Oscar: I’d like to welcome to the studio today, Danny Goldenberg of Marine Connection. Welcome, Danny.
Danny: Thank you. Thanks so much.
Oscar: On behalf of the Entrepreneurs’ Organization of South Florida Chapter, I’d like to congratulate you for earning a prestigious ranking on the 2014 Inc Fastest Growing Privately Held Companies in the United States. Congratulations.
Danny: Thank you. It’s an honor.
Oscar: Danny, how did you do it?
Danny: 2006, that’s when we started the company. Before that when I was in college, upside New York, Cornell University, I had a little chat with my father. He told me, “What do you want to do?” I said, “I don’t know what I want to do. What do you suggest?” He told me probably the most important thing that I heard in my life. He said, “Do what you love.”
Throughout my childhood, I was a fanatic boater. I did everything on the water, water skiing, fishing, and I said, “I wanted to do something related to boating.” Luckily, Miami was the place to do it. I had a special place in my heart for Miami. Immediately after graduating, I moved to Miami. I joined the training session to become a yacht broker. I did that for a while, and then I started my own company in 2006, and one thing led to another and we grew the company to a level where it allowed us to made the list this year.
Oscar: What’s unique about your business?
Danny: We’re a young group of people. I think it’s the team. We acquired Marine Connection in 2010. It was an older management. Immediately, we brought in some young people more tech savvy, graphic designers and actually coders. We’re able to do a lot of marketing in-house. If we come up with ideas to do a different kind of marketing, we can execute it in-house very quickly.
We’re able to reach a lot of people faster. As you know, technology is very important these days in any business. I think that’s our competitive edge being a tech savvy boat dealership.
Oscar: Fantastic. What is your ultimate long-term vision for you company?
Danny: Obviously, I’m an entrepreneur and I’d like to try different things. I’m at the moment investing in different businesses. We have an exit strategy. We have a 10-year plan. We’re going to grow the company to a level so that we can exit and we can have a bigger group acquire us and make the company bigger.
I might still run the company for a while but ultimately, we would like to become a national, national recognized company and become available to more states.
Oscar: Excellent. When you bought the company, you I’m sure had a vision, a plan post-launch, how has things changed since that very beginning?
Danny: When we acquired the company, actually, it was one of our competitors. We were doing the same thing but Marine Connection was a competitor. It was a tough time at the time. It was beginning of 2010. Things were starting to roll again. Housing market was recovering. Specialty, luxury goods were still a little sluggish.
We started with one brand. We started with only selling one brand. Then once we saw that the manufacturers were investing and manufacturing and coming out with new products, that gave us confidence. Now, we have seven brands. We carry about $10 million of inventory at any moment. Things changed but the economy gave us confidence. It’s way bigger than what we started.
Oscar: Your company is very successful. As an entrepreneur, what habits do you make you who you are?
Danny: I always believe in being at the right place at the right time and knowing what you’re doing. Back in 2008 and 2009, we were just starting out. The economy was struggling, so there were a lot of opportunities on the banking side where you could get into some banks assets and market those things and you could actually make good profits at that time.
If we were large at that time, we would probably have to downsize or we’d have to shrink the business, but we were lucky enough to grow in that environment and when things took off, we were ready to just switch the things on and move forward with the growth.
Timing is very important. You have to know what you’re doing. I knew the marine business. I knew every aspect of it because it was a hobby at the beginning. If you’re doing something that you really like that helps, you naturally know every angle of the business.
Then I think lastly, you have to be cautious at any moment. You have to remember that things can change or you always have a contingency plan.
Oscar: You mentioned that your marketing efforts were unique. You introduced technology but what made you unique to your customers? What was the key differentiator that you may have had?
Danny: From our customers’ standpoint, we get this all the time that we are a very easy going business. Now, what is an easy going business? When you walk into a business, you want to buy a TV or you want to buy a car or a boat, you start asking questions.
It could be technical questions and then, “Can I take it home? Can I return it if I don’t like it, I’m not sure about the size?” Pretty much every answer we get, we try to answer with a yes. It’s harder in the boat business or in a marine environment because you’re dealing with high-ticket items like cars, anywhere from 30,000 to a million dollars we’re talking about. That’s our market.
