Founder and CEO of StreetModa.com - Matt Kubancik

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Matt had a passion for fashion, and was an entrepreneur at heart. So at 18 he started an online clothing company from Louisville.

He said it wasn’t going well ’til he found the help of a mentor. Learn what Matt’s mentor taught him to help make his business a success! (Plus why he doesn’t consider himself a really smart guy)

Go to StreetModa.com for more info!

Thanks so much for listening!

Any questions or comments on the podcast let me know!

Transcript:

Welcome to the Eventual Millionaire podcast with your host, Jaime Tardy. Real talk and real advice from real millionaires, with a sharp focus on you, the eventual millionaire.

Welcome to the Eventual Millionaire podcast. I'm Jaime Tardy and today we have Matt Kubancik on the show. I really am excited to have him on the show. The reason why is actually I got an email from a listener that said, "This guy is really cool, you should totally interview him." So I got him on the show. I'm really excited. He owns a site called Street Moda and it does designer clothing at affordable prices and I'm really excited to talk to him because he has got a great story on how he started it and he's ridiculously young too so that's cool. Thank you so much for coming on the show today, Matt.

MATT KUBANCIK: Thanks. Thanks, Jaime, for having me. How are you doing today?

JAIME TARDY: I'm good. Let's start getting into it. I read your site. I did a bunch of research on you having to do with this person going like this guy is really cool. I get that a lot. I get a lot of emails of people going you should interview so and so. I'd never heard of you before so I was really excited to check you out. When did you start your site and why did you think starting a clothing and shoe site was a good idea?

MATT KUBANCIK: I started selling on eBay when I was 13 years old. A friend of mine, Andy Estes, who now owns a software firm that I am part of, Agile Harbor, we write inventory systems for ecommerce retailers. Started selling on eBay when we were 13/14 years old back in ‘99/2000. Then we just slowly developed a few different businesses and kind of realized shoes and apparel worked the best for us. It was the highest margin and it seemed to have the highest velocity.

I always kind of had a passion for fashion so I started Street Moda by myself when I was 18, in high school, and when I was 19, I was in a warehouse. Had two employees and I met a mentor that has been my mentor ever since. His name is Jerry and he has been in the shoe business for 45 years. I met him when I was 19. Wasn't very successful from 18 to 19 and he kind of transformed my life the old school shoe mentality, shoe dog we call it way and he had businesses in New York and Chicago and really transformed my life so I kind of took the internet marketing aspect and fashion knowledge I had and just kind of developed it myself along with his guidance as a business advisor because I never went to college.

That's kind of how I got started. So right around 18/19 and that was in 2005 and today it's 2012 and we've grown tremendously about tenfold from where we were in 2006/2007. We're just growing rapidly. We're up about 30/40 percent year over year from 2012 to 2011 and we're investing a lot of money into the new website and a lot of our non-profit charity efforts. So that's kind of where the company is now. We're an online retailer of shoes and apparel in women's and men's and it's a destination price point so it's very price sensitive. We're an off price retailer so we tend to see 30 to 80 percent off retail prices. Some vendors make us adhere to certain MSRPs so we do respect them and we listen to whatever the vendors have but we do offer that, free shipping, free exchanges and easy returns.

So there is a smart label in every box which normally you really only see with a lot of regular priced retailers. We try to offer that. Not only are we offering 30 to 80 percent off but also free exchanges. So if a lady orders a pair of shoes a size 7 and she wants a 7½, it's real easy. Just stick the label on there and you can ship it back for free and we ship you out a 7½ for free. Then we offer low cost international shipping. Thirty to forty percent of our business is around the globe and we definitely give a shout out to the international customers because they are a big part of our business.

JAIME TARDY: That's awesome. First of all, are you like 26? How old are you?

MATT KUBANCIK: Yes, I just turned 26 three weeks ago.

JAIME TARDY: Jeez I said you were young. So you started a business when you were freaking 13 years old, which is a little ridiculous. Usually people at 13 are like dorky and trying to get into girls. But no, you were on eBay like hardcore. Are you still dorky? Okay, good. Hardcore working on business stuff. What made you get into business? Is it just something that happened or was your family into business? Like what made you decide to start doing that?

