Most founders can list the external events that shaped their company. Fewer can name the decisions of their own that limited it. Rupesh, founder of the multi-brand ecommerce company Ergode, does both, and the gap between the two lists is the most instructive part of his story.
Over nearly two decades, Ergode absorbed a series of shocks. Its largest inventory source disappeared. Its original business model hit a margin ceiling. COVID put a wave of consumer brands up for sale. Tariffs introduced uncertainty that, in his reading, would not clear quickly. Each event forced a decision, and each decision moved the company into a better model.
Asked what held the company back, Rupesh pointed to none of those events. He named two choices he made himself: closing his mind to outside investors, and stepping back from technology for stretches of time. He calls them "what stopped us from becoming 10x of what we are today." The figure is his own estimate rather than a measured result, but the admission carries more weight than the number.
That gap is where the lesson sits for scaling CEOs. Disruption arrives with a deadline and forces a decision. A standing choice about capital or technology carries no deadline, so it rarely gets reopened. Rupesh's account shows what that difference can cost, and why he now sees technology leadership as something a founder should not hand off and stop watching.
Ergode began with a textbook. Rupesh was working as an application engineer in San Diego when his wife went back to college, and the price of her books sent him looking for cheaper copies. Comparing eBay and Amazon, he found books he could buy on one and sell on the other. The first transaction was a book bought for $30 to $40 and sold for $1,600. It was pre-sold, so the margin was guaranteed rather than a matter of luck.
The arbitrage alone did not make it a business. The software did. Rupesh had a chemical engineering degree, a master's from Texas A&M University–Kingsville, and 36 credits of computer science from UCSD. He wrote programs that scanned eBay auctions and placed bids automatically while he was at work. Before long, the house was filling with books.
He did not quit his job. At the time, he saw visa and insurance limitations as real constraints, and he considered himself more technical than entrepreneurial. He moonlighted for three years with a few remote workers before AMI Ventures became a C2C business, buying from wholesale sources such as eBay lots and Doba and selling on Amazon, Sears and its own site.
That early pattern matters later. Technology was never a support function at Ergode. It was the mechanism that let a part-time operation scale. Today the company runs four lines of business: AMI's C2C operation, wholesale retail partnerships through VIR Ventures, white-glove growth services for other brands, and about 15 acquired in-house brands, supported by seven offices in India.
The first major break came from a supplier. Half.com was the company's largest inventory source, with purchases running at $30,000 to $50,000 a day. When eBay, which owned the site, shut it down, Rupesh "lost almost 80 90 % of your inventory source suddenly." He says the loss forced the company to look beyond half.com more aggressively. He does not describe what that search involved, how long it took or what it cost.
The second break was quieter. By 2014, Rupesh had concluded that C2C had a ceiling. Buying from open sources and reselling could only go so far, and margins stayed small. His response was VIR Ventures, built to work with brands directly as a retail partner rather than indirectly through resale. Within three years, VIR was larger than the business AMI had built over the previous decade.
The third came with COVID. Rupesh saw that many consumer brands were up for sale and judged that "it would be too good an opportunity to let it go." Ergode acquired almost all of its current brands in that window, many of them already selling in Walmart and other big-box retailers. The move completed a progression he describes in margin terms: small margins as a C2C reseller, somewhat better as a B2C retailer, and double-digit margins once the company owned brands and sold direct to consumers.
The most recent shift followed tariff uncertainty. Rupesh read tariffs as an unknown likely to persist, and Ergode started a white-label services business that applies its tools, technology and SOPs to growing other companies' brands. He has not described an outcome for that business.
Taken together, these are four decisions with a common structure. Each was triggered by an external signal that left no room to wait. Each moved Ergode closer to the brand and further up the margin ladder. Each also demanded capability the company did not yet have: working with brands directly, owning inventory and brands, and selling offline, which Rupesh calls "a totally different game for us" at the time. He describes the whole sequence as events that taught the company business, or forced its decisions.
The COVID window held a tension many acquirers resolved badly. Rupesh believed the opportunity was too good to miss, yet he was buying in a market where prices had detached from historical norms. Before COVID, ecommerce brands typically traded at two to four times EBITDA. During the boom, some large acquirers were reported to be paying nine to twelve times.
His criteria were narrow. First, products customers love, measured through reviews and ratings. Second, at least one major offline channel, because Ergode knew how to sell online and wanted brands already working in a channel it had not mastered. Third, a price that made sense. On that point he is direct: "what you pay to acquire company matters a lot in the long run," particularly when bank debt finances the purchase.
The result was a willingness to walk away from deals in the same window he was racing to use. Ergode passed on targets that "looked great on paper, but didn't make financial sense and we chose not to." The logic is simple to state and hard to hold under competitive pressure. Urgency to buy and discipline on price pulled in opposite directions, and he settled the conflict on the math rather than on fear of missing the window.
The same discipline shaped what happened after each close. Most acquired companies had fewer than ten employees, and Ergode generally offered people a similar or slightly elevated role; the key sales leader from one of its largest acquisitions is still with the company. Manufacturing was the exception. Rupesh does not see managing raw materials and machines as a core competency, so production moved to partners in the US, Mexico or Asia. The company stayed asset-light, running a single warehouse, acquired in 2021, that handles under 5% of its logistics.
A company that changes models every few years needs people who can operate without a playbook. Rupesh's hiring rule reflects that: "Choose, almost always choose will to do something over skill to do something," especially for the long term.
He tests the idea with a scenario he uses inside the company. When someone says they lack training or instructions, he asks what they would do if the power or water went out at home. They would work out what was wrong and how to restore it, with no defined SOP. Process still matters; Ergode sells its SOPs as part of its services business. But each model shift created work that no existing process covered.
