Tony Whatley co-founded LS1Tech, the forum most LS owners have read at some point. He built it on nights and weekends while working as an engineer and project manager in oil and gas, and he and his partner sold it for $2.3 million. In 2018 he was also running DV8 Motoring, a high-end wheel business, and 365 Driven, a coaching business for small business owners. He had just released a book called Side Hustle Millionaire.
Kevin Dubois of My Shop Assist and Evolution Dynamics hosted this episode. It was their second try at recording it after the first one was lost.
The conversation covers how a forum grew into a $400,000-a-year business, how Tony picks which side businesses are worth his time, what he learned selling a company, and why he joined Toastmasters. Much of it applies to any shop owner who has thought about selling a part, starting a second line of business or building a following online.
How LS1Tech started
Tony started working in oil and gas at 18 as a welder and pipefitter's helper. He paid his way through an engineering degree and moved into project management for large companies. Cars stayed his passion, so he built his own way into the industry through side businesses.
In 1998 he and a group of racers met on an earlier LS1 forum. The new Camaros and Firebirds had almost no aftermarket parts, so the forum was where they swapped ideas, how-to articles and quarter-mile records. The owner didn't pay the server bills, and the site lost everyone's work more than once. When the racers complained, he told them to start their own. In November 2001, Tony and his partner John did. They named it LS1Tech to keep the focus on the technical side.
Tony had taught himself HTML and Photoshop in the late 1990s and built websites for local businesses, often trading the work for car parts. He designed the LS1Tech oval logo to look good as a decal on a car. Thousands of those stickers are still on cars today.
Growing a community into a business
There was no Facebook in 2001. About a hundred people joined on the first day, and the site grew by word of mouth. Sponsors paid around $75 a month for a banner. Once that covered the server and software, which cost about $100 to $200 a month, the partners started giveaways. Server logs showed half the visitors never logged in. Each month the site gave a $200 gift certificate, which had to be spent with a sponsor, to a random registered member. That brought sales to the sponsors and pushed the share of anonymous visitors down to about 25 percent. A bigger audience meant they could charge advertisers more.
They treated users and sponsors as customers even though users paid nothing. They backed up every post and upgraded servers as soon as the site slowed down. Posts from November 2001 were still online 17 years later. They also let members attach photos directly to posts so a guy in his garage didn't need a separate photo host to share what he knew.
About 75 volunteer moderators kept it running. LS1Tech let them build their own names and partner with vendors on install articles. John and Tony also started a drag racing series, paying $10,000 to $15,000 per event out of their own pockets, up to five events a year.
They turned down ads they couldn't control. Tony said they gave up about $100,000 a year in profit by not running Google ad links, because the ads would slow the site, annoy members and undercut the sponsors who paid to be there.
Selling the site for $2.3 million
Early on, Tony spent three or four hours a night on the site. Once it was running, it took about an hour a day, mostly invoicing and collecting from sponsors. In its last few years it made a profit of almost $400,000 a year, about $200,000 each for Tony and John. People who offered to buy it named numbers like $100,000.
By 2006 the F-body Camaro and Firebird had been out of production for four years, and both partners had busy careers. When a buyer approached, they picked a number they would accept. The first offer was more than double it. They hired a lawyer, a friend of John's, who told them a first offer is always the low one. They countered once, the buyer accepted, and they sold in 2007 for $2.3 million. The recession and the rise of Facebook came soon after, and Tony said forums never reached that kind of value again.
His worst business experience came from that sale. He said they didn't know enough about the legal side of buyouts, and it cost them money to resolve things afterward. He also learned that big companies can bully smaller ones because they can afford to, and that once a deal reaches six figures, business is business.
Picking side businesses that pay
DV8 Motoring grew out of LS1Tech. Tony built about 30 project cars in five years, and people kept asking about his wheels. He was referring all that business to the big wheel brands for free. Most brands wanted a buy-in of around $10,000 to become a dealer, so he ran an introductory sale to his audience to fund it. In 2018 DV8 sold an average of $300,000 to $400,000 a year in wheels on about an hour of work a day.
He kept away from what he called part-number wheels, the commodity products that sit on a shelf and only pay at high volume. He sold high-end wheels where his fitment knowledge was the value. He also learned to spot price shoppers who want all the fitment details so they can buy elsewhere, and he stopped handing that information out before a sale.
Kevin said he often got pulled into the idea of making a part to sell on the side. Then the part has to be designed, sourced, packaged, shipped, listed online and priced for wholesale buyers. Tony's answer was to run the numbers. Set a monthly income goal, compare each idea against it, and drop the ones that can't reach it, even ideas you love. He would rather people chase $10,000 to $30,000 a month with skills that scale, or work they can train someone else to do, than spend their time making $300 extra a month.
He also knew DV8's limits. Scaling it would mean turning it into a full-time job, and he could earn more as an engineer.
Coaching, the book and getting over the fear of speaking
Tony had advised shops on branding, marketing and structure for about ten years before going public with 365 Driven in May 2017. His day job meant managing projects of $100 million to $300 million, so a $1.5 million shop didn't intimidate him. The oil downturn showed him that high-paid engineers are the first cut, and he didn't want his family's income to depend on someone else's decision.
He said about 80 percent of his car followers welcomed the business posts and about 20 percent wanted him to stay "the car guy." He tested the idea with a private Facebook group that drew about 200 people on day one, then opened a free public group that grew to almost 1,600 members.
The book came out of a survey of more than 100 entrepreneurs about what held them back. He kept it under 120 pages so a busy person could read it in three or four hours. It hit number one on Amazon nine hours after launch. Tony kept that goal on the vision board that he saw every day as his computer background.
I identified those steps and all I did was just execute the steps, execute the steps, execute the steps, and then the result happens.
A year earlier, public speaking scared him. He joined Toastmasters, which he said cost about $45 for six months with one meeting a week, and went on to win speaking contests. He recommended it for any owner who wants to do videos or podcasts or talk to customers with fewer filler words.
If you don't have pain or discomfort, you're not going to change. You're not going to improve.
Key takeaways
- Run every side idea against a real monthly income goal and drop the ones that can't reach it.
- Sell where your knowledge is the value. Commodity parts only pay at high volume.
- Treat your audience and your sponsors as customers, and don't sell out their experience for short-term revenue.
- Get a lawyer before you sell a business, and expect the first offer to be the low one.
- Self-doubt doesn't go away. Small wins on a written plan are what beat it.
- Practice public speaking. It makes every customer conversation and video better.
Know what each line of work pays you
Tony's rule was to compare every idea with real numbers before spending time on it. A shop owner can only do that with good data on what each kind of job brings in for the hours it takes. My Shop Assist tracks time on every job and task, keeps parts and purchase orders tied to the work, and exports invoices to QuickBooks, so you can see whether that side product line is paying for itself. See the full list of My Shop Assist shop management features.
If you want those numbers for your own shop, start a free 30-day trial.
