EP 70 - Stefano Starkel - Get Ahead of the Game with Business Automation Software

Get Ahead of the Game With Business Automation Software

Software and automation tools have become essential for businesses to stay competitive. By investing in the right system, business owners can improve productivity, revenue and efficiency.

On today’s podcast, Steve Simonson introduces us to Stefano Starkel, Co-Founder of Zon.Tools. Stefano is a brilliant entrepreneur and has been living a unique and free lifestyle for many years. Here are some key points on today’s episode:

• Stefano’s origin story.

• How he started in the E-commerce business.

• His take on the Catalyst88 Mastermind group.

• What Zon.Tools is all about and how it helps E-commerce entrepreneurs.

So listen to today’s episode to learn more about growing your business with the right software and tools.

01:35 (Steve introduces today’s guest, Stefano Starkel of Zon.Tools.)

10:36 (Stefano talks about his origin story.)

32:44 (Stefano talks about how he started in the E-commerce business.)

56:53 (Stefano talks about Zon Tools.)

1:06:34 (Stefano’s final words of wisdom.)

Welcome to the Awesomers.com podcast. If you love to learn and if you're motivated to expand your mind and heck if you desire to break through those traditional paradigms and find your own version of success, you are in the right place. Awesomers around the world are on a journey to improve their lives and the lives of those around them. We believe in paying it forward and we fundamentally try to live up to the great Zig Ziglar quote where he said, "You can have everything in your life you want if you help enough other people get what they want." It doesn't matter where you came from. It only matters where you're going. My name is Steve Simonson and I hope that you will join me on this Awesomer journey.

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01:35 (Steve introduces today’s guest, Stefano Starkel of Zon.Tools.)

Steve: You are listening to Awesomers.com podcast episode number 70. And that is a pretty fun little benchmark there, episode number 70. And all you have to do is go to Awesomers.com/70 to find out all the links and interesting details we may discuss in today's episode. Now today I'm joined by my very special guest and very fun entrepreneur, Stefano Starkel. Stefano is a brilliant entrepreneur and has been kind of living a unique and free lifestyle for these many years. He definitely never fit in the traditional box and as you will hear in part of his origin story today. He was able to just kind of figure out things as they came to him and as he got more and more experienced, he got better and better at it. And today that's culminated in an exciting new enterprise, relatively new, maybe a year or so into it, where he helps Amazon sellers manage their pay-per-click advertising in a much more scalable, much more systematic way. And I'm proud of what he's done. I've watched his progress for at least two years and it's really exciting to see somebody who's so inherently smart, has such great business acumen, apply those skills and he's able to kind of transcend the ordinary and jump into the extraordinary. And that's always something that I think Awesomers are trying to do even when they don't know they're trying to do it. It's just part of your DNA. It's part of what pushes you. And when you feel yourself being pushed or pulled in some cases towards a particular goal or objective, be like Stefano. Don't be afraid, take that leap. As I like to say jump off the cliff and then figure out how to build a plane on the way down, before he hit the ground ideally. And that's something that Stefano has demonstrated over and over again as he rebelled his way through his young adult life. So I think you're going to love this origin episode. Not only will you love the episode, I think you're also going to learn something about Amazon sponsored products. How to manage campaigns instead of using the manual methodology. You're able to switch into more systemic and software driven. And Stefano's new product as new service is a SAAS model. S-A-A-S, Software As A Service. I'm sure most of people who have been in the E-commerce space are familiar with this model. And he's able to kind of take this wonderful technology and help entrepreneurs around the world get smarter, better and faster. And really that's the Awesomer dream anyway. And I certainly hope that I know he understood my jokes. And when I joke about what an Italian stereotype to be driving around pizzas on the best butt with Mama, right? That's it's just fun stuff. And he's just somebody that I really appreciate, really admire and respect. And I like to have fun with him. He's a great guy. Everybody welcome back, it's Steve Simonson we're here again on the Awesomers.com podcast. And today I'm joined by my good friend and brilliant entrepreneur Stefano Starkel. Stefano, how are you buddy?

Stefano: Hi there Steve. I'm very well. Thank you. Thank you for inviting me.

Steve: My pleasure to have you. Stefano is definitely a brilliant entrepreneur and has been doing all kinds of fun things. We're going to get into that. But Stefano I've already kind of read in your bio and I shared a little bit about your background from the high level with the Awesomers community out there. But tell us in your own words where do you live today? And what takes up your time day to day?

Stefano: Alright. Right now we live me, my family, my wife and the kid of three and a half years. So now perhaps little bit more, I need an account. But yes we are right now in Mauritius. We've been traveling a lot since Martin was born. We used to live in Vietnam but we didn't think it was a good place to bring up our kid. So last three years and a half was like soul searching. And we ended up being in Mauritius more than once and perhaps this is where we're going to stay for the next year two years, three years.

Steve: Yes. For those who don't know where Mauritius are, it's like off the tip of Madagascar, right? It's these little Island Seychelles and the Mauritius. It's a crazy little beautiful place, right?

Stefano: Yes it's very beautiful. It’s as far away as everything as somebody can imagine, not as far as Bora Bora. We’ve been together to Sta. Lucia. And if you want to picture Mauritius, picture St. Lucia, same creole, same language, same people, same kind of sceneries and kind of vegetation and probably not fauna only flora isn't it?

Steve: I like it. Very good delineation between no fauna but yes to flora. I’ll find the dictionary and figure out what fauna actually is. So you've been an avid traveler, but share with the audience if you will what's one of the motivations why you travel? And why you go try to find some of these cool islands? Whether it's Vietnam, Mauritius or wherever.

Stefano: I like wind. I very much like to kite surf. I used to pretty much my... I would say my previous life. So before I was a kid everything was centering out me. Getting my dose of kiting and the last three and a half years has been a very strong struggle. Because I still need my stakes but there's also a kid need a fix now. So it's like alright, I gotta work and then the time I've left is juggling. And they already grows but more I get a childhood. But yes search of wind, looking for a place but it doesn't get too cold in the winter, doesn't get too warm in the summer. As much fun as possible, a nice Pristine Beach, good food and very slow life. That's what we figure out we like.

