Talking to entrepreneur Blake Johnson about The Webb Schools makes for an easy interview because his answer to almost any question about Webb’s impact on his personal life, his business acumen, even his day-to-day comportment, is a resounding, “everything!”
Johnson is a wildly successful entrepreneur who is now growing his fifth company. The most recent of his companies, Currency (currencycap.com) an online financial lending platform, sold for $97 million. His companies are also repeatedly ranked as the “Best Places to Work in Los Angeles”. His new venture, byte (byteme.com), is bringing perfect smiles to the masses. byte provides custom orthodontist-designed invisible aligners which straighten your teeth without a single trip to a dental office and for a fraction of the traditional costs.
At Webb, Johnson served on the Honor Committee and played football and tennis; though he lived in Jameson dorm for most of his time at the school, he spent many, many evenings at the headmaster’s house, the home of one of his best friends to this day, Max Nelson ’95. He supports the school in a multitude of ways – through generous support of The Webb Fund, as an Alumni Class Agent, and by returning to campus numerous times to impart his knowledge at the Honors Symposium and Sophomore Career Night.
He recently sat for an interview, describing his successes and the three driving factors he took from his experience at Webb: persistence, gratitude and perspective.
1. What do you consider your biggest entrepreneurial success?
I’ve started and sold 4 companies. I’m on my 5th company now (byte) and the last four have sold progressively larger in terms of exit value. The newest could be my largest sale. Currency sold for $97 million, hopefully that changes with this current business (which – according to Johnson – has the potential in the next 24 months to hit the $400 million valuation mark).
2. Do you mind being described as a “serial entrepreneur” and what does that mean to you?
I don’t mind it at all! Lots of time people ask me what I do, and I give them a canned response about being an entrepreneur and I always get a weird look. I think it’s something they’ve seen in the movies and they imagine it’s someone who lives at home, sits on his couch and works on a laptop.
With each company, I have around 15 key people that I bring to the next venture. I would be nowhere without them. Each of them owns their respective lane and there are no overlapping disciplines. For example, there is a person who specializes in marketing and sales, one in analytics, another in IT and software development, etc. [In just 18 months, Johnson and his team grew their first company’s revenue stream from $5 million to $100 million and have continued that cadence with the subsequent ventures].
Because I personally provide all of the financing needed to start these companies and there is no outside investment, we have no misaligned outside influences dictating our course or trajectory.
I start every deal from scratch – from the scouting (i.e. what business to get into next) to the financing. We only do one thing at a time, so we have no distractions and only two options – to fail or to succeed. I always preach 100% alignment and full transparency. When you have 100% of your people fully aligned– both for the upside and most importantly, the downside and everyone knows exactly what’s going on 100% of the time, really special things can happen. Everyone has “sweat equity” in our deals and that has been the key ingredient to accomplishing the end result of selling the company because everyone makes life changing sums of money only when we sell. Luckily, we now have the track history to point to so the team puts a lot of faith in the end result.
There are two types of serial entrepreneurs, and they’re both like trapeze artists. One wakes up and practices over a safety net, the other uses no net at all. We’ve chosen to be the latter. If someone writes you a check, you have a safety net and you’re a lot weaker. When you bet and spend your own money, you will always be stronger as you are forced to make decisions that are significant. We have a big downside in failing so we’re hyper-focused on not missing the bar.
3. How do you choose your next business venture? What do you look for?
I have a few boxes that I like to check; I found that our model has been different than the traditional ones I hear about. We’re focused on identifying trends in industries that we can commoditize through technology and software. Equally important, we focus on business models that can “cash flow” quickly. There are many business models that lose vast sums of money year after year. They need external capital/investment to continue to pay their bills in hopes to turn a corner, almost like they are on life support. I hate being in the “life support” stage, even with my own capital. Hence, I’m not prone to waiting a long time to get to the cash flow positive stage.
