How does a 25 year old guy start a business renting the Ferraris, Lambos, and some of the world’s coolest cars?
In this conversation with Noah Lehmann-Haupt, the Founder and President of Gotham Dream Cars, Noah shares his story of building the world’s largest exotic car rental company.
We chat about everything from key lessons Noah’s learned building his business to some funny stories including one about how one of my best friends and mentors Kenny Herman decided to take one of the Ferrarr’s for an extended joy ride on the job #WellPlayed
Anyone looking to build a business will have a ton of great takeaways in this conversation and hopefully a few laughs as well.
Scott: Noah, how are you man?
Noah Lehmann-Haupt: ‘m good Scott, how are you?
Scott: Dude, I’m so good and like we were joking, I can’t believe that here we are, you’re driving around using a Bluetooth jiggered set up in your car and I’m down in Brazil and we’re going to have a conversation right now; that’s pretty cool.
Noah Lehmann-Haupt: It’s amazing; I’m in San Francisco over Skype over Bluetooth and you are sitting in Rio and that’s modern technology for you, I love it.
Scott: I love it man; so Noah, I feel like your business is the type that when people hear it, they probably think it’s the coolest thing in the world. Can you take a minute and just tell everybody a little bit about Gotham Dream Cars?
Noah Lehmann-Haupt: Sure. And yeah, I think some might argue it is a pretty cool business but it’s got its ups and its downs. So Gotham Dream Cars is an exotic car rental and experience company that I started about ten years ago. Our bread and butter business is we rent out Ferraris and Lamborghinis and Bentleys and Porches and Aston Martins and BMWs and Mercedes and Maseratis and Rolls Royce and everything you can imagine. We rent them by the day or the weekend or the week and we also do exotic car experiences.
So, we run things like our thing called the Dream Car Sprint in which we set up a little autocross track and you get to drive a Ferrari or a Lamborghini for a few laps around our mini autocross track or Dream Car Tour which is an experience we run where you get to drive six different exotic cars over a 120-mile public road course that we put together and every 15 miles you switch around and get to drive a different car. So, that’s what we do, we are the exotic car provider.
Scott: I love it man, how many cars do you have today?
Noah Lehmann-Haupt: We have about 35 cars in our fleet around the country which does not sound like a ton but they are all — average price of a car is 150 grand; so it’s a pretty big chunk of metal we got.
Scott: I was going to say, 35 Ferraris and Lambos doesn’t sound too shabby to me.
Noah Lehmann-Haupt: Yeah, it’s funny I went over our history of how many cars we’ve owned and we have owned total in the last ten years, through cycle we’ve owned I think close to 80 different Ferraris and Lamborghinis. I know that one dealership alone; we brought ten different Gallardos from them over the past ten years. And it’s pretty interesting, it’s like yeah we are the largest Lamborghini Gallardo buyer in their ten-year history and it’s pretty cool to have that.
Scott: That sounds very cool, now take me back to the beginning; how the heck does a guy get started renting the world’s coolest cars?
Noah Lehmann-Haupt Interview: So, I am the kind of person — I have been an entrepreneur basically my whole life and I think one of the best pieces of advice I have read and have continued to give people is that the best type of business to start is the business where you experience the exact pain point that you are trying to solve. And I think that’s where you are going to get the best experience and be able to be in the best position to solve a problem. So I, back in 2002, wanted to do the Gumball-3000 with a buddy of mine; we wanted to do New York to L.A. in the summer of ’03.
We wanted to do it, it seemed like it would be an amazing experience. I wanted to rent a car to do it, I wanted to rent a Lamborghini and do the drive. And I went around the town and I started researching just like most of our customers do today. I went on the Web and started researching on renting a Ferrari or renting a Lamborghini and was pretty disappointed to discover that there really wasn’t a big opportunity to do that especially in New York. I mean there were definitely some companies in L.A. and there were definitely some companies in Miami that did this but there was nobody of note in the New York market where you could do this. And I said, well, that’s silly.
It seems to me that people would kind of be interested in that, New York is the greatest city on earth. New York is a place where you can get everything you want. If I want a Ferrari or a Lamborghini, I should be able to get it. And I used a really valuable web-search tool that let you kind of monitor what other people are searching for and one of the things that I discovered was about 50 people a month were searching for the phrase, the exact phrase or a slight variation ‘Ferrari-rental-New-York’ and there were literally no results for it. And I said, well, that’s interesting and I started doing the numbers and kind of figuring out if I, maybe could do this as a side-business.
