From The Seedy Underworld of Drugs and Prostitution To Entrepreneurial Success: David Sharpe’s Journey with Empower Network (Part 7)

Sramana Mitra: All right and with this model, you have generated about a $100 million in affiliate commissions so far. Of which, about 70% of that has been paid-out to your partners?

David Sharpe: Technically, 100%. Last year, we did around $63 million in product sales. All of that, less processing fees, are given out as commissions.

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From The Seedy Underworld of Drugs and Prostitution To Entrepreneurial Success: David Sharpe’s Journey with Empower Network (Part 6)

Sramana Mitra: If you’re claiming that part of your secret stuff in building this company is this 30,000 affiliate network, then I need to understand how you got to 30,000 affiliate partners in two years. I’m looking for round numbers. Let’s say you pay 90% commission to one layer of affiliate and they go and recruit their own affiliate, how much commission is that layer of affiliate getting as they recruit their own affiliate? Two, I need to understand what the compensation structure is that drives this multi-layered affiliate structure.

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From The Seedy Underworld of Drugs and Prostitution To Entrepreneurial Success: David Sharpe’s Journey with Empower Network (Part 5)

Sramana Mitra: You pay what percent as affiliate commission?

David Sharpe: It’s not quite 100% commission because we’ve got merchant, accounting , and processing fees. The commission is between 90-94% for our core product lines.

We’re doing a $12,500 event at the beginning of March. Clearly, there’s event cost for that but instead of paying a $2,000 commission, we’re paying almost a 50% commission. That allows us to pay for the event cost and also gives us a nice margin. More importantly, it’s giving our affiliates a nice commission.

Sramana Mitra: Affiliates are making most of the money and whatever balance that’s left in the pool goes into the operating cost of managing this network, what is your revenue model? Is it the monthly affiliate fees that you derive out of all this affiliate partners?

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From The Seedy Underworld of Drugs and Prostitution To Entrepreneurial Success: David Sharpe’s Journey with Empower Network (Part 4)

Sramana Mitra: What were the profiles of these people? Were they sales people?

David Sharpe: Yes. Initially, we were looking to find people who would help us go out and promote our products and services. We went after salespeople, promoters, and marketers.

Sramana Mitra: What did you tell them? What was the call to action for these 40-50 people?

David Sharpe: It was a call to action combined with a vision. I think a lot of times when an entrepreneur is launching a business, one of the biggest mistakes that they make is just saying facts. We all know that facts and telling stories don’t work. Our call to action was simply buy our products, use them, go through them so you can buy-in to what you’re actually promoting. What we did was, in combination with giving them a call to action, we also painted a vision of where we wanted to go with the company.

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From The Seedy Underworld of Drugs and Prostitution To Entrepreneurial Success: David Sharpe’s Journey with Empower Network (Part 3)

Sramana Mitra: I’m going to get into a granular line of questioning so that we can extract the real story here. When you decided that you wanted to start a company, what did you do first? I imagine you incorporated, but was there any savings? How did you put this business together?

David Sharpe: We started with very little startup funds. We basically had an idea about the company and we put our heads down and went to work. Yes, we incorporated and set up bank accounts and so on and so forth. For the first 90 days since the inception of the idea until the date that we launched that company, we were on phone calls. My business partner for this company lived in Costa Rica. We actually lived in different countries.

Sramana Mitra: Who is your business partner and how did you meet him?

David Sharpe: His name is David Wood and we were in the same industry together. He was somebody who was producing a lot of sales and results. He had been in the industry for a little bit longer than I had been. I came into the industry and started producing as well. We just noticed each other and got on the phone, made a connection, and started a conversation.

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From The Seedy Underworld of Drugs and Prostitution To Entrepreneurial Success: David Sharpe’s Journey with Empower Network (Part 2)

Sramana Mitra: How old are you now?

David Sharpe: I just turned 30 last November 17.

Sramana Mitra: How does this bridge us to your entrepreneurship? Where does your entrepreneurship begin – more of the kind of entrepreneurship that we cover? 

David Sharpe: Certainly, you guys didn’t contact me because of my entrepreneurship in the street.

Sramana Mitra: No, that’s not our specialization.

David Sharpe: Yes, there’re other people who specialize in that. When I went through a 15-month treatment program in 2008 and 2009, it was the first time that I was introduced to being with myself and being clear-minded. I immediately got a telemarketing job. When I went in to that telemarketing job, I was only looking for a job; I wasn’t looking for a career. But what I found was, I was good at talking. I was good at connecting with people. I was good at adding value on the phone. So I became the top producer in this telemarketing company. I didn’t know how to show up on time though, so I eventually lost that job.

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From The Seedy Underworld of Drugs and Prostitution To Entrepreneurial Success: David Sharpe’s Journey with Empower Network (Part 1)

From drugs, sex, prostitution, David Sharpe has seen it all. Hopelessly lost since his teens, a father at 15, jailed in his twenties, David has found his way back to a healthy life through entrepreneurship. Enjoy reading one of the most unusual stories we’ve done in the eighth year of Entrepreneur Journeys.

Sramana Mitra: Dave, tell us where you’re from. Where were you born and raised – what kind of circumstances?

David Sharpe: My name is Dave Sharpe. I was born in Clearwater, Florida which is right outside of Tampa Bay in 1983. I turned 30 last November 17.

Sramana Mitra: Tell me a bit more about the circumstances. Where did you do school? What did you study? What kind of mental set are you coming from as an entrepreneur? What’s your family background?

David Sharpe: The fascinating thing is I don’t come from an entrepreneurial family. My mom was very involved in a lot of what I did, extracurricular wise. I was a sports player. I was an athlete. By the age of five, I was on a baseball field throwing the baseball around. My parents divorced when I was 2-years-old, but my dad always showed up for my baseball games. Then I had a stepfather, still do. My mom and my stepfather are still married.

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Running A Global Virtual Incubator: 10 Lessons We Have Learned

Further to my earlier post, Mentoring Startups: 10 Lessons We Have Learned, I want to also go over our learnings through running, what is today, the world’s only global virtual incubation program.

1. Reach & Scalability: We have successfully created a virtual incubation program that entrepreneurs all over the world are using. The self-service curriculum is quite rich now, which makes the program scalable. Also, the online mentoring roundtables have been extremely productive, as discussed in the earlier post. We’re also running an active content organization that helps our portfolio companies get coverage, as well as distribution for their messages through social media (reach over 100k currently).

2. Inclusive vs. Exclusive: We have successfully reset the definition of entrepreneurship within the program from Entrepreneurship = Financing to Entrepreneurship = (Customers + Revenues + Profits), Financing and Exit are optional. This has enabled us to be inclusive, as opposed to exclusive. Unlike YCombinator that takes pride in how many entrepreneurs they reject, we take pride in the fact that we do not reject anybody. Over 99% of entrepreneurs seeking financing get rejected. We work with ‘The Other 99%’ irrespective of their fundability, helping them grow to become successful businesses, and to raise financing if appropriate. Also, you don’t have to move to Silicon Valley to get incubated with us, which also gives us tremendous flexibility on whom we can work with.

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