Randy Nonnenberg

Guy Kawasaki:
I'm Guy Kawasaki, and this is Remarkable People. This episode's remarkable guest is Randy Nonnenberg. He is responsible for thousands of hours of lost productivity because he is the co-founder of Bring a Trailer. This is a website for buying and selling collectible cars. He's been at it for ten years.
Before that he worked for BMW. He has a BS degree in mechanical engineering from Stanford and an MBA from UC Berkeley. In 2019, Bring a Trailer had 100,000 registered bidders, 11,000 listings and two million monthly visitors. It currently has 300 listings per week. Malcolm Gladwell is among the people that loses hours of productivity on the site.
Bring a Trailer started as a hobby for Randy and has grown to be an existential threat to traditional car auctions. You may not be into cars, but Randy's story is still interesting because it is one data point that pursuing your passion can work.
Also, listen to his ideas about catalyzing valuable public comments on a site, fostering trust so that someone would spend hundreds of thousands of dollars on a car without seeing it in person, and competing with traditional analog forms of businesses. There's a lot any business owner can learn from Randy.
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I'm Guy Kawasaki, and this is Remarkable People, and now, here's Randy Nonnenberg.

Guy Kawasaki:
Are you at home right now? Or in the office?
Randy Nonnenberg:
I am. No, I am at home. Our office in San Francisco is closed up. So I am at home.
Guy Kawasaki:
So the Malcolm Gladwell interview was prior to the pandemic?
Randy Nonnenberg:
Actually, I snuck up to the office for that one. I knew that one was going to be video and I wanted a cool background.
Guy Kawasaki:
Oh yeah. Yeah. Sure. Sure.
Randy Nonnenberg:
So we did that up there.
Guy Kawasaki:
Yeah. So you pulled a Nancy Pelosi and snuck out into a closed area?
Randy Nonnenberg:
Yeah. Well, it's our own office. I think it's a little less controversial than shutting down small business, but that may be the first time in my life I've ever been compared to Nancy Pelosi.
Guy Kawasaki:
Well, there are a lot worse people to be composed to Nancy Pelosi.
Randy Nonnenberg:
Right. Sure. These days. For sure.
Guy Kawasaki:
Why do you have a Mercedes 300 SL in the cover photo or your LinkedIn account?
Randy Nonnenberg:
Oh, good question. We lucked out and actually got to play with that car a little bit, and then that car was listed on BAT as the first BAT premium listing, which was about a year ago now in I think May, 2019. It is still the record holder for the highest purchase transaction amount on BAT auctions.
Guy Kawasaki:
And how much is that?
Randy Nonnenberg:
1.2 million.
Guy Kawasaki:
Wow. And the buyer pays five percent on top of that?
Randy Nonnenberg:
Five percent, but we cap it. We cap it at 5,000 bucks because it goes on your credit card. So if you tried to put 5% of a million dollar card in your credit card, VISA would give you a call usually. So no, he paid 5,000 bucks on a $1.2 million car. So it's way less than one percent he paid.
Guy Kawasaki:
But aren't you a BMW guy? You have a Mercedes on your cover photo?
Randy Nonnenberg:
I'm an everything guy. Look at BAT. So I am all over the map. I love Mercedes, I love BMW, I love Japanese trucks. I love cars from all over the place – all types of cars.
Guy Kawasaki:
Toyotas, Toyota land cruisers.
Randy Nonnenberg:
Yeah. For sure. I love that. Yeah. Sounds like you've been looking at me up a little bit.
Guy Kawasaki:
Yeah. Yeah. Absolutely.
Randy Nonnenberg:
Yeah, I like that stuff. So I like it all. So yeah, having a Mercedes on there is no problem.
Guy Kawasaki:
So when you started your career, did you have this true passion for cars or it's just that you got a job at BMW? You could've gone to work for Intel, you could have gone to work for, I don't know, Apple or Walmart, but you happened to get BMW?
Randy Nonnenberg:
No, I knew that I wanted to do cars ever since I was a little kid. My dad got me into doing car stuff and I spent all my time in the garage, whether it was RC cars from a little young age to getting my first car and getting a wrench on it to studying engineering in school and then during college, I went over to Europe and got to intern at Audi and BMW. I was on that track and knew that I wanted to do that sort of stuff so it was no surprise that I would end up working for that sort of thing after college.
Guy Kawasaki:
Are you an example of pursuing your passion and the money will come?
Randy Nonnenberg:
A little bit. I don't know if the money was going to come in the big car world. It was more for passion and I just wanted to work on something where I had a little bit of expertise, but I also liked the product.
I've always really identified with hands-on product and getting to go work for BMW was like a dream because you'd see all the cool BMWs running around on the street that you couldn't afford and I got to work for that company. It was almost like a shortcut to getting my hands on one of those cars that I would never be able to afford myself. So that was my first gig out of school, and those companies are at the top of their game and it was really invigorating to be in the car business in the early 2000s.
Guy Kawasaki:
So let me just be Guy Ross for a few seconds here. So just explain the genesis of BMW to BAT.
Randy Nonnenberg:
For me, personally, yeah, so I've worked in the car business, worked at BMW. But we were building cutting edge, interesting high-performance cars there but what I always loved about that company was its heritage. It had a small vintage collection and mostly in Germany, a little bit in the US but there was two people in the company of thousands that would ever actually get to deal with the old cars and the heritage component of the brand as their day job so I didn't really see myself making it, able to do that every day. I've always been thumbing through car magazines and wrenching on old cars and driving old cars and playing around with that thing on the side.