Buy one car, rent it on the side and maybe it would make me some beer money, maybe it would pay for my apartment and I’d have a Ferrari, not a terribly bad fringe benefit for a 25-year old guy living in New York City. And so, I did the math and I figured we really only needed couple of days a month to cover the cost and maybe make a little profit for myself and said, you know what, let’s do this. It seemed easy at the time; it was certainly not easy to get started. Getting insurance took me almost a year; I had hundreds of phone calls of brokers and insurance executives, most of whom said, ‘Are you nuts? We don’t have any interest in covering this type of business.’
And you’d get these sort of really frustrating catch-22 answers like ‘well, if you had ten Ferraris we’d cover you’ or ‘if you add one Toyota, we’d cover you’ and ‘if you had one Ferrari in the middle of Nebraska, we’d cover you but starting with one Ferrari in the middle of New York, not a chance’. So it was a very frustrating process. But it took me just under a year to get it and I hand-built the website and put it up and turned on the phone system and set up a whole voice-over-IP phone system and kind of — I was [Inaudible 0:06:27] ready to go and I remember when the phones rang, I was like ‘oh my god, someone is actually calling, this is awesome’.
And very quickly discovered a couple of things after running the business for a month or two; first off, I was right in that people actually wanted to rent Ferraris in New York, which was great. I was wrong in my numbers in how much it would cost to run and how many days a month I’d need to break even. It turned out to be much more expensive maintenance wise than I expected and I was wrong, in a good way, about the 40 people a month searching for it. It turns out there was actually a lot more than that who wanted to rent cars in the area and they ended up asking — folks would call and ask for Ferraris and Lamborghinis and Porches and I said, ‘uh-oh, I might have something here’.
So we launched in March of 2004 with a single car, a Ferrari 350 Modena and three months later, we brought a Lamborghini Gallardo and away we went.
Scott: So I got to ask the question that probably some other people are wondering right now; how the heck does a 25-year old afford to buy a Ferrari?
Noah Lehmann-Haupt Interview : It’s a good question and in fact, I’m going to extend your question a little bit because I think it goes beyond just — take away the Ferrari piece of it and I think the bigger question is, how does a 25-year old get $150,000 in seed capital to start a business? Because that really was what the challenge was; whether I was starting a printing company for which I needed a printing press or I was starting to building an app which I needed programmers, the fact was I needed capital to get started. And in my case, it happened to be that the main asset that I was purchasing was a Ferrari.
But I think that question can be extended and there isn’t actually a good answer yet and it’s getting better, there are a lot of programs and there are a lot of — especially in the tech space, there are accelerators and startups of that — startup accelerators and programs like that where you can get seed capital to get going. But no matter what you do, it’s hard to get seed capital to start a business and I did it the kind of way that people do it; which is go to friends and family and get a little bit of a commitment here and a little bit of a commitment there and show them the business plan. And I think the good part in this case was, of the capital seed capital that I started with, most of it was the car and I remember thinking about it is that cars are relatively fundable and it’s a fairly liquid market for them and they don’t really loose a ton of value.
So the pitch was, ‘look, let me get this car, let me start, the worst thing that would happen is that I lose $10,000-$20,000 in the value of the car if I pay too much and I can’t sell it easily’. But even that is fairly low-risk scenario and I think the people that I worked with to get started understood that. They said ‘look, let’s give it a shot’; I didn’t ask for a million dollars to go buy ten cars right off the bat, I didn’t need a team of people to build a piece of software for a year that that money would disappear, I just needed to buy an asset and if the business didn’t work, I’d sell the asset and call it a day. And thankfully it did.
Scott: Got it. So I want to kind of dive into the logistics here a little bit to paint a clear picture. So, how much money did you raise to get this initial car and then how much were you charging per day in that first three months if somebody wanted to rent it?
Noah Lehmann-Haupt: So I raised $150,000 of which a $120,000 went into the car and $30,000 was working capital to kind of get me going for the first couple of months. And the company was basically profitable within the month; we started renting and it took me — [technical difficulty] started doing some Google AdWords before people started really — you don’t necessarily go and book the car the first day you see it, but you go and you read about it and you make a call and you find out and then you [technical difficulty] price of $2,000 a day. I learnt almost immediately and that is on my first customer, that those prices are always negotiated and you always have to be a little bit flexible. So, that was a very early lesson that holds true to the business and yeah.
Scott: Got it, and I’m really curious just one last point in the early days, I mean besides raising the seed capital, what was the most challenging part for you?
