This is Marcus Lemonis. You might know him as the prophet or the fixer or the CEO of Camping World. Marcus does a lot, but above all else, he's an entrepreneur. He's a hustler, and he knows a lot about business. Marcus joins me today to talk how he made his fortune in RVs, how he became a TV star, and why filing for bankruptcy was actually the best thing that ever happened to him. My name is John Davids. I'm the CEO of Influicity. If you're a fan of this show, like, subscribe, and leave a comment. Now, my conversation with Marcus Lemonis. Marcus, I've got so many questions for you, but I guess my first one is, how did you make your first million bucks?
Wow. I made my first million working at a company called AutoNation, which is an auto consolidator that I joined in probably 1997 after I ran for office in South Florida. And it took me about three or four years to accumulate that. But I remember very distinctly when I arrived at that number because I had kept my W2s for all the years that I worked there. And when I broke a million, I knew it. And I want to say it was like three and a half or four years in.
And was that life-changing money for you at the time or were you already kind of working up to it?
No, I mean at the time when I first started working there, I was making 60,000 a year. And I thought I was the richest guy on the block. And so as I started to make more money, my lifestyle started to change. But the accomplishment of getting to that number was not as significant as the work that it took to get there and the recognition of the commitment and the sacrifices it took to get there. And I remember feeling very clearly that when that happened, I expected to be celebratory, but I measured it against what I gave up. And I asked myself the question, was it worth it? And in hindsight, it was because I learned a certain work ethic and I had a respect for money. So, while I was thrilled about making 60,000, then 160,000, then 360,000 on my way to get there, it was important for me to recognize, and I want other people to recognize that it takes time. And too often we have people that think they're just supposed to make a million in the first year. And that's how it works. And it does for some people, but just didn't for me.
So, you grew up, I think, around, you know, the early 80s and 90s. You grew up in the automotive world. You were working on an auto dealership and then at some point in the mid '90s you get into the world of RVs and I think that kind of sets up the next decades of your life. Can you talk about what you saw in RVs and what made that such a good business?
I had been in the auto business my whole life. My family had an automobile dealership in Tampa and in Miami and it was really embedded in me and the rest of our family that that's what we do for a living. And I went off to go to school in Milwaukee from Miami, which is the natural progression. You go from Miami where the weather's terrible and the people are not good-looking, and you go to Milwaukee where the opposite is true. And when I went back to South Florida in 1996, I went to my family's car business for a while and I decided that I didn't want to do it. And I got recruited by the Democratic Party to run for the state house at 20 or 21 years old. And I did that. And coming out of doing that, I met Wayne Huizenga and a number of other folks who were just really paramount in dragging me into the auto business. About four years, 1999, at the end of 1999, I got a phone call from Lee Iacocca, who's a family friend of mine, and he asked me to come out to California to meet with him. And he said to me, 'If you want to make a difference in the world, I need you to get out of the auto business and I need you to get in the RV business.' And I said to him, 'Well, geez, I work for a big public company. I make great money. My career is going in the right direction.' And he said, 'I understand, but it's going to go nowhere at some point. You're going to reach a ceiling.' And he was on the board of a small publicly traded RV company where he was selling his electric bikes. And back at the time, gosh, 25 years ago, when electric bikes were a thing, they weighed about a thousand pounds and they cost about $3,000 compared to what they are today. And the reason that he was in that business and he was connected to an RV business is he understood segments and industries inside of the general economy. And he looked me straight in the face and he said, 'Listen, I'd like you to trust me. I want you to leave the auto business. I want you to get into the RV business and I want you to take everything you've learned in the auto business and transfer it to the RV business.' And I said, 'Well, I don't know what that means.' He goes, 'Well, you learned how to do acquisitions. You understood what consolidation was. You knew what worked and didn't work in a consolidation. And you're going to go into an industry that doesn't have a lot of competition. And you're going to come out of an industry that has competition that will eat you alive. And you'll thank me 10 or 20 years from now because you'll take the skills that you have and you'll get into this industry and you'll break it. You'll change the way people think about it. You'll be the least popular person for the first five years because people will see you as a disruptor and not a creator. And in the end, if you do everything you're supposed to do and you stay disciplined, you will change the RV industry forever.' And when he said it to me, I was 26 or 27, I can't remember exactly. And I thought, well, I have two problems. One, I like the income that I'm making. I like the company that I'm working for, but I have Lee Iacocca, who I trust dearly, that's telling me that I should go do this. He told me that I would take a cut in pay to do it and that I would be able to be the CEO of a publicly traded RV company.