In order to make that my full-time gig, I knew I was going to have to maybe find some other path. So I started this project called Bring a Trailer, which really just started as a blog and me talking about cars I found for sale across the internet. A friend of mine and I, he was very tech-minded and he said, “We’ve got to start publishing this and you can write about it,” and it was very rudimentary to say the least at the beginning and we turned it on and 2007 and I tried to write one story every day, and that's where it started.
Guy Kawasaki:
The nature of those stories were what? About a particular car for sale or a model or...
Randy Nonnenberg:
It was particular listing of a car for sale. So it's like a treasure hunting site. It was like there's a million cars for sale all across the internet, but Randy is a maniac and he spends too much time doing this and he finds his favorite one of the day and writes about it. And like we talked about a moment ago, my tastes were really diverse and resonated with people whether they liked Toyotas or BMWs or pickups or hot rods or whatever it was, I would just find an interesting one, and I wasn't going to buy it myself so I said, “Why not post it here?” And so that gave people this steady drip of interesting things that were found online. There's many websites like that now and, honestly, it doesn't sound super innovative now, but in '07 there really weren't any sites like that at all.
Guy Kawasaki:
How did you make the transition from content to commerce?
Randy Nonnenberg:
So the first couple of years we just started doing this and we built a following of an email list that would go out in the morning. You wanted to get your BAT email every morning, and that still exists and the audience grew around it and eventually started to say, "Hey, you featured my car. You found my car on Craigslist, St. Louis, and when you did, all these people came looking. So hey, I have another car for sale. Can I just list it with you directly instead of crossing my fingers that you find me?" And so we said, "Oh, that's interesting. Okay, we'll do that." We did that just as a friendly thing to do for a little bit and then we said, "Hey, maybe we ought to charge these guys twenty-five bucks to do that. Or maybe we ought to charge them 100 bucks to do that, or what's going to happen?" So we came up with a very, again, handshake, uncomplicated way to do that and it started getting interesting.
And then this is at my home. I was just doing this on the side, personal checks started to roll into the mailbox and we started to say, "Wow, this could actually be a real marketplace."
Guy Kawasaki:
But surely you knew at the time that eBay sold cars. So didn't somebody say, "How can you two guys in a garage compete against eBay?"
Randy Nonnenberg:
Absolutely. Many of the hours that I spent and the links that I found were eBay, many were Craigslist. Many were dealer’s sites. The internet became the great place to sell cars, but it was so fragmented, and honestly, still is to some degree.
You want to go find a cool BMW motorcycle, or you want to go find an old Porsche, you had to look at twenty places and you got to do so much educating of yourself. It's almost daunting for most people. So yeah, so there were a couple big players.
Ebay was a really meaningful player at the time, and the auction dynamic on eBay was always really interesting to us in terms of setting the price. So we always knew once we started listing these cars and people would fight over them at a fixed price. We're like, “That's not the name of the game. There's got to be a better way,” and building a bidding model was always in our mind, but it took us some years before we did that.
Guy Kawasaki:
Isn't there a unique aspect to your bidding and that each bid extends the open period that the cars for sale so that people don't wait till the last second?
Randy Nonnenberg:
Absolutely. Yeah. A lot of people call that the anti-sniping feature. Sniping is what you can do on a timed auction like eBay like you mentioned where it's going to end at 2:00 PM. You get your bid in as late and as high as you can and then you cross your fingers and pray that nobody else did the same. It's a hollow feeling frankly because you really never know if you're going to have a fair shot. We really wanted to replicate, if you've ever been to tent auction or a Christie's auction, art auction or watch auction or whatever, if somebody bids, then they say, "Will anybody else outbid that?" They don't shut off the bidding and send everybody home. They leave it open for a moment to talk about it and to make it available. “Anybody going to bid higher?” That's how a real auction actually works.
So a timed auction that ends at a particular time was always very frustrating for me. So I said, “There's got to be some cooler way to do that.” Online, thankfully, you can have this clock ticking down, but you can reset the clock. So yeah, we extend it for two minutes to give everybody a chance to breathe and the bidding tends to do two minutes, plus two minutes, plus two minute tends to go on as there's drama and bids at the end.
Guy Kawasaki:
Is there a record for it went on for twenty-four hours more or something like that?
Randy Nonnenberg:
I think the record is we've extended one for almost an hour before. It's like a baseball game. There are nine innings and technically there's no clocks or it could theoretically go for five, six weeks, but it tends to eventually settle down and somehow it ends. So I think it's about an hour that we've extended them though, which does seem pretty long.
Guy Kawasaki:
Yes. So that means at least thirty more bids came in or something like that, right?
Randy Nonnenberg:
Absolutely. Or more, because some people wait the full two minutes and some people are just really trigger happy and bid quite a bit at the end. I don't know, if you watched some of those auctions how they end, it's fireworks.
Guy Kawasaki:
The reason I found out about you - I love cars, but I had not heard about this site, was that I was visiting Chapman and the VP of admissions is this 2002 freak. You know him? Mike Belkey?
Randy Nonnenberg:
Absolutely.
Guy Kawasaki:
Mike Pelli. Yeah.
Randy Nonnenberg:
Pelli. Pelli sold a beautiful BMW, 2002 TII. He probably told you the result maybe when you were there, he's a long-time Chapman guy. Yeah. That's how you hooked up.