MATT KUBANCIK: My father is very old school conservative type of person. He always worked in a corporate background but he was always like you got to work for a living, you know, very hardcore conservative type of mentality and I kind of grew up with that edge. I think that kind of triggered it. My grandparents owned a fabric store so I guess I had clothing and fabric in my blood. I was in high school and I started working at Backyard Burgers and Subway, in the normal teenage jobs that people do and I didn't want to dip fries my entire life. You know what I am saying?

I saw the only opportunity is to do it myself so I worked. People always told me I couldn't do anything. I went to a BMW dealership in my freshman year of high school and he goes no I think you're better off looking at a Honda and not think you belong here and then a year after I pulled up in a Certified Pre-Owned BMW. So it's like you know.

JAIME TARDY: You're like yeah.

MATT KUBANCIK: Then I tried to figure out how to do it. I'm not a smart person at all. I have a lot of smart people around me in my life and that's what I depend on. I'm good at a few certain things. I nail it down to there and then I hire people who are smarter than me in other categories of business and let them do their thing and give them a part of the business as an incentive, if they want it. I'm successful.

JAIME TARDY: Really? That's the thing, so do you think that's like an asset of yours of going well I don't know everything. A lot of the times entrepreneurs will go no I can do it all, I'm awesome, you know, let me do it all. But it sounds like the opposites really work for you. You're like okay I'm good at this. I'm going to do this stuff and then I am just going to find really amazing people to do that other stuff.

MATT KUBANCIK: It can be positive but it can also be negative. Not to put a political spin on it but if you kind of look at the Bush presidency he kind of was the person that was like very much so dependent on people that were kind of his father's friends or something that were very thought of as high level people and honestly we all look back at the presidency most of it was a failure. Towards the end, if history repeats itself. If you look at that aspect, it can backfire and be a failure on you. In my term, and most of the time it has been successful.

There's two types of people. There's people that have their hand in everything, as a business owner, like you said that try to know everything and then there's people that say, I'm not good at ABC and D but I'm good at E and I need to find somebody that knows that." What I kind of find as the perfect model is a little bit of hybrid of both. You kind of have to know how to do ABC and D and if you're really weak at D but AB and C you're able to know enough about and do it yourself for a few months and just really learn, whether that be getting on the ground floor of your warehouse, answering emails in customer service, you know, knowing everything on the ground floor and then hiring people and teaching them that process.

Knowing that they're better than you, at that process, but knowing that you know enough to know where you can still check up on it. So I kind of find it a hybrid of both of hiring people that are smarter than you but not totally just throwing them off the deep end and still continue to work with them and stuff.

JAIME TARDY: That's super cool. My mentor always called it the difference between delegation and abdication. So delegation where you give them a task but you make sure they're doing it and checking it and you sort of already know what they should be doing whereas abdication is like you do it and then you realize later that maybe they haven't done it or something like that and you weren't even in it at all. So that sort of sums it up. That's awesome.

At 18, 19 years old you're like okay I am going to start this business. Number one, when you are 18 or 19, you said 2005 ish? So that wasn't like the hot 2000s bubble or anything like that. What made you decide to get into clothing which number one affordable pricing of clothing which is lower profit margins usually in general and have tons of competition. So what made you decide to get into that at that moment?

MATT KUBANCIK: It's something that I had a passion for. I had a passion for fashion and I believe, I'm at the key where you can be successful in whatever you want to be in if you have the passion for it. You know what I am saying? It's really just a matter of how hard you work. So if I had a passion for electronics, I feel that I would have been successful in that. I don't have a passion for technology. My main phone is still a 3-year-old Blackberry Curve. I do have a smart phone as a second line but I don't have a passion.

I don't need the newest app for everything but if my passion is fashion, then I'll figure out how to form a niche in that market. I'm not zappos.com. I don't have everything for everybody, but if I can form a little niche in the marketplace and be successful and know what I am good at and not try to be what everybody else is then, at the end of the day, you can really do whatever you want to. It's just kind of about hard work. I never went to college; it's just how hard do you want to work and how hard you work.