4. What would you say are the top 3 skills that are needed to be a successful entrepreneur? And why?
1) You need a decent IQ and an extremely good EQ (emotional quotient AKA emotional intelligence). The EQ is definitely the most important because you need to be able to understand, read and deal with people all day, every day.
2) You can’t be afraid to lead – you have to have clear self-direction and know the difference between right and wrong (both morally and business-wise).
3) You have to have ethics and empathy – if you’re not building value for people all the time, you’re going to fail.
5. What is the first thing you do when you wake up in the morning.
I’ve always been an earlier riser and that comes from growing up on a cattle ranch in El Centro, California. In college, I always scheduled the first available class. I find that my brain and energy levels are at their freshest first thing so I try to do the hardest things first – the biggest pain-in-the-a** thing.
6. You grew up on a cattle ranch in El Centro, California, and so far, in your career, you have successfully started and sold a variety of businesses for a combined valuation of $350 million. What role did Webb play in your development as an entrepreneur?
Everything!! I grew up in El Centro which had and still has one of the highest unemployment rates in California or the U.S.A. It was very rural, our water came from canals, we had 12,000 head of cattle, I learned to drive a semi-truck when I was 12 – it had something like 39 gears! My grade school principal whose daughter briefly attended Webb (Alia Brown ’94) suggested it to me so I wrote to Webb and went on a visit. Taylor Stockdale was very influential in convincing the administration to take a chance on me!
My freshman year, I was paired with a big brother, John Choate ’92 who went on to attend the Naval Academy and became a Navy Seal. We’re still friendly – we recently had dinner in Las Vegas and had a great conversation about character and what Webb inspired in us, most importantly, telling the truth and taking the road less travelled.
My Webb education has played a part in every success I’ve had – it taught me to think, to lead, to have a great work ethic. It taught me to think about consequences and not just in a “is this smart or stupid?” way but in a manner which raises the more important question: “is this right or wrong?”
7. You have stayed close to the school and have been generous in your support, both financially and through volunteerism. What motivates you to stay connected to Webb and to support its mission?
Gratitude and perspective are the two words that most immediately come to mind. And they go hand-in-hand. In order to be grateful, one must have perspective. I’ve been blessed with enough perspective to realize that not many people get to experience a place like Webb.
I would describe myself as crazy, crazy loyal to Webb! Susan and Taylor let me in, gave me an unparalleled opportunity, and I’ll hold on to that till the day I die.
8. Why is it important for successful entrepreneurs to give back to their communities?
We’ve all been the benefactors of lucky breaks in our lives – been given opportunities or had doors opened. Because we’ve been given a shot, been the recipient of people’s time, dollars and effort, it’s easy to see that we must give back and to provide those same lucky breaks to others. I’ve been hyper-focused on it. [As a philanthropist and participant, Johnson has been involved with organizations such as Big Brothers/Big Sisters, Museum of Contemporary Art, Los Angeles, International Justice Mission, YPO Los Angeles, Boy Scouts of America – he attained the rank of Eagle Scout as a youth –and more.]
I balance all of that with trying to be a good father and husband. I know I got breaks, someone took a stake in my well-being and future, now it’s time for me to extend a hand.
What advice would you give to aspiring entrepreneurs?
Don’t freaking give up [chuckle]! There’s an old adage: “if it were easy, everyone would do it.” Entrepreneurial success doesn’t look like it does in the movies. There’s chaos, most of the time it’s not fun, and it can be very frustrating. Success doesn’t look or feel like anything you think it will. Luckily, I had good advice from my dad, he told me: “Whatever you plan on, just know that it will be twice as hard, twice as expensive and take twice as long as you think it will.”
You must have persistence and be nimble. There is no guaranteed thing. The right path may not even be the one you’re on today – but you need to be able to see the right path when it pops up in front of you and then figure out the way to move onto it.
Johnson is the incoming chairman of YPO LA for the 2020 calendar year. He lives in Pacific Palisades with his wife Courtney and their two children.