If they want to test it, let’s go test it. No strings attached. We don’t require any kind of commitment. “Can I test it today?” “Yeah, why not?” We’ll make it happen. We have a lift. We have a trailer or we can in one of our stores, we will make it happen. We try to make it happen. “Can you deliver it to my home?” “Yeah.” “Can you pick it up?” “Yeah, absolutely.”
We try to charge them a fair price for these services. We don’t try to make money on these additional services. They say, “This is amazing.” When we were thinking about buying a boat, we were frustrated. When they come here, when they come to one of our locations, we blow them with yes. That’s our key.
Oscar: It’s frictionless.
Danny: Exactly. It’s actually disruptive, a little bit because traditional marine businesses, they want to make sure that they are dealing with a buyer. They want to make sure that there’s a deposit. All those old-school rules, they don’t apply in our locations.
Oscar: You’d change the game.
Oscar: When you started your business, what did your average workday look like compared to where you are now?
Danny: Pretty much, we were working everyday, 20 hours a day. We were on the road all the time trying to find manufacturers, trying to find banks that would give us a contract on their liquidations. One day I was in South Carolina, the next day I was in Pensacola, the next morning, I was going to Cincinnati, Ohio to see if there are any opportunities there. There was a lot of traveling because we wanted to understand all the habits of different states.
Then obviously, we didn’t have a secretary. We didn’t have an accounting department. I was crunching QuickBooks trying to put everything together, opening a bank account. If you need a new utility, you go there and registering all those things. I’m not ashamed to say, we went painting bottom, bottom painting or waxing the boats for delivery. We did all that.
Now, when I’m looking at my employees, I understand what they go through. It’s a different mood for sure. Less hours but more stress because you have to make that payroll. I need to make sure that everybody is going to get paid and we’re not going to have casual problems and all those things. It’s equally tiring but definitely less physical work as far as moving. I have more time to myself now.
Oscar: When you purchased the company, how did you finance it originally?
Danny: We accumulated enough cash to make the purchase and again, it was a strategic buy for us. We bought it at the right price. No one was investing in marine business at that time. We financed it to our own equity. We have some traditional home equity lines. I say, I have a partner in the business. I run the day-to-day operations but I do have a partner. We pretty much use our own cash.
Oscar: What would you say as your greatest asset that you have in your company?
Danny: Probably, and I know it’s a cliché but it’s the team. My sales team, my service team, I have a couple of managers that they have been in the business for a long time. I inherited some employees when I acquired the business. Without them, it would be impossible to run the business like we do. That would be the most important asset of the business.
Oscar: Your team? Some you inherited, some you added on to that.
Oscar: This is a tough environment to recruit top tier talent. How did you manage to accomplish that?
Danny: It is a challenge. I feel like I’m doing more HR than anything else because it’s very, very tough. We do interview a lot of people. Sometimes we interview even though we don’t have the immediate need for that position. We try to have some people in the back of our heads. We follow the traditional methods.
I work with some headhunters and I try to recruit technicians from educational areas. There are a couple of marine universities. We go there every once in a while and we try to talk to people. At the end I found that references are the key. If you have a good report on someone, you’re more likely to get a good guy there. I rely on that.
Oscar: Yes. What would you say is the most difficult decision you ever had to make owning this company?
Danny: The most difficult decision would probably be the financing because we utilize … We have to keep a decent amount of stock in order to capture the market. We have a leverage. We have to use leverage. We use GE Capital for our inventory financing. We have great relationships with them. I think we’re a tier one customer for them.
We do have a good amount of debt to run the business. The level of that is the toughest decision because I can grow it faster if I want to but I like to be cautious and I don’t want to grow too fast, carry too much inventory, open too many stores. Pretty much, that’s the toughest decision that I have to make day-to-day on where to keep my inventory level.
Oscar: I would like to make a $1 million investment in your business. I brought with me a check today giving you a million dollars. How will you invest those million dollars in your business?
Danny: Obviously, I’m in retail sales. The only way to invest is to open up a different store or grow into a different market. If it was a service business, I could come up with 20 million ways to utilize that money in a very efficient way, but in my business, it’s retail sales. We’re selling a luxury good, so we need to grow into different market.
I have 180-mile stretch from Vero Beach to Miami. I would probably find a good area and open up another store or two. It could be West Coast or Florida. We can try a different state but that would be the only feasible way to utilize that million dollars.