Noah Lehmann-Haupt: It was getting insurance coverage. My order of operation for the business — basically I decided I wanted to start the company in about April of 2003 and I did not secure insurance coverage until January or February of ’04. And then once that happened, I kind of pulled the trigger on the money and the website and I built — and I kind of put the phone together and I got a little logistics in place. So it was basically nine months of getting insurance coverage and then three months to actually put all the other pieces together. And I had them lined up obviously but the actual execution a vast bulk of it was getting insurance coverage.
Scott: Got it. So you have people calling you, three months and you are profitable and people want Lamborghinis, people want Ferraris; what happened next, how did you get the next car?
Noah Lehmann-Haupt: So, I was able to go back to the group of folks who provided me the seed capital and say, ‘hey look, first off, here is [technical difficulty] a big chunk of that money that I have just earned over the past three months in revenue and so I’m going to now be able to put a down-payment on a new car. And you’re going to earn your money on the first car; let’s do exactly the same thing with your second car, only now, I actually have three months of data.
And they were very quick to say, of course, if it works, [technical difficulty] if you can make an investment — I think a lot of people are able to scale up and say look, if you are making an investment and the investment starts to return, and you are not aggressively trying to over saturate, people like a good return on their investment and I provided a good return [technical difficulty] to back it up and I was able to put some money down on the second car and so I did the exact same thing for the second car. And that was basically the process that I repeated going forward except after enough time, I was able to exchange the private friends and family and I was able to actually get financing through a dealer.
So now, I had a little bit of a credit history for this kind of thing and so when car number three and number four and number five came around, I could go to the dealership and say, hey look, finance me through your — Audi Financial for example, was one bank that happened to do it because Lamborghini was owned by Audi and so you could go in and Audi Financial would provide coverage and that kind of stuff. And you were paying a slightly higher interest rate and you’re putting in a little bit more down-payment but I was generating enough cash to be able to put the down-payment on. So that’s how we basically scaled up.
Scott: Yeah, it’s so interesting because a lot of people that come on the show are software entrepreneurs and how they scale up is they get to a certain metric or a proof point and they raise a crap ton of money and hire a bunch of developers. And this seems like a much more gradual, honest growth process; is this something that you have enjoyed or you kind of wish it was the other way? Talk a little bit about this style of business versus a lot of this traditional software venture capital stuff.
Noah Lehmann-Haupt: Yeah, I very much enjoy it. I think this could lead to a longer conversation but I’m a big believer that there really are three things that you have to think about when you are starting a business. You have to think about whether you are building a business, whether you are building a product or whether you are building a feature and those are the three [technical difficulty] and I think that a lot of software entrepreneurs especially these days, are looking to build products. And products mean — when you say, what’s your revenue model, oh, we are done thinking about that now; we just want users.
And that’s fine by the way and I’m not making a judgment as to whether one or the other is better, I’m just saying that you have to understand what it is that you’re doing. And when you are building a business, you want to make sure that that business is going to be there and that you are not going to extend beyond what your business is capable of doing. So that’s why we took the approach of look, we are building a business and that meant we want to go slowly and we want to make sure that we test each step of the way and make sure that what we have is going to continue to be a business.
And a lot of software entrepreneurs are looking to build products and that by the way is great because you can build a product and you can sell your product to Facebook or Google or Apple or make a crap-load of money these days and that is a project and I think a lot of people are into that and I think that’s totally fine. And also, I think there is a hybrid where I think there’s people who are building software businesses and they discover that there is a business and it is much easier to scale up quickly when you have found — when you are locked into a good business.
I’ll give Uber as an example, like a hybrid technology automotive logistics company; Uber is a business they are looking to make a profit in what they do and I think Uber recognizes that it’s a business and it’s really attractive to a lot of people. So they have built a business but they are scaling up very quickly and they are pumping a lot of money into it because they want to move quickly and take as much market share as they possibly can because they’ve got this really rabid fan-base that really loves their product. So, I think there are companies and there are situations where it absolutely makes sense to scale up and raise a ton of venture capital money to do that. I didn’t feel that that’s a sort of a no-brainer as a billion-dollar business and in fact frankly, I still don’t feel it is a billion-dollar business.
I think it’s a niche business and I think there’s a market for it but I don’t think we would gain anything by rapidly expanding and raising a ton of money and buying 30 cars on day one. I just think that kind of thing takes time and [Inaudible 0:17:59].