He does not want a uniform team either. He would rather have a CFO who is a penny pincher and a media lead willing to take enough risk to find what works. The two temperaments are meant to pull against each other. He describes his own role as a servant leader: the last person standing and the last to take the heat.
He is also plain about his limits. With every new business, his individual capacity is constrained, so Ergode opens a new office only once it has identified an anchor leader who can carry it.
The disruptions above were imposed on Ergode. The two limits Rupesh names in hindsight were not. Neither arrived as a crisis, which is why both lasted.
The first concerns capital. Ergode received investment offers over the years, many of them unsolicited. Rupesh says stories about outside investors ruining a company or taking control closed his mind to them. His view has since changed: there are good and bad investors in the same way there are good and bad companies, and "I should have considered some of those well-intended investment early on."
The misframing he describes is specific. Outside capital was treated as a threat to control, so offers were dismissed as a category rather than judged one at a time. He is not arguing that every founder should take outside money. His point is narrower: a blanket stance against investors kept him from weighing offers on their merits, and he believes that cost the company growth. The contrast with his acquisition record is worth noting. Brands were judged deal by deal. Investment offers, by his own account, were not.
The second concerns technology. Rupesh consistently names team and technology as the two constants that carried Ergode through every change. Yet there were stretches when he took his eyes off technology and let someone else run it. His assessment of those periods is blunt: "those are the least growth years."
The misframing here is that technology becomes something to delegate once a capable leader is in place. Rupesh does not say founders should never hire technology leadership. The distinction in his language is between handing off execution and withdrawing attention. At Ergode, software was the mechanism of scale from the first automated eBay bid, so stepping back from it meant stepping back from what had driven growth. He offers this as his view of his own company, not as a proven cause.
He also sees the stakes rising. With AI changing how operations run, he considers staying close to technology more crucial than ever. His advice is direct: "if I were to advise anyone, I would say never take eyes off from technology."
Under external pressure, Rupesh's record is strong. A supplier vanished, a model topped out, a market overheated and tariffs clouded the outlook, and each time Ergode made a decision that moved it into a better position. The pressure itself put the question on the table.
The two limits he names had no such trigger. A standing stance against outside investors and a gradual distance from technology both felt like settled matters, so neither was revisited until he looked back. That is the practical point of his account: the decisions most likely to cost growth may be the ones a CEO no longer recognizes as decisions.
For a CEO weighing outside capital, the question is whether offers are being judged individually or rejected by rule. For a CEO who has hired strong technology leadership, the question is whether that delegation has turned into distance, especially as AI changes how the business runs. Rupesh does not claim to have settled either question for anyone else. He says he is still learning, and he offers his own costs as the evidence.
Rupesh Sanghavi is the founder of Ergode, a multi-brand ecommerce company spanning C2C resale, wholesale brand partnerships, white-glove growth services and about 15 acquired in-house brands. A chemical engineer with a master's from Texas A&M University–Kingsville and computer science training at UCSD, he is a member of YPO and EO.
https://www.linkedin.com/in/rupeshsanghavi
__________
Jeff Holman is a CEO advisor, legal strategist, and founder of Intellectual Strategies. With years of experience guiding leaders through complex business and legal challenges, Jeff equips CEOs to scale with confidence by blending legal expertise with strategic foresight. Connect with him on LinkedIn.
Intellectual Strategies provides innovative legal solutions for CEOs and founders through its fractional legal team model. By offering proactive, integrated legal support at predictable costs, the firm helps leaders protect their businesses, manage risk, and focus on growth with confidence.
__________
The Breakout CEO podcast brings you inside the pivotal moments of scaling leaders. Each week, host Jeff Holman spotlights breakout stories of scaling CEOs—showing how resilience, insight, and strategy create pivotal inflection points and lasting growth.
Listen and subscribe on your favorite podcast platform:
__________
Want to be a guest—or know a scaling CEO with a breakout story to share? Apply directly at go.intellectualstrategies.com.
TRANSCRIPT SUMMARY:
00:00 Lessons From Scaling E-Commerce
01:59 From Engineering to Entrepreneurship
05:17 The $1,600 Textbook Sale
08:05 Building a Side Business
12:21 Creating a Brand Ecosystem
16:38 Losing Most Inventory Overnight
18:58 Acquiring Brands During COVID
22:41 Prioritizing Team and Technology
25:09 Becoming a Servant Leader
27:02 Choosing Will Over Skill
34:14 Evaluating Brand Acquisitions
47:51 Lessons That Limited Growth
FULL TRANSCRIPT:
Rupesh Sanghavi (00:00)
lost almost 80-90 % of your inventory source suddenly. What you pay to acquire a matters a lot in the long run. What stopped us from becoming 10x of what we are today. It should have considered some of those well-intended investments early on. If I were to advise anyone, I would say never take eyes off from technology.
Jeff Holman (00:25)
Welcome back, everybody, to the Breakout CEO podcast. I'm your host, Jeff Holman. I'm with Intellectual Strategies, a law firm that serves startups and scaling companies. And we work with a lot of cool companies and CEOs. And we can't tell you their stories necessarily, right? Because they're confidential. So what we do is we bring stories from other successful CEOs who are sharing some behind the scenes insights with you so that you can maybe learn, relate to, appreciate the things that.
that other people are going through that you're probably experiencing too. So you're not alone. We've got we've got a bunch of episodes and guests that you can listen to on the podcast and hear what they're going through that that are going to be similar to what you're doing as as a scaling CEO. Today we've got the pleasure of having Rupesh Sangavi on on with us. Rupesh, thanks for coming on.