Lee Iacocca tells you, 'I'm going to make you the CEO of a publicly traded RV company. You're going to get a cut in pay and you're going to change the world.' You got to consider it.
It was Holiday RV Superstores.
And so, glad that you did that research. Yeah.
Oh man, I got lots of research. So you start in that business. And just to drill down a little bit for the viewers here, in my opinion, and tell me if I'm right or wrong, I would think the automotive business, obviously automotive is challenging for all sorts of reasons, but in the RV world, I'd imagine there's a lot more mystery, and where there's mystery, there's margin. People are more passionate about it. It's more of a lifestyle. There seems to be all kinds of factors here that would make RVs a better business in general. Was it that or was it just that it was fragmented?
I think I didn't really appreciate the mystery of the margin, the black box. I didn't appreciate it at the time. What I appreciated was that it had been a cottage industry and no big company, no big private equity firm, nobody had really thought about rolling it up because it was such a cottage industry that maybe people thought that the juice wasn't worth the squeeze. And so I liked the fact that it was so small as an industry and so quiet as an industry that I could really become a trailblazer. And he did a great job of selling me on like you can change it forever. And when you're 20-something and even 50-something when somebody you have a lot of respect for that had accomplished things like that in their lifetime, you're like, 'Yeah, this is probably possible.' I did not anticipate that the industry would be as rewarding financially for the business as it was. I did not appreciate the lack of sophistication at the time from technology and from small mom and pops and I did not appreciate what it could become at the time. I liked the fact that I was being given a chance to try something totally different.
So, you are setting up on this mission at 26 to roll up the RV industry. And how did that go?
Well, my first day at the office after accepting the job, I walked in and the CFO asked if he could see me and he said, 'I just want you to know we have no money in the bank and we're out of compliance with all of our lenders. We're in default.' And I picked up the phone and I called Lee and I said, 'Hey, what did you do to me here?' And he said, 'Lesson number one, you should always trust but verify. And you should have done your own research and done your own due diligence instead of just taking my word for it.' And there's going to be people over time that you trust and you believe that are going to give you their word or tell you something. And unless you do your own research and do your own work and make your own decisions, you're going to end up where you are now, which is a little screwed.' And I said to him, 'Why did you do that to me? Why did you do this? Like, this is like not a good thing.' And he goes, 'It's easy to go into a business that makes money. And it's easy to run a business that has a lot of cash. Try running and growing a business that is in turmoil and it is on the cusp of closing. And I wanted you to learn from the inside out. I wanted you to understand how difficult it is. And I wanted you to learn how to negotiate with lenders and how to raise capital and how to solve problems because the rest of it will be easy once you figure that out.' And I was pissed.
You were pissed. But it sounds like it's a really school of hard knocks lesson to come in and have to deal with the hardest stuff first and then I'm sure once you got that out of the way, the next 20 years were cakewalk, right?
Well, sort of. I took a cut in pay. I'm now the leader of a public company that's at the risk of failing and there's reputational risk. And so every day that I would get up, money became not even a small factor. I moved back in with my parents. I drove an hour and a half each way. And I made the decision that I needed to really become as draconian as I could about my own life and about the business just to get it to survive. And I would say to you that as I sit here today, like every good child from a very tough parental lesson, I'm grateful as I look back. But in the moment, it was a tremendous crisis because I didn't think I could go back to the auto business. And I didn't know that if it failed, what would I do? I had never raised capital before. I had never run a public company before. I had never even been or sold an RV. I'd never even gone RVing before, let alone deal with all that trauma. And that to me was pretty frightening.
So, when did it start to go right? I think at some point there was a bankruptcy. Maybe this was when you already came in, but it sort of I know that the first go was not so good and then the second go went much better.