Steve: That's amazing. Well and I think a lot of Awesomers out there can identify with this concept anyway. Even if they are not able to actually live it just yet, this concept of being able to follow one of your passions which is kite surfing and find the place that makes the most sense. And fits in with now your family lifestyle. And I've seen some of your videos. I don't know if you have the GoPro on or how you're taking those videos but some of those are pretty incredible videos.

Stefano: You know what I loved? It's like pictures. You take a picture, you look at the picture and then you never look at it again sometimes. And digital media is everywhere, we want to create content for our self. But it's not that you're never going to look at it. So I started doing it and then by the time you do it you're going to mount it. And then you're going to like it and then it's so much time investment for something that you never go back and look, watched. But to answer your question, is I bought a mouth mount, so it is like a snorkel. So rubber man leaving a pipe out, it's a camera mount. So your movies awkward thing in your mouth.

Steve: That sounds like a nightmare.

Stefano: It does. Yes. I use it three times, and then I say... like you say, “The juice is not worth the squeeze”.

Steve: That's one of my Axioms. And I can't imagine whose idea is like, well we can't. If they don't want to wear a helmet or we can't put it on the board or the kite or whatever. So let's just put it in their mouth. I never would have imagined that being a mount.

Stefano: Well, better mouth than other places.

Steve: I supposed your right. That's right, take a little creativity to figure that one out. Stefano, we're going to take a quick break. When we come back I'm going to dive into your origin story. We're going to share with the audience some of the interesting and I think very inspiring parts of your life. And we're going to do that right after this break.

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Steve: Okay here we are. We're back everybody. It's Steve Simonson again on the Awesomers.com podcast, joined by Stefano Starkel. An entrepreneur, extraordinaire and somebody who's travel around the world kitesurfing just we just talked about before the break. Stefano to get a better understanding of kind of your background and a little bit of your history, let's start out from the very beginning and tell us where you were born?

10:36 (Stefano talks about his origin story.)

Stefano: I was born in Italy, it was 1981 and a town called Trieste which was I still love it. It's a wonderful town, was right according with what used to be Slovenia. Yes, a very lovely place where I grew up.

Steve: When you were a kid and you were just coming into this world, what kind of work did your parents do?

Stefano: My father always loved to travel. My father always loved to ski winter times, snowboard for me. He loved to camp and he loved to hike. Although when I was a kid I pretty much hated every single one. He hammered that into me. He was I think you say a Novel Engineer not a mechanic. He was not an Architect and his specialty was sailing boats. So he was per se I would say an entrepreneur, probably more like a self employed because at the end he has his own studio, was working for himself, designed for his own clients. And I say self-employed rather than an entrepreneur.

Steve: It's a dream.

Stefano: He does his own studio, his own business, his own clients, his own dreams, his own designs and very well since I can remember.

Steve: Nice. So that is kind of entrepreneurial. Having your own design engineering or architecture studio, it sounds like a marine base which is very interesting. What did your mom do? Did she work during that time? Stay home with the kids? How that work?

Stefano: My mom... they separated when I was 16. And until 16 she was a housewife and after 16 you know separation and everybody's gotta do his own work. So she started back working. But she… no, just a housewife.

Steve: Yes, well it's obviously an important job and something that takes a lot of energy but it is not uncommon. Once a separation, divorce happens where people have to go find their own their own career path and so forth. How about any siblings, did you have any brothers or sisters?

Stefano: I had a sister but she passed away about three and a half years ago, she passed away and she was younger than me.

Steve: Wow. That's probably hard for the whole family.

Stefano: Yes, was very very hard. I wasn't there because I left Italy in 2005 and I go back once a year, it's a lot. So I wasn't there throughout the period which she will seek her travel to Italy for every every three months. I was just traveling in and out just to stay as close as possibly could but yes unfortunately she passed away.

Steve: Yes that's tough, definitely tough stuff. A lot of folks out there, they experienced similar things but thank you for sharing that with us. How about… did you go to university? Did you go to college at all?

Stefano: No but it's also some struggle with my father. My father of course he somehow... It was for a tease for me. And so for him my path was very clear from beginning. So you go to a very good school which in Italy I mean, you go to elementary which is five years. When you get the first grade which is three years, when you go to a middle one which is we call insane which is five years and after you go to university. So as long as he could choose for me, it puts me in the best schools. By the time I start rebelling and his dream was for me to just follow his path.

Steve: He wanted you to be a naval engineer as well.

Stefano: He wanted me to since I was a kid. He was already bringing me around to the factories to see how things are, friends and to his studio to meet his colleagues and show me stuff in the computer. Like how to cut when it was science fiction, to allowed to cut. And so it was history but is clearly not my dream. And I was pretty rebellious when I was a kid.

Steve: I can't imagine you being rebellious. Oh my, sarcasm party of one. So tell us, since you didn't go to university and you were in the rebellious phase, did you go into a job straight away after you graduated from regular high school or whatever?

Stefano: Yes. I sucked at school, I mean vote wise, grade wise, I sucked, relationship wise I was very good. I mean teachers love me. I still know how to do this lot. A lot of bad things happened to my attitude now but it is joyful. It’s loss but teacher used to like me. And because of me being not that good at school or definitely below expectation. I didn't really ever never have pocket money. So what happen is... but by the time I was 14 years old at the time in Italy, I could legally drive a motorbike without a helmet. Which is…

Steve: Sounds dangerous.

Stefano: I mean it does. It does to me now. Not at the time, I basically started. I borrow money from a friend. I bought a Vespa, a fifty one week here with probably say you see only in the in the Italian movies. And I started taking delivery pizzas at 14 years old and I kept doing it until I left Italy, no a little bit earlier. Yes from when I was 15 and till about 2001 I was taking pizzas around them. It was my main employment for very long time.

