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The Only Time When a 1% Success Rate is a Good Deal

A Slice on Craig Weiss, Serial Entrepreneur and Founder of Flagstaff Ventures

We’re all familiar with the “family business” model, when kids join their parents in running a family business and then their kids do the same, and the loop continues. This is the path Craig Weiss found himself on when becoming a patent attorney under his father’s law practice along with his brothers. Here he dipped his toe into the startup ecosystem by providing IP legal services to entrepreneurs, but he wouldn’t start delving into the business world until joining the leadership (President and later CEO) of his brother’s e-cigarette company, NJOY. During his time at NJOY, Weiss would lead the company through a “wild and crazy ride”, raising $200 million in private equity and $74 million in their series D round before stepping down. From there, Weiss would go on to found multiple companies, including Retainer Club, and is now starting his own VC fund, Flagstaff Ventures, aiming to raise $50 million.

Flagstaff Ventures will be Weiss’ way of helping young entrepreneurs achieve their dreams, while also investing in his own visions, starting with Retainer Club. The name of his fund came not only as a reference to his home state of Arizona but also from his consumer branding background. “When I think about building a brand, I think you’re planting your flag, right? And you’re telling the world this is my brand and this is who I am. This is what I represent.” Weiss will also bring along Gadi Amit, the designer of Fitbit, as a strategic partner to help build CPG brands.

Backing up to the late 2000s, Weiss’ good friend and mentor, Elie Wurtman, was the one who nudged him out of the law world and into entrepreneurship while at a coffee shop in Arizona. “He [Weiss’ friend] says, ‘So do you want me to tell you the secret of life?’ And he sort of points to all the people in the coffee shop. ‘You see all those people over there? They have the same inventory of hours each day as you and me. The difference between me and them is they’re selling theirs for money…but at the end of the day, there are only so many hours to sell. And if you are selling your time for money, there’s a cap on how far you go in life. But as an entrepreneur, you have an ability to leverage your time to make money that is in essence not correlated to the hours that you have to sell.”

After stepping down from NJOY, Weiss turned to his passion: consumer branding. Learning the value of a brand in the B2C model during his time as a patent attorney, Weiss began his entrepreneurial journey with Aladdin Dreamer, Inc. in 2015, a lucid dreaming technology. He then went on to found Retainer Club in 2017 with his good friend, Dr. Blair Feldman, renowned Arizona-based orthodontist. Together, they created a subscription model for retainers using 3D scanning technology to ditch the expensive alternative. Out of the success from this model, they also applied this technology to custom mouthguards for athletes, founding Mouthguard Club.

Throughout his journey, both leading and founding companies, Weiss has had extensive experience fundraising. “[Fundraising] is really time-consuming and kind of sucky. Part of the problem is that it’s almost like speed dating. You basically have to very quickly establish whether there’s a love connection and whether this person gets you, gets your business model and understands. You don’t know whether or not they get it until you tell them your story. You’re emotionally, passionately telling them your story just to finish and find out five seconds later they didn’t get it or it’s the wrong fit.” Being located in Arizona also proved to be challenging while fundraising, which is what inspired Weiss to found Flagstaff Ventures. Many founders in Arizona look outside of the state for funding, to cities like New York or San Francisco.

Weiss found that experiencing rejection after rejection is an inevitable process of being an entrepreneur. Comfortability with rejection and a strong passion for what they’re doing is necessary to succeed. Weiss advises young entrepreneurs to find a passion that doesn’t feel like work and that excites them every day because entrepreneurship is not for the faint of heart. Weiss believes entrepreneurs are built differently and are able to see the world in a unique way.

“The $200 million that I raised for NJOY was like a 1% success rate and a 99% failure rate. The vast majority [of investors] looked me in the eye and said, ‘I don’t believe in you, I don’t think you’re gonna pull it off.’ And you have to absorb that rejection all day, every day, and be told you’re not good enough. The only way to survive that is to believe in your heart of hearts that you are good enough and that they’re all idiots, they don’t get it. Eventually, you’re going to find the person who does get it. There’s a certain math that I actually find alluring about that ratio of 99% failure to 1% success. As an entrepreneur, it’s the only area in the world where that math works. If I was a barista at Starbucks and 99% of the time I made my drinks poorly, I would be fired. Right?”

“But in my world, if my 1% success rate means I’ll be a millionaire, that’s a pretty good deal.”

Founder Bio

Craig Weiss began his career as a patent attorney before working at NJOY as CEO. After stepping down, he has since founded three companies (Aladdin Dreamer Inc., Retainer Club and Mouthguard Club) and his own VC firm, Flagstaff Ventures. Connect with Weiss on LinkedIn.

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