This High School Dropout Went From $0 To $200 Million In Revenue In 12 Months
High school dropout Derek Wall just built a $200 million in revenue business in less than 12 months, without raising any outside capital to do it. Even crazier, this is just one of many companies he has started since his teens. In a recent interview on the DealMakers Podcast, Derek Wall shared the inside scoop on how he has built multiple businesses, how he is disrupting a multi-trillion dollar market by solving problems even Alibaba, Rakuten, eBay, and Amazon are still grappling with, bouncing back from failure, and many more topics. From the Surf to Inventing Snowboarding & Creating 7 Brands in a Day Wall’s father was a startup guy in the semiconductor industry. Since childhood, he had a lot of insight on how to start a company, how to build cubicles and move into a new facility. His dad was really at the heart of a technology revolution from a component perspective and was often in New York raising money and overseas in Japan monitoring subsidiaries. Being a very frugal guy, Derek didn’t really realize how successful his father was until someone told him he was the top paid guy in the Valley one year. This is someone who chose to drive a diesel VW Rabbit to work and parked next to Ferraris and Lamborghinis, even though he could have easily afforded one. Surfing was a big passion, and he mastered the water from Santa Cruz to Dana Point. Still a teenager, his friends were some of the top surfers in the world. One got dropped from a brand when the company ran into financial trouble. The next day, there was a Bible sitting on the kitchen counter. They picked it up and plucked out a name. Ezekiel clothing was born. A surfing brand now in Nordstrom worldwide. They bootstrapped it by trading in the inherited Rolex watches, using credit cards and selling door to door. Something Derek still does to this day to stay in the fundamentals of his business. While always having a penchant for conquering the world, Derek has never wanted to be involved in just reinventing the wheel. In fact, he came across his next idea to build a company when his surfing friend and a nuclear engineer, Mark Freeman, showed him his invention - a snowboard-making machine. As a result, Derek invested every single penny he had, including credit cards, into creating what would be his next company, Crown Distribution. Their first brand called Purged Snowboards was then followed by 18 other brands. In a single day, they created seven new brands to satisfy all the distributors in Japan that wanted to move their product. All done by fax machine, and immediately putting $3.7 million in orders in the bank. In just two years they had grown to a few hundred employees and sold it to a public company. Derek was still just 24 years old. Taking on Tech Derek’s passion was still around building technology. A 24-year-old kid who had just sold his company for millions, he moved to Malibu and lived the life of a kid who was irresponsible, spending money in a really unsustainable way. That was his segue into meeting his brother in law and starting his first tech company, Techstore, out of a barn on a farm in Marin County. Techstore was monetizing big computer distributors. He drove down to San Jose, raised around $100 million, acquired other companies, and then the big stock market crash hit. The timing of the crash as he was right in the middle of a huge fundraising round. His life unraveled right after the market crash. The stock that was worth hundreds of millions of dollars was gone, he lost everything. It left him starting from scratch with nothing. He became overnight a much humbler and kinder person. After that, this founder had a couple more hits in tech. He helped the founding team behind PriceGrabber, which eventually was acquired by Experian for $485 million. He then went on to found BuyNow a subsidiary of Buy.com with its founder, Scott Blum. Buy.com was later acquired by Rakuten for $250 million.
After the acquisition, Derek built VAULT, a fashion marketplace platform, under the umbrella of Rakuten. The company went on to become a big success. Unfortunately, due to certain disagreements with Rakuten , he decided to leave everything behind, moving to Miami. Once he was in Miami deciding what he would do as the next phase in his professional career, Derek took on angel investing and mentoring other startups. When Derek looks at a company for investment, he says he’s not investing in the idea. Not investing in their technology. Not investing in the patent-pending. Not investing for any environment that they're in or the location. He’s investing in the entrepreneur. For him, what makes it or breaks it is 90% the founder and maybe 10% the idea. He is looking for someone that is smart, dedicated and humble. Someone that literally takes the backseat and allows his organization to rise. That is the best leader from his perspective. When considering making an investment, Derek is all about how entrepreneurs think. How they interact. How they work in stressful environments, work as problem-solvers, and are willing to change. HUBX: From Zero to $200 Million in 12 Months Derek decided he wanted to try once again as an entrepreneur. While attending HBX Harvard Business School, he saw a multi-trillion-dollar industry out there that needed to be fixed. That was B2B commerce. This led to $200 million in revenue in just 12 months with no investors or any kind of outside financing. Below is a screenshot of their Google Analytics showing their impressive revenue numbers.
Among the problems facing big companies in the industry like Alibaba, eBay, Rakuten, and Amazon are that their marketplaces result in many customers and sellers circumventing the system. At Amazon alone, this is a multi-billion dollar problem. Many manufacturers and distributors are also getting stuck with millions of dollars in product.
HUBX is disrupting this problem by creating one of the first anonymous marketplace platforms that connect worldwide B2B buyers and sellers. The company‘s infrastructure gives manufacturers, distributors, vendors, buyers, and customers the ability to connect and communicate anonymously.
Derek and his team built and produced $60 million in a beta test. In 2018 they shipped to 101 countries. Their mobile phone revenue is growing 100% week over week. Derek says “it's turning into an ATM. It's changing things.” Listen in to the full podcast episode to find out more, including:
Using credit cards to finance a business · Bouncing back from failure · Building a team of passionate individuals · Identifying gaps in the market · How to filter through 800 resumes for talent · What to ask during interviews potential employees