Rupesh Sanghavi (01:13)
Thanks Jeff for having me. Really appreciate your time.
Jeff Holman (01:18)
Yeah, no, it's it's great to it's always great to get somebody who's so busy to set aside an hour and come chat and share some insights. So that's fantastic that you're willing to do that. it's a testament, I think, to all of our guests who are who make the time to share their insights so other people who are maybe on maybe on different parts of the same path and and and everyone can learn together. you're with Ergoad, and you we're gonna hear all about your business.
But you've been doing this for some time, two thousand seven I think is maybe when this started. But before we get into the company itself, what was your background leading up to starting a company?
Rupesh Sanghavi (01:59)
grew up in India and ended up getting a degree in chemical engineering, bachelor's degree. And after that, I kind of inspired by my friends, I applied in US to various universities. And I kind of got accepted into more than 10 universities.
Texas A Kingsville gave me full scholarship. I mean, that was just start of me realizing this is to me a part of a larger story that why I think I would call US as my almost a father and India as my mother. mean, imagine a country or a university giving a full scholarship to a student with nothing expected in return. Very thankful to that.
Jeff Holman (02:58)
What what did you study at at Texas A and
Rupesh Sanghavi (03:01)
Chemical engineering.
Jeff Holman (03:02)
Okay. So you did chemical for under for your undergraduate or and then you did.
Rupesh Sanghavi (03:06)
and for my graduate.
Jeff Holman (03:08)
Okay, okay. I you don't you don't know this yet, but my daughter, Whitney, is at Texas A and right now in a PhD program for finance. So it's fantastic program.
Rupesh Sanghavi (03:19)
Go eggies!
Jeff Holman (03:20)
Yeah, that's right. That's right. So I need to make it out there for a football game. She's not very much into football, so we've you know, we've gone and met in Waco twice when Utah, where I'm at, University of Utah played Baylor. But haven't I haven't made it out there for an Aggies game yet. I need to do that.
Rupesh Sanghavi (03:40)
Wow, that's a very small world. Thank you.
Jeff Holman (03:45)
So you got so you did your so you went out to were you doing a PhD program at that point? Okay.
Rupesh Sanghavi (03:49)
I did masters from
Texas A then right after year 2000, like I graduated just at the, like, I mean December 2000. And then I was, I got a job as an application engineer in California. Was wonderful experience. It was in San Diego, California, one of the
beautiful city I ever been or would ever be, perhaps. Amazing. a pleasure living there almost five, six years. And I did kind of computer science master. Like, I mean, did wait, did go to UCSD and did almost 12 credits, 12 courses. So 36 credits of computer science. How that all ties up together is that
I mean, so now I had some chemical engineering knowledge, which now is not relevant to what I'm doing. But computer science, so I was buying a book. We got married in 2004, 2005. So 2004. I was buying a book for my wife. I mean, after some time, she decided to go back to college.
Jeff Holman (05:15)
Mm-hmm.
Rupesh Sanghavi (05:17)
still thought that the textbooks were pretty expensive. so I thought that, let's like, mean, when I did masters, I didn't have, I mean, maybe enough choice or I didn't explore choice. So I started looking and I looked on eBay and I was just playing around with tinkering kind of with eBay and Amazon. Realized that there are a bunch of books that I can buy
on eBay and sell it on Amazon. And the very first transactions that we did, Jeff, was buying a book for like 40, 30, $40, sold it for $1,600. And it was actually pre-sold. Did you say 6?
Jeff Holman (06:04)
Yes, Jeff. that's a that's a good margin. So
Rupesh Sanghavi (06:10)
Exactly and guaranteed margin because it was pre-sold not a luck, matter of luck.
Jeff Holman (06:16)
Okay. So
Rupesh Sanghavi (06:18)
Now I kind of got hooked and now my computer science knowledge sort of started playing up and I built a bunch of software that would automatically go through all the options on eBay at that time. It will automatically place the bid even while I'm at work and win the items for me. And maybe I should have taken next step is to pay for it as well.
didn't think that at that time. But a lot of automation started happening. pretty soon our house started filling up with books and more books. And then like my wife was like, okay, I mean, she was very supportive. And that is how we sort of got started in this business.
Jeff Holman (07:09)
into the 'cause 'cause you're doing e commerce and we'll hear more about all of that. But so you just I mean did you want to start a side business? Were you looking for extra cash and stuff? Or were you just did it ju you just kinda happen to luck upon this and be like, wait, this is I made some money. Maybe I'll do it again and again. Like were you looking for a side business at this time?
Rupesh Sanghavi (07:32)
I think I would say that it is sort of ingrained in the society or the community I come from, so to speak, like my dad, uncle, mean, how does doing business is considered a cool in the social circle I grew up in.
Jeff Holman (07:54)
Okay. So
it was a fun thing. Like if you can do a deal or you can sell something, like that was just something something you would do. It wasn't ev it was natural for you.
Rupesh Sanghavi (08:04)
Exactly, exactly.
Jeff Holman (08:05)
Okay. Okay. Well so at what point did you you were working this job as an application engineer in San Diego. You you started selling books. Did did that just stay kind of a side hobby for a while or did it eventually did you eventually say, I'm gonna sell books full time?
Rupesh Sanghavi (08:24)
It was like, I no, I did not cold quit. I actually continued perhaps taken easier route of because visa like, mean, at least at that time in my mind, there was a limitations with visa, limitations with insurance. Maybe I hadn't figured out system enough yet that how to how others do it.