Guy Kawasaki:
The reason why I knew he was a car guy was we were visiting Chapman because my daughter was a rising senior in high school, and there's this beautiful Tangerine, if that's the right name for it, a 2002 in the garage. He said, "Whose car is that?"
Back then, would you ever have predicted, not to be the extreme case, but would you have predicted that people would buy $100,000 cars more or less sight unseen without driving it?
Randy Nonnenberg:
I think people's perspective on that has really shifted substantially over the past few years. Yeah, honestly, we in launching the auctions we said, "Is a seven-day auction enough?" And people do their research. Does it need to be fourteen days or thirty days so people can get on a flight and go test drive it and do all that sort of stuff? But the main change of people's behavior, I believe, is just the fact that the scary parts of buying on the internet are both the seller, if you can't get communication with them or you don't get good information and the thoroughness of the listing.
So the problem, “Would I buy a car on Craigslist that has two photos and a person that doesn't speak in complete sentences and won't get back to me and that... No way. I'm not going to do that,” and that's what honestly a lot of internet listings looked like from 2000 to 2012 or '15, frankly.
So we showed up in 2014 and said, "No, you got to have hundreds of photos and you have to not explain it with flowery language." You have to have very just the facts language, which is one of our calling cards.
We get a lot of car dealers and such say, "Oh, it the best BMW ever, and it's wonderful." It doesn't sound credible. So ours some people say it's a little dry it's very matter of fact. So elevating the description and the thoroughness and the trustworthiness now makes it so people feel much more confident springing for bids yet people are buying every day on BAT. Now people are buying six-figure cars and people ask all the time how many of those people go test drive them before? And it's a small percentage because people have a much higher degree of confidence in the marketplace.
Guy Kawasaki:
So would you say that today BAT is an auction site with a community or a community that buys cars?
Randy Nonnenberg:
It's a good question. The community is really the thing that sets BAT apart. If it was an auction and all the community went away, it wouldn't function as well as it does. So I really do believe that the community is first and foremost, and the open microphone culture that we have tried to cultivate over the years of people being able to openly talk both positively and negatively about a vehicle that's there, it's something you really don't find that many other places.
We didn't set out on day one trying to build that, but it felt right to encourage that behavior because, again, it gives you as a buyer or a bidder or even just spectator a more transparent and thorough view on what's actually being offered for sale. Which always really just bugged me about classified listings and car dealers and all the bad reputations that the car business has, most of them are well-earned by people who are liars and who shade the truth and who are sketchy. Trying to build something that cut across that to make it clear and more truthful is really a passion of mine and I think we've gotten most of the way there, there's still work to do.
Guy Kawasaki:
I would make the case that your community, or your commenting system, may be the only or certainly the best example of commenting that can work. What if Jack Dorsey or Mark Zuckerberg called you up and said, "Listen, how did you do this? Is there any lessons you can apply from BAT to Reddit, YouTube, Facebook, et cetera?"
Randy Nonnenberg:
Man, some of those forums for commenting, you've seen them, right? They're just like a bloodbath. It's just the human value on respect and constructive dialogue is zero, but there's not a lot that combine it with commerce, but you're not even talking about commerce, you're more just talking about communities online and yeah, anonymity combined with charged political topics on Facebook or whatever, it just goes down the tubes.
We have done a lot of work over the years monitoring the comments and the discussion. We have a team and it sounds crazy. I don't know if you could do it for Twitter or Jack Dorsey but we monitor every conversation and we watch them and we read them and we listen to them and we engage. You can see BAT will comment on different listings and that sort of thing.
We are present and we're there because it can't just be a... YouTube is actually really famous for just a Wild West free-for-all of people saying whatever they want to say. Unfortunately that tends to steer towards people being not constructive. So we try to keep it constructive. Some people think that means it should always be positive, and that's not the case. It can be constructive criticism, but it can't be disrespectful or in poor taste or self-aggrandizing or whatever. All those sorts of things are what really cause problems.
Guy Kawasaki:
You ever encounter a case where let's say somebody lease a 1968 911 T and waxes poetically about it, not total bullshit, Cherry Concours 1968 911 T, and then somebody comes in and says, "Well, the air injectors in a 911 T just sucked and it really wasn't until there was fuel injection that the engine got good." Is that up for grabs? Is that objective truth? How do you navigate something as specialized as that?
Randy Nonnenberg:
That's a very good question. Yeah, it shows that you know a lot about the different years of 911, there's a lot of technical details and you can get very deep into nuance, “I like this year better than this year,” and that sort of thing. We are thrust into the role of both librarian and fact checker, but also policemen of what is allowed to be said and what isn't.
If somebody says that, “I had 911 S instead of a 911 T and here's the differences, and here's why I liked mine better,” honestly, that adds to the conversation and I think that's interesting. If somebody leaves fifty comments in a row about how their car is better than the car on offer or whatever, that starts to erode the constructive nature of what we're looking to talk about.
We love people's enthusiasm. We want people to share their experience and their thoughts, again, positive and negative within reason. But if it just becomes, again, a person's podium to talk about their themselves, instead of what's actually on topic, it can veer off, but yeah, that's a gray area. So it's a great question that you ask.
Its gray areas, sometimes we have to make a judgment call and figure out, "Okay, should that be included? Or should we jump in and coach the discussion back on track?" Which is another tactic, but it takes a lot of work. It's encouraging to me that you find the discussion that positive on BAT, because we try to make it that way.
