Question: Where did you grow up?
Answer: I grew up in a military family so we moved around a lot, but I grew up predominantly in the Sacramento area, from fourth grade through high school. My father worked for the CIA, and I don't really know what he did. I didn't have a very good relationship with my dad, to be honest, which I think probably drives me in a lot of ways. My mom was a teacher, and she and my dad divorced when I was at a very young age. She remarried to my stepdad whom I really consider my father figure.
Q: Much of your career has been related to cars; were you a car nut as a kid?
A: Yes, definitely. When I was 14, I started a car-detailing service because all the people in my neighborhood owned really nice cars and I really wanted to drive them, but I was too young. So I started this business just so I could drive their cars up my 1-mile driveway and back down. That was my perk. It was called Scott's Auto Detailing Service, and I employed all the neighborhood kids. We had 7-year-olds cleaning cars. It was like a cartoon.
Q: How much money did you make?
A: I didn't really care. I just really wanted to drive the cars. Later I joined a ski club and I started a ski tuning service. I would take everyone's skis and tune them over the course of the week and everyone would pay me $20. That made me a bunch of dough. I ended up using that to buy my first car a Mercury Capri before I even had a license to drive. I sold that for a profit, and when I turned 16 I bought a Fiat Spider. My dad had owned one and I always wanted one of those. The car gave me my freedom, and I could pretty much work wherever I wanted, and when I was in high school I ended up buying a brand-new Audi Quattro.
Q: So how did you end up in the Army?
A: One day I was riding my motorcycle to take a wind-surfing class, and my motorcycle threw a chain right in front of the U.S. Army recruiting office. There was a recruiter there named Dwayne Stafford who came out and sat with me on the curb. We got to talking, and he showed me this brochure for West Point. I was sort of a rebel my senior year in high school, so when he said, "Look, you can get into West Point on your own; you can do this and basically snub your family." I thought that was the coolest thing I had ever heard. So I did it.
Q: Did you go to West Point right away?
A: No, I had to go into the Army for about two years before that so I could study and get a nomination to attend West Point. I was trained as a Spanish interrogator and attached to the 82nd Airborne division.
Q: What was West Point like?
A: My experience was a somewhat unique one. When I showed up, I was 21 years old and practically everyone else was 18. I had jumped out of airplanes, I had been to interrogation school, I had been to language school, and I showed up with two rows of ribbons and an air assault and airborne badge. It was like I was going to school with a bunch of little brothers. And I ended up becoming my class president.
Q: How did that happen?
A: I got nominated from my company, and I was up against 35 other people. The day you run, they take all of you on stage and they ask who would like the microphone to tell everyone why you should be class president. I volunteered to go first, and I said, "Look, I've never held class office in my life, I have no resume that would say I should do this or would be good at it, but I can always pull magic off. And I promise that as class president we'll have a toga party, we'll have an unchaperoned trip to New York City." I had a list of like four things. It was right off the cuff, and people were going crazy.
Q: Did you guys actually have toga parties?
A: We ended up doing all those things.
Q: How did you get to UC Berkeley?
A: On a rugby scholarship. I've always been an athlete and I love soccer, but I could only make the backup bench for the C squad at West Point because they recruit for soccer. So I went and tried out for rugby, and I ended up becoming an all-American candidate. Cal has a great rugby team and they beat us the two years I was at West Point, but those were the only two matches I ever lost there. So their coaches approached me about a scholarship and I left.
Q: What was it like going from West Point to Cal?
A: It's funny because I grew up in a very conservative house, and West Point is a pretty conservative place, and I ended up at the most liberal school in the world. I immediately did not get along on any level with any of my professors. I had different points of view about everything, from business to politics. I really got to be in the mix and in the debate. In fact, I started my first company because I had written a business plan and submitted it to my economics professors and they came back and told me 20 reasons why it couldn't work. I wanted to prove a point.
Q: What was this company?
A: It was a company called InfoAccess, and it was a service that helped people buy cars. I knew a programmer, and we would go get all the newspapers and figure out how many cars were for sale. Then you start calling dealers and find out how many cars are on their lots that they're not advertising right now. We put all this into a database and sold the information to people for $15. I literally rented out a house and I had 16 rugby players working for me part time, and I had their girlfriends working for me part time.
Q: What happened with InfoAccess?