Steve: I have to say it sounds a little stereotypical to have an Italian young man on a Vespa delivery pizza. I mean you could hardly be more stereotypical to that Stefano.

Stefano: Well it was in Italy, right?

Steve: Unless you and Luigi are bouncing over different obstacles. I don't know how you had to put more Italian into that story. So well done.

Stefano: Thank you.

Steve: So tell us about this from that time you're delivering pizzas to now things have changed, right? There's been a lot of things that are back. I wonder if there's a defining moment that one or more that you can remember that put you on the path from then to now?

Stefano: Yes, there is one specific moment that put me on the path now. But it's a path that I really follow through since then. And that was in 2001 when I realized I could sell stuff on eBay. So let's say we had Brenda did some questionable fashion items.

Steve: Some stuff in the back of the truck. We're still rolling with the Italian.

Stefano: I put it on eBay and I say eBay in 2001 in Italy. I mean I don't remember anything before you base, so I was pretty young yet. Yes let's put in all honesty it will work out and it did work out very well. So basically I moved away from Istanbul first on. And I just said be imported from China. So I use the English which was one of the few things that like somehow kind of enjoyed its coldness. You know what? Let's try to write some into these Chinese people, it was not Alibaba. You remember what was there but we were looking for a class on Google and finding stuff. So basically we were importing. Me, my sister. My sister was five years younger than me, so we are doing together important stuff of China. Get it to our place and putting on eBay. I wouldn't say it was entrepreneurial because we didn’t have any plan which as pocket money. But that definitely was the Aha moment that I kept dating over and over. And it keeps building up until Aha and that was alright, drop everything else.

Steve: It sounds quite entrepreneurial to me even though sometimes these ideas of making our own way, don't start out as I'm going to make a business. I'm going to make this business worth money and I'm going to put in systems. Most of us when we have that entrepreneurial seizure as it's called in the E-Myth, we don't start out with a plan, we're just like we need to make some money, we need to buy some food for dinner, that sort of thing. And it sounds like it started out in that way but over time built. And you were a private labeling stuff way back in the old days.

Stefano: Yes I've started in 2000 and well yes, 2001 lets say. Was not really private label on eBay. I was just labeled.

Steve: Okay, it wasn't a major brand that you're buying from China or is it a major brand?

Stefano: Major brands.

Steve: I was very good on selling those major brands.

Stefano: Yes. I stopped when... actually at the time they didn't have any rule from I just say fake stuff...

Steve: Yes counterfeit.

Stefano: Thank you. Counterfeit. And I stopped, I left in 2005 and my sister kept selling for I think one year longer. And after that eBay started to really restrict control of what was sold from these major brands and let it stop.

Steve: Yes. It was a Wild West time back on eBay at that time. The counterfeit stuff, the fashion stuff. I knew a fella and he worked for me back in the day and was a really brilliant guy. He started basically importing some jeans that were a major brand also and as far as he was concerned they were all legitimate. And he had the invoices and all the documentation but let's just say that at some point the FBI raided his place. And he had like a hundred fifty or hundred sixty thousand dollars worth of jeans, that were not necessarily the brand that they were described as or at least intended to be. And so a lot of really bad surprises. But that was in the that 2004-2005 timeframe. Okay, was really putting the clamp down on counterfeits.

Stefano: In Italy they were... I mean Italian fashion something like me Italian guy delivered a pizza, right? And it's what you sell them in Italy you sell facil. So pretty much and it was interesting because we were selling as I mean there was no buy it like at one-tenth of the price.

Steve: Wow what a contrast to today's rigid enforcement. And of course the people understand now that that's not as easy but you guys literally were advertising that in your time. Counterfeit by law and the price, I love it. Well I think that's at least aboveboard. So that's a very clear defining moment, they kind of put you on that path towards learning how to import and things like that. Was there a big lesson that you learned along that journey? That still sticks with you today?

Stefano: Yes, one of my list of it. I realize only later on but the facts end it was not only for me. But anyway it was fun, but actually if there is a will, there's a way.

Steve: That is a good point.

Stefano: Yes. And at the time they will was to... you know I was carrying this around, spending my time with my friends. I didn't really want to work. So if there is a will to make some cash there is a way. It just in how keep open mind try to think outside the box. And I would say be open to opportunity. But is not that much to be open is as much as like people looking... I never stopped looking for opportunities because eventually you’re going to see something. And that kept me and that's the mindset that since then, I always had with Charlie.

Steve: It is interesting. So you talked about this concept of being open to ideas and I think if you're open to ideas and you're looking for ideas or opportunities, you're more likely to see him, right? And so this goes along with this concept of the the Baader-Meinhof Phenomenon, right? So if you have a blue Vespa you're more likely to see a bunch of other blue Vespas, right? Because your mind is focused on that as a data point. So the same thing goes in for an opportunity, if you're looking for a way to stop delivering pizza and start earning money or kind of steers, you're more likely to find those things. Again linked to that Baader-Meinhof Phenomenon. So how did you go from the sell and the stuff on eBay, that was questionable let's say, to your next bit.

Stefano: Okay. So either the next bit will be my traveling phase. Very very long traveling face. I had a girlfriend in Italy, the traditional way is like grow up, no need to get out of your home because your mom wants you in until you're 90. Find the girlfriend, wife which your mother needs to liked and only a bit time perhaps you're allowed to get out. And she has a peace of mind. So I was at this stage, I was with now women which my mom kinda liked. And she was and she started like, “When you would get married?”

Steve: She was dropping some subtle hints on when you would get married.

Stefano: Exactly, yes. Her and my grandma was like….