Oscar: Great. If you had magical powers, and you can go back in time from day one of your business to current, and you could change anything that you did, it could be strategy, it could be higher, a location, a brand that you decided to represent. What would you change?
Danny: I would get in to a better real estate.
Oscar: What do you mean by that?
Danny: In Florida, the waterfront properties are very expensive. In order to run a healthy marina or a marine dealership, you’re better off being in a waterfront environment. As you know, real estate keeps going. It keeps going up even though sometimes it goes through some downturns. Ultimately, it becomes the best investment to me. I would try to get into some waterfront properties in Florida. I really believe in waterfront in Florida. That would be the thing.
Oscar: [Crosstalk 00:15:50]
Oscar: Now, continuing with your magical powers, I’m going to give you a crystal ball for you to look into. Tell me, how do you think the business climate will change for you the next five years and how that will impact your business.
Danny: The business climate is ever-changing, but I like to look at the fundamentals. Strong brands are fundamental needs. They never change. We were using a phone. I mean, when I grew up, there was a phone at home. There is still a phone. Maybe not at home, in my pocket, but there’s still a phone.
Of course, we cannot look at the crystal ball and see 200 years ahead and I don’t need to but I’m not going to be around. We were drinking Coke and we’re still drinking Coke. There were boats in the water, there are still boats in the water. They were very different but ultimately, they’re floating and they’re boats.
I don’t think that’s going to go away. There will always be boat owners. People will always enjoy Florida waters or any waters around the world. It’s how do we facilitate that. Luckily in my business, that’s not going to change. You need a distributor or a dealer to facilitate that. You cannot order a boat online. You could, technically, but someone needs to facilitate that.
I’m very bullish on my business model, but then again, it’s a trade and their margins will be minimized in the future just like anything else. The distribution business will ultimately be affected by something. I cannot foresee how is that going to be. If I had a crystal ball, I would want to see that.
I have some ideas on what’s going to happen within 10, 20 years, the consumer habits on how to purchase things like that, how to buy a car. Another thing is marine business is coming behind auto business. By looking at auto business, on how things are moving, I’m able to project in the future and see what’s going to happen. I cannot tell you what’s going to happen if I … but we will change our model accordingly.
Oscar: Excellent. What one word describes you as an entrepreneur?
Danny: That’s a very good question, Oscar. Probably, it would be patience. Patience allow me to run my team because ultimately, I’m not building something but I am building a team. We get into arguments throughout the day. My managers, they get into arguments. There are conflicts. I’m grateful to have that virtue, that I have the patience to hear them, to calm them and to get them to do their job and not to be bothered with these arguments.
Oscar: As an entrepreneur, how do you define success?
Danny: Success is I think going home at the end of the day and feeling happy about what you do day-to-day. It’s not about hitting that number or selling that company to X amount of dollars or having X amount of employees. I think it’s about you. It’s about how you feel when you sleep at night and in the morning, you want to do that all over again. I think that’s success.
Oscar: That’s fantastic. If you’re looking for some guidance or advice or to brainstorm an idea, who do you go to?
Danny: I’m lucky enough to have a partner even though we’re at the same age and same background. It’s good to be able to just talk to someone. It becomes like a therapy session. Time-to-time, I feel like, “What if I was alone and running a business alone?” because partnerships are not easy. It’s not an easy institution.
We talk to each other a lot. I have other business partners in other businesses. I go to them. I go to my father. I go to some of my manufacturers because they are successful business owners. They have hundred million businesses. They build things.
There are few manufacturers that I respect. I have great respect for them, so I go to them. That’s about it. I value mentorship a lot and I would like to be a mentor to someone one day. Whoever I can visualize as a mentor, I go to them.
Oscar: Great leaders are always learning. What is your best source for knowledge?
Danny: Probably time. Time teaches me a lot. I didn’t tell you a lot about my background but when I graduated, and I graduated from a decent school. It was Ivy League school. I did not go into a large corporation. Unlike my friends, I did not start a career at a multinational or a national company. That would have been a good training for me.
Now, looking back in retrospect, I regret that I didn’t do it, but when you’re an entrepreneur and you want to do something, you just want to get out there and create something, put some money into what you’re doing. I try to learn from my own mistakes and try to learn from my past, what we did, what happened. I try to read books. I love biographies. I read biographies of successful business owners and artists sometimes, and all sorts of influential people.