Scott: Yeah, it’s interesting and I’m curious to know how you basically been able to, as a luxury business, continue to get and attract customers. Is it still online the main channel, I mean there’s a lot of relationships, what’s the deal there?
Noah Lehmann-Haupt: And the answer is yes to all of the above. We’ve been around long enough now that we get a ton of business through word-of-mouth and we get a ton a business through relationships with concierges of hotels and folks who know us and just trust us. We have a relationship with American Express for example, that we are their go-to company. When you pick up your U.S. Centurion Card and you pick up and you call American Express and you speak to the concierge service and you say, ‘I need a Ferrari’, we’re at the top of their list and that’s just something that you get over time. We running on its business and we’ve been very good for their customers and so they call us when they need something. And of course there’s the online component too, we rank very high in the search engines and good SEO is very important to us and that’s a critical piece as well. So there’s really a ton of stuff that goes into it but yeah, it’s a combination of all the above.
Scott: And how does running a business that caters to the luxury market different from a lot of these, different types of entrepreneurial ventures we see out there? I have to imagine that when the economy is not doing good, if you are selling Tupperware, you might be okay but if you are selling Ferraris and Lamborghinis, what happens there?
Noah Lehmann-Haupt: So, we actually did not see a significant dip in our business during the recession and I think that surprises a lot of people. We managed to keep our business profitable or at least most of it. There’s certainly a few months of — when things happened at the end of ’08 was little bit of a nightmare for everyone but ’09 was a profitable year for us and we — for my [Inaudible 0:20:07] I can’t speak to the greater — because I know a lot of luxury business were very, very hurt. For us though, I think the desire to drive a nice car is a fundamental and sort of fairly constant desire among people. I think if you ask — most people who are into or have any interest in cars, ‘would you like to drive a Ferrari?’ And their answer is going to be ‘yes’.
I think who it is, changes and our customer-base certainly dramatically changed throughout the recession. We were renting to a lot of mortgage brokers and guys like that in ’06 and ’07 and they obviously completely disappeared. Those were the guys — but there was always some [Inaudible 0:20:54] in some part of the economy regardless of how the overall economy is doing and I think where you see that, there are folks to want to have a kickback and relax and enjoy themselves a little bit. And so we saw a big shift in our customer-base but overall, there were still people who wanted to do the experience and so we still were able to do it.
Scott: And I know you’ve done some creative stuff like the Sprint program with Groupon; can you talk about some of these offshoot opportunities that you have capitalized on?
Noah Lehmann-Haupt: Yeah, and it all derives from a fairly basic premise of ours which is, our business — if you step back and you ignore the flash and what it is we do, our business is a rental business. We are — our goal is to trade money for the experience of being in an exotic car. That’s — if I were to describe it in the most boring of terms, that is what our business is and what we realized was our baseline was, we were trading money for a day in an exotic car. And we said, well, let’s figure out creative ways to reduce the commitment level; maybe we want to trade money for an hour in an exotic car, maybe we want to trade money for five minutes in an exotic car and you can’t just do it.
You can’t just say come into our office and rent a car for five minutes, because the logistics are impossible, you have a line of people going out of the door, where are they going to go, the neighbors are going to get annoyed and so we had to think about creative ways to fulfill it. But fundamentally, our thought process was, let’s just reduce the commitment level and obviously the price and get it down so that now we offer products where we will trade you money for as little as five minutes in a car with is our Dream Car Sprint product, up to a week with is our rental product. And I think if you want to kind of get a sense of where we are going to be going in the future, look at where our divisions are and we’re just going to get more fine grain. So right now we have the Dream Car Tour which is a three-hour experience, we have the Dream Car Sprint which is a five-ten minute experience and we have a rental which is a day-long experience.
So there’s a ton of variation in there; we’ve just launched this new product called the Dream Car Dash which is going to take place on a racetrack, an actual, full-size track and that’s more of a 10-15 minute experience and so that will be priced accordingly. And then I think there’s an opportunity for an hour-long experience and there’s an opportunity for a 20-minute experience. I just think — and you just be aware of where you go and what you do and what the variations are and that’s really how we market what we do.
Scott: That makes total sense in that there is a lot of friction. I mean I always — in New York we’re just like, ‘if I could just have a dog for a week, I could get a girlfriend or whatever it is –
Noah Lehmann-Haupt: Right.
Scott: — I mean that can be translated into so many different markets.