Steve: Cranky…

Stefano: Cranky, yes. Like, “Oh God! Really?” And at midpoint to say I had some cash in the bank which was not really happen ever, due to eBay. A baton was also moved away from just simply carrying pizza but was being a waiter. So I would just kind of waiting tables. And so yes it's a money and people pushing me to marry. And I say, “You know what? I'm out.” So I bought one-way ticket to Jamaica.

Steve: You are a rebel, I tell you Stefano . You are definitely a rebel.  

Stefano: And I gave them two weeks. So I bought the ticket, going to say guys in two weeks I'm out and it's one way. So I could make you like ten days but I got some cash so I'll keep going as long as I possibly can with my name if I say so. So I gave all the eBay business to my sister and just do what you want and I was out raising that.

Steve: Takes a lot of courage actually to just kind of hey I see what's happening here and it's not that I don't love you, but I'm I just got to go. And just what made you choose Jamaica out of curiosity?

Stefano: I used to smoke a little pot.

Steve: Uh-huh. That's a good place for that.

Stefano: Yes exactly, like was a bucket list and my one was only one.

Steve: That's a good... as we're making our bucket list everyone, there's all kinds of different inputs that go in there. And we see that Jamaica was in there for very clearly.

Stefano: I've got a very small bucket but with just a very big teak.

Steve: How long did you stay in Jamaica?

Stefano: The plan was to never leave but I felt very very very uncomfortable due to the fact that my english was pathetic. Due to the fact that it's very hard to move from a place of comfort which is your hometown, to a place where your white.

Steve: Yes, you’re the odd man out for sure. Yes.

Stefano: Yes. You don't really understand what we say, whatever you say is not really understood. And you’re like, Okay. So my bucket-list shattered two weeks, was kinda uncomfortable and you know like a fish out of the water just gasping from air and hoping to find air here and better. But at the end, you know what? I don't like it. So I figured with Mexico would be better because there was some Spanish in Italian that kind are alike. So I went to Mexico and I stayed there for three months. And I love this very very good. I love the food, I love the people, the language was much easier. I did take some classes, not being bored. And then after Mexico was either continued to go all the way down to South America. But I was running out of money and the other option was isolated relatives in Melbourne. And the other option was take all the money that was left and buy another one way. So I bought the one-way ticket from Mexico City to Melbourne and then start the other big let's say brake light bulb. But I realized that aside from internet, again if there is a will there is a way. So I actually started working Australian, my language was bad, I learned at one disbandment, I learned to speak in a way people understand me. And I started waiting tables which was the only thing I knew how to do. And that's funny because now I would say what I could have kept that eBay business but with the insight. But at the time I didn't think be they like what I was doing, like something which could bring any big fruit.

Steve: Yes that's fascinating. How you kind of go through those different phases and obviously you've travel around and probably enjoying some of the journey. I suspect there's possibly some kite surfing along the way or some kind of beach activity. Is that fair to say?

Stefano: Was a lot of this activity, was a lot of very very tough work, very hard work because were specific program which allow me to stay one year. And you had the chance to renew to be a second year but in order to do the second year you would like to do far more. Which means picking fruits which is hardcore. So I've done some of it, I've done enough to be able to get my sacrum here in Australia. But I never actually took a semester again. And yet by the time of it, by the end of my Australian journey there were bucket list build. And we'll like all the freaking box ticked off and the last thing in my bucket list would learn to Kite surf. And at the time was 2006, kite surfing its infancy but it was still a very very rare sight at the beach.

Steve: Now it's far more common to see that and understand what people are doing. But when you first saw those devices out there it's like, what is that? What are they doing? How does that work? It's like, is it going to fly away? We don't know what's going to happen.

Stefano: I felt like there was like Marilyn with a magic wand somewhere and being like is you…

Steve: You can really fly out of this, out of the water and into the sky for sometime.

Stefano: And that's exactly our children thinks, I got to do that. I'm not lazy by nature so a lot of people do Australian doorknob to serve, I didn't want to put the effort...

Steve: I like that. You're always optimizing the amount of activity you have to do. So tell us from the point then you kind of completed the Australian journey. At what point did you start getting into your own E-commerce business?

32:44 (Stefano talks about how he started in E-commerce business.)

Stefano: So I would say was about 2010. 2010 I was in Vietnam, I had been in Vietnam pretty much since I left Australia. So I would say already about three years in Vietnam in 2010, I went through stages but mainly I was teaching kitesurfing. And in 2009 had a chance to buy into a kitesurfing school and for some reason I had enough money to do that. Actually the reason I have money because I ask money from my mama. Yes, and I say I'm going to pay you back which I did pay her back. Yes that's why, so I wanted to be school. So I'd go to school for one year and a half and then bets went by. eBay thing came back to me, I got what we got, a school here, my partner taking care of a personal relation and organization and music contact. And it was the guy which was every time for the longest. So in you ought to do it in space and I decided not to learn how to get our website. So I could like download it with Joomla for Dummies.

Steve: Joomla, that's a good time.

Stefano: And I started playing around with Joomla and the kite school. But what I learn is that there was a lack of offering on Vietnam which is our custom, like customizing the kites of  customer they were arriving to Vietnam in Saigon which was about four hours away from where our business was located. And there was a lot of misconception and misinformation about the numbers still is. so we were basically scared to get out to the airport. And they always asked us to arrange for them taxi.

Steve: So four hour taxi?

Stefano: Yes four hour taxi, you know I'm going to curse to find me hotel. It's find me hotel was a pain because you got a deal with. But to say, no what can you get me? Also tacky to be cannot bring it you, to your school, to hotel and say okay. And the margin of the most absolute straight. So in 2011 I created Saigon2MuiNe.com which was Saigon, two like a number, Muine which is place where we live, .com. And was a great place. I didn't even notice it at that time. It was a good choice.

Steve: Nice.

Stefano: Yes. So it was a taxi, Vietnam, was the first very very at the time big hit for me. And because my wife was my then girlfriend, so we started working together.

