How to Find the Right Business to Start, Invest in, or Join w/ COO Artem Mashkov
Tune into this episode to hear SwagUp COO Artem Mashkov chat with Ben Burman on his podcast, Starting it Up. Artem and Ben dig into the superpower of entrepreneurial hunger, developing a kick-ass network, and the art of investing. If you’re interested in how to spot opportunity in any kind of market, this episode’s for you. Let’s go #tothemoon!
💡 the big ideas:
- Why sexy ideas are not the key to a successful business (and what is)
- How Paging Zone’s customer-first approach shut down competing stores and helped them expand to 12 locations
- The three questions to ask before investing time and money in anything
- How to use industry/market weaknesses to your advantage
- Why it’s worth it if someone doesn’t return the $20 you loan them
Ben Burman is the host of the podcast Starting it Up where dozens of top startup founders, CEOs, and investors share their entrepreneurial stories. Each episode uncovers actionable information and inspiration to help you turn great ideas into reality and level up your life.
- Listen to this episode on Starting it Up
- Get more big ideas from Ben on Spotify or iTunes
- Follow Ben on Twitter
- Follow Artem on Twitter
- Book recommendation: Antifragile by Nassim Nicholas Taleb
🚀 get started:
Keep reading for a sneak preview of everything discussed in this podcast episode!
Using entrepreneurial hunger to succeed
Serial entrepreneur, investor, and SwagUp COO Artem Mashkov’s first step into entrepreneurship wasn’t all sunshine and rainbows. In fact, most would consider it a misstep.
“I didn't get into college after a very prestigious high school,” Artem says, “I basically fucked up applying. I didn't send my transcript to one school and then I didn't send my SAT scores to another school. So I had an incomplete application for two schools.”
But even back then Artem knew how to roll with the punches. After running out of the $2000 he earned working at a nonprofit summer camp, Artem recalls a painful situation where his friends ended up paying for his meal. “It ended up being that I ordered, like the more expensive stuff on the menu,” Artem recalls.
“And they didn't really say anything but then I kind of saw the bill. I'm like, Fuck, I'm a dick. My family was on welfare and I understood like, that's, you just have to go through that. And I'm okay with charity coming from like, people that could afford it but it was like kids my own age who had jobs too.”
It’s an uncomfortable position to be in for anyone. But for Artem, it was a turning point: he never wanted to be in that situation again. “I'm like, I don't care, let me go work for any amount of money,” Artem says. The journey to his first big successful venture started simply: distributing flyers outside a cell phone store.
Soon opportunity came knocking. “The guys wanted to smoke some weed. They're like, ‘Yo, can you watch the store while we go smoke weed?’ And I was like, OK, cool - this is my chance.” At that point, Artem had been giving out flyers for two months. He knew the plans, he knew the technology.
Then he executed. “They came back and were like, ‘Holy shit, you sold things?’ I'm like, Yeah. They're like, ‘You made more sales than we've made.’ So they let me work inside the store.”
Artem’s advice on cultivating entrepreneurial hunger? “Go do something that's not easy for you. Go get out of your comfort zone.”
The most important asset in business
Six months in, Artem took over the cell phone store. About a year after that, one of the original partners came back. He wanted to do another store with Artem — this time with Verizon in Williamsburg, Brooklyn.
They scoped out the location and ran the numbers. It was double the rent, but also a different customer base. “We went there and we saw the neighborhood and we saw how many people were walking by,” Artem said, “We're like, you know what, worst case scenario we’ll work the store one, two people.” Artem and his partners took the leap.
It paid off. The new Verizon store was pulling higher numbers than the original store. Artem left the original store to focus on the new store. At the same time, he returned to school at Baruch College and earned a BBA in Entrepreneurship.
“I'm one of the first people to drop into school after starting a business because I realized that I was missing that skill set, the tactical skills like managerial accounting and business law and everything,” Artem says.
All of this happened during a recession. “We opened up the Verizon store in Williamsburg, Brooklyn in 2008. And then from that we ended up focusing really on customer service versus sales and that was so radically different from all the other dealers [...] that stores around us started to get closed down,” Artem says, “Verizon would close stores if they didn't hit certain metrics, and customer service was one of those metrics. I believe we had five total stores shut down around us.”
Paging Zone ultimately grew to 12 locations. “We were able to expand A) because Verizon was telling us, hey, you guys could take those stores, but also B) because I realized that humans were the most important asset in that business. That's the difference between a good store and a bad store,” Artem says.
"We ended up focusing really on customer service versus sales and that was so radically different from all the other dealers [...] that stores around us started to get closed down." — Artem Mashkov, SwagUp COO
Lessons from investing and joining SwagUp
If Artem’s story has inspired you to open a bunch of cell phone stores, the SwagUp COO would advise you to think twice. “The reason I got into this business is because I worked in the business. I managed a store, and I knew what it could do. So I had enough data and had enough skill sets to be able to predict my success or failure,” Artem says.
“Now, that's basically the difference. People come to me for consulting all the time. You know, they always give me these ideas. Like I'm gonna build Uber for dogs or whatever the fuck it is, and I'm like, alright, great. How many developers do you have? Are you able to code yourself? How many dogs do you know?”
For newcomers to the entrepreneurship and startup space, it can be tempting to fixate on the idea. But Artem says what’s missing a lot of the time is execution. “It's not about the idea. It's about what can you execute on, and what do you have a special skill set to execute on. I had a special skill set for running a cell phone store in that neighborhood. It was super, super niche. It doesn't matter whether something is sexy or not. If you have a special skill set to execute on it, you do it.”
Artem’s had several successful investments and a couple bad investments. The latter, he says, is more useful for learning. “I've had some very good investments, but I would say my best investments were when I lost money. You don't learn from winning,” Artem says. Those bad investments taught Artem the kind of questions to ask and the qualities to look for in a founder and their venture.
“I don't care how/why this is going to succeed. Tell me why this is gonna fail. [...] If they're not able to answer that question, they're lacking knowledge in the industry or they have willful blindness.” — Artem Mashkov, SwagUp COO
“So the kind of deals I look for is, can this person execute on what they're doing? And is this person trustworthy? Most people cannot execute on the things they want to do,” Artem says. The third quality he emphasizes is self-awareness — which, not coincidentally, was one of the first things Artem noticed about SwagUp founder Michael Martocci.
“Mike at that time, I believe he was like 21 or something like that. And like we started chatting. And I see he's like, really smart. And he's smart, but he's humble,” Artem says, “I think he just came off of selling like over $200k, $300k worth of an ebook for a former professional athlete. If you look on Instagram, people sell $1,000 worth of something and they're renting out lambos, and taking pictures, and the whole nine. Nah, that's not Mike.”
“He's like, well, you know, this could have been done better. And this- I'm like, holy fuck his superpower is self awareness. I'm like, you know, I gotta get into business with this guy.” When SwagUp was born, Artem joined first as an advisor and then as the COO. “It's because of Michael and because of Helen,” Artem says.
“They're amazing people. I could build an amazing company, but I'm not going to get people like that. So instead of me building a company and trying to find the people, I'm like, I don't care what you guys are doing. I want to work with you to make this a success.” That’s the power of a superstar team.
Get the full story of Artem’s experiences as an entrepreneur and investor on the rest of this podcast at Starting it Up.