Noah Lehmann-Haupt: And yeah, look at companies like Rent the Runway which is a company started by a friend of a friend and you know they are doing dresses and fashions and stuff like that and they learnt that maybe you don’t want to go and buy a new dress and have it, maybe you just want it for a night. And they have opened up a retail store at The Cosmopolitan in Las Vegas and one of the things that they found I think is that they got a lot of folks to come in off the flight, they go to the store, they rent a dress for the night out, they go to Marquee which is right next door and there’s a business there. I know another company, I just met the founder the other day, called Style In, very similar peer-to-peer clothing.
If you have this awesome dress sitting in your closet but you don’t necessarily want to sell it, you might want to wear it sometime but maybe you have somebody who would want it for a little bit of time. I think there’s a ton of businesses where there’s an opportunity to kind of parse up time and make products available that way.
Scott: Now what’s — it was interesting to think about is you have this asset between American Express, probably some celebrities, probably people that deal with — a ton of different people that have a lot of money; have you ever thought about expanding into different verticals or trying to replicate this type of business and maybe for a different type of product.
Noah Lehmann-Haupt: No, and I think there’s a lot of companies who have tried to do it and I think it’s a huge mistake. Our business is the car business and there are commonalities among jets or houses or other things like that but not really. It’s very different and I think that in a business like this, you have to focus on what your product is and our product is the car business. And I think every company that I have ever seen who tried to do jets and mansions and this, this is just — they never work because they are just completely different business.
Now that being said, could I see us launching a completely separate business that’s luxury houses or luxury jets because they are complementary? Sure, that I can see but Gotham Dream Cars is a exotic car business and I don’t see it going into any other area; I think that’s our expertise, those are the folks we have working for us who know cars. And our car mechanic can’t work on a jet or a boat and I wouldn’t want him to, frankly.
Scott: Yeah, it makes sense when you think about all these minute details, but there’s a ton of them and I guess that kind of leads us to my next question is, what’s something that you have encountered that you never would have guessed when you started this business?
Noah Lehmann-Haupt: That’s a great question; I think the customer-base is very different from what I would’ve expected. I think, if you ask an average person in New York, let’s take New York as an example, ‘who is going to be the customer for this?’ I think there would be two answers. One is investment bankers and Wall Street guys and two would be people who fly on private jets. So, the first thing you should do is partner with all the banks and the second thing you should do is partner with all the jet companies and I think that’s the kind of conventional wisdom. And I found both of those to be totally wrong; we certainly do some — we do have some Wall Street folks who rent from us but it is just not our primary business.
It’s much more folks who are — guys who own 20 pizzerias around the city or sort of unknown real estate guys who own a ton of buildings in Queens or guys who are in general contracting companies. It’s sort of the affluent but not known-affluent kind of folks and I would never have guessed that. I didn’t even know that segment of folks really existed but that’s really — we have one guy who is a plastic surgeon and he is a — he’s probably our single biggest customer and he is not even in the city. He works in Central New Jersey but he’s got a huge plastic surgery business and we’re sort of like his private garage.
And the second thing about the private jets is, it’s just one of those random things, we had our first office at Teterboro Airport not really because we wanted to be at the airport but we happened to find a really great deal on office-space or warehouse-space I should say. But we have assumed well Teterboro Airport, we were just going to be raking in the folks who are landing and want a car. I would say, in the three or four years that we have that office, we delivered a car to Teterboro Airport maybe once, maybe twice. It’s just folks who are flying private, when they land they want a nice limo there to pick them up and take them into the city, they don’t want a Ferrari waiting for them. It’s an interesting experience and I would not have guessed that.
Scott: Is there any creative thing that you have done to reach this kind of like silent millionaire segment of customers?
Noah Lehmann-Haupt: I’d love to take credit and say ‘we’ve nailed it’ but no. Honestly it’s just through the regular channels, they found us and if you have any awesome ideas on how to reach more of these folks, I’m all ears. [Laughter].
Scott: I guess wealth managers right now are shrugging their shoulders that are listening to this. So, I’ve talked to Kenny — and just as a quick background, me and Noah got introduced by one of my former colleagues Kenny who I guess used to work for Noah and joyride with his cars and it’s — one thing that I thought of you cool is that lot of entrepreneurs come on here and they talk about their servers crashing and they had to stay up all night and that was the craziest thing that happened. I have a feeling, when you are renting out luxury cars; you have some pretty interesting stories of crazy things that have happened. Could you share any one of those with the audience?