So like, and besides I was still passionate about the work I was doing and didn't add enough of knowledge, so to speak. was like, I always considered myself a little bit more technical than entrepreneur, at least at that time. So I was like, I didn't project enough and I didn't kind of plan aggressively. thought like, let's continue and see how.
kind of chips fall in place. So I continued for three more years while giving more than 100 % at the work. This was my evening fun activity well supported by my wife.
Jeff Holman (09:38)
Wait, you're saying over three years did you you started to employ people during that time?
Rupesh Sanghavi (09:44)
Yes and no. For three years, I sort of did moonlighting. I did employ a few people, but they were all remote workers. I worked from home in 2007-2008.
Jeff Holman (10:02)
Wow, that had a had a good job. They were leading the pack ahead of ahead of the rest of us when you know, a lot of other people didn't do that till COVID hit. so I said so so how did that how did that business or that experience lead into you starting because you y you started in two thousand seven, see what was the business? It was AMI Ventures. Like that sounds like a that sounds like a big leap to go from application engineer, selling books, you know, as a as a passion on the side, and now all of a sudden
AMI Ventures. What did AMI Ventures do? Just a quick note about our guests. I host the Breakout CEO podcast to share behind the scenes insights from scaling businesses. As an attorney, I see the real challenges leaders face long before success becomes public. But clients' stories have to stay confidential. So we invite guest CEOs to share their own moments of struggle and success. I'm so grateful to our guests and my team at Intellectual Strategies.
For making this show possible. Now let's get back to the show.
Rupesh Sanghavi (11:05)
So, AMI Ventures was primarily into buying products from open sources online and selling it online. You can almost say C2C type of a business is what it started where we would go to some of the wholesaler website. There are places like eBay, Lott's, are places like Doba.
where a customer or consumer usually wouldn't buy or cannot buy. So we would buy from those sources and sell it on our own website as well as marketplaces like Amazon and Sears. Like there was no Walmart at that time. So Amazon did exist and Sears and perhaps eBay and few other marketplaces is where we would sell those same products.
Jeff Holman (12:04)
Okay. Okay. Well it sounds like that that was the kind of the first generation, if you will, of of what later became Ergoad. and
Rupesh Sanghavi (12:13)
Correct.
Jeff Holman (12:14)
and tell us what Ergo does just generally. I think I think it's more of the same, but but a lot more, right?
Rupesh Sanghavi (12:21)
Yes, yes, absolutely. So if AMI Venture is a starter, I would call Argod as a full mill,
Jeff Holman (12:33)
Okay.
Rupesh Sanghavi (12:33)
so to speak. so what we do today is we are into business of brand growth, primarily online, but also offline. And what we have done so
AMI Ventures continues to be the business of C2C even today.
Jeff Holman (12:56)
okay.
Rupesh Sanghavi (12:56)
And there are still opportunities in that segment. Then we have another business vertical where we act as a retailer. we partner with brands, buy their products at a wholesale rate and sell it at
retail, very simple distribution business. Third business that we do is we actually provide a white glow services to various businesses in US, which includes like I mean, so we use our own software, our own talent, SOPs, everything, but we would just help
any consumer brands grow online, be it on marketplace or off marketplace. So
Jeff Holman (13:55)
Okay.
Rupesh Sanghavi (13:56)
we have acquired a bunch of companies, 15 bunch of businesses like 15 in total that have their own brand and our job is to obviously now once we acquired it, become a brand owner and
Our job is to grow the brand as an in-house. I'm sure everyone knows that like the way Costco or Walmart has their own in-house brands. Same way, we have some of our in-house brands as well. So, that is the whole gamut of work that we do to grow our own business as well as grow others'
Jeff Holman (14:41)
D did this all just come from your love of business and and wanting to start something and the books led to selling other things, to buying brands, to helping brands? Was it just a natural evolution for you? Or or was there another draw that brought you into the e commerce retail world?
Rupesh Sanghavi (14:58)
I think it's almost all of it, I would put it as a natural evolution or natural progression. It's just perhaps the three passion that I go or live by is travel, family and business. And I mean, sometimes I wonder if I was not busy with business, perhaps.
I don't know what I would have been doing.
Jeff Holman (15:29)
really? Do do you actually when you're traveling, are you doing business when you travel? Do you are you visiting brands and things like that or or do you keep the travel separate?
Rupesh Sanghavi (15:38)
More often than, like, okay, 100 % of the time I'm sort of working, maybe fewer hours than normal time, but yeah, that is inseparable. But also, yes, it goes both ways that if I'm in somewhere, some place is cold, I would take all the opportunity to have some fun travel as well.
Jeff Holman (16:03)
Okay. So you're you're very keeping a good balance there. A as you look back on what you've built with AMI Ventures, and I think your second one was VIR Ventures. You had another venture in there, right? And then and then onboarded with Walmart, onboarded with Google, onboarded with all these places and and and then start acquiring your own businesses. When you look back at this journey that you've been on, where do the milestones stand out to you? The the milestones being those places where
your business grew the most but but maybe also had to had to overcome the most.
Rupesh Sanghavi (16:38)
I would say that almost every year I feel that we have faced either some opportunity or maybe some challenges, like some major challenges. For example, in 2010 or 2011,
I think our biggest source of inventory was a website called half.com. would do maybe over 30, $50,000 a day, just buying products from half.com and selling on our website or marketplace. And suddenly eBay decided like it was owned by eBay, for what like reasons I don't understand.
maybe financial, they decided to shut it down.
Jeff Holman (17:41)
So
Rupesh Sanghavi (17:43)
I mean, well, like, how do know? You like lost almost 80, 90 % of your inventory source suddenly.