Steve: That's amazing. So many little different turns and twists in there, from the pizza delivery to the waiting to the taxi business. As I recall it was their restaurant business involved there at some point to?

Stefano: Yes it was a restaurant... kite school, restaurant...

Steve: Yes. That's a lot of stuff. And obviously you like Vietnam because you were there for so long.

Stefano: Yes correct. I loved it for living there for almost ten years.

Steve: And then at some point though you put your focus on to Amazon. How did that transition happen?

Stefano: Yes, that’s happen because everything I had was going down. The bar never work, the restaurant never work, there was a Russian crisis and the majority of tourists was Russian. And the rabble went down,Schmidt just stopped travelling. And I mean you're in very tiny trees destination with relay for 70% occupancy to Russian. And Russian they just... the government doesn't have time to absorb this 70%. To push it to other nations though for two years with just no money and in then two years, it was 2014, I've been a mess. Amazon still machine, it was the fourth edition and was four grand at the time, which was a lot for somebody raising it. None. But you know every single thing that I learned on selling on eBay, that I learn on with the taxi business. Regarding SEO positioning, how important are titles, everything. But to learn business-wise, running the bar, running the racetrack, it came all together in before day lunch. That helped immediately find a product or ebay, you have to optimize listing, oh that's a taxi business. You run a business, oh I know how to run a business. And say it was a deal that was putting everything together.

Steve: It is fun when there's kind of that crossroads of all your past experience, that is able to be utilized and leveraged to bring you forward to that next deal. And so did you, at some point did you go full-time with that Amazon business?

Stefano: Yes. I was very fortunate, I was. I think a really good product but my first project was I was a very big win there. And I think simply because of the experience it had before it's different feel. So my first project that was a hit, so I was table within two months. I mean I started the course in October, end of December my brother was live, by February I was taking already other salary. Not a big one but I was taking out money. And at mid time I knew it was time to full-time. So I go down to all my businesses.

Steve: Yes, you went all-in. If you saw the potential and the rest is history in terms of that experience, because you built a very nice business and it scaled well. And that's something that became a foundation for your next adventure. Your next adventure we're going to talk about that after the break but this is where you... again were able to take all that experience, all that pain of having to deal with an Amazon business and leverage it into the next deal is correct. And we're going to... we'll talk more about that round for this break. We'll be right back.

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Steve: Okay. Steve Simonson joined by Stefano Starkel. And we are talking about Stefano's journey and his origin story. And we just led up to the point where he got into the Amazon business. He got really good at it and had probably some good experience that led to good fortune. What they always say good luck follows those people who work really hard, right? And luck favours are prepared. There's a million of these types of quotes and so it was good fortune that you were able to have your first product take off. And then the business subsequently took off but at some point you saw this problem or this opportunity with Amazon Pay-Per-Click Advertising, tell us about that.

Stefano: Yes I mean I had some experience with outdoors so I really dig into AdWords with the taxi business because this was our only way to get leads through Adwords. And so I have some experience that. On Amazon was either think in a way easier because you didn't at the time see now. The retail to create headlines, the picture is there. I mean the ad is built for you the long is a good listing, face your ad so you will just be keywords. And see how it goes and negate. So the logic of sponsored product was clear from the beginning. For me the hard part of it was the scalability, we were growing so fast and we were adding keywords and product but the way that I was running my PPC strategies was very very very hard to both keep track manually with the begun a large bit I wanted. As well as was very hard to do it without errors because there is some process. It needed to be run like some of them twice a day, as long as one product, you can do it. But when you start with like 15-30 SKUs running things twice a day and every thousand of keywords, it start to be very hard and very difficult to handle. Your team members which understand but potentially a lot of problem. As well as talking with other people and it was a maximum in China which is another AHA moment. This guy was... he did a presentation on how to design. It was not exactly how to design but the way in my mind was presenting how to build a software to help in your business in Amazons. So basically you might say you know what maybe rather than putting my attention in doing myself and then training stuff as a nice day, maybe I should simply build a software to do what I need. And that's when the idea of Zon2 started.

Steve: So I just want to jump in. It's a common thing and I think a lot of entrepreneurs and Awesomers out there can identify with this thing. When you have this problem that exist for you. Solving it for you is kind of like job one. It's like this is a giant pain in the Keister, keeping track of so many products, so many keywords, right? It's a problem that needs solved and a systemic solution is always one of my favorite things to do. So my question is, when you first had this aha moment about building the software, did you see it as a solution to the problem? On a pure inside basis or did you see it as something that you could mark it later and less people could use it?

Stefano: Pure inside basis? We discussed with now is my co-founder and partner Tarik which is the time of the guy that I hired to code. He asked in the beginning, “Is this something your going to use for yourself or we going to sell? Because I need to know in order to structure the right way.” Let's say I don't want to deal with sell, don't worry it's going to be just me. It was the first year and a half.

Steve: It is hilarious because so often that is the exact path, right? We're trying to solve that problem and we don't necessarily think of the next thing. Because that's a whole other set of problems we haven't contemplated although today. And everybody can find this in the show notes. If you go to today's episode you'll be able to find the show notes, the links, over design tools and so forth and some of the other things we may talk about. But the reality is over time you and Tarik decided maybe this does have merit for others. How did that sequence happen?

Stefano: I kept like I could come into your Mastermind, so I kept meeting very smart people and I kept... And you were very good in like pushing participant to share, like a cross shape. My first ever presentation was your Mastermind.

Steve: Yes. So just for those keeping score at home, at the Catalyst88 Mastermind everybody has to share, everybody has to give. That's one of the founding principles. And not everybody's comfortable with that, not everybody's experience with it, but it doesn't matter. Because we're all on the same boat, we're all there to share. And Stefano definitely shared. Even if he did not know.

