Roger Ver's Business Story - EP02 - Growth, Tax & Setbacks

My business is starting to get some name recognition within the other dealer to dealer marketplace and got up to around. I think eight or twelve people at this point and then then I got arrested. [ Music, ], beanie babies.

I don't know how many people are old enough to remember beanie babies. I used to play a lot to match the gathering and the local match of the gathering card shop sold, matching the Gathering cards and beanie babies.

I don't know how that came to be a combination, but that was his business niche and I struck up a deal with the owner of this card shop to sell his merchandise online. So I listed all of his match: the Gathering cards and all of his beanie babies online to sell on the Internet, maybe 1997 or 8 McDonald's had a big thing where they had teeny beanie babies and McDonald's sold the Teeny beanie babies, for I think 3 or 4 bucks each, but he had to buy a food item.

So me and my friends, we would drive from McDonald's, location to McDonald's location. They had a limit of 10 per person. So we would order 10 apple pies, because that was the cheapest thing on the menu and 10 beanie babies and we wound up with way too many apple pies, that I never need.

Another McDonald's, apple pie ever again, but we had lots and lots these teeny beanie babies. Then we could turn around and sell on eBay and on Usenet and sell them on the internet for six seven, eight dollars each and then I still remember the most popular expensive was Bongo the monkey and Bongo the monkey would sell for like $ 13 each because There were a lot less of them, and so we could sell all these on on the Internet for almost double or in some cases triple.

I don't care about beanie babies at all, but I saw that there was a way where I could take a product from where they're worth less and move them to where they're worth more anyhow. Any voluntary interaction with anyone anywhere makes both people better off.

The people that bought the beanie babies are the match, The Gathering cards. For me, they valued those beanie babies more than they valued the money that they gave me and I valued the money more than I valued the beanie babies.

So both of us were richer after the trade, because the value is into each of our minds, not in the beanie babies or the pieces of paper for the dollars or those are the magic cards, and that's. Why the more free trade we can enable around the world and the more we can allow people to trade whatever it is.

They want to buy and sell with anybody in any voluntary transaction. Everybody's richer after the trade, otherwise the trade won't happen. So I remember when I started buying these computer parts and selling them online, and it was just amazing how many were available and how cheap they were and how much more we could sell them for online and to people all over the country and all over the World I'd, had a normal job before and I had received paychecks and I saw the taxes taken out of the paychecks and I was like.

Oh, I was a little bit annoyed by that, but, like didn & # 39, t really have the full understanding. Until I realized like wait a minute. I'm buying these computer parts from somebody and then I'm selling them to other people, and then I have to charge the people that I'm selling.

The computer parts that I bought. That belonged to me. I have to charge them an extra. It was like. Eight percent was the sales tax back then, on top of the price that I'm charging them for and then at eight percent.

I have to give to some other people that I've, never met and unless we fill out a bunch of other paperwork and then I don't have to charge in the 8 %, because somehow the paperwork changes that - and I Remember apologizing to so many of my customers, because I really felt guilty like there was this third party intruding into our transaction.

I wanted to sell a hard drive. This person wanted to buy it. I think when I really started to feel and see firsthand just how crazy a lot of these tax things are. So if I had just stayed home playing video games every day, I wouldn't have to send these strangers in Sacramento any money whatsoever.

But if I worked really hard all day buying computer parts and posting ads online and answering emails and shipping out these computer parts to people, then I have to send a whole bunch of extra money to somebody.

I've, never met in Sacramento. That really didn't make any sense to me at all. The idea was starting to creep into me there that people should pay for the things that they use and in the products they consume and the services they use and they shouldn't pay for the ones that they don't and Just like when I go to Starbucks, I only pay for the coffee that I consume and I don't pay Starbucks a percentage of my income for the coffee.

I pay them whatever the price that the coffee is so then, when we have all these government services, why shouldn't, I just pay them, for whatever the price of the service is rather than a percent of the amount of other stuff.

I'm doing and I should have the ability to say no, I don't want to buy Starbucks coffee, but with Starbucks I had the ability to say no. With with governments you're forced to participate, and so philosophically I think that's, a really really big problem, but the business grew and grew, and I had to hire a couple more people to help me and then I ran out Of space in that first little office, then I moved to bigger one.

Things were really starting to go and my business was starting to get some name recognition within the other dealer to dealer marketplace and got up to around. I think eight or twelve people. At this point and then then I got arrested because I was selling all these computer parts in a very, very small part of the business as well, mainly because it was something I like, I loved firecrackers as a kid, and there were a bunch of people selling A firecracker on eBay, it was called a pest control report mm, and I saw I said: oh, I can buy them over here where they're, worthless and sell them over here, where they're worth more.

The first order I placed was from Cabela's. Sporting Goods catalog it's; the number one Sporting Goods catalog in the entire United States. If you've heard of the video game, big deer hunter - that's from the same companies for Cabela's Sporting Goods, so I bought them from them and then used them myself.

I thought oh, these are great. These were lots of fun and I saw that they were selling for more on eBay, and then I found a distributor where I could buy them for free, even cheaper than Cabela's and then sell those on eBay.

So I did the math a long long time ago. I think the actual explosive material was like less than a pound. I became the only person in the entire country to be prosecuted for those while ended up signing a plea deal to do ten months in federal prison.

At that point I had like maybe 12 employees and the business was really going well. I think I'd, have to go back and check my records, but I think we were coming up on being able to do. You know over a million dollars in sales a year and had to lay basically everybody off, except for one guy, and then I hired my mother to help oversee him.

While I was in prison because there was still enough money being made from just the sales coming in via the website, it was a sad sad day when I had to lay everybody off and basically scale back the entire business, and it went basically on pause.

While I was in jail waiting to be let back out, and so when Bitcoin came along, I knew I knew that people gonna start using these money. [ Music, ]