
How A Kid Earned $2m Before He Could Drink – And The Shocking Way He Lost It - vaksel
http://mixergy.com/andrew-thomspon/
======
simonw
tl;dr: built tacky MySpace themes sites, promoted them by paying "MySpace
whores" with 10,000s of friends to post bulletins, got in early with Yahoo!'s
beta ad program when they were massively overpaying, made at peak $200,000 a
month, blew a TON of money on cars, a house etc, redesigned the site (and
permanently deleted the old one) without realising that changing his URLs
would kill his Google rank, blew $30,000 on SEO experts, none of whom
apparently told him he should set up redirects, ended up selling the MySpace
site for $75,000, still has the house.

~~~
nfnaaron
"tl;dr: built tacky MySpace themes sites, ... still has the house."

I'm having trouble reconciling the "dr" part of "tl;dr" with your concise
summary of almost the entire interview. :)

"built tacky MySpace themes sites, promoted them by paying "MySpace whores"
with 10,000s of friends to post bulletins, got in early with Yahoo!'s beta ad
program when they were massively overpaying, ..."

Or, built a service that many people on MySpace were very happy to use,
promoted that service very effectively within the web and MySpace community
dynamics of the time, had lucky timing and benefited from his status on
MySpace and the Web to get in the Yahoo ad beta stage when it was was more
lucrative ...

"... made at peak $200,000 a month, blew a TON of money on cars, a house etc,
redesigned the site (and permanently deleted the old one) without realizing
that changing his URLs would kill his Google rank, ..."

Or, made more money at peak per month than most people will make at peak per
year, ever, blew a lot of money, redesigned a site that had grown organically,
as did his knowledge of software engineering and business, made a fatal error
not just in changing the URLs but _all_ the text on his site (html, css,
javascript, etc)...

"... blew $30,000 on SEO experts, none of whom apparently told him he should
set up redirects, ..."

When, what he should have done is spent a few hundred or thousand to have an
SEO expert tell him what went wrong (or hired such before he finalized his
decision to switch everything over in seconds) and how long it might take to
fix it (if it could be fixed at all). If anyone had told him about redirects
by that time (they probably did), it would have been too late because the
mistake was already irrevocably "out there" ...

"... ended up selling the MySpace site for $75,000, still has the house."

Still had a business that could be sold for some amount of money, and, he's
already dusted himself off and working his way back with what may be a viable
and lucrative service.

The guy is 22 (?), and already he's built and lost/sold a million dollar
business (based on nothing but tacky MySpace themes!) without, apparently,
knowing much about business, and without benefit of any experienced adviser.
He learned some very expensive lessons about spending, source control and how
search engines see and judge your site, and about how important it is to learn
important things before they're important. He did it in the fashion often
advocated here: do it, and learn what you need when you need it. Unfortunately
he learned a few things a bit later than when he needed it, but it doesn't
seem to have discouraged him permanently.

Most of us make mistakes and learn about managing our life and business in our
early twenties, we just don't think of those mistakes as "shocking" because we
aren't spinning millions of dollars and our own business around.

I thought it was an interesting and useful story, and I liked the "en vivo,
open kimono" format.

~~~
derefr
tl;dr, when accompanied with any further text, means not "it was too long; I
didn't read it," but rather "for the benefit of those who thought it was too
long, and thus didn't read it:"

~~~
nfnaaron
Ah, thanks for that.

------
mikeryan
Just a note, Mixergy seems to put up a bunch of interviews that I'd be
interested in _reading_ but watching a 1 hour interview just doesn't work for
me.

~~~
mcantor
I have this issue with Mixergy as well. It sounds kind of stupid now that I'm
typing it out, but... an hour is a _long time_. And the synopses that they
write for the interviews are rarely very good.

~~~
vaksel
I actually disagree completely, yes an hour is a long time, but that is
exactly why I like watching them.

Most "real" interviews are so short, you never get any details, with mixergy
you can actually get the nitty gritty details that help you see the actual
thinking behind the actions. And since you can ask your own questions, you can
actually get your questions answered.

For me the interviews, fall at 2pm, so I just watch them while I eat lunch.
Probably the best hour I spend per day, come to think of it.

~~~
aaronblohowiak
If watching an interview is the best hour you spend per day, consider doing
different things during the rest of the hours.

------
covercash
It was an interesting interview, definitely more Howard Stern and less 20/20
as far as the guest and content are concerned. I really didn't need to know
when and how he lost his virginity. His money management (or lack thereof),
business "partnerships" (giving full server access to a kid in another country
he never met before) and business ethics (scraping a competitor's site and
spamming their users under the guise of direct marketing) painted a picture of
a very naive entrepreneur to say the least. I think this interview is a very
good example of what NOT to do.

~~~
codexon
I thought it was fairly stereotypical how it was only after he was making lots
of money that he was able to find a girlfriend let alone lose his virginity.
Maybe for some people this is part of the allure of being an entrepreneur.

About the business ethics though, there's a reason why the saying "behind
every great fortune lies a great crime" is often said. Because the currency
economy is mostly a zero-sum game in the sense of total money ownership
(barring inflation), the people that have less scruples than you will often
rake in more money than the more honest counterparts.

~~~
timwiseman
_Because the currency economy is mostly a zero-sum game in the sense of total
money ownership (barring inflation),_

This statement is true in its literal sense but very misleading. Holding
currency is close to a zero sum game, holding wealth is nowhere near that.

If someone were to, say, sell me a pound of gold for $1, he would win in terms
of pure currency. He would have one more dollar, and I would have one less,
but I think I would come out ahead.

Similarly, if someone sold me a tool I needed to do my job, he would clearly
win in terms of money in that transaction, but I could turn around and use
that tool to create new things that never existed before and create more
_value_ in the world.