JAIME TARDY: So tell me about from 18 to 19 where it sucked, because a lot of the times we see success stories and we're like oh you're awesome. Sweet. Good. Everything must have gone perfect for you. You're 26, have amazing companies, that sort of stuff. Tell me about the really crappy times when you're 18, 19 where you really didn't know if it was working. I mean it sounded like you had a warehouse and stuff so it was going kind of well but you must have ran into some stumbling blocks.

MATT KUBANCIK: Honestly and I still fight this every day is I have failures all the time. The biggest thing is probably my age honestly. It's just being an adult and learning through the process. I mean I started too young honestly and a lot of people come into this and they might start when they're my age right now – 25, 26. My biggest mistake was just maybe my youth, you know what I am saying. We made a lot of money but when I was 21, 22, 23 I spent a lot of that money because I never had a lot of money. I was like okay I want the nicest everything.

I want a house in Florida. I want to buy a car. You know what I am saying? If 26-year-old Matt could go back and tell 21-year-old Matt and I always say if 22-year-old Matt could go back and tell 18-year-old Matt. It's not that it was just 18, 19. I feel like it's in every stage of my life is that you always go back and you say I wish that I would not have been so young, but it's all learning experience. You learn from your mistakes and that's the only way you can really learn in business. I guess that's really the answer to the question is it's an ongoing process. When I'm 30, I'm going to tell 26-year-old Matt I wish you would have done this differently. It's a never-ending cycle.

JAIME TARDY: Definitely. You can only make the choices that you know with the information that you have and as we get older we get better and better information. So of course we make better and better choices but we don't realize that we're not all that smart at this age, especially when it comes later. That's super cool. It sounds like, in general, with your mentor though, that that really catapulted you. That's the best thing, right? Learn from someone who already has that information that can tell you, which will definitely help. What sort of things did he do in your business that really changed everything?

MATT KUBANCIK: He taught me how to talk to manage people; everything you would learn in college out of a textbook he taught me real life. He had a lot of connections in the shoe business so that helped a lot with vendor relationships. He helped how to manage, how to hire people, how to treat people. A very big concept of mine is everybody in this company is paid upon incentive of how they perform in the company or how the company performs.

So if you're an hourly warehouse person or you're vice president of the company, you're paid upon your own individual performance and the performance of the company whether it be sales or profit. We try to make that 10 to 30 sometimes 40 percent of someone's pay. The reason that is I want to perform an operation where people want to come to walk not have to come to work. It's very difficult and it's never going to be perfect but if I can at least get 50/60 percent of the people on board to believe that and then 70 and then 80, I don't have to be here at 8:00 a.m. to open the doors. You know what I am saying? I can come in at 10. I can work to later in the night. I can go for three days and spend time with my family.

I still work seven days a week, in my head mentally. I'm still on the computer. Just like anyone is programmed the same way, if you own your own business but that's the biggest thing. Is he really took me to make people feel like it's part of they're the operation. They may not have an ownership stake so to speak but at the end of the day, if they work X hard, they get more money for it and they see the fruitations from their hard work. That's really a key thing I think for anybody doing a business is don't just pay people an hourly rate. Pay them whether, try to figure out how you can quantify their job whether it be number of emails answered per hour or how many pick in the warehouse.

Or if you have a person managing your payroll, pay them on a savings over payroll year over year. If your payroll percent last year was 13 percent and they hit 12 percent or they hit 11 percent, then you can give them a portion of that. Then you're not sitting there managing the payroll yourself. That's kind of a key concept along with going and finding people that are smarter than you and then giving them, I try to get people that want to start their own businesses or may have wanted to in the past but may not have had access. I lucked out; I had a good mentor when I was 19. Otherwise, I'd probably be working for somebody.

JAIME TARDY: Really?

MATT KUBANCIK: Yes.

JAIME TARDY: First tell me, how did you get him as a mentor?

MATT KUBANCIK: Article in the local business paper and he just said, "I've been in the shoe business 45 years and I'd like to help you out."

