Transcription
I remember working 80 to 90 hours a week, only making $1,000 a month. Thinking to myself, “Where did I go wrong? Where did I mess up?” I was anxious, stressed, and felt like the rest of my life was going to be an endless treadmill. And in the blink of an eye, my life changed. I now own a vending machine business that does over half a million dollars a year, working just a few hours a day. And more importantly, it has given me the opportunity to be a real dad to my two kids. My name is Mike Hoffman, and this is my story.
When I was growing up, I grew up in a small farm town in southwest Iowa. The town I lived in had only 800 people. In fact, I drove 45 minutes to high school every single day. Further, my parents were extremely hardworking. My dad was a small-town large animal veterinarian working on pigs and cows, and my mom was a teacher that also worked camps in the summer. This is what led me to my entrepreneurial DNA. Reflecting on my childhood, you can tell the entrepreneurial DNA came out with my aspirations of always trying to be an entrepreneur. I remember in our small town, we would have an antique walk in the heat of summer, and I would always have a lemonade stand selling bottled water. I would get it for 10 cents and sell it for a dollar to all these guests that came into town to shop for antiques.
Having to drive 45 miles one way to go to high school every day while also playing four sports led me to be very efficient with school. I couldn't bring homework home because I didn't have time; baseball practice would end at 7:00 p.m. I'd drive an hour to get home. I didn't have time to do homework, which forced me to be super efficient and have time management skills that most kids didn't have to worry about. These time management skills ended up being super valuable down the road, which I'll get to here in a little bit. Having had to go so far to school every day led me to being a more independent person. And as a result, out of the four kids in our family, I was the only one that went out of state for college because I valued that idea of going out on my own and blazing my own path.
Going out of state for college, I ended up going to the University of Kansas, where I studied exercise science and strength conditioning. After graduating, I did an internship down in Florida, also did an internship at the University of Iowa with their football team as a strength and conditioning intern, and then got my first job as a strength and conditioning coach in St. Louis at Lindenwood University. This job at Lindenwood is ultimately what led me down the path of trying to earn with my mind and not my time. During this job, I was literally working 80 to 90 hours per week, and my take-home salary was $1,200 a month as a strength and conditioning coach. During the football season, you're literally working seven days a week. I remember one day I was literally spotting an athlete during a squat on a Sunday afternoon, and I had an aha moment. I was like, “What am I doing with my life? I've been on my feet for three hours; this is the seventh day in a row I've worked this week, and I'll be back here on Monday.” I went down this path of, “How do I earn with my mind, not my time?”
When you only make $1,200 a month, there's not a lot of wiggle room with your finances. So I actually took my emergency fund, which was $14,000, and put it down on a rental that was $70,000. That emergency fund of $14,000 took me two years to build just because I was making such a little income. As you can imagine, when you're only making $1,200 a month, investing in that first rental property—$114,000—is a huge risk. I didn't know if the market was going to crash the next year; I didn't know if it was going to go up, but I knew during that aha moment I had to do something to get out of the rat race of working for a paycheck. With that first rental, I started making $300 profit from the rent of our tenants. I started to realize that there are people out there that aren't going to take the risk I did and will just rent for the rest of their life. And that is what led me to wanting to double down on these entrepreneurial opportunities and passive income streams like rental properties.
In 2014, I got a phone call from a mentor of mine that asked if I wanted to move from St. Louis all the way to Palo Alto, the most expensive city in the world. He offered me a job for only $42,000 a year. I remember getting that phone call; I was 24, I had just gone through a breakup, and I was like, “Why not? This is the opportunity to get out, get uncomfortable.” So literally, I packed up the car, my mom flew in from Iowa, and we literally got in this 2001 Toyota Camry and started driving from St. Louis all the way to Palo Alto, California. When we got to California, I had to be creative on what I could afford, so I found a house that had five bedrooms and listed the other bedrooms for rent and found four random roommates to make ends meet on a $42,000-a-year salary in the most expensive city in the world. Rent on that five-bedroom house was $4,000, and we were all able to break it up to be around $800 each.
When I moved to Silicon Valley, I started to realize the culture that the valley has. We worked in this startup constantly with the dream of trying to make it big. As this tech startup started to take off, I had to start traveling. When I started traveling, I was literally Premier status on three different airlines because I was on the road three weeks out of the month—literally 21 days out of the month—I was on airplanes or automobiles to go implement our software with sports teams. During these road trips is when I got exposed to vending machines. I remember all the times when our flights were delayed and it was late at night and no restaurants were open in these airports, so I'd have to walk down the hall to these vending machines and go buy a protein bar that I knew only cost a dollar, but in these vending machines, they were being sold for 4X that—these 400% margins that some guy was making off of me. Me with this vending machine brought back all of the memories from that antique walk in small-town Iowa where I was selling water for a dollar that I got from the store for 10 cents.