Stefano: Again it's like this, it's a muscle. The time training still now is a very weak muscle. It’s getting better. So anyway sharing, what are you going to share? You're going to share what's your passion but it's the easiest thing to share. Going to share something that you're confident in. So my special power of what I felt in will still feel special power. It’s like what I do with BBC regardless of the automation. So I started sharing my strategy, what they do, why I do it. And the people was getting from the participants of your Mastermind and other groups which I was sharing my ideas into was very very good. And some people say you should have a software sell. I say yes well I have it. So over time I say, “What? I didn’t want to sell it. I didn’t want anybody to have it.” But I see a genuine need from other people in my situation and that's when I called Tarik esoteric. You remember when you asked me who's going to use it?

Steve: In the computer programming business we call that a rewrite. It's a big pain in the keister. Is that what happened?

Stefano: Exactly.

Steve: I swear, we're developing software anybody who breathes a word rewrite to me is as liable for trouble. Because I will chase them and I will beat them senseless. And they have to say it differently, they have to say we've got a new Vector or we've got a cool idea to enhance the software. But I say you've read the word rewrite, I'm going to blow my lid. It's insane but you guys obviously had to cross that bridge.

Stefano: Well there was an option, I mean I was somebody who knows nothing but coding. I mean calling rewrite, I know it's going to rewrite but at the time was like I mean it just is going to happen. I didn't think of the implication. How easy would it be. I just gave the right answer like one year earlier, one in a half earlier. I mean yes, you know shit happens.

Steve: That's how we learn honestly. And in so many ways these things, if you had tried to go in from the very beginning. Say I'm going to build this thing as a Software-As-A-Service and do all these things, it may not have worked because you'd be too distracted from solving the main problem. Getting the core software, right? Because you'd be so worried about customers or how is it all going to work. And so these things happen for a reason. I think it's a good thing. I do want to share or wonder if you remember any of these. So occasionally, I would say more than occasionally but we often would have meetings at the Catalyst88 Mastermind. Off-the-record meeting, fireside chats with really smart people from Amazon. And every time somebody from Amazon sponsored products would show up. Man, Stefano would get out his like surgeon cap and just start cutting and dicing. And every question it was hilarious because there were all very good questions. They were very fair but man oh man they showed insights. You remember any of those sessions Stefano?

Stefano: Every single one. Every single one I remember. And they really helped shaping Zon Tool the way it is now. And building confidence me in the action but we are taking Zon Tools because there's a lot of information around. A lot of information on Facebook mainly, a lot of gurus that have been bigger names than me. I've been doing this for perhaps the same years but many years. And then knowledge fit what I do but is different what they do, is the right way of doing it. Simply because I have the chance and then you facilitated it actually. Bounce things off with actually who know stuff which is Amazon. And not like with people who think we know stuff. That was extremely helpful that's why I was still excited when I think about it.

Steve: For me it was just fun to watch because the level of the questions and the level of depth of detail. So Stefano might ask a questions like, hey you know how does this work? And with this in the API is showing this but in the report it shows that. And they would maybe start with, well you know that data is updated to 12 times a day at this point, right? And there's the half moon and the full moon, the different data set. I mean Stefano knew all kinds of detail that often was, as much or more than some of the guys in the room, who were from Amazon working on those products. And I found it to be fascinating and hilarious at the same time.

Stefano: That's Amazon. I mean as a seller you deal with support and the same experience with you guys of the audience here. We had the same exact treatment and experience on the API support which is asking something. Yes so a lot of things that we found was trying to learn, trying to push as far as possible, believe is trying to our goal is this one and that's what we need to achieve. I suppose say no I don't care but that's what we got achieve. And we always... it's funny enough we could always find way to achieve what actually I was saying now. It's not possible and it was done only like finding like a limiter of the code but they offered us much. Probably why a new Tarik knows more than me. I know that the bigger picture he knows little details.

Steve: Well it definitely was very impressive. And that the level of insight and level of experience was clear to me. And it is not uncommon for us to be so tuned in to a specific aspect of Amazon's ecosystem. Even more so than the Amazon staff member. So even the ones that own the product itself and of course most of these meetings were kind of off the record. And we don't talk about the exact details what we talked about but they would only say what they say. And we always agreed not to take it to a place that it shouldn't go, in terms of a confidentiality or getting them into any hot water. But all of their mission was there to just try to help facilitate better experiences for sellers, a better usage of their platform. And from the time we started doing those meetings, more than a couple years ago they were doing around 500 million of sponsored products as a product income stream, probably in 2016. And in 2018 they'll do around 2.2 billion dollars in sponsored products. So I think they're accomplishing their mission there, they're definitely facilitating and making it easier for us to spend money with Amazon. Have you seen continuing budgets increasing and are alive holding the line?

Stefano: We see this looking at the big picture of Dr. Wit Widget overall beats are going up. And ACOS is going down for many reason.

Steve: Now ACOS going down do you mean?

Stefano: Sorry, sorry. It’s going up.

Steve: So ACOS is getting worse because the cost per click is going up.

Stefano: Yes there are many reasons but I could think of definitely is getting much more competitive and the competition is not really on the blue ocean's. Which could be higher cost items, oversized items but all the new seller are still following what was taught to us in 2014 and even before, small light. And small light is cheap and it's very hard to play 3-4 bucks a click on something that sell for 20 bucks.

Steve: Let me dive in on that for a minute. So basically what Stefano is saying is if you follow the general principles of small and light, this is often going to be a $25 or less item. It's very tough to be able to afford a cost per acquisition that starts with a four dollar cost per click, right? Because we didn't acquire the customer for that four bucks. You just gotta click for that four bucks then you get the impressions, and then you get your conversion, and that's what leads you to your cost per acquisition. Well just do the math on 4 bucks, if you're selling for $25 and you have a twelve dollar profit margin let's say after Amazon fees and so forth. That means after three clicks you have no more money left on the gross profit basis. A twelve dollar cost per acquisition and you make no money and it's going to cost more than that. Because what would be the conversion rate on three clicks?

Stefano: 33%.