Noah Lehmann-Haupt: Yeah, I’ll give you three stories and [technical difficulty] first I should reference your point about our wonderful friend Kenny. Kenny was our intern and Kenny has the distinction of being hired and fired four times by me. We hired him in — Kenny is awesome and he will — he’s a wonderful guy who will always be a good friend and I’m very thankful to have met him and become good friends with him. When he first worked for us, he was the kid who just had no idea of what he was doing was even wrong. I remember once, he asked permission to pick up a car from a customer and it was near where his house was and he lived and he said, ‘I’ll save you guys the trouble, I’ll pick up the car from the customer and bring it right back to my garage.’
We said, sure, and so we gave him permission to do it. And I remember we went back and we looked in the GPS, he picked the car up from the customer and then he went off on a 100-mile drive with one of his buddies; and we’re like, Kenny, what are you doing? And it was so funny because his answer, when he came back — and we fired him right after that, we said, ‘Kenny you can’t take one of our cars from our customer and go joy-riding’ and his answer was, ‘Well, you didn’t tell me I couldn’t do that. You just said make sure it gets back to your house, you didn’t say that I couldn’t go take my friends out with them.’ And I was awestruck by that and then he was one of those guys where he genuinely believed that, like it really wasn’t malicious.
Like I really think that he genuinely believed that it was totally fine to take our car and go on a 100-mile drive with a buddy of his up to the mountain before bringing it home.
Scott: Don’t ask for permission, ask for forgiveness.
Noah Lehmann-Haupt: Right, which probably makes him a better entrepreneur too. So, second great story was one of my favorite customers that we ever rented to. I got a call from the office of Senator Ted Kennedy one afternoon and it was exciting and I ended up talking to the woman who worked in the office and she said, look his wife wants to treat him. It was for a big birthday, I think it was either his 70th or 75th birthday and I apologize I don’t remember which one. And his wife wanted to treat him and take him down for a drive down to their vacation home in Virginia and so I talked through and it was really a fun experience.
We talked through, we worked out the logistics, we agreed we were going to bring down our black, Aston Martin Vanquish, which at that time was my favorite car and the one that — I had only one car posted on my wall and that was like my inspiration and that was it. It was the black, Aston Martin Vanquish and so it was kind of awesome to finally have that car. And we worked it out and I went down to deliver it because I wanted a chance to meet the senator because he’s awesome or he was awesome, he will always be awesome. And coming down to D.C., parked it in front of his residence, his wife came out, Victoria and she’s wonderful and said, oh, he’s going to be so excited.
And so she called him and he comes downstairs and he looks outside and she goes, ‘happy birthday’ and he is sort step back and he he’s like, ‘you didn’t buy it for me, did you?’ [Laughter] She started laughing and said no, no senator; it’s just for the weekend. So that was a really fun experience and I got to show him how to drive it and get on a test drive and I got a couple of great pictures that I was very happy about.
The third story which is sort of on the crazy side of things was probably the one time where I really wish we had a reality show and we had a couple of guys come in and rent a car. They flew down from Baltimore and they rented our Bentley convertible in Miami and they rented the car and they — we always check the car and we always look up our GPS just everyday to see where our fleet is. We noticed that the Bentley had nearly started driving north. So these guys had flown down from Baltimore, picked up a car in Miami and were driving back towards Baltimore. We said, that seems weird — weirder things have happened but that just seemed to be weird and a day later we got a call, a sort of a hushed call in the morning from a guy who was basically saying, ‘look, I can’t tell you who I am but the guys who rented your Bentley are trying to steal it and they are driving to the port and they are going to put it in a shipping container and you should probably get that taken care of’ and we said, ‘well, thank you and who are you?’ And he said, ‘well I can’t say but’ — it was like we had our own little deep throat calling in and giving us tips about what was going on.
Scott: That’s Grand Theft Auto, the video game. [Laughter]
Noah Lehmann-Haupt: Yeah, he kept calling back, he called, ‘hey have you guys picked up the car yet? What are you doing?’ And so interesting fact by the way, if you call the police and you tell the police, ‘hey we have some people who are trying to steal our car’, the first thing they say to you is, ‘well, have they stolen it yet?’ [Laughter] And we say, ‘no, but we have been told their bringing it to a shipping container and they are going to steal it’. And they say, ‘well, call us back when they have stolen it because right now they haven’t committed a crime’. And then you say, ‘once they have stolen it, the car will be in a shipping container in the middle of the ocean’ and they said, ‘sorry, that’s the way things work’ and it was sort of a remarkable experience and surreal for us.