Jeff Holman (17:52)
Well
Rupesh Sanghavi (17:53)
But it kind of forced us to look outside, look beyond half.com, a little bit more aggressive. 2014, I'm just...
saying some of the milestones that we did come across. 2014 is when we realized that there is a limitation of how much we can do with C2C. So we chose to start kind of Veer Ventures, VIR Ventures, primarily to hedge against, mean, to sort of help out different vendors or the brands that can actually, different vendors or the brands that
we can directly work with rather than working indirectly. in three years, business that we started in 2014 became larger than the business we had at that time for 10 years. That is AMI Ventures. So, that was the one part that got us quite a bit of growth.
2020, I would say is another milestone year when COVID hit. We sort of realized that a lot of these businesses are up for sell and it would be too good an opportunity to let it go. For example, some of the brands we acquired are already in or at that time they were already in Walmart and some of the big
a big box retailer. mean, like those businesses like I mean, so we typically acquired a company or a brand with the consumer goods products that are selling online and offline. I think from 2020 to 2022, in like two years, we 23 perhaps, we acquired almost all the companies that we have today.
Jeff Holman (19:55)
Okay.
Rupesh Sanghavi (19:57)
And that got us a next level of growth because as a C2C, the profit margins are small. When we went to from C2C to B2C, that is from business to consumers, our profit margins got a little better. But when we became like D2C, is direct to consumer company with the brand ownership, the margins
started crossing double digits. I mean, like some of the events around us sort of taught us like taught business to us or maybe forced some of the business decisions. But I'm glad that we did it. And in 23, 24, I think 24 is when we had this
uncertainty coming out of tariff. we realized that, I mean, tariff is a sort of a big unknown that is going to be around for a while or at least that's what we thought. And that's when we started this white label support business where we can actually grow someone's business using all the tools, technologies and SOPs that we have. So
That is how the progression happened. Over a period of time, when something happened, we sort of learned from it and moved to the next step.
Jeff Holman (21:34)
Well, and you've been adding businesses and not not only adding your own businesses, but adding acquiring businesses with you know, brands within your business. And then so the just so I have it ri right, from your website you talk about an accelerator. Is that that's the services that you do, right? To
Rupesh Sanghavi (21:52)
Excelletor is a part of a, I would call it a vendor partnership business model of a kind of a retailer type.
Jeff Holman (22:01)
okay. So you do services, but then you also do this vendor partnership accelerator and you've bought your own brands. I think you said fifteen brands. You were early on in this, it feels like, in the e commerce space, right? A lot of people have started since COVID even. You call it the last four or five years. Everybody has has, you know, gr grand expectations of starting a really profitable e commerce business when if as as I understand it.
i the the platforms are kind of taking more and more of the profit out of out of the businesses. What would you say that you did early on that set you up for success later on?
Rupesh Sanghavi (22:41)
think I would say that focus on building team and technology because those are the two.
solid constant that will see you through any situation and perhaps far more efficiently. I think, yes, a lot of time, just even to start with, buying items from eBay and selling on say Amazon or other marketplaces,
We kind of skilled very quickly because of technology. Lot of time when we start, we have seven offices in India to support our business. And we usually do any office when we identify an anchor leader who would be able to do something. And anytime whenever we do new business, of course, as a...
Like individual, my capacity is limited. So I'll have to rely on team to get us what we need to do. I think, yeah, I would keep coming back to team and technology and anticipating that what's going to remain, what's going to change the least.
is something that we internally focus on.
Jeff Holman (24:27)
Okay. With with team and technology, it seems that with your background in chemical engineering and a master's in engineering with computer science, like the technology probably comes really, really easily to you. I think a lot of people and and and I have an engineering background also. I did electrical engineering in my undergrad. I might be less technically skilled than you because I I moved pretty quickly into law after that. But but I say this with with much love, and that is
A lot of engineers that I know aren't necessarily great team builders. Did you find that that the that building a team was easy for you or did you did you have to learn how to how to build a team and culture around that?
Rupesh Sanghavi (25:09)
I learned along the way, I must say that, and Paresh I am learning every single day. What resonates most with me, Jeff, is what I call as a servant leader. That I wouldn't mind marking myself as the last person standing, last person taking the hit, last person taking ownership. Whatever it takes,
for me to shield and help my team member growth, that is what ultimately matters to me. I think, yeah, I would say over the years, I've become definitely, I would say that I've learned how to convey the message and how to
sort of work with Tim, but that's one of the biggest equations that I feel that I would always be learning even 20 years from now.
Jeff Holman (26:21)
Yeah, you're very you you very much have a a learning attitude and approach. It's it's clear. So as your team has grown, what what do you think were the best kind of steps or moves that you made to build the right team for your business? 'Cause I know a lot of businesses as they grow, you know, early stages, you bring on people and and as you move to the next level, right? They they they say you what got you here won't get you there. And sometimes the team members that got you here
aren't necessarily the right team members for later on. Ha h how did you how did you move through that progression of, you know, not just growing your business business, but growing multiple businesses at at the same time?
Rupesh Sanghavi (27:02)
I think that's one of the very so to speak old learning but to me it is still very valuable is choose will over skill.
Jeff Holman (27:20)
What is that?
Rupesh Sanghavi (27:22)
Choose, almost always choose will to do something over skill to do something,
Jeff Holman (27:30)
okay.
Rupesh Sanghavi (27:31)
specially for long term.
Jeff Holman (27:34)
Choose will over skill. So a lot of people that I I've I've heard people say, well, one phrase that I don't necessarily love is A players hire A players and B players hire C players. And th this doesn't sound like it it's anything like that. You're not grading employees. You're not you're saying you're saying show me that you have the will to do it. I can teach you the skill.
Rupesh Sanghavi (27:56)
Absolutely. see there are like I sometimes I give these examples even within our team.