Guy Kawasaki:
How many people do you have doing this?
Randy Nonnenberg:
Our team now are up to 300 auctions a week now, and each auction that we do scales up, we need to have more and more people. So yeah, we're up to almost fifty employees now. Some of them are putting together listing. Some of them are customer support. Some of them are managing the community like what you're talking about. Some of them are experts on the sales side and marketing side of things.
Guy Kawasaki:
Yeah. Are you constrained by the supply of good cars or the supply of liquid buyers?
Randy Nonnenberg:
Good question. Honestly, we haven't hit the limit on either of those. We're most constrained by our own process at the moment. So we have an operational challenge right now because it is a very human process.
If you're selling a car, you get a human to talk to, you get assistance in putting your listing together. A lot of advising from our side and we're working to make that process as smooth as possible. So we have more sellers than we can handle and somewhat shocking in COVID over the past six months is the fact that there are plenty of buyers.
People are buying cars like crazy right now. You asked me a question before the podcast about that, right? Like how's the demand side of things? And it has been going like gangbusters. So we are not really limited by either buyer or seller on this econ supply demand chart. We are only limited by ourselves right now, which is why we are hustling on the BAT side.
Guy Kawasaki:
How do you explain in the middle of a pandemic, recession, depression, et cetera, that there are plenty of willing buyers. Don't they know that unemployment is at a high level et cetera? Or is it Mark Zuckerberg buying old cars?
Randy Nonnenberg:
I don't know that Mark's bidding, but there's plenty of interesting folks bidding that come out of the woodwork, but on the whole, yeah, our main concern, say March when things got really unstable, March of this year, we were like, "Huh, I think there's going to be plenty of sellers," because the neat part about a marketplace, the dynamics are in a great market, people are buying, money's moving around. Everybody's really confident. In a down market, some people need to liquidate, so there's always going to be you get both sides. But on the buyer side, it's not necessarily that great on both sides. You certainly want a more robust economy on the buying side. We saw a dip there with some uncertainty, but then we saw it absolutely take off as all the inventory started coming online instead of all of the tent auction competition that we had all went away, because nobody wants to sit in a tent next to a stranger and share their cocktail or whatever.
So that whole business, or it was outlawed, specifically based on the size of the groups that they would put in those, so those all went away, and still now, they're really hardly coming back on and they're not getting the crowds that they were once getting. So online is really the way.
We saw this huge wave of all these buyers and sellers come on, and also, there's the behavioral component and maybe you could speak to this a little bit, but I think people are shifted home, shelter in place, they're looking around their house. You hear things like home improvement sales are way up and fashion and wardrobe is… because people are sitting here looking at their closet, looking at their house, looking at their yard, looking at their, in my case, my garage, and I got a couple of car projects to work on and I'm looking at cars for sale anyway. So I think car-oriented people have been buying cars a fair amount and in an even stronger way than before, and then there's that online wave as well.
Guy Kawasaki:
Then you look back and you'll say, "I knew there would be a pandemic and there would be no more in-person auction. So we created BAT in anticipation of that," and everybody will say, “You were such a visionary,” right?
Randy Nonnenberg:
I don't think that's the story, man. I don't think I could have predicted it. I can't take credit for that, honestly. There's so many businesses that are not as fortunate and so I try to take a thoughtful and humble approach to that. We really lucked out, right place, right time, and we had built it before the pandemic and the move online is benefiting many online businesses, but ourselves included. So yeah. I don't think I can take credit for that one.
Guy Kawasaki:
I'm not saying it's true, I'm just - you can tell that story.
So you said you have 300 auctions, but you obviously get more cars trying to be listed. So how do you pick?
Randy Nonnenberg:
That's a great question. Yeah. We curate the listings that are on the site, and there's a few different dimensions there. You want a good vehicle, obviously. You want a good seller. You want a good presentation and you want a fair reserve price on auctions. You have what's called the reserve where if it doesn't reach that it's an asking price. So there's a few dimensions there, and we need to try to have the good cars and have the good sellers. We've assessed that out through some communication with the seller and how they're presenting the car.
Again, do they come in both guns blazing, say, "This is the best Acura NSX there's ever been." You're like, "This guy may be a little overconfident. I don't know if that means he's going to treat the buyer all that well." Or do they come in with a nice approach and a transparent presentation, good photos, those sort of things. So yeah, we vet on a number of factors.
If you just have a standard car that there's twenty of on your local Craigslist, it's probably not really cut out for BAT. We tend to try to get special stuff because in auctions what you want is that scarcity factor. If you tend psychologically to want to bid really strong, if you don't think you're going to have a chance to buy this car tomorrow, if another one's just going to show up tomorrow, you can just wait, but if it's a really special one you really got a bid so that's what creates the good bidding environment.
Guy Kawasaki:
Well, what if somebody contacts you and says, "I have an absolute one owner Cherry 2000 mile Javelin?"
Randy Nonnenberg:
Are you saying Javelin like it's a good thing or a bad thing?
Guy Kawasaki:
No, bad thing. Or Gremlin, pick a car, Javelin, Gremlin, Pacer, any of the above. Do you say, “That's a collector's car someday?” Or do you say…?
Randy Nonnenberg:
You'd be shocked. That's why I asked you which way you think it is.
Guy Kawasaki:
That's why I'm asking! Yeah!
