Co-founder Jeff Frieden bootstrapped Auction.com to about $180 million in revenue and profitability. Thereafter, he raised private equity financing and growth capital and ran a private company that was more than qualified to be a public Unicorn. The company had a legitimate revenue and profitability model that was scaling phenomenally well. Unlike many ‘funny money Unicorns’, this one was for real!
Sramana Mitra: Let’s start at the very beginning of your journey. Where were you born, raised, and in what kind of circumstances?
Jeff Frieden: I was born in Orange County, California and raised in Anaheim, California. It was right across the street from Disneyland. My mom and dad both worked at the Internal Revenue Service at Los Angeles after World War II.
Sramana Mitra: What about school?
Jeff Frieden: I graduated from Loara High School in 1979 and went on to go to Cyprus College for one year. Then, I started down the entrepreneurial journey and couldn’t find time for school.
Sramana Mitra: What was your first entrepreneurial venture?
Jeff Frieden: As a kid growing up in Anaheim, I was always the top sales guy of the candy and they would give us funds. When I was 16 years old, I was fascinated by CB radios, which probably no one knows about today. I would ride my bike over to the Orange slop meat stand and I would hang out at this foreman’s stereo stand. She gave me a job when I was 16 for $20 a day to help her set up and tear down her slop meat stand. Then, I started to sell for her when I was 17.
They opened up a retail stereo store in Covina, California. I didn’t have a car so I used to take the bus from the Disneyland Hotel to Union Station in Los Angeles and had to transfer buses to Covina. I worked in that stereo store and their slop meat business.
I graduated from high school. My partner, Rob Friedman, of 35 years was in the same year at Loara High School. His last name is Friedman and mine is Frieden. As a result, we were always next to each other in pictures. His father was an anesthesiologist and said, “We should have our own version of that stereo store in Orange County.” This was 1979 to 1980. So we did.
We opened up The Stereo Connection, which was in Anaheim in 1980. Like the store I worked at Covina, we were the first one to introduce Korean electronics to Orange County, California. Everything was Japanese back then – Sony and JVC. No one knew who Samsung even was. We were the first one to offer a 19-inch color TV at $199. I had learned how the stereo business worked through working in this store in LA where all the merchandise was bought. I borrowed $5,000 from my uncle in Florida. Rob put up $10,000 to $15,000. We opened that store on the same model as the folks at LA.
When we got to the store, there were 100 people lined up. We sold out everything. We took the money and went back down to LA and bought more. We got a line of credit from Samsung and a lot of other vendors. The next thing you know, we opened store number two, three, four, and five. All are in Orange County and one in San Diego. This is 1981 now. We were making $40,000 to $50,000 a month and we were 18 years old.