See, lot of times we rely on that, I don't have a training or I don't have an instruction or something very simple, right? I always kind of motivate them or maybe convey that. Think about you losing a water or a power to your home.
Jeff Holman (28:24)
Mm-hmm.
Rupesh Sanghavi (28:26)
What would you do? How long would it take for you to figure out what's wrong and how to get it back?
Jeff Holman (28:33)
I love that.
Rupesh Sanghavi (28:35)
Define
a self-be right?
Jeff Holman (28:37)
I love well, I love it because they're, you know, my wife and I, my wife helps run my law firm. She's very, very good at the operations. And and a lot of times we'll have conversations, we'll be like, We're in problem solving mode. Like just what's the solution? It's okay to express the problem, but if you express the problem without saying how you're how you think you're gonna solve it, it's not very useful. This is a very this is maybe one of the most vivid examples I've heard before. What would you do if you lost power to your home?
You're not just gonna sit and complain, are you? You're gonna figure out how to get power back if you have any any way to do it. I I love that.
Rupesh Sanghavi (29:14)
This is my favorite example that most people are quite adaptable. Even if you look at your journey or my journey, like chemical engineering to e-commerce or electrical engineering to law firms, that way mind is very fluid and plastic. Somewhere you wanted to be a lawyer and you...
found ways to do it where most people will say what like most people perhaps cannot even name 10 low colleges in US.
Jeff Holman (29:52)
I'm gonna I'm gonna step back a little bit because it seems to me that people who say things the way you're saying them live without as much fear as other people who who aren't as solution oriented, right? People who have fear oftentimes are afraid to take action and therefore they they seem stuck more in in the complaining mode or the or the
I don't know what else to call it. I could maybe complaining mode is little harsh. But they get stuck in this mode of of just observing what's wrong and not taking action. And really it I think fear sometimes is the reason they do that. They're like, well, what if I don't do it right? What if what if this doesn't work? What if, you know, someone thinks that I should have done a different way? And and do you think that you're that you as a person, Rupesh, that you view fear differently than other people?
Rupesh Sanghavi (30:50)
Definitely to an extent. mean, like I've been told in a very positive way that perhaps I have less social fear or I'm kind of good. Like, let's jump. It has backfired too sometimes, but let's jump in the pool literally and figure out swimming after that. that has happened. I would say
I mean, sorry to have used so many lines, but a noun of an action is much better than a pound of thinking or planning. I'm from that camp. Let's take a first step and see what happens.
Jeff Holman (31:39)
Do do you find that other CEOs are that way too? Is that is that a a trait or characteristic that CEOs have that other other people maybe don't have as often?
Rupesh Sanghavi (31:53)
would say yes by and large because as a head of a company or like when sort of box stops with you, you are forced to make a decision looking into the future. You are forced to charter, but perhaps less travel or never travel. And that's, think, it's just the nature of the
responsibility that you have is you'll have to think little out of box have put some
Even though it's little bit risky, but look at the reward part of and try to focus on reward. That is what I think each one of us is asked to do or supposed to do.
Jeff Holman (32:56)
Yeah. I w as you've been as you've been building businesses, have you found that it's been easy to help other people learn to act in this same way?
Rupesh Sanghavi (33:07)
People like just I feel like, I mean, we have three kids, three boys. And I feel that even they are not like, I mean, they are not the same despite growing up in the same house, same everything. In a very similar way, I feel that everyone who is working in the company is an individual. But at the same time, I believe that it is actually a blessing from the nature.
I would rather have my CFO, I was super tight control, like, I mean, I would rather have my CFO as a penny pincher. But at the same time, my media person has to be willing and able to take enough risk to see what works. So, I mean, yes, like getting the right people in the right seat is very crucial. But just we have to
sort of we need as a company, cannot have all of the same types, right? We need different nature.
Jeff Holman (34:13)
That that makes that makes sense. I I wanna shift a little bit into this, the brand acquisitions that you've been doing. 'Cause I think I think w I'm seeing a lot more people not just in e commerce and retail, but in across the board, right? Everyone's talking about entrepr entrepreneurship through acquisition. They're talking about, you know, merging I've got clients who just merged just just acquired a s a smaller brand and brought it on board and they're
You know, always exploring other mergers and acquisitions as as part of their growth strategy. how how do you approach brand acquisition? What is what do you look for when you're trying to buy a company? Is it just the like the financials? Is it the team? Is it the history? It what what makes a good company in your portfolio?
Rupesh Sanghavi (35:04)
I think I would say three things that matter to us the most. One is products with good review and ratings. Essentially, we want to invest into products that customer loves. That's the cornerstone. Second is that product is
or like needs to be omni-channel. Omni-channel primarily at least one offline, one major offline channel because given that we are an e-commerce business, we perhaps know a thing or two about how to sell online. But offline is a like now we have learned few things, but at that time it was a
totally different game for us. So we wanted a brand that sells offline and third is the company offer price has to make sense, right? I mean, it has to be available for so to speak within the right price zone because what you pay to acquire company matters a lot in a long run and
Especially if you have taken any kind of loan from bank or any kind of investment from bank. I remember that when we were buying companies like that time in e-commerce, were now those companies are not around anymore, but there were companies like Thrasho, Perch and few other companies.
They used to pay or at least it was reported like it was published that they used to pay from 9 to 12 X of EBITDA multiple. like I mean, before like before COVID, the ongoing rate was between 2 to 4 EBITDA multiple. Now, when you pay three times or at least that's what we felt. Yeah, we held on to
lot of acquisitions that looked great on paper but didn't make financial sense and we chose not to. So, has to be mathematically attractive.
