From $75 to a $1.2B Public Company: How Payam Zamani Built His Business Empire | Entrepreneurship | How We Profit | E10

Young and Profiting (YAP) with Hala Taha: Entrepreneurship and Self-Improvement Podcast

Payam Zamani shares his journey from fleeing Iran as a child to building a $1.2B public company and founding One Planet Group—a holding comp

Key takeaways

• Profitability should be prioritized from day one, not deferred to the future.
• High customer acquisition costs are unsustainable; aim to spend no more than 50% of revenue on CAC.

Main topics

• Profit-first entrepreneurship
• Private equity and holding company models

Notable quotes

Profitability to me is not optional. If you talk to my executives, they will tell you that I often don't know the revenue of their businesses, but I know their margins.

I don't care about top line. I'm not running a publicly traded company. If you give me a business that has revenue, I'm able to make it profitable.

Conclusion

Entrepreneurs should build businesses with profit as the foundation, prioritize

Transcript preview

Speaker 1 (0:00) Profitability to me is not optional. If you talk to my executives, they will tell you that I often don't know the revenue of their businesses, but I know their margins. Because Speaker 2 (0:09) you don't care about the top line revenue. I don't care Speaker 1 (0:11) about top line. I'm not running a publicly traded company. If you give me a business that has revenue, I'm able to make it profitable. Speaker 2 (0:18) Payam Zamani is the founder and CEO of One Planet Group. He previously co-founded AutoWeb and took it public at a $1.2 billion valuation before turning 30. Speaker 1 (0:29) Our biggest company is called BuyerLink. BuyerLink is a $130 million a year business. 10 % of all new cars sold in the U.S. are sold through BuyerLink. What Speaker 2 (0:40) is your guidance on customer acquisition costs? Speaker 1 (0:43) In my business, I don't want to spend more than 50%. on acquiring a customer. Often people come to me and they say that, you know what if... Speaker 2 (0:51) So how did you like first start OnePlanet? I got a Speaker 1 (0:55) call from my company, reply.com. They said that, can you come back? We're dealing with a disaster and our bank loan is being called and the company will go away. And I decided I'm going to buy the company. So I made an offer to the board that was bigger than anyone else's offer. Truth be told, I did not have the cash at that moment in time, but... Speaker 2 (1:18) Payam, welcome to How We Profit. Speaker 1 (1:20) Thank you for having me, Hala. Speaker 2 (1:22) I'm so excited for this interview. And actually, I'm thinking about this interview as like a hybrid regular YAP episode and a How We Profit episode because you are just so accomplished. And you've actually achieved things that many entrepreneurs don't achieve in their whole lives. At 28, you had a company go public. It was valued at $1.2 billion, which is... Absolutely incredible. And now you've got a company, OnePlanet, which essentially buys and sells and invests in companies, which is just so cool. And a lot of us entrepreneurs, we're newbies. You know, we probably, many of us listening haven't even exited a company yet. And maybe we want to have a holding company or a private equity company in the future. So I want to kind of start with the basics. Does that sound good? Speaker 1 (2:06) Absolutely. Let's do it. So Speaker 2 (2:07) let's start with like private equity. Speaker 1 (2:09) What Speaker 2 (2:10) is private equity exactly? Speaker 1 (2:12) You know, I've got my own definition of it. And frankly, I don't even know what I'm running. If it is private equity, it's my company. And I don't have any LPs. I don't have any outside investors. Okay. So I manage my own money. And like you said that, you know, we do own a few companies, but most companies that we own, we found it. So I have been the founder of those businesses. Yeah. Speaker 2 (2:35) But Speaker 1 (2:35) we have also invested in, I think, 45, 50 companies to date. Speaker 2 (2:41) Really cool. So when I was researching you, it's kind of like a hybrid between a private equity company, a holding company, and an operating company. It Speaker 1 (2:50) makes sense out of my chaos. That's the truth. You know, I always tell people that if you look at One Planet logo, there's that pale blue dot, which is the earth. But to me, my brain is full of dots. And that one dot kind of... forces me to focus a little bit. You know, recently I made a movie. I wrote a book and, you know, I operate a bunch of different businesses. So I live a bit of a chaotic life and I enjoy it, but I try to also remind myself, focus. Speaker 2 (3:18) Yeah. So let's actually talk about your story because it's so powerful. It's very inspiring. And you actually, your world kind of started like very chaotically. Talk to us about how you grew up and how you ended up in America. Speaker 1 (3:34) I was born in Iran. I was born in a Baha'i family. That's my religion. And then the revolution happened in 1979. And the new government did not think highly of a lot of people, including the Baha'is of Iran. And so the 1980s became very difficult. They killed a lot of Baha'is. They imprisoned a lot of Baha'is. And all of it because of different religion. They were fanatics. And they also expelled Baha'is from many schools. Even today, 47 years later, Baha'is don't have the right to attend universities in Iran. Wow. So when I was 11, I was expelled from school in the most horrific way. They basically, the religious leader of the school, got a mob of over 50 students. Speaker 1 (4:31) to kill me. That was his plan, to get rid of me, to exterminate me. That was