Randy Nonnenberg:
We need some Javelins, bring some good money and bidding interests, but yeah. Gremlins and Pintos and stuff that were absolutely cast off. If you ever really clean one of those, yeah, we like a good mix and hopefully you've seen this on BAT.
What has always excited me about the car world is not like, “Oh, the more expensive it is, the better it is. Let's get all Ferraris and Lamborghinis and exotic type stuff.” My fantasy is like my high school parking lot and what everybody drove. People drove Jeeps and Datsun 510s and the Acura Integras and all this kind of stuff and most of it you don't see on the road that much anymore.
So if we get those submitted, some people may look down their nose at some of them and be like, "Oh, that Toyota truck isn't special." And for me I'm like, "Oh man, an '82 Toyota pickup truck 4X4, that's my favorite thing in the world." So thankfully we've tapped into audiences that appreciate all sorts of crazy cars so that variety and that price range, meaning selling anything from $5,000 up to a million dollars, that whole range is what makes BAT special.
Guy Kawasaki:
Okay. Have you sussed out any algorithm or wisdom to predict what cars will be collectible? I'll give you an example. So I own a first year NSX. Okay?
Randy Nonnenberg:
Cool.
Guy Kawasaki:
I owned. Past tense.
Randy Nonnenberg:
Past tense. Not cool. That means it's gone.
Guy Kawasaki:
Yeah, exactly. Yeah. What drove me crazy was that, after 5,000 miles, you had to buy new tires. I just couldn't wrap my mind around that. Then my wife thought a 911 has soul, but an NSX has no soul. It's neither a Ferrari, it's just, what is it? It's ahead of its time, and yet an NSX today is a great collector's car. So how do you predict that? I don't know. Today if you bought a BMW M240, five speed, one of the last manuals. Can you predict that'll be hot in twenty years or...? I'm looking for some wisdom here.
Randy Nonnenberg:
Yeah, for sure. Well, there's a lot of ways to skin this cat. That is a good one though. That's a good question.
The old way that you used to do that with really vintage cars, pre-war cars, and then cars of the '50s, '60s, '70s, you used to look at production numbers, so rarity, you used to look at options that were on it, like a 425 horsepower Corvette would always be worth more and would be more special than a 325 horse Corvette or different metrics like that or a famous designer, or if it was a special Italian designer that did the body, there would always be some angle like that, but that has evolved because scarcity is being redefined and people are seeing... A lot of people didn't think '80s or '90s or 2000s cars could ever be collectible, similar to what you're talking about with the NSX. Oh, does it have enough soul? Do people actually really just want a Ferrari and not an NSX? It actually turns out-
Guy Kawasaki:
Exactly! Exactly!
Randy Nonnenberg:
No, but it's not what it is, but that is a good case in point about why that's not true, and what I just mentioned to you, the kind of cars that I'm nostalgic for and that have a bunch of draw are really oftentimes nostalgia-driven and what you either missed on or used to have when you were a kid - what did your parents drive you to the mountains or the lake and sitting in the back of back in the day? A lot of people have these rose-colored memories of what that was. These '70s Ford station wagons with wood paneling on the side and stuff. Did anybody ever think those would be collectible or desirable? Of course not.
Guy Kawasaki:
Or any Bronco.
Randy Nonnenberg:
No, we won't even go there. Yeah. That's a whole other topic in terms of the values, but Bronco at least had a cool off-road factor, but there's cars that are very pedestrian that you wouldn't think would be desirable. Then people are outraged at how much they bid too on BAT but I don't think it's a mystery.
I think the fact that some rare item that was produced by the millions back then, but they're all gone and rusted and crashed and dead, and one special one comes up, that has a whole bunch of desirability to it. So when you're asking, what's the next thing going to be, you always look at like, "Okay, who's the next group that was nostalgic for a particular era and what cars did they like?" And go find the best examples of all of those and those will have crazy value going forward. So it may be an M 240, it may be the one M that preceded that, everybody was always speculating on that car. Those values are going up and there's just everybody asks, “Are Teslas ever going to be collectible?”
Guy Kawasaki:
I was coming to that.
Randy Nonnenberg:
In some way shape or form, one with a story or low miles, or it's the one that was in the first dealership ever in Palo Alto and was the test car or whatever, there will be stories like that which sound absurd a little bit right now but those call back and somebody sold the first whatever, Steve Jobs like Apple 2C computer, which everybody thinks is a piece of junk for a million bucks or whatever. Or the first Nintendo system. Those sort of things, and way out on the edge of the bell curve eventually because people want them.
Guy Kawasaki:
Okay. Going to a business questionnaire. I'm so fascinated that your fee structure is that the listing is a flat rate, but the buyers pay a percentage of the price up to 5,000 bucks. So what other business is there where the buyers pay a fee? It's not real estate, that's for sure.
Randy Nonnenberg:
Good question. No, that's a good question. We really built it just because we knew both players needed to have skin in the game. So I don't know how much we were looking at other business models, but we were looking at what was broken in the car buying model, particularly online, because if only one person has skin in the game, the whole problem with many other sites online is that you get this flake scenario, right? Somebody who says they'll buy the car and doesn't show up or who wins the auction online and doesn't show up and that's because many of those don't charge the buyer a cent, right? So there's not a lot of intrinsic motivation. So we knew we needed to balance that and have that on both sides of the financial equation so that the seller does a lot of work to list their car, to email with us, to make it through the vetting and to craft the listing and to pay a small fee and all that sort of thing.
