effort and not a half hearted, do it for six months and then bail. They had that conversation, and as long as we had that conversation and we were all on the same page, they were like, “Go for it.” I took essentially, I had $15,000 from what I had saved up from AOL-Time Warner, borrowed $5,000 from my mom, so I had $20,000 seed and I started the company essentially.
Jay: That’s amazing. It sounds like your parents are actually quite supportive, and that’s, I think that’s, it’s fortunate of you that they were supporting you, but I think that a lot of people, they fantasize about becoming an entrepreneur because it’s the cool thing to do and even more so now, entrepreneurship, that word gets thrown around like crazy. Everyone wants to be an entrepreneur. It’s so cool to be an entrepreneur, but not a lot of people actually know before they start how difficult it is to be an entrepreneur.
When your mom or you dad told you that this is something you have to commit to, you can’t just bail after six months, I think that is sound advice. The fact that they were able to, I think when it comes to, a lot of Asian, first generation Asian parents into the States, they were entrepreneurs, but it wasn’t called entrepreneurship. It was called survival, right?
Jay: They’re very, a lot of them are very successful entrepreneurs and grinded it out and did everything they could to make their business successful. They just called it life, right? I think this notion of entrepreneurship is quite interesting because it’s become, people romanticize about being an entrepreneur but-
Kent: Yeah. Agreed.
Kent: It’s really weird because I, essentially been an entrepreneur this whole time, for the last 15 years or 16 years or so. I’ve noticed that transition, and I want to say, probably in the mid, probably 2005, 2006, when that transitioned over and people started even talking about the small businesses, the startups, and that was even, prior to that, it probably wasn’t even, at least in my mind, it wasn’t even a topic of discussion. It was interesting because back then, even for me in 2001, even opening a credit card merchant account or processing account was, they made us jump through hoops and hurdles. It was unheard of.
Kent: Like, “Who are you? Why do you want to process credit cards for,” like, “and why would you want to?” It was a little foreign back then. It is interesting to see how the pendulum has swung in such a opposite direction.
Jay: Yeah, and I think part of that is because it is now easier to start a business than it ever has been because of the internet and all the commoditization of these ancillary service providers and services that are required to start a business.
Jay: You can literally jump online and do it in a few minutes, but it doesn’t necessarily, I think that it doesn’t necessarily make the entrepreneurship journey any easier. Maybe at the initial outset, but to be a successful entrepreneur and to really deserve that title, I think it’s a lot harder than most people think.
Kent: Yes. I couldn’t agree more. Absolutely.
Jay: Yeah. Okay, so let’s continue on the journey. You had $20,000 seed and you basically, what was the business model? You basically started sourcing the equipment and selling it stateside?
Kent: Yes, correct. Source the merchandise, list it on eBay, so for a while we used eBay. Again, this, at the time, I think eBay was, middle 90s, so at 2001, eBay and Yahoo were probably at their peak. At the time eBay, we used eBay as a launching pad. We had our own eCommerce but that was just, at the time it was a little odd to buy things online. At least it wasn’t mainstream yet. Buying on eBay was a little more acceptable, but buying online in general was not.
We used eBay as a launching pad and we did some marketing. We were, one thing we keyed into, or I keyed into very early on was Google AdWords. We were one of the beta testers. At the time, we were one of the first ones to use it and we picked up on it relatively well and it drove a lot of traffic to us and it did very good for us. Same thing for a couple other products that don’t exist anymore, but yeah. We were very good at leveraging some of the tools and some of the resources that were, that existed at the time.
Jay: Yeah. With limited budget and your boots strapped, you really have to be creative and just think of ways to use that little bit of resource and leverage that to make an impact. Okay, so two questions now, Kent. Was there a point, A, that you were going to toss in the towel, ever, in the early days? Then the second part of that question is, at what point did you feel like, okay, we’re good now, we’re going to be successful?
Kent: I’m sorry, that-
Jay: Big questions, I know.
Kent: For the first one, you said was there ever a point when I felt we were going to tap out?
Kent: I get asked this question a lot. In general just from friends. It’s really interesting, and I think unless you’ve run your own business or had your own business, you don’t fully appreciate this, but I had a friend that worked at Microsoft and Bill Gates would say this over and over again, and I really, I think it’s very, very true. Even at that time, Microsoft was huge. This is early 2000, 2003, 2004. There’s never a moment when you feel the company is stable. There’s always some variables that you feel that could catch you off guard, and almost, proverbially, overnight.
Essentially overnight, people could put you out of business. There’s always that, and believe it or not, from experience, I’ve learned this reflex that anytime I feel comfortable and complacent, that the business is doing well, to be very alert and careful and be on the lookout for anything that’s going to pop up and catch me off guard because it seems to always do that. It seems to, that seems to be inevitable. Every time I feel comfortable, something decide, comes out of left field and totally takes me aback, and I’m just, I’m a little out of bearing for a second.
