Joshua Levitt, UsedCisco.com Founder shares His Entrepreneurial Experience
Hi Fellow Young Entrepreneurs!
Today we have an interview with a wonderful Young Entrepreneur – Joshua Levitt of usedcisco.com, a company he started aged 29.
Founded in 2005, UsedCisco.com is the world’s largest online network hardware outlet, offering thousands of network hardware products at significant savings off list price.
Joshua is a seasoned entrepreneur – and having gone through the trials and tribulations of starting his own business he has many great insights such as:
“My grandmother once told me when I was running my first business in 2003. ‘You better learn how to roll with the blows.'”
“You will never be the cheapest guy out there and remember, people buy form people they like.”
Enjoy the interview and as always let us have your comments.
To Our Success
Joshua Levitt Interview
1) Hi Joshua, thank you for agreeing to this interview,
You are the Co-founder of usedcisco.com. What made you set up that site? Get involved in that industry?
The decision to build usedcisco.com was predicated on the desire to align our business model with 3 emerging trends, therefore increasing our probability of success.
The first trend being the demand for bandwidth. I recognized the potential impact of the computer revolution while in high school. I wasn’t the best student, but I always had the ability to find relevance between my studies and the environment. I was learning about the industrial revolution in my history courses and I was simultaneously taking basic computer electives. I quickly realized that computers and the internet would account for a revolution greater than that of the industrial revolution. I figured, a career in networking technology would be akin to choosing a career in the manufacturing or the railroad back in late 1800’s. The demand for bandwidth is ever increasing. The growth is and will continue to be exponential and usedcisco.com is selling the equipment necessary to be a part of it
The second trend is that of e-commerce. Studies show that more and more people are doing their shopping online every day. Frankly, I believe with the advent of the internet and e-commerce, most anything can and will become a commodity in the next 10 years. E-commerce affords customers better access to product pricing and product research than ever before. This trend is going to continue growing exponentially as well.
The third trend is the environment. Green IT and environmentally friendly corporate philosophies are on the rise globally. Driven by the necessity to minimize our impact on the environment this trend is not going anywhere soon (or ever). Our ethics have evolved in the past few years to consider the environment on a scale never before known by the human race. At UsedCsico.com we are selling pre-owned network hardware and therefore reducing the impact of e-waste. E-waste accounts for more than 3% of the global carbon output, which is equal to that of the airline industry. Reuse and recycling will continue to be part of the mainstream in the years to come both socially and legislatively.
2) You mentioned starting a business was an emotional rollercoaster. “It’s a Rollercoaster in the sense of the emotional constitution required to build a start-up with limited resources” Tell us a bit more about how you dealt with this and what gave you the strength to persevere?
The strength comes from my desire to succeed and my passion to win. I am a competitive person and I think it carries over to my career as well. I draw strength daily form my team. We are all overworked and under-paid; it’s the nature of any start-up business. My team continues to be highly motivated and committed to the success of UsedCisco.com regardless of our ups and downs. Finding the right people to build your core team is tantamount to the success of any entrepreneur. It’s imperative that you surround yourself with individuals who buy into your business model. These people need to be driven, hungry and willing to make a sacrifice. These people are not your typical 9-5ers and I could not do it without them.
3) Can you share some of the biggest lessons you have learned personally and as a business as UsedCisco.com has grown? If you were to start again, what might you do differently?
My biggest lesson has been the management of cash flow. Any business needs capital to succeed. This business was started on a modest bootstrap and therefore resources have always been limited. I regret not working harder towards raising additional capital to grow the business. I thought we would grow organically and therefore have no debt. We have done just that. However, looking back, I now realize that we could have grown markedly faster with the assistance of outside capital. Faster growth is essential to staying ahead of the competition.
Regarding cash flow there is a very delicate balance between re-capitalizing profits back into the business and dedicating cash for operating capital. Start-up businesses are less likely to secure loans and lines of credit from a traditional bank due limited history and less than 3 years of financials. So be very careful not to screw up the balance even once because you will have little or nothing to fall back on. At a start-up you have to carefully re-invest in your businesses to reach its goals. This balance is rather difficult to budget because there are no historic trends to assist in budgeting. Revenues can fluctuate drastically with no benchmark to call upon. A few consecutive slow months in sales can sink your shiny new ship before it ever gets out of the harbor.
4) Do you have any recommended strategies for getting customers who buy once to come back and use your service again – other than of course good service?