Paul Graham talks about this in more detail and more eloquently than I can
hope to at <http://www.paulgraham.com/wealth.html>

(Edited to add a small comment).

~~~
codexon
_This statement is true in its literal sense but very misleading. Holding
currency is close to a zero sum game, holding wealth is nowhere near that._

I already understand that "value" can be generated regardless of how much
currency is available. Why is everyone here on HN in a rush to ignore that
currency exchange is a zero-sum game and keeps trumpting that wealth can be
generated? Perhaps it is because Paul Graham wrote that article.

Wealth is a different subject from currency. You can generate all the "wealth"
in the world, and if there is only $100 circulating in the world, all that
"wealth" isn't magically going to expand this $100 except when you convince
the government to print more money.

This has important limitations on the liquidity of your "wealth". Let's say
that you've created $1 quadrillion worth of meat. You want to convert this
into alternative forms of wealth such as currency and medical supplies.
However, is it at all likely that you will be able to convert all this wealth
before it expires? Nope. And this is one of the most important distinctions
between wealth and currency.

The supply of currency is artificially limited by the government, while the
supply of wealth is an arbitrary measure that people decide to assign their
work and belongings.

~~~
nazgulnarsil
wealth creation with fixed currency causes deflation. deflation means you can
now buy more products and services with the share of the currency you do have.
so you're wrong.

~~~
codexon
If you think deflation is good for liquidity, you are missing econ 101
knowledge. You only have to look to Japan in the 90's for proof or the great
depression!

When deflation rises, businesses start feeling uncertain about the amount of
money they can pull in regularly and start laying off workers. Individuals
start to save more and spend less. Instead of hiring workers to do their lawns
or buying meals, they will try to do everything themselves. In this manner,
the "monetary" value of "wealth" from lawn mowers and processed food producers
approaches 0.

This is another fundamental difference between the wealth pool and the
currency pool.

~~~
nazgulnarsil
you mean people will forgo consumption in favor of investment? the horror!

~~~
herdrick
Exactly. Codexon, saving just causes another, ostensibly wiser, form of
spending. If you save your money in a bank, then they will lend it out where
it will be spent, usually on capital goods (whatever that means anymore, or
ever meant). If you save it by buying some stock, you drive up the stock's
price, making it more a better deal for the company to issue more stock (and
spend the proceeds in building their business). Same thing with bonds.

~~~
codexon
I think you are being a bit naive here.

Think about this. If everyone saves all their money, who is going to do the
spending? How is anyone supposed to earn money?

The only people you can trust to earn money from are the people who aren't
saving all their money.

If you save your money in a bank, how are you and the bank supposed to make
interest if everyone starts saving and no one takes out a loan??? Your savings
rate will drop towards 0 in a situation like this. If companies act in the
same manner, why should they issue any stock??? What is the benefit for them
if they prefer to save up and use their own cash instead of share holder cash?

What happens in a situation like this is that the stock prices don't grow at
all as you can see here in Japan for nearly 20 years:

[http://www.progressdaily.com/wp-
content/uploads/2007/10/Nikk...](http://www.progressdaily.com/wp-
content/uploads/2007/10/Nikkei225.jpg)

I recommend you think about these points for a while before discussing this
matter again.

~~~
herdrick
Codexon, on this site people use a civil tone. Please read this:
<http://ycombinator.com/newsguidelines.html>

Also I'd rather not debate economics, sorry.

------
jncraton
This title is a little misleading. He didn't lose the $2m. He spent it all on
fun stuff and then broke his SEO in some way so that the revenue stopped
coming in.

~~~
ToJo
It's also misleading in the fact that he didn't earn the money before he could
drink. He earned it before he reached the legal drinking age.

~~~
vaksel
i truncated it since I kept hitting the topic character limit.

------
thechangelog
I think this says it all:

"Interviewee: Yes, that was actually an .htaccess thing I forgot to do. You
can do a redirect - there's a few types of redirects you can do, there's like
301s, 401s, and there's one, there's a redirect that you can do in the
.htaccess file that says, "Hey, this page is gone - not missing, it's over
here." And we didn't do that, and I didn't figure that out until a month later
when it was too late, when the old design, when the old site was already
gone."

------
richardburton
Sometimes it's all about being in the right place at the right time and
getting a little lucky. I have a friend who had a lastminute.com affiliate
account go ballistic because his affiliate code somehow got onto all of their
call center's terminals. He was earning commission from every single holiday
booked over the phone at lastminute.com for around a month!

------
jyothi
It was an interesting interview which could have very well be summarized in 10
min. Andrew Warner has just dragged it way too long.

Kid's spending patterns and his love intersts. Not necessary. It pretty much
seemed like he ran out of questions or was it like a highschool kid in awe
interviewing another highschool kid.

------
morphir
This is a classic scenario where a human is overspending and don't have any
insight to economics. He also thought he knew his domain, while he didn't. The
SEO-guy was ripping him off, and he should have taken legal action against the
SEO-scam that effectively pulled the plug on his cashflow.

------
pbhjpbhj
I looked for beemodel.com that he mentioned about a dozen times, think he got
the address wrong! Whoops. There is a bemodel.com but only a domain seller
holding page at beemodel.com.

------
bradgessler
Does anybody else think its wrong how he blames his loss of $2mm on his
website falling on Google's rankings?

Umm... maybe he lost $2mm from all the crap he bought!

~~~
forensic
He lost his $200k/month golden goose due to falling on google's rankings.

He traded his $2million in cash for some status symbols.

------
vaksel
I posted about this yesterday, and Andrew finally upped the interview, so here
is a link.