Jay: Yeah. I think that’s good instinct. Like you said, there’s so many successful entrepreneurs, echo that advice, and essentially, my two questions were answered in one answer, which is basically nearly every day or there could be something wrong. Maybe not to the point of tapping out or tossing in the towel, but that’s just part of building a business. Then at the same time, you should never rest on your laurels and get too complacent or comfortable.
Kent: Absolutely. Correct.
Jay: This leads us to actually the next segment of your journey, which is, you recently had an exit.
Jay: Congratulations about that.
Kent: Thank you, thank you.
Jay: I guess after you sold the company you could finally relax for a bit. Tell us a little bit about the exit, why you decided to sell your baby that you grew for 15 years from your house with $20,000 of seed capital. Why did you finally decide that you, it was time to sell?
Kent: Yeah. That’s a great question, and thank you for calling it my baby. I used to firmly believe in that, but 12 or 13 years into it, you, okay, I think she’s old enough now that you don’t refer to it as your baby anymore. It’s not really yours anymore.
Jay: True, true.
Kent: Really, believe it or not, that’s how I felt. Around 12 or 13 years into it, we were large enough that really I was working on the strategic level stuff, bigger picture, financing, business development kind of things, very little operational matters. It really felt like it was not so much, it was very mature, at least, at that point. It felt like it was almost, I don’t want to say cruise control, because it never really is on cruise control, but at least operationally you wouldn’t have to worry about it.
You do have to worry about potentially, who knows, legislation may pass or something may shift the, do a whole paradigm shift, and essentially you could be out of business. For me, my role at the time was to look longer term, bigger picture stuff, strategic and make sure that we were on track and that we didn’t get caught off guard by some of these things, but yeah.
About 13 years into it I had actually handed the operations off to my partner, so for the last two years I was really focused on working on other things. It was either doing other verticals that were complementary or flat out starting a new company. We tried a couple of verticals that did well, but they never really took off took off. What happened was in the last year, the industry got really mature. At the time, airsoft was actually larger than paintball.
Jay: Oh wow.
Kent: Yeah. Airsoft overtook paintball, and it was mature and it had reached saturation. We were doing great, and for me, I was like, okay, good. To some extent that was like, okay, so what’s next? How do we make sure we continue pushing forward? You look at companies like Johnson and Johnson, you look at Google, you see how much stuff they’re continually innovating and pushing out. My thought was, okay, there has to be something else.
Essentially I got a little homesick. I was a little, I was like, okay, where’s the growth potential? Essentially that’s when I decided, okay, I think it’s time to exit. I think it’s time to start something new. That happened about 14 years into it. We set our, positioned ourselves to be acquired and we did very well with, my partner did very well with running the business while I handled basically the acquisition and the sell off, and then while they were doing that and while we were working that out, I started on the new business as well.
It was a one hand on, one hand off, but there was never any time when I had, “Oh, I have nothing to do. I’ve sold my business and now I’m just going to sit back and relax.” That unfortunately never happened, and believe it or not, my wife complains about that all the time, that there was no, there wasn’t a break somehow in between there.
Jay: Yeah. I think that you at least deserve a night out with your wife or a beach vacation or something like that.
Jay: That’s a great story though, Kent. I’m happy for you. Again, congrats on the exit. After you made the decision that you were going to exit, then you basically, you said you positioned your company to be acquired, so it was just, literally just very strategically approaching potential companies that would buy your company? Was that basically your strategy, or was there already people that were interested?
Kent: Exit is actually pretty tricky. Exit involves both knowing what the industry is like, knowing the potential players or the potential buyers, and then usually you actually have to change your business model just slightly to accommodate a smooth transition or potentially make yourself more palatable or more enticing for the buyer. We spent about a year wrapping up on that and gearing up for that, and that’s part of the staging or the ramping up for the exit, and then going to potential buyers and suitors and having discussions with them.
Jay: Right, and was there any sort of trailing agreement where you had to stay on, or your partner had to stay on, or the employees-
Kent: Yes, so they absorbed about 80% of our employees and then they kept my partner on for six months. That was part of the deal. That worked out really well, actually. It freed me up to allow me to start the new business and ramp up on the new business and then actually start it once we exited. That was, worked out perfectly actually.
Jay: Amazing. Okay. Yeah, so tell us about the new business.
Kent: Sure. The new business is called Milk and Eggs. It’s milkandeggs.com, and essentially we’re a online farmer’s market. We’re a farm to door ala carte, and it’s more than just farm to door because really we’re artisanal foods. It’s all farms, artisanal foods, everything local and sustainable, aggregated and delivered to your door.
Jay: Wow. Okay, well, so first of all, how did you come up with this idea, and secondly, I feel like it’s not exactly the easiest segment to go after.
Kent: Oh wow. Yes, you absolutely hit it on the head, yeah. The one, yes, it’s, I’m going to answer them in reverse order.
Jay: Okay, okay.
Kent: Yes, it’s not the easiest. In fact, it’s the hardest because we actually only do perishables. 90% of our products are perishable, and perishables are the single hardest commodity to handle, both because of the temperature requirements as well as the perishability of the commodity. The goal was intentional. What happens is if you can do something that’s very difficult but it’s a niche and you’re very good at it, you can always go downstream and you can always do the easier things.