Steve: 33%. Yes, you're good by the way. I love that math. Having a 33% conversion ratio over the long haul at scale is very tough to do in my opinion. What's your thoughts Stefano?

Stefano: On average, we see something more, something better. But I would say if you see about PPC conversion of 15%? That's crazy good.

Steve: I quite agree. Often I'll see these urban legends on Facebook where somebody's like oh you know my conversion rates 50%,60% this item, spent 70 percent for three years or whatever. And it's I'm skeptical number one and even if it is true, even if those numbers are accurate there's no scale to those numbers. There's nobody who's selling a thousand units a month with the 70 percent conversion rate in my opinion except maybe Apple. One of the intent is very high but even then I would say it's never going to be that high. So 15% conversion is really reasonable, especially from the click side.

Stefano: Yes. When we go to more expensive items of only hundred bucks at Wilbur, I would save it. When you have a conversion 10%? It's already excellent. More expensive item, reasonable conversion rates.

Steve: Yes, so I would say in the more expensive items this starts to transcend, what we call considered purchases. So when somebody has to think about their purchase, right? It's not just a spur-of-the-moment, its prime, it's 20 bucks, just click the Go button. I'll return if I don't want it. A hundred bucks you start to go, well I know I can return it but\ do I want to make this purchase? Is this really something I want? That consideration period will lower typically the conversion rates. So you have to make sure there's margin there. So Stefano I love what you've been doing with Zon Tools and it's been very successful. I think you guys have done a great job. Is there anything special about your tool that you want to make sure that people out there know specifically?

56:53 (Stefano talks about Zon Tools.)

Stefano: Yes. The special part of it, basically the way the tool work is just another layer on top of Amazon. So all the data, all the buildings still have some Amazon. All the serving algorithm is still Amazon shipping. So Zon Tools is no secret sauce. They act on the algorithm. But our secret sauce is the way we show you the data. So it should be common knowledge that you need a hot different, three to four different kind of strategies per product. So you might want to... how to campaign, you might want to broad campaign, a phrase campaign and an exact campaign for product. Now this is clearly possible to do it manually on solid central but the fact is you never going to have the top level feature. I mean in order to know who's for campaigns and put them together. And understand how your products actually performing and if you see you will live to download a spreadsheet and additional spreadsheet offer only the last two months. So you will have to save them every two months and then like people with data per product to see how is it for me. Zon Tools, we invented something that we call PGN which are Product Group Name. Which is something that we cannot patent but we wish. Basically we want click of a button, you create it so you give us the skills, you give us a keyboard, you give us some tracer if you cut butter and we create. They go destruction for you. We go ahead and create it all the four campaigns for you and we overlay one more layer on top so that you can track your result and keyword level. Which is already what you can do is very simple but we overlay in top, so whenever you create a PGN from one’s own tool you will be able to look at the PGN of those four campaigns, the dimension before as one item.

Steve: Fascinating, I like that. It rolls up the day that consolidates the information across these different campaigns. So you can see through economics which by the way this is one of the things that is lacking. So kudos to you guys for building. Is too often we get confused about what our true profitability is on items. So it doesn't matter if you're selling on Amazon or your own website. If you're driving a bunch of different traffic into there and you don't know your true cost that's from the import and buy side of the equation. And then you don't know your cost of advertising for that individual item. You don't really know how well that item is performing and if it's mixed into that marketing budget and it's mixed into the customs of freight budget and it's not broken on by product, you really have no idea what your business is doing. And that is very troubling to me. So I'm intrigued by this, how have your customers found this feature to be additive to their business? Or they like it?

Stefano: Well you need knowledge. Knowledge is power. So the fact is, the one click of a button doesn't mean it's you don't have to understand what we do. But the other studies but actually you can go ahead in one click of a button. You can have a software, creating this golden structure, an avid manage for you because we've been the tech assistant for campaigns. We know which keyword to mine from the outer campaign. Well to put in Moviemaker System we know which were to negate from where. And we understand it. We should automatically negate it as a Phrase and Exact. So we've been with ecosystem it will build you everything has made its own. Even though you might not know anything about the PC which I don't advise you. Just go and take a coach and really study these. I mean I have a passion for it but users should know what happens to the bacon. Aside from that you can petition, click the button, create a PPC structure for your product every time you launch a product. And the only reason we all think you need to know is like you see your profit margin. So you will just give it a cost ratio which is how much profit you have click on the button we created for you. And we will optimize that for you based on the profit that you told us.

Steve: I love it. It's that process of optimization and targeting based on your profitability or acost. However you care to think about the metric, that process is what is missing and so often, right? Because without putting rigid standards in for yourself, your business and your product you necessary kind of like I'll just go and tell. It feels uncomfortable but a lot of times that's after you spend all the money on marketing. You're like wise Amazon getting rich because we're all giving them all of our money. And to be honest with you that's one of the things, cost per click inflation is caused in part by people not knowing how to do good bidding and proper profitable bidding. That's one factor. The other factor in my opinion is big brands are coming in and they throw them out, throw around money without really much consideration for how their ROI is. They're like okay we've got two million to spend on Amazon and we have to spend it this year. And so they just start putting money and they don't really care about the independent ROI. Do you think that's a factor coming up for us?

Stefano: I do Steve. I do see some big brains come in to sponsor us but I still think IMG is very good. I grab it. All the money from big brains. So big brains are still believing in whatever IMG, Amazon made a group of threes good because with a lot of money to the plate. But yes, the unified be honest it not for me. It is such a huge disaster in all the amazing searches. I mean we're still running big layers of fixing stuff with the unification of the Amazon, that's for me I see the trend but you indicated has seen getting bigger and bigger. So big brands having access through IMG, through what used to be only the enduring only AMS headline bigger net access to be simple. But we are now. So it's a flip of a coin. It's going to be good for us because we might get access to those tools but at least implants into the big brain with crazy high budget. With people like spending left and right. We will access to our small player tools. So it is definitely going to see Amazon being very happy about it. What we seen I think everybody noticed the organic search moving over and over and lower and lower and lower. It was what Google has done some years ago.