JAIME TARDY: So he came to you? Like you didn't go searching for him?

MATT KUBANCIK: No, it was just kind of ironic. His wife at the time made him retire. Work was too hard at taxes and working seven days a week and then two months after moving back to Louisville, Kentucky he located me through a big article in a local business journal that they wrote up on our business and said, "Look I've been in the shoe business 45 years" and said, "I'd like to help you out." It just kind of started from there.

JAIME TARDY: That's so cool. Imagine if you didn't get that piece of press and he never saw it like where you'd be right now. You really think you might be working for someone else?

MATT KUBANCIK: I mean yeah I would have probably, I made a lot of mistakes and he has kept me, I mean at least saved me a few million dollars minimum.

JAIME TARDY: You're like thank you for contacting me! That's awesome.

MATT KUBANCIK: But I still don't tell him everything. It's still a constant battle like any relationship.

JAIME TARDY: That's sort of a question. You don't pay him, right? I'm assuming.

MATT KUBANCIK: No, no. We worked out an agreement that's based really upon the performance once again – incentive-based agreement – based upon the performance of the company. So let's go back to that, but no I didn't give up any ownership stake, but I worked out something that as a company grows and as the company he makes a percentage of that and he's still in here every other day – two/three days a week – for a few hours a day and advising.

Really it has kind of gone to the point where he's really working with my vice president and high level employees a lot more and really working with them and working for our accountants and that sort of thing. We still talk a lot on business trips but we're not in here meeting two to three hours a day like we were. He has definitely been a huge asset to me. His name is Jerry Mudd.

JAIME TARDY: That's awesome. Tell me a little bit more about the growth, especially from 2005 until now. Online things have changed like crazy in seven years. What have you done as a business to sort of keep up with all that?

MATT KUBANCIK: The biggest thing was first off we're organic. So we're 100 percent no venture capital money, no investment money. I've had to bootstrap it since 2005, no outside money whatsoever, all organic. It's definitely frustrating sometimes because you see big ecommerce operations that blow up to $100 million, $200 million overnight and then you hear the back story and it's like oh well they got $300 million investment money. Yeah, you can pretty much buy whatever you want to buy.

When you're growing organically, you kind of have to fight temptations sometimes. You have to fight temptation. You can't build Rome overnight. You have to build it one block at a time and we're kind of like the tortoise and the hare and we're the tortoise just bumping along. We're growing 20, 30 percent and that's honestly what we've done. You just have to fight temptation. You have to realize are you going to go out and invest money, are you going to have people in suits tell you what to do every day. If you want that more power to you, you know what I am saying?

I'm forming two different companies right now that are more software and ecommerce related that have not a lot to do with Street Moda. I'll talk more in the future on that sort of thing but I am forming partnerships in those aspects and getting people smarter in other areas involves because otherwise those companies wouldn't be successful but for Street Moda I chose to keep it 100 percent me and not give it out. So that's really how I grew. When I have failed and when we have had bad months or bad quarters is when I try to go too corporate up to the next level overnight and not just going back to the basics of worrying about what you need to do today.

You need to get up in the morning and say what do you need to do today. Still be worried about the future and what other people are doing but you need to be concentrating on your business, not your 17 competitors out there. I think that's what a lot of people do is they worry about everybody else out there but then meanwhile their business is falling down. If you worry about yourself and worry about the people around you, you'll be successful. Everything else will kind of take care of itself.

JAIME TARDY: If you don't mind, what are your revenues for Street Moda right now?

MATT KUBANCIK: We're a multimillion dollar company and we'll probably hit anywhere between 10 and 12 million this year. It just depends on how Q4 goes. That's up 30/40 percent from last year. Just depending on the quarter; our strongest quarters are Q1 and Q4 and then our slowest quarter is Q2.

JAIME TARDY: Yes, Christmas. Tell me about why you decided to not go with venture funding for Street Moda, but now getting into other things you're talking about it, because usually the person is like no, no, no I want to bootstrap, I can do it myself blah, blah, blah. Usually they're kind of hardcore on that instead of going well for this company it makes sense and for another company it doesn't.