In 2016, I was blessed to meet a girl who was an assistant coach at Stanford. In 2018, she actually became my wife. She got a job up here in Oregon, and in 2018, we made the decision to move out of Palo Alto and come up to Oregon. When my wife was coaching at Oregon, she was worried about the nutrition of her athletes—would they come over to training table and eat the meals all the way across campus? So as a result, I tried to come up with a solution and go into these apartment complexes where the athletes lived and started to ask these property managers, “Do you have modern, healthy vending machine options for these athletes?” When I walked into this apartment complex to pitch them on a vending machine—keep in mind I didn't even know where to find a vending machine, I just loved the concept—so I went in there and met with the front desk gal who was also the property manager. I still remember to this day, six years later, when she said, “We're a luxury property, and we don't want old-school, big, bulky vending machines.” And so I pitched her on the idea of these smart machines that aesthetically looked really good and also had the shelf space to put anything in it, from laundry pods to salads. She said, “Let's move forward,” and I remember thinking, “Oh, where do I go find a vending machine?”
Once this happened, I saw the opportunity—why couldn't we do this at scale? That first machine, when I looked on my app and I realized it did $70 literally while I was sleeping, is when I was so excited. Not only did I make money, but I also made money while I was sleeping. That vending machine that I first started at that property complex did $1,500 in the first month. To take it a step further, I only went by that vending machine one hour a week. You do the math on that hourly rate. Not to mention, remember I was literally making $1,200 a month working 90 hours a week three years before that. Now this vending machine was making more than I was making while I was sleeping. Not to mention that first machine, I didn't even put any money down; I literally financed it over 60 months, and my first machine payment wasn't due until 90 days after it was installed. So the whole point of that was there was no $14,000 emergency fund down payment; I literally did no money down, and I did three months of sales before my first $112 machine payment. On top of that, not only was this machine making $1,500 a month, but I was literally only spending one hour a week with that machine. I knew after I realized that potential I needed to go all in.
Once I got that first property and first machine doing $1,500 a month, I knew I needed to rinse and repeat. So I went door knocking to the other properties around this college town campus and started doing the same pitch over and over. And before you knew it, we started to have double-digit machine matches and double-digit properties. After I got up to multiple machines, I realized I needed to start delegating. This whole opportunity helped me realize that I was working 80 to 90 hours a week previously, making less money than what I could be doing for working way less. And that's what drove me to going down this path of making everything as passive as possible. This passive income led me to spending more time with my family, doing things I enjoy like golfing or working out, and ultimately the freedom financially to travel the world. Keep in mind when I got started with that first machine, I was still working a day job, and that $1,500 a month let me do things I really enjoyed, like join the country club, or that second machine that paid for our daycare, or that third machine that paid for our nanny. All those things in that parlay led me to have the opportunity to finally just leave my day job. Right now, we have over 50 machines in micromarts doing over $60,000 a month, which is all delegated, so basically it's passive. I have over 50 machines, and I'm literally spending only three hours a week on this. My whole goal with this was the idea of wanting to spend more time with my family and not being a slave to my boss, my W-2 paycheck, or whatever the other demands of a normal job create.
In 2021, I had a friend who lived in San Diego reach out to me asking, “Can you help me build a vending machine business down here?” This friend was tied up in the same exact rat race of trying to please his boss and get that paycheck because it cost a living in California. So once I started helping him, that's when I had another aha moment. Literally, the coaching me came out. I realized in such a fragmented vending machine industry, there is opportunity to coach other people that have had the same issues as me in the past. I was coaching athletes how to eat healthy, how to get stronger, how to help their body recover—why couldn't I just do the same thing with vending machines? And that's exactly what I did. In 2021, I started a brand new Twitter page where I just started posting content, and people would resonate with the story of wanting more freedom and time back with their kids. And so I just started helping them build vending routes wherever they live. Just like when I was in the Bay building out software to help athletes all across the world, I realized vending and the request for people wanting to get into vending had the same demand. As a result, I started Vendingpreneurs to reach as many of these people as possible, to reach but more importantly help as many people as possible. To my surprise, I was absolutely shocked at how many people saw success in their early stages of this business when they didn't even know how to start a business before meeting me. I saw a firefighter who wanted to get some passive income on the side that went from no vending experience to $10,000 a month within 90 days. I also saw a high school teacher in Texas who had had no time during the day to build a vending route and started doing it on the weekends and before school started, and now he's doing over $20,000 a month. And then Jason in Minnesota, who's literally got four teenage kids and teaching them supply and demand economics 101 by each giving them a vending machine to set the prices, pick the products, and compete against each other, ultimately to fund their college funds.
I'm extremely blessed to help others have the opportunity to ultimately get their time back so they can spend more time with their family, their kids, golfing, traveling, whatever they enjoy. Because what's the point of building a business that consumes your entire life? Regardless of whether you're watching this because you want to get into vending machines or not, I'll leave you with this: It is never too late for a second try at life, even if you're in a tough spot right now. It's all in your power to change your life and circumstances. I've seen this in my own life and with my students. You're only a year or two away from the life you know you deserve. With that being said, if you are someone that resonated with my story and wants to get into this business, you can keep watching my free content on this channel, or you can let me and my team get your vending machine business off the ground. No pressure, but if you want to save yourself the headache and thousands of dollars of mistakes, I know this will help you. Thanks for watching. Mr. Passive, signing off.