Jeff Holman (37:45)
That that makes sense. You know, I'm I'm thinking back on a a client I worked with at one point and they they were an e commerce company and some other things and they would they they wanted to buy a brand and and I remember talking with the CFO, you know, I'm not a CFO myself, but I've got an MBA and I know I know some things about numbers sometimes and I said, Hey, you're using you're using this certain type of debt to purchase this company, but how have you
Have you actually done I mean, this maybe this is a little bold of me, but I was like, have you actually done the math on this? Because this is very expensive debt and you've like you've got to hit a home run just to just to pay back the debt. You don't have a lot of a lot of buffer in there at all. So what happens if, you know, you don't hit the home run? And, you know, I won't I won't go into the details of what what happened to that company, but
Rupesh Sanghavi (38:36)
I'm really impressed by what you just said. Thank you for sharing that because this is the exact kind of context I would love to have on a speed dial. Who is willing to go out of their way even if means perhaps loss of own business. I'm quite impressed what you said Jeff.
don't know what decision they made but if they choose not to go to acquire that company it would mean a little less business for you but you stood by the client and not just necessarily short gains. Impressive.
Jeff Holman (39:21)
Yeah, well, I like I like doing businesses that, you know, not just not just have a transaction today, but hopefully we'll have lots of transactions in the future. And and you know, bad financial decisions you know, we've all seen it, right? Bad financial decisions hurt the company, they hurt the team, they hurt individual team members too at times. It hurts your rep reputation. And not that every company has to work out, like it like you take swings and you do a
measured risk and I think that that's good. But, you know, bad companies hurt more people than they help and they end up in litigation. And litigation is I don't think it's fun for anybody except maybe a few attorneys out there who just absolutely love it. But but yeah, I don't know. There's something about there's something about for me, and I think a lot of people are probably like this, whether they're you know, I don't know in the legal field, but like you, I imagine that you look at you look at businesses and you're like,
It is so cool that I was able to, you know, imagine something. I was selling books and then I was able to say, well, what if we did this? And all of a sudden you take some action and boom, a business is born that didn't exist last year and it's working. Like that's pretty cool. You're creating something that didn't exist. And that that's to me, that's just I mean, that's central to the innovation process. And I I believe personally, you know, maybe in a philosophical way that we're all
We're all creators. We're all most of us, we're all innovators. Like we we are energized by creating something new, by innovating something new and and that brings life to us, you know? So anyway, that's I I appreciate you I appreciate you commenting on that and and it's always fun for me to kind of bring some of my some of my other skills into the conversations, even though it's not always requested.
But you know, I've gonna be but if I see it, i you know, it's kind of like well, in in other settings, you know, I've got three daughters, and one of the things that we've told them as they've grown up is if you see something, say something. Now that's more of a personal safety type of setting that we usually say that, but I think it applies in business. You know, I'm sure you appreciate it when your team set if your team sees something that looks at a place, you know, financially or operationally or whatever.
It's you you certainly appreciate it when they say something about it and bring it to your attention, I'm sure.
Rupesh Sanghavi (41:52)
Absolutely. Love like this. Love this life. If you see something, I never connected the dots, but now I can see that how it can be, that famous saying can be applied into the business.
Jeff Holman (42:07)
Yeah. Well, so back to your back to back to your acquisitions. Is there an acquisition that you did that was kind of your favorite acquisition?
Rupesh Sanghavi (42:16)
Yes, think I would like, yes, even though I love all of them, there is a what like, would say one fun brand that it's not the largest one, it's not the most the like, it's not the most profitable one. But it's one of the coolest one. It's called Clean Bottle. I
Jeff Holman (42:42)
Okay.
Rupesh Sanghavi (42:43)
mean, I got a lot of interesting
products that we acquired, but this clean bottle was the, it's a bottle that actually opens from the top as well as from the bottom. So you can take out the bottom and clean the bottle better. So there is this cleaning aspect to it. That product was featured on Shark Tank
Jeff Holman (43:07)
cool.
Rupesh Sanghavi (43:08)
and like Mark Cuban at that time invested into that product. mean, then
It kind of felt sideways and didn't exactly work. yeah, mean, like it is one of the coolest product, the colors on that product. mean, just motivates me to be better hydrated. And I love it.
Jeff Holman (43:31)
that's cool. So so you bought it probably after it was after it struggled a little bit and then and then kinda help helped to rehabilitate it.
Rupesh Sanghavi (43:38)
Yes, yes.
Jeff Holman (43:39)
Okay. Clean bottle. That's that's fantastic. Well and I think someone can any of our listeners could go onto your website at Ergoad dot com, right? And they could see a a a sample of the brands that you guys have. Yes. And it's kind of varied. There's not necessarily at least I didn't notice when I was on there, I didn't notice that it's all in one category or you know, it was
kind of spread out. So y how does do you mostly buy the brands and and and bring bring the brands in house with your existing team? Or do you bring you know, do you do kind of an aqua hire where you bring some of the team members from the brand in to continue operating?
Rupesh Sanghavi (44:18)
Sort of a good combination. I think case by case, most of the companies we have acquired are not that large, mean, rarely there is a company with more than 10 employees.
Jeff Holman (44:36)
Okay.
Rupesh Sanghavi (44:37)
So most of the time, mean, one of our largest acquisitions we did, the key sales
leader is still with us.
Jeff Holman (44:49)
Okay.
Rupesh Sanghavi (44:50)
So as and when things work out, we prefer to offer a similar position or even a little bit position to everyone involved. Except for one fact that we, or at least in those years we preferred
to have a manufacturing not as a part of our work. We want products to have a manufacturing outsource because I truly believe that managing raw material, managing those manufacturing machines, that is not our core competence.