MATT KUBANCIK: On the other companies, which are more inventory related, out of smaller shipment and Agile Harbor, which we write inventory systems for ecommerce people, and then I am forming another ecommerce operation. We're not taking venture capital money but I am taking a percentage of ownership. I'm kind of digesting some of my pride in forming partnerships with certain people and because I am an alpha male and alpha personality, sometimes it's hard to do. But I know for the good of those companies, that I can never form and be a part of that unless I did that.

It really depends on your business. I bootstrapped it when I was 18/19 but I never had any money so I really didn't have a choice and my company was very small. It was also a different age, you know, 2005 and 2006 was the age of when the dotcom bubble was in '99 and then 2000-2007/8 the internet world, for the most part, was bare. It was a lot of street entrepreneurs so to speak that gave the 2000-2005 was the rise of the big eBay sellers and they did multimillions of dollars on eBay because investment money was bare.

Anyways, in today's world, it is a whole different ballgame. There's tons of investment money out there for the internet. Fortunately I grew my business when there wasn't. Fortunately or unfortunately, I grew my business when there wasn't a lot of money out there. Now there is, but I bootstrapped it all the way here so there is no reason to go out and do it that way. I am happy where we are going and I feel confident about our trek. Tortoise and the hare and the tortoise will eventually win the race long term.

JAIME TARDY: What makes you decide to not bootstrap the other companies though? Now that you have cash, right, you said you were broke before so it made just perfect sense, especially being an alpha male and you just said specifically that you didn't want like suits looking in on you, what makes you decide to go that route? Just because it's abundant?

MATT KUBANCIK: It's just the opportunity we need to do. It's not taking investment money but it's partnering with people I need to to make things happen.

JAIME TARDY: So it's not necessarily seeking venture funding but it's really finding the people that can help.

MATT KUBANCIK: It's like a sports player that's taking a salary less to go to the A team.

JAIME TARDY: What is a typical day in the life for you? It seems like you're really busy. Tell me what a normal day in the life, are you working 12 hours a day?

MATT KUBANCIK: I get up about anywhere from 6:30 to 9:00 every day and I usually hit the gym in the morning. Then I am in the office usually between 8:30 and 10:00 every day and I am usually leaving around 6:00 to 7:00. I have some classes at night I take, not like regular classes and some commitments, some charity commitments after and then I do a lot of, I usually hit the gym again sometimes and then I'll go, I'll usually do spinning two times a week. I like spinning. It keeps the fat off.

JAIME TARDY: A little bit busy though. That sounds kind of crazy. You've got a ton of stuff going on.

MATT KUBANCIK: On weekends I'm usually working, if I am not traveling. Most of the time we have file department heads and I'm the vice president so we have a Monday morning management meeting. We have employee meetings and department meetings and other than that it's just kind of checking on the operation. I do a lot of the sourcing and management of the company so I have two or three buyers working under me but I maintain a lot of the vendor relationships so most of the time I'm usually talking to vendors during the day and kind of planning where we're going with the company.

Then I have a few other commitments outside the company like the software company I am starting and they're actually in our building now so I am usually meeting up. That's just kind of that and then weekends and nights sometimes I'll come back to the office or stay real late and get a lot of work done that normally I can't when people are asking me questions and I have a lot of appointments, conference calls and that sort of thing.

JAIME TARDY: How many hours do you think you work a week on Street Moda, not on the other stuff?

MATT KUBANCIK: Low end 48, high end 70/80. It just depends.

JAIME TARDY: Good to know. That's sort of the thing. You love what you do. I mean you can tell you love what you do too so working that much probably isn't that big of a deal I am assuming.

MATT KUBANCIK: Two days in Florida and then you're like ready to get back and ready for action.

JAIME TARDY: Like come on. Awesome. For the last question that I always ask – what's one action that listeners can take this week to help move them forward towards their goal of a million?

MATT KUBANCIK: One action? Man, tough.

JAIME TARDY: I know. This is my hard core, hard hitting last question.