They're very invested and they want to sell their vehicle, but a buyer, if you win the car and we haven't charged you a dime, there's a very good chance you're just going to be like, "How much am I actually tied to follow through here?" So our fee structure leads to a very high rate of follow-through, which is something that we wanted to fix with other venues. But you ask who else charges the buyer?
The crazy part is tent auctions, traditional auctions, charge the buyer ten percent to twelve percent and with no cap. So on that going we were talking about, they would charge the buyer 100 grand in a fee, which I used to go to Monterey to the car auctions and I would just sit there and I was like, "The fee is 100 grand, 100 grand ought to buy you a sports car, what are you doing, that's just a fee!” So I was somewhat outraged at that and remained so, and so that's why we capped the fee at 5k, which sounds appropriate for a high dollar car and we charged a little bit to both to make sure there's follow-through.
Guy Kawasaki:
I'm just curious, what percentage of buyers actually, literally, bring a trailer?
Randy Nonnenberg:
Good question. A lot of people hark and bark, "Oh, in the early days of BAT, everything was on a trailer," and that's actually not the case. We came up with the name, and I was there in the early days. Obviously, I think I, if anybody can speak to that, I think I can, I wrote all those stories.
I liked the name Bring a Trailer because when I was reading classified ads in the San Jose Mercury News when I was a kid eating my cereal before school or whatever, I would read these listings for a Corvette in somebody's garage in Mountain View and it would say, "Doesn't run, hasn't run in ten years. Bring a trailer." You'd actually put that in the text. It's actually an interesting search term online for classified sites when it says bring a trailer in the listing. So that was a buzzword, but for me it has always meant it could be a total piece of junk, bring a trailer. Honestly, they would say bring a trailer if it was a Shelby Cobra race car, because it doesn't have any license plates on it.
So you'd have to bring a trailer for somebody selling an Indie 500 race car, you'd need it for that too. So I've always thought of the name as from running the entire gamut show car to piece of junk, but a lot of people are like, "Oh, bring a trailer. That must mean they're all rusty project cars." No, I actually think it's a more universal term, but to answer your question more directly, I think honestly, it's under ten percent. The vast majority of the cars on the site run and are fine and there's driving videos of them and I don't think you need to bring a trailer necessarily, but some people do, it varies.
Guy Kawasaki:
But getting back to the pandemic, if you're in San Francisco and you buy a car in Miami, are people willing to get on a plane for six hours, shoulder to shoulder, and drive it back?
Randy Nonnenberg:
Pandemic is a totally different environment, but even pre-pandemic would you do that? Thankfully, and we're looking to solve this more and more directly on the website. The ability to ship a car is actually really, really pretty simple. There's reputable people out there that can do that. Figuring out how you can bid on cars far away is something that's very doable.
Some people will fly in and drive it and we get these adventure stories of a maniac who drives a convertible through a rainstorm for three days to drive it home and breaks down in Winslow, Arizona, and all the great stuff. Or some people will put it on a truck or some people will take a truck with a trailer on it and drag it on.
Guy Kawasaki:
So some quick questions now. So autonomous cars, good or bad?
Randy Nonnenberg:
I think very interesting. If they can be made safe, I would rather drive one of those then drive and stop and go traffic on the freeway.
Guy Kawasaki:
Okay. Electric cars.
Randy Nonnenberg:
I think electric cars are cool. I think we should be responsible in terms of the future of the planet, but at the same time I think there are very real limitations to those in terms of range. If I'm driving from here to New York City, I don't know that I want an electric car and sit in a parking lot in the middle of Nevada in the middle of the night to charge it. Technology will catch up.
For ninety-nine percent of daily use and your daily driver, they will be okay. What's missing from a lot of electric cars right now is they're not interesting. The Tesla Roadster I thought was cool looking and had some interesting dynamics. The Tesla sedans are tremendously boring to me. They're great to drive and they make going to Costco practical but I don't want to drive one on a windy road anywhere, and they are very fast.
The new Porsche is amazingly, dangerously fast. The technology is getting there, but most of them have not found a way to be interesting yet. For me, what's going to be interesting is the trucks. When trucks come and they're electric, like the Rivian and some others, I'm excited to see what those look like.
Guy Kawasaki:
Okay. How about the decline of the manual transmission? Is that the sign of an apocalypse?
Randy Nonnenberg:
I like the manual transmission and, frankly, my kids like sitting and shotgun and rowing through the gears. There's some tactile interest in doing that, but as we've seen, race cars are faster without them. Cars now get the same... guys, used to say, “Oh, automatic sucks gas. It's a gas mileage thing.” No, it's not really that anymore.
It's mostly nostalgia based now, but one thing that I do like about manual transmissions is I would rather be shifting through the gears and have another hand on the steering wheel than have somebody playing, texting on their phone while they're in their automatic car.
Guy Kawasaki:
Good point. That's a good point. Yeah.
Randy Nonnenberg:
So I actually think it engages your mind more in driving in the vehicle than cruising in an automatic or a hands-free with your latte and your cell phone crashing into people. I don't love that. I would rather your NSX have that manual and you're paying attention to what you're doing and... So there's some tradeoffs and some things that need to be thought about and hopefully technology can solve some of it.
Guy Kawasaki:
I'm going to use that argument on my wife.
Randy Nonnenberg:
There you go.
Guy Kawasaki:
It's for safety that I'm buying a stick. Just that alone made this episode for me.