Oscar: Excellent. Based on your experience, share with me wisdom that could benefit a fellow entrepreneur.
Danny: Number one, do something that you love. Don’t do something because you see there’s a market for it. That might be a good strategy but at one point, when you go through that time that you’re going to be successful in a couple of years but you have to go through that miserable time of not getting the reward right away, doing what you love will help you go through that time because it won’t feel like you’re doing something for a reward. You are doing it because it makes you happy, because it nourishes you. That would be the number one advice that I can give.
Be patient because you’re not going to get the reward and whatever that reward may be, it could be a prize, it could be money, it could be basically anything, but you have to be very patient.
Oscar: Along those same lines, what knowledge would you like to receive that would benefit you?
Danny: What knowledge would I like to receive? I would like to know what’s going to happen within 10, 20 years in the technology business because I’d like to time my business at one point to technology. Even though we’re delivering a product, I would like to see where the next technology evolution is going to take place.
Oscar: How does your company make a mark in your industry or community?
Danny: We change lives, I’d like to believe that because we have a lot of fans and we call them family. They bought a boat from us, maybe they are there. They bought their second or third boat and they refer us to their neighbors or to their family members and they come and they talk to us that their boat changed their life because they started enjoying their lives more.
Florida is huge. We have a huge coastline. You have to enjoy the water at some point in your life. Otherwise, there’s really no point of living in Florida if you’re not doing that at one point. Even if it’s for a day, I suggest everybody to do that. That’s very important for me.
Oscar: Could you share with me one of the coolest things you’ve ever done either professionally or personally?
Danny: Coolest thing that I’ve ever done was again, I’m going to say it’s related to my business. I would like to share that with you that I was racing. I used to race boats and I have a couple of trophies. That was in the European Circuit in Norway. One race took place in Turkey and that was a thrilling experience for me. Probably, those races have something to do with my success because being exhilarated with something, it’s something that you would never forget.
Oscar: That’s great. What do you think is the boldest move you’ve ever made in your business career?
Danny: The boldest move was to invest in a restaurant in London. It turned out to be a very successful investment for us. Probably we got the best return from that investment. We did that from what we earned from Marine Connection.
We wanted to diversify at one point and we invested in couple of the businesses but investing in a restaurant was the craziest thing that we’ve ever done.
Oscar: I have a place to go eat in London?
Oscar: Excellent. In what ways do you develop trust with your team or your partner?
Danny: That doesn’t happen right away. It takes time, but everything that you do, every move you make, it’s observed. Even though you don’t feel like you’re observing your partner or you don’t pay attention on how he deals with others or what he does in his personal life, everything makes a difference.
You create that profile, you create that footprint over time and then there’s a little bit of gut feeling that you want to trust that person. There’s a psychological aspect to it. Over time, you build that trust. It’s like building a home or building a building. It doesn’t happen all the time. You have to lay bricks little by little and it becomes something strong.
Oscar: That’s great. Final question, let’s pretend that your company is gone. Tomorrow is a new day. What business would you like to get involved in tomorrow?
Danny: I would like to get into a tech company or I would like to start a tech company because it’s already huge, what you can do with your phone or what you can do with your computer. I see now I at age where I’m going to be a father in the near future, hopefully and they’re going to grow in an amazing environment. It may be harder for them but they’re going to grow up very differently.
I want to do something and I want them to become my customers in 20 years, 30 years. That’s what I want to do. We already have a startup called Park Jockey, where you can book parking and pay for parking. It’s a parking optimization software. It knows where you are, where you’re going. It gives you a message, “You’re going there, would you like to buy a parking in advance?” and stuff like that. It’s an amazing tool. it’s already launched in Miami and we do in New York and Chicago and there’s one also in London.
It’s very exciting for me because that’s something that you build a user-based and you can reach to millions. I don’t think I can reach to millions selling boats or owning the biggest boat dealership in the world but you can reach to maybe one day billions through a software.
Oscar: That’s fantastic. Very, very exciting. Danny, I’d like to thank you so much for coming out to the studio today. Congratulations on your ranking on the Inc list being one of the fastest growing privately held companies in the United States. It’s been a pleasure. Thank you so much.
Danny: Thank you very much. Glad to be here.