MATT KUBANCIK: You really do clean up with the hard question. If I had to pick one thing, I would say back to what I said is concentrate on yourself and your business and don't, if you're in the mood of worrying about what everybody else is doing in your market or your niche, you still have to be aware of it because you definitely know the surroundings of the business, but worry about what you have to do. When you wake up, be grateful for what you have today and don't be the type of person that you're not satisfied with whatever you have and worry about what you have to do that day.

If you're in that mindset and just take it one day at a time and not try to build Rome overnight, then you will find yourself being more successful. Any time I try to get too ahead of myself, I find that the company has bad lapses. And anytime where I just wake up and I'm like here's what I have to do today, I have to walk out of bed, I have to go to the gym, I have to do this for the company and then I have to leave and then I go home and I start the day over like that, that's the best thing you can do in running a business and if you switch your mindset to that, you will feel a lot more accomplished and you will get a lot more done and the people working for you will appreciate what they do and what you do for them a lot more.

I guess that would kind of be your one advice thing whether you want to get started in a business or you're already running a business is do that. Just one day at a time.

JAIME TARDY: That's awesome. Anybody that's listening right now, look at your day. Don't worry about way down the road because that's the thing that's what all of us does. We really worry about like one-year goal and five-year goal and what it's going to look like then and that's not really what it's about. What we really need to do is focus on the here and now and what you can do today and be okay with what you accomplish today and if you add all those up that's when you start to see the change.

MATT KUBANCIK: Exactly. It works personally too. It works in your personal life. You've got to plan out everything to a tee. It's the funniest saying, "We plan, God laughs." You have got to have a plan but if it doesn't go exactly how you want it, just suck it up.

JAIME TARDY: Perfect. Where can we find you online? Tell us about Street Moda about where we can maybe even follow you. I don't know if you have your own Twitter, Facebook or if Street Moda does, but tell us all about that.

MATT KUBANCIK: I'm pretty active on Twitter for Street Moda and Instagram Street Moda and I am on the fan page that is twitter.com @streetmoda and then Street Moda on Instagram. On Facebook it's facebook.com/streetmoda or Street Moda Footwear. Either of them go to the fan page. Catch us up on there. I really don't have my own direct Twitter or Instagram but I do a lot of my personal postings and tweets and say hey this is Matt from Street Moda, if you're there. I really just don't have time to try and manage.

JAIME TARDY: More than one, yeah.

MATT KUBANCIK: So I just kind of do it from Street Moda and try to build up the following there and I am pretty active on the fan page. The big thing I do with my company is we have flyers that go out with every order and a lot of times we'll have customer service contact information and then it's like if you ever have a question, concern or anything I will give out my email so it's just Kubancik@streetmoda.com. I get 200 to 300 emails a day but it's good.

You've got to be at the front of your company and that's something that I always try to say is I do give my contact information out and I am active in the social networks. You can find us on streetmoda.com is obviously our shopping site and you'll see us on a bunch of different marketplaces all over the web in our merchandise and then if you text Street Moda to 46786 you'll get a code for 25 percent off your first order that's good for domestic customers only and then we urge you to sign up for email lists as it blasts out a bunch of flash bulbs.

But the good thing about our email list is you can select what you want to see. So, Jaime, I'm not going to send you emails on Affliction t-shirts. I would send emails on women's dress pumps or women's dress boots.

JAIME TARDY: Shoes, ooh good! Well I like t-shirts. I usually wear no…

MATT KUBANCIK: We try to target exactly what people want to see.

JAIME TARDY: Perfect. Thank you so much, Matt. I really appreciate it. Also, because like I said I got an email from someone saying that Matt is really cool. He's giving back to the community. I know we didn't touch on that. You guys are doing a ton of stuff to give back. I really appreciate it and he's also like he seems like a really cool guy so you should just interview him. So thank you so much for coming on. I really, really appreciate it. I hope you have an amazing day.

MATT KUBANCIK: All right. Sounds good. Thanks a lot.

Just to note, you can download the top ten tips from these millionaire interviews on the blog.

Thanks for listening. You can find out more great information like this on EventualMillionaire.com.

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