I had no business experience at all.
My job was to go out at three in the morning once a week and interview people, “What are you up to at 3 in the morning?”
I did that for four years. Once a week I’d put up the best interviews for that week on the HBO website.
It was a web show called “III:am”.
I had never done interviews before. I was always nervous just going up to someone in the middle of the night and saying, “Hi! Can I ask you what you are doing.”
I had a photographer with me.
One time I went up to a transvestite prostitute and she said the night was the only time she could leave her house.
She said she grew up in foster homes and raped in every home since she was a kid.
“I didn’t know what sex I was by the time I got kicked out of foster care. The only place I could go was the street.”
A car went by and flashed its lights.
“Yoo-hoo,” she yelled at the car and it stopped and she got in.
Another guy was always out at three in the morning. I ran into him no matter what part of town I was in.
I called him 24 Hour Kahadi.
“People are trapped in the day. They wear their prison uniform. They go to their prison jobs. They go back home to their prison TV shows. They sleep. They repeat.”
“For me, the people in the night are real. Each person is unique. Each night is a story.”
For him, 3am was a religion. A way of life.
For me, it started to be a way of life as well. The idea that the day has its strict societal rules but the night is for people who wanted to make their own rules.
Later HBO asked me to shoot a pilot for “III:am”.
Jon Alpert, a well known documentary producer, was assigned the task of being my babysitter and producing the pilot.
[Jon Alpert appeared on The James Altucher Show at Ep. 295:https://jamesaltucher.com/podcast/jon-alpert-how-to-be-the-catalyst-for-social-change/ ]
He told me,
“No talking heads ever!”
Meaning: no interviews. We only shoot action.
I watched him do his magic. He put a mic on a prostitute so we can hear her with customers.
We once found a group of homeless kids at Tompkins Square Park and when he found out they were upset at another group of kids he suggested they all fight.
We went to Rikers Island, the jail. There’s a bus that goes every hour, 24 hours a day from one stop in Queens to Rikers. No matter what time of day, if a prisoner got bailed out, he was released right then.
At the stop in Queens there were drug dealers and prostitutes always hanging out. They were waiting for their best customers to be released from jail.
One time I spoke to a girl who was a prostitute who was waiting for the bus., We were lit up by the neon lights from the “Donut Time” store that was the only store open at three AM.
She was skipping up and down, happy, why she was talking to me. A small guy walked up to her and stood in between me and her.
Suddenly she shouted, “ooohhhh”, like all the breath and life came out of her. She fell to the ground.
The guy said, “hisss!” And she limped away, around a corner where it was just dark and later, when I went to look, I couldn’t see more than two feet in front of me.
He said to me, “She’s none of your business.”
A construction worker, with a neon vest and a hard hat came up to me. He flashed a badge. “We’re all over.”
The bus came, the doors opened, I got on it.
We kept the cameras hidden under the seats. A woman and her daughter were on the bus. “Our boy needs to get bailed out.”
“What did he do.”
“Somebody did something to someone,” said the daughter.
We got to Rikers Island. It was quiet. Everyone was quiet. The door opened and everyone got off.
Guards dragged a guy who had burn victims onto the bus.
The doors closed.
I sat down next to the guy with burns. “You ok?” He didn’t speak.
When the bus got to Rikers, he didn’t move. The bus driver said, “Oh geez.”
The guy was blinking. But he didn’t want to get off the bus. The driver called 911.
Police and the fire department and an ambulance showed up. “You have to get the cameras out of here,” yelled someone.
They carried the guy off the bus and put him in the ambulance. Put on the siren, and drove off.
“Another night,” the bus driver said, and he put the bus in gear and pulled away, back to Rikers Island.
What does this have to do with wealth?
One time Comedy Central asked me to do for them what I did for HBO.
I had created HBO’s first Intranet. I put all of their databases online and I installed “Netscape” on everyone’s desk. Most of the employees had never seen a web browser before.
On one page I set up they could click in an actor’s name and see all the movies and shows he had been in. Click on a show and see all of the actors.
This was before IMdB.
The most popular page? I put on the database that managed the menu of HBO’s cafeteria.
Click on a day and see all the items on the menu.
Now the woman in charge of Comedy Central’s IT department said, “We’ll pay you.”
I said, “Give me the 3am time slot so I can do a talk show.”
“Really? We’ll pay you whatever you cost.”
“I only want the time slot. You only have infomercials there.”
“Let me ask.”
A week later she called me. “It went all the way up to the CEO,” she said, “He said no”.
My brother in law had a CD-ROM business. CD-ROMs were the same as CDs that had music but instead of music they had games or interactive presentations.
He was going out of business. I showed him what the Web was. One Saturday I brought him to HBO and showed him the Intranet I had made.
He had a friend of a friend who introduced us to Shlomo, who ran a wholesale diamond business on 47th Street.
Shlomo said, “I could be killed if they knew I was doing this.” “They” were the 500 diamond retailers, mostly Hasidic jews, who sold diamonds out of every storefront on 47th Street, between 5th and 6th Avenue. The “Diamond District” .