Steve: I totally agree. I've been talking about this general concept of learning from history for some number of years. That although Google still has organic on the page, its placement and it's considerable pushed down and it's like where is it. That same thing will happen on Amazon and Amazon even has more incentive to reduce organic altogether. Because as long as they feel like the results they're getting from sponsored, from the headline search and from all these other placements, as long as they feel like that's highly relevant to the customer they have no reason to show any organic in the long run. So don't be surprised everybody if Amazon continues to monetize their page in the same way that retail stores require you to pay for placement. You cannot go into a Walgreens and get that end cap as a brand unless you pay them money for that end cap. And that's no different than Amazon and I think that's a very good. Your crystal ball is working very well to tell the future there Stefano. That's a good one. Any other predictions for the next five years that you see coming?

Stefano: Five years, how to tell... to be honest I wish I could look for it far ahead but I got nothing.

Steve: I think we've already given up probably the biggest thing that's going to happen or two things actually. What brands are coming and they're going to drive up the cost which is going to drive down our ROI if we're not careful about it. If we're not very judicious about optimization and if we're not taking care to optimize our spins, right? Don't spend money forever at loss. That's free advice, so take it or leave it. But you may say I'm going to do this at a loss or at a break even for launch or a lawsuit or break even for some special promotional period. But long term that is not a sustainable business you have to be able to pour money in the top of the funnel and get profit out in the bottom. That's what a sustainable business is. So we've given up that costs are going up, so be careful about optimization. And number two big brands are coming. Those are pretty good insights Stefano. As we run out of time here, I wonder if you have any final words of wisdom for the Awesomers out there listening.

1:06:34 (Stefano’s final words of wisdom.)

Stefano: Looking at... let's stay to sponsor product on generalizing. I would say advice, would be don't really focus only on your makers. Amazon is an interesting platform because we don't really know the way it works, And the way you build it as the way your ass perform might or might not be related on the way. I must decide to position you. Also my advice is don't just look at your spend at the PCs is a closed container. But try to understand what is cost per position which is something that you mission. And don't look at the gospel equation for sponsor product but look at the cost per acquisition on your total volume. And that way you will understand if spending more on PPC perhaps, setting a higher equals will equal to a lower overall cost per acquisition. Meaning that there are some cases which spending more of the PC might lead to better. So your money is done your cos prohibition goes down because you rank better and your profit is done on your engine. So it will be my advice. So don't look just as opposed to prudent, look at the good picture, look at much money you're putting into the business. And look how much money you're putting out and track with fine trends. And see if you find the opportunity to spend more while driving down the cost per acquisition.

Steve: Yes. I think that's very good advice. There are many cases where particularly on leading on head terms. As they're called in search on the big terms where you may have to spend more money and that those may be empirically unprofitable. But they it drives other things to happen either greater awareness or greater sales pull through, which leads to higher conversion. Maybe better organic ranking and therefore some sales that are unattributed to the spend itself. But are indirectly responsible. So there's an old saying as statistics causation or correlation does not imply causation or vice versa or whatever it is. And so we have to be careful to look for that linkage, not just assume the more we spend and sales go up that we're happy. Make sure that you're diving into it and really understand your numbers. And you do that with using software and automation tools like Stefano's built to get a really solid handle on it and understand it. So Stefano, thank you for joining me today. It's been a real pleasure to catch up with you.

Stefano: Thank you very much Steve. Very long time haven't seen you and it's very good chat.

Steve: Yes, my pleasure. No doubt we'll probably have you back again sometime. We'll dive deeper in design tools as you continue to roll out. Awesomers listening out there, wherever you are, we'll be right back after this.

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Steve: I've been lucky to be able to hang out with Stefano as we talked about in the episode. Down in St. Lucia at a Mastermind event, he's come to Seattle a bunch of times, to the Catalyst88 Mastermind group which is a 25k high-end group. That gets a lot of my time. That's where I spend I would say the majority of my efforts trying to help those entrepreneurs. Because I love entrepreneurs, I'm completely into it. When Stefano and people like Stefano or people like you listening, when you are able to kind of transcend and jump to that next level. When you level up, it makes me happy. And you know part of my dream in life is to be able to hang out with entrepreneurs, travel as entrepreneurs and kind of anytime we want to. So it'd be great to just post in a Facebook group or send on the email go, “Hey, next week I'm going to Tahiti. Who's in?” And then have people show up in Tahiti and that's part of my dream. And I'll tell you a quick story we did this year, maybe two years ago. Now where I just said hey I'm going down, I had a great idea from a dear friend Brigetta. And I said I wanted to go somewhere. She's like hey let's just go down to Roatan and meet some of our friends, Sean and Kelley Marcos. And so we all started meeting down there. And we ended up having 10 or 12 of us down there and it was a delightful very very fun event. So many great people there, Laura and Jim and Alan and Brian and so many others. That really was living the dream and I want you listening to be able to live the dream as well. We were in Paradise and the most perfect beach is the most perfect weather with the most perfect company, that's the dream. And I want everybody to get their share of the dream really soon. So don't forget, this has been episode number 70 in the Awesomers.com podcast series. And all you have to do is go to Awesomers.com/70 to get all the little show notes and details that you need to find.

Well we've done it again everybody. We have another episode of the awesomest podcast. Ready for the world thank you for joining us and we hope that you've enjoyed our program today. Now is a good time to take a moment to subscribe like and share this podcast. Heck you can even leave a review if you wanted Awesomers round you will appreciate your help it's only with your participation and sharing that we'll be able to achieve our goals. Our success is literally in your hands. Thank you again for joining us. We are at your service find out more about me Steve Simonson, our guest team and all the other Awesomers involved at Awesomers.com.Thank you again.