And so we ended up finding, thankfully, we got a guy in the Grand Theft Auto Specialty Division with the Maryland State Police who had been looking for this group. They had been known for luxury cars and shipping them off and so we finally got his attention and he was like ‘aha- this is actually my chance to crack this case’ because this is what you want; you don’t want to hear once the car is gone, you want to hear when the car was in the process of being gone. So we got this trooper, this detective I guess to get super-excited and they set up a sting and they sent out SWAT teams to where the car was located with helicopters and they raided this whole [technical difficulty] I think they recovered like ten cars and they busted all the guys in the group.
But I just remember the moment where I was sitting on my phone getting updates from this detective saying, ‘okay, SWAT team going in’, you can hear the radios crackling in the background, ‘all right they are prying the door open’, ‘okay, please confirm you got the blue Bentley’, and we said, ‘yes, that’s ours’, they said ‘okay, we got it, we got it.’ It was a really intense and amazing experience; so that’s one that will always stick out.
Scott: Yeah, that sounds certainly a little more interesting than servers crashing, that’s for sure.
Noah Lehmann-Haupt: Yeah, it has its moments.
Scott: To give you a little background, I’ve been in kind of “sexy” businesses and my first job was actually at a sports agency that represented pro-baseball players and I think a lot of people, they just hear these stories, they hear these things like, ‘wow, this is so much cooler than my Excel-jockey job at the bank’ or wherever it is. Is there any downside to this type of business?
Noah Lehmann-Haupt: The only downside that I can come up with — and I expect you to cry me a river on this one, is I’m not the kind of person that would be — that wants to do the same thing over and over and over. I know a there are a lot of people, I know a kid who is this insane photographer who is an automotive photographer and he’s been doing it for ten years and he still gets excited every time he sees a Ferrari at the same level of excitement as the first time he ever saw one.
I’m not that kind of person, I don’t — I guess there’s a saturation point so I think the biggest downside for me is that my initial sort of excitement about all these cars has given away to sort of a nonchalant — the cars are metal, and they make us money and they run our business and so I have lost a little bit of something of that kind of excitement for the cars themselves. I still love cars and I still get excited when we get a new car but I don’t excited about getting a new car because I really want to go drive it for a week. I get excited because it’ll do well for our business and our customers will be happy. So, I have definitely cured myself of the car thing which some might say, is a bad thing.
Scott: Yeah, it’s interesting because I have talked to a lot of different people and it’s like go build a product that you are passionate about and I’m kind of more of the type of entrepreneur that like, man, I want to build a group of people that I really like, or a company that I really like because that’s really what’s most important and not like the physical thing or selling and it sounds like maybe you are from the same school of thought.
Noah Lehmann-Haupt: Yeah and I agree, I would love and this is a whole separate topic but I believe that hiring people is one of the most important things in any business and biggest challenges and it’s such a shame that when you hire a wonderful group of people for a business, if the business gets sold or if it fails or whatever happens to it, then the kind of people dissipate. And it seems to me that I like the idea, sort of fundamentally, even though I don’t have an experience with this of finding your kind of dream team of people and working on multiple things with them. And if one business doesn’t work, you do a different one and if you build one, maybe you do a different one because the biggest effort is finding great people and if you can find great people then you can crank out a bunch of great ideas and great businesses and make a great product.
Scott: I love it man and it does really sound like a dream and because at the end of the day, I mean that’s — working side by side next to somebody that you really love and care about and it’s going to do an excellent job, so much for the worrying part. So I wanted to finish off with just a question here that I always ask our guests who have done really inspiring and awesome things; for everyone who is listening out there, we always to try to get them a tip or a practice or a habit or just a piece of advice that helps them get a competitive edge in their own entrepreneurial journey. Is there a piece of advice that you could give people about something that you have done that has really helped you in your journey?
Noah Lehmann-Haupt: I mean I could probably go on for hours about it. I think probably the most important lesson that I have learnt with any business idea when you are starting out is, understand the difference between negative feedback and haters, to use a colloquial term, and I think it’s very important to develop a sense of calibration of who is giving you negative feedback because they are jealous and who is giving you real negative feedback [technical difficulty] [off the record discussion] — so, I think there’s a bunch of ideas that I would add without advice that would probably go on for ages on that but I think the single biggest and important tip that I can give people is, to use a colloquial term, understand the difference between negative feedback on an idea and haters.