Just a few more questions. So if Ferdinand Porsche came back from the grave and said, "Randy, you can have any 911 that you want. Which one would you select?"
Randy Nonnenberg:
Oh man, there are many. I like Porsches and, right now, I would say this changes from time to time. But right now my favorite would be probably a 67 911S Irish green, black interior, Fuchs, pretty stock but maybe lowered a little bit and maybe some CV lights on the hood. I have my spec that I like. That probably changes every month though.
Guy Kawasaki:
Is '67 the first year or '66?
Randy Nonnenberg:
Actually, they made them as early as '65 and produced them as late '64 maybe even. But that was the short wheelbase car, yeah, this is the early one before the wheelbase was extended in '69?
Guy Kawasaki:
Do they still make Fuchs?
Randy Nonnenberg:
There's all sorts of companies that have copied them. I don't know if the Fuchs company is still in business or was acquired or whatever. I don't know if they make real ones anymore, but we sell them on BAT. It's actually one of the most popular items on BAT. It's Fuchs wheels. It's crazy.
Guy Kawasaki:
Yeah. 99.9% of the people listening to this are, "What the hell are they talking about? What's a Fuch? WTF"
Randy Nonnenberg:
Well, I do geek out on car stuff. You're pretty into it. That sounds fun.
Guy Kawasaki:
WTF. What the Fuch?
So anyway, if you had a 100, 000 bucks to buy a car right now, planning for what's valuable and collectible et cetera in twenty years, what car would you buy for 100 grand.
Randy Nonnenberg:
Oh man, interesting question. So I always say that I dream 25,000 bucks at a time. So I would probably buy four cars for 100 grand and three of them wouldn't run and one of them would probably run at any given time. That's my style for better or worse, if you asked my family.
For a 100K right now, I think that the vintage truck market has more legs to run. It's really crazy what you're seeing in Toyota Land Cruisers and Broncos like you mentioned, right? All the Ford marketing around the New Bronco values are crazy right now, and when I ask all my buddies, so I'm forty-three, and all my buddies it's, "Oh, Randy, if only I could get a vintage Bronco, that's what they all say." And I don't even know why. They just all want that. I had buddies who drove those in high school and I get it. They're super cool, but man, are they 100 grand and they're going for even more than that on BAT and elsewhere. So I think there's plenty of years where that demographic is going to have disposable income to spend on those. So I think that's interesting.
Guy Kawasaki:
I just got a Chrome notification about a listing on VAT.
Randy Nonnenberg:
Oh good, that means your computer is set up right. We have made our way into your day-to-day. That's perfect. That's perfect.
Guy Kawasaki:
To alter the question slightly, you have 100 grand to buy a new car. So it's something that's currently for sale.
Randy Nonnenberg:
I think that, man, that's actually a tricky one. What's sold right now that is going to be really desirable later on, and I think you can't really get a super low production Porsche for that money these days, which is a shocking thing to say but it's true.
Guy Kawasaki:
No, but you could get a, what’s it called? Is it 718 stick? Whatever the six-cylinder one?
Randy Nonnenberg:
You can't get a GT4 for that money, but you could get a... What makes things valuable later on though is some weird factor and some preservation though, right? So if you could get like a special color in Porsches, those tend to bring money later on. But honestly, if you're trying to speculate and make money later, I think it's smarter to buy a car that's already depreciated a little bit before it then turns around.
I think I would rather buy a two-year-old GT4 that's been babied and perfect than buy a brand new lesser spec car trying for that to be valuable, because it's those special trims of any make, not just Porsche, BMW, special M cars or Audis or Ford, Shelby edition Mustangs, different sorts of cool stuff. All these like crazy horsepower Hellcats and stuff that Mopar is producing. Are those going to be valuable? They may be in some sense, and figuring out what spec and what engine and what those are going to be in ten years from now, most of those are going to be beat up and there will be some that are... Corvettes, new C8s coming out. They're going to produce a whole bunch of those and they are going to depreciate, but maybe there'll be some special additions or maybe you buy a few year old version that is ZR1 or something. Those sorts of things could be more valuable.
Guy Kawasaki:
And when you say Shelby, do you mean Shelby Mustang GT 500 or Shelby from Las Vegas factory?
Randy Nonnenberg:
No, I was talking there about Ford Mustangs that are GT 500s and GT 350. Some of those are very impressive and they do limited runs of them. So there's an argument to be made that those could be valuable later. Shelby in Las Vegas is punching out continued replicas of their old '60s cars, which those I don't believe will be on too much of an upswing in terms of value. If you want value on those, you have to buy the older ones.
Guy Kawasaki:
You could see if Hertz is dumping tens of thousands of cars and they used to have Shelby Mustangs, right? Wasn't there a Hertz gold that had, I don't know, GTRs?
Randy Nonnenberg:
They called it a GT 350H for Hertz.
Guy Kawasaki:
Yeah, for Hertz.
Randy Nonnenberg:
It was a publicity stunt in 1966 and they did a number of those cars and then they brought them back in what was it? 2012 or something like that. They had GT 350H and those are rare and unusual. I don't know if people pay too much extra for the gold stripes and the H package. Those always had a little bit of a mystique too around wow, this was a rented. Did somebody just beat this thing all up until you got it? So those are a little tricky.
Guy Kawasaki:
Okay. [crosstalk 00:45:08].
Randy Nonnenberg:
But the early ones, the '66s are actually great and I would love to have one of those. So those are cool cars.