Well that’s just it, good service! Our philosophy here has always been to exceed our customer’s expectations. I try to drill in the philosophy of under promising and over delivering. A customer of ours should be pleasantly surprised after ordering a small part from us and hopefully next time she will come back to make bigger consecutive purchases. My definition of over delivering can include; an early arrival of your order by a day or two, professional packaging, friendly and knowledgeable sales rep’s and terrific post sales support.
I try to push our sales team towards providing business solutions to their customers. I tell them, “you are not here to quote people on hardware; you are here to solve their business problems.” Hardware itself is a solution to a business problem, and we try to understand the bigger picture of what our customers are trying to accomplish. If we can fully understand them, then we can suggest out-side of the box solutions or configurations. Sometimes even at the expense of losing the deal if hardware is not the appropriate solution. I believe when we can get a customer to consider an option that they had never previously thought about, is when you truly begin to add value and stand out form our competitors. These are the customers who will award us with the most lucrative long term relationships.
5) Do you have any suggestions for coping with set-backs, negative experiences?
Yes, my grandmother once told me when I was running my first business in 2003. “You better learn how to roll with the blows.” This advice was imparted on me after I had just finished complaining to her how I was having a spell of bad luck with equipment break downs and bad help. I said my life will be a lot easier when everything is running smoothly and I don’t have to put out fires so often. I soon realized that the days of “smooth running” are often fewer in numbers than those of fire extinguishing. It’s the nature of being in business. If you want stable, repetitive, and thoughtless tasks to work on daily then stay as far away from a start-up business as you can get. I learned to expect the unexpected and to make the best decisions I can with the most information I have. I commit to those decisions quickly and move forward with tenacity. It’s simply the best I can do. At the end of the day you can’t beat yourself up for doing your best.
6) How do you keep your business focus – Do you have any suggestions for entrepreneurs who are experiencing challenging times?
It’s very easy to get caught up in the day to day operations of any business. It’s imperative that you take a step back every so often and consider the bigger picture. This also included celebrating milestones. There are always more goals to achieve and deadlines to work towards, but you need to make a concerted effort to document these milestones and pat yourself and your team on the back after reaching each one. Sometimes, talking about your business to a perfect stranger helps you stay in touch with the bigger picture of where you are trying to go. If you experience tough times, fall back on that broader goal and draw strength from where you have come so far and the milestones from your past.
7) Is there anyone that you look up to and model yourself on?
I look up to My Dad and grandfather who were both successful entrepreneurs and who taught me early on about what it means to succeed in small business and most importantly how to control costs. More recently I have looked up to Joe Asady my co-founder and angel investor for UsedCisco.com. Joe owns and manages several businesses in the network hardware arena and was a mentor to me in the early stages of development. He pushed me to grow and become the best I could be. I call upon both Joe and my Dad for my toughest business questions. They always have the right answers.
8 ) Do you have any favorite business related or web design related books that you can recommend to other entrepreneurs?
I highly recommend a book by Jessica Livingston called Founders at Work. It is a collection of in depth interviews and stories of start-ups’ early days during the dot com bubble. The case studies found in that book are invaluable to anyone who is thinking of starting or exiting from any business.
9) What is the best advice you have ever been given?
You will never be the cheapest guy out there and remember, people buy form people they like.
10) As someone who has achieved success so young, what advice would you give to a Young Entrepreneur starting their first business today?
The devil is in the details. Having a good idea is the easy part. There is another good idea every 30 seconds in this country. The difference between those of us who succeed and the majority who fail is EXECUTION. Execution is 98% of the equation. There s no short cut to success and substitute for hard work and diligence. Everyone I know thinks they have a good business idea. They talk about their product and or service, and its superior advantages. However, if you cannot manage cash flows and you cannot motivate a team of the right people you will get nowhere fast. Understanding of basic accounting principles and the intricacies of running a business financially are equally as important as your great idea, if not more so.
11) What do you like best about the Internet?
I like how the internet brings people together. It is shrinking the world at a rate faster than the railroad, automobile and airplanes combined. I love the collaboration this affords. When you can you combine so many minds and information in one place the potential for advancement is insurmountable. This is all afforded by the ability to upload. Historic mediums like newspapers and television always projected information in one direction. Never before has any other medium allowed people to contributed in real time.
12) What do you like least about the Internet?
I dislike all the unscrupulous behavior. The hackers, the phishing scams, certain unethical marketing platforms etc…
13) Any advice for how young entrepreneurs can bootstrap? (Not spending a ton to get something off the ground)?
Yes, in the words of Joe Asady, one of my mentors previously mentioned. “Beg, Borrow and steal,” all kidding aside, you need to remain humble and keep your costs to an absolute minimum.