We, by intention, are doing that space because it’s, one, the hardest, two, it’s the least competitive because it’s the hardest. It has the hardest barrier to entry, and three, you can always move downstream after that. You can always bring on the easier stuff to carry. How we came up with that, that was actually pretty interesting. It’s a culmination of several things. To put it, make it easy, essentially is I saw the opportunity. I saw the trend and I reverse engineered a way to be competitive or offer a value in that space. That’s very generic terms.
Jay: Well, it makes sense though, right? When you see, it’s almost like when you see something that’s working but you think that you can do it better.
Kent: Yeah. Absolutely. Correct. Yeah.
Kent: You see people doing it or you see companies doing it, and you see companies trying to do it. You see Walmart first, three or four years ago, in their Supercenters, and then Target doing it two or three years ago, about two years ago, and then you see the farmer’s markets. Then you see the trend towards natural foods, and then you figure out, okay, where can I be competitive in this space and offer something of value to consumers? What are they missing in this bigger puzzle? Then you come up with a business model and then you test it and then you go to market.
Jay: Wow. Amazing. I love hearing entrepreneurs, successful entrepreneurs that basically, exactly what you said. It’s like, we actually picked a difficult market to go into and tackle. I think that, there’s a lot of crossover when you, as a businessman and an entrepreneur, the skills of running a business no matter what sort of niche or segment or industry it’s in, there’s a lot of things that are just central to doing business.
I love hearing stories about entrepreneurs that just find a niche that they can potentially dominate and just go after it, because most people would be like, okay, come on. Not another artisanal food delivery type service, but hey, if you can find that and dominate it, then it can be extremely lucrative, right? The thing about artisanal products is that they have such a strong customer loyalty. When you build something or create a product that has artisanal value, once a customer, always a customer, that sort of thing, right?
Kent: Right, absolutely. Not only that but you have no one, you have very little competition that’s fighting for this business because really, you’re not going to buy it at the supermarket, right? That’s exactly it. It’s, where else can you get this? You have to get this because it’s made by Joe or it’s made by Tony or it’s made by Melissa, and only Melissa can make it this way.
Jay: Right. Kent, thanks so much. We’re going to look to wrap up here. I really appreciate you coming on and sharing your story. It is amazing. Your journey has been great to hear and amazing, and I’ve heard bits and bobs since we know each other from before but, and also congrats on the exit. Last couple questions, so first one of the last, let’s say the last three I’ll ask you is, who do you look up to or draw inspiration from? Is there one or two people that, along your entrepreneurial journey, that you’ve looked up to that have helped you along the way?
Kent: Wow. There are several. Some intimately and some more, know of them. Intimately I probably would want to say my grandfather has been a great inspiration, just his work ethics and his ambition and vision and the fact that he did so much with so little as well, more than I think I’ll ever be able to accomplish. It’s amazing to see what, for the lack of a better phrase, hard work and a little bit of a working smart and doing the right thing, where it gets you. I think more of a knowing of, and looking up to, not so much on a personal level, I want to say are two people. Probably I want so say Bill Gates and Elon Musk. Those two are very just, I think they’re probably on a lot of people’s lists, but they really are quite exceptional.
Jay: Right. Iconic. Well, thank you for sharing that. Second to last question is, how do you, Kent Wu, want to be remembered? When you’re older or maybe you’re not around, you’re a serial entrepreneur, you’re still, you’re just beginning. You’ve exited one company, you’re very far into your second and I’m sure that you’re the type of person that will be building companies probably the rest of your life. How do you want to be remembered?
Kent: That’s a great question, Jay. I like that one. It’s a big picture question. I would like to be remembered as someone that had an impact, that improved some, either a certain industry or a certain community or, people refer to it as a legacy, but really it’s more so they, we had a positive impact in a specific space or a certain group of people, to a certain group of people. That’s what I would love to be able to have, leave behind or be remembered for.
Jay: That’s awesome. Good answer, and the last question is much easier, is just, where can people find you, follow you, connect with you? I’m not sure if you are active on social media, or if you have a website that you want to direct people’s attention to, by all means.
Kent: Sure, so I’m on LinkedIn, it’s under Kent Wu. I think you should be able to find it in a search. If you’re looking for the new company, it’s milkandeggs.com, you can take a look. Hopefully we’ll be spreading out. We’re currently only in LA, Orange County, but hopefully this year we’re supposed to be expanding into other cities and other states.
Jay: Great. Awesome, so milkandeggs.com and Kent Wu, you’re on LinkedIn. Great. Thanks so much, Kent, we really, I had really enjoyed catching up with you and hearing about your story. Thank you for sharing all your, your journey with the audience. I think they’re going to get a lot out of it, so we appreciate having you on the show.
Kent: Thank you, Jay. It was great being here, and it was a pleasure.
Jay: All right, thanks.
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