their plan. Luckily, I survived. But think of it as a march of death. For one mile, kids spitting on you, beating you, throwing rocks at you, kicking you. And, you know, I talk about there are two times in my life I did not think I'm going to get out of that situation alive. That was the first one. I survived that. But I was never able to go back to that school. But you fast forward about six years later, my parents decided that it's time for me to leave the country. Speaker 2 (5:08) And Speaker 1 (5:08) good law-abiding citizens, they had to find a smuggler to get me out of the Speaker 2 (5:13) country. That's so crazy. And so your parents basically saved up to allow you and your brother to go to Pakistan. Is that right? Speaker 1 (5:20) That's right. My brother left first a year before me. And then... I left in 1987. They paid a smuggler. And, you know, it was a very, like, it's one of those journeys that you don't want anyone to ever go through. It leaves its mark on you forever. Speaker 2 (5:42) Yeah. Speaker 1 (5:42) The way you say goodbye, the way that you're going through a desert that you don't know if you're going to survive. You have no idea where you're headed. Yeah. And I was just a child at the time and by myself. no family member with me as I was going through that. Speaker 2 (5:57) Oh, you weren't with your Speaker 1 (5:57) brother? Speaker 2 (5:57) No, Speaker 1 (5:57) he had left the year before me. And so it was a very, you could call it terrifying experience. And it was the second time I thought I'm not going to survive was during an incident that happened during that journey. But again, you know, I look back and I feel that these difficult journeys in life They end up defining who we become. Makes business really Speaker 2 (6:27) seem easy after all that. Speaker 1 (6:29) A bad quarter is nothing. Speaker 2 (6:31) Yeah. Okay, so how did you make your way to America? Because that's really where you got your education. You started building businesses. Speaker 1 (6:41) So in 1987, when I made it to Pakistan, After getting my, basically what is called temporary asylum from the United Nations, I found my way to the U.S. Embassy in Islamabad. And I talk about this quite often, that that was a moment when, for the first time, I experienced human rights, that my life is worth something. Speaker 2 (7:04) The Speaker 1 (7:05) U.S. treated me with respect. The embassy, in fact, hired a lawyer to make sense out of my case, to present it to the ambassador. That was done, and ultimately I received a residency, an asylum from the U.S., and then a charity out of New York bought my ticket, so I was able to make it to the U.S. And my brother and I, we ended up landing in the U.S. together at the same time in June of 1988. And, you know, there are many headlines about this journey that I've done and many interviews I've done, and the headline is always, that we landed in the U.S. with 75 bucks in our pocket. Speaker 2 (7:44) I love that. It reminds, so something, we were talking earlier before this interview, and I was telling you that, like, I feel very, like, relatable to your story because of my father. And I remember my dad passed away, but when he was alive, he loved America. Speaker 1 (8:00) He'd always Speaker 2 (8:00) be like, this is the best country in the world. America is the best. Like, he was so proud to be American because for him, he was able to make all his dreams come true. by living in America, and he really, really appreciated the freedom, the freedom to build businesses, to be successful, and, you know, there's not much oppression. It's like everybody is equal in America. Yeah, I mean, clearly Speaker 1 (8:25) we have our problems in the U.S. We Speaker 2 (8:26) have our problems, Speaker 1 (8:26) of Speaker 2 (8:27) course. And Speaker 1 (8:27) also, I would also say, and American Dream is an invitation. It's not a guarantee. Speaker 1 (8:36) The U.S. is a platform that was built over 250 years, at times unjustly. Speaker 2 (8:41) Yeah. Speaker 1 (8:42) But it was built over 250 years. And this foundation is what we entrepreneurs take advantage of to build. And I think that's also important because we need to keep in mind that it's not just me building or you building. Many people sacrificed for this foundation that we are able to take advantage of and build our businesses. And we need to be grateful for that. I Speaker 2 (9:03) totally agree. Speaker 2 (9:06) Let's talk about how you put yourself through college because I think this is really inspirational. A lot of people who are listening right now, I think everybody's coming from all walks of life. Some of us are successful entrepreneurs. Some of us are just starting out. And a lot of us are starting from zero. We don't have wealthy parents. We feel like we're behind a lot of our peers because of that. Talk to us about your journey of putting yourself through school and how you kind of like built your wealth initially. Speaker 1 (9:31) Yeah. So I had one year of high school left when I came to the U.S. And so let's get past that. Yeah. And then I went to UC Davis and I painted homes. And that was actually a great experience for me because the idea was to paint homes, but I wanted to. run a business. Speaker 2 (9:55) So Speaker 1 (9:55) I would hire other students to paint homes. And I was the manager giving estimates and getting the jobs booked and so on. So I did paint homes, but I had three job sites going on at the same time at any given time during the summer. That's Speaker 2 (10:11) great. And the Speaker 1 (10:12) idea was to make as much money as I could so I could pay for my college years. And that was the primary way I was able to pay for school. But also, I think