And what I mean by that is I think there are people when they hear that you are starting a business or starting a new product, there are people who are just going to be jealous and there are people who are just going to not want you to do well and those are the haters. If you know, those people are out there and it’s natural part of jealousy and it’s a part of the human emotion but there’s also people out there who genuinely want to give you feedback and they want to give you negative feedback or positive feedback. And I think it is incredibly important to develop a sense of distinction between the two types of feedback and you have to ignore the people who are just going to be negative and you have to listen to the people who are giving you actual negative feedback because I think that’s really important.
And it’s hard, I mean, if it were easy, everyone would know how to do it right away. But it’s hard because I think there are a lot of people who confuse every bit of negative feedback for haters, and so they say, ‘this idea is going to work even though everyone tells me it’s not going to work’ and likewise there are people who get discouraged by people who are just hating on them really quickly. So developing a sense for how to listen to feedback and how to judge the person giving you feedback as to whether they are really the right kind of person to give you feedback. Sometimes — and this is just going to be a generic knock on lawyers, I love lawyers obviously and I hate them at the same time, but a lot of people ask a lawyer for business advice.
And in general, it’s not a great idea because lawyers are — their job is to protect you and to know the law and to know all the possible things that can go wrong. And so a lot of folks will ask their buddies, who is a lawyer for business advice and they’ll get this hundred-page long reason why it won’t work because of these regulations. And then they’ll go and they’ll listen to that and they’ll say, ‘oh, I should give up’ or on the other hand, they’ll somebody who is an expert in their field who will tell them this piece of advice; I think that this business is not going to work for these reasons and they dismiss it by saying, ‘oh they’re just being a hater’ and I think you can’t make either of those mistakes. You have to understand how to listen to feedback and what the right feedback is.
Scott: Are there any key indicators that you look for when you are trying to evaluate whether somebody is trying to be helpful or they’re just hating?
Noah Lehmann-Haupt: I mean you just have to know who they are and you have to be a good judge of character and of people. And you have to listen and you have to understand what their basis for giving you the feedback is and whether they are — you really have to judge somebody’s ability to give you feedback. If I go and I ask Tim Cook for his opinion on my piece of computer software, I’m going to listen to his feedback; the guy runs Apple, he knows what runs and what doesn’t.
And that’s a very extreme example but if you ask my advice on a real estate business, don’t listen to my opinion because I don’t know anything about the real estate business. I know how to run a business so cover that and understand — they have to cut a rank, you could say, ‘all right, well Noah knows a lot about business and so he knows what generally works and what doesn’t but he also knows nothing about the real estate business. So if it is a real estate specific question maybe I shouldn’t really listen to his feedback but if it is kind of a general business question, maybe I should.’ And you have to build that model for the people that you talk to and kind of get a sense where is this person qualified to give me feedback?
Scott: Yeah, I think that’s really good advice because everybody has an opinion out there and sometimes you can really get — our head feels like it’s going to blow up because we have 20 different people telling us 20 different things and trying to figure out who you should listen to, can be super-challenging.
Noah Lehmann-Haupt: Yeah, and along those lines, another point I just thought of, sometimes you’ll get confused; people will say, ‘this guy sold his company for a billion dollars, so therefore he can answer any business question’. That doesn’t necessarily make this person an expert. Yes, it perhaps may make him an expert in the process of selling your company for a billion dollars, I would certainly listen to his advice on that but sometimes people get clouded and they think, ‘well, he was successful and therefore he has all the answers’. So it just being — have some discretion in who you seek advice from and know who is going to give you a good opinion or not.
Scott: It’s great advice [Laughter] which is kind of an ironic thing to say after we were just talking about advice. But Noah, I just want to thank you for coming on today and telling us how you built your business, some of the things that have worked, some of the things that have been challenging; I think a lot of us are really going to take a lot away from this conversation. If people want to get more information on you, on Gotham Dream Cars, where’s the best place for them to go?
Noah Lehmann-Haupt: So Gotham Dream Cars is the website, it’s Gotham Dream Cars dot com and me personally I’m very easily reached, I’m always happy to chat, my Twitter handle is @noahlh, my email address is Noah at [technical difficulty] I try to get to all the emails, I’m very open about that so that’s probably the easiest place to get me and yeah, that’s pretty much it.
Scott: Awesome, and you conveniently cut out when you gave away your address, so I just want to double-check that; it’s Noah at Gotham Dream Cars?
Noah Lehmann-Haupt: Yes, that’s it.
Scott: Awesome man, well, thanks again for coming on, I really appreciate it.
Noah Lehmann-Haupt: Thank you, I’ll talk to you again, thanks for the time.
[End of transcript 0:48:22]