Well, I will tell you the first go was actually good for me because I spent about 18 months selling off the assets, raising the capital necessary that I needed and winding the company down and paying all the banks off. And the only reason the company went through bankruptcy is just to ensure that the NOL could be preserved and that the assets would be good. But what I was always proud is that nobody, not one person ended up not getting paid. And so from a reputational standpoint, while it was the end of the road, at least I thought it was, I learned the lesson about proper wind-downs, how to make sure that you do what you say you're going to do and you pay people. And I have never, I actually was not at the company when it filed bankruptcy. I had already left and it was already wound down. The assets were sold and the lenders were all paid and it went through a cleansing for all the reasons that I mentioned on the NOL. But it turned out to be that whole experience turned out to be the reason that Camping World in the form that it is today exists. Because in that process, I got calls from the two banks, Bank of America and Chase at the time were the lenders in the business. They financed all the inventory and they all got paid. And they called me and said, 'Hey, I have great news for you. You didn't screw us. You did everything you said you were going to do. We think you understand the business and we're willing to give you a line of credit if you can raise some equity and start over.' Because you did everything you were supposed to do and nobody got hosed. And now we know that you'll put the business in front of yourself. You'll put the banks in front of the shareholders and you'll take care of every single bill that you know exists at whatever cost it is. And now we know the character of the man. We now need to get you the experience and the capital to be able to build something much bigger.
So you run that business and obviously it goes public. It does extraordinarily well. You roll up the industry. Lee Iacocca's intuition was correct in the end. And then around 2013 you become a TV star. What was happening in your life that that was on the road map?
I'm probably more comfortable talking about it today than I was at the time, but I tend to get bored very easy and I tend to reach a certain level on a certain topic and I need different stimulation to keep my mind and my excitement going. And while Camping World will forever be the most important thing that I ever did in my life, not just my career. And I want to make that distinction because my wife doesn't love it when I say that. But it was the most important accomplishment of my life. I needed to fill my life with other things. I needed to not be so one-dimensional. And when I came out of college and got in the car business and then went into the RV business, I never really got a chance to learn other things, see other things, demonstrate my skills, and television ended up being something that I think fit my personality. It fit my appetite to be a teacher and it fit my desire to prove other people wrong. And I remember sitting with, god, six or seven networks trying to pitch The Profit and the name didn't exist at the time. I can't remember. I think it actually may have been called like The Fixer or something at the time. And everybody other than two networks said you can't carry a show. You're not talented enough. You need to be on a panel. You don't have enough experience. You've never invested in anything else. And the list goes on and on. And the History Channel and CNBC said yes. And in that moment in time, I remember going to 30 Rockefeller Center where NBC Tower is and meeting with the then chairman of CNBC. And he said to me, because I fibbed a lot, I said, 'Oh, there's a lot of networks that want to do this.' And I only had one and I said, 'I'm down to making a decision. I'm going to make it in the next week. I have like three networks that want to do this. This is the budget they have.' I was doing my pitch. He said to me, Mark Hoffman is his name. He's a wonderful man. He said to me, 'Well, we do not do programming at night on CNBC. We're a daytime show. The ratings are going to be terrible. Nobody's going to watch it for the first couple of years. I have a limited budget and I have no idea if it's going to work. But if you want to be seen as a credible business guy and not a TV personality, you do it here because I'll embed you in the rest of my network in the day. And at some point, you may want to do something different with your business. You may want to take it public. You may want to buy another business. You may want to raise money. And you need credibility and I have it and you don't.' And it was a great sales pitch.
That's really good. And you went ahead and was it a success off the I remember it. I remember seeing the trailers and just thinking, 'Wow, what kind of show was this?' And I mean, I don't know if it was just you on camera or how they positioned you, but it was for me it was a hit from the start.
It was a hit conceptually, but the ratings in the first season was only six episodes. And I didn't understand the TV business or the ratings business at the time. And the first episode, if a good show on TV today gets three or 400,000 in the demo and maybe 500,000 overall. That would be like a good show today. The first episode got an 11. 11,000. And I didn't understand what that meant, but there was an article written that said that it was a total bust of a show and nobody watched it and CNBC failed or some crazy stuff. And then the second episode did like a 35. And then it sort of started to build from there. And what I learned in the business was it's not where it starts, it's how it builds and what sort of retention and how sort of the buzz happens. And by the end of the first season, I think it had gotten up to like an 80,000. And I said to myself like, 'Oh, this is going to get cancelled. This is bad. I'm so embarrassed.' And they renewed it again. And when they renewed it in season two, it came out of the gates really strong. And the reason it came out of the gates really strong is that CNBC didn't have a lot of programming at night. So it just took the first six episodes and it aired it and it aired it and it aired it. And if you thought about it like a fishing net, they just kept throwing the net out there and picking up more fish. But what would happen is the viewer that they would catch would stick. And in season two, I think it opened up to like 200,000. And then by the end of season two, beginning of season three, it was the highest rated show that had ever been on CNBC and it was a top 10 cable show and it was winning Tuesday nights and it was getting all this attention and then my life really changed.