that, you know, it's interesting when I think back to those days, school wasn't doing it for me. It wasn't exactly getting me all excited and joyful. But I felt that, you know what, as a Bahá'í in Iran, I would not have had the right to go to university. Speaker 2 (10:39) I Speaker 1 (10:40) have to finish college. So that was something that I wasn't willing to negotiate with myself. I went to college, but you think back, I studied environmental toxicology. I'm not doing anything with it. But it did give me the discipline, I guess, the commitment and the background that allowed me to do other things. Speaker 2 (10:57) And then was AutoWeb the first, like, real company? Well, I guess the paint company was a real company, but it was auto. Like, how did you start AutoWeb? Speaker 1 (11:05) Yeah. So in 1994, when I graduated from Davis, my brother also graduated from university and he got a job in Microsoft. Speaker 2 (11:15) And Speaker 1 (11:15) one day he called me and he said that I want to buy a Honda. Honda doesn't own a website, doesn't have honda.com. What do you think about building a website for cars? Now, up to that point, I was 24 or 23. I owned 16 different cars. I loved cars, cheap cars, but I would buy and sell cars. Speaker 2 (11:35) And Speaker 1 (11:35) I thought that if there's a way for me to get even with car dealers, I'm in. Speaker 2 (11:40) I would Speaker 1 (11:40) love to do that. But I didn't know anything about the internet. He became the technologist and I was a sales and marketing guy. So we founded that business in November of 1994. And if you think about back then, you know, there were only 5,000 domains that were registered total. There was no Google. Yahoo had just started. Wow, that's so early. Early on. I mean, to sign up somebody for our program, we had to first define, describe. What is the internet? Because they had never been online. It's crazy. So really early days. Speaker 2 (12:18) Really early days. And then you ended up going public at 28 years old. That must have been incredible. Like what happened there? Like when did AutoWeb, at some point you guys got like kicked out basically of leadership, right? Speaker 1 (12:33) Yeah. So it was not. easy for us to build that business. Neither me or my brother, we had not gone to Ivy League schools. We had not gone to Stanford. And Silicon Valley, especially back then, was very much about, you know, legacy in a sense. Are you a Harvard grad? Are you a Stanford grad? And are you white? And there were many other factors that really played a role in Silicon Valley. But I always say this, in the U.S., there are bumps along the way. But the road is never blocked. So, you know, just find your way through it. Don't let those things define you. And don't become a victim of them. Speaker 2 (13:12) So Speaker 1 (13:12) to raise money, we had to go to Fort Lee, New Jersey. Now, we were based in Silicon Valley, but we had to go to Fort Lee, New Jersey to raise money. There's Speaker 2 (13:19) more brown people in Fort Lee. Oh, yeah, probably. Speaker 1 (13:22) And then ultimately for the third round, we raised money from Technology Crossover Ventures, DCV in Palo Alto. But it took a while for us to get them interested in investing in us. We built the business, but we did not raise a whole lot of money because we couldn't, Speaker 2 (13:40) which Speaker 1 (13:41) was a good thing. It meant we held on to a lot more ownership. We were forced to hold on to a lot more ownership. So we took the company public in March of 1999, but I was a CEO until January of that year. And the board was insistent that we bring somebody from the outside. We did. Unfortunately, great guy, but just that wasn't his passion. Just because the company was going public, it did not mean it was no longer a startup. And a startup requires, I think, the soul of the founder. Speaker 2 (14:15) And Speaker 1 (14:15) so many wrong decisions were made, which, you know, you look back, you know, you wish that that wasn't the case. Speaker 2 (14:24) And you ended up buying the company back. Like 30 years later, right? Speaker 1 (14:30) Four years ago, the company had a challenging few quarters and the company had a going concern issued by the auditors. And so I made an offer and I bought the company and took it private. Speaker 1 (14:48) Definitely was a sweet moment to be able to buy the company back. And the company had accumulated $350 million in losses over all these years. We made the company profitable in one month. Speaker 2 (15:01) I'm going to ask you about that. We're going to talk all about turnarounds and how to turn around companies. But let's focus on OnePlanet. How does OnePlanet, like, really break it down for us? Like, what do you do in this company? How do you guys make money? Speaker 1 (15:15) Yeah. OnePlanet itself is really a whole link company. So OnePlanet does not, you know, it does not have much of a P &L. But the companies within OnePlanet have operations. Our biggest company is called BuyerLink. Speaker 2 (15:35) And Speaker 1 (15:35) BuyerLink, actually, Autoweb is also owned by BuyerLink. Speaker 2 (15:38) And Speaker 1 (15:39) BuyerLink is $130 million a year business, very profitable. And it is basically a significant company that really impacts a lot of things, but you probably have never heard of. It's the largest generator of consumer demand for new cars in the U.S. Speaker 2 (16:02) 10 Speaker 1 (16:03) % of all new cars sold in the U.S. are sold through BuyerLink. Interesting. And BuyerLink's businesses, websites. We also own assets like UseCars.com. We own autoweb.com. We own contractors.com. We own california.com. We own a lot of assets, but all of these assets are designed to generate