Guy Kawasaki:
So I know everybody must ask you this in interview, but of course I got to know what's in your garage.
Randy Nonnenberg:
Oh, cool. Yeah, like I said, I dream at a pretty modest amount per car, but then I've collected and been fortunate to be able to grab a few interesting cars, but I like a lot of cars from my youth. My first car that I had was a Toyota land cruiser FJ40. So my, what was it, second paycheck out of college, I bought a $3,000 junker, FJ40 and restored it in my dad's garage. Twenty years later I still have it, and that's parked at the BAT office right now. I love those. Those are great. They've become collectible and stuff now, but those were just beater junk trucks when I was in high school, driving those around and they were fun. I like '80s BMWs. So I have an '87 BMW 535 IAS sedan that I liked a lot. It's called an E28 body style. Those are super cool.
My sisters drove Volkswagens when I was in junior high I guess. They were in high school and I always wished could have at 16-valve VW GTI. So I went and bought one of those a year ago, a '92 Mark II GTI, sixteen-valve, and then I dearly drive a '94 Toyota pickup truck, which is what I would have loved to have had back then, but was in all the advertising and the Ivan Stewart Off Road, racing video game and everything else. So that's my daily.
I have the weirdest and then I'll stop. The weird curve ball is I bought a 1956 Chrysler 300B Hemi, which is fifteen feet long and a cool old '50s car with wide white wall tires that I always loved at car shows, going to car shows with my dad when I was a kid. So everybody asks me if it's my grandpa's car because it's an old crazy American boat, but it is pretty quick and pretty fun to drive.
Guy Kawasaki:
Does it have big wings and stuff like that?
Randy Nonnenberg:
Yeah. Tailfins. Yeah.
Guy Kawasaki:
Fins, and all that kind of stuff?
Randy Nonnenberg:
It's got find and chrome and bench seat, electric bench seat that's like a sofa that moves four and up if you want it to. And two big old carburetors, I think it gets about eight miles to the gallon. So it's a big old one.
Guy Kawasaki:
Okay. As you can tell I'm into cars, usually it's somebody serious and remarkable... Well I'm not saying you're not serious, but it's somebody about the vaccine or climate control, climate change or women's rights or whatever. Today we get to talking about cars. The most...
Randy Nonnenberg:
I love that. I didn't know. Can you share or tell me any of your car story? It sounds like you've had some interesting ones and you're very into the technical details. So tell me about it.
Guy Kawasaki:
Yeah, well I don't know about that, it's funny. So whenever people are asked, yeah, fairly visible or successful people, what motivated you? A lot of people say, "Well, I wanted to make the world a better place. I wanted to improve society," and all that. I’ve got be honest, when I was in high school - I'm from Honolulu, Hawaii - when I was in high school, some family friend took me out in a 912 or a 911T or something and it fricking changed my life.
Then in college, my roommate came from a wealthy coal mining family, so one Thanksgiving we went to his house for Thanksgiving and I'm from a very poor part of Hawaii. So we go to Phoenix, Arizona, and his backyard is the golf course of the Arizona Biltmore. His father picks us up in a Rolls Royce, so my head is exploding.
We go out to dinner and his mom was tired so she asked me to drive her home in a Ferrari Daytona. So all these people have these really high-end reasons for wanting to succeed and studying hard and all that, changing the world and all I wanted to do was change the car. I've had a few 911s, I had an NSX. I was a Mercedes-Benz brand ambassador so I got whatever I wanted from them, including a GTR. Not GTR, the GT, the 911 killer that they have, and insipid as this may sound to many people, but it's not like I had a midlife crisis or my company went public. So finally I went and bought bling. As long as I can remember, I have loved cars. I don't know, it's just the way it is.
Randy Nonnenberg:
I love that. We find that a lot. You're surprised, this common thread about cars, we can be at something that is totally unrelated to cars and somebody who's in some other segment of society will come out and be like, "Oh, well I love BAT, because I really love looking at cars all the time." And I'm like, "What are you talking about? What are you doing?"
Some people would think that BAT has an audience where it's a bunch of people turning wrenches in their garage or whatever else, right? But it has really been astonishing how far reaching the automotive passion is throughout society and it's a fun thing to be able to connect on. So I love hearing your story. That's fun for me to hear that, man, that the Ferrari Arizona story sounds like it would have impacted me as well.
Guy Kawasaki:
You know what would make your life and my life totally completed is if someday we found out that Anthony Fauci is into classic cars. That would be it, right?
Randy Nonnenberg:
Maybe. You never know.
Guy Kawasaki:
That would be it. We could die happy after that. All right Randy, thank you so much. It's been such a blast and if I can ever do something for you, just let me know because I love what you guys are doing.

I hope I didn't geek out too much about cars in this episode. But as you can tell, I do love cars. Having said that, there is a lot to learn from Randy about creating a website, creating a market, creating a community, monetizing that community. I think you can apply this to many other businesses, and if any of you have a '66 911 sitting in your garage that you haven't touched for forty years, be sure to reach out to Randy or I.

My thanks to Mike Pelli for making this all happen. My thanks to Jeff Seih and Peg Fitzpatrick, who are the collectibles of people working on a podcast.
Having a great car doesn't matter if you don't wash your hands, maintain a social distance, stay out of crowded places, and listen to scientists and doctors, not politicians.
This episode of Remarkable People is brought to you by reMarkable, the paper tablet company.

This is Remarkable People.