He explained to me everything about diamonds. The “4Cs”. How he found cheap diamonds. How they were cut and cleaned and made ready for rings.
We made the website. It’s still at “diamondcutters dot com” although looks different now after 24 years.
He gave us $35,000 in a brown paper bag. My brother in law took $17,500 and left me the rest in the bag.
I had $0 in my bank account. I was living in an apartment in Astoria, Queens and my only furniture was a foam mattress.
It was summer and I had no air conditioning (I don’t even think I had electricity) and every morning I’d wake up and my sweat would be soaked up by the foam of the mattress. The mattress was perpetually moist from my sweat.
I took my $17,500 and got a room at “The Chelsea Hotel” which was known for letting artists, drug dealers, and prostitutes live there.
[The Chelsea Hotel]
Stanley Bard, the owner, took my bag of cash and said, “Are you a drug dealer?”
No, I said, I work at HBO.
“Can you get us free cable?”
He let me move in. It was illegal to live in a hotel but there were no rules at The Chelsea Hotel.
It was the best place I ever lived. I lived there for many, many years. It’s the only place i ever lived where most of my friends lived in the same building as me.
It’s the only place I ever lived where nobody told me the truth about anything.
Now that I lived right in between HBO and my brother in law, we were in business. We called our business “Reset”.
Time to reset your business to take advantage of this new thing.
“What new thing?” everyone asked. JP Morgan asked. Sony asked. Warner Brothers asked.
“The Internet,” I said. And then started to explain.
One for them. One for us.
We’d do Con Edison’s website for $300,000.
Then we’d do Fine Line Films for $1000.
We’d do “The Matrix” for $250,000.
Then we made a website for fun called “Shoebox”. Two friends of mine from the Chelsea Hotel came over. One was a dominatrix and the other was a professional submissive.
They brought over 100 pairs of shoes. We photographed them licking each other’s shoes. We photographed Maria tied up while Veronica stood in 8 inch stilletos with a whip giving Maria water to drink.
One company, a Fortune 500 very conservative company, looked at Shoebox and said, “Make us a site like that!”
Nobody knew what they were doing.
We charged a lot of money.
We did websites for Loud Records (the Wu Tang Clan), Bad Bad Records (Puffy), Interscope Records, Jive Records, BMG, Sony, we did Time Warner dot com, and many of New Line Cinemas movies.
[We did website for Wu-Tang Clan back in 1997.]
We did Miramax (everyone was terrified Harvey Weinstein would hate the website). We did HBO’s website.
We were known in the industry for being the best for entertainment websites.
One time Vadim, our first employee, came back from a shoot he did with Loud Records.
He walked in red and sweating. “That’s it!” he said, “I am not going to anymore shoots where guns are randomly firing.”
I wanted to sell the company.
A year earlier I had written to Felice Kincannon, who was head of mergers & acquisitions at Omnicom and was focused on this new breed, the interactive agency. The web agency.
Omnicom had invested in Razorfish, Agency.com, and a few others.
I met her for breakfast at The Palace Hotel, owned by the Sultan of Brunei. I loved the pancakes there.
“Maybe you are too small for us now,” she said.
“I understand,” I said and for the next hour I asked her questions about herself, her job, what she was looking for, details about the ad agency business which I knew nothing about.
I knew nothing at all about any business.
For the next year I would send her a monthly letter. We got X new clients. We went up Y% in revenues. We moved offices to handle our growth, etc.
Every six months we’d meet for breakfast. I asked her more questions.
I met with accountants to learn what deals looked like.
What sort of money did companies pay. Oh! They pay also in stock? Oh! They sometimes pay over time to make sure we keep our customers.
I didn’t know that. I didn’t know anything.
Every week I would arrange lunch or dinner with different competitors. Companies who also made websites.
There were only a few of us. We all knew each other. We all competed on every single deal.
We were frenemies. We were co-opetition.
We’d ask each other questions. We tried to make deals with each other. I’ll give you these clients if you give me those. You heard what about who? He got that client? You are using what technology?
New industries grow up together. We were all in the same sandbox. I’m still better friends with some of my competitors from then than some of my best friends from then.
Later, whenever one of us got acquired, we all got acquisition offers.
Finally, Felice at Omnicom was interested in buying Reset.
She introduced me to various agencies that Omnicom owned.
We got four offers. My mom said, “Who is going to pay for your business?”
“But mom,” I said, “We just got a nine million dollar offer.”
A stockbroker from Prudential kept calling me. I never called him back.
Finally I picked up the phone and he said, “Jesus, you’d think you’re Warren Buffett you never call me back.”
He wanted to help me sell my company. He wanted a 5% cut. “Ok,” I said.
He set me up on three meetings. All of them visited our offers. I set up a map and put needles in all the parts of the world where we had clients.
Werner, who made an offer, looked at the map and said in his thick German accent,
“There’s a lot of business in New York City. You don’t need to travel all over.”
I learned so much from people with forty more years business experience than me.