A: Another company, 1-800-Car-Search, came into the Bay Area and they ended up buying me out right before graduation. But there was an earn-out provision and I would have to move to Los Angeles to work. So I decided to leave. By then I realized I wasn't excited about what I was learning at Cal, and I never really placed value on a degree or external validation. So for me I was much more intrigued by the fact that my business had become real. Besides, I had gone to Cal to play rugby.
Q: How did CarsDirect get started?
A: Well, I spent a few years starting up and financing various companies. Then around October 1998 I got a phone call from Bill Gross, the director of Idealab in Pasadena. I didn't know who he was, and he explained the whole incubator thing. And he said, "Can we meet? I want to sell cars on the Internet, and I've heard your name mentioned." And I thought, You know, I could definitely take my old business plan and apply it to the Internet. So I ended up going out to Idealab and starting CarsDirect. We were there for about a month, then I moved the company to Sherman Oaks. I think the day we moved into the new facility we had 14 employees. A year later we moved out with 280 people.
Q: How long were you chief executive?
A: I was chief executive until 1999 when I became vice chairman, and I left the company in 2000.
Q: Why did you step down as chief executive?
A: I had never run a public company. I had a wild ride, I got to pitch to George Soros and Charles Schwab, and it set me up to be the entrepreneur I've become now. But I think the broad acknowledgment then was, "Let's bring in a seasoned CEO that you can learn from." And I was comfortable with that.
Q: What makes Zag.com different from other car-buying Web sites?
A: Well, the terminology is important. There aren't really any car-buying Web sites. Even sites like AutoNation.com don't really sell cars over the Web. They use the Web to market effectively and do a lot of lead generation. I think we are the furthest down the funnel towards auto buying. We require the dealers in our network to put an upfront price on their cars, and we force them to make it a good price. And in exchange for making them give us an upfront price, we only charge them when they actually sell a car.
Q: How do you think the fact that you moved around so much growing up impacted who you are now?
A: I never really have been involved with anything longer than two years other than this company. I love change. I'm definitely not a creature of habit. I embrace a dynamic, ever-evolving environment. And maybe I got that because I never had the stability that comes from growing up in one house all your life. But whatever created that desire for change, it certainly works for me.
Q: Do you still feel that desire for change now?
A: No, not as much. For me personally, I hit an inflection point when I had my first son six years ago. I said, "You know what, I want to stop the two-year cycle in my life in everything. I want to stay at Zag." It's the first big company that I've had when I've also had my boy, and I realized I want to come home at a regular time every day and start to be a dad.
Q: You're obviously good at raising capital. Do you enjoy it?
A: Raising money sucks. It feels like that movie "The Prestige," where Hugh Jackman has to kill himself every night to pull off his magic trick. And the fact that I've done it a lot and am good at it just means I have a job where I have to do it. It is like cooking a Thanksgiving meal and getting everything hot to the table at the same time and then getting everyone seated.
Q: What's one thing employees don't know about you?
A: I'm a remarkably open person, but one thing they probably don't know about me is that I actually want to have 10 kids. I want to become a full-time dad at some point, and I want to raise my children to be great people like I want to raise great companies. I very much love the idea of a large family. I always have. I have two kids now, so only eight more to go, right?
Q: What's your favorite car?
A: Hands down the Ferrari 550 Maranello, 1999-2002. It's the greatest grand touring car of all time.
Q: Do you own one?
A: Oh, yeah. Really, I love any car that just is what it should be. I love the Mini, I think it's a great purpose-built vehicle. I've got a Tesla, and I love it for what it is. I used to have a Hummer, and as grotesque as the Hummer is in light of the last year, when I had it, it was great. I had two dogs, I was building my own house, it's big and roomy. It's bad ass; it can go through mud. It wasn't pretending to be a Mini.
Q: If you could own one car that you currently don't, what would it be?
A: The Aston Martin Rapide. They don't sell it yet, but I'm first on the list. It's probably the greatest sedan concept that's ever been dreamed up, and it's going to be the best car that I don't yet own. But I get mine in May 2010. I'll be driving it around with my two boys.
Q: And the dogs?
A: No, I don't think I'll let dogs near that car.
Title: Founder and Chief Executive
Company: Zag.com Inc.
Born: Seattle; 1968
Education: Attended United States Military Academy at West Point and University of California, Berkeley
Career Turning Point: Starting CarsDirect.com at Idealab in Pasadena
Most Influential People: Two grandfathers: one worked for a single
company his entire life; the other created companies
Personal: Divorced; lives in Bel-Air with his two boys, Luke and Noah
Hobbies: Kite-boarding, sailing, skiing and driving performance cars
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