Jeff Holman (45:37)
Yeah.
Rupesh Sanghavi (45:38)
So we would prefer to have those manufacturing outsource. if the brand had already been manufacturing or assembling
something we would find we would let we would move the entire manufacturing to somewhere else either be it in US, Mexico or somewhere in Asia but we would not we would not prefer to have it on our PNF.
Jeff Holman (46:06)
I see. I see. So you probably also use three PLs and things like that to to do all your distribution. So that that all makes sense. So you're really you're really at the core, you're the brand owner and you know, you're the brand, the customer facing brand, but you're outsourcing the non-core competencies.
Rupesh Sanghavi (46:29)
asset light model.
Jeff Holman (46:31)
Yeah, a very asset light. That's a great way to put a great way to put it. So
Rupesh Sanghavi (46:35)
absolutely. Yeah, we have one warehouse that we run like we for first decade plus we didn't add our own warehouse. But 2021 is when we acquired a warehouse and we run that. that is only maybe does less than 5 % of our logistics 95 % of our logistics still flows through 3PL and
outside our gates, so to speak.
Jeff Holman (47:08)
Okay. As you look back on your career, Rupesh, is there something, you know, we've got an audience of of other CEOs who are building and scaling their businesses. Some of them are maybe doing similar things to you and some of them are doing different things, but but all are all the CEOs, I think, to a large extent go through similar learning curves. Maybe not in the same order, right? But but you've got to learn these lessons along the way. Is there a lesson that you've learned that you think is is kind of a priority for other CEOs?
to learn as they're growing a business, something that maybe you could share with them and they could try to learn that sooner and with less you know, less headache than maybe what it took for you to learn it.
Rupesh Sanghavi (47:51)
could see two things, perhaps, what stopped us from becoming 10x of what we are today. We could have been. Now, one is that, and we still get it, but we used to get a lot of investment offers, even unsolicited investment offers.
It sort of closed our mind to that, like, hey, like outside investors, like, I mean, you hear some of these stories that outside investors can easily ruin it for you or can control it and whatever. I sort of realized that may not be necessarily be the case. Yes, it may. It could be.
As much as there are good people and bad people, good company, bad company, right? So I should have considered some of those well-intended investment early on. That's one thing. Second is as much as I feel that I'm focused on team and tech, there are periods of patches of time over many years when I try to take my eyes off from technology.
that let someone else run it. those are the least growth years.
Jeff Holman (49:23)
Totally.
Rupesh Sanghavi (49:24)
Consequences, yes. mean, so I think, and especially with the current wave of AI, it is even more crucial than ever before. At least in my opinion, if I were to advise anyone, I would say never take eyes off from technology. That's just...
I I read somewhere that almost every company is a technology company just manifested in a different ways.
Jeff Holman (49:53)
Yeah. I I I like to tell people when they're coming to me there very early, I say, Hey, you know, you you've gotta do three things. One is you gotta validate your technology. And I use that ver very broadly. I I tell people I I'm saying technology, but that might be a service, it might be a product, it might be a platform, whatever that is, that that's your technology. You've got to validate your technology, validate your market, and then you've gotta protect your freedom to operate. So
Rupesh Sanghavi (50:18)
very cool.
Jeff Holman (50:19)
Well, I I I love this and I love the lessons. Take take
Take smart money or consider taking smart money for growth, right? And and and then don't take your eye off technology. So from your experience, sounds like those are two of the keys to to think about. Is there anything else that you'd share with our audience about growing a business that that that you think that they'd like to hear?
Rupesh Sanghavi (50:44)
Continue to have fun along the way. I mean, don't wait. mean, there is no destination, so to speak. I mean, almost every time when I go out, I'm almost always filled with guilt that I will be away from what I've been working on for months and now I'll leave a lot of those things behind.
I mean, like every time when I come back, I feel glad that I did that. I took that decision to, even though it was hard, almost every single time that I wish, like I had a little bit more time before, it's a vacation time or travel time, but then it falls in place. So, that's, I think, is what I've learned.
Jeff Holman (51:39)
That's that's it. You know, a lot of people are like, I can't wait for vacation. You're like you're like, I just need to put it off a little bit longer 'cause I'm I'm I'm busy with work and I've got stuff going on, but but when you go you when you go you love it. Well, on that note, my final question is do you have somewhere do you have somewhere planned fun to go i in the near future?
Rupesh Sanghavi (52:02)
Yes, like going to Caribbean in Christmas.
Jeff Holman (52:06)
very
Rupesh Sanghavi (52:07)
Been to Caribbean many times, but there are many countries around that geography that we haven't covered.
Jeff Holman (52:15)
So g some more some more new country exploring. That sounds sounds fantastic. Well, Rupesh, thank you so much for joining me today. It's been it's been a pleasure hearing about your business, how you've developed it, about your leadership style and skills, and and it's been a pleasure just chatting chatting with you today.
Rupesh Sanghavi (52:31)
Likewise Jeff, really pleasure and love the way you almost I feel you took the best out of me and that's in a very positive way.
Jeff Holman (52:41)
well, thank you for sharing that part of you. It's been fantastic. And thanks to everyone else who joined us on another episode of the Breakout CEO. Be sure to follow or subscribe on your favorite podcast platform. And if you enjoy the show, a rating or a review goes a long way. Our mission is to promote the stories of breakout CEOs in scaling SaaS, e-commerce, and tech companies to equip peer CEOs with valuable perspectives and confidence.
Thanks again for joining us on this episode of the Breakout CEO. I'm Jeff Holman, and I'll see you next time.