Then the worst period of my life (up until then) began.
“We’ll close the deal in just a few weeks,” he said. “It’s just legal paperwork.”
I was so happy. I had never had money before.
I had paid for my college. I graduated in three years to avoid another year of borrowing. I had taken six courses a semester and took two courses every summer while working 40 hours a week to survive.
I moved to NYC in 1994 with nothing in my pocket. My first room in NYC was a room I shared with Elias, a chess hustler from Washington Sq Park. He slept on the couch, I slept on the futon.
I had a garbage bag full of clothes. Every morning I’d pull a crumpled suit out of the garbage bag and then walk to HBO so as to save on the $1 subway money.
Elias and I would play chess all night.
It was one of my favorite times in life. And I had zero money at all.
“Just a few short weeks,” Werner promised in March 1998.
It was horrible. Every week there were new delays. New tricks. New traps.
To sell a company, you have to get approval from your landlord. Why? Because now they will have a new tenant.
Our landlord didn’t want to give approval. He was a “garmento” who worked on 38th and 9th.
I’d sit outside his office all day and wouldn’t leave until he gave approval. Werner kept calling me, “Did you get your landlord’s permission?” I would say, “Yes”. “Ok, send it over.” And I’d hang up. And wait. And at night I would cry. I was afraid.
“Tell me the stock buying you,” the landlord finally said. He wanted to buy it.
I didn’t know what to say. I said I can tell you as soon as deal is done. He signed the permission.
We had to sign a document saying that all of our employees had been insured.
But Adrian had forgot to pay insurance for the past few months. All of our employees thought they were insured but they weren’t. And our insurance company wouldn’t take us back.
I didn’t know what to do. I forget how we solved that problem. If we even solved it or just signed the document anyway.
Russia debt collapsed in the summer of 1998. The market was going straight down.
“The Internet might be over!”
Werner told me on the phone.
“No,” I said, “It isn’t. We are getting more business than ever.”
But, in truth, our clients were disappearing or not renewing with us.
“Let me see your contracts,” Werner’s lawyer would say. But we had no contracts.
We had agreed to the deal in March. April, May passed. July 4 passed. August.
I couldn’t sleep anymore and would walk around all night. And I was still doing my “III:am” show for HBO.
I used to be a morning person. But now I was one of the 3am people.
“Do you need money,” Werner said. “We could give you a loan.”
“No,” I said, although I was dying to say “YES!” But I thought it was a trap.
“Are you sure?” he said.
It was definitely a trap.
I made many many mistakes. Mistakes every day. If I listed all the mistakes it wouldn’t even be a book. It would be a horror movie.
One mistake, though: I said we were a “web services agency”.
But lazy people make more money than hard workers.
I was lazy and I had built all sorts of software to help me quickly make websites.
Think “Wordpress” but it was 1998 instead of 2015. My software allowed me to pick templates, and add all sorts of features to a website and upload images and designs with just a click.
But I didn’t tell anyone because it would only take me an hour or so to do a website and we’d charge $270,000 as if it had taken us months.
I thought I was smart.
But software companies were going for hundreds of millions of dollars. Software can scale. Agencies can’t.
We sold on August 31, 1998 for six million in stock.
I was so happy.
The stock went up and down. In 1999 I bought the most expensive apartment I could buy in NYC.
It was three blocks from the World Trade Center. Nancy, the real estate agent, said, “prices will never go down. Manhattan is an island and you will live in the best location.”
I said to Nancy, “but what if a plane hits the World Trade Center and the building comes down.” I wasn’t being prophetic. Just paranoid.
“You can’t live your life that way,” she said. So I bought the apartment.
[My apartment back then.]
The low of the stock after I sold Reset was $2 a share. I had 450,000 shares.
In February of 2000 the stock reached a high of $48. I sold almost all of my stock then.
I looked at the money sitting in my Prudential stock market account.
I kept hitting reload. I couldn’t believe what I was seeing.
“We’re done,” I said to my then-wife. “We did it.” I had been broke all of my life. Now this cash was sitting in my account. All cash. I had cashed out. Cash.
I had a daughter. I loved her. I loved everything.
Two years later I was dead broke. I was losing my home. The smoke from the old World Trade Center was still shooting itself into the sky a few blocks away.
Many things happened between 1998 and 2002. Amazing, exciting things. I have many stories. I made many friends.
In the summer of 2002 none of those new friends were around anymore. They all disappeared. Nobody would return my calls.
I didn’t want to think that people liked me for just money. But many people liked me just because I had money.
One time I needed to buy diapers for my daughters. I forgot which brand so I used a payphone to call my then-wife.
I picked up the phone and put it next to my ear but there was no dialtone. Something felt sticky in my head and ear.
I pulled the phone away. It was covered in shit. My ears and hair and cheek were now covered in shit. I hung up the phone and went home.
I forgot how to smile. I forgot how to find happiness tucked away in the laughter of my daughters. I wanted to be alone. I was nothing.
I was dead broke and needed to figure out a way to bounce back.
That was then.